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International relations

Qatar crisis ripples through Southeast Asia

Philippines stops sending some workers, Qatar-related stocks hit

KUALA LUMPUR -- Southeast Asian countries have taken precautionary steps after Gulf countries severed diplomatic and commercial relations with Qatar.

The Philippines, which has over 140,000 workers in the gas-rich kingdom partially suspended the deployment of overseas Filipino workers on Tuesday, citing fears of repercussions from the Middle-East crisis.

"This will enable us to assess the situation because there are so many wild rumors going around," said Labor Secretary Silvestre Bello.

Saudi Arabia, along with Bahrain, the United Arab Emirates, Yemen, Egypt and the Maldives broke off ties with Qatar, accusing it of supporting terrorism. Reports said the move came after Doha allegedly paid up to $1 billion to organizations linked to international terrorism for the release of members of its royal family who were abducted on a hunting trip.

Flights operated by these countries to and from Doha have been cancelled and borders shut, causing a panic in import-dependent Qatar where supermarkets were reported to be running out of food as residents stockpiled provisions.

The tiny kingdom with a population of about 2.2 million relies on foreign labor to sustain its economy. It is the largest producer of liquefied natural gas, accounting for about one-third of global supply.

A Filipino who works as a development officer for the Qatari government fears the Philippine decree could cause job losses for his countrymen in the Gulf country. Qatari companies in Egypt have already implemented "massive terminations" in the wake of the crisis.

"The Philippines' reaction to suspend may be a bit too early," said the overseas worker, who declined to be named out of fears his comments would be used against him.

The governments of Muslim-majority Indonesia and Malaysia that enjoy warm relations with Qatar said that while the situation appeared to be under control, they were monitoring developments closely.

The Indonesian embassy in Doha assured its 40,000 nationals in Qatar that "anticipatory measures" have been taken and asked them to remain calm. The country's transport authorities are assisting passengers who had bought tickets from Qatar Airways for pilgrimage tours to the holy city of Mecca in Saudi Arabia to change their flights to other airlines.

Jakarta is also considering giving the landing slots allocated for the Qatari national flag carrier to other Gulf airlines such as Emirates Airline and Etihad Airways to minimize the impact on tourist arrivals.

Arief Yahya, Indonesia's tourism minister, said around 50,000 from the Middle East may cancel planned visits to Indonesia this year due to the travel ban on Qatar Airways. The figure is more than a quarter of total visitors from the region last year.

Immediate pain

So far, the immediate impact of the crisis has already been felt by companies that have business dealings in Qatar.

Shares of Indosat Ooredoo, Indonesia's mobile telecommunications operator, fell by 8.6% from Monday's close to end at 6,100 rupiah ($0.46) on Wednesday. The group is 65% controlled by Ooredo, Qatar's communications company.

In Malaysia, oil and gas company Serba Dinamik said its operations in Qatar were not affected and that it saw opportunities as contractors began to pull out of the country. Even so, shares in the company which provides engineering services in Qatar have dropped by 8% since Monday.

CIMB Investment Bank said in a research note on Tuesday that companies with exposure in Qatar could be affected by disruptions in job progress, payment and the shipment of goods. The brokerage said civil contractor, WCT Holdings, has substantial work orders in the Gulf region. About two-thirds of the company's trade receivables of 790 million ringgit ($185 million) in the first quarter of fiscal 2017 were attributed to the region, including the Lusail real estate development project in Doha.

Other Malaysian companies with business in Qatar include national oil company Petronas and Malaysia Airports Holdings, which recently secured an extension to a 192 million ringgit contract to manage the Hamad International Airport.

Singapore's Keppel Corp., which employs some 1,800 workers at a solid waste management and wastewater treatment facilities as well as a shipyard in Qatar, said operations are proceeding as normal. 

Staff writers Mikhail Flores in Manila, Erwida Maulia in Jakarta and Justina Lee in Singapore contributed to this article.

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