Digging Up Diplomacy: The Salwa Canal and the Saudi-Qatar Stalemate

 

With the Saudi led blockade against Qatar entering its second year, the socio-political and economic stalemate looks set to become more complex. Dr. Sophie Olver-Ellis reflects on the effect of the construction of the Salwa Canal on Qatar and Saudi Arabia.

 

Over the decades, Qatar has been branded as the rogue state of the Gulf Cooperation Council because of their alleged support of groups, governments and media outlets that are a threat to the security and stability of the already volatile region. As a result, in June 2017, a trade embargo was imposed on Qatar through the implementation of an air, land and sea blockade. In order for the embargo to be lifted, the coalition states, comprised of Saudi Arabia, the UAE, Bahrain and Egypt, set a list of 13 demands, which included Qatar ending their purported close diplomatic ties with Iran and closing down the state-run Al Jazeera news network all within ten days. Qatar refused and now the blockade is into its second year, with the stage set for it to become more complex. Instead of pursuing a diplomatic solution to the socio-political and economic stalemate, the Kingdom of Saudi Arabia has come up with another strategy- digging up the issue, literally.

 

In April 2018, the Saudi Government announced that they were accepting tenders up until 25thJune, 2018 from companies, who had expertise in digging canals and who would be able to help construct one along the Saudi-Qatari border within a year. The proposed Salwa Canal, which has an estimated cost of $750 million, will be 60 kilometres long, 200 metres wide and will be deep enough for large ships to sale through it.Economically, the canal is expected to contribute to the Kingdom’s diversification efforts promulgated by Vision 2030. Because new port cities will be built to attract sea trade with large tankers and container ships able to pass through the waterway, the canal project is expected to transform the area into a unique industrial and economic hub. Through constructing luxurious yacht piers, five-star resorts, private beach villas and offering water sports and other attractions in the marina bays, this will directly attract and enhance tourism. The Salwa Canal project, therefore, has been declared a catalyst for the Saudi economy not only because will it create thousands of employment opportunities, but because it will also make the Kingdom one of the most attractive tourist areas in the Gulf region.

 

As the maritime channel is likely to create a more direct and shorter shipping route between Saudi Arabia, the UAE, Bahrain and Kuwait, it would enable the Kingdom to further reinforce their blockade against Qatar. The waterway will essentially end Qatar’s land trade ability with the rest of the Arabian Peninsula and through the ongoing embargo, a large number of cargo ships will be required to bypass the emirate and in doing so, will further reduce Qatar’s sea trading abilities. Even though the Salwa Canal will be located one kilometre away from the Qatari border and built completely on Saudi territory and funded by Saudi and UAE investors, the Kingdom of Saudi Arabia will have complete economic ownership of the canal. This alone will have substantial geo-political repercussions; according to media outlets, the Kingdom has also proposed to build a nuclear reactor and waste facility on the canal alongside establishing an active military base. Conversely, analysts have declared such propositions surrounding the canal as a propaganda project that is beginning to backfire on Riyadh. Instead of economic stagnation, the International Monetary Fund has predicted that the Qatari economy will grow by 2.6 per cent over the coming year, which is a positive indicator, especially as economic growth stood at 2.1 per cent in 2017 when the blockade began. Qatar is also seeking to establish new trade routes, rectify their human rights record and boost their production of liquefied natural gas and essential goods such as dairy products. Despite the protracted blockade, therefore, Qatar looks to be revitalising their financial situation and surviving the diplomatic stalemate.

 

However, with no end in sight for the blockade, if the Salwa Canal is successfully completed, this will not only cut Qatar off physically from the Arabian Peninsula, effectively making it an island but it will also further isolate Qatar from their GCC counterparts socio-economically, an aim which Riyadh has not sought to hide.This project will also, in effect, signal that the Kingdom believes that relations with the only other Wahhabi state in the world is so fractured that there is little chance that diplomatic ties will be restored. Although it remains to be seen if and when the blockade will end, this longstanding stalemate brings into question once again the longevity of the Gulf Cooperation Council as the politico-economic bloc that will continue to oversee the region’s affairs.

Dr. Sophie Olver-Ellis is a political economist and works as a Research Officer for the Kuwait Programme at the London School of Economics Middle East Centre. Her research focuses on the transforming political economies of the Arabian Gulf with particular emphasis on the changing social, political and economic structures and emerging dynamics of the Gulf Cooperation Council States in the post-oil dependent era.