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Friday, September 30, 2011

Gulf states keep winds of change at bay – but for how long?



Bahrain elections (Source: @bna_ar)

By James M. Dorsey

Oil wealth and demographics have so far largely shielded a majority of the six Gulf Cooperation Council members from the brunt of the Arab revolt sweeping the Middle East and North Africa, but have hardly insulated them from the winds of change.

Saudi Arabia, Kuwait, the United Arab Emirates and Qatar have until now successfully sought to ring fence themselves by supporting Bahrain's brutal squashing earlier this year of mass anti-government protests, bankrolling Oman, splashing billions of dollars on social spending at home and banking on the fact that a majority in the Gulf prefers reform to revolt and the fears of nationals of the smaller Gulf states that public protest would open a Pandora's box with expatriate majorities putting forward demands of their own.

The measures are likely to at best buy the Gulf states time. Their ring fencing strategy is threatened both from within the GCC as well as by the revolt elsewhere in the region and could be undermined if a drop in oil prices makes it more difficult for Gulf governments to maintain their financial largess.

The crackdown in Bahrain backed by GCC troops has moved the protests out of the capital Manama and into Shiite villages, split the opposition along sectarian lines and enabled the ruling Khalifa family to keep for now keep the opposition in check. It has failed however to generate a credible national dialogue that addresses widespread political and economic grievances The point was driven home this week with jailing by a military court of 36 people, including 20 medics who treated activists wounded during the protests and two handball players, to sentences from five to life for participation in the demonstrations.

If Bahrain’s festering problems could at any time abruptly and radically upset the Gulf apple cart, Oman could break the mould of buying off populations with spending and pro-forma baby steps towards more representation by granting its elected Shura or advisory council greater legislative powers. A third more voters will be allowed to vote on October 15 in elections called after mass anti-government protests earlier this year that focused on higher wages, more jobs, an end to graft and more powers for the council rather than a change of government.

Omani leader Sultan Qaboos bin Said, who has ruled Oman since he ousted his father in 1970, has yet to announce how extensive the council’s legislative powers will be. Nonetheless, granting the council such powers sets the Omani council apart from similar assemblies elsewhere in the Gulf with the exception of Kuwait and Bahrain whose parliaments have long had legislative powers because they are being granted as a result of the revolt sweeping the region and knocking on the door of conservative Gulf states.

This week’s by-elections in Bahrain intended to fill 18 parliamentary seats left vacant after members of the opposition Islamist Al Wefaq party resigned did little to restore credibility to the island’s political process or the government’s claim that they demonstrated its commitment to political reform. Only 17 per cent of registered voters cast their vote after the party declared a boycott in protest against a constitution that it says disallows equal representation by reorganizing election districts to favor Sunni candidates.

Municipal elections this week in Saudi Arabia, the kingdom’s second, and, in the United Arab Emirates next week for a powerless federal council, half of whose members are appointed, do little to really advance the political process. In an acknowledgement of the winds of change, Saudi king Abdullah announced that women would be allowed to vote and stand as candidates for the country’s advisory council but only in the next election four years from now. The government earlier this year was able to quell protests in its predominantly Shiite, oil-rich Eastern Province. Turnout in Thursday’s election was low with activists calling for a boycott because the toothless councils demonstrated the government’s refusal to empower the public.

Nationals in the UAE as well as in Qatar have been reluctant to take their grievances public because they constitute a minority of their countries’ populations and fear that protest could inspire expatriates, who form a majority, to demand a greater stake in their adopted homes. Nonetheless, criticism of the UAE federation’s is expressed behind closed doors, including a sense among the northern emirates that they benefit far less from the country’s oil wealth than Abu Dhabi, which has the most significant reserves, and Dubai. The UAE has in recent months cracked down on critical voices and reportedly invested a half a billion dollars in the creation of a mercenary force for the eventuality of public protests.

Nevertheless, the Gulf states have by and large in recent months been able to contain whatever impulse for revolt has reared its head. Social spending and cosmetic change however are unlikely to address widespread simmering discontent, much of which involve the same issues that have this year already sparked protests that overthrew the leaders of Egypt, Tunisia and Libya and have the regimes of Syria and Yemen teetering on the brink.

With an official unemployment rate of ten per cent, Saudi Arabia has to create 5 million jobs for nationals by 2030. In a report last week, HSBC Holdings Plc warned that the kingdom could cut output if falling prices threaten the financing of its budget and $130 billion social spending and stimulus plan. HSBC said it expected an average $90 a barrel oil price next year, a 15 per cent drop compared to its current price of $105, and the point at which the kingdom could decide to reduce production.

For now, most Gulf leaders, like the monarchs of Morocco and Jordan who have been invited to join the GCC, have the advantage that their populations yearn for reform rather than revolution. The Moroccan and Jordanian kings have responded with political reforms that have stopped protests from escalating but have yet to prove that they meet the calls for change. Most Gulf states have yet to follow suit. Their reluctance to be proactive rather than reactive has so far shielded them from the revolt. The question is for how long and at what price.

James M. Dorsey is a senior fellow at Nanyang Technological University's S. Rajaratnam School of International Studies in Singapore and the author of the blog, The Turbulent World of Middle East Soccer.

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