The Rich Arab States in Trouble

A careful analysis of the situation among the oil-producing states on the Persian Gulf reveals how simplistic is the view that the more money such a country earns the more “secure” it is. In reality the very opposite may be correct. During the first ten or twenty years after oil revenues have begun to flow, it is relatively easy to channel the funds in such a way that the population is satisfied and approves of the way government affairs are being managed. In a rich oil-producing country, government affairs consist largely of handing out the money. When this is done in a sensible manner, the government can be reasonably sure of popular support. Certain services are widely regarded as having priority and governing officials know that these must be provided: health and education, then housing, road construction, jobs. During the first generation of national prosperity it is much easier than it will be later to satisfy the needs and wishes of the populace, because the memory is still fresh in their minds of how living conditions were before the oil wealth began to flow.

The people of those Gulf countries have a status somewhere between subjects and citizens. They are governed in traditional Arab fashion by traditional tribal rulers, yet they have a certain voice in affairs in that they have the right to come before their rulers and complain about abuses and inadequacies. At the outset they are thankful to be getting new hospitals and schools. Some of them manage to become prosperous. Certain governments, such as that of Kuwait, have made sure that most families in their realms have enjoyed at least something of the country’s new wealth—though as always there are those who have profited enormously and others who have benefited to only a modest degree.

In most cases the popular distribution of a minimum of the oil wealth has had to do with real estate ownership and home building. The governments of these states have seen to it that all their citizens have their own home and a bit of land. This has enabled the common folk to profit from the fabulous boom which, in the course of just a few decades, has transformed what were once worthless pieces of desert on the edge of the oil towns into “parcels” now selling at prices close to those of New York real estate.

To the members of the first “oil generation” it was also a delight to be able to acquire an automobile, a refrigerator, an air conditioner, and a TV set. (For their sons and daughters, all these things have become absolute necessities of life. And indeed the new Kuwait and Abu Dhabi are so constructed that cars and air conditioners are virtually necessities.) For that first generation the fact that their children received a free primary education, then secondary-level schooling along with some pocket money, and finally university scholarships for those willing and able to use them, constituted an unprecedented privilege for which …

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