The Qatarstrophe

The Arab world has plunged into an un-expected turbulence after Saudi Arabia, UAE, Bahrain and Egypt
cut off ties with Qatar. Eastern Libyan Government and Maldives too are in the list towards the ban
against the Qatar which has invited the suspension of diplomatic relations with Doha, apart from blocking
off land, air and sea routes to the fuel-rich nation. This unprecedented decision from neighbors may cost
Qatar, billions of dollars by slowing trade and investment and making it more expensive for the region to
borrow money as it grapples with low oil prices.

That Qatars isolation by its powerful neighbors comes just weeks after US President Donald Trump used
his Saudi visit to squarely blame Iran for fueling extremism in the region. Riyadh could be using this
opportunity to curb dissent within the Sunni flock and get them to line up behind it.

Nepal & Qatar

According to World Bank Migration and Remittance Fact Book, Nepal holds the third position among the
countries to receive highest proportion of remittance to GDP, and have largely driven poverty-reduction
in recent years. That engine of Nepals development could start misfiring as the Gulf crisis deepens.

The ratio of remittances to GDP increased from 24.2% in 2014/15 to 30.8% in 2015/16. During the
financial year 2072/73 (2015/16), total no. of Nepali citizens moving Qatar for employment were 129,038
(127,520 Males & 1,518 Females). However, till FY 2015/16, total number of Nepali citizens working at
Qatar was 971,675 (962,338 Male & 9,337 Female).
If the Gulf crisis results in an Arab war and Nepali migrant workers return from there, it will be a
disaster for our economy, says Kamal Tamang, former General Secretary of the NAFEA. A gulf war
will kill our economy, especially because Malaysia has already stopped taking migrant workers from
Nepal.

Malaysia was the biggest employer of Nepali migrant workers until a decade ago. After Qatar won a bid
in 2010 to host the FIFA world cup in 2022, the oil-rich country has surpassed Malaysia. That year, only
25,612 Nepali migrant workers went to Qatar: the number rose to 124,050 in 2015.

Qatar has nearly finished building the World Cup infrastructure, but it is still the second biggest recipient
of Nepali migrant workers. Currently, more than 600,000 Nepalese migrant workers are in Qatar. Saudi
Arabia now attracts more migrant workers than Qatar, but it is also directly involved in the current crisis.
Another 500,000 Nepalese work in Bahrain, UAE, Oman and Kuwait.

If the crisis continues in the Gulf, and the workers have to return, what will the workers do in Nepal, is
the burning question in the todays date.

Aftermath Situation

Due to the high tension arising among the Gulf countries, Qatar is likely to have a destructive impact on
Qatars economy and the living standards of its citizens and residents. It will lead to a shortage in
commodities, a huge increase in prices and inflation, and a big decline in the volume of exports due to
shutting down of production in some factories and plants. Another sector that will be impacted is
transportation and its subsectors; land, air and sea, and in particular, Qatar Airways, which is a key
contributor to the countrys GDP.

The Qatar Exchange Index plunged 7.3 per cent, erasing nearly 30 billion Qatari riyals (Dh30.26bn) off
its market cap and leaving it at its lowest level since mid-2013.

Super-markets recently viewed higher-than-normal activity. I think its better to stock up on things my
family and I need rather than being left out, a supermarket customer told Al Jazeera. A few currency
exchange outlets that Al Jazeera visited also reported a jump in transactions on Monday. If this dispute
goes on for a while, the ramifications could be huge, said an international banker based in the Gulf,
declining to be named because of political sensitivities.

Flight Schedules & Costs

On the other hand, the closure of three neighboring countries air space will force the airline to make
major alterations to its routes, which will lead to rising costs. The resultant impact has already been
observed. Etihad Airways suspended its flights to and from Doha. The UAE flag carrier does not have
direct flights to Doha from Kathmandu, but Fly-Dubai has three flights a day and many Nepalis fly that
and other budget airlines like Air Arabia to go to Qatar. Qatar Airways has three direct flights daily from
Kathmandu to Doha, but most migrant workers prefer budget airlines that stopover in UAE.
Nepali migrant workers now have limited options to fly to Qatar, said Bimal Dhakal, President of the
Nepal Association of Foreign Employment Agencies (NAFEA). They will have to buy more expensive
tickets. More expensive tickets could be just a minor problem compared to the major, long-term impact
on Nepals economy, potentially stalling GDP growth and reversing social progress, if the row intensifies.

Also, Fliers from India will now spend an additional half hour on their flights to Doha, with the
worsening crisis in the Persian Gulf prompting carriers to skip airspace over the UAE, using the flyover
of Pakistan and Iran resulting in the delay to reach the destination to reach Qataris Capital about 10 to 50
minutes.

Credit:
aNiKeT