by Lin Noueihed
It was a similar story in Morocco, which could ill afford the economic concessions made in the wake of the protests. In August, the government announced that its compensation fund, which subsidizes the prices of basic commodities on the local market, would require a budget of $5.9 billion for 2011, more than four times as much as initially estimated. Living standards were a world away from those in the Gulf, with some of the region's highest poverty rates, and King Mohamed was in no position to write the same social contract that governed the relations between ruler and ruled in the UAE or Qatar.
Instead, he oversaw proposals for reforms that gave new powers to the prime minister, who would now come from the party with the most seats in parliament rather than be appointed directly by the monarch. But the palace would retain control over security, defence and foreign policy and the monarch remained head of the religious establishment, even though his position would now be described in the constitution as ‘inviolable’ rather than ‘sacred’. The reforms won 98 per cent approval in a July referendum whose official turnout of 73 per cent suggested genuine enthusiasm for the new measures, although their opponents claimed voting irregularities. Given calls for a boycott by the youth movement, turnout for the general elections held in October was 45 per cent of Moroccans who registered to vote, a modest figure but better than the record low of 37 per cent at the last parliamentary polls in 2007. Lacking the funds to make Gulf-style economic handouts, the rulers of both Jordan and Morocco could be forced to make ever greater political concessions to keep demonstrators at bay.
Yet the most dangerously unsustainable spending pattern of all can arguably be found in Saudi Arabia. Although it is the world's largest oil exporter, the kingdom's expenses bill is growing at a precarious pace. Annual government spending doubled between 2004 and 2009, while the total public-sector wage bill rose by over three-quarters between 2003 and 2009.28 The oil price required for the state to balance its annual books had doubled between 2005 and 2010, and stood at around $84 per barrel in the summer of 2011.29 Domestic consumption of oil is rising far more quickly than production, and for every barrel consumed at home at heavily subsidized prices, the state makes a substantial paper loss from not selling it on the international market.30
In addition, the Arab Spring was more expensive for Saudi Arabia than for any other state. In February, King Abdullah announced a $130 billion package that included salary rises, tens of thousands of new jobs, and bigger housing loans – by far the largest financial concessions of any Arab government in 2011. And this was even before counting the overseas commitments that Saudi Arabia made, with the GCC promising $10 billion each for Oman and Bahrain over the coming decade, plus multi-billion dollar grants to Tunisia and Egypt and payments to myriad tribal leaders and politicians in Yemen.
Despite this, there is no immediate urgency for the Al Saud family to tighten their purse strings. One study estimated in 2010 that the kingdom could run a deficit worth 10 per cent of GDP every year for a decade without having to issue any debt, and would still hold reserves of more than $110 billion.31 Although the break-even oil price has soared in recent years, it was still well below the average market price in 2011, and still generating healthy budget surpluses.
But if left unchecked, these imbalances could trigger a future crisis. The turmoil of 2011 has left Riyadh even further away from preparing its economy and population for a time when the state will no longer be able to demand so little of its citizens, however distant that time may be. In practical terms, that may mean reducing domestic subsidies on fuel, limiting the numbers of government employees and their salaries, or even starting to impose taxation. That would fundamentally change the social compact in the kingdom and call into question the asphyxiating restrictions it imposes. When it happens partly hinges on oil prices, but most Saudis may well see drastic changes to their country within their own lifetimes. And whether it comes in 2020 or 2040, a poorer Saudi Arabia will bring regional repercussions that can be partly traced back to the Arab Spring.
Shaping Change
Drivers making the journey between central Amman and Queen Alia international airport in the autumn of 2011 followed a road that twisted and turned around construction work on the foundations of a new motorway. The $115 million project would not be complete until the following year, but Jordan's cash-strapped government had recently announced that motorists would be charged a fee, making it the first toll road in the country and one of only a handful across the region.32 As the road continued into the affluent Abdoun suburb of Amman, cars passed the clean-cut white stone building of the new Saudi embassy, looming over one of the city's many valleys. It was a neat juxtaposition of Jordan's own precarious financial position and the Gulf oil wealth that extended its influence beyond the Arabian Peninsula.
The old geopolitical concerns discussed in the first section of this book – oil, Israel and Iran – will continue to shape change as Arab monarchies reposition themselves in the light of regional turbulence. Saudi Arabia may be unwilling to empower the Shi'ites in Bahrain because of its wider cold war with Iran; meaningful electoral reform in Jordan is linked to the fate of the Palestinians; and no one, from Washington to Beijing, wants to see uncontrolled unrest in the world's biggest oil-exporting region that could drive up crude oil prices and batter the fragile global economy.
But 2011 created a new external threat for Arab kings and emirs, one that might blow the seeds of political activism and people power to their own shores. This was a serious concern for regimes that have not forgotten how Arab nationalism and Ba'athism filtered across their borders in the 1950s and 1960s, prompting what Malcolm Kerr called the Arab Cold War. The monarchies were seeking to control and limit change at home, as argued above, but they were also trying to shape the impact of the Arab Spring outside of their own borders. This was particularly true for two Gulf countries – Saudi Arabia and Qatar – though each appeared to have its own motivations.
Riyadh has always been in a position of regional influence as the wealthiest Arab state, the most populous in the Gulf, the key US ally in that region and the birthplace of Islam. Its foreign policy has been principally aimed at retaining its own domestic power, whose basis was at odds with many of the ideas and aspirations voiced by the Arab Spring, and at exploiting the regional turmoil to isolate and weaken its biggest enemy, Shi'ite Iran. As far as any clear strategy was discernible, the kingdom has tried to protect other monarchies from the risk of revolution, and to ensure that political forces emerging in the new-look republics were not threatening to its own broader regional and international interests.
Standing on much firmer domestic foundations, Qatar's tiny population, religious homogeneity and immense wealth mean that its motivations overseas are more about extending its political and commercial clout around the region – and acting as a rival to Riyadh. Through its ownership of Al-Jazeera, Doha clearly played a pro-revolutionary role in Egypt and Tunisia, essentially supporting the removal of leaders which Riyadh was loath to see go. The Al Sauds harboured Zine al-Abidine Ben Ali when he fled, and were furious about what they called outside intervention in removing Mubarak from power in Egypt.
On other conflicts, Saudi and Qatari interests have converged and both opposed the upheaval in Bahrain while ramping up pressure on Assad in Syria. None of the Gulf rulers wanted to see kings in Jordan or Morocco overthrown, or even downgraded by popular pressure into powerless figureheads. However unlikely that possibility was in the short term, it would demonstrate that not even the Sunni monarchies were immune to popular action, and there were signs that they sought to close their ranks.
Jordanians may have been surprised to read in May that their country might become a member of the GCC, the six-member economic and political bloc dominated by Saudi Arabia. Even more surprising was the news that Morocco, whose capital city is as close to Boston as it is to Riyadh, could also join. By September, talks had begun on how the council could incorporate the two newcomers, and a five-year financial support
plan was to be finalized by the end of the year – though by February 2012 there was little concrete news of any progress.33
While there were some practical economic arguments for Jordanian membership – less so for Morocco – this expansion would never have been mooted without the Arab Spring, and suggested that Saudi Arabia was concerned about other monarchies catching the revolutionary virus. The idea that those two countries would provide the GCC with an extra deterrent against Iran makes less sense than the additional police and security personnel that they could supply to help put down any major domestic insurgency in a GCC state. Several Gulf security forces already recruit from other Sunni Muslim countries, including Pakistan, and both Morocco and Jordan could offer a valuable source of trained Sunni manpower.
The expansion plan also suggested that Arab monarchies, spearheaded by Riyadh, were seeking to form a counter-revolutionary club of kings to insulate themselves and their citizens against a future league of pro-democratic republics and their dangerous ideas. That is over-simplistic for several reasons. The monarchies may have some things in common – they are all Sunni Arab, for instance – but they do not have a unified strategy or speak with a single voice. Rifts and rivalries between the Gulf states go back far into history and partly explain a frequent tendency for the GCC to announce grand plans, such as a single currency, that never get implemented. The expansion plan may meet the same fate.
Nor is there a homogenous band of republics to face up to. The future of Egypt, Libya and Syria was so uncertain by early 2012 that any potential pro-democratic league of republics could only really count diminutive Tunisia as a member. Even though its foreign policy had been more pro-active than in the past – Tunis had taken a strong stance against the Assad regime in Syria, for instance – that policy was hardly likely to include fomenting revolution in the monarchies as one of its main goals.
Saudi Arabia and Qatar were not counter-revolutionary in the sense of trying to turn back the clock in Egypt, Tunisia or Libya, but rather they sought to exploit the momentum to further some of their own ends. Without their backing, the foreign intervention in Libya may never have happened. Qatar and the UAE were among the Arab combatants in that war to remove a fellow Arab head of state. Saudi Arabia and Qatar led the diplomatic and media charge against Assad, attempting to raise international pressure on an Arab leader who has allied himself with Riyadh's greatest rival – non-Arab Shi'ite Muslim Iran.
Both countries, but particularly Saudi Arabia, also sought to ensure that the new forces emerging from the uprisings did not pose a threat to their own domestic grip on power. Riyadh in particular must fear a future scenario whereby a major domestic uprising requires such brutal repression by the security forces that it isolates the Al Sauds in the same way that Gaddafi and Assad had been isolated in 2011. If the Arab League were to become a more relevant body in the future – its endorsement of a no-fly zone in Libya was a major part of the Western decision to attack Gaddafi – then having powerful friends in the new democratic republics would reduce the chance of external sanctions or intervention and allow the monarchies to suppress domestic opposition by whatever means necessary.
The worst-case, in contrast, would arguably be the rise of an aggressively pro-democratic Arab government that supported or armed anti-regime groups in other countries, in the same way that Libyan militias had reportedly done with the Free Syrian Army in late 2011, or one that rallied other Arab countries and the international community against authoritarian monarchies clinging to power. Those scenarios are hypothetical, but the Arab Spring certainly demonstrated how alarmingly quickly things could change.
Religion and money were at the heart of how the Gulf sought to influence what happened in North Africa. Prominent Islamist leaders in Libya had been living for years in Qatar and it later emerged that Doha had been directly funding armed Islamist groups.34 The Saudis have been accused of funding the ultra-conservative Salafists in Egypt, although no concrete proof has come to light. With Tunisia and Egypt facing troubled economic times, new governments led by Islamist parties will not be inclined to turn down financial support from wealthy Gulf monarchies, useful both for funding their own political campaigns and distributing across the economy to help maintain the domestic popularity.
It is impossible to know the real level of this financial support, but the perception of Gulf interference and their alignment with Islamist parties was already provoking resentment, particularly against Qatar. Protesters in Tunis held a demonstration outside the Qatari embassy in November, while across the region Al-Jazeera is now tarnished by its association with Qatari foreign policy. In Morocco and Jordan, the younger generation of activists are sceptical about GCC membership, fearing that the oil-rich Gulf would hold back a popular desire for change by subsidizing cheap commodities or funding thousands of well-paid government jobs. Others are wary of a greater Islamization of society to keep religious parties in power. Many North Africans and Levantines, boasting ancient cultures and civilizations, still ask what they can learn from Gulf countries they consider to be nouveau riche desert tribes with little to offer beyond oil money and a particularly zealous form of Islam.
Abdel Rahman Shalgam, Libya's former ambassador to the UN who defected from the Gaddafi regime at the very start of the February uprising, provided the most colourful backlash against the tiny Gulf state. ‘Qatar isn't neutral with all parties,’ he said in November. ‘Qatar will gather these weapons and give them to others… we will not accept to be used by Qatar. We will not accept to be a new emirate that belongs to the new “Emir of the Believers” in Qatar… I do not rule out Qatar setting up a Hezbollah party in Libya. We don't want a foreign country to interfere.‘35
Yet the fact remained that the most popular parties in post-uprising Tunisia and Egypt were Islamist. This is not to say that the Gulf states had come out better than before. Given a choice, Riyadh might well have taken Ben Ali over Ennahda and Mubarak over the Muslim Brotherhood. But the latter were probably the next best thing. If there had to be a democracy, then better a Sunni Islamist one that could bolster the Gulf's stand against Shi'ite Iran than a firebrand secular liberal regime with a mission to spread freedom to the monarchies. And the more hierarchical structure of Islamist parties, with their older generation of leadership, also made them easier to interact with than the often nebulous secular movements.
For that reason, any regional pro-democratic movement is more likely to come from non-state actors rather than governments. The type of secular, liberal youth activists who did so much to organize the occupation of Tahrir Square or the removal of Zine al-Abidine Ben Ali in Tunisia might try to export their ideas, using Cairo or Tunis as their base of operations and the internet as their weapon. But, a year later, those forces looked weak. They were struggling to make any impact at the ballot box in their own countries, let alone elsewhere, and were hopelessly outgunned financially by the big budgets of Gulf countries.
Activists trying to promote democracy in the monarchies will also have to wade through a thick mist of popular apathy about politics. A poll carried out in July, after a new royal committee in Jordan reported its recommendations on constitutional reform, found that only 38 per cent of respondents were even aware of the amendments.36 Nor will activists find much support from Western powers, which have neither the means nor the inclination to facilitate popular action in the monarchies.
Washington and London no doubt realize that the current political and economic structures in the Arab monarchies are ultimately unsustainable, particularly with the decline of oil, but no Western government working to its own short-term electoral timetable wishes to see unrest that could push up energy prices or play into the hands of Iran. By gently pushing for gradual, top-down change, or remaining silent, they add to the risk that suppressed volatility in several countries, particularly Saudi Arabia and Bahrain, will eventually crash violently to the surface.
This does not mean that ruling families will not adapt to their rapidly cha
nging circumstances, as they have so far proven adept at doing, but the point is that they will face little external pressure to move at anything other than their own pace and on anything other than their own terms. All this is possible with money, which the Gulf states have in abundance for at least the next decade. But beyond that, some, particularly Saudi Arabia, look vulnerable to upheaval. And if other players in the region have become reliant on Gulf financial support, then the impact of that upheaval could be huge.
Much also hinges on the mindset of individual kings, emirs and their families, a factor that is difficult to assess from outside the corridors of power. Some leaders claim to be committed to the idea of constitutional monarchies, gradually transferring power from the palace to elected institutions. ‘[The] Arab Spring actually gave me, in a way, the opportunity that I've been looking for the past eleven years,’ said Jordan's King Abdullah in August 2011. ‘Once you open the floodgates, that's it. Now the challenge, I'll be quite honest with you, is that the political reform is done in the right way.‘37