The Only Way Out Of The Qatar Crisis

Authored by Ahmed Chari via The Strategic Culture Foundation,

Qatar has been known for years as a small peninsula nation that punches far above its weight. Its immense oil wealth and enormous influence, through its English- and Arabic-language Al Jazeera channels, have given it diplomatic clout across the Arab world. Its soft power has been felt in negotiations in Darfur, Tripoli, Sanaa and elsewhere. Everywhere it has been either admired or envied.

Now Qatar is on its back feet, fighting off criticism from all sides. Qatar’s candidate to run UNESCO is now almost certain to lose; a few months earlier, he was the frontrunner. Activists are pressing FIFA to bar Qatar from hosting the World Cup. Pressure is mounting to close the U.S. air base in Qatar; U.S. Air Force general Charles Wald, who opened the base in 2001, is now, in retirement, publicly calling for its closure. A coalition of thirty-four thousand predominantly African American churches protested Qatar in Washington, DC, on June 28, citing Qatar’s persecution of Christians, Jews and other religious minorities. (Qatar bans crosses on the outside of churches and bars public prayer by Christians, even though there may be more Christians in the country than the three hundred thousand native Qataris.) The protest, outside Qatar’s embassy at Twenty-Fifth and M Streets, is the first-ever public demonstration against Qatar in Washington. It won’t be the last.

Even more dramatically, Qatar’s neighbors and allies have turned against it. Saudi Arabia, Egypt, Bahrain and the United Arab Emirates have cut diplomatic ties with Qatar and closed their air and sea ports to Qatar’s planes and ships. The Arab-language media is full of venom directed at Qatar. Now it is either pitied or feared.

What happened? Qatar was found to be funding the enemies of America and its Arab allies. Washington policymakers are concerned that Qatar has funded, according to the U.S. State department, Al Qaeda affiliates in Syria as well as elements of ISIS—the very groups America is bombing in its campaign to liberate northern Iraq. It also supports Hamas, which both the United States and EU have designated as a terrorist organization. Bahrain believes that Qatar is supporting armed opposition groups against its royal family. The Saudis fault Qatar’s financial support to the Yemen-based Houthi rebels (opposed to the Saudi regime) as well as Qatar’s backing for violent opposition groups in the Saudi province of Al Qatif, which is mostly Shia.

Meanwhile, Qatar has offered a sanctuary to the Muslim Brotherhood and known terrorists. The oil sheikhdom also shelters the Muslim Brotherhood’s spiritual guide, Yusuf al-Qaradawi; Khaled Meshal, who was until recently the leader of Hamas; and Abbassi Madani, an Algerian Islamist leader—as well as many Taliban leaders. Nor was Qatar simply giving these extremists a roof and a cot. It gave them a platform, through Al Jazeera, to raise funds, woo followers and boost their prestige.

All of this duplicity and support might have been tolerable, as it too often was before the September 11 attacks, were it not for the Arab world’s confrontation with Iran. The Islamic Republic is already engaged in both a direct and a proxy war against the Sunni states. Iran’s state-run broadcasts refer to Bahrain as Iran’s “eighteenth province,” even though Persians have not ruled there for some three centuries, and call on believers to end Saudi control over the Muslim holy places in Mecca and Medina. The UAE has a bitter territorial dispute with Iran. And let’s not forget that Iran is developing atomic weapons and the missiles to carry them; it may be planning to settle its religious and regional arguments with a Hiroshima-style blast.

In contrast with its neighbors’ conflicts with Iran, Qatar is in business with the Islamic Republic. It shares with Iran the Pars Sud gas field, one of the world’s largest.

While Iran was under embargo, Qatar continued to sell Iranian natural gas to Europe. The shared gas field gave Qatar the perfect cover to help its partner in crime, Iran. Yet shipping by sea is slow, costly and risky. Qatar proposed a pipeline across Syria to move Iran’s energy products (as well as its own) to the power-starved European market. A pipeline would have cut costs while strengthening Qatar’s hand. The Syrian dictator soon put an end to this pipe dream.

In short, Qatar’s support for Iran was the last straw for its neighbors. The U.S. State Department is trying to be neutral, and is asking for evidence of Qatar’s transgressions. Meanwhile, President Donald Trump has been far clearer: he has demanded that Qatar stop funding America’s enemies.

Clearly, Qatar must stop opening the money spigot for groups designated as terrorists by its allies, and it should turn over the terror leaders it is hosting to face justice in their native lands.

The U.S. State Department should also invite Morocco to help. Iran, and indirectly Qatar, is backing armed uprisings by minority Shia groups across the Sunni-majority Arab world. Morocco’s king, Mohammed VI, is also his kingdom’s supreme religious ruler. His words and moderate religious teachings have calmed restive Shia populations and inspired them to oppose violence. Under the king’s leadership, Morocco is now enjoying a new influence in Africa. Mohammed VI, as a spokesman for political and religious moderation, is an important voice to combat Shia uprisings and Sunni reprisals.

Qatar must stop fanning the flames of Islamic division, and Morocco and the Gulf Arabs should be given a real chance to head off a religious civil war between Sunnis and Shia, which could cost millions of lives in a war that could drag on for decades.

We have come to a time when confrontation with Qatar will produce peace, and compromising will lead to war. Trump’s instincts are right. If Qatar doesn’t change, the world around it will.

Illinois House Approves Historic 32% Tax Increase, Governor Vows Veto

With Illinois, which on Saturday morning entered its third fiscal year without a budget, facing a catastrophic downgrade, late on Sunday evening the Illinois House approved the most controversial element of a budget package, a tax hike which will increase the income tax rate by 32% from 3.75% to 4.95%, and the corporate income tax rate from 5.25% to 7%, to try and end a historic budget impasse. The bill passed 72-45. The House also approved a $36 billion spending plan minutes later on a 81-34 vote. According to the Sun Times, it cleared an initial hurdle on Friday with 23 Republicans voting “yes.”

“While no one could say this was an easy decision, it was the right decision,” House Speaker Mike Madigan said after the spending bill vote. “There is more work to be done.” Dems said they would work with Republicans on other resolution of other issues on table.

The proposed tax increase will now head back to the Illinois Senate, which approved a revenue bill on May 23 with all Democratic votes as part of its “grand bargain” package. But Governor Bruce Rauner has said he’ll only support an income tax hike if it’s limited to four years and paired with a four-year property tax freeze. He’s also still seeking changes in workers’ compensation and pensions.

Commenting on the just passed House bill, Rauner said he’ll veto the revenue bill.

I will veto Mike Madigan’s permanent 32% tax hike. Illinois families don’t deserve to have more of the hard-earned money taken from them when the legislature has done little to restore confidence in government or grow jobs,” Rauner said.

“Illinois families deserve more jobs, property tax relief and term limits. But tonight they got more of the same.” He also said in an emailed statement that “if the legislature is willing to pass the largest tax hike in state history with no reforms, then we must engage citizens and redouble our efforts to change the state.”

Some commentators promptly countered that Rauner’s veto will likely be overriden.

The tax bill passed with some essential Republican support: it needed 71 votes. But Illinois House Republican Leader Jim Durkin questioned how it will address the state’s $14 billion backlog. Durkin is seeking to get Rauner the “balanced budget package,” he wants, which includes spending reductions and “meaningful reforms.”

“I am disappointed that we’re taking this up at this moment when there has been significant, significant progress to address the priorities of the governor and also the priorities of this caucus,” Durkin said.

 

There are, of course, political ramifications to supporting a tax hike, on both sides of the aisle. Some House Democrats were expected to vote no to try to shield themselves from Illinois Republican Party attacks in next year’s election. But some House Republicans, knowing they’d too be targeted for supporting it. said there’s no other choice.

Others were even more fatalistic: “If I lose my seat so be it,” state Rep. Michael Unes, R-Pekin said, adding the state shouldn’t have gotten so close to a financial collapse. “Without this, we will lose thousands of lives and thousands of jobs and the alternative is so much worse. I don’t like this. This is not easy. This is really, really difficult,” Unes said. “But the alternative is much worse than this. The alternative is literally taking our state off the cliff.”

David Harris was among the Republicans who supported the bill, while also urging the governor to sign the revenue and spending bills if passed: “Have the courage to do what is right and bring this madness to an end.” 

“I was not elected as a state legislator to help preside over the financial destruction of this great state,” Harris said. “I respect my colleagues who are voting no. But to me, enough is enough.”

Meanwhile, changes made by House Democrats from the original Senate bill include the removal of streaming and satellite fees. It also closed corporate tax loopholes, increased the earned income tax credit, and restored the research and development and manufacturers’ tax credit to attract more businesses.

House Democrats filed amendments to both the tax and spending measures on Sunday, which included nearly $400 million more in cuts. Although some House Republicans voiced frustrations over changes, House Democrats said they were reflective of topics discussed during negotiations.

It is unclear if the passed tax increase will be sufficient to placate S&P. Recall July 1 was the date when the credit agencies said they would drop the state to “junk” status without a budget. Ultimately, the fate of Illinois’ credit rating is now in the hands of Rauner, and whether and how fast his imminent veto is overriden.

Ultimately, Illinois faces a lose-lose dilemma: get junked and see its funding costs soar, or save its lowest possible investment grade rating, and watch as what is already the worst metropolitan exodus (recently the population of Chicago shrank the most of any US city), go into overdrive as tens of thousands more scramble to escape the state’s soaring tax rates.

Could climate risk disclosure be the new bottom line for Australian companies?

A new global report is putting pressure on publicly listed companies to disclose their risk to climate change

Some of Australia’s largest listed companies, including Woodside, Rio Tinto and Santos, are likely to face sweeping changes to the way in which they model, plan for and disclose risk from climate change to investors. How they respond will affect their ability to attract funding from lenders, insurers and superannuation funds who are under pressure to stress-test investments for a carbon-constrained future.

The release last week of a report by the Financial Stability Board’s taskforce on climate-related financial disclosures is expected to add pressure on publicly listed companies to formalise their climate risk disclosure practices – particularly through scenario analysis – or risk investors pulling finance and rating agencies making assumptions about their risk profile.

Related: No more business as usual: the corporates stepping up to save the planet

Related: Business is leading the transition to renewables while politicians dither

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