Qatar seeks fivefold increase in trade with Iran

CAIRO – 27 November 2017: Iranian Foreign Minister Mohammad Javad Zarif met Qatari Minister of Economy and Commerce Sheikh Ahmed bin Jassim Al-Thani on Sunday to discuss the proposal made by Qatar to increase the trade exchange between the two countries fivefold, amid Qatar’s attempts to recover its economy that has collapsed since the boycott.

During the meeting held between Zarif and Al-Thani, both stressed the importance of lifting all the trade restrictions and facilitating an economic exchange between the two countries.

Iranian Minister of Industry, Mines and Business Mohammad Shariatmadari revealed that the current level of annual trade between Iran and Qatar stands below $1 billion. Doha’s proposal sees that trade increase to as high as $5 billion annually.

Al-Thani said that Iran has previously played an important role as a middleman, facilitating trade to and from other countries such as Turkey. He pointed out that the export volume between Iran and Qatar has only reached $97 million since the crisis despite agreements signed between them.

During the visit, Iran, Qatar and Turkey signed a trilateral agreement aimed at boosting trade. The deal would facilitate the process of transiting goods between the three countries and overcoming the obstacles created by the boycott.

Shariatmadari said that Qatar seeks to expand ties with Iran in all sectors because of their declining economic growth after the Saudi-led blockade against them was instated, according to a report by Iran’s IRNA news agency.

International reports have confirmed that Qatar’s economy has been under pressure for the last five months after the Gulf diplomatic crisis first arose.

A study conducted by Coface Company in June 2017 stressed that the prolongation of the diplomatic crisis between Qatar and its neighbors would cause great challenges in the medium term for Qatar’s economy.

If the crisis continues, Qatar’s import costs would escalate, further impeding the growth of many sectors such as construction, because the prices of materials would rise.

“This would dampen the country’s growth performance despite intervention from the government to reduce financial and fiscal risks,” read the study. Continued political uncertainty would reduce investments into Qatar and weaken their economy.

In addition, Qatar’s foreign exchange reserves have declined 25 percent since September according to official data announced by Doha’s National Bank in November.

The official data, published on the bank’s website, showed that the foreign exchange reserves declined to 6 billion riyals ($1.6 billion) last September, compared to the same month last year when they amounted to 173.7 billion riyals ($47.7 billion).

On June 5, Egypt, Saudi Arabia, the UAE and Bahrain decided to cut all diplomatic ties with Qatar, hurling allegations that the state supports terrorism. Ports and airspace were cut off to Qatari vessels. However, several Qatari media outlets denied the existence of any economic crisis in Doha.