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When Fake Countries Go to War

DOHA, QATAR—Until recently, life in Qatar was quite pleasant. But then Saudi Arabia, backed by President Donald Trump, who has gone from critic to fan of the ruling royals there, led an effort to isolate its smaller neighbor. With supreme irony, Riyadh, whose people have done more to fund and man terrorist attacks on Americans than any other nation, accused Doha of backing terrorists.

It’s impossible to predict the outcome of Saudi Arabia’s hypocritical jihad. More moderate Kuwait has not joined Saudi Arabia, whose leaders, among the most licentious in the Muslim world, run a government that may also be the least tolerant. Despite President Trump’s Saudi swoon, the Defense and State Departments have taken more measured positions. Turkey rushed to Qatar’s defense, Iran airlifted food, and Russia, ever more active in the Mideast, called for a diplomatic resolution of the conflict.

The Gulf countries really cannot afford to be at odds. The half-dozen Gulf states share a critical characteristic: all are essentially fake countries. To be sure, they have governments, diplomats, and military. But they are monarchies, some of recent vintage, in a world that long ago abandoned primogeniture.

And all contract out the hardest work, from manual to professional, to foreigners. Instead of being countries, they resemble country clubs, in which a dominant few paying customers effectively make the rules and hire others to implement them. A large share of their populations are foreign and live in the shadows, with few rights and no opportunity to participate politically in the societies in which they live.

That Qatar could not operate without its foreign workers is evident when landing in Doha. Almost any practical job of importance is performed by a foreigner. It’s the same in the other Gulf States.

It’s not unusual for governments to contract out work. Western governments do so, though usually to their own citizens, and in order to save money. What makes the Gulf States unique is the scale of reliance on foreign labor and the reason for doing so: to ensure that their own citizens need not be bothered having to work, or at least work unduly hard.

The increased role of expatriates reflects oil wealth. In the early 1970s the number of foreigners in the Gulf was modest. But as oil prices rose, starting in 1973 the disposable income of these states rose dramatically—as did demand for expatriate labor. The number trebled within a decade. And the numbers have continued to rise. At the same time the proportion of non-Arabs (and non-Muslims) rose.

Estimates of the share of expatriates are rough but striking. Up to 90 percent (some estimates are a bit lower) of the residents of the United Arab Emirates are foreigners. Roughly 85 percent of Qatar’s population is foreign. Kuwait comes in at 70 percent. Bahrain’s expat share is 55 percent. Both Oman, the least visible of the Gulf nations, and Saudi Arabia, the most populous of the six, fall in at 30 percent. In the latter even the smaller percentage means there are upwards of eight million foreigners in the Desert Kingdom. In sharp contrast are Iran, Iraq, and Yemen, which have followed a different path.

Money obviously can buy comfort, if not happiness. It seems to have worked for the Gulf States. But the fall in oil prices has put the Gulf model under severe stress. Once addicted to free spending, the countries are facing deficits and being forced to borrow to maintain current outlays. Yet even the latter is no longer easy. Bahrain and Oman have seen their credit ratings downgraded to junk status.

Kuwait, with a democratically elected National Assembly, has faced popular resistance to retrenchment, particularly reductions in social benefits and economic subsidies. Roughly half of the Assembly members elected last November formed an unofficial opposition. Even the most dictatorial of the Gulf States, Saudi Arabia, feels the pressure. The deputy crown prince led efforts to trim expensive social benefits and subsidies as well as government salaries last fall, but the monarchy recently reversed those cuts. This will exacerbate the underlying economic problems.

Another austerity target is expat labor. For years governments have officially committed to labor force nationalization, without great effect. Some recently launched new efforts to reduce reliance on expats: taxes on hiring foreigners, requirements for domestic hiring for particular occupations, and employment quotas in some industries. A few have even rounded up and deported some expats. But an increased cash crunch may provide the most powerful incentive of all to change.

Nevertheless, moving toward a more normal balance in the labor force won’t be easy. First is the sheer magnitude of expatriate hiring. A nation that brings in nine times as many foreigners as it has citizens cannot easily replace the former’s labor. Although many of the jobs are nonessential, such as domestic servants, they remain popular.

Lack of adequate skills is another issue. Some jobs require specialized training or professional education, which takes time and commitment. Local interest in such occupations doesn’t match demand. Even worse, many locals exhibit a minimal work ethic.

Equally problematic, the sense of entitlement runs deep. The number of nationals employed in private business has been increasing. But government remains the preferred type of employment. Even locals joke at the difference: Kuwaiti officials privately talk dismissively of the willingness of their fellow citizens to work. Many Gulf residents believe their national oil wealth entitles them to easy but remunerative employment.

More fundamentally, citizenship has a feeling of being transactional. Monarchs of dubious legitimacy get to rule so long as they share enough revenue with their citizens to provide lives of relative ease. In effect, foreign labor becomes part of the deal, essentially an entitlement of citizenship available only to a privileged few. Although the regimes usually retain control of security agencies, there are creative exceptions, such as Bahrain importing Sunni Muslims from Bangladesh and Pakistan as emergency service workers and policemen.

Plenty of Americans and Europeans like their welfare states and clamor for more benefits. Yet in all those nations the same people pay taxes and sometimes are required to perform military or other national service. Most see their political community as a larger whole and perceive citizenship as something beyond mutual transactions. The Gulf States feel differently.

While the Saudi-led attack on Qatar is dominating today’s headlines, a more fundamental challenge faces the Gulf. Can artificial states dependent on buying the loyalty of their own citizens while farming out the toughest work to others survive forever?

Iran scares Riyadh and its neighbors because the former poses a moral rather than military threat. Islamist rule in Tehran is odious, but offers meaning to people who believe in more than money. Transactional rule is tenuous even in the best of times. It becomes more dubious as the cash flow slows.

To survive, the Gulf governments need to look beyond simple questions of labor-force nationalization and economic austerity. They must adopt political reforms that give their peoples a greater stake in their own societies. Ultimately the best way to defeat Iran is to offer a more convincing governing philosophy and a genuine sense of community—characteristics now absent from the monarchies that are America’s closest Arab allies in the region.

Doug Bandow is a Senior Fellow at the Cato Institute and a former Special Assistant to President Ronald Reagan. He is the author of Foreign Follies: America’s New Global Empire.

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24 Comments To "When Fake Countries Go to War"

#1 Comment By Ken’ichi On July 4, 2017 @ 12:30 am

Instead of being countries, they resemble country clubs, in which a dominant few paying customers effectively make the rules and hire others to implement them. A large share of their populations are foreign and live in the shadows, with few rights and no opportunity to participate politically in the societies in which they live.

And how many actual citizens Athens had during the “Athenian democracy”, versus the metics and slaves? What was ratio of the Spartiates to helots in Laconia?

#2 Comment By Alex (the one that likes Ike) On July 4, 2017 @ 8:03 am

I would not call Saudi Arabia even dictatorial. Deriving from Roman magistracy, a dictatorship must have at least a veneer of legality. Saudi Arabia doesn’t have that. It’s simply a tyranny.

#3 Comment By skeptical On July 4, 2017 @ 9:46 am

The Gulf is of interest because of oil, period. Whether the people who control the oil can be considered “real states” is immaterial, because we have to deal with whomever controls the oil. We don’t war on behalf of these “fake states”, any more than we warred in Iraq and Afghanistan to prevent abuse of women and children; we war in the Middle East for continued access to the oil.

#4 Comment By SteveM On July 4, 2017 @ 9:58 am

Re: “To survive, the Gulf governments need to look beyond simple questions of labor-force nationalization and economic austerity.”

The sclerotic Gulf state regimes already have an alternative plan in place. Their multi-BILLION dollar weapons deals with the American Merchants of Death are implicit protection money to the U.S. to guarantee their security. Trump’s ridiculous sword dance with the odious Saudi princes was the icing on the cake of the warped compact.

One way or another, U.S. influence is now propagated at the point of a gun.

#5 Comment By Steven On July 4, 2017 @ 11:24 am

Having lived in the region for some years, I think Bandow’s blanket description of relationships between government and people there as “transactional” is quite wide of the mark, even ignorant.

These countries are quite obviously not western democracies, but more like a tribal government where one family runs things for the whole tribe, and the tribe and clans have been able in the past to either tell the family to find a new leader or to transfer their allegiances to another family. It’s not Jeffersonian democracy, but in once bitterly poor countries with very little education, it worked quite well, just like Liechtenstein.

An analogy that is not entirely wrong would be the relation Italian Mafia dons had with villages in the days before they got into drugs etc. He didn’t keep a parliament, but if you had problems, you could go to him and expect him to help you find a solution.

I should also point out to Bandow that nobody forces these foreigners to work in the gulf states, nor do they complain that they found work there. So what is his problem with their arrangements?

#6 Comment By habarigani On July 4, 2017 @ 11:32 am

If Islamist rule in Iran “offers meaning to people who believe in more than money” why is it “odious”? After all it governs largely with the consent of people. Is it “odious” because it does not confirm to Western concept of government and democracy in other words “Western exceptionalism”? Iran is evolving alternate path to Islamic democracy and the Persian Gulf could take a lesson from them. Instead of demonizing Iran, we should encourage its neighbors to make peace with it and emulate it!

#7 Comment By blimbax On July 4, 2017 @ 12:41 pm

Islamist rule in Tehran is odious, but offers meaning to people who believe in more than money.

“Odious” compared to what? And who are we to say?

I get the feeling that even when writing articles like this one, that are critical of the regimes in the gulf, the authors feel some obligation to say something gratuitous and negative about Iran.

#8 Comment By Howard On July 4, 2017 @ 1:26 pm

The parallels with our own country are there, though strangely not mentioned alongside the differences. In the Gulf states, there is a shared religion and a shared ethnicity to bind the minority “citizens”, but in the USA those bonds do not unite even citizens. How much is the “patriotism” of today really based on moral necessity — particularly when the insistence to “render unto Caesar what is Caesar’s” comes from a religion that is no longer encouraged — rather than on threats or bribery? (And like the Gulf states, Uncle Sam is finding it harder to afford to pay the bribes.)

#9 Comment By Iyad On July 4, 2017 @ 1:51 pm

The Gulf will never ever be able to offer a more convincing governing philosophy and a genuine sense of community than Iran. When you hear Iranian people telling you: We are from Persia, or when every non-official Iranian I saw outside Iran in the West is Liberal you know there is something different than the Zoo called Gulf.
Im a Syrian-American Christian who lived 2 years in KSA. And yes what Trump did in the Gulf was wrong and nothing but wrong. We hoped for a new day. The only support Trump got before elections was from the Syrians: Syrian Vice President wrote an article defending him!

#10 Comment By Cynthia McLean On July 4, 2017 @ 2:28 pm

The people of Iran remain loyal to their country not due primarily to fealty to “Islamist rule,” but because of 1000’s of years of glorious Persian history –arts, philosophy and literature, heroic figures etc. What such roots have the Gulf States in contrast?

#11 Comment By William Burns On July 4, 2017 @ 3:32 pm

Primogeniture’s got nothing to do with it. Saudi Arabia’s a monarchy, but it certainly doesn’t follow primogeniture.

#12 Comment By David Smith On July 4, 2017 @ 5:05 pm

A friend of mine who used to work in that area put it like this: “Saudi Arabia is not a country, it’s a company.”

#13 Comment By Dennis Tuchler On July 4, 2017 @ 5:27 pm

Why aren’t more literate Americans complaining about our slavish support of Saudi Arabia? US demonize Iran, a somewhat repressive theocracy in which women have rights and other monotheistic religions can be practiced. Find me a church in Saudi.

What would happen to the United States if Iran became he hegemon of the middle east? Aside from US oil interests and American Israelis, how would Americans suffer if we just bugged out of the Middle East?

Oil is for sale on the international market. We can get if whether it comes from Iran, Saudi or somewhere in the Western Hemisphere.

#14 Comment By bacon On July 4, 2017 @ 6:38 pm

@skeptical is exactly right. Before oil became the most necessary commodity in the world the Middle East was unimportant and in 50 or so years when oil and natural gas are nearly gone the area will be a backwater again. The Suez Canal may remain a major trade route, Israel’s hold on the world’s attention and particularly its influence in the US will still be a factor, Iran will still be a potential global actor, but the days of US presidents visiting Saudi Arabia and figuratively kissing the king’s ring will be over. That is not to say the oil sheikdoms won’t be problems, perhaps at war with one another, but it will only be a problem for the US, Russia, or Europe if our leaders cannot control their need to interfere in every little thing, everywhere.

#15 Comment By Winston On July 4, 2017 @ 10:01 pm

@Steven, Yes the Gulf countries are basically run in an anachronistic way. Not much different from how this region was governed locally, except with British intervention, Ibn Saud managed to dominate others in his area, and the British also helped to form the others.

[1]

The only 2 with significant populations are the Saudi Arabia and Yemen.

Seems to be needing to rely so heavily on foreigners is really an acknowledgement of incompetence, not because locals do not want to work.

Iran is actually the best run ME country. It has capable women and allows them space. A young girl designed a much lauded bridge in Tehran. Which other ME country has given females this latitude?

See:
[2]
Take it to the bridge: the Tehran architect striking the right chord in Iran and beyond

And this is just one example pf the contributions female make to the country.

#16 Comment By Omar On July 4, 2017 @ 11:20 pm

“Ultimately the best way to defeat Iran is to offer a more convincing governing philosophy and a genuine sense of community—characteristics now absent from the monarchies that are America’s closest Arab allies in the region.”

It is truly sad that these states are America’s closest allies. What if the people of these states wanted political change? They would have to go up against Kings armed to the teeth by America. It is therefore America which stands in the way of real change as much as the Kings themselves. America is the great enabler of most if not all Arab Kingdoms.

#17 Comment By BadZ On July 5, 2017 @ 2:28 am

“Ultimately the best way to defeat Iran is to offer a more convincing governing philosophy and a genuine sense of community—characteristics now absent from the monarchies that are America’s closest Arab allies in the region.”

I’ve yet to hear a good reason why it would be a good thing for anybody to ‘defeat’ Iran. After all, Iran is currently only in open military conflict with Al Qaeda and ISIS types, so who do we want to see defeated? Also, no matter how odious we may find the government, Iran is still a paradise of freedom and democracy when compared to Saudi Arabia (as was Syria, for that matter).

#18 Comment By Michael Kenny On July 5, 2017 @ 12:34 pm

Who gave Americans the right to decide that this or that state is “fake” or “artificial”? Or that they “must” adopt political reforms? Or that this or that other state is “moral” and “offers meaning to people who believe in more than money”? Mr Bandow certainly doesn’t seem to beleive in “non-intervention”! Although (cynical me, you may say!), he might well make an exception in regard to Ukraine.

#19 Comment By Frip On July 5, 2017 @ 1:32 pm

The substance of this article could have been covered in 4 short paragraphs.

#20 Comment By Nolan On July 5, 2017 @ 3:56 pm

“Ultimately the best way to defeat Iran is to offer a more convincing…”

Not until the last line, but is that what this article is about? Why must this author promulgate the obnoxious “Iran is evil” line – we can go and find all over MSM! I suspect you have little experience in these countries and find your words on Iran stale (and odious).

#21 Comment By Cornel Lencar On July 5, 2017 @ 9:51 pm

What one can expect from slaver states?

#22 Comment By Mark M On July 5, 2017 @ 10:24 pm

I’m one of the few Iranian-Americans that has extensive experience working in the Arab countries and also in visiting Iran and all I can say is just stay away from it. Most of these Arab countries are going to implode at some point whereas Iran I expect will moderate and mature. In the meantime, get off the oil.

#23 Comment By RockMeAmadeus On July 7, 2017 @ 4:20 am

The Islamic revolution and Islamic republic institutionalized constitutionalism, elections from the local level to the highest officials, mass literacy and education from primary to post-doc level, military power and mass healthcare and…in Iran after 2,500 years of monarchy.

Nothing “odious” about that.

#24 Comment By RockMeAmadeus On July 7, 2017 @ 4:27 am

Instead of wanting to “defeat” Iran, the American REPUBLIC should ally itself with the Islamic REPUBLIC against the Gulf clowns and the apartheid state in Israel.

Somebody should check and see if Cato gets any Gulf money, hey who knows…