Did the Qatar Blockade Work? Evidence from Trade and Consumer Welfare Three Years after the Blockade

Abstract

This article examines the effects of the embargo (blockade) imposed on Qatar in June 2017 by four countries: Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain. Using highly disaggregated product-destination quarterly trade datasets provided by the Qatar General Authority of Customs, we find a significant decline in Qatar’s aggregate imports and consumer welfare (with an increase in the prices of imported goods) in the short run, but not thereafter. Political relations with non-besieging countries seem to be associated with Qatar’s bilateral trade after the blockade, particularly in the first quarter. Shortly after the blockade, countries opposing the blockade experienced a sizable growth in exports to Qatar. In the medium to long run, Qatar succeeded in mitigating the impact of the blockade by diversifying its import origins and adopting new reforms to stabilize the economy and enhance the country’s food security and self-sufficiency.