As the end of the oil era approaches, Saudi Arabia is lining up a US$2 trillion sovereign wealth fund

By Shabbir Dastgir, University of Huddersfield

The falling price of oil is beginning to have a real impact on the energy-fuelled economies of the Gulf. In 2014, after almost a decade of record highs, the price of a barrel of Brent crude began to collapse from a peak of US$140 to less than US$30.

Saudi Arabia is lining up a US$2 trillion sovereign wealth fund to see it through the twilight years of the oil era. But not all the countries of the Gulf Co-operation Council, or GCC, have this kind of cash. Indeed, even for Saudi Arabia, the new era of low oil prices spells increasing budget deficits, reductions in state subsidies and a slowdown of the energy and construction sectors, which the region’s economies have been built on.

Both private and state-owned firms are starting to restructure to reduce costs and increase efficiency now that the boom is over. They are merging divisions or outsourcing certain functions, introducing performance-related earnings, offering redundancies or smaller pay increases to staff. Qatar ought to be able to continue awarding annual salary increases given the continued investment in areas such as construction thanks to the 2022 football World Cup. But others, such as Saudi Arabia – most exposed to oil price fluctuations and subject to wide-ranging public sector cuts – will likely see redundancies at a time when the rate of inflation is high and subsidies are declining.

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U.S. sold $33 billion of weapons to Gulf states in 11 months

Defense News reports: The US State Department has facilitated $33 billion worth of weapons sales to its Arab Gulf allies since May 2015, according to department figures.

The six Gulf Cooperation Council (GCC) countries have received weapons including ballistic missile defense capabilities, attack helicopters, advanced frigates and anti-armor missiles, according to David McKeeby, a spokesman the State Department’s Bureau of Political-Military Affairs.

“Consistent with the commitments we made to our Gulf partners at the Camp David summit last May, we have made every effort to expedite sales. Since then, the State and Defense departments have authorized more than $33 billion in defense sales to the 6 Gulf Coordination Council countries,” McKeeby told Defense News. [Continue reading…]

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Gulf states guarding their interests in Saudi-Iran rift

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The New York Times reports: For all the diplomatic dominoes that have fallen across the Middle East in recent days, with ambassadors from different countries flying home as a result of the explosive rift between Saudi Arabia and Iran, the map of allegiances has not significantly altered.

Certainly, several countries offered muscular shows of solidarity to Saudi Arabia after an Iranian mob attacked its embassy in Tehran over the weekend, prompting a crisis that has put the United States in a bind and has threatened to set back the prospects for a resolution to the conflict in Syria.

By Tuesday, Kuwait had recalled its ambassador to Iran, the United Arab Emirates had downgraded its diplomatic relationship, and Bahrain and Sudan had joined Saudi Arabia in severing its relationship with Tehran entirely.

Yet many other Sunni Muslim countries signaled that they intended to take a more measured approach to the argument — sympathizing with Saudi Arabia, a rich and powerful ally, but also determined to avoid getting sucked into a harmful conflict with Iran, a country governed by Shiite clerics, with potentially grave costs.

“The smaller Gulf states are worried they will get caught in the middle,” said Michael Stephens, a research fellow at the Royal United Services Institute in London. “It worries them greatly that things could go badly.”

Some countries, like Turkey, Egypt and Pakistan, are already battling their own domestic insurgencies. Others are keen to guard their strategic interests or to keep the door open to trade with Iran while there is a prospect of American sanctions being lifted.

Qatar, which shares with Iran access to the world’s largest natural gas field in the Persian Gulf, has yet to declare its hand. Oman has also been quiet, sticking to its longstanding position of neutrality on Saudi Arabia and Iran.

In Turkey, where senior officials have warned about the impact of the crisis on a “powder keg” region, Prime Minister Ahmet Davutoglu offered his country’s services to help resolve the conflict peacefully. [Continue reading…]

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The politics animating Sunni-Shia sectarian conflict

Nader Hashemi writes: The response by most Arab regimes, principally those of the GCC, to the Arab Spring is revealing. It serves to highlight the salience of authoritarianism over theology in understanding the dynamics of Sunni-Shi‘i relations today. Fearing that the demand for political change would sweep across the Arab world and destabilize their own societies, several of these regimes relied on a strategy of exploiting sectarianism to deflect demands for democratization. The response from these governments can be situated within the framework of Joel Migdal’s thesis [discussed earlier in this article] on the nature of “weak states” and the “strategies of survival” that shape their politics.

In writing about the House of Saud’s reaction to the Arab Spring, Madawi al-Rasheed observes that:

Sectarianism became a Saudi pre-emptive counter-revolutionary strategy that exaggerates religious difference and hatred and prevents the development of national non-sectarian politics. Through religious discourse and practices, sectarianism in the Saudi context involves not only politicizing religious differences, but also creating a rift between the majority Sunnis and the Shia minority.

This was made easier when only Shi‘as in the Eastern province came out to demonstrate during the Arab Spring, while similar protests in the rest of Saudi Arabia failed to materialize. The specter of an Iranian Shi‘i/Savafid threat was invoked, and the usual Wahhabi court (Ulema) were given air time to issue fatwas against public demonstrations and to warn people of the wrath of God that would fall upon those who defied their rulers. The security forces were then brought in as backup to restore order via the usual tactics of repression that are common in non-democratic regimes.

Al-Rasheed, however, notes that it is wrong to characterize relations between the Saudi regime and its Shi‘i population as a one-way street that relies exclusively on repression. The House of Saud “deploys multiple strategies when it comes to its religious minorities and their leadership,” she observes. “Wholesale systematic discrimination against the Shia may be a characteristic of one particular historical moment, but this can be reversed. A political situation may require alternatives to repression. Sometimes repression is combined with co-optation and even promotion of minority interests and rights.”

For example, when ISIS bombed Shi‘i worshippers on two occasions in May 2015, the Saudi regime strongly condemned the attacks and vowed to hunt down the perpetrators. Expressions of solidarity with the Shi‘a soon followed and were widely disseminated on official state media. Summarizing this strategy, al-Rasheed concludes that:

It is important to note that there is no regular and predictable strategy deployed by Saudi authoritarianism against the Shia. Each historical moment requires a particular response towards this community, ranging from straightforward repression to co-optation and concession. The Arab Spring and its potential impact on the country pushed the regime to reinvigorate sectarian discourse against the Shia in order to renew the loyalty of the Sunni majority.

[Continue reading…]

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The cost of the suppression of the Arab Spring

How many mass movements in search of political rights would have been pronounced failures if success had to be established in just five years?

The quest for women’s rights has continued throughout human history and continues today.

Palestinians, Kurds, Tibetans, Kashmiris, and numerous other groups of indigenous peoples have for many decades campaigned and fought for their rights, often with very limited success.

But when it comes to the Arab Spring, those who stand to lose most from the expansion of political rights across the region, are now — not surprisingly — only too eager to pronounce it an expensive failure.

The idea that it might have been better to stay home and stay quiet, will all too easily resonate among the millions of people who have suffered the effects of the suppression of the Arab Spring.

As some of the region’s autocratic rulers and their advisers gathered in Dubai this week and soberly measured the “cost of the Arab Spring,” they should also — had they been honest — have been celebrating the rise of ISIS.

From Dubai to Tehran and from Riyadh to Cairo, it has been ISIS that has saved the day. The Arab Strategy Forum should have invited Abu Bakr al-Baghdadi as their guest of honor.

Don’t get me wrong. I’m not promoting any of the conspiracy theories about ISIS being the creation of a foreign government (be that the Saudis, the Turks, the Israelis, or the Americans — which of those being the culprit would depend merely on who the proponent such a theory sees as the worst enemy).

ISIS saved the day through its savagery by convincing nearly everyone else that political stability is worth more than any kind of political freedom.

Much as it will often be repeated that the need to destroy ISIS has never been more urgent, those whose rule is currently being legitimized by ISIS’s existence will be quite content for this war to be a valiant fight that sees no end.

And those blinkered by the conviction that the U.S. government is the architect of all the world’s afflictions, need to recognize that conflict in the Middle East is now being driven from many engine rooms — in Damascus, Moscow, Tehran, Jerusalem, Ankara, Riyadh, Cairo, Abu Dhabi, Doha, Beirut, Raqqa and elsewhere — in pursuit of incompatible agendas.

Among those costs, the greatest are not measured in dollars — the numbers of casualties and refugees. And these are not costs of the Arab Spring; they are, above all, the cost of the Assad regime’s refusal to respect the rights of the Syrian people.

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U.S.-led air war on ISIS in Syria has little allied support

The New York Times reports: As the United States prepares to intensify airstrikes against the Islamic State in Syria, the Arab allies who with great fanfare sent warplanes on the initial missions there a year ago have largely vanished from the campaign.

The Obama administration heralded the Arab air forces flying side by side with American fighter jets in the campaign’s early days as an important show of solidarity against the Islamic State, also known as ISIS or Daesh. Top commanders like Gen. Lloyd J. Austin III, who oversees operations in Syria and Iraq, still laud the Arab countries’ contributions to the fight. But as the United States enters a critical phase of the war in Syria, ordering Special Operations troops to support rebel forces and sending two dozen attack planes to Turkey, the air campaign has evolved into a largely American effort.

Administration officials had sought to avoid the appearance of another American-dominated war, even as most leaders in the Persian Gulf seem more preoccupied with supporting rebels fighting the government of President Bashar al-Assad of Syria. Now, some of those officials note with resignation, the Arab partners have quietly left the United States to run the bulk of the air war in Syria — not the first time Washington has found allies wanting.

Saudi Arabia and the United Arab Emirates have shifted most of their aircraft to their fight against Iranian-backed Houthi rebels in Yemen. Jordan, reacting to the grisly execution of one of its pilots by the Islamic State, and in a show of solidarity with the Saudis, has also diverted combat flights to Yemen. Jets from Bahrain last struck targets in Syria in February, coalition officials said. Qatar is flying patrols over Syria, but its role has been modest. [Continue reading…]

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Extreme heatwaves could push Gulf climate beyond human endurance, study shows

The Guardian reports: The Gulf in the Middle East, the heartland of the global oil industry, will suffer heatwaves beyond the limit of human survival if climate change is unchecked, according to a new scientific study.

The extreme heatwaves will affect Abu Dhabi, Dubai, Doha and coastal cities in Iran as well as posing a deadly threat to millions of Hajj pilgrims in Saudi Arabia, when the religious festival falls in the summer. The study shows the extreme heatwaves, more intense than anything ever experienced on Earth, would kick in after 2070 and that the hottest days of today would by then be a near-daily occurrence.

“Our results expose a specific regional hotspot where climate change, in the absence of significant [carbon cuts], is likely to severely impact human habitability in the future,” said Prof Jeremy Pal and Prof Elfatih Eltahir, both at the Massachusetts Institute of Technology, writing in the journal Nature Climate Change.

They said the future climate for many locations in the Gulf would be like today’s extreme climate in the desert of Northern Afar, on the African side of the Red Sea, where there are no permanent human settlements at all. But the research also showed that cutting greenhouse gas emissions now could avoid this fate. [Continue reading…]

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Why are the Gulf states so reluctant to take in refugees?

By Rana Jawad, University of Bath

Europe’s reaction to the refugee crisis has hardly been a calm and considered one; with fences erected and border controls reinstated, the continent’s governments are struggling to agree on a response.

But at least Europe’s governments are acting. In the Middle East, things are rather different. In particular, the Arab Gulf States are catching serious flack for their response to the crisis – or rather, their failure to respond.

One big question is reverberating in the minds of the general public, expert observers and policy-makers; why have the Gulf states, who are among the richest countries in the world, not taken in any Syrian refugees? There’s no need to rewrite the commentary that’s already out there: many articles have provided useful statistics and background information on the international conventions and treaties the Persian Gulf countries are signed up to, and their failure to honour them.

What all this misses, though, is the general lack of social justice and a social welfare ethos in the Persian Gulf and Middle East in general. This is a complex story about the mindset of a region in disunity and disarray.

[Read more…]

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The Arab world’s wealthiest nations are doing next to nothing for Syria’s refugees

Ishaan Tharoor writes: To varying degrees, elements within Saudi Arabia, Qatar, the U.A.E. and Kuwait have invested in the Syrian conflict, playing a conspicuous role in funding and arming a constellation of rebel and Islamist factions fighting the regime of Syrian President Bashar al-Assad.

None of these countries are signatories of the United Nations’ 1951 Refugee Convention, which defines what a refugee is and lays out their rights, as well as the obligations of states to safeguard them. For a Syrian to enter these countries, they would have to apply for a visa, which, in the current circumstances, is rarely granted. According to the BBC, the only Arab countries where a Syrian can travel without a visa are Algeria, Mauritania, Sudan and Yemen — hardly choice or practical destinations.

Like European countries, Saudi Arabia and its neighbors also have fears over new arrivals taking jobs from citizens, and may also invoke concerns about security and terrorism. But the current gulf aid outlay for Syrian refugees, which amounts to collective donations under $1 billion (the United States has given four times that sum), seems short — and is made all the more galling when you consider the vast sums Saudi Arabia and the U.A.E. poured into this year’s war effort in Yemen, an intervention some consider a strategic blunder.

As Bobby Ghosh, managing editor of the news site Quartz, points out, the gulf states in theory have a far greater ability to deal with large numbers of arrivals than Syria’s more immediate and poorer neighbors, Lebanon and Jordan:

The region has the capacity to quickly build housing for the refugees. The giant construction companies that have built the gleaming towers of Dubai, Abu Dhabi, and Riyadh should be contracted to create shelters for the influx. Saudi Arabia has plenty of expertise at managing large numbers of arrivals: It receives an annual surge of millions of Hajj pilgrims to Mecca. There’s no reason all this knowhow can’t be put to humanitarian use.

No reason other than either indifference or a total lack of political will. [Continue reading…]

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Most of the drivers of regional destruction have little to do with Iranian-Saudi rivalry

Rami G Khouri writes: [Regional] destruction is painfully visible every day in Iraq, Syria, Lebanon, Palestine, Bahrain, and Yemen, at the very least. This spectacle of multiple fragmenting states is bad enough; it is made even worse by the latest troubling development — it is too early to call it a trend — which is the spectacle of repeated bomb attacks and killings of government officials and security forces in three of the most important regional powers that should be stabilizing forces in the Middle East: Turkey, Egypt, and Saudi Arabia. Add to this the ongoing war in Yemen, and the erratic battle against “Islamic State” (ISIS) forces in Syria, Iraq and other tiny pockets of ISIS presence around the region, the massive refugee flows and the stresses they cause, and the dangerous sectarian dimensions of some of the confrontations underway, and we end up with a very complex and violent regional picture that cannot possibly be explained primarily as a consequence of Iranian-Saudi rivalries.

A more complete explanation of the battered Arab region today must include accounting for several other mega-tends: the impact of the last twenty-fix years of non-stop American military attacks, threats and sanctions from Libya to Afghanistan; the radicalizing impact of sixty-seven years of non-stop Zionist colonization and militarism against Palestinians, Lebanese, Syrians and other Arabs; the hollowing out of Arab economic and governance systems by three generations of military-led, amateurish and corruption-riddled mismanaged governance that deprived citizens of their civic and political rights and pushed them to assert instead the primacy of their sectarian and tribal identities; and, the catalytic force of the 2003 Anglo-American led war on Iraq that opened the door for all these forces and others yet — like lack of water, jobs, and electricity that make normal daily life increasingly difficult — to combine into the current situation of widespread national polarization and violence.

Most of these drivers of the current regional condition have little to do with Iranian-Saudi sensitivities, and much more to do with decades of frail statehood, sustained and often violent Arab authoritarianism, denied citizenship, distorted development, and continuous regional and global assaults. [Continue reading…]

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U.S. may raise Arab states to ‘major’ ally status

Politico: The White House is open to the possibility of declaring all of the Arab states attending a Camp David summit “major non-NATO allies,” a designation that makes it easier for the United States to provide financial and military aid, a top U.S. official said Thursday.

The designation stops short of being a mutual defense pact, but a joint statement released later in the day includes a promise from the United States “to use all elements of power to secure our core interests in the Gulf region, and to deter and confront external aggression against our allies and partners.”

“I am reaffirming our ironclad commitment to the security of our Gulf partners,” Obama told reporters at a news conference at the conclusion of the summit.

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Iran these days is a greater focus of Arab ire and disquiet than Israel

From Dubai, Roger Cohen writes: When Amr Moussa, the former secretary general of the Arab League, spoke here of the Arab world’s humiliation by three non-Arab states — Iran, Israel and Turkey — and the way they had, through their “hegemony,” turned Arabs into a “laughingstock,” I asked him what exactly he meant.

His response focused on Iran. This in itself was interesting. Statements from Tehran about Iran calling the shots in several Arab capitals — including Damascus, Baghdad and Sana — had “enraged many of us,” he said, leaving Arabs humiliated that any power “would dare say that.”

As this remark suggests, Iran these days is a greater focus of Arab ire and disquiet than Israel, a country with which many Arab states have aligned but unsayable interests.

Cut to Camp David and President Obama’s attempt to reassure Persian Gulf leaders that the United States can, in Secretary of State John Kerry’s words, “do two things at the same time” — that is, conclude a nuclear deal with Shiite Iran and honor its alliances with the Sunni monarchies, whose oil is now of less strategic importance to an America in the midst of an oil boom.

The walk-and-chew-gum American argument is a tough sell because Arab honor and Arab humiliation are in play. That’s why King Salman of Saudi Arabia stayed away from Camp David. That’s why the Saudis started a bombing campaign in Yemen: to stop the Houthis, portrayed in Riyadh as pure Iranian proxies. That’s why much of what you hear these days in Dubai (where many Iranians live and trade) is talk of Obama’s betrayal of the Arabs through infatuation with Iran. [Continue reading…]

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