The recent rise of Dubai and the Persian Gulf in the global consciousness has been profound. Once a small, unknown fishing village, Dubai has turned into a powerful megalopolis recognized worldwide for its skyline, shopping, business dynamism and shipping. A veritable Arabian Disney World for adults, its meteoric rise has been the envy of governments around the world.
Yet the Dubai model is beset by problems not readily apparent to outside observers, starting with a massive demographic imbalance and issues concerning identity and citizenship. One notable shortcoming of the UAE has been its lack of democracy and representation, with the attendant issues of inequality and human-rights violations. Michael Herb compares the UAE (specifically Dubai) with another, less prominent, rentier state: Kuwait.
Like the UAE, Kuwait has a massive amount of oil wealth; unlike the UAE, it has developed a strong and influential parliament, the National Assembly. This political body is unique in the Gulf; however, Kuwait also stands alone as the only Gulf state to fail to maximize its economic potential. It is through this lens that Herb compares these two Gulf countries: one with a successfully diversified economy but no representation, the other with the most politically liberalized system, but lacking in economic diversification.
Michael Herb, a prolific writer and expert on the Middle East, has written several works on the Gulf monarchies. His area of focus is democracy and the effect that oil has on the politics and economies of Arab states. He has taught at Georgia State University for almost 20 years and has been awarded numerous accolades for his work.
In this book Herb does not try to create a universal economic model but to argue that there is a difference between the most extreme rentiers in the Gulf (Kuwait, the UAE and Qatar) and the moderate ones (Saudi Arabia, Oman and Bahrain). The extreme rentiers are so wealthy they can employ almost every citizen. Kuwait is the only member of the GCC with a strong parliament — a result of Iraq's threat to its sovereignty. In Kuwait, the citizens have a voice in determining their economic policy, and this has resulted in a very different model than the one found in the UAE or Qatar. Finally, because the ruling families of the UAE are free to pursue their narrow economic interests, the result has been Dubai, Inc.
Because the extreme rentier states are so wealthy that the government can hire almost their entire citizenry at exorbitant wages, the private sector is almost entirely filled by foreigners earning far less. Thus, in order to achieve the Al Maktoum family's dream of turning Dubai into an ultra-cosmopolitan city, the country needed to import massive numbers of foreign labor to work in construction and tourism. This has led to a massive demographic imbalance: only one in 10 people living in the UAE is an Emirati.
In Kuwait, however, citizens have a say in the country's economic policies. This has produced an utter neglect of the private sector. The middle class is so tied to state jobs and its oil wealth, its members see no need to diversify the economy by developing a private sector that will only benefit foreigners. This is Herb's explanation for why Dubai has become an economic powerhouse with a fraying sense of identity, while Kuwait remains underdeveloped.
Herb compares Kuwait's level of political participation with those of the rest of the Gulf states. Here he makes the point of just how unique and privileged Kuwaitis are to have a powerful National Assembly and explains how and why this developed in Kuwait alone. Herb asserts that the threat of Iraqi invasion and the liberal leanings of Kuwait's emir, Abdullah Salim, are the reasons for the National Assembly. Kuwait is dependent on outside assistance to guarantee its sovereignty, and being more democratic is a politically expedient way to get such support. The National Assembly provided the legitimacy needed to gain the support of Britain and Egypt's Nasser in the '50s and '60s, and then, of course, of the Americans in the '90s. The lack of an existential threat in the rest of the Gulf and the narrow economic self-interest of the ruling elite have inhibited the development of political liberalization beyond Kuwait.
In explaining Dubai's development, Herb argues that, because there is no strong parliament, the ruling families benefit immensely from controlling undeveloped land, especially in Dubai. The success of the Dubai model has inspired the rest of the Emirates, as well as Qatar and other Gulf states. But, because the citizens benefit less than the rulers from unrestrained economic growth, it is likely that the Dubai model is incompatible with democracy.
Herb analyzes how Kuwait's political system has prevented it from following the Dubai model and addresses other issues facing Kuwait's economy. He acknowledges that, because the populace is employed by the state, they have no desire for a stronger private sector. However, he also discusses how the National Assembly's innate fear of corruption has led to the death of many projects. The lack of available land for development is another major issue that inhibits growth: the citizenry rather than the capitalist elite hold Kuwaiti land.
Near the end, Herb tackles the concept of the resource curse, using Kuwait and Norway as examples of places that, despite their great resource wealth, have achieved political liberalization. He also notes that, while severe demographic imbalances do occur in other extreme rentier states, they do not occur in all of them. After extensive global analysis, his major point is this: extreme rentierism does not guarantee any particular path or outcome for a state, but it does seem to produce a series of likely trends.
Herb understands that Kuwait and Dubai do not exist in a vacuum. He often compares their models to other Gulf states and oil rentiers across the world. He does not limit himself, though the book involves a comparison of two countries. The broader comparisons that he makes are a real strength of this book. However, the author spells out exactly what he is going to argue before he argues it. This feels unnecessary and a little simplistic, although perhaps it is useful for some readers.
Michael Herb has written about very technical economic concepts using a plethora of graphs and advanced terminology to argue his points. The subject matter isn't for everyone; those with a background in economics and political science will appreciate the book more than others. Yet the book is lively and engaging and Herb has taken a potentially dreary subject and produced an intriguing book accessible to all.