13:08 GMT19 January 2021
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    A £200 million ‘palace’ development in London by the Qatari royals has fuelled fresh speculation about Britain’s relationship with the tiny state. Massive cash flows by Gulf investors have raised questions about whether the money is good or bad.

    The Gulf countries have been investing heavily overseas for some time now. And one of their favourite investment spots is London.

    The royal owned Qatar Investment Authority now owns Harrods department store and has a share in a host of other buildings, including the Shard.

    And this week, it was announced that the United Arab Emirates would add another iconic London landmark to their foreign property portfolio, when they paid an astonishing £120 million above the asking price for the Scotland Yard building in the largest ever West End land deal, costing £370 million.

    The building will reportedly be replaced with a block of luxury residential flats, provoking concern from some, who see this as another way the government is favouring big business over ordinary people. Meanwhile, in Regent's Park the Qatari royal family are converting 3 Regency terraced mansions into a £200 million palace.

    "This is yet another sign of how space in London has become a function of the global economy," says Daniel Bentley, communications director at civil society think tank Civitas, "The most valuable real estate is being snapped up by international wealth managers seeking out the best returns for their clients. The sale of Scotland Yard is great news for the Metropolitan Police, who have a responsibility to the taxpayer to maximise the profits on any sales they make like this. But on the other hand the high transaction costs of deals like this are translated into high office and residential property costs", he said.

    Qatar is seeing rapid growth in its international presence, having become the country with the world's highest GDP per capita.

    To outsiders, Doha projects an image of a forward thinking country which encourages a moderate interpretation of Islam. But it has faced accusations of encouraging extremism, and even of funding the Islamic State in Syria and Iraq.

    Despite its vast wealth and seeming global influence, Qatar is still wedged between some big regional power players, notably Saudi Arabia. And it has something of an ongoing feud with the United Arab Emirates.

    "Qatar feels the most vulnerable of the Gulf States compared with Saudi Arabia. It wants to appear independent. They see that maybe funding certain important Islamist groups may help improve their strategy", says Egyptian journalist Nervana Mahmoud.

    But despite the accusations, little evidence has yet been gathered about Qatar's role in funding extremism, with few people in the West at least who are willing to speak out against Doha. In September, the Telegraph newspaper published a bold investigative piece calling Qatar a "prime sponsor of violent Islamists", but there is still little evidence available to back this up.

    British Prime Minister David Cameron met the Qatari Emir Sheikh Hamad bin Khalifa Al Thani in October and purportedly broached the subject of Islamic State funding, but it is unclear what results he obtained. Any talk of ISIL funding was probably overshadowed by investment discussions.

    At the time, Labour's shadow foreign secretary criticised David Cameron, saying wealthy Qataris and Kuwaitis had channelled millions of dollars to terrorists.

    As Qatar's interests abroad have expanded, so have its diversifying offerings at home. It has announced the opening of a branch of the iconic London department store Harvey Nichols in Doha's Festival City.

    All the Gulf countries are sending mixed signals about where their geopolitical allegiances lie. And although Qatar, on the surface at least, is giving off the image of a modern, developed state, it struggles with other criticisms. Its 2022 World Cup bid has faced controversy amid allegations of bribery and poor worker rights.

    But these issues don't seem to bother the British government. "Land is released for housing development in response to global prices and demand rather than domestic levels of affordability", says Daniel Bentley of Civitas.

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