Warming relations between Qatar and Saudi Arabia to increase business deals
Qatari companies are now playing a significant role in the
completion of Saudi giga projects, pivotal ventures aimed at achieving Saudi
Arabia's ambitious 2030 goals to diversify its economy away from oil.
When Saudi Crown Prince Mohammed bin Salman joined Qatar’s
emir in a Bentley SUV, it symbolized a newfound camaraderie following years of
strained relations. Prince Mohammed's 2021 visit to Qatar marked the end of a
three-year political rift and sparked a surge in Qatar-Saudi business relations
that has only grown stronger since.
The uptick in business activities between Qatari and Saudi
firms spans various sectors, including railways, defense, and an innovative
project to create snow in the Saudi desert. This business renaissance is
largely credited to the prince's visit, which served as a catalyst for closer
ties.
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Following the 2022 World Cup, Qatari companies, seasoned by
a decade of intensive construction projects, sought opportunities in Saudi
Arabia. This shift has resulted in at least $10 billion in contracts,
significantly strengthening the partnership between Qatar's Sheikh Tamim bin
Hamad Al Thani and Prince Mohammed. This development is welcomed by Western
allies, keen on ensuring stability in the region.
The extent of Saudi contracts awarded to Qatari firms
post-boycott is unprecedented. These contracts are crucial for Saudi Arabia's
giga projects, which are central to the country's Vision 2030 objectives.
The relationship between the two nations contrasts sharply
with the period of discord that began in 2017, when Saudi Arabia, along with
the UAE, Bahrain, Oman, and Egypt, imposed a boycott on Qatar, accusing it of
supporting extremism and maintaining close ties with Iran—charges Qatar denied.
The rift ended in 2021 with a series of reconciliatory steps.
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“There is so much work in Saudi Arabia, I think all the
companies in the Middle East will go,” said Saif-ur-Rehman Khan, managing
director of Redco International, a Qatari construction firm. Khan highlighted
that Prince Mohammed's visit led to the formation of a joint Saudi-Qatar
committee, which identified Qatari companies well-suited for Saudi projects.
A December 2023 meeting of the Saudi-Qatari coordination
committee, described as held in a “spirit of friendship, brotherhood, and
mutual trust,” further solidified this cooperation, aiming for a
"renaissance for the two countries."
Redco, once focused solely on Qatari projects, has shifted
its operations to Saudi Arabia. The company secured its first two contracts in
the kingdom worth $3 billion and relocated over 8,000 employees and significant
equipment to an industrial zone on the Red Sea coast. This shift was
facilitated by an invitation from Saudi authorities for Qatar’s top
construction companies to bid on projects, with NEOM as a primary focus.
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NEOM, a flagship Saudi project, has seen delays, but Redco
has advanced rapidly. They built the world's largest precast concrete factory
in six months and are now working on tunnels for an underground railway and
infrastructure for Trojena, Saudi Arabia’s first ski resort.
Diplomatically, the two countries are also aligning. Saudi
Arabia supports Qatar's mediation efforts in conflicts like the Gaza war and
recognizes Qatar's recalibrated foreign policy, including its stance on Syria
and peace negotiations in Yemen and Sudan.
Defense collaboration is another burgeoning area, with
Qatar's Barzan Holdings partnering with Saudi Arabia’s SAMI to explore joint
production of weapons and defense items.
“Stronger economic ties bind the interests of Qatar and
Saudi Arabia closer together in ways that overcome the issues of the recent
past and underpin the rapid improvement in the political relationship,” said
Kristian Coates Ulrichsen, a Gulf expert at Rice University’s Baker Institute.
For Qatar, a leading liquefied natural gas exporter, this
partnership with Saudi Arabia offers an opportunity to strengthen ties with the
region's most influential country and diversify its economy.
Entrepreneurs Moutaz and Ramez Al-Khayyat, who bypassed the
Saudi-led boycott by importing 4,000 milk cows during Qatar's food shortage,
now have $7 billion in construction projects in Saudi Arabia, with plans to
double this amount.
“The door is now open,” said Moutaz Al-Khayyat, chairman of
Power International Holding. He downplays the past rift, calling it “a small
period. An incident.”
Source: https://thearabweekly.com/
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