Capital Ethiopia Newspaper

Class formation in the Persian Gulf region

As we have been discussing in the previous article, the Persian Gulf region is at the center of the political economic spectrum of the Middle East. Despite very deep material inequalities and with the partial exception of Bahrain, the Persian Gulf states are generally known for a very low level of political discontent, leaving their authoritarian regimes with a firm grip on power. There are several reasons for this. It is largely a result of both domestic and external factors which are significantly shaped by the relationship between the Persian Gulf and the global order.
There is a hidden and largely forgotten history of significant social struggles in the Gulf. From the 1950s to 1970s, there were several well-organized and militant Arab nationalist and left-wing movements across the region. Strikes and protests across the Saudi oil fields, the guerrilla struggle in Oman, and the widespread support in Kuwait and elsewhere for the Palestinian struggle are some examples There was strong sympathy among the Gulf populations for Palestinian and Arab nationalist causes, often linked to the presence of Arab workers from Palestine, Egypt, Syria, Yemen and so forth.
With strong backing by the Britain and America, these movements were met with repression by the ruling monarchies. But in addition to this repression, there was also a transformation in the nature of the region’s labour markets that became evident through the 1980s and 1990s. During this time, particularly following the deportations that took place around the first Gulf War (1990-1991), there was a shift away from Arab workers toward temporary migrant workers from South and East Asia. There were also Ethiopian workers but their number was very small compared with the Asians.
Today, the Gulf states are distinguished by their very high reliance upon this type of temporary migrant labour, with around 70% of these workers from South and East Asia and 30% from the Middle East. These labour flows differ from the permanent migration flows seen in other areas of the world because they are short-term in nature, lack citizenship rights, and are focused on maximizing remittance flows back to the country of origin. In all of the GCC states, temporary migrant workers represent more than half of the entire labour force and in four of these states (Kuwait, Qatar, Oman and the UAE) the proportion is greater than eighty per cent. This heavy reliance on temporary labour flow closely ties the key labour exporting regions to accumulation patterns in the GCC.
The relative stability and adaptability of Gulf capitalism and its ruling elites is closely connected to this class structure. As we all know from the sanding ordeals of our poor compatriots who were deported from the Persian Gulf countries mostly with impiety pocket and severe physical injuries.  High levels of exploitation are enabled because a worker’s residency status is directly tied to holding a job. Once they become unemployed they become ‘illegal’ and are required to leave the country. In other words, because the right to be in the country is conditioned on employment, employers hold an enormous power differential over the worker. Moreover, generational reproduction of the class is highly fragmented because workers generally return home when they finish their contracts. Legal restrictions codify these barriers to class-based action, with unions banned in Saudi Arabia and the Arab Emirates and severely restricted elsewhere.
Contrary to the generally accepted picture of these societies, relative poverty does exist among the citizen population in countries such as Saudi Arabia and elsewhere in the Gulf. But the absence of a local, citizen working class means that political struggles lack an effective social base. Political conflict in these states with the exception of Bahrain thus generally originates in inter-elite discord or Islamist movements not from any widespread class struggle. This relative political calm can be contrasted with the situation in two oil-rich neighbouring countries, Iraq and Iran, where the working class has a long history of mobilization and persistent opposition to Western policies in the Gulf and wider Middle East region.
The implications of this could be seen in the reaction to the 2008 economic crisis. In the immediate wake of the crisis, the Gulf states saw little popular protest or anger. It is certainly true that many high-profile projects were halted, consumer demand plummeted and businesses shut their doors, but the citizen population emerged relatively unscathed. Instead, there was a slowdown in hires of migrant workers and in places such as Dubai thousands were sent home. This meant that the real pain of the crisis was felt by the swelling numbers of unemployed people across the Gulf’s surrounding regions.
Bahrain, however, is an important partial exception to this pattern. It has less oil wealth than other Persian Gulf states (only 0.03% of proven Persian Gulf reserves according to OPEC), and the peculiarities of its historical development meant that a significant sectarian divide was established between a largely Sunni ruling elite, dominated by the Al Khalifa monarchy and a majority Shi’a population. Yet Bahrain’s social structure is not a question of some obdurate religious conflict between Shi’a and Sunni as it is usually portrayed in the media and purposively promoted by the Bahraini monarchy. Rather, the discrimination against the country’s Shi’a majority cannot be understood separate from the ways in which class formed. While the country continues to rely heavily upon migrant labour – in 2005, around 58% of the Bahraini population were non-citizen migrant workers – much of its Shi’a majority remain unemployed, poor and face entrenched, systemic discrimination.
Over recent years, relative to other Persian Gulf states, Bahrain has also endured a lengthier and more advanced experience of neo-liberalism. According to the Heritage Foundation 2010 Index of Economic Freedom, this has deeply accentuated the unevenness of capitalist development widening gaps between poorer citizens concentrated among Shi’a and the private sector and state elites that have benefitted from Bahrain’s position as the “freest economy in the Middle East”. In 2004, the Bahrain Centre for Human Rights estimated that over half of Bahraini citizens were living in poverty and yet, simultaneously, the richest 5200 Bahrainis had a combined wealth greater than $20-billion. The more proletarian like character of the Bahraini citizen population, which overlaps with the sectarian discrimination and has been reinforced by the deep impact of neo-liberalism, has meant that labour and left-wing movements remain significant within the country.
Moreover, the significance of Bahrain extends beyond the country itself. There is a sizeable Shi’a population in Saudi Arabia’s oil-rich Eastern Province – just across from Bahrain. There were protests in this region in early 2011, and there exists a great fear among all the Gulf states and the Western powers that support them that a successful movement in Bahrain would quickly detonate similar struggles in Saudi Arabia and elsewhere. This explains the furious repression that has been unleashed on the Bahraini people over 2011, including the sending of Saudi, UAE and Qatari troops to the country in an attempt to quell the uprising.
The importance of the battle over oil price is one of the major issues worth mentioning. According to the common conventional wisdom of trade economics, the factors determining the price of oil are related to availability and supply of different oil grades and other energy sources, global demand, levels of capital investment in the industry, speculation, and the political situation in the Middle East. There has been a generally upward movement in the price since 1999 punctuated by a large fall in the immediate wake of the 2008 economic crisis.         
High prices of oil are strongly correlated with recessionary periods and, as the 1970s showed, those countries that are reliant upon oil imports can be badly hit by high prices. The further trend of rising food prices in the current period means that the impact of high oil prices can be devastating in multiple ways.
The other side to this, however, is the interest of the Gulf States and, of course, oil companies in a higher price. There are various estimates of the ‘break even’ points for the Persian Gulf states – the necessary price of oil for these states to meet their fiscal requirements. At this particular point, we need to remember that the GCC states have launched a massive program of government spending in the wake of the uprisings to undercut any dissent within their countries.
Another important issue which has a greater impact on the dynamics of capitalism and class formation in the Persian Gulf region of the Middle East is the unfolding of the current “Arab spring” or as the Iranians coined it “the Arab Awakening”.   The increasing weight of the regional economy and the differentiated impact of the global crisis mean that it is impossible to treat the national and regional scales as two distinct political spheres. What appear on the surface to be ‘national’ struggles that are contained within individual nation-states, inevitably grow to confront the construction of these broader regional hierarchies. This is the context in which the Arab uprisings have unfolded.
The social structures that characterized political rule in Egypt, Tunisia and elsewhere are themselves part of how the Persian Gulf countries, linked to the domination of foreign powers and the position of Israel, established its place atop the hierarchies of the regional market. The struggles against dictatorship that the uprisings represent are, simultaneously, intertwined with the way that capitalism has developed across the region and, in this sense, are also struggles against the Gulf.
This explains the furious attempts by the Persian Gulf states to hold back and derail these uprisings; they are absolute central to the counter-revolutionary wave that is being unleashed today in the region. There are many other examples – we can see it in the billions of dollars that are being promised by the Gulf states to the regimes in Egypt and Tunisia; the military intervention in Bahrain; the offer made to Jordan and Morocco to join the GCC; and the centrality of the GCC to attempting to mediate and steer the uprisings in Syria and Yemen. And, perhaps most significantly, the rising threats that are being made against Iran.
Therefore, the uprisings present a real possibility of shifting the regional order. In the long-run there are no ‘national’ solutions to the broader problems of uneven development facing the Middle East and North Africa. These require a pan-regional solution and, centrally, that means confronting the position of the Persian Gulf states as the core of capitalism in the region.