By Roula Khalaf for Financial Times — As PM of Qatar he invested in Britain and intervened in the Arab Spring. In one of his luxury London hotels he talks about what went right — and what went wrong
One of the richest men in Qatar, and the world, Sheikh Hamad Bin-Jaber al-Thani has been the face of the small emirate’s property-buying frenzy in London, either splashing his own family’s wealth or that of the state. You name it, and he’s been involved in buying a stake in it: One Hyde Park, in which he keeps an apartment; Harrods; the Shard; Chelsea Barracks; Canary Wharf; the London Stock Exchange; the Berkeley and the Connaught. So it’s hardly surprising that Fera, the Michelin-star restaurant we meet at, is in Claridge’s, another luxury hotel owned by the Qatari royal.
It is three years since HBJ, as he is known in London’s financial circles, stepped down as prime minister of the small state of Qatar, part of a deal in which Sheikh Hamad bin Khalifa al-Thani, the ruler at the time, abdicated in favour of his son Tamim. So powerful was HBJ that the only way for the new emir to rule was for both his father and the prime minister to exit.
From 2007 to 2013, HBJ was not your typical prime minister. The former emir once said that while he ran the country it was HBJ who owned it. In government as foreign minister for two decades, a post he kept when he took the helm of government, HBJ was known for his willingness to speak his mind, to swing unabashedly from one policy to another. As prime minister he also enjoyed the state’s financial muscle, heading the $250bn Qatar Investment Authority, the emirate’s sovereign wealth fund, generating many of its highest-profile deals but making enemies in the process.
More recently, HBJ has had to contend with news-making of a different kind. Qatar’s investment in Barclays at the height of the 2008 financial crisis has been the subject of regulatory and criminal probes by UK authorities, though there is no suggestion that HBJ or Qatar itself acted illegally. His name also appeared in the Panama Papers, which revealed an offshore company used to manage his $300m superyacht moored in Mallorca.
I’m ushered to a bare table by the window and reassured that the whole row will remain empty throughout lunch. I order water and wait. A tall, imposing figure walks in a few minutes later — flanked by two aides who promptly disappear — and sits across from me.
At 56, HBJ is too young to retire so he travels the globe, making speeches and hobnobbing with leaders in business and politics. But he still spends a lot of time in London, which is a second home for many in the al-Thani family (he has 15 children).
I tell him that he’s been referred to in the media as the king of London real estate. “I’m not sure,” he says, “maybe there has been some noise but the Middle East is full of conspiracies and people like to sometimes exaggerate.”
HBJ, who when abroad sheds his white robe and headdress for a perfectly tailored suit, certainly seems at home. After a quick glance at the menu, he orders the lemon sole on the bone and asks if the smoked salmon is available; it isn’t, so he picks the grilled salad instead. I opt for the scallop starter followed by halibut in pine oil. By the time a mysterious-looking amuse bouche is placed before us — millet pudding with lovage, and Tunworth and mushroom — we are deep in conversation.
I ask HBJ if he has read the recent Atlantic magazine piece “The Obama Doctrine”, an extraordinary account of the US president’s non-interventionist penchant and his attitude towards many allies, whom he describes as “free riders”. Across the Middle East the reaction to “The Obama Doctrine” and the US retreat from the region has been scathing.
Yet HBJ tells me everyone should be thanking Obama. “To be frank, I am also depressed, and I don’t blame him,” he says. “We [Arabs] didn’t demonstrate we are an ally you can rely on. We have to have an excellent relationship with the US but the US won’t come to the region like before.”
That’s not to say that he doesn’t share the regret of others. “There was never a balance in the US-Gulf relationship. For 30 years the Gulf region led by Saudi Arabia was controlling the oil price for them (the west) — and what did we gain in return? When the price used to drop too much they would say, ‘Control the price’. Yet when the price would go up, they start screaming, they call us a cartel, and say, ‘You can’t do this’.”
The first course is served and we move on from Obama to Vladimir Putin, a sore topic for HBJ. Although Russia’s interventions in Syria on the side of the Assad regime fly in the face of Gulf countries’ policy — they are the main backers of Syria’s rebels — the region’s leaders have been beating a path to Moscow. “For Russia it’s a game,” HBJ explains. “The Russians want to prove a point for the region and it has been proven. The point is, ‘Don’t rely on America, rely on us’. But we need to rely on ourselves first, before we go to Russia or America.”
Talk of self-reliance is popular in the Middle East today, but when it comes to putting it into practice, the consequences can be disastrous. Nowhere has that been more evident than in Syria, where the US outsourced support for the rebels to Qatar and Saudi Arabia. Money and weapons flowed but with no clear strategy or direction; the whole enterprise was undermined by bickering and competition between the two Gulf states.
The Gulf’s Syria policy is closely associated with HBJ, who was often seen as relishing the rivalry between Qatar and Saudi Arabia, Doha’s larger and more powerful neighbour. I ask him whether he accepts some responsibility for the debacle in Syria.
“I will tell you one thing and that is maybe the first time I say this: when we started being involved in Syria [around 2012] we had a green light that Qatar would lead this because Saudi Arabia didn’t at that time want to lead. After that there was a change in policy and Saudi Arabia didn’t inform us that they wanted us in the back seat. We ended up competing and it was not healthy.”
I’m not convinced, pointing out that the same policies were followed in Libya, where Qatar and the United Arab Emirates have backed opposing sides in the civil war since the demise of the Gaddafi regime in the 2011 revolution. He acknowledges that in Libya, “There were a lot of cookers in the end. That’s why it was spoiled.”
As for Saudi Arabia and its intensified power struggle with Iran, the Arabs, he suggests, are following Iran’s lead. “I have to admit one thing: they [the Iranians] are more clever than us, and more patient than us, and the best negotiators. Look at how many years they negotiated [with world powers]. Do you think an Arab country would negotiate for so long?”
. . .
HBJ is reputed to be a hyperactive character. He takes control when negotiating business deals or political mediations, and rarely gives up. But today he seems pretty relaxed, despite the speed with which he dispatches his sole. He only really loses enthusiasm when I turn the conversation to his recent investments. And no wonder. It has been a rocky ride for companies he and Qatar have poured money into. The QIA is one of the largest shareholders in Volkswagen, which has been battling an emissions cheating scandal.
“We are concerned as shareholders,” he admits, but “that’s the market, it goes up sometimes and it goes down sometimes.”
It’s not his money on the line in VW in any case. Deutsche Bank, however, is another story: his family became the second-largest investor in Germany’s largest bank in 2014; shares are down 50 per cent in the past year. “We have a long view and we have faith that Deutsche will come back,” he says. “It’s a strong economy . . . and we’re long-term investors.”
Don’t judge Qatari investments based on those that made the most headlines, he adds, many others you’ve never heard of are performing well. Still, in the current environment, he insists, “It’s not a good time to invest. It’s good to study and wait”.
Among his most controversial investments was the £7.3bn Barclays emergency cash call, where Qatari investors were given handsome fees and free Barclays warrants in addition to their stakes. The deal has been the subject of ongoing regulatory and criminal probes by UK authorities, though there is no suggestion that HBJ or Qatar itself acted illegally.
By now, HBJ appears to be losing all interest in our conversation. It is not a saga that he wants to discuss, though it doesn’t seem to be fading away. A lawsuit in January alleged that Barclays had paid Qatari investors (HBJ’s family is presumed to be one of them) £346m in secret payments to secure their participation in the bank’s emergency fundraising. The lawsuit was brought by PCP, the investment vehicle of Amanda Staveley, who was another investor in the deal. HBJ won’t comment on any ongoing lawsuits or investigations but says the QIA “did everything in the right, legal way.”
Does he regret the investment? “No, I think it’s a good investment. I regret the noise. We thought we had helped the British economy at a bad time and that someone would thank us for it.”
He had predicted back in 2008 that Qatar would invest up to £20bn in the UK. “People laughed at me. But now the investments are around £30bn.”
Which is why the prospect of Brexit worries him. “Staying in the EU makes the UK stronger and for any investor it would be better.”
The other controversy, and one more embarrassing on a personal level, is the lawsuit in London brought by a former official in Qatar alleging that his land had been seized. The claim was struck out in court on the grounds that HBJ had state and diplomatic immunity. He is listed as a counsellor at the Qatari embassy in London — a curiously big step down from the position of prime minister, perhaps, but a sign that he still remains an important link between Europe and Qatar.
“I won’t go into the details of the case,” HBJ tells me, appearing tense again. “It’s behind me and I have a way that I don’t talk about these things. I don’t like to talk about these things.”
. . .
HBJ is still close to the former emir, Sheikh Hamad, and the two often travel together. In Doha, however, he keeps a low profile. Since Sheikh Hamad’s abdication, Sheikh Tamim has sought to reshape government, dismantling power structures left in place by the former prime minister.
Entrusted with foreign policy, HBJ had positioned Qatar as a mediator in crises but also taken it on some mischievous adventures. A country that heavily relied on the US for its own security suddenly began extending its own influence into bigger but more deeply troubled Arab states, including Egypt, Syria and Libya, when the Arab Spring upended the old political order in the Middle East.
The new government has also looked into conflicts of interest between HBJ’s previous government positions and his sprawling business empire, buying him out of Qatar Airways, for example. His tutelage over the Qatar Investment Authority also ended with the departure of his understudy, Ahmed al-Sayed, last year. The new leadership at the QIA and direct investment arm Qatar Holding are now restructuring the sovereign wealth fund, and minimising the blurring of personal and state investments. While many in Qatar miss HBJ’s personal dynamism, others in the private sector are relieved he no longer wields so much power in the domestic business scene.
HBJ suggests I am reading too much into changes in Qatar. “It’s a different approach. Maybe when we were doing this, we created a lot of jealousy, a lot of enemies . . . But I was a soldier in the government and doing things at that time was necessary for Qatar to be recognised, either politically or economically.”
He tells me every new government brings in a new team and introduces new policies and that given the collapse in energy prices, Qatar needs to retrench. “Sometimes I thank God that from time to time we get hit by the oil price. Because we get spoiled.”
It’s getting late so we order coffee. We argue over the meaning of conflict of interest. Combining business and politics in Qatar is a strange way of life. “Here in the west, this is always mentioned as if it’s one pocket but there is a Chinese wall — what’s personal is personal,” he says. “If you tell Qataris don’t do business if you work in the government, you might not find anyone in a job.”
I mention the emir’s comment about him owning the country. “The emir always likes to tell jokes about me,” HBJ says with a chuckle. “Thank God, there are wealthier people in Qatar.” And then comes a warning he’s repeated time and again during lunch: “Not all of what you hear is right.”
Roula Khalaf is the FT’s deputy editor
Source: Financial Times