Bloomberg news report This week shed new light on Luxembourg-based Banque Havilland’s 2017 proposal to allegedly destabilize Qatar’s economy on behalf of one of its biggest clients, Mohammed bin Zayed, Crown Prince of Abu Dhabi and de facto ruler of the United Arab Emirates.
In June 2017, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed a diplomatic, trade and tourism boycott on Qatar.
At the heart of this problem is the health of Qatar’s currency and economy, which Doha says has come under attack by banks determined to pressure it to surrender to demands from countries blocking the blockade. .
But more than three years after the blockade, Qatar’s economy has become more self-sufficient and resilient, adapting in ways that could now help the country weather the global coronavirus crisis.
A rapprochement in the Gulf crisis may also be in sight.
Speaking at a press conference on Wednesday, Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani said there were no obstacles to resolving the Gulf crisis at the political level, just days after confirming that “movement” was taken on a resolution.
While the prospects for a solution look bright for the new year, the economic effects of the blockade remain a significant problem.
Qatar has learned to weather the storm economically during the last three years of the blockade.
Before the restrictions, Qatar imported 90 percent of its food. Over the past three years, it has adapted, opening national dairy and meat farms and increasing its trade with Turkey and Iran.
Like nations around the world, Qatar is now grappling with the economic fallout from the coronavirus pandemic and falling energy prices, and it faces its biggest budget deficit since the blockade began.
But the resilience and agility brought by Qatar in dealing with the Gulf crisis could also bear fruit in managing the economic implications of the pandemic.
“Financial buffers remain sufficient” in Qatar, according to an International Monetary Fund report released earlier this month, and the country is expected to increase its GDP by 2.5% in 2021, the second highest rate among countries in the Gulf Cooperation Council.
The Gulf saga has deep roots. Qatar was accused of supporting “terrorism”, of being too close to Iran and of interfering in the internal affairs of other countries.
The blockade was aimed at harming Qatar’s economy and forcing its government to accept demands from the four nations, which included shutting down the Al Jazeera media network, downgrading diplomatic relations with Iran, and ending military cooperation. with Turkey, as well as the severing of ties with what the bloc considered to be “terrorist groups”.
The lobbying campaign also had a financial aspect.
Following the severance of relations, Qatar alleges that three banks – the First Abu Dhabi Bank of the United Arab Emirates, Samba Bank of Saudi Arabia and Bank Havilland – have sought to sow economic instability by undermining confidence in Qatar currency and bonds, according to a legal action filed by Qatar in London and New York in 2019.
In a press release announcing the trial, the government claims the banks had attempted to weaken the Qatari riyal by “submitting fraudulent quotes to New York-based exchange platforms, to manipulate New York-based indices, and disrupting financial markets in New York, where significant Qatari assets are owned and many investors in Qatar. are situated”.
Qatar has spent billions to strengthen its monetary anchoring and its economy, and “while financial market manipulation has failed in its efforts to undermine confidence in the Qatari riyal and Qatar, it has nonetheless caused economic losses,” he said. declared the government.
As proof of its allegations of financial market manipulation, Qatar brings up a 2017 plan created by a former Bank Havilland analyst for an alleged attack on Qatar’s economy, condensed into a presentation with a mission that reads : “Control the yield curve, decide on the future”.
The presentation was sent to the UAE Ambassador to the United States, Yousef al-Otaiba, by a former British intelligence officer who worked as a consultant for Bank Havilland and adviser to Crown Prince of Abu Dhabi Mohammed ben Zayed (MBZ), Bloomberg News reported. this week.
The screenshots of the presentation were publicly revealed after the al-Otaiba email hack, and The Intercept was the first to report on them in November 2017. The presentation file had been recorded under the name “Rowland Banque Havilland” on al-Otaiba’s computer and is now part of Qatar’s lawsuit against the bank.
“Maintain the [currency] Anchoring requires intensive use of the central bank’s foreign exchange reserves, ”another mission statement in the presentation read. This is exactly what happened.
Qatar’s government has said it spent billions to defend its currency peg and protect its financial system before Bank Havilland’s presentation was made public. In court in April, lawyers for Qatar put it simply: The bank’s executives were “caught with their pants down” when the plan was unveiled, Bloomberg News reported.
Banque Havilland has argued in court that the presentation was created in August 2017, two months after the start of the Qatar blockade, as a “risk management strategy to protect the UAE’s holdings of Qatari bonds” , wrote Bloomberg News reporters, not a plan to wage an economic war.
“Bank Havilland strongly denies any allegation of wrongdoing or improper conduct by the State of Qatar,” a bank spokesperson told Bloomberg News. “The bank has not participated in any conspiracy against Qatar and rejects all of Qatar’s allegations.”
The publication of the Bloomberg News report dealing with MBZ’s relationship with Bank Havilland – and its unorthodox work on its behalf – has drawn a lot of attention.