LONDON — At first glance the willingness of Al Jazeera, the satellite network owned and financed by Qatar, to pay in the neighborhood of $500 million for Current TV, Al Gore’s struggling channel, seems like a vanity project. And it may turn out that way.
But in recent years Qatar has developed what is one of the more energetic and sophisticated foreign investment strategies of the Gulf oil and gas producers. Al Jazeera’s expansion plan in the United States can be seen as part of its overall plan to put itself on the map and make itself heard globally.
The Qatari leadership want to propagate “a Qatari-sponsored narrative of events in the Middle East and elsewhere,” said Kristian Coates Ulrichsen, a Gulf analyst at Chatham House, a London research institute. “Being able to shape that narrative and how it is being seen in the U.S. is extremely important.”
When he overthrew his father in 1995, Qatar’s ruler, Hamad bin Khalifa al Thani, took control of what was a small and vulnerable country jutting out into the Gulf from the Arabian Peninsula. He has assiduously worked to change Qatar’s circumstances, most notably by bringing in partners like ExxonMobil and Royal Dutch Shell to build the liquefied natural gas installations needed to exploit Qatar’s enormous North Field.
As a result, Qatar, which had been a relatively small oil producer, is now the world’s dominant L.N.G. power with financial surpluses in the range of $30 billion to $40 billion a year, according to Rachel Ziemba, an analyst at Roubini Global Economics in London.
The oil and gas money has given the ruler and his key collaborator, Prime Minister Hamad bin Jassim al Thani, the means to transform the once sleepy capital, Doha, into a Dubai-like cityscape that has become a preferred location for international conferences like the recent COP 18 summit meeting and prestigious sports events like the 2022 World Cup in soccer.
Qatar is also now the world’s wealthiest country per capita. Income was close to $100,000 per person in 2011, according to the C.I.A. World Factbook.
Having so much money to spend has helped make the Qataris key global deal makers in both business and politics.
“The leadership of Qatar is probably the most dynamic and ambitious of any senior leadership in the Gulf,” Tarik Yousef, chief executive of Silatech, a Qatari nonprofit that helps young people in the Middle East set up businesses, said in an interview last year. “They not only have ambitions and drive, but they have phenomenal financial resources.”
That ambition and drive have been conspicuously in evidence of late. In a high-profile gambit involving mediation by Tony Blair, Britain’s former prime minister, Qatar helped force Glencore to increase its takeover bid last autumn for the miner Xstrata, in which Qatar’s sovereign wealth fund held a large stake, increasing the price of the multibillion-dollar deal 9 percent, said Jeff Largey, an analyst at Macquarie in London.
Despite being a tightly controlled monarchy, Qatar is the only Gulf country that has enthusiastically bought into the Arab Spring revolutionary movements that have roiled the Middle East over the past two years. Qatari aid was instrumental in toppling the Libyan dictator, Col. Muammar el-Qaddafi, and its leadership was early in calling for the departure of President Bashar al-Assad of Syria. Qatar has backed the government of President Mohamed Morsi of Egypt with promises of billions in investment, including money for an oil refinery near Cairo.
Some of these decisions, like investing in the Xstrata deal or Qatar’s supplying new capital to Britain’s Barclays bank during the financial crisis — a matter that is now under investigation in Britain — make good business sense. So does Qatar’s stake-building in major Western companies including Shell, the German construction giant Hochtief and Volkswagen. But they also help accentuate Qatar’s political clout. When buying large shareholdings “you are gaining access to a network. It’s almost a means of doing politics,” said a senior Western investment banker in the Gulf last year, who declined to be identified because it might affect his business.
Being the site of billions of dollars in investment by major oil companies including ExxonMobil, Shell and Total also enhances Qatar’s relevance, as do its L.N.G. contracts with countries like Japan and China. The Qataris are thinking “if you have many long-term partners around the world, you won’t be sacrificed in a time of need,” said Mr. Ulrichsen of Chatham House.
In this context, Al Jazeera’s plan to expand in the United States may be seen as another part of Qatar’s global outreach campaign, though Al Jazeera has changed its tactics from its early days.
Al Jazeera’s English channel, introduced in 2006, has helped at least partially change its image from that of a network used as a vehicle by Al Qaeda and hostile to the United States to that of a professionally run news channel that has won prominent U.S. journalism prizes, including George Foster Peabody and George Polk awards last year. The Polk prize came for coverage of unrest in Bahrain, another small Gulf emirate.
“The key question is whether this is to give Al Jazeera in English more exposure in its current relatively objective form or to buy a forum for sending more of a Qatari and Arab message to U.S. viewers,” said Anthony H. Cordesman, a Gulf security expert at the Center for Strategic and International Studies in Washington.
The English channel has struggled to find viewers in the United States. It reaches only 4.7 million homes and far fewer actual viewers. The deal for Current TV will multiply potential viewers almost tenfold. “This is intended to be a commercial venture,” said Stan Collender, a spokesman for the company. Al Jazeera made the purchase only after “several years of study,” he said.
Article source: http://www.nytimes.com/2013/01/07/business/global/07iht-jazeera07.html?partner=rss&emc=rss