Russian Hackers Responsible for Sowing Discord Middle East

Emir of Qatar Tamim bin Hamad Al-Thani. Picture by Presidencia de la República Mexicana

CNN reported on Tuesday that Russian hackers were able to insert a made-up news story into Qatar’s state news agency in order to influence diplomacy in the Middle East in a negative way.

According to US authorities, Russia was most likely trying to create a breach in relations between the United States and its allies in the Gulf region.

US intelligence agencies hinted that Russian hackers were connected to the first cyberattack that took place two weeks ago. Since that event FBI agents went to Doha, the capital of Qatar, to help them investigate who was responsible for the original attack.

Although it is clear that some entities based in Russia are the source of the hacking, it is not yet known if they are criminal organizations or Russian military groups, like perhaps the GRU. The actual source might not be that significant since, as one unnamed official said, based on previous intelligence on Russia’s cyber-hacking behavior,

“nothing much happens in that country without the blessing of the government.”

The Qatar News Agency published a story on May 23 that they stated was falsely attributed to Sheikh Tamim bin Hamad Al-Thani, the country’s emir. The story quoted the emir as wondering what the future has in store for President Trump and the hostility the US harbors towards Iran. Iran is an ally of Qatar, but an enemy of the other Gulf states, including US ally Saudi Arabia.

The story said that Al-Thani said, “There is no wisdom in harboring hostility towards Iran.” Qatar said that the report itself as well as the quote were not true, calling the report a “shameful cybercrime.”

Relations between Qatar and the other Gulf Cooperation states hit a new low this week when it was announced that Bahrain, Egypt, Saudi Arabia, and the United Arab Emirates were going to withdraw their ambassadors and support staff out of Qatar, and cease flights in the region.

“Whatever has been thrown as an accusation is all based on misinformation and we think that the entire crisis being based on misinformation,” Qatari Foreign Minister Sheikh Mohammed Bin Abdulrahman al-Thani said. “Because it was started based on fabricated news, being wedged and being inserted in our national news agency which was hacked and proved by the FBI.”

High Unemployment Rates in Bahrain and Oman

The asset management firm Al Masah Capital published a report revealing that Oman and Bahrain have the highest unemployment rates than other Gulf countries.

The Great Job Rush

The Dubai-headquartered firm released ‘MENA: The Great Job Rush’, which described rates of 15% unemployment in each of the two Gulf states. In comparison, neighboring Qatar has an unemployment rate of 0.5%.

Saudi Arabia also revealed its own high unemployment rate of 10.8% while in the midst of a program of nationalization designed to help reduce this rate.
Kuwait’s jobless rate is also low, hovering at about 2.2%.

The report stated that “there is an urgent need for action.”

“Joblessness is a structural problem, particularly among the youth in the region. Short term solutions will not remove problems which took generations to fester. Deep structural changes are required, changes that go to the heart of cultural mentality.”

The MENA region has the highest unemployment rate in the world, with North Africa at 9.8% and the Middle East at 10.3%.

Youth Hit Hard

Saudi Arabia faces a serious unemployment problem among the young of the nation. The Kingdom’s youth are out of work at a rate double that of the global rate of jobless people, at 25.9% compared to 12.6% for the rest of the world.

A report of the World Bank published in 2003 predicted that the MENA region will need to create about 100 million new jobs during the 20 years between 2000 and 2020 in order to overcome a severe unemployment crisis.

Stock Market Stalled as Bahrain Protests Continue

Not only do regimes topple and heads of state crumble in response to massive demonstrations in the Middle East, but so too does the equities market. As protests continue in Bahrain, political uncertainty is causing investors to step back and wait before taking risks on the purchase of stocks.

The Bourses will be open on Thursday in both Bahrain and Qatar but in other Gulf States the markets are scheduled to be closed either for the weekend or for a religious holiday.

Managing Partner of Dubai-based asset management company Frontlane Capital, Hashem Montasser commented on the poor reaction to the Egyptian crisis in the Gulf Region.

“Revolution in Egypt was shrugged off too easily by Gulf markets," he said. "Markets were mispriced in the sense that risk premiums have gone up, but equities prices didn't reflect that. Bahrain has become the catalyst to now re-price Gulf equities."

Calling the attack of an overnight encampment of protesters in a central square in Manama “real terrorism,” the leader of the main Shiite opposition bloc in Bahrain expressed his outrage, and also described seeing at least 50 armored cars traveling in the direction of Pearl Square in Manama.

Montasser added that, as far as investing is concerned, Bahrain has heightened risk for at least the next couple of months."

Qatar’s Al Rayan Rises on Upbeat 4Q News

News of a slight increase in quarterly profit caused Qatar’s Masraf Al Rayan to rally yesterday.

The Islamic lender’s Shares of the Masraf Al Rayan climbed 1.5 percent. The company’s profit of QR289m ($79.4m) in the fourth-quarter, rose from from its earlier profit of QR280m.

Qatar’s index QSI rose 0.3 percent to 9,041 points. The index rose for a third day, a rebound after Sunday’s three-week low.

“The risk-reward profile does not warrant an entry at this stage and more pull back is required to trigger buying,” Shuaa Capital wrote in a research note.