The Rich Arab States in Trouble

A careful analysis of the situation among the oil-producing states on the Persian Gulf reveals how simplistic is the view that the more money such a country earns the more “secure” it is. In reality the very opposite may be correct. During the first ten or twenty years after oil revenues have begun to flow, it is relatively easy to channel the funds in such a way that the population is satisfied and approves of the way government affairs are being managed. In a rich oil-producing country, government affairs consist largely of handing out the money. When this is done in a sensible manner, the government can be reasonably sure of popular support. Certain services are widely regarded as having priority and governing officials know that these must be provided: health and education, then housing, road construction, jobs. During the first generation of national prosperity it is much easier than it will be later to satisfy the needs and wishes of the populace, because the memory is still fresh in their minds of how living conditions were before the oil wealth began to flow.

The people of those Gulf countries have a status somewhere between subjects and citizens. They are governed in traditional Arab fashion by traditional tribal rulers, yet they have a certain voice in affairs in that they have the right to come before their rulers and complain about abuses and inadequacies. At the outset they are thankful to be getting new hospitals and schools. Some of them manage to become prosperous. Certain governments, such as that of Kuwait, have made sure that most families in their realms have enjoyed at least something of the country’s new wealth—though as always there are those who have profited enormously and others who have benefited to only a modest degree.

In most cases the popular distribution of a minimum of the oil wealth has had to do with real estate ownership and home building. The governments of these states have seen to it that all their citizens have their own home and a bit of land. This has enabled the common folk to profit from the fabulous boom which, in the course of just a few decades, has transformed what were once worthless pieces of desert on the edge of the oil towns into “parcels” now selling at prices close to those of New York real estate.

To the members of the first “oil generation” it was also a delight to be able to acquire an automobile, a refrigerator, an air conditioner, and a TV set. (For their sons and daughters, all these things have become absolute necessities of life. And indeed the new Kuwait and Abu Dhabi are so constructed that cars and air conditioners are virtually necessities.) For that first generation the fact that their children received a free primary education, then secondary-level schooling along with some pocket money, and finally university scholarships for those willing and able to use them, constituted an unprecedented privilege for which one had to be grateful—and was. Faced with all these sudden advantages, the people were prepared to accept and forgive the extravagances and more or less comprehensible ostentation of the ruling classes.

Even in the first generation, of course, there was a clear difference between the broad though underpopulated Saudi Arabia and the ministates along the Gulf—Kuwait, Bahrain, Qatar, the Emirates. In the city-states conditions were transparent and the rulers could with relative ease remain in contact with the people. In many cases this meant that mistakes and dissatisfaction became evident early enough to be corrected. The ruling class in these countries usually consists of a widely ramified family or clan, the chief figures of which hold the most important cabinet posts under an all-powerful ruler (emir or sheikh). The links between them and the citizens and subjects of the Gulf city-states have seldom been broken completely, no matter how rich the rulers have become.

In Saudi Arabia, by contrast, the situation was different from the outset. Stretching over almost the entire Arabian Peninsula, this state was created on a foundation of the religious and tribal solidarity of the Wahabite tribes of eastern Arabia, under the leadership of its first monarch, Abdul Aziz Ibn Saud. The Wahabites—a puritanical sect of the Sunni branch of Islam—conquered western Arabia and its holy cities shortly after World War I. The Saudis’ rule over their extensive kingdom is thus relatively young. In this huge territory there are many tribes, linked to the ruling class by complex political ties; there are also divergent religious movements, contrasts and conflicts of interest between urbanites and Bedouins, and extreme differences in mentality, such as those between internationally linked merchant families in the centers of pilgrimage and isolated oasis farmers.

When oil revenues began to flow into this broad, barren kingdom it was like rain in the desert, which quickly collects into rushing torrents that briefly fill the dry wadis with destructive masses of water. The money flowed in specific political and economic channels. It was very difficult to arrange for a broadly based distribution that would have benefited the country’s approximately five million people with some degree of equity. Those who already had money and thus were in a position to make good deals became steadily richer, while the torrents of money flowed right past many Saudis, who experienced little more than their inflationary effects.

In former years, of course, some channels led from the Saudi court to the various tribal chieftains, who retained great power over their tribes to the extent that they were able to count on the financial and military support of the Riyadh regime. In his day Abdel Aziz Ibn Saud, founder of the ruling dynasty, married dozens of daughters of these tribal chiefs. One by one, as they found themselves divorced by the monarch, these women returned to their tribes and were granted financial support from the throne for themselves and their little princes, of whom there are several thousand today. In the 1960s, when Saudi pilots began defecting to Nasser’s Egypt with their aircraft, the entire air force was grounded at first. Then it was decided that in future only royal princes would be trained as combat pilots—which gives some measure of how heavily the Saudi state, just fifteen years ago, counted on the solidarity of blood and privilege which held the kingdom together.

But with the influx of oil money that society began to change. Its tribal structures are dissolving, the tribesmen and their families moving to the cities and the urban slums around them. The traditional tribal leaders, who themselves are moving into urban luxury housing, are losing their control over the people. Citizens with money now travel to Europe and elsewhere. On the surface many of these prosperous people continue to lead strictly traditional Muslim lives. But behind the walls of their villas and palaces the customary luxuries of the West are being cultivated. In time, of course, the former tribesmen now crowding the urban slums learn what is happening in the centers of opulence, and in many cases they may imagine it as even more sensational and vice-ridden than it really is. The religion which once bound these people together now becomes a divisive element, because the common folk are inclined to believe that the upper classes only pretend to be strict Muslims in order to ensure that the masses will remain bound to the strict Wahabite rules of behavior.

On the Arab side of the Persian Gulf the oil began to flow shortly after World War I. By the time oil revenues quadrupled in 1973, the second generation had just grown up and begun entering active economic and social life. This is a generation of people to whom the pre-oil days are known only from hearsay, who take for granted—or even regard as their natural right—all those things for which the former generation was so grateful. They no longer compare the old Kuwait or Qatar with the new; instead they measure today’s Qatar or Bahrain against London, Zurich, or New York. Why should their cities, as rich as Zurich and richer than either London or New York, not be equally pleasant to live in? And if they are not, it is obviously the fault of the government. The ruling classes find it steadily more difficult to satisfy a population which has already attained a considerable level of prosperity without having had to earn it by their personal labors.

The governments of these Arab oil-producing states, often advised by foreigners who have an interest in selling them industrial equipment, have begun making provision for the time when their oil deposits will have run out by attempting to establish modern industries. In doing so they have found it necessary to call in two kinds of foreigner: highly trained specialists, and the more numerous workers required to undertake those labors which the now-prosperous native sons are no longer willing to carry out. Certain categories of experts have had to be brought in from other Arab lands, most notably (for linguistic reasons) teachers, instructors of all kinds, administrative specialists, communications experts in the mass media, officers, and to some extent physicians. Other specialists have been brought in from Europe, Japan, the US, the Arab world, and the Indian subcontinent. Large numbers of lower-level workers have come from Iran, Pakistan, some from India and Korea.

In Saudi Arabia the largest contingent of imported workers is from Yemen, a poor mountainous country with a significantly larger population than Saudi Arabia’s. There are between one and two million Yemenite workers in Saudi Arabia today, which means that as many Yemenites as Saudis, if not more, are working in that country. In the United Arab Emirates there are great numbers of immigrant workers from Oman, who came there before oil was discovered in their own country. The UAE, whose oil boom did not get started until the 1970s, has had to look to the Indian subcontinent and the Far East in its search for foreign workers. Today more than half of Kuwait’s population consists of foreigners. They are divided into many groups and categories with varying status—but all of them are less privileged than the Kuwaiti citizens.

In Kuwait’s social pyramid, just below the various classes of Kuwaitis come the Palestinians (about 20 percent of the population), most of them teachers, bureaucrats, and technicians of every variety. They are followed by other Arab groups (Egyptians, Iraqis, Lebanese, Syrians). Many of these enjoy some of the same educational privileges as the Kuwaitis, but they are disadvantaged in other ways. For example, they may not open businesses of their own, unless it is in partnership with a Kuwaiti. Immigrants from India (many from Goa) and Pakistan are decidedly underprivileged; many of them are doctors, office workers, or skilled industrial workers, but their children’s schooling must be paid for by themselves or the companies that hire them; many have come without their families. Finally there are the manual and part-time laborers from Iran, the various Arab countries, and the Far East, some of them even without residence permits.

As the second-oldest oil producer of the region (Bahrain is the oldest, but has always had a relatively small output) Kuwait has an especially large and influential Palestinian presence. This is because many Palestinians, especially highly qualified people, flocked to that new El Dorado after the founding of Israel.

As industrialization has progressed in the Arab oil-producing states, two fundamental difficulties have become increasingly evident. First, that the new industrial facilities are in general neither profitable nor competitive on world markets. Second, in many cases these industries must be headed by foreign specialists (because of a lack of qualified locals) and operated mainly by foreign workers (because unskilled locals prefer earning their living in such occupations as taxi driver). The relatively few well-educated native members of the younger generation prefer to work primarily as managers and businessmen, in the hope of joining the ranks of domestic millionaires.

In Saudi Arabia these developments have led to a situation in which there is today a large number of people who no longer live in the traditional social nexus but nevertheless are not at all inclined or suited to become industrial workers. Consequently it is the Yemenites and other foreign laborers who are being trained and who threaten to outstrip the Saudis in knowledge and skills.

At the same time the big profits from industrial expansion are going to Saudi entrepreneurs, many of whom already have more money than they can ever spend and whose life style is patterned accordingly. Thus the cleft running through Saudi society grows steadily deeper and wider. The foreign buyers of Saudi oil as well as the big businessmen working closely with the country’s ruling class are eager to see more and more of the oil money circulating, which in turn further promotes the social imbalance. In recent months the Saudi rulers appear to have begun to realize, although still only dimly, that the more money it spends the shorter their regime will last. As a result there have been demands from within the royal family for a reformulation of the kingdom’s development plans.

In the ministates along the Gulf, on the other hand, it has been possible to maintain something like a coherent social pyramid, chiefly perhaps because internal conditions there are more transparent. Although the socioeconomic differences in those countries too are tremendous, the various strata are in sufficiently direct contact with one another to have a counterbalancing effect. The Kuwaitis “control” the Arab immigrants who in turn keep a rein on the non-Arab workers. And even the virtually disenfranchised and severely exploited illegal immigrant workers at the bottom know that they have a vested interest in the continued existence of the present regimes of these ministates, which enable them to make a kind of living they could never earn at home. This “stability,” of course, is dependent on the entire social pyramid’s constantly being lubricated with oil revenues. Aside from oil, these Gulf states produce very few goods or services, and it is only with their oil money that they can pay for their enormous imports. (Bahrain, with its small and declining oil revenues, is something of an exception. With considerable foresight, it is trying to become a service center for the neighboring oil-producing states and their vast fortunes.)

The ministates along the Persian Gulf are heavily dependent on the military and political power of Saudi Arabia. They know that they would inevitably be affected by any storms that might break out in the Saudi kingdom. The rulers and political observers of those tiny countries are therefore keeping a concerned, if not worried, eye on Saudi Arabia these days, wondering how much longer its present regime will be able to stay in power.