DOHA, Aug 15, (Agencies): Qatar’s foreign minister said Tuesday it will take a “lot of time” to rebuild any trust between sparring Gulf countries because of the region’s continuing diplomatic crisis. As the impasse between Doha and four Arab states led by Saudi Arabia entered its eleventh week, Sheikh Mohammed bin Abdulrahman Al-Thani said regional relations had been transformed by the dispute. “Qatar has always been one of the founders of the GCC organisation and we still consider that this has a great importance for all of us in the region,” he told reporters. Created in 1981, the Gulf Cooperation Council (GCC) groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. “This organisation has been built on a strategical security and been built on trust.
“Unfortunately, what happened lately with this crisis, this factor is missing now and needs a lot of time to rebuild the trust again. “We hope that it’s restored.” Saudi Arabia, Bahrain, the United Arab Emirates and Egypt cut ties with Qatar on June 5 — accusing it of backing extremism and fostering ties with Iran — triggering the biggest political crisis in the Gulf for several years. Doha denies the claims and accuses the other countries of an attack on its sovereignty.
The Saudi-led countries have also imposed sanctions including restrictions on Qatari aircraft using their airspace. Sanctions imposed by other Arab states are continuing to push up food prices in Qatar while hurting the real estate market, but not to the point of damaging the economy severely, according to inflation figures released by the government on Tuesday.
The annual inflation rate fell back sharply to 0.2 percent in July. It had spiked to 0.8 percent in June from 0.1 percent in May after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar on June 5, accusing it of supporting terrorism, which Doha denies. By closing Qatar’s land border with Saudi Arabia and disrupting maritime shipping routes, the sanctions slashed Qatari imports by more than a third in June, pushed up prices of some basic goods and hurt business sentiment in Doha.
There were fresh signs of that damage in the July inflation numbers. Food and beverage prices climbed 4.5 percent from a year earlier — their fastest rate of increase since at least 2014, and accelerating from a rise of 2.4 percent in June.
Food and beverage prices gained 4.2 percent from the previous month. Many dairy products and other perishable foods used to be imported across the Saudi border; they are now having to be fl own or shipped in across longer distances. Prices of non-perishable goods such as clothing, shoes, furniture and household appliances fell in July, suggesting Qatar is having no trouble importing those products at affordable prices. But housing and utility prices sank 3.6 percent from a year ago in July, their biggest drop for at least several years, and slipped 0.6 percent from the previous month. They began falling early this year and dropped 2.9 percent from a year ago in June. Saudi, UAE and Bahraini banks have begun pulling deposits and loans from Qatar, tightening liquidity in the banking sector, while there is anecdotal evidence of citizens from the three countries offering real estate investments for sale — bad news for Qatar’s property market.