EIGHTEEN YEARS ago Sheik Hamad Bin Khalifa al-Thani took advantage of his father’s absence from the sleepy Persian Gulf emirate of Qatar to stage a coup against him and begin what has been one of the modern Middle East’s most remarkable transformations. Qatar, a nation that has only 250,000 citizens but is the world’s largest exporter of liquefied gas, has gone from being a backwater few Westerners had heard of to one of the region’s most influential powers. As emir, Sheik Hamad created the al-Jazeera television network, hosted a large U.S. military base, sponsored peace talks for Sudan, Yemen and Afghanistan, and lavished tens of billions on an “education city” featuring offshoots of Cornell, Northwestern and other major U.S. universities.

More recently, Qatar’s adventurism has become an irritant for the United States and allies such as Saudi Arabia. Over the objections of those countries, Qatar has funded Islamic extremist factions in Libya and Syria, subsidized the Palestinian Hamas movement and handed billions to the Islamist government of Egypt, allowing it to avoid economic policies and political compromises urged by the International Monetary Fund and the Obama administration.

Now the 61-year-old emir has completed another surprising initiative by handing power to his 33-year-old son, a move that contrasts with his own coup as well as the gerontocracies of his neighbors. Whether the handover was long planned, as the official account says, or forced by Sheik Hamad’s health or family is the subject of much speculation. Either way the change, combined with the retirement of Qatar’s long-serving prime minister, opens the way for adjustments in Qatar’s foreign policies and in the rigid autocracy that still reigns over the skyscrapers and luxury hotels of Doha.

Domestically, reform is overdue. Despite the lucrative deals Western academic institutions have struck with the emirate, Qatar remains a near-absolute dictatorship where political parties are prohibited and freedom of speech and assembly is tightly restricted. Al-Jazeera has broken censorship boundaries around the Middle East but refrains from critical reportage on its own government. Parliamentary elections have been promised but not held; reformers hope the new emir, Sheik Tamim Bin Hamad al-Thani, will follow other Arab monarchies by allowing an elected parliament to choose a prime minister.

In the region, Qatar has done much to foment revolutionary change, including the overthrow of Libya’s Moammar Gaddafi. Yet its agenda is not liberal but sectarian and Islamist. With several of its gulf neighbors, the emirate is fanning what has become a dangerous polarization between Sunnis and Shiites that could convulse much of the Middle East and prevent desperately needed economic and political modernization. While little is known about the new emir’s views or intentions, both Qataris and other Arabs must hope that he will employ his power and vast resources to promote democratic solutions both at home and abroad.