The Development Strategies of the Oil-Rich Countries of the Gulf - Assignment Example

1) How have US/Saudi relations been affected by the events of 9/11? The world forever changed the morning of September 11th 2001. The attacks on the US World Center represented the most serious terrorist acts ever carried out on US soil. A watershed moment in world history, that fateful morning will forever be engrained in the American national psyche. From a political, social and economic perspective, the hijackings of 9/11 were unparalleled in scope and sheer devastation. In a fascinating article entitled “Measuring the Effects of the September 11 Attack on New York City”, it was estimated that the direct cost of the attack stood at between $33 billion and $36 billion to the city of New York. In addition to the direct economic costs associated with terrorism and the threat of further terrorism, 9/11 also had important international ramifications. Seeking to strengthen its ties with allies in the Middle East region following the attacks the United States sought to immediately solidify its relationships with its major allies in the region. (Orr, Bram & Rappaport, 2002) Accordingly, support for dictatorships in the Middle East emphatically demonstrates that cold, hard geopolitical factors influence American state behavior and supersede any concern the United States may have for other factors such as Middle Eastern democracy or the promotion of human rights. Human rights abuses are routinely ignored in Egypt, where President Hosni Mubarak has resisted calls for democratic reform and remains President of the Egyptian Republic since the assassination of his predecessor Anwar Sadat in 1981. Saudi Arabia is a notorious oppressor of human rights and commits rights violations against women and religious and sexual minorities on a near daily basis. Since Saudi Arabia is one of the world’s largest producers of crude oil, the United States has turned a blind eye to human rights violations and has helped propped up the theocratic Saudi monarchy since the days of Ibn Saud. Both countries, either overtly or tacitly, supported the US invasion of Iraq (Morag, 2006). The US invasion of Iraq of 2003, codenamed “Operation Iraqi Freedom” curiously was not undertaken following Saddam Hussein’s genocide of the Kurdish minority in Halabja in 1988, nor after the violent suppression of a Shi’a insurgency following the First Gulf War. Instead US interests lie in securing the availability and continued flow of oil from one of the world’s most important producers of this important natural resource. Although cloaked in rhetoric concerning the freedom of the Iraqi people, the invasion in fact has led to untold death on both sides, military occupation and a violent 5 year old insurgency. Saudi Arabia is home to untold natural wealth and the despotic Al Saud regime has ensured a strong relationship with the world’s hegemonic power. Accordingly, relations with the US and Saudi Arabia remain positive six years later (Bloom, 2005). 2) What are the development strategies that have been followed by the oil-rich countries of the Gulf? As one of the wealthiest regions of the world in terms of annual revenue and gross national product, the countries which make up the Gulf Cooperation Council have very different economic situations relative to their Arab brethren in other parts of the Middle East. Accordingly, Qatar is described by the United States Central Intelligence Agency as having the “highest per capita income in the world”, which in 2007 was estimated at $87,600. While not all countries of the GCC can claim to have such a phenomenal GDP per capita, strong economic growth and high revenues derived from natural reserves are a unifying characteristic of the Gulf countries within the Gulf Cooperation Council. Accordingly, from an economic standpoint a country like Saudi Arabia with an annual GDP of $546 billion USD (2006 estimate) is in a very different economic situation from that of its southern neighbor and GAFTA member Yemen which has an estimated GDP of only $21.66 billion USD and a GDP per capita of $2,500 USD per annum. Compare that with Qatar which boasts a GDP per capita of $87,600 and the differences are staggering. This can make regional integration challenging, especially for a large and regional hegemon like Saudi Arabia. While extensive oil and natural gas revenue is a near universal characteristic of the Gulf Cooperation Council countries, the revenues accrued from these resources are unevenly distributed and this has the potential to pose problems for the member states. Accordingly, extensive oil and natural gas revenue is an important attribute which sets these countries apart from other GAFTA nations in a regional context. Development in this region is primarily funded through the exploitation of natural resources. Despite this, some Gulf countries have begun to diversify their economies, such as Oman (Qatar 2008; Saudi Arabia 2008; Yemen 2008). According to a revealing report by the World Tourism and Travel Council (WTTC), Oman has the fastest growing tourism and travel economy in the world, generating more than 5.4 million USD in economic activity in 2007. Tourism contributes approximately 2.2% of the Omani GDP and this share is expected to rise by more than 40% to 3.2% by 2017. Employment in the industry currently accounts for 10.1% of total employment in the country or 1 in every 9.9 jobs. Global travel and tourism spending exceeded $7 trillion USD, employing about 231 million people and generating more than 10.4 per cent of total world GDP. Accordingly, global travel and tourism spending is expected to exceed $13 trillion USD within the next ten years (Oman Air 2008; Mansfeld & Winckler, 2007). 3) The Saudi king is the "Guardian of the Two Holy Sanctuaries" How important is this role and how stable is his kingdom? A monarchy headed by the al-Saud family, the modern states of Saudi Arabia is a theocracy, meaning a country in which religion plays an important role in the political functioning of the state. Accordingly, the Saudi monarchy views itself as the caretaker of the two holy places in Islam (Mecca and Medina) and its political orientation reflects the special role that the Saudi government plays in the global Islamic community. Saudi Arabia is an officially a theocratic state and Islam is a guiding force in the day-to-day workings of the country. Saudi Arabia is home to Sunni Islam and is a monarchy with extensive ties to the religious establishment. In conjunction with the Wahhabi religious establishment, the modern Saudi state essentially represents a union between the conservative clerical religious leaders and the Al Saud family. Accordingly, the legitimacy of the monarchy is directly related to the role of the king as the Guardian of the Two Holy Sanctuaries. Accordingly, the basis of the regime rests upon this guardianship. Although historically rather stable, Saudi Arabia has had to contend with a variety of insurgencies, in recent times from al Qaeda offshoots who see the state as heretical and anti-Muslim. Al-Qaeda provides perhaps the best and the most frequently sited example of the “new” global terrorist. Terrorism is now transnational with the Al-Qaeda network spawning both adherents and imitators from Jakarta to Kabul and from London to Vancouver. The Al-Qaeda network has reportedly been responsible for a myriad of attacks beginning with Yemen in 1992 and continuing today as part of the Iraqi insurgency. The Al-Qaeda network, headed by former Saudi citizen Osama bin Laden and Ayman al-Zawahiri, has mastered the use of modern technology, including the internet as well as the Middle Eastern television network Al-Jazeera, to gain adherents to their global jihad. While their demands vary – from Israeli withdrawal from the Palestinian territories to the overthrow of the conservative monarchy in Saudi Arabia – Al-Qaeda has engaged in terror in countries as diverse as Indonesia and Britain, the United States and Tanzania, as well as the United Kingdom and Morocco, just to name a few. Its reach truly is global. In fact, this particularly insidious network of jihadists represents the most pronounced threat to global peace and international security in modern times. Despite challenges, the state has successfully defended itself against these charges in the past and should continue to do so in the future (Bloom, 2005). 4) How significant is the GCC in the war against terrorism and as a force for globalization? The Gulf Cooperation Council (GCC) is a multilateral organization which promotes the economic and social integration of six Arab countries in the Persian Gulf. A regional trade bloc with important economic objectives including the eventual establishment of a common currency, the Gulf Cooperation Council is a regional actor in the Middle East with increasing political leverage and diplomatic sway. Initially created to further the economic integration of Bahrain, Qatar, Kuwait, Oman, Saudi Arabia and the United Arab Emirates, the Gulf Cooperation Council fosters a sense of Arab community within the Gulf context and represents Arab multilateralism in the region. Thus the GCC represents Arab Gulf multilateralism and successfully promotes the globalization and liberalization of the economies of the Arab world. Is the GCC a force in the war on terror? Not really as it is fundamentally an economic organization and not a military alliance such as the North Atlantic Treaty Organization (NATO) or other multilateral bodies. Accordingly, the major objective of GAFTA is the elimination of barriers to trade including import duties and other barriers to free trade among Arab producers and consumers. At the outset, the goal of GAFTA was regional integration from Morocco in the West to Oman in the East through the elimination of tariffs or tariff-like barriers to trade. Attempting to implement widespread liberalization through the economically diverse Arab countries of the Middle East and North Africa, GAFTA sought an Arab-wide response to the growing need to diversify the economies of the community and lessen restrictions on inter-Arab trade. Regional cohesion and integration are just some of the advantages the GCC and GAFTA offer to the Saudi state. Accordingly, the GCC represents multilateral action on a variety of fronts and its member states act in unison to promote Arab Gulf interests. Business interests thus benefit from regional cohesion and Gulf-wide standards (Hoekman & Zarrouk 2000). REFERENCES Bloom, M. (2005). Dying to Kill: The Allure of Suicide Terror. New York: Columbia University Press. Bram, J., Orr, J. and Rapaport, C. (2002). “Measuring the Effects of the September 11 Attack on New York City.” Economic Policy Review 8.2: 44-69. Hoekman, B.M. & Zarrouk, J. (2002). Catching Up with the Competition: Trade Opportunities and Challenges for Arab Countries. Detroit: Published by University of Michigan Press. Mansfeld, Y. & Winckler, O. (2007). The tourism industry as an alternative for the GCC oil-based rentier economies. Tourism Economics, 13:3, 333-360. Morag, Nadav. (2006). The Economic and Social Effects of Intensive Terrorism: Israel 2000-2004. The Middle East Review of International Affairs 10:3, 33-42. Oman Air. (2008). Oman Air, An Important Strategic Partner Promoting Tourism. Retrieved September 03 2009, Qatar (2008). CIA World Fact Book. Retrieved September 03 2009, https://www.cia.gov/library/publications/the-world-factbook/geos/qa.html Saudi Arabia (2008). CIA World Fact Book. Retrieved September 03 2009, https://www.cia.gov/library/publications/the-world-factbook/geos/sa.html Read More