The Qatari riyal is under severe pressure, further augmented by rising prices and chronic shortages of basic food items. The crisis, sparked by the economic and political boycott by Saudi Arabia, the UAE, Bahrain and Egypt, has left Qatari citizens standing in long queues for hours to buy everyday essentials. The country is also facing inflationary pressures, mainly due to the ongoing mega projects, which now stand suspended due to the boycott. Futures traded against the Qatari riyal stand at a low of 275 points. This decline is the lowest in the past 19 years, falling to QR 3.76 against the dollar. Qatar has seen this declining trend ever since the political and economic boycott was initiated due to Doha's support for terrorism. Ninety percent of the food items in Qatari supermarkets are imported from aboard. This has made Qatar vulnerable to rising prices, trade embargoes, and food supply cuts. This is one of the biggest challenges facing Qataris now. The Qatari currency has fallen, and so also has the value of shares of international companies, which will now have to provide for greater guarantees to do business. Two months from now, these companies may even have to seek compensation from the Qatari government for their losses. The government and insurance companies will then have to stand as guarantor, and the Qatari sovereign fund would be largely used for the purpose. The high cost of imports is only compounding the problem. The resulting inflation would have a significant impact on the common man, especially low-paid foreign workers, who account for 85 percent of the population of 2.6 million. Qatari exports to four countries, Saudi Arabia, UAE, Bahrain and Egypt last year was QR 20.4 billion, which is 83 percent of the total exports of the country to Arab countries. Qatar only produces 8 to 10 percent of the foodstuffs being consumed in the country due to a number of constraints, mainly harsh climate, soil quality, scarcity of irrigation water, unsuitable agriculture cycle for crop rotation, restrictions in market, agricultural practices and insufficient subsidies.
