reflections

Mar 15, 2019 | 10:00 GMT

8 mins read

The Arab Gulf's Tall Task to Transform the Populace

Saudi men unfurl a giant Saudi national flag during a ceremony to raise the highest flag in the country in the eastern city of Dammam on June 17, 2008.
(AFP/Getty Images)
It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.
Highlights
  • Much like the USSR's failure to create a New Soviet Man, the Arab Gulf states' attempts to cultivate transformed, economically productive citizens are likely to founder due to a lack of local support.
  • As Gulf Arab states encounter public resistance to their policies of economic reform, they are likely to fall back upon traditional means of pacifying their populations, such as massive public subsidies.
  • At the same time, growing nationalism that the Gulf's royals houses cannot control could create more conflict in the region.

Some blessings are also curses — or so the Gulf Arab states of the Persian Gulf have discovered. Though blessed with vast quantities of hydrocarbons, the countries are cursed with the looming knowledge that the world will not pay ever-higher prices for them. To meet the price of modernity and reform their economies, the Gulf states have embarked upon sweeping national identity projects to transform the tribes and sects of their countries into productive, globally competitive and loyal citizens of sustainable nation-states. But while such plans appear destined for success on paper (or PowerPoint), reality may be a different proposition altogether: A lack of local buy-in may scuttle these ambitious projects to coax citizens into becoming economically productive citizens, leaving a patchwork of half-implemented reforms — while rumbling nationalism threatens to foment conflict.

The Big Picture

The Gulf Arab states are some of the wealthiest in the world, yet their royal rulers have recognized that economic diversification is a must if their countries are to thrive after the age of peak oil demand. Transforming their economies, however, also requires transforming the economic lives of their citizens, who have grown accustomed to massive public subsidies and the perks of unproductive public-sector employment. In the end, converting the Gulf's inhabitants to the ideals of the ambitious economic restructuring program will not be an easy task.

From New Soviet Man to Homo Sovieticus

Of course, there is a precedent for projects to fashion a new person: the early Soviet Union. There, a legacy of imperial conquest, as well as habits born of centuries of feudalism and serfdom, had worn down the czar's erstwhile subjects into human raw materials that could scarcely help construct the new Communist order. In response, the Soviets tried to impose a cultural, national and economic identity upon the peoples of the vast union — that of the New Soviet Man.

It didn't work; in place of the selfless and socialist New Soviet Man came the Homo Sovieticus — a creature that imbued the exact opposite qualities that Moscow sought to instill in its citizens. This Homo Sovieticus never managed to become the economic engine of the USSR or combat the wave of nationalism that welled up during glasnost, eventually breaking apart the union itself.

One reason for the Soviets' failure to create a new person stemmed from their top-down approach to identity building, which never gained support at the grassroots level. Whether in Tbilisi, Tashkent or Tomsk, Soviet citizens were told which languages, rituals, heroes and economic habits to uphold by remote — and often Russian — central planners, rather than receive the chance to insert their own identities into this fresh Soviet face. Moreover, while the Soviets extolled hard work and productive economic habits, they fundamentally failed to structure their economy to incentivize this from the bottom up. When geopolitical push came to shove toward the end of the Cold War, the New Soviet Man was nowhere to be found, apart from the archetypes depicted in propaganda posters.

When geopolitical push came to shove toward the end of the Cold War, the New Soviet Man was nowhere to be found, apart from the archetypes depicted in propaganda posters.

Making a New Gulf Arab

Today, the rulers of the Gulf Arab states face a similar problem in terms of buy-in. As they embark on their top-down national identity strategy, they must find ways of transforming their nationals from passive subjects to active and productive citizens. But while many of them may achieve some of their goals to restructure the economic lives of their populations, their hopes of keeping their peoples apolitical and loyal are likely to run aground.

The six Gulf Arab states of the fractured Gulf Cooperation Council have disparate local histories and identities. Oman's sultanate is centuries old, but its modern borders only took shape after several bloody wars in the 1950s and 1960s. The emirates of Kuwait, Qatar, and the United Arab Emirates remain heavily influenced by the tribal structures the British discovered and reified in the 1800s. Saudi Arabia rules over regions that often have more in common with the country's neighbors than the capital, Riyadh. 

To construct modern nation-states, the GCC countries are experimenting with national identity projects. On paper, the cultivation of a New Gulf Arab has merits — just as the New Soviet Man did. But in practice, older mentalities will always be bubbling just below the surface, ready to reassert themselves in contradiction to the goals for 2030 and beyond

Such dynamics produce contradictions: as rulers in one Gulf country enact a reform to structurally change an economy, they introduce another subsidy to undercut it. For evidence, look no further than the United Arab Emirates' introduction of value-added taxes alongside public sector pay raises in 2018; Saudi Arabia's own reforms to implement taxes along with a direct subsidy as part of the Citizen Accounts Program in 2017-18; as well as delays in Oman in implementing a value-added tax — an issue that is of particular worry for the sultanate given its urgent need for reform.

Throughout the Arab Gulf, states have implemented structural changes to improve productivity, reduce reliance on the public sector as a means of employment and boost state revenue beyond hydrocarbons, only to do just the opposite by undercutting the reforms with new privileges and subsidies. States fearful of a public backlash against necessary, but painful, economic restructuring have delayed, reversed or completely canceled intended reforms — even as they tout mega projects and foreign investment as proof of their economic program's success. Unable to find political paths to defuse public resistance, Gulf states have instead resorted to tried-and-tested subsidies to maintain their social contracts, which inculcate dependence in the population, decreasing the chances that they will be able to participate in any economic transformation in their countries. No Gulf state has yet broken this pattern, particularly at a time when an uptick in oil prices has reduced the immediate need for structural reform. 

States fearful of a public backlash against necessary, but painful, economic restructuring have delayed, reversed or completely canceled intended reforms.

Rallying Around the Flag

But that is not to say national identity projects will make no progress. In fact, crises within the region and further abroad are fueling unprecedented nationalist sentiment. The Saudi-led blockade against Qatar has caused the country's nationals to rally around the al-Thani royal family, holding aloft new nationalist symbols and heroes. Elsewhere, the war in Yemen has rallied many Emiratis to the federation's flags, while Riyadh's cold war against Tehran has given the otherwise disparate Saudis a national foe to rail against. All of these events are girded by intentional national policies that have emphasized singular national identities: Qataris, Emiratis, Saudis, Omanis, Kuwaitis and Bahrainis see themselves more and more as distinct from one another. This was front and center at the recent Asian Cup in the United Arab Emirates, in which the GCC's divisions over the Qatari blockade played out in the stands, with Omanis and Kuwaitis backing Qatar (Emirati authorities barred most Qataris from attending the tournament), and Emiratis throwing shoes at the Qatari team, which knocked out Saudi Arabia and the home side en route to winning the tournament.

Gulf rulers are not accustomed to such patriotic fervor, but as this new trend evolves, individual nationalists in each state will develop their own priorities, vilify their own foes and decide for themselves what constitutes national honor and what does not. That, in turn, will force Gulf rulers to consider their populace in profound new ways. The subject of war and peace has long been the purview of the royal majlis, or council, but nationalists may have other ideas. For that matter, nationalists may foment conflict on issues that their rulers might prefer to avoid — much like the seemingly intractable Armenia-Azerbaijan conflict, in which the rising tide of local nationalism overwhelmed the unifying Soviet identity to ignite a civil war in the late 1980s and early 1990s between the two Soviet republics. Conversely, it may also fuel isolationism, compelling leaders to avoid making strategic overtures to countries to appease nationalists. They may undermine agreements their rulers make with foes they dislike or demand shows of support and solidarity with nations their rulers would prefer to avoid. Ultimately, this new wave of nationalism will undercut the strategic freedom of the royals.

Looming on the horizon, however, is an even greater worry: peak oil demand. When that comes, neither sovereign wealth funds nor hydrocarbons will be able to pay the bills. How will the nationalists react to that day? Will they rally, circle the wagons and buckle down in austerity, as the royal families will hope? Or will they blame their rulers in a fit of populist rage — infused with a national backbone that crosses sect, age, gender and ethnicity? That day remains a long way off, but coming it is. 

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