Things in Qatar are looking grim. Back in April, the country opened up a Festival City retail development in Doha for $1.8 billion dollars. Foreign tourists and investors were looking to Qatar for shopping expense which would help Qatar be an attractive destination and help the economy, which would ultimately help the country.
This news turned sour this week because about five countries have cut ties with Qatar, putting travel and citizens in a black hole. The fallout happened between Yemen, Bahrain, Egypt, UAE, and Saudi Arabia. To them, it might be political, but to Qatar, this could cost them everything.
Isolation to Qatar has been finalized, meaning that travel by air, land, and sea are not allowed. All these countries have also asked Qatari citizens to exit their countries and go back home and diplomats are in the process of getting expelled. The rise of events has caused the Qatari stock market to crumble.
Apparently, the situation began because other countries found out that the Qatari government might have paid blacklisted al-Qaeda offshoots and security officials 1 billion dollars because the country wants the release of the Royal family hostages that al-Qaeda has. There are concerns about Qatar’s economic situation and if it ends badly, the luxury goods industry could plummet.
A wealth fund called Qatar Investment Authority is placed on the department store Harrods and they have investments with Balmain, Valentino, and Anya Hindmarch with the near possibility of Jimmy Choo landing in the ranks. The businesses are the most vulnerable as the severed ties could potentially mean a loss of profit and market power. The apparel and footwear market is worth $1.3 billion and by 2019, it was predicted to rise by 51 percent. It sounds as if this year will be a difficult one for Qatar as a downside could be happening.
Logistics are the main concern because a handful of brands distribute to Qatar from UAE, one of the countries who does not want anything to do with Qatar. Qatar also imports from Europe through UAE, making Qatar have two major problems. The country relied on the shipments from UAE and one port has already banned ships carrying the Qatari flag.
Spending procedures for consumers are warned of what is going on, but many of facing a dilemma because they need the shipments. Right now, there is no way to repair relations, but fiscal buffers make it that much harder even though it is not under direct threat.
The tourism industry could suffer if things are panning out this way. Qatar is a small country, but they do rake in tourists and this now poses as a threat for high-end fashion brands such as Dolce and Gabbana and Prada. In 2022, Qatar had announced that they were having the FIFA World Cup hosted there, which was expected to bring in an abundance of people, but that dream is now shattered. The row between countries has caused a pause of the constructions of new buildings.
The political riff has convinced Qatar players to not comment on stories. Although Qatar is not changing their economic forecasts, it still is such a horrible situation. The country has hope that the ties will be resolved once again and things will go back to normal, but it is a lot to ask for.
Qatar is pulling away from getting too much involved with what is proceeding because space is probably what these feuding countries need right now. It is up to the five countries to come to an agreement about uniting with Qatar or not do anything different at all.
Featured Image via Asergeev