Qatar hopes for returns after backing Libyan winners

DUBAI/DOHA Wed Aug 24, 2011 11:04pm IST

A rebel makes the victory sign near Bab Al-Aziziya in Tripoli August 24, 2011. REUTERS/Louafi Larbi

A rebel makes the victory sign near Bab Al-Aziziya in Tripoli August 24, 2011.

Credit: Reuters/Louafi Larbi

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DUBAI/DOHA (Reuters) - Qatar was one of the first countries to back Libyan rebels seeking to overthrow its one-time friend Muammar Gaddafi and with his 42-year-old rule collapsing, the natural gas exporter hopes to reap the political and economic rewards.

The tiny Gulf Arab state, which sought to establish itself as a force independent of regional power Saudi Arabia following a bloodless coup in 1995, stuck its neck out among Arab states to support the rebels and the NATO air operation.

Qatar was one of the first countries to recognise the rebel's National Transitional Council (NTC) as the legitimate authority in Libya and supplied rebels with water, weapons, more than $400 million in aid, and gave help with selling and marketing Libyan oil.

Qatar was also instrumental in getting Arab League support for the UN-mandated "no-fly zone", provided fighter jets to enforce it and, analysts say, offered financial guarantees to NATO if the war dragged on.

Gaddafi's overthrow would have been a lot tougher had Qatar not been so involved.

"Without their financial support, it would not have happened. The Qatari role was not only essential, it was the cornerstone of the whole effort," said analyst Ghanem Nuseibeh of Cornerstone Global Associates, who visited Doha last week.

Qatar's help was so great that Libyan rebel officials are now making subtle efforts to distance themselves in public.

Gaddafi spokesman Moussa Ibrahim has attacked the foreigners backing the rebels saying they want to snatch the spoils of war, and such nationalist sentiment could become a headache for the NTC.

"Qatar rescued us during a crisis, to help us generate some income. But once the political and economic embargoes are lifted, the Libyan people will resume production of oil," NTC prime minister Mahmoud Jibril told a news conference on Tuesday. Jibril was in Doha on the eve of a meeting Qatar proposed this week to organise $2.5 billion in international aid.

FRONT SEAT IN LIBYA

Analysts say Qatar -- which has little significant financial interests in the North African state -- could be hoping for a front seat in its economic development planning.

"There is likely to be a significant advisory role for Qatar and probably prime investment opportunities for Qatar, should they choose to follow up on their courageous initial decision to stand against Gaddafi," said David Roberts of the London-based Royal United Services Institute (RUSI).

Most intriguing perhaps is what Qatar, which hosts a U.S. military base, might be hoping to achieve in the energy sector.

Libya is a major oil producer but had not yet engaged in large-scale natural gas exploration and development. Qatar is the world's largest exporter of liquefied natural gas (LNG) with the world's third-largest gas reserves -- the wealth that has transformed a state of only 1.7 million people into a major regional power.

Now Qatar will be on hand to influence the emergence of a potential new natural gas competitor, said an Arab writer familiar with Qatar who requested anonymity.

"They won't stop it but want to have a stake in what is done. They couldn't have done that with Gaddafi, though the Emir was a personal friend," the newspaper columnist said.

"Either the country will be torn apart in a protracted low-intensity conflict, in which case there won't be any gas, or it settles down and the Libyans look at their gas reserves, in which case the Qataris will be there."

Analyst Samuel Ciszuk of IHS Global Insight said Libya's limited LNG facilities were in a bad state before the war, but saw potential for joint projects such as marketing Libya's oil and gas.

"The Libyans now will have to focus on rebuilding, not on launching new projects, and Qatar can help with that. They can likely coordinate a lot of things together," Ciszuk said.

Qatar's forward position was evident in media coverage. Al Jazeera, the Qatar-owned pan-Arab broadcaster described in U.S. diplomatic cables as a "bargaining tool" in Qatari foreign policy, was among the first with images at each stage of the battle over Tripoli.

LEADER OF THE ARABS

Analysts say Qatar's leadership speaks in grandiose terms of effecting an Arab renaissance with its wealth. Doha has a prestigious museum of Islamic art and last year opened a museum of contemporary Arab art.

"They appear to be becoming, and definitely want to be seen as, leaders of an Arab renaissance, rather than an Arab Spring'," said Nuseibeh. "Now all the pieces are coming together, whether it's political, economic or cultural."

With vast resources to disperse among the three major tribes of its population of about 260,000 nationals, Qatar sees itself as insulated from the popular uprisings -- the Arab Spring -- spreading through the region.

Emir Hamad bin Khalifa Al-Thani and a small group of family members dominate decision-making, with cabinet and an unelected Shura Council advising, though there is one elected municipal council.

Al Jazeera has played down protest movements in the other Gulf monarchies, while cheering revolution in Libya, Egypt, Tunisia, Syria and Yemen.

David Roberts of RUSI, one of a number of think tanks invited to open branches in Doha, said Qatar's leaders had the right to bask in the success of their Libya decision given the risks it carried.

"One must never forget that this was a risky decision, for no one was at all certain that the rebel's cause would lead ultimately to success and their failure would have had serious, likely security-related repercussions for Qatar," he said.

(Writing by Andrew Hammond; Editing by Matthew Jones)

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