Money, Markets, and Monarchies: The Gulf Cooperation Council and the Political Economy of the Contemporary Middle East
by Adam Hanieh
Cambridge University Press
Published September, 2018
The New Arab Urban: Gulf Cities of Wealth, Ambition, and Distress
by Harvey Molotch and Davide Ponzini (eds)
Published February, 2019
Spaceship in the Desert: Energy, Climate Change, and Urban Design in Abu Dhabi Gökçe Günel
by Gökçe Günel
Duke University Press
Published March, 2019
The viewing platform of the Burj Khalifa, currently the tallest building in the world, provides an exceptional view. On a clear day, you can see Dubai’s towers clustered along its highways and the scattering of urban megaprojects giving way to suburban sprawl. But clear days are increasingly rare on the Arabian Peninsula, due to rising levels of pollution—a significant product of this area’s fossil-fueled urbanization and contribution to climate change over the past 60 years.
Turn toward the waters of the Persian Gulf, and you can see The World, an artificial real estate archipelago that we are told was the idea of Dubai’s ruler. Since its inception, The World has struggled to be economically viable, destroyed the fragile salt flats, and buried the coral reefs in its vicinity. On the other side of The World, you can see the Strait of Hormuz on the horizon, and then the outline of Iran. This body of water is considered the world’s most important oil artery, with almost one-fifth of the world’s oil passing through it. It is also a geopolitical fault line, the frontier of a conflict between the United States and Iran.
So, it is perhaps unsurprising that observers of the Arabian Peninsula have strong opinions about its politics, its focus on extracting oil and gas, its religion, and its gender relations. Many of these opinions are generated at a great distance from the everyday lives, histories, and geographies of those who are from or who inhabit the region itself, a separation that often leads to distorted accounts.
The Arabian Peninsula is often referred to as the GCC, an abbreviation for the Gulf Cooperation Council. The GCC was formed, in 1981, as a loose political and economic alliance between six of the seven countries that make up the Arabian Peninsula: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE); impoverished and war-torn Yemen is the only state on the Peninsula to be excluded from this grouping. In 2017 the GCC was thrown into crisis when Saudi Arabia, the UAE, and Bahrain severed diplomatic relations with neighboring Qatar and imposed an air, land, and sea blockade against it. Despite the fragility of the alliance, the term ‘GCC’ is often utilized to discuss these six countries together, because of their shared historical geography; cultural and religious mores; governance structures (characterized by authoritarian monarchies and highly personalized rule); large migrant worker population; rapid urbanization; and vast revenues generated from oil and gas. It is all too easy to focus on everything that is exceptional about the GCC—the record-breaking towers and shopping malls, the three-hundred-island real estate archipelago trying to replicate the world. But this reasoning does much to cover up the GCC’s ordinariness, its multiple connections to everyday lives around the world.
How exceptional can a region that produces so much of the energy that powers contemporary capitalism be? Or that is such a central player in the global financial system, as the GCC now is, home to technology companies, global real estate interests, outposts of elite Western universities, and experiments in urban design? It’s long past time that observers of the GCC undo their view of the region as exceptional and recognize it as the global power broker it has become. It was shaped by—and now is central to shaping—global capitalism.
Decisions that are made in the GCC have ramifications that reverberate around the world. The region influences how urban development projects are undertaken in New York or Mumbai; what is studied at the Massachusetts Institute of Technology (MIT) or the London School of Economics; and whether it will be possible to develop the political motivation and technological systems needed to address the climate emergency. Detailing how the GCC is pivotal to global circuits of capital is the central project of Adam Hanieh’s Money, Markets, and Monarchies. Hanieh, in his analysis, does not single out the GCC’s fossil fuel exports, but looks at its role in the worldwide circulation of all commodities.
Financial surpluses from the Gulf are now critical to the global economy, Hanieh argues, and he substantiates this claim by tracing how these surpluses have been invested, ‘unpacking who holds them, where they go, and what they do.’ What Hanieh illuminates may surprise those who think of the Gulf as outside the central framework of global society. The vast capital that has been generated by the region’s oil and gas exports has now been recirculated into global institutions that are household names: Credit Suisse, Barclays, Deutsche Bank, and Citigroup; Daimler and Volkswagen; Twitter and Uber. Following Qatar’s purchase of the Canary Wharf Group—owner of the Canary Wharf area of East London that is home to many major banks—a number of reports detailed GCC-based real estate investors’ significant holdings in London. The English paper, The Telegraph, concluded that Qatari investors own more of the city than the mayor of London’s office and three times more than the queen.
Many of the GCC’s impressive investments have roots in the 2008 global financial crisis. In the aftermath, GCC investors ‘took high-profile positions in some of the world’s biggest companies and brands,’ Hanieh writes. Although he points out the crucial position the GCC took after the global financial crisis, he doesn’t go quite far enough in explaining just how significant a player the GCC was before, during, and, now, after this seismic event. We still need a full account of how the GCC seized its current position in the ‘interlocking matrix’ of corporate balance sheets that make up the global financial system. The GCC has a critical stake in banks that are listed as ‘global systemically important institutions,’ like Barclays. But we need to know more about the impact of that investment, especially as Barclays is currently being scrutinized in the court room as part of a billion-dollar lawsuit.
In addition to the financial sector, real estate is central to the power of the GCC’s corporate oligarchies. The region’s urbanization has had a profound global influence on the worlds of architecture and urban planning, and on what urban megaprojects are more broadly expected to do in an economy or society. This is the focus of The New Arab Urban, a new anthology edited by Harvey Molotch and Davide Ponzini.
‘A few state-owned developers—that is, the ruling family—divide available urban land and sell it to high-worth individuals,’ writes Yasser Elsheshtawy in his contribution to The New Arab Urban. ‘The result is a fragmented urban fabric geared toward exclusivity, where livability and urbanity—in short, a sustainable urban environment—are issues that are dealt with, if at all, after the fact.’ This is a story that will resonate for anybody who lives near a major global metropolis. As a number of authors in The New Arab Urban note, the GCC’s urban developments are having a direct impact on the design of cities around the world.
The Cityquest KAEC Forum, an elite new-cities-themed meeting that is held annually in Saudi Arabia, plays a crucial role in establishing policies, norms, and assumptions about urban practices, from architecture to urban planning. Sarah Moser details her experience at the forum in her contribution to The New Arab Urban. ‘In part through projects like Cityquest KAEC Forum, the Saudis have taken on the mantle of experts on building new cities,’ she writes. The Gulf, as Moser and others claim in The New Arab Urban, is not just a passive recipient of urban policy, but a key site of production. All New Yorkers need to do is look at Hudson Yards, the new urban megaproject known as ‘little Dubai,’ to see evidence of this spread.
One of the most notable instances of the GCC’s innovative urban policy is the establishment of Abu Dhabi’s Masdar City. Masdar is a planned city, launched in 2006, with a slated cost of $22 billion. It was intended to be a ‘zero-carbon’ district, where cars were prohibited in favor of an automated personal rapid transport network. It also included a graduate research center, the Masdar Institute, established in collaboration with MIT and focused on renewable energy.
But Masdar City was short-lived. Soon after the financial crisis of 2008, the master plan was reformulated. Since then, it has been slowly transformed from an ‘eco-city’ to a special economic zone for renewable energy and clean technology companies. The Masdar Institute was merged in 2017 with Khalifa University and the Petroleum Institute to create the Khalifa University of Science and Technology. Even in its compromised state, though, Masdar City remains one of the largest experiments in how we can produce a ‘zero-carbon’ urban fabric.
In Spaceship in the Desert, Gökçe Günel zeroes in on Masdar City. Günel is determined to take Masdar and its inhabitants seriously: she wants to understand how cosmopolitan actors such as ‘Jack,’ who has a PhD in engineering science and is an American faculty member at the Masdar Institute, ‘set about the task of building a renewable energy and clean technology sector.’ People like Jack and institutions like MIT will be central to any resolution of our current state of climate emergency, and it’s necessary to study their process. Jack’s training in the GCC model of green development is especially consequential, because renewable energy and clean technology—the Masdar way—also relied on cheap labor and the speed, capital, and efficiency that authoritarian rule lent to the project. These political dynamics, Günel shows, were not only left unaddressed at Masdar; they were actively buried.
Avoiding pressing social and political injustices is not something that is specific to the founders of Masdar or the UAE, as Günel is also keen to stress. Western companies like Siemens and General Electric were equally adept at sidestepping difficult social and ethical issues. These companies created fantastical images of the future at Masdar where, as Günel writes, ‘renewable energy and clean technology companies embodied a messianic promise, seeking to liberate humanity from its guilt-ridden consciousness of the twentieth century.’ The global climate crisis is serious, but Günel shows that our attempts to tackle it are less so.
Günel could have devoted much more attention to the relationship between MIT and Masdar. Still, her account of the politics at Masdar should make for uncomfortable reading for those at MIT. And it should be considered in the current debate around GCC funding of MIT and other American universities, as well as the expanding international operations of universities more broadly. For instance, Günel details how MIT derived research benefits from its agreement with Masdar, because it could circumvent the institutional review board (IRB) protocols. Even more damning was the purging of six students—two Lebanese and four Iranians who had registered their religion as Shi’ite—from the institute by UAE authorities. Later, these students informed Günel that two Iranian faculty had also left the institute with no explanation.
While it is commendable that Günel follows up with one of the expelled students, citing how they were targeted by the UAE and abandoned by MIT, she only appears to have pressed the issue with MIT lightly. ‘Fred,’ her main contact at MIT, brushes this incident off: ‘He reiterated that MIT could not challenge a national policy.’ Günel does not seek further answers from Fred, other MIT faculty, or the administration on this serious case of religious discrimination at Masdar. Notably, it has not been part of the current debates around MIT’s partnerships in the Middle East. This incident should have implications for how MIT undertakes its continuing expansion around the world and the specific discussion around Saudi Arabia and the GCC.
But while it’s necessary to pay attention to these issues, it’s important to not slip into the trap of assuming they only exist inside the GCC. The launch of MIT’s new Schwarzman College of Computing, which cites ‘ethics’ as central to its mission, also inadvertently highlighted MIT’s own inability to address this ambition. The school was established with a $350 million funding package from Blackstone Group billionaire and Trump confidant Stephen Schwarzman, a fact that has caused great aggravation among a number of students and academics at MIT. Saudi Arabia has been central to the rise of the Blackstone Group, investing as much as $20 billion to assist Blackstone in building the world’s largest infrastructure fund.
MIT’s own academics have produced scholarly works on the need for any technological efforts that combat climate change to incorporate questions of global political economy, as well as ethics, justice, and culture. But at the highest levels of the institution, these lessons are ignored. At MIT’s Masdar Institute, for instance, there was no evidence of the broad scientific consensus that any effort to keep fossil fuels in the ground requires simultaneously creating new technologies and addressing economic, sociopolitical, and urban governance questions.
This inability to address social questions has shaped the artifacts produced at Masdar. Günel cites how the technological fixes developed at Masdar, such as ergos, an energy currency that aimed to bring ‘the economy and the physical world together,’ were devoid of serious sociopolitical and ethical thought. Ergos’s developers dismissed the various social risks—like ‘technocratic dictatorship’—that the currency presented. Our contemporary moral mess, from the GCC to Massachusetts, can be seen all too clearly through the pages of Günel’s account.
The GCC is a central player in the mainstream global system of fossil-fueled capitalism. Its inability to escape from the moral and ecological climate emergency is shared by nations across the globe. But it’s crucial to stress that this global status quo will be particularly lethal for the GCC. Rising sea levels will threaten the coastal cities of Dubai and Doha; soaring daytime temperatures (often breaking 125°F) will make the region uninhabitable; and elevated levels of aridity and salination will increase the likelihood of water, power, and food crises. The problem that the GCC poses is not that it is the exception, but that it is the norm.
The Sydney Review of Books and Public Books have partnered to exchange an ongoing series of essays with international concerns. Today’s essay, ‘The World The Gulf Built‘ by Deen Sharp, was originally published by Public Books on 6 September, 2019.