Academic journal article Capital & Class

Adam Hanieh: Capitalism and Class in the Gulf Arab States

Academic journal article Capital & Class

Adam Hanieh: Capitalism and Class in the Gulf Arab States

Article excerpt

Adam Hanieh Capitalism and Class in the Gulf Arab States, Palgrave Macmillan: New York, NY, 2011; 266 pp: 9780230110779, $95 (hbk)

Oil-rich countries of the Gulf are mainly conceptualised as rentier-economies characterised by the reliance on oil as the main revenue, and by the importance of oil as the overall economic activity (see Loslan 2010). Capitalism and Class in the Gulf Arab States, however, despite recognising some insights of this approach and the importance of oil for the region, delivers a critical way of approaching the countries of the Gulf Cooperation Council (GCC) composed of Saudi Arabia, the United Arab Emirates (UAE), Qatar, Bahrain, Kuwait and Oman. The book portrays them 'not simply [as] monarchies that sit atop an oil spigot' (p. vii), but as capitalist states representing a particular expression of class formation that 'has evolved alongside and within the development of a global capitalist system, and is best seen as a specific reflection of a global capitalist world market as a whole' (p. 16).

This is illustrated by some crucial developments concerning the GCC region. First, with its increased demand for oil, the new political economy of postwar capitalism turned the GCC region, with its huge oil reserves, into a central part of the capitalist world economy. Second, the 'petrodollars' flowing from the GCC region to capitalist centres were recycled as loans to multinational companies, governments and other borrowers, and, since the early 2000s, constituted one of the cornerstones in 'propping up global markets [and] in the adjustment of global economic imbalances' (Morgan Stanley, cited on p. 98). Third, the industrial development of East Asia, especially that of China, triggered the export of oil and gas from the GCC region eastwards, creating important economic links between these regions, whereas the US-GCC trade is dropping. This is the reason why a chief economist in Dubai's International Financial Centre stated that the Gulf 'will be dancing to a Chinese tune; this is a tectonic shift in economic and political power eastwards ... this is where our future lies' (quote from p. 184). The fourth and last crucial development is the rapid industrial development of GCC countries, which turned them into an important market for world exports and services.

A novel contribution of Capitalism and Class in the Gulf Arab States is the analysis of the formation of a capitalist class within the region. This class--termed 'Khaleeji capital' --emerged essentially through state-led redirections of oil revenues to leading merchant families and other elites. Based upon Marx's analysis of the circuit of capital, the book analyses the productive, commodity and financial circuits of 'Khaleeji capital' from the late 1960s to 2008.

Through nationalisations of the exploration and production of oil in the early 1970s, the productive circuit mainly encompassed refining petroleum, distributing crude oil and gas, and producing aluminium, steel and cement. Since the 1990s, however, manufacturing and construction turned out to be important sectors as well. The dominance of the oil industry and the heavy reliance on imports is of special importance for the commodity circuit, as imports were only allowed if the products imported were represented by a local agent. And the states granted this representation right to leading merchants. During the 2000s, the Gulf region turned into a significant market for the import of consumer goods. But with the development of industrial manufacturing, the import of machinery and heavy equipment increased, too. The finance circuit, an integral part of the global economy since the late 1960s, was first characterised by flows of 'petrodollars' to capitalist centres. But especially since the early 2000s, the region attracted major capital flows, too. From 1997 to 2007, the Gulf region was the fastest growing region for FDI inflows in the world.

This book argues that the rapid and ascending development of 'Khaleeji capital' is inseparably tied to the presence of temporary migrant workers. …

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