Qatar’s Bets

The Persian Gulf emirate of Qatar is tiny, but it’s made a name for itself by placing big bets. Thanks to vast reserves of natural gas, its 2.6 million residents enjoy the world’s highest per-capita income: $129,700 a year. Qatar has acquired more than $335 billion worth of assets around the globe, buying up trophies such as London’s Shard, the tallest building in Europe. The emirate has also drawn attention as an outsized power-broker in a volatile region. Those gambles haven’t always worked out as planned. Qatar’s support for opposition groups challenging other Arab governments and its cordial approach toward Iran have enraged nearby countries, four of which severed diplomatic relations and cut off air, sea and land connections in June.

Saudi Arabia, Bahrain, the United Arab Emirates and Egypt cut ties with Qatar soon after U.S. President Donald Trump visited the region and joined the Saudi king in singling out Saudi archrival Iran as the world’s main sponsor of terrorism. The Saudis accused Qatar of supporting Iranian-backed “terrorist groups” operating in Saudi Arabia and Bahrain and of backing other “terrorist groups aiming to destabilize the region.” Qatar called the accusations baseless. The diplomatic crisis comes on top of other recent woes. After huge investments made Qatar the world’s largest exporter of liquefied natural gas, a global production glut has cut prices and driven a downturn in the country’s fortunes. Emir Sheikh Tamim Bin Hamad Al Thani, who assumed the throne in 2013, has focused more on domestic affairs than foreign adventures. Qatar’s first budget deficit in 15 years has prompted the government to restrain spending. The state-backed global TV station Al Jazeera has shed employees and shuttered its U.S. operations. After a probe by soccer’s governing body, Qatar was cleared of charges that it secured the right to host the 2022 World Cup through bribery. Still, the preparations have been clouded by reports of abuse of migrant workers building the facilities. Nevertheless, the country’s sovereign wealth fund hasn’t lost its appetite for high-profile deals: Qatar has pumped money into Turkey’s biggest poultry producer and Russian oil giant Rosneft. It’s the third-biggest shareholder in Germany’s Volkswagen and remains one of the largest investors in Barclays, after it helped rescue the U.K. bank during the 2008 financial crisis. Qatar has committed $35 billion to invest in American assets.