After the Sheikhs

by Davidson, Christopher

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  EXPLAINING SURVIVAL—DOMESTIC MATTERS

  The survival of the Gulf monarchies to date—at least on a domestic level—has been predicated on the unwritten, unspoken ruling bargains or social contracts that exist between the ruling families and their populations. Together with the neo-patriarchal governments that have formed, these bargains and their constituent strategies have usually been enough to placate most citizens, satisfy the needs of resident expatriates and guarantee some degree of political acquiescence from the population, thereby allowing the monarchies to avoid repression or coercive ‘maintenance of the polity’.1

  Given the economic and demographic disparities between the six Gulf monarchies, these ruling bargain components differ from state to state and, as circumstances have changed; new components have been added while others have been withdrawn. Nevertheless within all of these highly dynamic bargains there are readily identifiable patterns and much common ground.

  All of the Gulf monarchies have emphasised the state being first and foremost a distributor of wealth rather than an extractor, and arguably this remains the central pillar of monarchical survival. Drawn mostly from revenues derived from the region’s hydrocarbon concessions or from rent generated by more recent post-oil activities, the largesse of these modern day rentier states has undoubtedly provided their ruling families and governments with considerable ‘eudemonic legitimacy’—that is, legitimacy derived from economic well-being and the provision of social welfare.2 Closely connected to this component has been the ability of these states to boost massively the national identity and social status of their citizens or ‘locals’—immediately identifying them as recipients of distributed wealth and often positioning them in advantageous business positions. In the wealthiest monarchies, this automatically elevates citizens above all other sections of the population. Although technically not part of this ‘rentier elite’, the millions of expatriates living and working in the Gulf states are often similarly satisfied, as most are able to enjoy a competitive, tax-free income, and usually plan on returning home after a few years. Those that do not conform can easily be suppressed and deported.

  Non-economic components of the ruling bargains also matter greatly, especially in those monarchies with a declining ability to distribute wealth. In many cases, rulers and their heirs have invested much time and effort in cultivating personal resources or even perpetuating personality cults; often based on sporting prowess, scholarly achievements, or celebrity status. The aim, it seems, has been to sustain an air of traditional authority for these individuals to keep governing their people. Connected to this has been the generous funding and support for museums and other projects that emphasise the Gulf monarchies’ tribal heritage and pre-oil history, often serving as ‘living memories’ of how the incumbents can trace their lineage back to key founding fathers. Similarly important, especially in Saudi Arabia, but apparent in all six states, has been the exploitation and co-option of religion, mostly—but not exclusively—Islam. Ruling families have worked hard to generate an image of piety, while their governments have carefully funded and controlled most parts of the clerical establishment, thus heading off religious opposition. Other components have also recently been experimented with, often with mixed results. Projects and initiatives focusing on the environment or green energy, for example, have recently been proving popular. Despite the region’s massive hydrocarbon production and extremely high carbon footprint per capita, they have served to win favourable headlines for the dignitaries involved.

  Distributing wealth

  Since the 1960s the traditional system of tribal leaders giving gifts to their subjects, friends, and enemies in exchange for loyalty or faithful service has been massively advanced. The verbal instructions or small chits of paper issued by sheikhs or their secretaries to grateful petitioners were quickly replaced by official documents drawn up by rulers’ courts or new bureaucrats as hydrocarbon revenues allowed the nascent states to transfer wealth directly to their citizens and establish the most generous welfare states in the developing world, underpinned by subsidised utilities, fuel, and foodstuffs. One of the more visible benefits for citizens was the provision of government housing. Although fairly modest in the 1960s and 1970s, the free dwellings nonetheless allowed for air-conditioning and the connection of refrigerators, televisions, and other appliances. In the poorest parts of the region, especially in Saudi Arabia and Oman, the effect was to transform the lives of thousands. Many older Omanis today, for example, often state that ‘before Qaboos there was nothing’, referring to the poverty and lack of basic amenities prior to Qaboos bin Said Al-Said’s succession in 1970. In more recent years, the quality of free housing, especially in the smaller, richer Gulf monarchies, has dramatically improved, while expatriates have often moved into the original government housing. Recipients in these states can now expect sizeable apartments and villas, usually with one bedroom for every child. In some cases, utilities are also provided for free, as are telephones.3

  In Qatar, for example, the Barwa Housing Project has provided hundreds of families with reasonably high quality free accommodation complete with parks and playgrounds. The housing is available only to Qatari citizens, but allows for a relatively high monthly income threshold of $4,400.4 Similarly, and more extensively in the UAE, the Sheikh Zayed Housing Programme provides ‘deserving UAE national families’ with three choices: either a government-provided house, an interest free loan to buy a new house, or a grant to refurbish or maintain an existing residence. Most of the government-provided houses are of good quality, especially in the wealthiest emirate of Abu Dhabi, and the quality of free houses in the poorer, northern emirates, has been improving of late. In 2008 the programme’s annual budget was increased to $350 million, and an announcement was made that over 40,000 new villas would be constructed for UAE nationals over the next four years at a cost of $4 billion.5 In parallel Dubai now has its own such housing scheme, unsurprisingly named after its ruler—the Muhammad bin Rashid Housing Programme—and in early 2011 more than 700 new homes were allocated to UAE nationals at a cost of over $250 million. Aiming to ‘offer appropriate accommodation to Emiratis of all social classes and meeting their basic needs, especially a dignified housing’ the programme has little in common with government housing in other parts of the world, as the units are of nine designs ranging from three to five bedrooms and have façades in different architectural styles including Islamic and Andalusian. Moreover, the beneficiaries have been receiving text message construction updates direct from the developer.6

  Significantly, despite all of these new Gulf homes being part of official government spending, the keys are usually handed out to recipients in a more traditional setting—often by a ruling family member at some sort of cultural gathering. An incident heavily reported in the UAE’s state-backed media provides a particularly good example: in 2008 the ruler of Dubai was apparently touring the eastern province of Abu Dhabi in his role as UAE prime minister when he came across a 99 year old UAE national. Upon seeing cracks in the walls of the man’s house Muhammad asked him if he needed anything. Replying simply that he ‘wished for a long and happy life’, Muhammad reportedly replied ‘here we will build for you a very comfortable home’ before ordering the construction of a new villa for the man, and new accommodation for all the man’s grandsons. Three years later, in 2011, the local reaction to Muhammad’s earlier visit was understandably positive, with the elderly man explaining that ‘there are no words to describe the generosity and care [Muhammad] shows towards his people’ and with the district’s governor being similarly enamoured of the sheikh.7

  As well as houses, the government-led granting of land for agricultural and commercial use to citizens has also proved popular—a straightforward resource for many Gulf monarchies to exploit given that in most cases the state or even the ruler himself owns all land unless specifically re-assigned. For citizens still dwelling in rural or hinterland areas, many have been provided with plot
s of land to develop into working farms. And in the wealthier Gulf monarchies, especially Abu Dhabi—where Zayed bin Sultan Al-Nahyan had a particular keenness for ‘greening’ the emirate with trees and vegetation—many nationals have been provided with grants to purchase the necessary farming equipment and hire expatriate workers. Alternatively, and sometimes in addition to agricultural land, citizens have also been provided with plots of land in urban or industrial areas—either to be developed as retail outlets, workshops, or simply to build blocks of apartments to then rent out to expatriates. In some instances these plots of land have never been developed, serving simply as car parks or rest areas for lorries—but either way, they still generate rent for their respective landlords. As with the allocation of houses, the process is usually linked directly to key members of ruling families, despite being a part of official government spending. In Abu Dhabi, for example, the Khalifa Committee for Social Services and Commercial Buildings—named after and chaired by Zayed’s eldest son and Abu Dhabi’s current ruler, Khalifa bin Zayed Al-Nahyan—has dispensed over $10 billion in such property or grants since its inception in 1981.8 Undoubtedly its popularity helped bolster Khalifa’s status as Abu Dhabi’s long-serving crown prince. Similarly in Qatar, all citizens are eligible to receive a plot of land ranging from 700 to 1,500 square metres, and an interet-free loan of about $250,000 towards its development. In order to claim these plots an application must be made directly to the ruler’s court—a process through which ‘the Emir’s patronage is reinforced both symbolically and practically’.9

  In addition to social security benefits for unemployed citizens—which are very generous, about $3,000 per month in the wealthier Gulf monarchies,10 and modest in all but the poorest Gulf monarchies of Bahrain and Oman—the welfare states that have been set up since the 1970s also include free healthcare and education. Again there is marked disparity between the quality of services offered in the wealthiest and poorest of the six states. In Qatar, for example, a new $2.4 billion hospital is being established in co-operation with Cornell University,11 while the state-sponsored Qatar University is believed to operate with a massive endowment. In the UAE and Kuwait, similarly well-equipped hospitals have been in place for years, and students at state sector schools and universities can usually expect to receive free textbooks and in some circumstances even free laptop computers. In Saudi Arabia, a new public research university—the King Abdullah University of Science and Technology—was launched in 2009 at great expense. Comprising eleven faculties and already educating several hundred students, the university even offers stipends of several thousand dollars per year to its students. While Bahraini and Omani state sector hospitals, schools, and universities clearly lack the same level of attention and funding as in their neighbours, they are nevertheless far in advance of facilities available elsewhere in the developing world and are still easily among the best facilities available in the Arab world. Oman’s Sultan Qaboos University—established in 1986—enjoys a long and distinguished history in the region, as did Bahrain’s Salmaniya Hospital until recently.

  Another important and highly visible feature of the Gulf monarchies’ allocative states has been the provision of public sector employment to most citizens, provided that they meet the most basic of qualifications. In the 1970s and 1980s almost all citizens who graduated from university were guaranteed jobs in the civil service, in ministries, or in other government departments. Moreover, citizens invariably enjoyed higher salaries than their expatriate counterparts, along with generous pensions, relaxed working hours, and good promotion prospects. Although something of a taboo subject in the region, it remains fair to say that citizens—especially at this period—were not required to work to international standards, with very few ever being fired from their positions. Put politely, with reference to Saudi Arabia ‘…royals have on many occasions used their fiscal authority to…employ veritable armies of idle bureaucratic clients’.12

  In recent years it has become harder for the Gulf monarchies, especially those with declining resources or larger populations such as Bahrain, Oman, and Saudi Arabia, to keep creating and funding such generously paid and well-protected jobs. But in the smaller, wealthier monarchies it undoubtedly remains a central strategy, with public sector salary increases usually being tied to important political events. In the UAE, for example, within days of Khalifa bin Zayed’s succession as Abu Dhabi ruler and UAE president in late 2004 it was announced that all nationals working in the public sector would receive an immediate 25 per cent pay increase: understandably a popular decision.13 Even more dramatically, in December 2009—just days after Dubai’s economic crash was reported in the international media and many UAE nationals were questioning their real estate investments in the emirate—the federal government announced that all citizens in the public sector would receive a 70 per cent pay rise, including all staff employed by the giant ministries for health and education. Emiratis interviewed by state-backed newspapers were understandably impressed, with one remarking ‘I would like to thank the Government for making it easier for Emiratis to live in the city, and for helping provide for their future plans,’ while another claimed ‘this increase will help me live more comfortably, buy property, and increase the limit on my spending’.14 Significantly, as with most such salary hikes in the region, expatriates were excluded.

  As discussed later in this book, in those Gulf monarchies where public sector employment can no longer be guaranteed for citizens, it has been harder for the ruling families and governments to rely continuously on salary increases to boost popularity. Nevertheless, steps have been taken to make sure that those who end up working in the private sector can still benefit from their nationality. In Saudi Arabia and Kuwait, for example, many jobs that appear to be in the private sector are very often in large, government-backed parastatals such as the Saudi Basic Industries Corporation or the Kuwait Projects Company (KIPCO). In this sense, employment conditions for citizens differ very little from those working in ministries or government departments. Similarly, in Abu Dhabi, which has recently streamlined the number of civil service jobs from 65,000 to 28,000, and has plans to trim the number to 8,000,15 many new pseudo-public sector jobs have been created by giant government-backed companies and the many joint ventures they have sponsored. The aforementioned Mubadala Development Company is particularly noteworthy, as together with its many offshoot projects it now employs thousands of young UAE nationals.

  Where genuine private sector employment opportunities for nationals do exist, for example in Bahrain and Dubai’s export-processing free zones it is far more difficult to earmark jobs for citizens or to offer them different rewards from expatriates. Nevertheless, efforts have been made—though not always successfully—by some Gulf monarchies to encourage companies to help indigenise the labour force, either by imposing quotas or by introducing legislation that offers citizens greater job protection or better working hours than their expatriate peers. In 2004, a report conducted by Tanmia—the UAE’s National Human Resource Development and Employment Authority—recommended that the ‘system introduced by the Government of applying minimum quotas for employment of UAE nationals needs to be applied to more economic sectors to ensure jobs for nationals’ and that private sector firms should contemplate introducing training programmes specifically for citizens.16 Moreover, in late 2009, with concerns over the credit crunch growing, the UAE’s federal government resorted to blatant protectionism, announcing that it would be illegal for employers to make UAE nationals redundant from their jobs, except in the most extreme cases.17

  Other aspects of the wealth distribution strategy of the Gulf monarchies include the regular cancelling of debts, and the dispensing of ‘government charity’ to the minority of indigent citizens who somehow slip through the free housing and welfare state net. The former mechanism, much like the periodic public sector salary increases, tends to be deployed during economic or political crises as a means of reinforcing the loyalty of citizens. Kuwait provides
the best example of this, with the government having revoked most personal debts and stock market losses following the 1982 Souq al-Manakh crash—named after the informal, unregulated bourse that had been set up in an air-conditioned garage. Thousands of Kuwaiti nationals had bought into the market, in many cases their first experience of personal investments, before having their stocks wiped out. In 1991, following Kuwait’s liberation from Iraq, the government again moved to abrogate most personal debts, allowing citizens more quickly to resume their pre-war lifestyles. And in 2008 the government set up an $18 billion emergency fund, specifically to assist Kuwaiti nationals with debt problems. As the effects of the credit crunch on Kuwait’s economy intensified, this was extended in 2009 following the government’s purchasing of over $23.3 billion of consumer loans—this being financed from the annual interest accrued on foreign assets held by the Kuwait Investment Authority.18 As discussed later in this book, widespread debt cancellation has re-emerged in Kuwait 2011 and in many other Gulf monarchies, as all grapple with the aftermath of the Arab Spring.