What could this mean for Qatar's economy and people doing business there?
With
a population of about 2.7 million people, this tiny nation on the
north-east coast of the Arabian Peninsula is trying to punch above its
weight.
People know about it thanks in part to its national
airline (Qatar Airways), its international news station (Al Jazeera) and
through sport (notably winning the 2022 football World Cup and being a
former sponsor of perhaps the world's most famous club, Barcelona).
And with a distinctive skyline in the capital Doha, it has succeeded in attracting multinationals to open offices there.
So these latest developments mean there's a lot at stake.
Flights
Abu
Dhabi's Etihad Airways and Dubai's Emirates are suspending all flights
to and from Doha, starting from Tuesday morning. Both carriers operate
four daily return flights to Doha.
Budget carrier FlyDubai is also
cancelling the route, with other airlines, including Bahrain's Gulf Air
and Egyptair expected to follow suit.
It comes after Saudi
Arabia, the UAE, Bahrain and Egypt all said they would stop flights in
and out of Qatar, and close their airspace to the country's airline,
Qatar Airways.
And it is Qatar's flag carrier that risks being the
biggest loser. On one level, its flights to places like Dubai, Abu
Dhabi, Riyadh and Cairo will stop. That is dozens of flights a day.
It has already said it is cancelling its services to Saudi.
But
being banned from large chunks of airspace in the region would also
cause a major problem, forcing it to alter flight paths, inevitably
adding time to some flights.
And as well as cranking up fuel bills, that could annoy passengers.
Qatar Airways' growth has come through positioning itself as a hub airline, connecting Asia and Europe via Doha.
"If
a journey to Europe that used to take six hours now takes eight or nine
because it has had to change routes, then that makes it far less
appealing and passengers might look elsewhere," says Ghanem Nuseibeh,
director at advisory firm Cornerstone Global.
Food
Desert states, by their nature, struggle to grow food. And food
security is a particular issue for Qatar given the only way in by land
is a single border with Saudi Arabia.
Every day hundreds of
lorries cross the border, and food is one of the main supplies. About
40% of Qatar's food is believed to come via this route.
Saudi Arabia has said it will close that border and when the lorries stop, Qatar will become reliant on air and sea freight.
"It will immediately cause inflation and that will directly affect normal Qatari people," says Mr Nuseibeh.
"If
things start costing significantly more, then you're going to see the
Qatari people putting increasing political pressure on the ruling family
for either a change of leadership or a change of direction."
He also points out that many poorer Qataris make daily or weekly
trips to Saudi to do their grocery shopping as it is cheaper. Clearly a
closed border means this will no longer be possible.
Construction
A
new port, a medical zone, a metro project and eight stadiums for the
2022 World Cup are just some of the major construction projects going on
in Qatar right now.
Key materials, including concrete and steel come in by ship but also by land from neighbouring Saudi.
The closure of that border could, as with food - push up prices and lead to delays.
A materials shortage is already a threat that looms over Qatar's construction industry. This risks making things worse.
A lengthy closure of the airspace and land borders would "wreak havoc
on the timeline and delivery" of the World Cup, says Kristian
Ulrichsen, a Gulf expert at the US-based Baker Institute.
People
The
move to end ties bans Saudi, UAE and Bahraini citizens from travelling
to Qatar, living there or passing through it, according to the Saudi
government. People affected have 14 days to leave.
Meanwhile Qataris will have the same amount of time to get out of Saudi Arabia, the UAE and Bahrain.
More significant though would be if Egypt issued a similar ban. According to one recent report about 180,000 Egyptians live in Qatar - with many involved in engineering, medicine and law as well as construction.
A loss of that workforce would pose a problem for both local and international firms operating in the Gulf state.
Trade and business
We're already seeing business deals begin to crumble.
Many
Gulf firms have a presence in Qatar, including in retail. Those stores
are likely to to close, at least temporarily, believes Mr Nuseibeh.
And major Saudi football team Al-Ahli has cancelled a sponsorship deal with Qatar Airways.
Priyadsouza, BBC
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