Introduction: The States of the Gulf Cooperation Council – The Paradox of Wealthy Less-Developed Economies

For several decades now, the states of the Cooperation Council for the Arab States (GCC) have defied many preconceived ideas of modernity and development. Half a century ago, these countries could hardly be called anything but undeveloped. Illiteracy, subsistence economies and no electricity in large parts of the countries were no exceptions. Oman, to give just one example, was almost cut off from the rest of the world until 1970.

Today, all six states of the GCC are among the first sixty countries of the Human Development Index. (UNDP 2011) Even though they have remained developing countries, they have made tremendous progress.

The term developing country usually evokes a picture of states where a few elites have benefitted from growth while the rest of the society bears the burden of industrialization: exploitative and unhealthy working conditions and low wages, while infrastructure and social welfare are only slowly improving, if at all. The situation in the states of the Gulf Cooperation Council is different. The wealth seems to have reached all layers of local societies. There are not just a few wealthy oligarchs; all citizens seem to have expensive cars, the latest cell phones, access to free health care and other welfare while paying virtually no taxes.

To many Western observers it is puzzling to find these well-known features of our own technological era combined with what could be perceived as traditional and Islamic features: a large percentage of local women can only be seen veiled and the idea persists that women can only leave the house or country with their husband, father, or brother. In Saudi Arabia, for instance, women are not allowed to drive a car and many public spheres are divided into female and male zones. International media keep repeating these phenomena as major signs of discrimination against women, although these rules are often not effective. Equally complicating matters might be the planning of a shopping trip or visits to the authorities according to the daily prayer times during which clients in Saudi Arabia often have to leave a shop, mall or offices.

What might be more puzzling than the seemingly traditional habits of the locals, however, is the fact that one hardly meets and communicates with them. Knowledge of Urdu or Hindi is often of greater value in daily life than Arabic as most services are provided by the huge amount of expatriates in the region. Blue collar work is done by workers from poorer countries such as Pakistan, India, or other countries in South-East Asia, who often send their money back to their families. Due to labor migration, development in the GCC states has an important international outreach that has shaped the economies of labor exporting countries too. In the smaller Gulf States, these workers are more numerous than the local population and "the Gulf economy and lifestyle, as it is now, would simply not be sustainable without its migrants." (Osella 2011: 8) Nevertheless, these workers have to struggle for the recognition of the essential work they do and their working conditions are often precarious. Returning empty-handed to their home countries, however, is not an option either.

The "locals" prefer to work in white collar jobs, but also here, many high-skilled posts are held by foreigners from industrialized countries or other Arab countries: the latter work as engineers, teachers, doctors, professors or advisers. Gulf citizens – and this is not only a prejudice – mostly work as civil servants in the inflated public administrations. (Davidson 2009: 149-153)

Although these impressions from the region are not unjustified and are supported by a vast amount of data, they are not always 100% clear. Modern vs. traditional, male vs. female, foreign vs. expatriate are helpful, but often deceptive categorizations.

Many of the traditional features, especially where women are concerned, are the result of a multi-layered interplay between traditional and Islamic institutions and the rapid modernization in the aftermath of the oil windfalls. They are far from being mere remnants of old traditions, and some of them, such as women who stay at home instead of work for pay, have only been made possible by the revenue from oil. Women are now better educated than their male peers in the GCC, and staying at home or wearing the abaya, hijab and niqab is sometimes a very modern choice, and not a traditional or Islamic custom. The same holds true for business habits which have become a mixture of foreign influences and traditional habits. Businessmen may wear the traditional dishdasha or thobe and conversations and negotiation styles may differ substantially from Western habits (Cole 1992; Badran 1995; Hecht-El Minshawi 2007; Rothlauf 2006; Berger et al. 2014) but nonetheless, Western influences, often imported via consultants and expatriates, are strong and often cause confusion, not only between foreigners and locals, but also between the younger and older generations, or local and foreign-educated nationals. It is not unusual that young Gulf nationals become demotivated in inefficient, highly hierarchical business structures, and one has to ask whether the oft-quoted rentier mentality has become more structural than mental.

The same is true for other ideas about the "local". While it is true that one would hardly find a Gulf citizen working at a building site, there is poverty, unemployment and underemployment among nationals of the more populous GCC states. Even employed, well-educated young men often find that their skills cannot develop within the local business structures, whereas others face an unbridgeable gap between fulfilling the traditional role of a son in an extended Gulf family with the demands of a modern labor market, such as spending time working or studying abroad. Young males especially have been the subject of a lot of concern in the fast-growing Gulf societies.

Nonetheless, the puzzle of seeing wealth and industrialization grafted upon traditional societies remains. In the industrialized countries of the West the relative wealth today is the result of a long development process whereas in the GCC states it stems mostly from oil exports. There is nothing in the GCC states that has not been affected by the discovery and production of oil and gas. Natural resources are not only the origin of all wealth and luxury, but several decades ago they played a major role in the consolidation of the young and fragile states and the drawing of their borders. Today, these resources are the basis of power of the ruling dynasties and therefore...