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Social Discord and the Power-Capital Nexus in the Gulf

[Riyadh, Saudi Arabia. Image from Broad Arrow/Wikimedia Commons. 2007.] [Riyadh, Saudi Arabia. Image from Broad Arrow/Wikimedia Commons. 2007.]

[The following is the executive summary of a study conducted and published by the Gulf Centre for Development Policies. The full report in Arabic can be found here.]

The Constant and the Changing 2014: Social Discord and the Power-Capital Nexus in the Gulf

Executive Summary

The sudden explosion of the 2011 Arab uprisings came as a shock-reminder that societies never remain stationary. Where, then, do the countries of the GCC—pivotal players on the Arab and global landscape—currently stand and what are the future trajectories that are slowly brewing within their societies? These questions lie at the heart of the annual strategic publication of the Gulf Center for Development Policies, released in its second installment under the title “The Constant and the Changing 2014: Social Discord and the Power-Capital Nexus in the Gulf.”

A product of the work of over twenty researchers from the GCC, “The Constant and the Changing” is concerned with the chronic disorders that plague the GCC development paths. The publication holds that the main challenges facing GCC societies can be grouped around four key disorders: the political, encapsulated in limited popular participation in the decision-making process; the economic, or the increasing dependency on oil rent as a primary engine of production and the economy;  the security disorder, or the inability of the GCC to provide adequate and independent protection, having to rely instead on foreign backing; and  finally, the demographic disorder, which focuses on the disproportionately large and ever-increasing reliance on migrants with few political and economic rights in society.

These disorders dialectically amplify and reinforce each other, generating a number of social contradictions that that have come to the fore in GCC societies. This issue chooses two manifestations of the disorders that have become paramount. First is the rising political antagonisms and fragmentation between various religious sects, ethnicities and region-based identities that have started to seriously threaten the social fabric. The second is the increasing concentration between political and economic powers. Taken together, these two contradictions serve as poignant reminders of an infamous diagnosis of GCC societies as ones where “political power is more than absolute” and the populations are “less than disempowered.”

The Political Disorder

This section offers an annual update of the political state of affairs in each GCC country in relation to the political disorder as manifested in the lack of popular participation in the decision making process. Particularly, this issue focuses on the theme of social discord and fragmentation, as each section describes the social fabric of each GCC country and the prevailing communal tensions therein. A dedicated in-depth article takes the phenomenon of sectarianism as a case study of social fragmentation. The study analyzes the responses of more than 1600 participants in a random sample of four GCC countries (Saudi Arabia, Bahrain, Kuwait and Oman) to questions on various key domestic and regional issues.

Regionally, the survey deals with the sectarian division over ongoing political crises in the region, such as the wars in Iraq and Syria. Domestically, the survey explores whether sectarian discrimination and exclusion has undermined the notion of full citizenship based on equal rights and responsibilities for all.

When asked for their opinions on regional conflicts, the sample has confirmed that there is, indeed, a clear division along sectarian lines. Domestically, the results have found that sectarian relations appear to be quite tense, though this varies from one country to another, as Bahrain has reported the highest tensions whereas Oman’s divisions have appeared to be marginal.

The study also examined the survey results while controlling for two broad categories of political orientation: Islamist and secularist. It was not surprising that the latter group is far more likely to dismiss the importance of their sectarian identity compared to Islamist respondents. On the other hand, the study has found that secular respondents have repeated the same patterns of sectarian division described above, tending to give similar responses to other members of their sect-group. These results suggest that sectarianism is a product of deep and structural contradictions in GCC societies.

Yet paradoxically, the respondents have overwhelmingly downgraded the significance of their sectarian and ethnic identities in favor of their Arab, Islamic and national identities. This suggests that these sentiments may serve as a basis for an inclusive national project based on full citizenship for all rather than one based on sects or ethnicities.

The Economic Disorder

This section offers an update on developments within each GCC countries in the years 2013-2014 in regards to the economic disorder, which may be summarized as the GCC’s overwhelming dependence on oil rent as a primary source of income. The finite nature of the oil commodity makes this development path unsustainable. Worse, dependence on oil rent makes GCC societies highly vulnerable to fluctuations in the commodity markets. Due to the sheer importance of the topic, the economic section of the publication has examined the processes of oil production and exports, exploring the challenges that face this industry.

GCC governments are not unaware of the pressing need for addressing their oil dependence, as many have articulated long term economic visions that rest on the principle of economic diversification. Examining these economic visions is the subject of another in-depth article, which has found neoliberal ideology, which privileges the private sector, lifting state controls over capital flows and privatization, to be the driving force behind their proposed solutions. In contrast to their pro-business emphasis, these economic visions tend to under-emphasize the economic and social rights of the general public, let alone their political right to participate in decision making.

The drive toward privatization, as is proposed by the economic visions put forth by various GCC states, necessitates a close examination of the banking sector, which represents a pillar in the proposed economic visions. But a close examination has found the booming banking sectors to be dependent on oil income, real estate markets and direct state support through the central banks.

The recurring official emphasis on privatization also raises questions about the ownership patterns of the private sector. What is the extent to which it is tied to the interests of the political elite, such as the ruling families and government ministers and MPs? Taking the stock markets of Kuwait, Saudi Arabia and Qatar as case studies, the study has found an intimate connection between the interests of the political and economic elite. One facet of this connection is the direct state ownership of sections of the stock market, which the study has found to reach 12% in Kuwait, 19% in Qatar and 40% in Saudi Arabia. On the other hand, the study has found ruling family members to own 8% of all stocks in Kuwait, 36% in Qatar and 13% in Saudi Arabia. Their representation within company boards is even higher, indicating a close matching between economic and political power.

The Security Disorder

The GCC states are unable to defend their own borders due to their small size and their weak military apparatus. The GCC states therefore find themselves having to rely on their alliance with superpowers for military protection. This volume has found that this disorder remains unchanged, as over 50,000 military personnel of foreign armies continue to be based in and patrol the territorial waters of the GCC. Yet, despite the weakness of the GCC’s military apparatus, these states are among the world’s highest spenders on military hardware. Taken together, the GCC states spend as much as the United Kingdom and Israel combined.

In light of the significant impact that post-2011 Egypt has had on GCC societies, both on an official as well as a popular level, the security section of this volume has focused on the determinants of GCC-Egypt relations in a historical context. Among the key determinants discussed in this section are: the Muslim Brotherhood-GCC connection, Gulf capital investments in Egypt, migrant Egyptian labor in the GCC and the historic relations between the GCC and Egyptian military establishment. This section also deals with the response of the GCC states to Egypt’s political crisis, where a coalition inside the GCC establishment has been backing the Egyptian military while Qatar has been backing the Muslim Brotherhood. The section concludes by suggesting that management of Egypt’s crisis in this manner is detrimental to both the future of Egyptian society as well as intra-GCC relations.

The Demographic Disorder

The latest statistics show that the size of the labor force—20.5 million in total—continued to rise in the GCC, as 2013 saw an annual increase of 8.47%, driven largely by rising migrants. Overall, migrants comprised 48% of the total GCC populations of 49.3 million in 2013. The percentage varies from one country to anther, however, as migrants make up 32% of Saudi Arabia’s overall population, in contrast with UAE’s 89%. Migrant workers concentrate in the private sector whereas nationals are mostly employed public sector, which offers relatively more secure jobs.

The demographic section of this volume has focused on the kafala system, which governs the flow of migrants to the GCC. Among the key questions this section poses is the nature of this system as a means to systematically marginalize both migrants as well as nationals politically and economically, particularly in kafala’s function as a patronage and rent-seeking phenomenon and the sprawling patronage networks that rentier politics generate.

In sum, this publication has attempted to connect the changing landscape of GCC societies together with the chronic disorders from which they suffer. The publication holds that social fragmentation on one hand versus increasing concentration of political and economic power on the other represent mirror-image symptoms of these disorders. Given that the political elite’s primary concern is maintaining and expanding its power, which rests on rent and profit generation and distribution via patronage networks, it is not surprising to find that communities seek refuge in sub-group identities. To avoid further social disorder in the way that many Arab societies have experienced since 2011, change toward an alternative of an inclusive, democratic and sustainable development path become an urgent goal for the people of the region.

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