Desert Kingdoms to Global Powers: The Rise of the Arab Gulf

DESERT KINGDOMS TO GLOBAL POWERS

Copyright © 2016 Rory Miller

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Library of Congress Cataloging-in-Publication Data

Names: Miller, Rory, 1971- author.

Title: Desert kingdoms to global powers : the rise of the Arab Gulf / Rory Miller.

Description: New Haven : Yale University Press, 2016. | Includes bibliographical references and index.

Identifiers: LCCN 2016024734 | ISBN 9780300192346 (c1 : alk. paper)

Subjects: LCSH: Persian Gulf Region—Economic conditions. | Persian Gulf Region—Politics and government. | Persian Gulf Region—Foreign relations.

Classification: LCC HC415.3 .M55 2016 | DDC 330.9536—dc23

LC record available at https://lccn.loc.gov/2016024734

A catalogue record for this book is available from the British Library.

10 9 8 7 6 5 4 3 2 1

To Erin and Maddy

CONTENTS

Acknowledgements

Map

Introduction: Paradise Found

1Over a Barrel

2Neighbourhood Watch

3Tax Americana

4Thy Brother’s Keeper

5Bloc Party

6Sheikh Down

7Self-Defence

8Oil Change

9Divided We Stand

10The Hub

Conclusion: (In) Capacitated

Notes

Bibliography

Illustration Credits

Index

ACKNOWLEDGEMENTS

The initial idea for this book was born out of conversations I had in 2012 with Phoebe Clapham, then a commissioning editor at Yale University Press, who had attended a talk I gave at the LSE a few months earlier on contemporary security challenges in the Arab Gulf. We believed that it could translate into a reader-friendly book on the region, aimed at a non-academic audience. In the years since then, I have been well served by my editors at Yale – Rachael Lonsdale, Heather McCallum and Melissa Bond. All have offered guidance, demonstrated great patience and, above all, been generous with their support and enthusiasm for this project throughout the entire process. I would also like to thank the various anonymous reviewers who provided feedback on the initial book proposal and on the final draft of the manuscript. The book has benefited greatly from their expert advice and recommendations.

Over the course of the project, the following former and current students have provided invaluable research assistance: Guiditta Fontana, Sarah Cardaun, Jihane Benamar, Yasmeen Hamad and Kareem Malas. I would also like to thank Rofaida Azzam, Haya Al-Romaihi and Jaber Al-Thani for their thoughts and feedback on many of the issues discussed here. My Georgetown colleagues Dan Stoll and Sonia Alonso gave detailed and invaluable comments on large parts of the manuscript. I’d also like to acknowledge the ongoing support of my colleagues and friends in academia in Doha, London and Dublin: especially Sohaira Siddiqui, Michael Kerr, Simon Waldman, Clive Jones, Amnon Aran, Eunan O’Halpin and Michael Kennedy.

On a personal note, Gus Nichols was kind enough to read some early chapters, and Alan Shaw has been a constant source of support over the last few years. I would also like to thank Dermot Brosnan, Jonny Orr, Stuart Fox, Andy McConnell, Richard Knatchbull, Rizwan Rahman, Mateen Qureshi, Mahveen Azzam, Louise O’Toole, Simon Meldrum, Jason Stuart and Cedric Heather for their continued friendship. I was an absentee friend while I worked on this book, but having them all there for me was always appreciated. My mother, Marion, my siblings, Lisa, Daniel and Emma, and their families have, as always, been hugely supportive. Finally, my wife, Michelle, and my daughters, Erin Ruby and Madeleine Rose, have had to endure me working on this project mornings, nights, weekends and holidays for much of the past few years. For that and for everything else, I am immensely grateful to all three. This book is for them.

Map of the Arab Gulf States

1. Muslim pilgrims circumambulate (tawaf ) the sacred Kaaba during sunrise after fajr prayer in Mecca, Saudi Arabia.

2. President Nixon and Mrs Nixon welcome King Faisal of Saudi Arabia on a visit to the United States in May 1971.

3. Henry Kissinger (left), the US Secretary of State, meets the Shah of Iran (right) in Zurich in early 1975.

4. Sheik Yamani talks about oil and the Palestinian problem during a press conference in Saudi Arabia in July 1979.

5. Crowds oflranian protestors demonstrate in support of exiled Ayatollah Sayyid Ruhollah Khomeini in 1978, the year prior to the revolution.

6. Iraqi leader Saddam Hussein addresses members of his armed forces shortly before the invasion of Iran in September 1980.

7. Saudi Arabian soldiers prepare to load into armoured personnel carriers during clean-up operations following the Battle of Khafji, 2 February 1991. The Battle of Khafji was the first major ground engagement of the 1991 Gulf war.

8. Palestinian women demonstrate with Palestinian and Iraqi flags and portraits of Yasser Arafat and Saddam Hussein in the West Bank during the Kuwait crisis of 1990–91.

9. Kuwaiti men dance in the streets and Egyptian coalition forces join in as they celebrate the liberation of Kuwait from Iraqi occupation, 28 February 1991, in Kuwait City, Kuwait.

10. US General H. Norman Schwarzkopf, commander-in-chief, US Central Command, dictates conditions for a ceasefire of combat operations to Iraqi generals during talks, 3 March 1991, in Safwan, Iraq. Next to General Schwarzkopf is General Khalid bin Sultan (right), the senior Saudi military officer and commander of Joint Forces in Saudi Arabia, and across the table are two Iraqi lieutenant-generals.

11. On television from somewhere in Afghanistan, left to right: Sulaiman Abu Ghaith, the Al- Qaeda spokesman; Osama bin Laden; Ayman Zawahri of Egypt’s Jihad; and Mohammed Atef.

12. Sheikh Hamad bin Khalifa Al-Thani, Qatar’s emir between 1995 and 2013, meets with President George W. Bush at the White House in Washington, DC, in May 2003, less than two months after the American invasion of Iraq.

13. Saudi ambassador to the United States Prince Bandar bin Sultan, who served in that role from 1983 to 2005.

14. Prince Bandar, who served as Saudi ambassador to the United States from 1983 to 2005.

15. Sheikh Zayed Grand Mosque, Abu Dhabi, United Arab Emirates (UAE), in 2010. This impressive mosque was named after the ruler of Abu Dhabi who was the main driving force behind the founding of the UAE. He served as the first president of the UAE for thirty-three years until his death in 2004.

16. Prime Minister Khalifa bin Salman Al-Khalifa of Bahrain welcomes German Chancellor Angela Merkel in Manama, Bahrain, 27 May 2010. Merkel visited four Gulf Cooperation Council (GCC) countries during this trip to discuss politics and business in the midst of the global financial crisis.

17. The view towards Saudi Arabia from the halfway point of the King Fahd Causeway linking Bahrain and Saudi Arabia.

18. Protestors on the streets of Bahrain in April 2014, three years after the civil strife that divided the kingdom and led to an unprecedented GCC military intervention.

19. A Saudi soldier on duty at the largest oil refinery in the world, located at Ras Tanura, on the east coast of Saudi Arabia.

20. President Barack Obama delivers remarks alongside delegation leaders following the GCC–US summit at Camp David, Maryland, on 14 May 2015.

21. US Secretary of Defense Ash Carter meets in Washington with Prince Mohammed bin Salman, deputy crown prince and minister of defence of the Kingdom of Saudi Arabia, 4 September 2015.

22. US Secretary of State John Kerry stands with Foreign Minister Yusuf bin Alawi of Oman, Baroness Catherine Ashton of the European Union, and Foreign Minister Javad Zarif of Iran, before the beginning of three-way negotiations about the future of Iran’s nuclear programme in November 2014, Muscat, Oman.

23. King Salman of Saudi Arabia with President Abdel Fattah Al-Sisi of Egypt at the end of an official five-day state visit to Egypt in April 2016. During this visit, both leaders announced the decision to build a bridge across the Red Sea to link the two countries, as well as connecting Asia and Africa.

24. A panoramic view of the Dubai skyscrapers and the Burj Khalifa tower, the tallest structure in the world, before sunrise in late 2015.

25. Preparations underway for a January 2016 performance at the stunning Royal Opera House, Muscat, Oman.

INTRODUCTION

PARADISE FOUND

‘Life isn’t about finding yourself. Life is about creating yourself.’

– George Bernard Shaw

Money can’t buy you love. But if you are an underdeveloped desert kingdom in a dangerous neighbourhood trying to catch up with the modern world and determined to protect your oil wells and gas fields you don’t need love. You need stability at home and influence abroad. This book tells the remarkable story of how the oil- and gas-rich states of the Arab Gulf have found both, and how they have worked to hold on to them over the last four decades. It is not intended for the specialist reader. It is intended for those interested in history, politics and current affairs in general and the rise of this vibrant and turbulent region in particular.

The term Arab Gulf is common shorthand for the Persian Gulf and Arabian Peninsula when referring to the six Sunni Muslim Arab monarchies of Saudi Arabia, Oman, the United Arab Emirates (UAE), Qatar, Bahrain and Kuwait. Together they make up six of the region’s eight countries, half of its entire territory, all of its western littoral and two-thirds of its northern area.¹ Long before any of these territories were nation states or important actors on the regional or world stage, travellers, writers, missionaries, diplomats and adventurers were enthralled by what the English poet Walter de la Mare fittingly described on the eve of the Great War as the ‘spell of Arabia’. This long-time fascination with the history, natural beauty and people of the Arab Gulf remains as strong as ever today. On top of this, since their transition from ‘pearls to petroleum, poverty to prosperity’² in the second half of the twentieth century, the time when this book begins, the Arab Gulf States have become increasingly important players in the regional and global economy. They are bustling centres of international commerce and finance and they aspire to turn their home region into a global hub between East and West. Nowhere in the world, except parts of coastal China, has undergone such a remarkable socio-economic transformation in recent years. All this makes the Arab Gulf a critical part of the global economy. Ambitious rulers have attempted to capitalize on this through extravagant marketing, advertising and sponsorship campaigns to build up their national brands and consolidate and extend their countries’ standing at the heart of the globalized world. High-profile overseas purchases, the hosting of major international sporting events and massive investment in cutting-edge tourism, transport and cultural industries have similarly served to generate unprecedented interest in the region.

There are other explanations for the world’s current preoccupation with the Arab Gulf. Simply put, what happens in the region matters and the stakes are high. The territories that this book deals with only cover about 4,000 kilometres in distance from the Shatt- Al-Arab inlet to the furthest tip of Oman. Yet they are home to more than half of the world’s oil reserves and over a third of its natural gas. With the exception of Saudi Arabia, which was formed in 1932, and Kuwait, which gained its independence in 1961, all the Arab Gulf States achieved independence and entered the United Nations in the last few months of 1971. Since then they have been sovereign states responsible, ostensibly at least, for their own security. Despite spending hundreds of billions of dollars on arms in the ensuing years they have never been traditional military powers. They can’t claim many successes in defending their territories from attack. They don’t have much experience in fighting their foes outside of their borders.

Nonetheless, the petro-dollar revolution in international affairs that followed the Arab–Israeli war of 1973 redrew the power map of the Middle East. Suddenly, Gulf rulers controlled previously unimaginable riches and for the first time the world thought of oil, and with it the oil-producing states, in terms of political influence. As The Economist noted, this provided the Arab Gulf with a ‘power almost unique in history’.³

Rule Britannia

Power in its most fundamental form is measured by the ability to influence outcomes and to provide institutional leadership. It also means being able to get others to act the way you want them to and to get them to take your interests into account before they act. It is fair to say that over the course of the last 100 years most Middle Eastern states have failed to acquire these types of power. All too often what has happened in the region has been defined by external interference and the economic and political dependence that comes with it. Historically, this was certainly the case for the smaller Arab Gulf States, though much less so for Saudi Arabia for reasons addressed later in this book. In 1798 the Sultan of Muscat signed a treaty with British officials. This marked the beginning of an informal British empire in the Arab Gulf that lasted from the 1820s until the beginning of the 1970s.

The British had three interconnected reasons for entering the region – to stamp out piracy and the slave trade, to keep out imperial rivals like the Ottomans and the French, and to protect vital trade routes and commercial interests. This final objective was of particular importance prior to the opening of the Suez Canal in 1869. Until then the waters of the Gulf played a key role in the communications lines to India, the jewel in the imperial crown. All this was achieved through a series of treaties with local rulers enforced by Royal Navy warships. Indeed, eight of the smaller Sheikhdoms in the south-east of the Gulf, including the six who would later come together to form the UAE, were known as the Trucial States in recognition of the treaties they signed with the British. These agreements gave the British the legal right to take charge of the foreign and defence policies of the Gulf Sheikhdoms. Initially, the famed East India Company, which controlled the profitable trade routes between India and Persia, was responsible for the formulation of Britain’s Gulf policy and oversaw the earliest treaties in its role as Crown agent in the region. From the late 1850s onwards, the British administration in India took over, relying on political agents on the ground in Qatar, Bahrain, Dubai and Abu Dhabi to ensure that British interests were protected and that relations with the region’s rulers ran smoothly.

In return for their deference on all matters of war and foreign policy, local leaders gained a British commitment to uphold their rule and where necessary, as in the case of the tiny Trucial States, provide military backing to help them deter all and any internal and external challenges to their rule. During the pre-oil era that lasted until the middle years of the twentieth century in Kuwait, Bahrain and Saudi Arabia and a decade later in Qatar and the Trucial Kingdoms, local rulers loyal to the Crown received rents in return for allowing British commercial and military interests use of their territories. These monies went directly to the ruler and played a very important role in consolidating power in the hands of specific individuals and their immediate families over future generations.

One can also see British influence in the way that rulers across the region chose to spend their rental revenues. Those under British protection and tutelage were more inclined to divide revenues up between major stakeholders in society. In Bahrain, for example, from the time the local Sheikh signed his first treaty with the British in 1820, he received roughly one-third of revenues, a third was paid out in government expenses and a final third was put aside for future needs. In Qatar, where the Sheikh of the Al-Thani tribe signed a treaty with the British in 1916, this policy had its own name, ‘the rule of the four quarters’, as revenues were divided four ways between the ruler, the large and growing Al-Thani family, savings and the rest of the population.⁴ In contrast, in Saudi Arabia, where the British had much less influence and no direct say on spending policies, every single dollar went to the ruler, who had the absolute freedom to spend it any way he chose. For many, this total lack of accountability explains why Saudi Arabia still needed to borrow money during the 1960s even though revenues increased thirtyfold between 1955 and 1965.

In theory at least, and subject to ‘constant advice and encouragement’⁵ provided by their British interlocutors, local rulers possessed full autonomy in the areas of legislative, executive and judicial power, except where a matter was deemed by British officials to cross over into the realm of international relations. They were also free to determine their own matters of succession inside the ruling family, though it was customary for the British government to announce its recognition of the chosen candidate at an official ceremony during which the new ruler officially declared his willingness to honour treaties with and past commitments to the British.⁶ In sum, the Arab Gulf was never colonized or ruled under a mandate like many British possessions in the Middle East and Africa. But the region was under de facto British control and the region’s leaders cooperated closely on all matters of state with the East India Company, the India Office and, finally, from the middle of the twentieth century onwards, the Foreign Office.

End of the Affair

The ‘policy of protectorates’⁷ at the heart of the British informal empire helps us understand the evolving power structures in the Arab Gulf during more recent times. It also makes it impossible to ignore the colonial legacy in the region when thinking about power structures and relationships. At the same time, one cannot explain the evolution of the Arab Gulf, or any other part of the Arab world for that matter, only or even primarily in terms of outside British influence, malign or otherwise. Instead, as this book will show time and again, local suspicions, intense political rivalries, conflicting ideologies and opposing interests and ambitions have conspired to keep the region divided, unstable and weak. By the beginning of the 1960s, British governments no longer had the money, the political will or the popular support at home to continue to provide security and play a leading political role in the eleven Sheikhdoms of the Arab Gulf. The dissolution of the British protectorate of Kuwait in 1961 was an early indication of the future downward direction of British influence in the region.

Over the previous two decades the British had been worn down by rising anti-colonial nationalist sentiment, which had turned the British Empire into public enemy number one across the Arab and Muslim Middle East. One by one it had lost or abandoned its dominant influence or control in Palestine, Jordan, Iran, Iraq and Egypt. In these terms, it was hardly surprising that in January 1968 the British Labour government announced that it would withdraw all its forces from the Gulf by the end of 1971. At home the response to this decision to depart the region after 150 years was resignation. In the United States it had been expected, though that didn’t stop US secretary of state Dean Rusk from deriding the move as the action of ‘Little England’ and reprimanding his British counterpart, foreign minister George Brown, ‘For God’s sake be British.’⁸ Preoccupied as they were with regional security, Arab Gulf leaders had little desire to see the British pack up and leave. Bahrain’s king harked back to the heyday of the empire and lamented how ‘Britain could do with another Winston Churchill’.⁹ Dubai’s ruler, Sheikh Rashid bin Said Al-Maktoum, spoke for many at the time. ‘The whole coast, people and rulers’, admitted this influential figure, ‘would all support the retaining of British forces in the Gulf even though … they may not give a direct answer out of respect for the general Arab view’.¹⁰ Though the ruling families of Saudi Arabia and Kuwait dissented, those of Bahrain, Qatar, Dubai and Abu Dhabi tried to convince British officials to stay by offering to meet the costs of remaining British troops. The Labour government had no intention of changing its mind and rejected the proposal out of hand, indignantly declaring that it was not in the ‘white slaver’ business.¹¹

From Tribes to States

The tribal nature of Gulf society and its interaction with state formation has been a defining feature of the Gulf region over the last fifty years. Functioning states in the modern world share a number of common characteristics – a specific territory, legal authority, an effective financial system and a monopoly on legitimate violence. Beyond this, states are unique and are shaped by their individual circumstances as well as their formative experiences. In the case of the Gulf, the tribe has always played a crucial role in determining social, economic and political interactions. Even during the era of British rule, the concept of a nation state was largely irrelevant in a region where tribes had always spread out across what are today’s national borders, and where families were, and continue to be, split between Saudi Arabia, Kuwait, Bahrain, the UAE and Qatar. Instead, tribalism was at the heart of society and characterized local identities. It also provided legitimacy for the local ruler, whose source of power traditionally came from his relationship with powerful tribes, as well as other factions within his own tribe. In the case of Saudi Arabia, the religious establishment was also crucial. In Kuwait it was the leading merchant families. In Qatar it was important families in the villages around Doha, who in the early 1960s led a strike in protest against the ruling family’s monopoly on resources. Apart from these key constituencies, lesser groups including artisans, functionaries, smaller merchants, traders and fishermen received protection and rewards for their loyalty to the ruler.

This situation had little in common with the relationship between the citizen and the state in Western democracies, where legitimacy derives from the consent of the ruled. In the 1960s and 1970s, as rulers attempted to integrate the tribes into rapidly modernizing oil-rich states and as the idea of a nation state gained ground, the tribal structure was eroded somewhat. This evolving situation led many to argue that the rise of the oil-rich sovereign state resulted in the demise of the power of the tribe. Others have made the opposite claim, making the point that the historic unfamiliarity with the concept of the nation state made it impossible for the Gulf States to evolve into fully capable political entities in more recent times.

There is a third alternative. In her recent entertaining and informative work Tribal Modern,¹² Miriam Cooke addresses the question of modernity, nationalism and state in the contemporary Gulf. In it she shows how the state has consolidated its pivotal position in Gulf society in recent decades as its power has increased in all areas. Though this has led Gulf rulers to co-opt tribal legitimacy and nationalize tribal identity, it has also seen them emphasize the importance of the tribe as part of their ongoing quest for legitimacy through state-sponsored nationalism. In these terms, Cooke rejects claims that the modern Gulf State, with its ideas of sovereignty and nationalism, is on a collision course with the tribal structures that long underpinned society. They are, she believes, just as likely to complement each other as to clash. In defence of her thesis, she points to the evolution of national and cultural brands across the Gulf deeply rooted in the tribal past. As the logo of the Qatar Tourism Authority announces to travellers in the departures terminal of the new airport in Doha, the kingdom is ‘timelessly traditional, distinctly modern’.

The ‘Smallness’ of Small States

Growing up in Ireland – a small, neutral island on the margins of Europe – I have always been fascinated by the role of small states in international affairs and well aware of the limits of small state influence beyond their shores. One of the aims of this book is to tell the story of the Arab Gulf in a way that takes into account the ‘smallness’ of its small states. In the decades after the Second World War, size played an important part in determining attitudes over whether a territorial unit was fit for statehood. So did military power and population size. There was a consensus in the literature for a long time that unless a country had more than ten million people, over 1 per cent of the world’s total GNP, a large territory and a sizeable military capability it was small regardless of what other attributes it had or roles it played.

When Qatar, Oman, Bahrain and the UAE gained statehood at the beginning of the 1970s they were some of the smallest of the world’s small states. Between them they could only claim a combined population of just over one million and no towns or cities with more than 15,000 people living in them. These new nations were so small that their entry into the United Nations engendered a passionate debate over whether the international organization would have more credibility if it refused entry to such tiny entities. As secretary general U Thant remarked, these ‘micro-states’ had raised a problem that was ‘likely to become more acute in the years to come’.¹³ Today, such concerns are no longer relevant. The great majority of the world’s 200-plus legally sovereign states are small. This has required a major reassessment of what does and does not constitute a small state and, more importantly, what a small state can and cannot do.

In the decades covered in this book, the Arab Gulf States have consistently been at the forefront of challenging long-held notions of how small states use diplomacy to consolidate stability at home and influence abroad. Most notably, they have used their wealth and the political capital that comes with it to intervene diplomatically across the Arab and Muslim worlds. Such ‘riyal politik’,¹⁴ as one leading regional expert has described it, has enabled them to become champions of conflict resolution in Yemen, Palestine and Lebanon and in the Western Sahara, Ethiopia and Darfur. On a regional level these interventions have been central to the Arab Gulf’s rising power over recent decades. So has the capacity of the Arab Gulf States to manipulate larger powers in order to protect and promote their own interests and to consolidate their external influence.

At the centre of the Arab Gulf sits Saudi Arabia. It has the largest population, economy and army, its longest involvement in international affairs, most of its oil and its most conservative rulers. Unlike its neighbours the kingdom, in territorial terms at least, has never been small. It is a massive country, the fourteenth largest in the world in terms of landmass, almost four times bigger than France, six times bigger than Japan and seven times larger than the next biggest Arab Gulf State, Oman. Though dwarfed by Saudi Arabia, Oman is still larger in size than Kuwait, Qatar, Bahrain and the UAE combined, a fact that goes some way to underscoring just how small those states are both in absolute terms and in comparison with the kingdom of Saudi Arabia.

So it’s no surprise that over the years Saudi Arabia has been viewed with wariness and distrust by the rest of the Arab Gulf. In recent years, gas-rich Qatar has looked to knock Saudi Arabia from its perch atop Middle East diplomacy. The UAE has looked to do the same in the areas of trade and finance. Oman, for its part, has rejected repeated Saudi calls for political, economic or military union. Mutual tensions and differences in vision aside, all agree with the Saudi view that ‘there is no life without stability’,¹⁵ as the kingdom’s defence minister Sultan bin Abdulaziz put it many years ago. More recently, in 2004, Hamad bin Jassim Al-Thani, Qatar’s then prime minister and foreign minister, made much the same point. ‘Stability’, explained one of the new millennium’s most influential, high-profile and go-getting figures, ‘is the basis for development and growth of our society and is the most strategic challenge facing the area.’¹⁶

Cooperation in Adversity

The scholarly definition of a region is a geographic unit made up of an interdependent cluster of states or territories that share a common space. In the Middle East, one can trace some form of informal order along these lines back to Ottoman times when almost the entire region except modern-day Iran were Turkish possessions and part of the largest land empire in history. After the demise of the Ottoman Empire in the early 1920s, those Arab states, colonies and mandates left behind struggled to promote cooperation on a regional level. In the wake of the ravages of the Second World War, regional groupings were established in many parts of the world including the Middle East, where seven former Arab possessions of the Ottoman Empire came together to establish the Arab League in 1945. Since then the idea of unity has played an important rhetorical function for an organization that can now boast twenty-two states and territories as members. Despite its growth over the years and its impressive achievements in some areas, the Arab League has always had a poor track record promoting cooperation on a regional level. The organization has been held back by a lack of community and cohesion, as well as persistent rivalries among members, not to mention the contested nature of the regional order and the oft-malign influence of external powers on inter-Arab politics. In short, Arab unity has been an elusive goal for the Arab League and on some levels it has even served to institutionalize divisions between Arab states rather than heal them.

In 1981 the Arab Gulf States, all members of the Arab League, came together at the sub-regional level to form the Gulf Cooperation Council (GCC). The initial hope was that this move would provide security in the wake of the recent revolution in Iran and at the start of a bitter war between Iran and Iraq that would ultimately go on for eight brutal and destructive years. From the outset the leaders of all six Arab Gulf countries of the GCC were full of optimism over the future prospects of this new body. Bahrain’s king refitted the Sheraton Hotel in his capital to include a number of luxurious self-contained suites in oriental décor where he could accommodate and entertain his fellow GCC rulers in style. He hailed the GCC as ‘a shining star in the sky of our region’, as well as a river that would ‘irrigate the path of the future where it meets with the streams of good and aspires to the coasts of glory’.¹⁷ Other Gulf leaders made the same point in a more sober manner. ‘We are thinking together, we are talking together, we are planning together, and we are seeing things together instead of individually,’¹⁸ announced Qaboos bin Said Al-Said, the charismatic Sultan of Oman, who was only in his twenties when he took power in a bloodless British-backed coup against his father in 1970. Crown Prince Abdullah of Saudi Arabia came of age in a completely different time. Born in the 1920s, he was a son of Abdul Aziz Ibn Saud, the founder of modern Saudi Arabia. Abdullah had never even visited any other Gulf nation before the birth of the GCC. That didn’t stop him from welcoming the new alliance as a ‘great’ idea that would have ‘far reaching effects’.¹⁹ His king and half-brother, Fahd, was just as positive. He hailed the GCC as the best example yet of regional cooperation and predicted that it would become a model for future cooperation in the Arab world.²⁰

The establishment of the GCC was undoubtedly a monumental step towards regional integration. Yet, like the Arab League and all other regional blocs, including the European Union, its members have repeatedly grappled with the need to cede national sovereignty in order to achieve deeper regional integration. From the time of the GCC’s launch, the one thing that has bound its members together despite this reluctance to give up independence for the benefit of all, is a shared belief that they are vulnerable to external actors who view them as rich and militarily weak states easily bullied, blackmailed or manipulated. This has engendered a deeply held belief among Gulf rulers that the safety of their kingdoms is more likely to be achieved by working together than by acting apart. For that reason the GCC has always been first and foremost a regional security grouping in which the main, if not the overriding, driver for cooperation is the never-ending pursuit of security in a volatile region. As this book will demonstrate, this explains why, at crucial moments, when their sovereignty has been threatened or the region has looked to be on the verge of the abyss the GCC states have closed ranks, put their grievances and national ambitions on hold, and chiselled out a united response in the political, economic and military realms. This was evident in the wake of the Iranian revolution in 1979 and during the Iran–Iraq war between 1980 and 1988. It was further underscored by the Arab Gulf’s response to the Iraqi invasion of Kuwait in 1990 and by its prioritization of cooperation following the attacks on New York and Washington on 11 September 2001.

This preference for cooperation over confrontation at times of intense pressure was also very apparent following America’s invasion of Iraq in 2003 and during the crucial months of the Arab Spring in the first half of 2011. As much of the region descended into chaos at that time, the Arab Gulf States kept their cool, cemented their status as the key Arab powerbrokers in a period of flux and quickly developed into a military and political force in defence of the regional status quo. Since then, they have had to deal with the fallout from instability in Egypt in the post-Mubarak era, the threat of a nuclear-capable Iran with hegemonic ambitions, a post-war Iraq divided on sectarian lines, as well as civil wars in Syria and Yemen and an Islamic State threat that knows no borders. All these and other security concerns not only preoccupy the Arab Gulf but also top the security agenda of the international community, ensuring that the region remains at the centre of the global security system well into the twenty-first century.

Despite sharing many of the same security challenges the Arab Gulf States do not always share the same national interests or priorities in foreign affairs. Like the member states of the European Union, they regularly compete against each other. They have also engaged in numerous squabbles and political stand-offs over oil, borders, Iran, Israel and much else besides. On occasion, tensions have led to clashes and the loss of life. In fact, for such diplomatic trailblazers they have been pretty poor in settling, if not defusing, their own intra-Gulf disputes, particularly on matters of territorial rights. This has cast a long shadow over relations across the Gulf. In particular, it has hampered the development of the bonds needed for the GCC member states to trust each other fully with their own strategic security. On the other hand, according to the scholarly literature, bordering states that harbour some kind of territorial dispute are forty times more likely than other countries to be involved in war. By that measure alone the Gulf States have done a remarkable job in never having militarized their differences with each other beyond localized and irregular clashes.

One explanation as to why such major differences have never boiled over into all-out conflict is that all the Arab Gulf States share much more than a belief in the benefits of collective security. They also share the same language, religion and monarchical political structures, as well as similar identities, customs and values and, to varying degrees, the same source of revenue – oil.

Little Big Spenders

Oil is a key consideration in social, political and economic structures in the Gulf. The Arab Gulf States are central players in the global financial system and world economy because of oil. Oil wealth enabled them to navigate the recent credit crunch and global financial and economic crises better than any other regional grouping. Their sovereign wealth funds (SWFs), state-owned investment vehicles, played a key role in responding to those same crises. In the process, they created what has been aptly termed an ‘aristocracy of liquidity’, whose influence stretches across the world. In the West, these funds, many only founded in the early 2000s, have taken substantial stakes in big-name companies, top financial institutions and luxury brands through high-profile purchases. They have bought up some of the world’s prime real estate and have financed the construction of some of the most noted new buildings. In the process the city skylines of some of the world’s great cities are increasingly coming to be defined by the iconic, innovative reminders of the Gulf’s presence and influence.

Throughout the Middle East and in key emerging markets like China and India, the GCC states are now also leading investors in tourism, finance, energy, construction and agriculture, playing a key role in shaping urban and rural landscapes for decades to come. The decision by Saudi Arabia’s King Abdullah to make his first ever state visits outside the Middle East to China and India in 2006 highlighted this evolving axis of power. So did the launch of the China–GCC Strategic Dialogue in 2010. What is true for China is also true for India. Speaking recently, the country’s foreign minister was categorical. The Gulf region, explained Sushma Swaraj, is ‘pivotal to our national development goals and … crucial to our national interests in myriad ways’.²¹

The Gulf’s capacity to spend hundreds of billions of dollars of oil and gas revenues at home and abroad on cutting-edge projects and high-profile assets should not obscure the fact that though the Gulf States are rich, they are small rich. In the early 2000s, for example, after almost two decades of low oil prices, Americans spent the same on tobacco in a year as Saudi Arabia received in oil revenues. To take another example, Washington spent US$89 billion in Iraq in its first full year occupying the country in 2004. The same year Kuwait’s annual GDP was about half that at US$45 billion. To use another, more recent example, in the middle of 2015, it was announced that Apple, America’s biggest company measured by market capitalization, was worth more than Saudi Arabia’s annual GDP. The point being that amid the newspaper stories of wealth, excess and grandeur one shouldn’t forget that, oil and gas aside, in purely economic terms the Arab Gulf States have never been able to compete with the world’s economic powerhouses. Even when one takes into account the region’s unprecedented global spending spree over the last decade, the GCC states still only hold 1 per cent of the world’s assets between them and still rank outside the top ten biggest economies when measured in terms of nominal GDP.

This has not stopped them from looking to lead the Arab world into new relationships with much bigger traditional and emerging powers including but not limited to China and India. Nor has it stopped outsiders from viewing them in the same way they view much larger emerging markets. ‘The real economic action in the world’, explained then British foreign secretary William Hague in 2010, ‘has been taking place in Brazil and India and China and the Gulf States, and that is where … we now have to connect ourselves much more strongly.’²² Many, though not all, Gulf citizens share a sense of pride with their leaders over being compared to such major economies and they also support the vision of the region as a global trading and financial hub that brings together East and West. Apart from their excellent location, the Gulf economies are certainly well positioned to undertake this highly ambitious project. They are the most globalized nations in the Arab world. They export goods and services at twice the percentage of GDP as other Arab states. Their markets are far more open and they attract far more foreign investment than other Arab economies. Some now even estimate that by 2030 the combined GCC economies will be challenging for a place in the top five economic blocs in the world, members of an exclusive club of economic giants that currently includes the European Union, the United States, Japan and China.

Across the region ambitious rulers have looked to develop their kingdoms into popular holiday destinations that they hope will one day lure and dazzle the world’s visitors. With this in mind they have invested heavily in urban spaces to turn them into attractive destinations for the more refined traveller. This ‘instant urbanization’,²³ as it has been called, has taken place alongside an aggressive campaign to attract major sporting and cultural events to their new cities. Qatar’s success in being awarded the world’s most popular sporting event, the FIFA Football World Cup, is the most obvious example of this. But not a week goes by without a major sporting event taking place in some part of the Gulf. The region is also home to branches of world-renowned museums and galleries like the Louvre and the Guggenheim. There are also several home-grown symphony orchestras, a thriving art and theatre scene, and thanks to the Sultan of Oman’s love of music, Muscat now boasts one of the world’s largest and most ornate opera houses.

The Arab Gulf is only home to 10 per cent of Arabs but Arabic is the fastest-growing language on the web, in no small part because Internet use in the GCC grew by more than 2,000 per cent between 2000 and 2012. The region’s young are now three times more likely to be connected to the Internet than other Arabs and this has sped up the integration of the Gulf’s young into global society. Saudi Arabia alone boasts more than ten million Internet users, more than one-third of the total population and up from only 500,000 a decade ago. The kingdom also has more Facebook users than all other Arab countries combined except much larger Egypt. Members include top royals who joined the site during the Arab Spring to demonstrate, somewhat feebly, their commitment to modernity. Saudi Arabia also has the highest number of YouTube views in the world per Internet user at ninety million per day and, along with the UAE, has more smartphones per capita than any other country in the world. The UAE is also only one of three less-developed status countries (the others are Israel and Slovenia) in the top twenty globally for broadband penetration.

Balancing Act

This leap into the technological age took place before the Gulf experienced the social and cultural evolution that usually accompanies this kind of progress. This has meant that modernization in the Arab Gulf and, in particular, the shift from tribal to urban society has taken place within the traditional confines of the tribal and monarchical order. In 1974, Mana Al-Otaiba, the UAE’s energy minister during the first oil boom, summed up a concern that this engendered even then. ‘I like to live in the desert, far from complication. We can try to keep our good traditions, but I can’t promise we’ll succeed.’²⁴ Almost half a century later, such sentiments are still commonly held by Gulf citizens and are a constant preoccupation for Gulf policymakers. This makes politics, as well as modernization, a complicated affair.

The same families have ruled continuously for generations. Even when there have been coups they have been bloodless intra-family affairs, and transition has been smooth. The socio-economic contract between ruler and ruled has allowed the state to maintain legitimacy without ceding political power to the people. With the exception of Bahrain, there have been surprisingly few protest movements and citizens have shown little appetite for revolution. GCC member states can boast an impressive record of internal stability at home. Crime rates are low and the standard of living is high. On average, Gulf citizens have incomes at least five times higher than those of their fellow Arabs. A recent study found that Kuwait had the fourth highest number of millionaires in the world as a proportion of population; Qatar and the UAE came fifth and sixth in the rankings.

The mid-1990s saw important progress on the political front. In 1997, in a speech before a packed auditorium of students, professors and Gulf watchers at Georgetown University in Washington, DC, the then emir of Qatar, who had come to power the previous year, was frank. ‘Unrest’, Hamad bin Khalifa Al-Thani told those assembled before him, was the result of ‘a lack of democracy’. At the same time, he also justified a cautious approach to implementing full political reform on the grounds that his country was ‘not yet ready’, and because ‘I want everything to go smoothly, and non-stop’.²⁵ Up to the mid-2000s political reform in GCC states was hardly smooth but it was gradual and consistent. There were municipal elections in Qatar and Saudi Arabia and elections to a national council in the UAE. Female suffrage was introduced in Kuwait and universal suffrage in Oman. Qatar launched a new constitution, Bahrain opened a new constitutional