Gulf Allies Recall Envoys From Qatar After Security Row

Saudi Arabia and two Arab allies recalled their envoys from Qatar, accusing the state that hosts Al-Jazeera television of undermining regional security in a dispute that drove Gulf stocks down.

The United Arab Emirates and Bahrain joined Saudi Arabia in pulling out the envoys “to protect security and stability,” they said in a joint statement. The decision follows a foreign ministers meeting in Riyadh yesterday, which failed to persuade Qatar to halt support for those “who threaten the security and stability” of the six-member Gulf Cooperation Council.

Qatar’s government said it regrets the decision and won’t retaliate with its own expulsions, according to the official Qatar News Agency.

Qatar’s backing for the Muslim Brotherhood, especially in Egypt, has drawn criticism from other Gulf nations that have cracked down on the Islamist organization. The dispute threatens to undermine efforts to integrate GCC economies, which supply about a fifth of the world’s crude oil, and casts a shadow over the region’s security cooperation. Plans to speed integration among members of the alliance, created in 1981, have made little progress in recent years.

Saudi Arabia and other Gulf states say the Muslim Brotherhood is criticizing GCC countries from Qatar, Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis in Dubai, said in a phone interview. “If Qatar doesn’t change its behavior, the GCC as a regional bloc will be damaged significantly,” he said.

Stocks Tumble

The Gulf states combined gross domestic product is $1.6 trillion, according to the latest data on the GCC Secretariat’s website. Saudi Arabia and the United Arab Emirates have the two largest economies in the Middle East.

Qatar’s benchmark stock index tumbled 2.1 percent, the most since August. Dubai’s DFM General Index declined 0.5 percent.

“We hope it’s a temporary blip,” Yaser Abushaban, executive director for asset management at Emirates Investment Bank PJSC in Dubai, said by telephone today. “It’s not yet clear how this impacts Qatar’s relationship with the rest of the GCC members in the longer term, which could have implications for investing in Qatari markets and instruments.”

Qatar sent billions of dollars of aid to Egypt during Mohamed Mursi’s presidency from 2012-2013. Since Mursi’s overthrow by the army in July, Egypt has returned some of the money. Saudi Arabia, the U.A.E. and Kuwait have backed the military takeover and pledged $15 billion in aid.

‘Hostile Media’

Since the start of the Arab unrest in 2011, Saudi Arabia has tried to strengthen security cooperation among the six member group, which also includes Oman and Kuwait.

Instead, tensions within the GCC have worsened this year. Last month, the U.A.E. issued a letter of protest in response to criticism by Qatar-based cleric Yusuf al-Qaradawi, who has close ties with Qatari royals and expressed support for the Brotherhood. Egypt last month summoned the Qatari charge d’affaires to demand the handover of Islamists who they alleged had found refuge in Doha.

The withdrawal of the ambassadors reflects “the insistence of the other side to interfere in the domestic affairs of countries,” Egyptian Foreign Ministry spokesman Badr Abdelatty said by phone.

Qatar has failed to honor a pledge to refrain from supporting organizations, individuals or “hostile media” that represent threats to Gulf security and stability, Bahrain, Saudi Arabia and the U.A.E. said in the statement today. Egypt put Al-Jazeera journalists on trial last month on terrorism charges.

“This could just be a measure to try to get Qatar more on board with GCC policies,” Wafa Alsayed, a research analyst at Bahrain-based IISS-Middle East, said in a phone interview. “It all depends on how Qatar reacts.”

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