Perhaps because I grew up in Ireland, I have always been fascinated by the role of small states in international affairs and well aware of the challenges and limitations they face at home as well as beyond their shores.
In 2014, I moved from London to Doha, Qatar, to teach international politics. Since then I have been able to observe firsthand the progress of some of the most vibrant and fascinating small states in the world – the Sunni Muslim monarchies of the Arab Gulf.
With the exception of Saudi Arabia, a massive country four times the size of France that is the world centre of Islam and oil, the other five Gulf States – Oman, Qatar, the United Arab Emirates, Bahrain and Kuwait – are by most measures small and young states that only gained independence in the 1960s and 1970s.
Since then they have used their oil and gas wealth to become bustling centres of commerce and finance. Nowhere in the world, except parts of coastal China, has undergone such a remarkable socio-economic transformation in recent decades.
Modern, high-tech cities have risen up out of the desert and this “instant urbanisation” has been accompanied by aggressive campaigns to attract the world’s top sporting and cultural events to the region.
The most obvious example of this is Qatar’s success in becoming the first Muslim country to be awarded the Fifa Football World Cup. But not a week goes by without a major sporting event taking place somewhere in the Gulf. The region is now home to dozens of museums and galleries, and branches of the Louvre and the Guggenheim are scheduled to open soon in Abu Dhabi. There are also several homegrown symphony orchestras, a thriving art and theatre scene and, thanks to the Sultan of Oman’s love of music, Muscat now boasts one of the world’s largest and most ornate opera houses.
Located at the midpoint between Asia, Africa and Europe, at least a third of the world’s population lives within a four-hour plane journey of the Gulf. Ambitious rulers have attempted to capitalise on this by turning their region into a hub between East and West at the centre of the world.
The success of this endeavour so far can be seen in the achievements of the biggest Gulf airlines – Emirates, Etihad and Qatar Airways. They are among the world’s top carriers when measured by key indicators like revenue and international passengers carried.
Last year, for example, Etihad was the fastest growing airline in the massive Indian market. While Dubai was the fourth most visited city in the world – after London, Bangkok and Paris – in terms of international overnight visitor arrivals. The ports of Jeddah and Salalah in Saudi Arabia and Oman are establishing themselves, like Jebel Ali in Dubai, as leading commercial transit and transshipment hubs.
The Gulf States are also positioning themselves as leading investors in tourism, finance, energy, construction and agriculture in key emerging markets like China and India, as well as less developed parts of Africa and Asia.
In more traditional Western markets they have taken substantial stakes in big-name companies (Volkswagen AG; BAA, the owners of Heathrow airport), top financial institutions (the London stock exchange; Credit Suisse; Barclays and Citibank) and luxury brands (Harrods; LVMH, the owner of Christian Dior and Dom Pérignon champagne). They have bought some of the world’s prime real estate, such as the Chrysler Building in New York. They have also financed the construction of some of the most noted new buildings including Europe’s tallest, the Shard, in central London.
None of this should obscure the fact that these same states face major socio-economic and security challenges. Some observers even argue that the pressures they face run so deep that they cannot be overcome.
The Gulf States inhabit one of the most turbulent and dangerous regions in the world. Outside their borders they have to navigate the ongoing turmoil caused by the crises in Syria, Iraq and Yemen, not to mention the threat posed by Iran, and non-state actors like Isis which have thrived in the post-Iraq invasion environment.
Yet as much as these external forces are reshaping the entire Middle East, the Arab Spring has underscored the extent that it is domestic socio-economic issues rather than external security threats that pose the greatest challenge to the Arab Gulf.
The need for economic diversification away from reliance on oil revenues is at the top of the list. Low oil prices and an energy sector radically altered by the exploitation of unconventional sources of oil and gas, including shale, make this all the more essential.
In order to address this daunting task the entire region needs to reform government spending, the patronage system and the bloated public sector. Simultaneously they must build up a productive private sector, tackle the problem of foreign workers – who make up on average 80 to 90 per cent of local workforces – and empower increasingly vocal young and female populations through greater economic opportunities and a stake in the future.
All this illuminates the central contradiction at the heart of the Arab Gulf. It has achieved so much in its rise to power and influence, but now needs to develop its human capital, which has not kept pace with its rapid transition into a key player at the heart of the world’s economic and financial systems.
In the past, the Gulf States have demonstrated great resilience and adaptability. They have withstood regional war and terrorism, as well as low oil prices, economic stagnation and the societal ills that come with rapid and uneven modernisation.
If they can now wean themselves off oil dependence and, in the process, achieve more sustainable and equitable economic development, they will consolidate stability at home and influence abroad for generations to come. And they will serve as a model for other small states facing different, but no less difficult, challenges of their own.
Rory Miller is a professor of government at Georgetown University in Qatar. His new book, Desert Kingdoms to Global Powers: The Rise of the Arab Gulf, has just been published by Yale University Press
