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Saudi Arabia, Egypt, Bahrain, United Arab Emirates, Libya, Yemen and the Maldives have severed diplomatic ties with Qatar.
But what does this move mean for Qatar's economy and business people there?
With a population of around 2.7 million, this small country on the north-eastern coast of the Arabian Peninsula is trying to engage in activities that require resources beyond its means.
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The audiences know Qatar's name among others from its airlines (Qatar Airways), its international news station (Al Jazeera) and by sport (ie elected to host the 2022 World Cup and once a sponsor of a club that may be ranked as the world's most famous football club , Barcelona).
And with a different skyline in the nation's capital, Doha, Qatar managed to attract multinational companies to open offices there.
Thus, these latest developments make a lot of things at stake.
Flights
The Abu Dhabi-based airline Etihad Airways and Dubai-based airline Emirates freeze all flights to and from Doha, starting Tuesday morning (06/06).
So far the two airlines have operated four round-trip flights to Doha.
Low-cost airlines FlyDubai and Air Arabia also cancel flights to Doha, along with other airlines, including Bahrain, Gulf Air and Egyptair airlines are expected to take the same step.
The developments came after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt said it would halt flights to and from Qatar, and seal the airspace for Qatar airline Qatar Airways.
And Qatar national airline is the most disadvantaged party. Flights to cities like Dubai, Abu Dhabi, Riyadh and Cairo will stop. That is, dozens of flights do not operate every day.
Qatar Airways has announced the cancellation of flights to Saudi Arabia.
"All consumers who have booked tickets for affected flights to and from Saudi Arabia will be given alternate options, including full ticket refunds for unused tickets and re-bookings to the nearest alternative destinations served by Qatar Airways at no additional cost," Qatar statement Airways.
But being banned across large areas of the region would also pose another major problem, forcing Qatar Airways to change its flight paths inevitably adding to the duration of some flights.
In addition to adding fuel, the addition of flying hours can also make passengers feel annoyed.
The growth of Qatar Airways occurred by placing it as the center of the airline, connecting Asia with Europe via Doha.
Food
Naturally, desert countries find it difficult to grow food crops. And food scarcity is a particular problem for Qatar because the only road inland by land is a single border with the Saudis.
Every day hundreds of lorries cross the border, and food is one main supply. About 40% of Qatar's food supplies are believed to enter this route.
Saudi Arabia says it will close the border and when the lorries stop operating, Qatar will depend on air and sea shipments.
"It will immediately boost inflation and that will have a direct impact on ordinary citizens of Qatar," said Ghanem Nuseibeh, director of consulting firm Cornerstone Global.
StadionHak over photoREUTERS
World Cup 2022
ages construction growth in Qatar.He also underlined that many poor people shop for groceries to Saudi Arabia every day or every week because the price is cheaper. Obviously the closing of the border will not allow that.
Construction
New ports, health care zones, metro projects and eight stadiums for the 2022 World Cup are some of the major construction projects Qatar is currently working on.
Important materials, including concrete and steel, are shipped by ship but also transported by land from neighboring Saudi Arabia.
Border closure, similar to food - drives prices up and causes delays.
Shortage of building materials has become a threat to the construction industry in Qatar. These risks further affect the conditions there.
Citizens
Steps to break ties also mean banning nationals from Saudi Arabia, Egypt, Bahrain, the United Arab Emirates, Libya and Yemen traveling to Qatar, living there or just passing by, the Saudi Arabian government says.
Those who are affected have 14 days to leave Qatar.
Meanwhile, citizens of Qatar also have the same time span to exit from Saudi Arabia, United Arab Emirates and Bahrain.
What is more significant is if Egypt issued the same ban. According to a recent report, some 180,000 Egyptians live in Qatar, many of whom are involved in health, law and construction engineering.
If the workforce has to leave then there will be problems for both local and international companies operating in Qatar.
Trade and business
Nervousness over the unprecedented situation sent Qatar 's main stock index down more than 7% on Monday amid concerns over the investment climate.
Many Gulf companies have opened branches in Qatar, including in the retail sector. The stores will likely be closed, at least temporarily. Such is the opinion of Ghanem Nuseibeh, director of consulting firm Cornerstone Global.
Indeed, we have witnessed a canceled business deal, Saudi Arabia's big football team, Al-Ahli, has canceled sponsorship agreements with Qatar Airways.
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