For the six Gulf monarchies – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) – the sharp fall in world oil prices since 2014 has intensified debate regarding the need to rethink socio-economic structures in order to address challenges to social and political sustainability. This reassessment comes only a few years after the ‘Arab Spring’ uprisings, in reaction to which these states spent extensively in implementing emergency economic and security measures to counter domestic and regional impact and to ensure the survival of the authoritarian order.
In the context of this questioning of the oil-rent model of development – a model on which these monarchies, which together make up the Gulf Cooperation Council (GCC), have extensively relied since the 1950s, and which has underpinned the social contract – the issue of relations between the national business elites and the ruling families has never been so critical. This reflects both the decisive role that the business classes have had for decades in supporting the established order and shaping political legitimacy, and which they are expected to play in underpinning each GCC state’s new economic vision, in which business is viewed as the primary engine of economic growth and provider of employment for Gulf nationals.
This paper shows that a common evolution has been taking place across the GCC. For much of the 20th century, a de facto ‘oligarchic’ pact linking the ruling families and the national business elites was central to the maintenance of the authoritarian status quo. Even if some variations could be seen in the nature of this state–business relationship from one GCC country to another, a common characteristic was that the economic pre-eminence of local business actors was recognized and protected, and the business elites were granted a large share of oil revenues in return for their support for the established order. But this informal understanding has undergone crucial changes over the past two decades, with the involvement of ruling families in business – from a variety of starting points – increasing dramatically in all countries. The paper examines the correlations and implications of the royals’ growing economic influence for the behaviours of the business elites in light of policies implemented, and their roles in this changing order. The increasing personal involvement of ruling family members in business in the Gulf monarchies is likely to have implications for the future legitimacy of these regimes. In particular, it will make large-scale austerity measures announced recently more difficult to justify, in a context of popular frustration regarding widening inequalities and increased concentration of wealth in the hands of a few.