Qatar has long been among the most stable countries in the Middle East, even amid the political upheaval that rocked many of its neighbors over the past year. This stability, combined with Qatar's natural gas wealth and status as the world's top liquefied natural gas (LNG) exporter, has enabled Doha to pursue an assertive foreign policy that belies the country's size. However, with many new LNG producers expected to come on line in the next decade, Qatar will face increased competition that will erode its current advantages, limiting its opportunity to leverage its strengths into a position of lasting influence in the region.
Qatar's Historical Role in the Gulf
Qatar occupies a strategically important position in the Persian Gulf. A tiny peninsula jutting out from Saudi Arabia's eastern coast, the territory that makes up modern-day Qatar has long served as a stop on international trade routes for silk, pearls and now crude oil. Qatar's arid climate and lack of domestically controlled fresh water resulted in a small population that was one of the poorest in the world until the development of the hydrocarbon industry. Even today, Qatar imports about 90 percent of its food and only maintains about two days' supply of water.
The al-Thani family, which has ruled Qatar since the country's formation, was only able to secure Qatar's independence from the occupying Ottoman Empire by signing a truce with the British in 1911. After its relationship with the United Kingdom ended in 1971, Qatar was again left without the means to defend itself from outside aggression. Choosing not to enter into a confederation with the states that made up the United Arab Emirates, Qatar became a founding member of the Gulf Cooperation Council (GCC) in 1981. While the GCC ensured that Qatar's Arab neighbors would recognize its sovereignty, the arrangement continued Qatar's dependence on its larger and more economically secure neighbors like Saudi Arabia and prevented Doha from challenging Riyadh's positions.
Qatar's security is guaranteed through its partnership with the United States, which has based its Central Command forces in Qatar since 2002. Like its arrangement with the British, the United States is a distant foreign backer possessing a strong navy that can protect Qatar's regional autonomy.
Shift in Relevance
Qatar's emergence as a significant regional actor has coincided with the rule of the current emir, Sheikh Hamad bin Khalifa al-Thani, who ousted his father in a bloodless palace coup in 1995. The following years saw the establishment of government-owned Al Jazeera, steady investment in LNG technology and an attempt to establish a Qatari alternative to Saudi Arabia's more conservative ideological leadership. Sheikh Hamad's ability to bring Qatar to the forefront of regional and Arab foreign policy negotiations belies the fact that Qatar lacks the large crude reserves, and thereby the massive cash stockpile, of many Gulf states, a significant military, or even much regional respect until recently. Bahrain and Oman notwithstanding, Qatar is the smallest crude oil exporter of the GCC and also has the smallest crude reserves.
Qatar's relatively quick rise to the top of global LNG exports only occurred within the past five years, giving the state a source of revenue not affected by Saudi competition. Though Saudi Arabia's ability to increase its production and export of crude could make Qatar's oil industry inconsequential, Qatar now outpaces Saudi Arabia in natural gas production and is the global leader in LNG exports.
Qatar's gross domestic product (GDP) and government revenue have grown in step with other regional hydrocarbon exporters during the past decade, with exports accounting for 50 percent of GDP in 2011. However, its smaller reserves of crude and the historically cheaper price of natural gas compared to oil have meant that Qatar brings in considerably less money in real terms than the majority of its neighbors. Still, Qatar's 2010 GDP, about $127 billion, is a dramatic increase from $17.5 billion in 2001, and this additional revenue has provided the country with unexpected opportunities to expand its influence.
Qatar's Tools for Action
Qatar's growing economic power has allowed the current emir to cultivate an iconoclastic political identity for Qatar within the region, especially as a leader in foreign policy issues. The regime owns Al Jazeera, arguably the most respected media outlet in the region and the one with the largest global audience. The importance of Al Jazeera to Qatar's foreign policy ambitions cannot be overstated. Qatar operates through relatively low-cost but high-profile foreign policy moves that generate interest and receive significant coverage in the media. This is no accident. Al Jazeera helped shape popular opinion in the Arab world through its critical coverage of the Mubarak regime in Egypt and the Gadhafi regime in Libya during the so-called Arab Spring, which compelled countries like Saudi Arabia, Bahrain and others to send delegates to Doha to push for less negative coverage of their sensitive political situations.
Increased financial independence also allows the regime to lend backing to various players in the region, including financial assistance for Libya's rebels and most likely Syria's rebels, hosting the Taliban and Hamas regional offices, and offering energy aid to Gaza. The relative calm and internal stability of Qatar's population of about 1.7 million coupled with the less-conservative nature of the regime has allowed Qatar to fill the void left by regional powers preoccupied with internal unrest. Lacking the ethno-religious tensions of some of its neighbors, Qatar has been able to move more boldly in areas of foreign policy. This was most obvious during the past year, when Qatar led the requests for foreign intervention in Libya and Syria.
Qatar has also had better ties with Iran than the rest of the GCC states have. Qatar does not have a significant fundamentalist religious population within its borders that would violently reject any involvement with Iran, and there is a long-standing yet relatively minor Iranian cultural influence on the peninsula. Combined with the fact that Qatar will never rise to the level of a regional hegemon like Saudi Arabia, interactions with Iran will not play into a larger, future conflict over regional dominance. On a more practical level, Qatar's natural gas reserves in the North Field are operated jointly as part of Iran's South Pars natural gas field.
Narrow Window of Opportunity
Qatar's current and future regional influence are strongly linked to its natural gas sector. With dependence on oil viewed as a strategic liability, Qatar's forward-looking investments in LNG production and export technology give the country an advantage in an increasingly popular energy commodity. Also, because it cannot be undermined in price or supply guarantees by Saudi Arabia, Qatar's LNG exports have given it considerable independence compared to its oil-dependent neighbors who are more likely to fall in line with Saudi views on most foreign policy issues.
Due to its significant LNG infrastructure investments and sizable reserves, Qatar will continue to be a key supplier of LNG for roughly the next 20 years. But with prices expected to peak within the next three to five years, Qatar faces both a shrinking profit margin and a more competitive market as regions such as North America are poised to become exporters themselves. Qatar will continue its attempts to mitigate some of these factors by encouraging its current customers to sign larger, longer-term deals — some up to 20 years — in an effort to lock in at current prices. Qatar reasonably has five to 10 years to entrench its current regional position and increasing clout on foreign policy issues.
With the ongoing unrest faced by Arab states, Qatar will have ample opportunity to capitalize on the inability or unwillingness of its neighbors to invest time and money needed to play a leadership role in regional affairs. Because Qatar's military capabilities are weak and its record of working with outside powers like the British and the Americans is viewed with some suspicion, this role will likely take the form of hosting regional discussions with often disparate attendees and sometimes advocating policies well out of step with the traditional Saudi-led conservative positions.
Despite its carefully constructed public image, Qatar lacks the tools to change the trajectory for any state in the region but itself. The closing window for economic independence means Qatar must condense the equivalent of two- to three-decades' worth of regional foreign policy involvement into only a few years to maximize its current opportunity and secure a position of influence that outlasts its LNG dominance.