A year into his reign, Qatar’s emir is finding it takes more than a checkbook to win friends. The stock index in Doha sank by the most in the world on June 3 while a panel looks into alleged corruption in Qatar’s selection to host the 2022 World Cup. Since Sheikh Tamim bin Hamad al-Thani took power in June last year, three neighboring countries withdrew ambassadors over Qatar’s foreign policy, a hostile Egyptian government accused the emirate of giving sanctuary to the opposition, and the Syrian rebels backed by the emirate faltered in a three-year civil war.
“There seems to be some disarray in Doha about how to exactly deal with all these mounting problems,” Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis in Dubai, said Wednesday. “It’s apparent that these are issues from the previous government and the current emir is trying to weather these events.”
Under the 34-year-old emir’s father, Sheikh Hamad bin Khalifa al-Thani, Qatar used the world’s third-largest gas reserves to buy stakes in Barclays PLC, Volkswagen AG and purchased London’s Harrods department store. It supported Libyan and Syrian uprisings, doled out billions to Egypt’s first Islamist government and won the right to host the world’s most-watched sporting event.
Now, some of the $200 billion of pre-World Cup spending is threatened, while projects such as a metro and rail system are behind schedule. Doha’s new airport opened in April, six years later than planned.
“It has been a rough introduction to geopolitics for the young new emir,” Jim Krane, a Gulf and energy research fellow at Rice University’s Baker Institute, said Tuesday. “He has had to assume his father’s mantle and has had to expand or cope with some controversial policies.”
The QE Index dropped 2.4 percent on June 3, the most among more than 90 stock benchmarks tracked by Bloomberg globally, as a panel set up by football world governing body FIFA prepared a report on possible corruption in the awarding of the tournament to the Gulf state in 2010. The index rose 0.7 percent Thursday, trimming this week’s losses to 3.4 percent.
The U.K.’s Sunday Times reported on June 1 that payments were made to football officials in return for support for Qatar’s bid to stage the tournament. The newspaper said it was passed millions of documents by what it described as a senior FIFA official. It alleged they showed former FIFA vice president Mohamed bin Hammam, a Qatari, paid more than $5 million to football officials mainly in Africa.
Qatar 2022 World Cup organizers denied the allegations and said in a statement Qatar won because its bid for the event was the best.
Sheikh Tamim assumed power after his father abdicated and is the youngest leader in the six-nation Gulf Cooperation Council. He acquired influence over a decade as crown prince. A graduate of the U.K.’s Royal Military Academy Sandhurst in 1998, he heads a country of 2 million people with the highest per capita gross domestic product in the world, thanks to its vast reserves of natural gas, according to the International Monetary Fund.
An official at the emir’s office said nobody was available to comment on his year leading the country.
“What’s happened in Qatar is the power has been moved to the son while the father is strong,” Sheikh Hamad bin Jassim bin Jabr al-Thani, Qatar’s prime minister under the former emir, said in an interview with Charlie Rose aired on May 14. “We could see, after almost a year, he is doing a good job.”
Yet the World Cup controversy caps a time when he has been confronted with a series of problems at home and abroad.
A week into his rule, Egypt’s military overthrew Muslim Brotherhood President Mohammad Morsi. Qatar backed Morsi with $8 billion of financial support and his toppling soured relations with the most-populous Arab state.
The Egyptian dispute also affected Qatar’s relations with its Gulf neighbors, who supported the military ouster of Morsi. Saudi Arabia, the United Arab Emirates and Bahrain withdrew their ambassadors from Doha in March.
“To me there are no real success to date except for some minor achievements,” Karasik said.
The QE index, while down this week, has risen 27 percent this year.
The increase came after MSCI Inc. upgraded Qatar to emerging market status.
While Sheikh Tamim helped mediate the May 31 freeing of U.S. Army Sergeant Bowe Bergdahl in exchange for five Taliban prisoners held at Guantanamo Bay, the deal represents another “risky international relations proposition,” Krane said.
The mediation was similar to past diplomatic efforts that ultimately backfired on the Qataris, he said. Qatar may be “seen as this vanguard of peacemaking in the region,” he said. “If it goes the other way, they will be seen as meddling.”
At home, Qatar’s development has been beset by delays and escalating costs. A $15 billion airport opened in April, a decade after Bechtel Group Inc. was awarded the $5 billion contract. The country plans to build eight World Cup stadiums, the organizing committee’s Senior Project Manager Ghanim al-Kuwari said in April. Twelve were originally planned. Tunnel drilling for a $35 billion metro and rail system is yet to begin and a year behind schedule.
Qatar won the right to host the football tournament at an awards ceremony in Zurich in 2010, beating out the U.S., Australia, Japan and South Korea. Sheikh Hamad and his wife Sheikha Mozah bint Nasser al-Missned were pictured on stage holding the World Cup trophy.
Qatar was the only candidate that FIFA ranked “high” in operational risk because nearly all the facilities for the event needed to be constructed from scratch.
Since then, the country has come under scrutiny for its treatment of migrant workers, who Amnesty International said in a report last November suffer “widespread and routine abuse.” FIFA is also pondering moving the tournament to winter because summer temperatures in the Gulf state can reach 50 Celsius.
Gala Coral Group Ltd., a U.K.-based betting service, stopped accepting wagers on Qatar losing the right to host the 2022 World Cup because its oddsmakers believe there’s a good chance the tournament will be taken away from the desert emirate, spokesman John Hill said on June 3.
“Brand Qatar took a beating,” Sultan al-Qassemi, a UAE writer and commentator on Arab affairs, said Wednesday. “Their investment of billions have been affected by allegations over a minute amount compared to how much they really invested in trying to promote their brand.”