Cover Page

AngloArabia

Why Gulf Wealth Matters to Britain

David Wearing











polity

Acknowledgements

While responsibility for any errors – grammatical, factual or analytical – is entirely my own, I owe a debt of gratitude to many whose help was crucial in carrying out this research.

Gilbert Achcar has been an invaluable mentor and a formative intellectual influence. I am very grateful to him, and to Adam Hanieh and Alfredo Saad Filho, for their guidance and advice on the doctoral thesis that formed the basis of this book. In general, the academic community at the University of London’s School of Oriental and African Studies – both staff and students – provided the perfect environment in which to develop and sharpen my understanding of this complex topic.

The Lipman–Miliband Trust was kind enough to award me a small grant from the Peter Gowan Prize fund to support my endeavours. Campaign Against Arms Trade kindly provided access to their meticulously curated archives and to their considerable collective knowledge and expertise. Rosemary Hollis and Tony Norfield were both very generous with their time, and I learned a great deal from our conversations. In attempting to turn my thesis into a manuscript that retained its academic rigour while becoming accessible and engaging for a general audience, I am indebted to the patience and professionalism of Louise Knight and Nekane Tanaka Galdos at Polity, and to the wisdom of a very kind and constructive academic reviewer. Thanks must also go to David Gee, Caroline Richmond and everyone involved in the production of the book, which has benefited significantly from their input.

For a mixture of helpful chats, support and good company, heartfelt thanks go to Mike Walton, Rachel Shabi, Nithya Natarajan, Maya Goodfellow, Niheer Dasandi, Sarah Crook and Clare Clark. For their unique insights and their inspiration to me, I am deeply grateful to Ala’a Shehabi, Maryam al-Khawaja, Iona Craig, Rasha Mohamed and Sayed Alwadaei.

Above all, this work is dedicated to my family and to the fond memory of my grandparents, with much love.

Introduction

The Gulf Arab monarchies, and Saudi Arabia in particular, are among Britain’s most important allies in the world – arguably more important than any other states in the global south. Investment from the Gulf is becoming highly visible in the UK economy, and controversy over British arms sales in the region – in the context of the Arab uprisings or the war in Yemen – is rarely far from the news. At the time of writing, a major humanitarian catastrophe is unfolding in Yemen, in large part as a result of a military intervention led by Saudi Arabia in which Britishsupplied arms have played a very significant role. Yet, until now, no detailed and comprehensive study of Britain’s relationships with the Gulf states has been produced in the modern era.

This book attempts to map the deep, material structures of Britain’s relations with the states of the Gulf Cooperation Council (the GCC), a grouping of Arab monarchies comprising Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates (UAE) and Oman. It will trace the historical background to these relationships, the arms that have been sold, the investments that have been made, the real significance of oil, and the balance of power between the two sides. What emerges is a unique Anglo-Arabian nexus of power and interests holding major importance for British capitalism and foreign relations. The reader will hopefully come away with a rich and detailed sense of why the Gulf Arab monarchies matter to the UK, and why the UK matters to them.

The key arguments of the book can be summarised as follows. First, UK–GCC relations in the modern era are the product of historical processes, particularly relating to the century and a half when the British Empire was the dominant power in the Gulf. Second, British power has been an important factor (among others) in the promotion and preservation of monarchical rule in the region. Third, the UK’s current interest in Gulf oil and gas is less about direct energy supply and more about strategic, geopolitical and commercial interests. Fourth, the current forms of capitalism that exist in the UK and in the GCC area have come to complement each other in a series of important ways. Fifth, and relatedly, the GCC area is as important to British capitalism as – and, in some crucial senses, more important than – any other part of the global south. Sixth, UK arms exports to the Gulf Arab monarchies are less about commercial profit and more about their strategic value to British military power, which value is highly significant and growing. Seventh, the British government has in recent years played a key enabling role in supporting both the authoritarian backlash against the ‘Arab Spring’ in the Gulf and the disastrous Saudi-led intervention in the war in Yemen.

The primary focus of this book is the period following the end of the Cold War up until the present day. This is a distinct epoch in the modern history of international relations, part of the broader era of neoliberal ‘globalisation’ in international political economy. The period after 1991, the fall of the USSR and the end of the Gulf War to expel Iraqi forces from Kuwait is also a specific historical chapter in the international relations of the Middle East.

AngloArabia situates UK–GCC relations within the global structures that define this historical moment, treating capitalism as an analytically indispensable dimension of interstate relations. The position of a state such as the UK within the international system is defined as much by its status as a capitalist power as by, say, its military strength. The decisions made by individual politicians at specific times are important but must ultimately be understood within these wider structural contexts. It is this deep background to the news headlines that this book attempts to provide.

Britain’s modern relationship with the Gulf Arab monarchies is a product of the history of empire. Chapter 1 will show how the Anglo-Arabian relationship was born and subsequently evolved: through the rise and decline of British imperial power in the Middle East; the emergence of oil as a key strategic resource; the establishment of the regional state system under imperial domination; the challenge posed by local nationalist forces and the rising power of the United States; and the seminal shift in UK–Gulf relations that occurred when the oil-producer states seized full control of their energy industries and started to maximise the economic benefits flowing to them. It is through the sweep of this historical narrative that we learn how Gulf wealth came to matter to Britain in the way it does today.

Gulf oil and gas are best understood, first, as a source of geostrategic power; second, as a source of energy; third, as a site of capital accumulation for the world’s energy firms; and, fourth, as a generator of sizeable revenues (‘petrodollars’) for the producer states, which can be recycled back into the global economy to the advantage of major capitalist powers such as the UK. The last of these factors is addressed in chapters 3 to 5. Chapter 2 addresses the first three. It examines the importance of the Gulf states to UK energy consumption; the wider geostrategic value of Gulf hydrocarbons to the United States (the UK’s main strategic ally) and to the UK itself; and the value of Gulf energy to the major British and Anglo-Dutch corporations, BP and Royal Dutch Shell.

Petrodollars represent a vital opportunity for British capitalism in a number of ways. Chapter 3 shows how the economies of both the UK and the Gulf have developed in such a way as to complement each other, with Britain’s need to attract financial inflows and secure lucrative export markets matched by the Gulf states’ considerable capital surpluses and growing domestic demand. Chapter 4 details the various dimensions of Anglo-Arabian trade and investment today and attempts to ascertain precisely how much Gulf wealth matters to British capitalism.

Gulf wealth does not simply matter to Britain in a narrow economic sense. Chapter 5 explains the role that major petrodollar-funded arms contracts play in supporting the UK’s military industry, an indispensable component of its enduring status as a global military power. The chapter also shows how the importance of the Gulf monarchies has led London to establish a relationship of close military cooperation with them, committing itself to projecting power into the Gulf and maintaining the coercive security apparatus of the conservative regional order.

Chapter 6 takes a closer look at how these military ties work in practice by examining two of the most significant episodes in the history of UK–GCC relations: the Arab uprisings and the war in Yemen. It details the British response to both these events, showing how the UK moved to support its local allies, including with increased arms sales and closer military cooperation, in instances where they were threatened by popular calls for democracy, and when they were involved in a conflict that degenerated into a humanitarian disaster. The Conclusion ties these various strands together, sizing up the UK–GCC relationship as a whole and touching on a few analytical, ethical and policy implications.

Before we continue, it is worth confronting and clearing away a few common misconceptions about the relationship between the UK and the Gulf monarchies which might obscure the picture and impede our understanding of the issues. In one of the most important and influential books in Middle Eastern studies, Orientalism, Edward Said argued that European colonial rule had been enabled and justified by the specific ways in which the region was represented in academic and cultural texts and in the thoughts, speech and actions of imperial policy-makers. Within this dominant discourse, Said argued, West and East were portrayed in a simple, juxtaposed binary: the West was progressive, dynamic, rational and morally upstanding, while the East was by turns backward, stagnant, superstitious, irrational, dishonest, lazy, sensual and exotic. This discourse was continually produced and reproduced until it became an all-pervasive common sense – one which flattered the West by comparison with its inferior Eastern ‘other’ and justified the projection of imperial power on ostensibly enlightened grounds. Moreover, this common sense evolved and survived in various forms through the twentieth and into the twenty-first century, influencing many attitudes towards the Middle East that remain prevalent in the West today.1

Echoes of this juxtaposition can sometimes be heard when British ministers and officials are challenged on the UK’s relationship with the GCC states. When questioned by the House of Commons Foreign Affairs Select Committee about Britain’s support for Saudi Arabia and Bahrain during the Arab uprisings, the Foreign Office minister Alistair Burt said that ‘[t]he values of these countries will never completely mirror ours and we cannot expect that’,2 while Sir Tom Phillips, who was British ambassador to Saudi Arabia at the time of the uprisings, affirmed the need to ‘work with the grain of particular societies to advance UK values’.3 Under questioning from another parliamentary select committee in 2016 on the UK’s support for the Saudi-led intervention in Yemen, Sir Simon Mayall, a former Middle East adviser to the Ministry of Defence (MoD), said that ‘[w]e are a values-based society. They are a values-based society. It is a different set of values.’4

Within the prevailing Western discourse regarding the Middle East, these familiar allusions do not need to be elaborated upon in order to be understood. ‘UK values’ are, it goes without saying, those of liberal democracy, in contradistinction to those of the Arabian Gulf. The picture then is one of a liberal democratic Britain encountering monarchies that have emerged from a fundamentally different culture and conducting necessary international relations as best it can in these challenging circumstances. The reality, however, is considerably more complex.

The political and cultural present in both the UK and the GCC states is the result of dynamic processes of social contestation that have unfolded over a long period of time. People in the Gulf, like people in the UK and everywhere else in the world, have disagreed vigorously and across a spectrum of opinion (a spectrum that includes democrats and human rights defenders)5 about the ways their societies should be run. The outcomes of this contestation are not predetermined by culture but, rather, are contingent on a number of factors. As we will see later on in this book, British power played an important role in the early decades of state formation in the Gulf and has been one important factor among others that has favoured the continued authoritarian rule of the region’s elites. UK–GCC relations are best analysed not as a clash of cultures but as a multidimensional and evolving interaction of state, class and economic interests.

In general, it helps if we think about states and the relations between them – not entirely, but to a significant degree – with reference to the context of modern capitalism. Taking a longer historical view, the international political economy of the present day – particularly in terms of relations between states of the global north such as the UK and states of the global south such as the Gulf Arab monarchies – is the product and legacy of the earlier age of formal empire. The hierarchical structures originally laid down by the imperial powers have changed and evolved considerably in recent decades, but the hierarchy itself endures in fundamental disparities of power and economic capacity. The more ‘developed’ and powerful states reside at the core of the system, while the states of the global south populate the periphery. At the top of this hierarchy sits a hegemonic power – the United States – which polices the system and plays the leading role in managing and reproducing it.6

The Middle East was brought into this system primarily by Britain and France during the nineteenth and early twentieth centuries. The economic role of the emerging regional states was then to transmit primary goods (such as oil) and capital surpluses to the core, while local ruling elites suppressed any popular challenges to the system. Today, these states are no longer the imperial subjects of global north powers such as Britain, nor are they literally subordinate to the hegemonic United States. They are independent, sovereign and more powerful than they once were. Rather, the relationship is one we might describe as ‘asymmetric interdependence’. Both the Gulf monarchies and their allies in the global north need each other, but the power balance is skewed in favour of the latter, and the hegemon above all.7

As for the British state, it should be understood as representing not so much a general ‘national interest’ as primarily the interests of those socio-economic classes and concentrations of wealth and power best able to penetrate, influence and shape it.8 Essentially, the state works to manage and reproduce a socio-economic system that benefits those powerful and privileged interests above all.9 The leading states of the global north perform this role both domestically and at an international level, which is important to bear in mind when we attempt to analyse their foreign relations.

Bob Jessop, a leading theorist on this subject, puts it in the following way. First, states establish and secure those conditions required for capital accumulation that private interests cannot secure by themselves. Second, they organise the collective interests of capital, as opposed to ‘the one-sided pursuit of any single set of capitalist interests’. Third, the state manages ‘the many and varied repercussions of economic exploitation within the wider society’ in so far as this is required to ensure that the conditions necessary for capital accumulation are maintained. The importance of these roles make ‘the large territorial national state … irreplaceable’, including in the current context of globalisation.10

Different major powers fit into and attempt to shape the global economic system in different ways, depending on their own specific circumstances and balance of interests.11 Whereas China and Germany, for example, have pursued ‘neo-mercantilist’ approaches to world market integration, given the importance of different kinds of manufacturing to their economies, the US and the UK have been leading proponents of the neoliberal approach. This preference can be understood in light of the fact that neoliberal globalisation has strengthened international finance and New York and London are the world’s two leading financial centres.12 This alignment of economic interests provides part of the explanation for Britain’s commitment to Washington’s continuing status as the hegemonic power in the world system.

The hierarchical international order described here constitutes a form of neo-imperialism: a structure of political-economic relations wherein the core capitalist states of the global north have the power both to create and maintain opportunities for capital accumulation to serve their own interests and to exert their state power (through military or political means) to that end. This is distinct from the narrower phenomenon of colonial empire, which refers to the acquisition of control over territory. Therefore, although the British Empire is long since defunct, Britain as a second-tier global power, alongside the likes of France, can still be seen as acting in an imperialistic way. As the number one imperial power, the United States belongs in a separate category, with its immense structural power in the world system granting it the status of hegemon, at least up until now.

The oil riches of the Gulf have a crucial role in this system. As the Lebanese specialist on the political economy of the Middle East Gilbert Achcar puts it, ‘[c]ontrolling access to oil, especially the biggest reserves in the Arab-Iranian Gulf, gives the United States a decisive strategic advantage in the battle for world hegemony, putting it in a position of dominance vis-à-vis both its greatest potential rival, China, and also its traditional vassals, Western Europe and Japan, all heavily dependent on oil imports from the region.’ In addition, the UK and the US are able to use their status to turn the wealth of the Gulf producer states to their advantage in the form of arms purchases and capital flows to their financial centres. Securing access to Gulf oil and gas for direct energy needs or supply to the world economy is only one part of the picture.13 As the historian Mark Curtis notes,

Oil is, of course, the fundamental Anglo-American interest in the Middle East, and was described by British planners in 1947 as ‘a vital prize for any power interested in world influence or domination’. ‘We must at all costs maintain control of this oil’, British foreign secretary Selwyn Lloyd noted in 1956…. Oil is designated to be controlled by Western allies in the Middle East to ensure that industry profits accrue to Western companies and are invested in Western economies. A traditional threat in the past has been that the nationalist regimes would use oil wealth primarily to benefit local populations and to build up independent sources of power to challenge US domination over the region. Traditionally, such regimes have been overthrown or prevented from arising by British and US power.14

This brief sketch of the relevant actors, relationships, interests and structures provides us with a rough map to aid our exploration of UK–GCC relations and helps us to pinpoint the various and complex ways in which Gulf wealth matters to Britain. It indicates that we should look into the historical development of the UK’s involvement in the Gulf, from the age of empire to the present era. It reminds us of the importance of Gulf hydrocarbons in both strategic and commercial terms, and it suggests that any evaluation of UK–GCC trade and investment should be conducted with particular attention to the precise character and current state of British and Gulf capitalism in the context of the wider global economy. Finally, it points us towards the importance of military and coercive power at all levels of the relationship. This then is the route that the following analysis will take.

Notes