In the picture
Cover of Karen E. Young’s book *The Economic Statecraft of the Gulf Arab States: Deploying Aid, Investment, and Development Across the MENA* (London: I. B. Tauris, 2023), 173 pp.
We know about the Persian Gulf petro-monarchies’ hydrocarbon exports and the sovereign wealth funds that some of them have established during the past decades of energy and economic prosperity. We know less about the diplomatic strategies they have employed in connection with their significant foreign investments. This aspect is the focus of the book *The Economic Statecraft of the Gulf Arab States* by Karen E. Young, a researcher at Columbia University who has been studying this topic during her time at the American Enterprise Institute and the Middle East Institute, both based in Washington.
The book focuses particularly on the years 2020 and 2021—that is, the post-COVID period, when what the author calls the “magical decade” (the “boom” in commodity prices, such as oil and gas, between 2003 and 2014) had already come to an end. It is, therefore, a work closely tied to the circumstances in which it was written. Nevertheless, it allows us to examine the preceding dynamics and offers certain perspectives on the future.
A widely recognized issue is China’s growing relationship with the Arab Gulf countries (the book focuses on the six member states of the Gulf Cooperation committee —or GCC, for short—; Iraq is therefore excluded). The GCC countries are the primary source of oil and gas imported by China, which will likely soon become the leading trading partner for this group of nations on the Arabian Peninsula.
But these countries are not only hydrocarbon exporters; the profits they have earned in recent decades have enabled them to carry out an diary of investments and financial aid to development aimed at gaining influence, particularly in the MENA region (North Africa and the Middle East) itself, in countries such as Egypt, Ethiopia, Sudan, and Yemen. The expansion of influence in the Horn of Africa accelerated after 2015; in 2019, 40% of the financial aid provided by the Gulf states went to that part of Africa.
Young believes that these transfers, in addition to serving the geopolitical interests of the various Gulf actors, also represent an investment in the future. Projections estimate that Africa’s population could reach 4 billion by the end of this century, virtually matching that of Asia. Given this outlook, the author suggests that Africa might become a labor-intensive manufacturing hub, in skill with Asia.
Young concludes that the Gulf monarchies tend to be guided by a rationale deeply rooted in realism and self-interest in their interventions, whether in financial aid or in investment. “There is tremendous volatility over time and in Issue. Gulf economic diplomacy is no more or less political than the actions of other states. It is, if anything, more demanding and precise—at least in terms of the results the Gulf states seek to achieve.” For example, Qatar provided significant financial assistance to Egypt when the Muslim Brotherhood won the elections following Mubarak’s fall, but withdrew its financial aid when General Al Sisi came to power; Saudi Arabia and the United Arab Emirates then stepped in to replace Qatar.