Changing the Arab Gulf States: Monarchy, Expatriate, and Economic Outlook in the Gulf

September 17, 2014, (Wednesday)
Japan External Trade Organization (JETRO)

>>>>Event Guide/Program

Organizers: Center for the Multicultural Public Sphere,
Utsunomiya University and IDE-JETRO

Introductory Remarks, Session 1  |  Session 2  |  Session 3

Session 2: The Current State of Economics and Immigrants in the Gulf Region
   “Immigrants, Labor and Business in the International Cities of the Arabian Peninsula”

Dr. Andrew Gardner
(Associate Professor of the Department of Sociology and Anthropology,
University of Puget Sound)


I’m going to cite a few examples and explain several customs, beliefs and modes of relations characteristic of Arab countries of the Persian Gulf today. However, these examples don’t illuminate the general structure of the oil-producing states in the Gulf as much as they are just a summary of the research I have undertaken up to now based on my own anthropological interests.

1. History and Demography of the Gulf States

I’d first like to talk about the history and populations of the oil-producing countries of the Gulf. When speaking about the various Gulf countries, there has been an enormous amount of effort spent on understanding the extremely unique historical experience of the countries that comprise the Gulf Cooperation Council (GCC). However, these efforts sometimes obscure another side of history that has been woven together through their commonality of having rich natural resources: that of being a part of the Ottoman Empire and the colonial rule of the British Empire. I find that, opposed to stressing the differences and uniqueness of each country, it can be more fruitful to talk about the points of commonality shared among these countries.

However, from an outsider’s perspective, the citizens of the Gulf countries likely seem homogeneous and uniform, yet from an anthropological perspective, they are quite diverse. There are Badw who can be traced back to the nomadic peoples, the Hadar, who originated with the city merchants and sea-faring merchants, the Abd, who are the descendants of slaves brought from Africa, and Persian immigrants. There are also those who refer to themselves as Arabs. There are also divisions among Sunnis and Shiites. Among this diversity, the central characteristic of Arab society and the nation-state can be found in the simultaneous maintenance of nationalism and the legitimacy of one-family/tribe rule. The ongoing construction in the luxurious international cities is an appeal to the world, and a rallying point for nationalism. The activity of the traditional cultural industries seen in museums is an elaborate test to create a singular sentiment of nationalism. These moves are done with the world community in mind and they are meant to create an image of modern cosmopolitanism, while also serving to display the magnanimity of the rulers who have carried this out.

2. Development and Urban Development

It has been development that has supported the systems of these Gulf States. Urban development has been the most important part of this. Most people in the GCC countries work within the public sector and public projects can be considered the way riches are distributed. The state-led development of the GCC countries led to the successful creation of cultural capital. Outlay on infrastructural development was a transfer of wealth from the state to the citizens.

In short, the legal systems of the Arab countries around the Persian Gulf allow only the ‘citizens’, with a few exceptions excluded, to own land and real estate. In addition to these legal systems, the Kafala system of sponsorship of foreign workers by the ‘citizens’ worked its way into the entire business sector. In Qatar, the state outlay involved in the construction of stadiums for the World Cup Soccer invite will be returned to the ‘citizens’ through the systems I mentioned earlier along with the profits gained from the local businesses tasked with the development. In this sense, development can be seen as the focal point around which the riches of the state are apportioned to the citizens. And, this then becomes the link to the basis for the legitimacy of the authoritarian leaders.

3. Migrants and Migration to Arabia

The Gulf States require copious amounts of labor, and they are dependent on a supply of this labor from South Asia and Southeast Asia. Analyzing this migration of labor across borders is a basic research aim for an ethnologist like myself. I am also researching the systems of the GCC countries from the perspective of a simple laborer. While it is normally illegal, the passports of transnational migrant laborers are held by their employers. The wages promised by the brokers in their home countries are also different from the wages that are actually paid. However, depending on the issuance of their work visa and work contract, the Kafala system binds a migrant laborer to a single sponsor, and they have no other means but to depend on them. In the Kafala system, there are the people who act as the sponsors, and the proxies who are allotted the responsibility of managing the migrant workers. The migrant laborers and their families return to their home countries in debt to the brokers there and their exploitation continues in this way. This how the systems of the GCC countries absorb the labor of less-developed regions. In their relationship with their sponsors, the position of the migrant laborer is regulated.

4. 'Gatekeepers', ‘Imagineers’ and the Relations of Business

Among my recent work is the story of Divendra, a migrant worker in Qatar. Among migrant workers there have been problems with non-payment or deduction from wages. There are cases of fines, but this is an issue of a lack of communication with the Palestinian employer. My research deals with the relations of various peoples from different countries and I have wondered how I should understand the presence of people from other countries in the Gulf States. I have tried to better understand the working environment of the Arabian Peninsula, but I have been met with some resistance. There are people who take the role of ‘gatekeepers’ and they have made it difficult to speak directly to the laborers. In contrast, the Gulf Arabs behind the ‘gatekeepers’, have been cooperative. In the hierarchical Kafala system, it is a fact of society that there are ‘gatekeepers’ who control contact between the laborers and other people. The proxies of the sponsors serve as their liaison. And that liaison is an important role. Due to the environment of the Gulf, it was inevitable that this type of liaison would come into being. The ‘gatekeepers’ are not only liaisons, but they are the focal point of communications, and for their bosses, they are also the ‘imagineers’ (image sculptors) who judge what is socially appropriate or not. Their connections with the Gulf region are thin, they are unfamiliar with the actual conditions in the societies, and they conceptualize the societies based on their own interests and desires. The extremely large disconnect between the interests and norms of the local Arabs as they are crafted by the imagineers and the actual interests and norms of the local citizen is crucial.

That covers the four themes I have focused on—the unique demographics, the development of cities, migrant laborers, and the role of the imagineers in business in the contemporary Gulf. As I mentioned in the beginning, this is not meant to draw a complete picture of the Gulf, but rather is best understood as a fragmented treatment, referenced from my own experience of the social, cultural, political and economic relations that are dominant today.

Dr. Andrew Gardner (Associate Professor of the Department of Sociology and Anthropology, University of Puget Sound)

Dr. Andrew Gardner
(Associate Professor of the Department of
Sociology and Anthropology,
University of Puget Sound)

Session 2: The Current State of Economics and Immigrants in the Gulf Region
   “Ethnocracy in the Gulf States: A Labor Market Dependent on Immigrants and the Stability of the System”

Dr. Masaki Matsuo
(Associate Professor of the Faculty of International Studies, Utsunomiya University)


An ethnocracy is “a political regime that generates and maintains differences based on national identity and immigrant identity to shore-up an authoritarian system.” In the Gulf States, the population of immigrants exceeds the national population, and this trend is especially prominent in the labor force. Immigrants are an indispensable political and economic component, but their status among the national population is low. This is a Gulf Arab-style ethnocracy.

In this presentation, I would like to talk about how it is that the Gulf States, which bring in so many immigrants, are stable. Rentier state theory, which postulates that states distribute to their populace income gained from natural resources such as oil, is well known. However, this simple policy of distribution gradually breaks down with the increase of domestic population and the weakening of the power to export resulting from an expansion in domestic consumption of natural resources. There has been a lot of research on how ethnocratic systems have hidden the differences and categories (sects) among the people by constructing a sense of privilege among the national populace and focusing on the characteristics of the populace, such as, in this case, their Arabness. However, I’d like to talk about the importance of the element of immigrants in examining the future of Gulf state regimes.

I’ll start first by analyzing the labor market in the Gulf States. The Gulf States can be divided into countries with a high division of labor (Kuwait, Qatar, UAE) and countries with a low division of labor (Bahrain, Oman, Saudi Arabia). In ethnocratic countries with a high division of labor, we can predict that the anti-government movements are weak, while in countries with a low division of labor the anti-government movements are strong. In low-division of labor countries, there is not much expected growth in oil income and it is impossible to absorb the entire population into the public sector, owing to a growing youth population. For example, the public sector in Kuwait and Qatar can absorb the labor population among the populace (with a financial surplus), but, in Bahrain, the personnel costs already take up 45% of the budget and they are in a situation where they cannot financially maintain a division of labor system. This is a structural problem and it is not easy to resolve with policy. Saudi Arabia is in a similar position to Bahrain.

Next, I’d like to compare Kuwait and Bahrain. Now, regarding the wage differences between the public and private sectors, as this figure illustrates, the Kuwaiti people who have been forced out of the private sector cannot compete against immigrants in terms of wages. However, in Bahrain, wages in the private sector, in particular, are lower than those of the nationals who work in the public sector and are on a par with and compete with immigrant wages. It is believed that this is linked to the strong criticism of the government in Bahrain after the Arab Spring.

Lastly there is Saudi Arabia where no division of labor exists. There were no protests there. A quota system (NITAQAT system) was introduced that required companies to hire Saudi nationals at high wages and when they were not hired, penalties were passed down, such as non-approval of the paperwork required to hire immigrants. As a result of this system, the Saudi nationals who work in the private sector have lower wages than the Saudi nationals who work in the public sector, but they are employed at higher wages than immigrants. Companies hire a large number of immigrants as laborers, so they respond to this system by passing the costs of hiring Saudi nationals to the immigrants. As a result of this, conditions of inequality are created among the national population and immigrants. In essence, an ethnocratic system has been established and this makes it possible to contain the discontent of the people.

Ethnocratic systems are not inevitable. So, why did the Gulf States have to introduce these systems? This is because they are rentier states. For example, a ‘normal’ country that accepts immigrants can redistribute profits through taxation. However, since there are no taxes in the Gulf States, there is no scheme to redistribute wealth using a tax system and since wealth is not distributed to the poor segments of the population, an ethnocratic system was introduced instead. In sum, economies reliant on oil bring about (1) dependence on immigrants for economic growth, (2) Dutch disease, and (3) the rentier state phenomenon. All of this brings about the ethnocratic system. This has nothing to do with claims of the Gulf States having a culture of slavery. Rather, this indicates a structural need for an ethnocracy and this system will continue into the future.

Dr. Masaki Matsuo (Associate Professor of the Faculty of International Studies, Utsunomiya University)

Dr. Masaki Matsuo
(Associate Professor of the Faculty of
International Studies, Utsunomiya University)

Introductory Remarks, Session 1  |  Session 2  |  Session 3