Christopher Davidson - After the Sheikhs - The Coming Collapse of the Gulf Monarchies

Although perhaps less visible, a more immediate concern — especially for the poorer Gulf monarchies of Bahrain, Oman, and to some extent the more populous Saudi Arabia — is the now evident breakdown of their capacity to provide the most basic facilities and economic opportunities for their citizens. As well as suffering from a declining ability to keep offering subsidies and the structural problem of voluntary unemployment, these states are increasingly experiencing a widening wealth gap within their national populations, with rising involuntary or real unemployment, and in some cases even citizens living in conditions of poverty. As with the personal fortunes of the ruling families, the latter issue has been another highly sensitive, even taboo, topic of discussion in the region for many years. It has been dangerous for the Gulf monarchies to admit that there are now substantial numbers of indigent nationals in their countries after decades of hydrocarbon exports and sizeable government revenues.

In Bahrain’s case, unemployment in 2005 was thought to be as high as 15 per cent, [537] 76. CIA World Factbook 2011 . Country overview on Bahrain. although official figures have usually been lower. In early 2011 the official unemployment rate was still less than 4 per cent [538] 77. Bloomberg , 21 February 2011. while independent studies in mid-2011 claimed it was about 15 per cent. Similarly in Oman, recent independent studies have estimated the rate at 15 per cent. [539] 78. Al-Masah Capital Special Report 2011, ‘MENA: The Great Job Rush’. Total unemployment in Saudi Arabia, most of which is probably now involuntary, is the subject of even more speculation, with estimates ranging from 10 to 20 per cent among adult males, especially among the youth. In 2009 official statistics were produced indicating that 27 per cent of men under the age of thirty were unemployed, while employment opportunities for young women remained extremely limited. [540] 79. See Nolan, May 2011. Indeed, it was even reported that some Saudi women were having to work as maids in Qatar. [541] 80. Fromherz, Allen J., Qatar: A Modern History (London: IB Tauris, 2012), p. 12. In late 2010 the Saudi minister for labour stated that 500,000 Saudi nationals were unemployed, promising a gathering at the Riyadh Chamber of Commerce and Industry that ‘We are going to have to solve this unemployment problem’. At about the same time, however, fresh official figures were released indicating that unemployment had risen to 10.5 per cent, with analysts claiming that Saudi Arabia’s published aims of halving unemployment by 2014 are unrealistic and that unemployment is likely to remain high. [542] 81. Arabian Business , 30 December 2010.

Unsurprisingly, this is leading to increasing criticism of the government from unemployed Saudi youth or those having to take on menial jobs. At a protest held by unemployed teachers in 2010, their spokesman claimed they were ‘…surprised about the lack of opportunities despite the need for teachers but the ministry was not interested in this’, while a recent Reuters report highlighted the case of those educated Saudi nationals who can now only find work as taxi drivers, private security guards or other low-paid jobs. [543] 82. Reuters, 29 August 2010. Increasingly, complaints are being directed at expatriates rather than the government, with a now popular — although seemingly inaccurate — belief among many Saudi nationals that foreigners are being paid more than citizens and are taking jobs that used to be reserved for them. According to a Financial Times report in late 2010 some Saudi newspaper columnists and social media users were lamenting publicly the ‘…money that they believed foreigners were skimming off Saudis, portraying expatriates as wallowing in luxury while the country struggles with unemployment’. In particular one columnist claimed ‘We are not surprised. Foreigners control all retail business, grocery stores… they are given facilities and priority, killing all job prospects for Saudis… nine million foreigners are bleeding the country dry’. [544] 83. Financial Times , 7 September 2010. Even in the smaller, wealthier Gulf monarchies there are signs that involuntary unemployment is rising, particularly in the UAE where there remains a great imbalance between the more developed emirates of Abu Dhabi and Dubai, and the poorer ‘northern emirates’. In Fujairah, for example, official statistics from 2009 indicated that the emirate’s unemployment rate was 20.6 per cent, well above the UAE’s national average of 14 per cent. [545] 84. Reuters, 6 July 2011. More significant is that most of the unemployed in the more developed emirates are likely to be voluntarily unemployed, while most unemployed in the northern emirate are likely to be involuntarily unemployed.

With regards poverty and poor living conditions, there is increasing evidence in Saudi Arabia of large numbers of nationals struggling to make ends meet. In a recent Financial Times report it was claimed that ‘…many young men cannot afford to marry or buy a home, raising concerns of social unrest and higher crime rates… many foreigners complain of bag-snatching or robbery at knifepoint by young Saudis, as unemployment stokes xenophobia’. [546] 85. Financial Times 7 September 2010. Meanwhile chief economists at Saudi-based banks have warned that ‘[although] the unemployment rate is not new it has become more of a political concern now. Prices are going up in very critical areas like food and housing. Purchasing power is being quickly eroded’. [547] 86. Financial Times 7 September 2010. Quoting Jarmo Kotilaine, an economist at NCB Capital. In Bahrain the situation is believed to be much worse, with some 50,000 Bahraini nationals estimated to be on waiting lists to receive affordable housing. [548] 87. Kinninmont (2012), p. 18. In some cases Bahraini nationals have had to wait over twenty years before being properly housed. In a report published in 2011, for example, a fisherman’s life was used to typify the poor social conditions endured by many Bahrainis. It was claimed that he had always ‘…shared the cramped, run-down family home in Sitra with his parents, four brothers and two sisters. The four adult brothers slept in one small room. One of his sisters is married with four children, who also live in the family home’. His income was believed to be only about $210 per month, which he complained was barely enough to cover a weekly food bill. Moreover, he had stated ‘…how much he wanted to get married and start a family, but he couldn’t afford a house. Like many young Bahraini men, he couldn’t start a family because he was too poor’. [549] 88. Global Research Special Report on Bahrain, 10 April 2010.

As well as their high unemployment rates, the UAE’s northern emirates provide perhaps the most interesting example of poverty in the Gulf monarchies, given the increasingly visible divide between the country’s richer and poorer emirates. According to statistics from 2008, Abu Dhabi’s contribution to the UAE’s overall GDP was nearly 56 per cent, while Dubai’s contribution was about 32 per cent. As such, the five other emirates combined accounted only for 12 per cent of GDP. Even more alarming, perhaps, was that Abu Dhabi’s contribution to the federal budget — from which most development assistance for the poorer emirates is funded — was only 3 per cent of its GDP, while Dubai’s contribution was only half a per cent of its GDP. [550] 89. The National , 27 June 2010. It can be argued that since the UAE’s independence in 1971 the relative GDP contributions of the northern emirates have actually declined. [551] 90. Davidson (2005), chapter 3. The poor conditions have manifested themselves in different ways. Small protests have occurred, some of which have been bought off with promises of increased housing benefits, while others have been quashed by federal security forces. [552] 91. Reuters, 6 July 2011. In 2006 inhabitants from a village outside Ra’s al-Khaimah blocked roads to stop trucks getting through. The authorities responded by sending in tanks and then followed up with substantial financial compensation for the villagers. More often, however, nationals of these emirates simply complain of a variety of problems ranging from a lack of basic utilities to housing shortages. But in all cases their remonstrations serve to dispel the myth that all UAE nationals are wealthy and content.