Al Khaleej seen as a big loser from Qatar isolation

Published: 06/12/2017, 7:38:16 AM

With Qatar increasingly isolated from its Gulf neighbors in an escalating geopolitical crisis, the economic and financial implications are starting to emerge, according to Bloomberg.

The country - which has been accused of supporting Islamist militant groups by Saudi Arabia, Bahrain, the United Arab Emirates and Egypt - relies on other Gulf states for about 20% of its imports and almost half of its tourists, according to Dubai-based Arqaam Capital Ltd. Billions of dollars of infrastructure projects are also at stake as it prepares to host the 2022 soccer World Cup.

"We expect the move to cut diplomatic ties with Qatar could have significant economic ramifications for its economy, but to have barely an effect on the rest of the GCC," said Arqaam's head of equity research Jaap Meijer. "We expect consumer prices in Qatar to be affected first, though economic growth and government projects should also be affected."

Dubai-based Al Khaleej Sugar Co., the world's largest port-based sugar refinery, is the U.A.E.'s only sugar refinery, according to S&P Global Platts. Saudi Arabia and the U.A.E. have stopped exporting white sugar to Qatar, ADM Investor Services International said in a report. India and European countries will be quick to meet Qatar's sugar needs, according to Yves El Mallat, chief executive officer of Bahrain's Arabian Sugar Co.