Abstract
Oil-rich countries of the Gulf are mainly conceptualised as rentier-economies characterised by the reliance on oil as the main revenue, and by the importance of oil as the overall economic activity (see Loslan 2010). Capitalism and Class in the Gulf Arab States, however, despite recognising some insights of this approach and the importance of oil for the region, delivers a critical way of approaching the countries of the Gulf Cooperation Council (GCC) composed of Saudi Arabia, the United Arab Emirates (UAE), Qatar, Bahrain, Kuwait and Oman. The book portrays them ‘not simply [as] monarchies that sit atop an oil spigot’ (p. vii), but as capitalist states representing a particular expression of class formation that ‘has evolved alongside and within the development of a global capitalist system, and is best seen as a specific reflection of a global capitalist world market as a whole’ (p. 16).
This is illustrated by some crucial developments concerning the GCC region. First, with its increased demand for oil, the new political economy of postwar capitalism turned the GCC region, with its huge oil reserves, into a central part of the capitalist world economy. Second, the ‘petrodollars’ flowing from the GCC region to capitalist centres were recycled as loans to multinational companies, governments and other borrowers, and, since the early 2000s, constituted one of the cornerstones in ‘propping up global markets [and] in the adjustment of global economic imbalances’ (Morgan Stanley, cited on p. 98). Third, the industrial development of East Asia, especially that of China, triggered the export of oil and gas from the GCC region eastwards, creating important economic links between these regions, whereas the US-GCC trade is dropping. This is the reason why a chief economist in Dubai’s International Financial Centre stated that the Gulf ‘will be dancing to a Chinese tune; this is a tectonic shift in economic and political power eastwards … this is where our future lies’ (quote from p. 184). The fourth and last crucial development is the rapid industrial development of GCC countries, which turned them into an important market for world exports and services.
A novel contribution of Capitalism and Class in the Gulf Arab States is the analysis of the formation of a capitalist class within the region. This class – termed ‘Khaleeji capital’ – emerged essentially through state-led redirections of oil revenues to leading merchant families and other elites. Based upon Marx’s analysis of the circuit of capital, the book analyses the productive, commodity and financial circuits of ‘Khaleeji capital’ from the late 1960s to 2008.
Through nationalisations of the exploration and production of oil in the early 1970s, the productive circuit mainly encompassed refining petroleum, distributing crude oil and gas, and producing aluminium, steel and cement. Since the 1990s, however, manufacturing and construction turned out to be important sectors as well. The dominance of the oil industry and the heavy reliance on imports is of special importance for the commodity circuit, as imports were only allowed if the products imported were represented by a local agent. And the states granted this representation right to leading merchants. During the 2000s, the Gulf region turned into a significant market for the import of consumer goods. But with the development of industrial manufacturing, the import of machinery and heavy equipment increased, too. The finance circuit, an integral part of the global economy since the late 1960s, was first characterised by flows of ‘petrodollars’ to capitalist centres. But especially since the early 2000s, the region attracted major capital flows, too. From 1997 to 2007, the Gulf region was the fastest growing region for FDI inflows in the world.
This book argues that the rapid and ascending development of ‘Khaleeji capital’ is inseparably tied to the presence of temporary migrant workers. Their high presence at the labour force of GCC countries – reaching 96, 94 and 55 per cent in the UAE, Qatar and Saudi Arabia in 2010, respectively (Al-Kuwari 2013: 5, see also Baldwin-Edwards 2011: 9) – is mainly attributed to demographic circumstances and the lack of national labour power. The book, however, convincingly argues that these proximate causes obscure the fact that this ‘spatial configuration of class serves as a “fix” for Gulf capitalism’ (p. 64) as ‘the working classes of the Gulf presented a significant potential threat to capital accumulation at a global scale’, and ‘any attempt by labor within the Gulf to wrest control of the oil rents fiercely guarded by the ruling family could profoundly impact the stability of the world market’ (p. 60).
The importance of this ‘fix’ is illustrated with regard to the working and living conditions of migrant workers. In most of the GCC countries, the recruitment of migrant workers is regulated through the ‘kafala system’, a sponsorship system that makes migrant workers heavily dependent on their employers. Trade unions are banned in Saudi Arabia and the UAE, and are strongly restricted in the other countries. Migrant workers face miserable working and living conditions, and have no right to minimum wages in the private sector. Most importantly, they can be legally deported. The outbreak of the global financial crisis in 2008 further worsened this situation. Deportations through the block-booking of entire planes, and deteriorating working and living conditions were accompanied by stranded migrant workers whose employers fled without paying them, or without returning confiscated passports. Such a class configuration, argues the book, not only increases ‘the ability to discipline labor … but, for the worker to struggle against a spatial identity that is solely constituted through their relationship with capital means, in a very real sense, to struggle against oneself. It thus represents an acute form of alienated labor’ (p. 65). The World Cup, to be held in Qatar in 2022, will most probably lead to ‘a civil works tsunami’ (a Filipino diplomat, cited in ITUC 2011: 5). This has already caused discussions in the media about the situation of migrant workers in GCC countries, and has led some of these states to declare their intentions to achieve improvements in this regard.
Capitalism and Class in the Gulf Arab States delivers a unique way of theoretically approaching the GCC region, and is also an invaluable empirical source for future research in analysing the region, since it provides a list of hundreds of GCC companies and financial institutions. The book provides a solid basis for further research focusing on state–capital, capital–capital and capital–labour relations in the GCC region.