What Can the Middle East Learn From What’s Happening in Qatar?

BY Tantum Collins and Tantum Collins  June 28, 2013 at 12:41 PM EDT

How will this week’s transition of power impact Qatar’s grand experiment? Photo courtesy of Tantum Collins.

Paul Solman: Tantum “Teddy” Collins was an especially stellar student in the “Grand Strategy” course I help teach at Yale. As part of the class, he spent last summer in Qatar. He’s also lived and worked in Jordan, and traveled across the Middle East. Having graduated from Yale this year with a bachelor’s degree in global affairs, he is now in Washington D.C., working on a book with retired Gen. Stanley McChrystal.

This week, Qatar’s emir, Sheikh Hamad bin Khalifa Al Thani, passed the baton to his 33-year-old son Sheikh Tamim bin Hamad Al Thani. Since there are few people anywhere who know more about the astonishingly ambitious economics of the emirate than Teddy does, I asked him to explain what’s been happening there.

Tantum Collins: By now, many in the West are somewhat familiar with Qatar — the enigmatic emirate that was largely unknown to those outside the Middle East before it came from behind to clinch the rights to host the 2022 World Cup. The scorched, Connecticut-sized spit of land has recently made headlines for its ongoing attempts to broker peace talks between the United States and the Taliban and, just days ago, for the transition of power from the emir, Sheikh Hamad bin Khalifa Al Thani, to his heir apparent Sheikh Tamim bin Hamad Al Thani.

While the latter may seem at first glance like a mundane matter of succession, it is, in reality, anything but that. Under Hamad’s rule, Qatar ascended from near-total obscurity to acquire fabulous wealth and carve out a glamorous diplomatic niche for itself.

Depending on how Tamim handles the country’s assets and problems, it could continue to develop as a cultural oasis in the Gulf, a hotspot for investment and business, and a key political node linking the Arab and Western worlds, or it could tumble backwards, one more failed experiment in a region rife with them.

A Quick Background

For most of its history, this thumb-shaped peninsula jutting into the Persian Gulf was a sparsely populated, impoverished backwater. Cartographers rarely included it on maps before the 1900s; in 1940 the national population sat at 16,000, and the state ranked as one of the poorest on earth. Through the 1960s, passports were not used at the Doha airport because the community of those who came and went was so small that airline employees knew them all by name.

Then, in the mid-20th century, Qatar stumbled upon what may have been the largest natural resource jackpot per capita in history: large oil fields and a spectacular gas field. Thanks to deft negotiation (a Qatari specialty) with outside oil and gas contractors, sound investment decisions and a pinch of luck, Doha turned these finds into explosive, sustained economic growth. In 2009, when neighboring nations saw their economies shrink, Qatar enjoyed 12 percent GDP expansion. In 2011, Qatar boasted both the world’s highest wealth per-capita and the highest GDP growth of any state — an intimidating pair of economic indicators.

Today, with a GDP on the cusp of $200 billion, Qatar has more economic heft than Iraq, Jordan, Lebanon or Oman, and has surpassed Kuwait and Bahrain to become the richest small state in the region.

These gains are the product of a singular grand strategy that Hamad has pursued over the course of his 17-year rule. GDP is only part of the equation, however. His real goal has been something much more remarkable: to transform this sleepy backwater into a world player, culturally, diplomatically and economically. He has used the state’s massive resource wealth on infrastructure projects designed to ensure Qatar’s cultural, and thus commercial, staying power long after the oil and gas fields have dried up.

The Deal in Doha

In Western media, Qatar’s strategic choices bubble up as an eclectic assortment of headline-grabbing controversies (the Taliban negotiations, the World Cup, the arming of Syrian rebels). Seen from Doha, however, these are part of a coherent whole. Since Emir Hamad came to power in 1996, ousting his father in a bloodless coup, he has aggressively sought to establish a place for Qatar at the diplomatic and cultural crossroads of the West and the Middle East.

By maintaining a list of seemingly contradictory friendships — America and Iran, Hamas and (kind of) Israel, Saudi Arabia and the Taliban — and by remaining largely unreadable on most policy issues, Qatar has become the arbiter-of-choice in a string of disputes. Led by its exceptional Foreign and Prime Minister Hamad bin Jassim bin Jaber Al Thani, now leaving office, Qatar helped resolve a decades-long internal Lebanese dispute, mediate a border disagreement between Djibouti and Eritrea, broker Sudanese peace talks, arrange a ceasefire between the Yemeni government and the separatist Houthi Movement, restore some semblance of calm between Hamas and Fatah, and even help Israel and Hamas reach a ceasefire after a flare-up of violence in Gaza last year.

The list goes on. Contrary to the Swiss model of small-country neutrality, Qatar has thrown itself into the diplomatic spotlight, without betraying any particular ideological alignment. (A large exception being its outspoken support of Arab Spring uprisings, representing a calculated, forward-looking bet that helped establish a progressive reputation). The West sees Qatar as level-headed and has used it as a diplomatic link to radical factions that cannot be dealt with directly, such as the ongoing efforts to host peace talks with the Taliban in Doha.

A politically-savvy investment strategy has further bolstered this image of Qatar as a cultural bridge. Its sovereign wealth fund — the Qatar Investment Authority (QIA) — recently made several substantial acquisitions in the United Kingdom, including Europe’s tallest building, “the Shard”; the upscale department store Harrods; One Hyde Park, the world’s most expensive apartment block; and sizable stakes in Camden Market, the London Stock Exchange, Sainsbury’s and Barclays banks, London’s Olympic Village and Heathrow airport. The U.K. has noticed: the emir found himself greeted by the queen on his last visit. The QIA also has stakes in Valentino, Tiffany, Porsche and Louis Vuitton.

It has also made less glamorous, more politically-minded purchases, such as investing $775 million in Greek gold in 2011 and launching a joint venture to inject $2.5 billion into struggling Italian industries. Icelandic economist Sigridur Benediksdottir told me that “Europe hopes Qatar will save them” from their debt crises.

At home, Qatar has embarked on a building spree designed to turn Doha, which one architect told me currently has more cranes per capita than any other city in the world, into a global destination and cultural powerhouse.

Over the past few years, ground has been broken on no fewer than a dozen new museums, many almost unthinkably extravagant. It is common for new money to turn to art — Abu Dhabi is building a 260,000 square foot franchise of the Louvre and an even larger branch of the Guggenheim — and Qatar’s royal family has done its fair share of buying up European masterpieces such as a record-breaking $250 million C├ęzanne.

But Qatar is not interested in simply importing name brand Western art: its initiatives seek to reconcile Western and indigenous elements. The Museum of Modern Arab Art collects work created since 1840 that connects to Arab culture and includes artists from Marc Chagall to Cai Guoqiang. The Orientalist Museum is dedicated to outsiders’ perceptions of the Middle East over time. Doha’s crown jewel, the Islamic Art Museum, is an I.M. Pei masterpiece built on its own island and boasting an unparalleled collection of Islamic Art.

And then there is Al-Jazeera, the news and entertainment service that has been captivating audiences, creating controversies and winning awards since its founding in 1996. Al-Jazeera’s director of development described how the network was founded by the emir to provide “accurate global news with a Middle Eastern perspective.”

Before Al-Jazeera, news in the Arab world came either from Western media outlets or from local government-sponsored propaganda. Now in its 16th year, Al-Jazeera has earned a place, he says, as a “leader of news across the globe” and is one of the world’s most influential brands. It provides live coverage of conflicts, such as the war in Afghanistan and the revolution in Libya, that other networks won’t risk covering and has won international acclaim for journalistic integrity. In 2011, then-Secretary of State Hillary Clinton praised Al-Jazeera for providing “real news” of a caliber U.S. networks failed to offer. While it has also attracted criticism, it is arguably the modern Middle East’s most important cultural emissary to the outside world.

Finally, Doha has set its sights on becoming the regional, and eventually global, leader in education — a place where rising Arab engineers, artists and statespeople can learn their trades and find inspiration.

Education City is the product of the behemoth Qatar Foundation, run by Emir Hamad’s preferred wife, Sheikha Moza. A collection of satellite campuses from prominent Western universities assembled on a 3,500-acre campus on the outskirts of Doha, it currently educates approximately 400 students. (By comparison, Harvard’s 21,000 students make do with 600 acres). On the surface, Education City resembles New York University’s campus in Abu Dhabi or Yale University’s new joint venture with the National University of Singapore.

Each of the eight Western schools selected, however, were chosen to resonate with some strand of Qatari identity: Northwestern University’s primacy in journalism is relevant to the home of Al-Jazeera; Georgetown’s School of Foreign Service focuses on the kind of diplomatic agility in which Qatar excels; Texas A&M has the expertise to educate a new generation of hydrocarbon experts. The goal, according to two Education City deans, is not just to provide a better education for Qataris but to create a research hub and springboard for the region’s rising leaders and scholars.

Education City aims to do for education what Al-Jazeera did for media: achieve unparalleled quality and a global brand, matching or exceeding what the West has to offer, while remaining culturally rooted in the Middle East. It is all part of what one of the deans called “the grand experiment” taking place in Doha. As he put it, Doha wants “to look to the world and influence the world.” The government hopes that in doing so, Doha will rise above the ranks of sterilized trade capitals, such as Singapore and Dubai, and become a New York, London or Paris instead.

Projects such as Education City, the Museum of Islamic Art, and the expansion of Al-Jazeera demonstrate a desire to balance Arab traditions and Western modernization. Compared with peer states, Qatar is making, in the words of architecture critic Nicolai Ouroussoff, “a more calculated attempt to find a balance between modernization and Islam.” Qatar’s ideal, hybrid national identity would fuse elements of conservative Islamic ideology and Western thought. Much like in its shrewd diplomacy, Qatar is not picking a side; it is creating a new one.

More than one person I spoke with in Qatar compared Emir Hamad’s ambitions to the “Golden Age” of Baghdad under Abbasid rule, which witnessed breakthroughs in trigonometry, optics, astronomy and philosophy. Powered by Baghdad’s cosmopolitanism, the Arab world became an international cultural, economical and political force. Abbasid leadership adhered to the Quran, but emphasized passages on the importance of knowledge and tolerance, and gathered Muslims and non-Muslims together in pursuit of scientific progress. To the outside world, Abbasid rule exemplified the most appealing aspects of Islam and Arab culture.

Will It Work?

Are these goals attainable? Fueled by practically bottomless wealth, spearheaded by a visionary emir, facilitated by a political structure that grants the royal family almost unchecked authority, and with only a small and relatively complacent population to appease, Doha’s odds are better than one might think. There is certainly no shortage of enthusiasts.

Obaid Younossi, director of the RAND-Qatar Policy Institute, the government’s adviser-of-choice on education reform and political matters, argues for the exceptionalism of Qatar’s ambitions — not just for Education City, but its broader attempt to remake Arab culture. A native Afghan educated in America, he sees the situation as unique because of Qatar’s extraordinary wealth, the emir’s “long-term, top-driven visionary leadership,” and the focus on programs with the potential to have “foundational impact.” Qatar, he told me, is “reaching to things that haven’t been done before.”

Carl Bang, the chief investment officer of the Qatar Foundation Endowment, also lauded the emir’s intentions and competence, saying that “he really aims to lift not just Qatar but in fact the whole region.” An official at the U.S. embassy in Qatar predicted that by 2030, Qatar will be “like Jordan but better,” serving as an ally of the West “while preserving their Arab core.” Joining this chorus of voices was a stream of businessmen, diplomats, architects and others I met while in Doha, all equal parts astounded and exhilarated by Qatar’s ascent.

Others, however, believe that the emir’s “noble vision” is at odds with “Qatarization,” a series of increasingly cushy benefits that native citizens have come to expect. Qatarization ensures employment, as well as providing a host of other benefits, ranging from interest-free loans to heavily subsidized education, to free healthcare and utilities. I spoke with two businessmen who had long lived in the country and who requested I not disclose their identities. “Qatarization guarantees that all companies in Doha — foreign, local, whatever — will be run at the highest level by Qataris,” one of them explained.

Sometimes these people are talented and driven, but more often, the companies could find more qualified candidates if given the freedom to hire based solely on merit. This not only has adverse effects on business performance, he told me, but it creates a two-tier society where expats are constantly reminded of their foreignness. It is a roadblock in the way of Doha’s cosmopolitan vision. For foreign nationals, acquiring Qatari citizenship is notoriously difficult if not impossible: a source close to the royal family told me that in an average year, only “12-15 friends of the emir will receive passports.”

For Qatar, a country used to being able to afford to have its cake and eat it too, this is an unusual difficulty, because no amount of money can appease both factions; every step towards enriching the Qatari experience further stratifies a two-tier society that alienates the newcomers Doha so badly wants to assimilate. An employee of a British think tank operating in Doha described security asking him to leave a public park because it had been reserved “for Qataris only.”

Fixing this is of great consequence for the emirate: forging a new identity would not only make Doha more pleasant, it would undergird the national character that Qatar hopes to project internationally. Without it, the country’s friendships will last only as long as its gas reserves: as Ausama Monajed of the Syrian National Council (SNC) put it, “there’s no special relationship [between the SNC and Qatar] … Doha is just a good place to have a meeting.”

Qatar seems to have all of the pieces in place, or at least under construction, for its caliphate makeover: the extravagant facilities and endless funding have made Doha a great setting for conferences, semesters abroad and short-term employment. But the Abbasid Golden Age vision will require a complex cultural ecosystem in which all residents contribute and benefit. Qatar needs to go beyond a compelling national brand to forge a new national identity that is accessible to foreigners. This was Hamad’s greatest challenge: the fundamental contradiction between the cosmopolitanism of his fantasies and the tribal nature of his country’s native culture.

Ultimately, if Doha wants to convince its talented visitors to stay, and if it intends to lay the foundation for continued growth and long-lasting “special relationships,” the newly anointed Tamim will have to master the opportunity cost of politics. This will probably require a willingness to risk offending the native Qatari population.

Qatar’s newfound assertiveness in the international sphere has proved that its rulers are capable of flexing muscle, but the continued indulgence of Qatarization suggests a reluctance to play hardball at home. Imbuing Hamad’s urban masterpiece with life will require a tougher line from Tamim: he will have to give less to and ask more of his people, and he will need to make citizenship and its benefits more accessible. If the grand strategy works, it will ultimately redound to everyone’s benefit — native citizens and newcomers alike.

Of course, the royal family has reason to be wary of pushing its people too hard: though the emir has the constitutional authority to do almost anything he wants, the political stability that enforces that authority is tenuous. There are unconfirmed but widely believed rumors that Hamad faced multiple attempts on his life, from actors both within and outside of Qatar. The forces of conservatism and ethnic privilege represent major obstacles. At a time when unpopular hereditary leaders are finding themselves deposed across the Arab world, rulers must think twice about pushing through reforms that give foreigners, especially Westerners, a stake in defining local identity.

Hamad’s decision to step down early is most likely motivated in part by this fear. Putting a younger face at the helm of the government broadcasts a progressive image to the country’s population, especially the 20-somethings that have been responsible for most of the trouble in Egypt, Tunisia and Syria. But if the total quiet of Qatar’s political scene over the past few years has indicated anything (Qatar is the only country in the region to emerge from the Arab Spring completely unscathed), it is that worries about unrest may be overblown.

Looking Forward

All of this means that 33-year-old Tamim has inherited a hefty set of responsibilities. The visionary Hamad has managed to avoid making a difficult decision; he retired before it became absolutely necessary to choose between Qatarization and internationalization. Tamim is tasked with blazing ahead on the road to continued Qatari economic and cultural relevance, hopefully without losing his job in the process.

If Tamim remains too cautious he will end up with, at best, a city-sized luxury hotel. At worst, the attempt to force organic growth of creative endeavor will dry up and wither away, like so much of the greenery lining Doha’s Corniche. If he pushes too hard, he may find himself deposed, like several of his peers in other countries, and several of his predecessors in Qatar. If he plays his cards just right, and finds enough luck in the process, Qatar may succeed in realizing its outsized vision.

Having spent most of his time prior to this transition concealed by the opacity of Qatari governance, Tamim is something of an enigma, and only days after the transfer of power, there is no real basis to make bets on which of these paths Tamim will follow. In the end, only time will tell whether the hybridized seeds of this artificial creation will flourish in the Qatari desert. The undertaking is unprecedented, ambitious, risky, and of massive consequence. If anyone can do it, it’s Qatar.


This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions