Across the Gulf monarchies, the relationship between the ruling family and business elites has experienced significant evolution over the past two decades. In particular, all the ruling families have moved much more extensively, and along a similar path, into business – albeit each at its own pace, depending on the historical balance of power between the two sets of interests. The first GCC country where this shift occurred was Bahrain. Rising oil revenues after 1973 and the suspension of the short-lived parliament in 1975 drastically transformed the pre-independence oligarchic pact. The business elites’ economic role is now generally restricted to the one of subsidiary partner in projects decided and led by a few senior members of the Al Khalifa, who have become the country’s most prominent business actors. The real estate sector has been crucial in this evolution, as much of Bahrain’s most valuable land has been tightly controlled by the ruling family. Since the 2000s, an uncontrolled real estate boom has come to serve as a diversification policy in itself, with megaprojects on reclaimed lands – such as Bahrain Bay (in which the king is a partner)2 or Bahrain Financial Harbour (in which the prime minister is involved).3
The extent of the Saudi royals’ business activities increased dramatically from the 1990s, as the generation of princes born in the 1960s and the 1970s, whose prospects of accessing senior political positions were very limited, engaged themselves elsewhere.
In Abu Dhabi and Qatar too, ruling family members are in control of powerful companies that dominate the economy – either personally or through sovereign wealth funds. The large-scale involvement of royals in the economy came about earlier in Qatar (in the late 1980s) than in Abu Dhabi (in the early 2000s), but has since increased in both emirates. The economic weight of former Qatari prime minister Hamad bin Jassim Al Thani4 and several sons of the late UAE president Sheikh Zayed, including Abu Dhabi’s Crown Prince Mohammed bin Zayed and UAE Deputy Prime Minister Mansour bin Zayed, illustrates this transition. Merchant elites are now subservient to the ruling families and are obliged to adapt to the latter’s business priorities. Among other positions, Mohammed bin Zayed chairs the government company Mubadala, regarded as his foremost investment vehicle.5 Mansour bin Zayed (who is married to Manal bint Mohammed bin Rashid, a daughter of the ruler of Dubai) chairs Abu Dhabi’s third largest wealth fund, the International Petroleum Investment Company (IPIC),6 as well as the Emirates Investment Authority, the UAE federal government’s sole sovereign wealth fund. In addition to these government roles, Mansour bin Zayed controls holdings including the Abu Dhabi United Group for Development and Investment (which owns Manchester City Football Club) and DAS Holding.
In Saudi Arabia few royals – apart from Talal bin Abdulaziz, from the 1960s, and his son al-Waleed (Kingdom Holding) – were involved in business on a wider scale until the late 1980s. Among these are Mishaal bin Abdulaziz, the current chairman of the Allegiance Council and the founder of Al Shoula Group in 1970; Mohammed bin Fahd, a major partner in the Al Bilad conglomerate since the early 1970s; Abdullah bin Faisal, who founded the Al Faisaliah Group in 1971; and his brother Mohammed, regarded as one of the pioneers of modern Islamic banking.
The extent of the Saudi royals’ business activities increased dramatically from the 1990s, as the generation of princes born in the 1960s and the 1970s, whose prospects of accessing senior political positions were very limited, engaged themselves elsewhere. Among the most prominent business royals who emerged this time are Hussam bin Saud (Saudi-Kuwait Holding, Zain), Abdulaziz bin Ahmed (Atheeb), Ahmed and Faisal bin Salman (Saudi Research and Marketing Group), Abdulaziz bin Fahd (MBC, Al Arabiya) and Khalid bin Sultan (al-Hayat newspaper, Al Raha Group for Technical Services). Subsequently, from the 2000s, a very large number of Abdulaziz’s younger grandchildren and great-grandchildren have entered business, including Khalid bin Bandar bin Sultan (Dayim), Turki bin Abdulrahman (Modern Group), Abdulaziz bin Mitab (Kanooz), Abdulaziz bin Sattam (BT Al Saudia), and Faisal and Turki bin Muqrin (Saudi Development and Training Company).
In Kuwait and Oman, where for a long period the business families were sufficiently strong to keep the ruling family out of their domain, royals have more recently entered business. In the case of Kuwait, the children and grandchildren of the current ruler, Sabah Al Ahmed, have become key actors in the economy. Prominent among these are Nasser Sabah (Al-Futooh Holding and Kuwait Enterprises Holding) and his brother Hamad (chairman of the holding company KIPCO, which has consolidated assets of some US $32 billion, and on the board of which two of Nasser’s sons also sit). They and other members of the ruling family, including the former emir’s daughter Hussa bint Saad (chair of the Arab Businesswomen’s Council and a board member of Ithmaar Bank), are only a few examples of the growing presence of the Al Sabah’s in the private sector.
In Oman the involvement of the ruling family in economic affairs has been evident since the mid-2000s. Notably, three sons of Sultan Qaboos’ paternal uncle Tariq bin Taimur – who in the absence of a named heir are the more probable candidates for the eventual succession to Qaboos – have prominent business roles. Asad bin Tariq, the sultan’s personal representative, has been chairing the board of trustees of the University of Nizwa, Oman’s largest private university; and also heads Asad Investment Company, which controls more than US $1 billion in assets worldwide.7 Asad’s half-brother Haitham, the minister of national heritage and culture and chair of the committee responsible for drafting Oman Vision 2040, the country’s long-term national strategy, controls his own holding company, National Trading. Haitham’s full brother Shihab chairs the Seven Seas group, which has investments worldwide in petroleum, mutual funds and medical supplies. Sultan Qaboos’s maternal uncle, Mustahil al-Ma‘ashani, has chaired Muscat Overseas holding, the most active business group in Dhofar. Mustahil’s son Khalid chairs the first Omani banking group, Bank Muscat, and Dhofar International Development and Investment Company, which is the main shareholder of the second largest Omani bank (Bank Dhofar).
2 O’Murchu, C. and Kerr, S. (2014), ‘Bahrain land deals highlight alchemy of making money from sand’, Financial Times, 10 December 2014, https://next.ft.com/content/b6d081a2-74b8-11e4-8321-00144feabdc0.
3 Richter, F. and De Sa’Pinto, M. (2011), ‘Special Report: In Bahrain, a symbol at the heart of revolt’, Reuters, 17 June 2011, http://www.reuters.com/article/us-bahrain-gfh-idUSTRE75F4LF20110617.
4 Of a total wealth estimated at some US $1.2 billion, he owns $700 million worth of public stock in Deutsche Bank, through his investment vehicle Paramount Services Holdings.
5 Gulf States News (2015), GSN 1,000: Transformation and trepidation in the Gulf monarchies, 17 September 2015, p. 43. Mubadala owns stakes in the Carlyle Group, a US private equity company, Piaggio Aerospace, General Electric, etc.
6 In June 2016 Mohammed bin Zayed announced the creation of a committee, to be chaired by his brother Mansour, charged with the responsibility of merging Mubadala and IPIC.
7 Asad’s son Taimur has been chairman of Alizz Bank, Oman’s second Islamic bank, since 2012.