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

>>>>Event Guide/Program

Coordinator: Dr. Koji Horinuki
(Research Fellow of JIME Center, The Institute of Energy Economics)
Discussant: Marc Valeri, Hirotake Ishiguro, Andrew Gardner, Masaki Matsuo

In Session 1 we began with how the business elite and national assemblies are involved in the decision making process in politics of the Gulf States. Dr. Valeri then indicated the role played by the business elite in continuing the monarchy systems, and claimed that business elites sought to support the survival of such monarchies to protect their own vested interests. Dr. Ishiguro then pointed out that even in the politics of Kuwait, the most democratic of the Gulf States, profit-driven politics were expanding to become a problem for politics in the country. In Session 2 we took up the issue of foreign workers. Half of the population of the Gulf States comprises foreigners and discussions on the politics and economics of the region cannot ignore this fact. I believe an instructive point can be made regarding this. Dr. Gardner approached the issue of the situation faced by immigrants in the urban development of Dubai and Doha, introduced to us the concepts of the ‘gatekeeper’ and the ‘imagineers’, and analyzed this new structure. Dr. Matsuo used statistical data to argue how the Gulf States use immigrants to stabilize their own regimes.

I would like to ask each of you for any reflections or comments regarding what you heard in each of these presentations.

Matsuo:

I thought Dr. Valeri’s argument about how business people and companies were using immigrants was very interesting. Her point that business people and the political elite are caught in a tug of war was important when considering whether these countries were heading for an open economy. Dr. Gardner’s concepts of gatekeepers and imagineers were very important perspectives. Foreigners have low status, but that is not something that has been generated by the state. Rather, immigrants (Palestinians) act as intermediates, and they impose the image of an acceptable immigrant on other new immigrants. We were under the impression that it was the host country that was actively manufacturing the image that the gatekeepers had been manufacturing.

Valeri:

I think everyone gave a fascinating presentation. I would like to take some time to discuss with the audience about what you thought of my presentation.

Gardner:

The discussions about ethnocracy and transparency were extremely interesting. I wrote about wasta (nepotism) in my book and I indicated that there was a lack of transparency in that system.

However, this is the main right of the national population and eliminating this would be difficult. Improving transparency and removing cultural and political constraints to allow decision-making without membership in the social system would likely be strange for them.

Ishiguro:

I felt that my presentation contrasted with the arguments of Dr. Valeri. No taxation without representation is a characteristic of the Gulf region. However, Kuwait provides an interesting example of the populace demanding accountability despite not being subject to taxes.

Horinuki:

How do foreign advisors and consultants influence economic policy in the Gulf States? There must be some brilliant people among the population, so why are foreigners brought in so often as consultants?

Valeri:

Often the advisors in many large GCC companies are foreigners. Apart from their experience, among the reasons that business families will bring in advisors from overseas are that they are more reliable than the local nationals. Also, they have no links with the local society, so they can maintain confidentiality for the company. Also, the gatekeepers are linked with the consultants. Many people in the Gulf States will not always trust the locals and they are likely trying to avoid involving society in political decision-making.

Horinuki:

Dr. Ishiguro spoke of transparency and accountability. Why is the Kuwaiti government pressed for transparency despite the lack of obligatory taxes in the country?

Ishiguro:

Local NGOs are actually pressing for transparency and accountability. This is also the case with wasta, but there is discontent regarding the fact that decisions are being made out of view. Recognition has reached a level where corruption cannot be ignored.

Matsuo:

The question of why would they participate if they don’t even pay taxes is wrong in its very assumptions. This may be normal in Europe; however, this may not always apply in the Middle East and other regions. The populace don’t pay taxes in the Gulf States, but the oil held by the state there is the property of the people and they are under the impression that the state is merely managing it for them. Pursuing transparency and accountability is explainable when linked with the logic that oil is the property of the people.

To add to that, the persuasive power of the argument of resource nationalism is that it will bring more profit. The justification can be found in the Islamic conception of fairness where resources are granted by the grace of Allah and are a shared source of wealth for all members, and that the populace can have free access to it. From this perspective, it is alright for the state to manage this, but they should not be allowed to monopolize it.

Horinuki:

The next question is regarding immigrants. Qatar exploits foreign workers to advance construction projects, but does the issue of the foreign worker lay in the sponsor system?

The issues of urban development and construction are tools for shoring up political legitimacy and that is a grace bestowed upon the citizens. The 2022 World Cup will also work to strengthen political legitimacy. But there are definite human right problems. My research also covers that. Journalists have attempted to cover this problem, but the gatekeepers act as a firewall to prevent them from getting any information, so no information generally gets out.

Horinuki:

If Qatar’s problem of foreign workers remains unresolved, is there a possibility that their right to host the World Cup will be revoked?

Gardner:

I don’t know. There’s also the issue of bribery. Also, even if the Kafala sponsor system was abolished, the work contracts would not be annulled. But, I’m an optimist in the long term.

There has also been discussion in Japan about bringing in immigrants to work in the fields of nursing and caregiving. Are there implications for Japanese immigration policy?

Matsuo:

I was considering this issue as I was polishing my research plan.
I believe there are a few hints.

1. What constitutes an immigration problem differs by host country. There are concerns in Japan that immigrants will not return home; however, easing restrictions on travel would be effective against this. There are looser restrictions in the Gulf States and they are even stricter in Europe and the US. But, in the Gulf States, they travel back to their home countries, the reason being that travel costs are low and even if they go back once, they can return to the host country again. When the travel costs are expensive, once they arrive they tend not to go back home. By reducing the hurdles to accept immigrants, it may prevent more illegal over-stays.

2. The world is currently in an age of vying for immigrant labor. In Asia, South Korea and Taiwan have far more developed immigration systems than Japan and Japan does not likely seem the best choice for an immigrant. It is obvious that countries with more rights for immigrants will get the best immigrant labor and the Gulf States, when they take in labor with the lowest productivity, they are adopting an extremely poor method. I think that rather than arguing for recognition of the human rights of laborers, change would most likely happen in ethnocratic systems if an argument was made that the productivity of a company would increase if it improved the welfare of its laborers.

3. The immigration systems of Europe are the basis for the discussions in Japan and these are systems that accept people who have the potential to become citizens. However, this is a special case for the rest of the world and it is not generally the case for other countries like Singapore, for example. Are the human rights of highly mobile immigrants and laborers a true issue? This is an extremely important point when considering immigrant societies in the 21st century.

Horinuki:

Who does the term ‘business elite’ actually refer to? Is it only nationals that have allied themselves with the ruling families? Can business people from Europe or the US, or the merchant class which came from their own countries to settle there also be called the ‘business elite’?

Valeri:

In my presentation, I primarily had the national population in mind. I provided several (5 to 10) business families and chambers of commerce in my research. It refers to what other researchers call merchants. There are also some foreigners, such as Egyptians, Palestinians and Pakistanis who naturalized and joined the business elite. They have a lot of power. Other foreigners (Westerners and Asians) are not the business elite. This is because they have no roots in the region. You should realize that the ‘business elite’ does not refer to individual businessmen.

Horinuki:

How does the business elite view the creation of employment for the younger generation of nationals? Are they taking responsibility and trying to provide it or do they favor hiring immigrants?

Valeri:

This is what I said was a dilemma in my presentation. In short, there is the short-term profit issue of low wages and all-purpose labor, and, at the same time, there is the long-term social responsibility to create employment. To be realistic, companies seek profit. Perhaps I am too pessimistic, but this is a long-term dilemma and a structural problem that will not be resolved. Many youth expressed this during the Arab Spring and this situation will likely repeat in the future.

Horinuki:

How are the UN and ILO responding to the labor problems in the Gulf States?

There is little recognition of labor problems in the world. International organizations hold conferences and publish reports critical of the Gulf States. This is also recognized by the Gulf States, but there won’t likely be any change to Gulf state policy through this kind of pressure. They can cut these voices off. However, the young people are different. The young people have a different attitude towards foreigners, human rights, and the rights of workers. This generation is slowly changing the picture of these problems.

Horinuki:

How do you evaluate the pressure from the home countries on these workers? The Philippine and Indian governments are calling for an introduction of a minimum wage system. The Philippines actually stopped sending maids.

Gardner:

Firstly, the situation in each home country is different. This isn’t a single issue, but a structural problem of the absence of regulations. The case of the Philippines is an interesting one and the countries bringing in immigrants are shifting to Indonesia and countries in South Asia where workers can be procured much more cheaply. Sadly, the Philippines did the right thing, but structurally, now Ethiopians are just going instead. Surprisingly, there are new worker camps with Vietnamese and Cambodians and the countries bringing in the immigrants have found new countries from which to ship out foreign workers.

Valeri:

India is also important in the sense that it is an economic link for the Gulf States. There are also large projects. The relationship between India and the GCC involves the treatment of Indians in the GCC countries. India is not only an economic superpower, but it is also a source point for immigrants. I touched upon this in my paper, but immigrant networks are transnational in nature. On the other hand, the situation is getting worse. Immigrants from Africa to Europe grow every year. I’m pessimistic in that the people who want the immigrant workers to come have quite a strong position.

In conclusion, I’d like to recap on the discussion up to this point. The interdependent relationships among the politicians, business elite, immigrants and monarchies in the Gulf have been made clear. We have also understood that these are influential in supporting authoritarian systems. So, what are some of the future issues ten years down the road? I’d like to ask all of you to comment on what issues surround the survival of the monarchies in the future, including the fact that they are Islamic countries and that there may be changes to the situation in the region.

Ishiguro:

The current system of divide and rule is likely reaching the end of its time. It is important to consider whether the government can entertain the grievances of the opposition, or whether the opposition can compromise by putting forward realistic policies. Thus, the opposition also shares responsibility and it is important that they build experience in politics.

The issue of sustainability of the monarchies also involves the issue of what they can do after the oil runs out. That depends on whether the monarchies can cope with dramatic changes. As an anthropologist, I want to say it is particularly good to rely on tradition and to adapt to one’s environment.

Six of the Gulf States have populations with half of the people at or below the age of 25. We believe that the youth who have received higher education will leave their home country within five years. The employment problem for them is not so much economic as it is social. Also, the mentality of the youth is quite different from their parents and grandparents, and they do not intend to allow a minority to make the decisions for them. The Arab Spring was a part of this and big changes are likely ahead.

Matsuo:

From a geopolitical perspective, Bahrain and Kuwait have small territories and this enabled them to physically contain the movements (protests); but Saudi Arabia has a large land mass and it would be difficult to contain the movements (protests) there. If the sultan of Oman, who wields all power, changes, the political regime will likely change. Reforms for all other countries are extremely difficult. With regards to immigrants, there is a concept of ethically-correct management in the recent global viewpoint. There is criticism of Apple and Amazon regarding this point, but as global companies like these become the target for criticism, they will likely improve their corporate labor practices. I can imagine a future where strange circumstances will prevail, for example, with the monarchies staying as they are and with the conditions for immigrants changing.

We can foresee major changes in the future, but we should probably view them from a larger context and from a larger perspective.