The Emergence of Khaleeji Capitalism

If, at the beginning of post–World World II decolonization, one had tried to pick that area of the colonial world that would become the wealthiest and most highly developed in the world, it would have been wildly prescient to predict the states of the Gulf. The Arabian Peninsula was a backwater of the Ottoman Empire, and had been under British domination as an afterthought.

In the 1960s, hastily erected monarchical regimes were rushed out of semi-colonial status by Britain (or in the case of Saudi Arabia, the United States) for fear that they might fall to the Nasserism and revolutionary socialism then sweeping the Middle East.

In the first chapter, Khalaf describes the political and economic history of the Gulf. He notes that already the region was seen as key to the survival of global capitalism under American hegemony. A State Department official returning from an exploratory trip in 1943 described the sea of oil that lay under the peninsula as “the single greatest prize in all history.” Yet the means to extract it could not be found in its sparse population.

Labor migration to the region was nothing new. Under British colonialism the Gulf States were ruled as extensions of the Indian princely states, with a colonial bureaucracy and coolie workforce drawn from the Raj. But for the newly independent states, it was only natural to solicit laborers from other Arab countries. Millions of migrants from Egypt, Yemen, and Palestine served as the muscle with which the oil industry was erected and the region emerged out of the darkest colonial-forced underdevelopment.

As John Chalcraft writes, the shift from Arab to South Asian labor was a deliberate strategy of states that felt threatened by Arab workers’ suspected political radicalism, and the solidarities that were beginning to emerge between them and the local population. Those states used the massive oil revenues to incorporate large sections of Gulf citizens into the ruling order.

The Workers

The kafala system is, in a sense, at the center of the book, for it is the system through which migrant labor to the Gulf must pass. In essence, it is an exclusionary regime that regulates labor through the medium of citizenship.

While each migrant worker must have a citizen sponsor (a kafeel) in order to get a work visa, the system has many varieties, and in all GCC economies shades into a twilight world of irregularity. It enfolds those who have stayed in the host country beyond the duration of their permit, those who have left their proper employment without approval from the kafeel (often their first employer), and a range of other semi-legal statuses.

As Mohammed Dito writes in his chapter on the system:

In most other countries, illegal status results from an infringement on the existing laws. Under kafala, however, irregularity is a direct consequence of the structure of the legal system. The sponsor’s extremely powerful position over the migrant . . . arises precisely because of the kafala regulations . . . [M]any migrants have no other solution to the difficult and exploitative conditions they face except to become irregular.

Some may perceive a tension in a system that requires millions of poor laborers from South and Southeast Asia to work at the same time as it subjects them to a brutal legal system regulating their presence. But there is none. Kafala is a highly intentional policy meant to completely marginalize the masses of workers that it pulls in, keeping them separate from Gulf political society. Yet, as we shall see, it has not been entirely effective.

In Saudi Arabia, where migrant labor is the smallest percentage of the workforce, it still makes up one third of the population according to official statistics (which are, as in the rest of the Gulf, often falsified). In countries on the higher end, such as the United Arab Emirates and Qatar, they form 89 and 86 percent of the population, respectively. These numbers rise when we consider the labor force as opposed to merely population.

So what do all these workers do?

The paradigmatic Gulf worker remains the male South Asian construction laborer (as discussed in Michelle Buckley’s chapter). The threat of mobilization from this group — shown in a number of wildcat strikes in Dubai in late 2013, which were brought to a contradictory conclusion when the workers won most of their demands but the leaders of the strikes were deported — has resulted in the development of a caste of “good workers” through the collaboration of governments in the sending countries and Emirati authorities, and that relies on the construction of a certain type of masculine identity to reinforce their expectations of security.

Yet the wildcat strikes suggest that future builders will be no helots.

Not all Gulf workers are so vulnerable. Indeed, it is hard to conceive of a country that could consistently disenfranchise such an enormous part of its population without giving other groups benefits.

In chapters about Pakistani police and security personnel in Bahrain and Westerners in the education sector of Qatar, K. T. Abdulhameed and Nela Vora show how privileged migrant status is constructed, stabilizing and in its way contradicting the ruling order. Along with the preponderant numbers of de facto permanent migrants in the Emirates with increasingly middle-class and consumerist mentalities, these groups have expectations that rub uneasily against the purposes the rulers have set out for them.

Citizens and Rulers

The traditional Marxist analysis of regimes like this is the “rentier state.” In this thesis, which was originally developed to analyze Pahlavi Iran, the state, having unique access to a valuable commodity (it is oil in every iteration of the thesis) and the ability to redistribute the rents from its extraction as it sees fit, is able to rise above the tensions that come with the politics of social classes to an extent unforeseen in any other society.

In his first contribution, Hanieh shows the multiple fallacies of rentier-state theory. In addition to its methodological nationalism and state centrism, it fails to account for the real class structure of the Gulf States, which have seen an unparalleled fusion of state and private capital in the form of the ruling families and their entourage. Almost all significant economic activity among the ruling class and the citizenry is the result of at least passive assent by these oligarchs.

Most of all, rentier-state theory, in accounting for the nature of the Gulf’s class society, focuses on distribution rather than the fact that the obscene wealth of these countries is generated by a vulnerable, heavily exploited and (up to now) easily deportable workforce.

Still, the system does not exactly work for the citizens themselves.

One should not underestimate the advantages of migrant exclusion to Gulf citizens, who may charge outrageous rents through their kafeel status and benefit from the exclusive right to highly remunerated public service careers. Yet many of these citizens are increasingly economically inactive and find themselves strangers in a built environment that does not match their own aspirations, seeming instead to be suited for the strange desires of their rulers and wealthy expatriates.

Sectarian tension between Sunni and Shi’ite citizens, engaged in with abandon by the ruling families of Bahrain and Saudi Arabia, is one logical consequence of the rulers’s efforts to ensure stability. In Bahrain, where Shi’ites form a majority of the citizenry, the Khalifa monarchy has time and again turned to stoking fears of pro-Iranian subversion by this community, most recently when it employed the divisions between Shi’ite citizens and migrants to rally support for itself during the demonstrations of 2011. The Arab Spring in the Gulf was then drowned in blood by migrant police, recruited on promises of residency, a high salary, and appeals to Sunni identity.

The Global Gulf

In sum, Transit States helps to expose the fierce tensions at the heart of the Gulf countries. While on their own the Shia revolutionary citizens, the upwardly mobile Indian migrant in the Emirates, and the militant worker in construction do not possess the social weight to overturn this most bizarre of neoliberal dreamworlds, they represent in the interim a percolation of forces that the ruling families ignore at their peril. One suspects that stoking sectarian tension may develop its own logic that could escape the rulers’s control.

But the significance of this collection goes beyond merely the scope of the Gulf and even the Middle East. As Saudi bombs rain down on Yemen, marking the height of the GCC’s political assertiveness since the Arab Spring, probing the sources of their wealth as well as their links to US imperialism becomes increasingly important.

This was shown very recently when Indian migrants in the US won a $14 million lawsuit against Signal International. Signal had recruited them on promises of higher pay and eventual US residency to work in the reconstruction of post-Katrina New Orleans. Yet once they were there, they met the horrible conditions, limited and withheld pay, and decrepit dormitories that many of them had seen while working in the Gulf.

As Sue Ferguson and David McNally write, the increasing geographical separation between the processes of production and the social reproduction of the world’s working class “entails processes of migration and racialization that are inseparable from its class and gender dimensions.”

If this is true, it means that the Gulf, while it is the pioneer of the emergent global migrant system of labor, and the home of its fiercest contradictions, the contributions in Transit States will become increasingly relevant across the world. But no less, the gravediggers of the global Gulf await.