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The New Regional Order
in the Middle East
Changes and Challenges
Edited by Sara Bazoobandi

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Sara Bazoobandi
Editor
The New Regional

Order in the Middle
East
Changes and Challenges
Editor
Sara Bazoobandi
Middle East Risk Consulting
Hamburg, Germany
Nonresident Senior Fellow
at the Atlantic Council within
the Global Business and Economics
Program and Global Energy Center
Washington, DC, USA
Nonresident Fellow at Arab Gulf State
Institute in Washington
Washington, DC, USA
ISSN 2662-2483 ISSN 2662-2491 (electronic)

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Introduction
In recent decades, millions of people across the Middle East and North
Africa region have shared the same grievances, including: inequality, lack
of social mobility, outdated state—citizen relationships and a general
lack of hope in their political systems (to name only few). These griev-
ances have driven widespread and ongoing change across the region.
A chain of dramatic and historical events has taken place in the region
since 2010–2011. This book is a collective effort to shed light on some
of the key events, the underlying reasons behind these and the future
challenges for the region. The scope of change and the pace of events
are both broad and fast, which makes it virtually impossible to capture all
trends. That is why contributors of this book have picked up on impor-
tant themes that are also closest to their fields of expertise. The idea of
this book was born in 2015 at a Gulf Research Meeting in Cambridge,
where Dr. Neil Quilliam and myself co-authored a paper on the key fac-
tors for strategic changes in the region. The book includes six chapters.
Chapter 1 reviews a number of key socio-economic challenges that
the region faces. Many of the socio-economic challenges that the region
has struggled with in recent decades were highlighted by the chain of
political uprisings across the region. This chapter explores how changes
in a number of social factors—including identities, social and individual
values, the definition of the social roles for different genders and state–
citizen relations—have contributed to the recent political uprisings across
the region. The degree to which such changes have taken root differs
between different countries; nevertheless, the change is widespread
v
vi INTRODUCTION
and visible in every part of the region. The chapter also sets out how
these challenges are compounded by the context of the so-called water–
food-energy nexus—a set of critical environmental challenges facing the
region.
Chapter 2 reviews the changes in and the challenges associated with
oil wealth management in the Gulf Cooperation Council. It sets out how
oil income has fuelled the region’s growth and development and helped
the ruling families to establish and maintain their rule. It then looks into
the role of oil wealth in the social contracts in place across the region,
and how low oil prices have prompted debates between policymakers
and citizens over the sustainability of oil-driven economic growth mod-
els and their impact on social contracts across the region. The chapter
illustrates how mounting pressure to reduce dependency on oil by diver-
sifying the economy and instituting structural reforms has brought about
an increased repurposing of assets that traditionally have been managed
through Sovereign Wealth Funds towards domestic and regional needs.
While Sovereign Wealth Funds remain active in international markets,
they are being readjusted to ensure sustainability in terms of returns,
income and operational capabilities.
Chapter 3 analyses how and why the GCC developed as a regional
organisation and security community in the 1980s, 1990s and 2000s.
It explores the factors that favoured closer cooperation among the six
ruling families in the Gulf and examines the nature of the cooperative
mechanisms that gradually evolved after 1981. Progress was far from
seamless or linear as tensions complicated, undermined, and in some
cases held back cooperation. The chapter argues that the shock of the
Arab Spring in 2011 and the differing regional responses to the upheaval
not only widened these fissures in Gulf politics, but also altered the com-
mon threat perception that had effectively constituted a consensual base-
line in regional considerations of security up to that point. The chapter
goes on to look into how the recasting of the dynamics of Gulf secu-
rity after the blockade of Qatar heralded the rise of a multipolarity of
participants in regional security structures that for decades had been the
preserve of first the British and then the US as external guarantors of
stability.
Chapter 4 provides a review of the history of Iran’s nuclear ambi-
tions, the nuclear negotiations, the Joint Comprehensive Plan of Action
(JCPOA) and its impacts at domestic, regional and international levels.
Iran’s nuclear programme began in the 1960s under the government
INTRODUCTION vii
of the country’s last monarch and was restarted by the Islamic Republic
after the end of Iran–Iraq War. Although, it was never proven that Iran’s
nuclear programme had an active military dimension, Iran’s regional bal-
ance of power struggle, the experience of eight devastating years of war
with Iraq, sharing borders with a nuclear nation (Pakistan) and having
multiple domestic security challenges led the international community to
conclude that it would have made perfect sense for the Islamic Republic
to aspire nuclear military capability. The nuclear negotiations that con-
cluded with the JCPOA became a milestone in Iran–US relations since
the Islamic Revolution and a significant diplomatic achievement for all
parties involved. The unilateral withdrawal of Trump’s Administration
from the JCPOA, however, has revived uncertainties about the future of
Iran–US relations. This chapter analyses the impact of the Iran nuclear
deal and the US withdrawal from it at the domestic, regional and inter-
national levels.
Chapter 5 addresses the question whether China’s developing eco-
nomic relationship, which is promoted through the Belt and Road
Initiative (BRI), will lead it to play a more muscular political, diplo-
matic and military role in the near future. The Gulf region is undergo-
ing a series of profound changes at national, regional and international
levels. It is at a pivotal moment in its history when the balance of
power amongst external powers is transitioning from a predominantly
US-dominated order to a multipolar one in which global powers, such
as China, and regional powers, such as Russia, Turkey, India and Brazil
are beginning to shape and influence the region. This chapter argues that
since the Obama presidency (2008–2016), the US has strongly signalled
that it is no longer willing to play the role of sole external security pro-
vider and, in doing so, has left a vacuum. It examines the exact nature of
the US change in policy, its wider implications for the region and, at the
same time, the deepening of relations between China and the Gulf.
Chapter 6 builds on the analysis presented in Chapter 5 by exploring,
in more detail, how Russia, India, Turkey and Brazil are beginning to
shape and influence the political and economic landscape in the Middle
East and North Africa. It begins with an assessment of Russia’s bid to
capitalise on the immediate opportunities afforded to it by Washington’s
pause. The chapter then compares and contrasts Russia’s role in the
region with that of other key external powers influencing and shaping
the region. The chapter provides analysis on India’s strategic move to
strengthen relations with the UAE and Saudi Arabia. It also argues that
viii INTRODUCTION
in response to those strategies, countries such as Turkey and Brazil align

themselves more closely to Qatar, which has been under blockade from
its neighbours since July 2017.
The book has benefitted heavily from the support of various indi-
viduals and institutions, directly and indirectly. I would like to thank
my husband, Rupert Winckler, for his constant support and encour-
agement. I am grateful to all the contributors of this manuscript. I am
particularly thankful for the support provided by Palgrave Macmillan
Political Economy series Christina Brian, Anca Pusca and Katelyn
Zingg and the series editor, Tim Shaw. I would also like to thank my
mother-in-law Marie Winckler and Rhiannon Alexander for patiently
reading and editing my writings. I am indebted to all the individu-
als who generously took the time to answer my questions in meetings
and interviews, amongst those, I would like to extend my special grat-
itude to Ambassador Charlotta Sparre, former Swedish Ambassador
to Jordan and Egypt and Patrick Costello, Head of Division Global3
at the European External Action Service. I am also thankful to the
Economic Research Forum for their generous funding of a research pro-
ject to which I contributed in 2016. The second chapter of this book
hugely benefitted from the findings of that project. Last but not least,
I am grateful to Mani Jad, Deputy Director of Centre for Middle East
Development, University of California, Los Angeles, for providing her
generous advice and assistance.
Sara Bazoobandi
Contents
1 The Middle East North Africa Socio-economic Challenges 1

Sara Bazoobandi
2 GCC Oil Wealth: The Power and the People 27

Sara Bazoobandi and Rhiannon Alexander
3 The Realignment of Regional Politics and the Future

of the Gulf Cooperation Council 49
Kristian Coates Ulrichsen
4 Iran Nuclear Programme, a Brief History 69

Sara Bazoobandi
5 The Role of External Powers: Global Actors (Part I) 93

Neil Quilliam
6 The Role of External Powers: Regional Actors (Part II) 119

Neil Quilliam
ix
Abbreviations
ADIA Abu Dhabi Investment Authority

ASPA Summit of South American-Arab Countries
BRI Belt and Road Initiative
CASF China-Arab States Cooperation Forum
CIA Central Intelligence Agency
EIA Energy Information Administration
FAO Food and Agriculture Organization of the United Nations
FDI Foreign Direct Investment
FII Future Investment Initiative
GCC Gulf Cooperation Council
GDP Gross Domestic Product
IAEA International Atomic Energy Agency
IMF International Monetary Fund
IONS Indian Ocean Naval Symposium
IRGC Islamic Revolutionary Guard Corps
ISIL Islamic State of Iraq and the Levant
ISIS Islamic State of Iraq and Syria
JCPOA Joint Comprehensive Plan of Action
KIA Kuwait Investment Authority
LNG Liquified Natural Gas
MbS Mohammad bin Salman
MENA Middle East and North Africa
MOU Memorandum of Understanding
NATO North Atlantic Treaty Organization
NPT Nuclear Non-Proliferation Treaty
NSA National Security Agency
xi
xii ABBREVIATIONS
OPEC Organisation of the Petroleum Exporting Countries

PIF Public Investment Fund
PPP Public—Private Partnership
QIA Qatar Investment Authority
SAGIA Saudi Arabian General Investment Authority
SAMA Saudi Arabian Monetary Agency
SPV Special Purpose Vehicle
SWF Sovereign Wealth Fund
UAE United Arab Emirates
UK United Kingdom
UN United Nations
UNSC United Nations Security Council
US United States
WMD Weapons of Mass Destruction
List of Figures
Fig. 1.1 Arab Youth Survey: How strongly do you agree or disagree
with the statement? (Source Arab Youth Survey [2016],
available at: http://www.arabyouthsurvey.com/
pdf/2016-AYS-Presentation-EN_12042016100316.pdf) 4
Fig. 1.2 University attendance in the Middle East (Source Catriona
Davies, “Mideast Women Beat Men in Education, Lose
Out at Work”, CNN, 6 June 2012. http://www.cnn.
com/2012/06/01/world/meast/middle-east-women-
education/) 17
Fig. 1.3 Global desalination capacities by region (Source CNN 2019) 19
xiii
CHAPTER 1
The Middle East North Africa

Socio-economic Challenges
Sara Bazoobandi
Introduction
Middle Eastern societies have been facing fundamental social, economic
and political challenges in recent decades. Many of these challenges were
highlighted by the chain of political uprisings across the region that
began in 2011. These challenges have arisen partly from changes in a
number of social factors. Identities, social and individual values, the defi-
nition of the social roles for different genders and state–citizen relations
have all begun to change across the region. The degree to which such
changes have taken root differs between different countries; nevertheless,
the change is widespread and visible in every part of the region. Such
changes have presented societies with new challenges for which neither
policymakers nor the public have solutions to offer. This chapter will
S. Bazoobandi (*)
Middle East Risk Consulting, Hamburg, Germany
Nonresident Senior Fellow at the Atlantic Council within the Global Business
and Economics Program and Global Energy Center, Washington, DC, USA
Nonresident Fellow at Arab Gulf State Institute in Washington,
Washington, DC, USA
© The Author(s) 2020 1

S. Bazoobandi (ed.), The New Regional Order in the Middle East,
International Political Economy Series,
https://doi.org/10.1007/978-3-030-27885-4_1
2 S. BAZOOBANDI
review a number of key socio-economic challenges that face the region.

It is worth noting that the order in which the list is conducted does
not represent their weight or importance. The chapter will examine the
ongoing shift of identities, the negative impact of the lack of efficient
socio-political dialogue, absence of social mobility, and poor public pol-
icy and planning across the region. It will also review the role of external
powers as well as some of the key internal players such as women, youth
and entrepreneurs. The chapter will then move on to studying the causes
of the governance crisis across the region and identifying the main chal-
lenges that the MENA region is facing in the globalised world. Finally, a
brief review of water–energy–food nexus will be provided.
Shift of Identities
Similar to the rest of the world, multiple aspects of globalisation have
affected the Middle East North Africa region. The way in which citizens
across the region define themselves has been influenced by their experi-
ence of living in a globalised world. The Arab Youth Survey1 is an inter-
esting source to look at empirical evidence to confirm regional trends.
Although the sample size of this survey cannot be said to represent the
entire population of the region (it includes about 200 interviewees per
country), it does tell a clear story about the mindset of the current youth
cohort in the Middle East. According to the survey, over the past years,
a high number of the young believe that globalisation has had a negative
impact on their local cultural heritage. The survey also shows that a high
number of the participants want their leaders to do more to improve
their personal freedoms, human rights and rights of women.2 The Arab
uprisings were to a great extent a result of the people’s desire for such
improvements. Globalisation has affected the ways in which individu-
als define their identities, values and aspiration across the world and the
MENA region has been no exception in this sense. Desire for protection
of human rights and personal freedoms is now an integral part of peo-
ple’s identity, which goes beyond the existing definitions associated with
the region’s national flags, of being Arab or Muslim.
One of the challenges facing Middle Eastern societies currently is
related to the core identities of the region’s citizens in today’s globalised
world. Such identities are often in conflict with one another. This is not
limited to the sectarian identities but also includes existing political and
social identities. For many years, the political apparatus in many Middle
Eastern countries has created identities that have been dictated to the
1 THE MIDDLE EAST NORTH AFRICA SOCIO-ECONOMIC CHALLENGES 3
citizens by the states. The governments in various countries across the

region had heavy-handed campaigns to create identities that suited their
own overall political agendas. In addition, for centuries, the patriarchal
nature of these societies has also imposed certain identities on citizens.
With the forces of globalisation, the influence of some of these ideologies
on regional identities has weakened over time. As a result, the socio-po-
litical entities that were created to promote those ideologies started to
weaken as well. For example, the regional effort to create Arab solidarity
no longer resonates with the social, political and economic values and
aspirations of most Arab nations across the region.
In 2017, I attended a workshop as a part of a regional peacebuilding
initiative. In one of the closed-door sessions that were held under the
Chatham House Rule, a regional analyst explained the emergence of the
new identities across the region as follows:
Bigger countries in the region have much bigger challenges to deal with and
are no longer focused on the regional issues. Simple socio-economic issues
such as education, employment and building one’s life through the ranks
of the society are the main priorities for their young citizens. The previous
regional sentiment towards the Arab neighbours that was boosted by the
concept of Arab solidarity has begun to fade and new identities started to
emerge across the region. Today, people, particularly the youth, define them-
selves through a rather complex combination of identities. The younger gen-
erations no longer consider themselves only as Arabs or Muslims. They also
describe themselves as Asians, Africans or Mediterranean. Such a shift of iden-
tities has had significant economic consequences as well. Economic relations
have diversified beyond the regional partners. Over the past years, regional
economies have been building p artnerships with Africa, Russia and China.
Lack of Efficient Channels for Dialogue

The next challenge facing societies across the region is the lack of social
and political dialogue at various levels. Traditionally, the region has been
missing efficient channels for dialogue at both national and regional
level. At the national level, the democratic institutions through which
the citizens are allowed to communicate with the political elite have been
corrupt or completely manipulated by the security apparatus or the polit-
ical elite. Moreover, the political leadership has structurally targeted free-
dom of expression and it has been always controlled and restricted due
to national security concerns. Needless to say, the definition of national
security has remained broad and intentionally vague across the region
4 S. BAZOOBANDI
(for example, through lack of clarity in the legal description of political

crime across the region). Bloggers, journalists, cartoonists, students, civil
right activists, women’s rights activists, academics, former politicians and
community leaders have all been targeted by the states’ security systems
across the region and portrayed as national security threats.
Throughout more than two years of research for this book, I have
travelled fairly frequently to various parts of the region and had numer-
ous conversations with people across the board (e.g. journalists, activists,
academics) about the future of the region. The point most frequently
raised in these discussions was that the only solution to address social,
political and economic challenges that the region is facing is to imple-
ment various drastic reforms. When asked about the prospect of such
reforms, though, most people were relatively cynical and believed that
the reforms will take a very long time. Not surprisingly, I came across
similar results in the Arab Youth Survey (see the graph below). The
Arab Youth Survey results show that the majority of survey participants
were more optimistic about the prospect of reform and the future of the
region at the beginning of the Arab uprising. As the time passed, how-
ever, a strong sense of cynicism has grown across the region.
Overall, events across the region confirm that the change, particu-
larly since the Arab uprisings, is going in a completely opposite direction
from what is required. The MENA region is losing the global compe-
tition where innovation, accountability, critical thinking, transparency
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Fig. 1.1 Arab Youth Survey: How strongly do you agree or disagree with
the statement? (Source Arab Youth Survey [2016], available at: http://www.
arabyouthsurvey.com/pdf/2016-AYS-Presentation-EN_12042016100316.pdf)
*Arab Youth Survey includes sample data from 16 Arab countries: GCC, Jordan,
Iraq, Lebanon, Palestine, Yemen, Algeria, Egypt, Libya, Morocco and Tunisia
and access to (at least some) information are the key factors for success.
Moreover, serious security concerns throughout the region, open con-
flicts in many countries that often, directly or indirectly, affected other
nations have influenced the direction of change in the region. As a result,
at the regional level, there is a vacuum of trust and communication at
highest political level. Whilst political leaders have been alienating their
counterparts by pushing for their own agendas, restrictions to the right
to travel, widespread state-sponsored media, regional security and ideo-
logical conflicts have also divided people at the grassroots level (Fig. 1.1).
Absence of Social Mobility

The lack of social mobility is both another pressing challenge and a sig-
nificant driver of social discontent across the region. This stems from a
lack of values to define social transformation across the region. Values
that define social transformation and the tools and mechanisms for
social transformation have been neglected in Middle Eastern societies.
Institutions, bureaucratic structure, cultural values and human capital
development required for the social transformation in the region have
not developed in ways conducive to social mobility. As a result, whilst
most of the societies within the global community have moved on to a
level of technological, economic and political structures which allow eas-
ier social transformation, Middle Eastern societies have been struggling
to implement simple changes to allow individuals to improve their social
status. In most societies across the region, having stronger links with the
political elite has been perceived as the best, and indeed the shortest, way
to access resources and opportunities. Individual merit, determination
and creativity have all been outdone by personal connections with influ-
ential political figures.
There are however, some agents for change across the region with
great potential to change the existing dynamics. Women, youth and
entrepreneurs are perhaps, in the current socio-political climate, the
most influential agents for change. In many countries women are effect-
ing change, at varying paces and making their voices heard. For example,
more than half of the graduates in many countries in the MENA region
are female. Given the demographic structure of the region, the majority
of the citizens in MENA are young and hold great potential for creating
innovative solutions and fighting the current obstacles to social transfor-
mation. In practice, however, the youth potential is restricted by both:
6 S. BAZOOBANDI
by a lack of opportunities and by the restrictiveness of the socio-politi-

cal space. Finally, entrepreneurs have demonstrated impressive potential
for change in the region. There are numerous examples of successful
entrepreneurial solutions across the region. Regional entrepreneurs have
introduced creative solutions in a broad range of social, environmental
and economic areas such as waste management, traffic, food and energy.
Whilst such solutions have hopeful prospects for creating jobs, their
operating environment is a real obstacle to development and success.
Exclusionary Public Policy

The exclusionary public policies of governments across the region also
present another set of challenges. The Middle Eastern political elites
have had carefully defined criteria based on which the ‘inner circles’ are
created. Ideological orientation and personal or family links have been
considered as key factors to create an inner circle to which the politi-
cal elite has given varying degrees of access to power. Often those who
comply with the dominant ideology of the elite (political or religious or
both) or have certain personal or family links with the ruling elite are
provided with better access to resources and political power. This has led
to widespread social dissatisfaction and various forms of radicalisation
that have emerged across the region over the past decades. In most of
the developed globalised societies, governments have introduced welfare
systems that aim to empower the middle classes and boost social mobil-
ity. However, in the Middle East, such welfare systems either do not exist
or do not function efficiently.
Looking at global political history, there are very few cases in which
political power has been given up easily. Transformation of power is
indeed a long struggle involving frequent forward steps and setbacks. The
Middle East is no exception to such a trend. As a result, for many dec-
ades, the same political powerhouses have dominated the social, political
and economic structure in most of the MENA countries. The main rea-
sons for the limited push for changing the monopoly of political power in
the region is to be found in the basics of the Arab Human Development
Reports: the deficits in freedom, education and women’s participation.
Another key element has been the state ‘buying’ loyalty from the citizens;
and, the role of the external factors such as historical ones related to the
colonial pasts, as well as more modern ones stemming from the West’s
long support—now renewed—for the traditional powerhouses.
The recent wave of citizens’ demand for change in the regional

power structure has certainly not led to any desirable outcomes yet. The
demand for change has so far only been the very beginning of a very
long, and probably painful, journey for change. Having said that, it is
clear that the overall regional dynamics have begun to change. The open
public debates over various aspects of social and political structure, a
greater interest and engagement from the citizens in political and civic
participation, more access to information from different sources (even
though often very uneven and mixed with misinformation), the break-
ing of political, social and economic taboos and last but not least a mas-
sive generational shift with large young populations are all solid evidence
of such changes. These are perhaps the beginning of a rather lengthy
process of transformation in the structure of political power across the
region. Such changes will in the long-run play crucial roles in reforming
the exclusionary policies in the region.
Delegitimised Democratic Institutions

Another key challenge facing the MENA societies is the structural and
organised effort for delegitimisation of democratic institutions by the
political elite. Rigged votes and sham elections have completely under-
mined the legitimacy of the democratisation of the societies. As a result,
people’s trust in such processes has declined across the region. General
public opinion in the region is fairly cynical about the integrity of the
existing election processes. For decades, various countries of the region
have experienced undemocratic political events such as military coups,
and the governments’ manipulation of the election processes and/or
change of legislations in favour of the ruling elite (e.g. expansion of pres-
idential power and limitation of the power of assemblies).
Such events have further delegitimised the democratic process across
the region. Paradoxically, though, in recent decades the participation
rate in various elections across the region has significantly increased.
In Iran, Egypt and Turkey, people’s involvement in various local and
national elections has shown that whilst the general sense of cynicism
over the integrity of the elections has remained unchanged, citizens still
view these processes as an important communication channel with the
ruling elite. Often the citizens use elections as unique occasions to pro-
test against ongoing suppression, corruption and monopolised political
power. Some recent elections, therefore, confirm that whilst structural
8 S. BAZOOBANDI
efforts to delegitimise democratic institutions have had a negative impact

on the institutions and their related election processes, many people in
the region turn to the ballot boxes to make their voice heard, even when
they are aware the impact on the result will be limited.
The Role of the Western Powers in the Region

For decades, Western powers focused on the stability of the region
through regional allies, whilst the promotion of human resources and
good governance was vastly compromised in the interest of regional
stability. As a result, many nations in the region found themselves with
weak human resources and poorly governed institutions. However,
when the latest political crises occurred in the region, the reactions of
the majority of the Western powers encompassed very little support
for maintaining social and political stability of the countries that were
undergoing the crises. After the widespread uprisings across the Middle
East and North Africa, the traditional partnerships between the global
powers and some of the regional allies have been altered (in some cases
temporarily). Such partnership alterations have prompted regional play-
ers to take drastic measures to consolidate their power and influence.
Moreover, it has created a hospitable environment for the non-state
actors to interfere in the affairs of weaker societies. The regional powers
have increasingly used state and non-state actors as proxies to promote
their strategies for gaining more power and influence, to the extent that
over the past two decades, foreign policy across the region has become
the politics of proxies.
The increasing number of people dislocated as a result of the polit-
ical crises across the region caused a wave of migration towards the
Western countries. This combined with their own social, politi-
cal and economic challenges, has boosted the rise of populism and
inward-looking politics in the West. This has caused significant reputa-
tional damage for the Western powers across the region. Moreover, it
has created new opportunities for other global powers such as Russia
and China to gain more influence in shaping the future of the region.
The Western powers’ image, already tainted by the legacy of colonisa-
tion, has not been improved by their long-standing support of regional
strongmen.
The Issue of Social Contract

Another important social challenge that the region has been facing stems
from the existing social contract across the region. In most of the coun-
tries in the region and particularly amongst the resource-rich nations, the
social contract has traditionally followed the so-called “allocation state
model”. In other words, governments have been able to separate them-
selves from the national economy as they did not need to tax economic
activities in order to finance their budgets. Broadly speaking, across
the region, this has been the underlying obstacle to an environment
that offers incentives or forces for economic efficiency. Opposite to this
model is the common social contract model in the developed economies,
based on the government’s tax collection policies in order to generate
revenue from various economic activities in the country. Whilst such a
model requires more accountability, transparency and efficiency both in
the government and non-government sector,3 the allocation state model
encourages inefficiency, corruption and rent-seeking.
Over the past decades, many countries in the region, including those
with abandoned natural resources, have begun to introduce tax regimes,
or reform existing ones. Many of the policymakers in the region have
started to think of strategies and solutions that allow them to change the
existing “Rentier pact” through which rulers distribute a financial incen-
tive package to both locals and expatriates in exchange for political loy-
alty and support.4 Different governments across the region have recently
introduced various initiatives, such as subsidy reform programmes, gov-
ernment salary cuts and introduction of new tax regimes, to reform the
existing social contract. Alarming financial difficulties that many govern-
ments in the region have faced over the past two decades have prompted
most of these efforts. Particularly in the case of economies rich in hydro-
carbon resources, the decline in the oil price has encouraged govern-
ments to introduce economic reform programmes through which the
governments would be able to reduce their social expenditure and intro-
duce tax regimes.
Moreover, the region has been facing a combination of youth bulge
and lack of sufficient employment opportunities. High fertility rates in
most countries in the region have led to significant population growth
across the region. As a result, the majority of the population in the
region is at working age (15–35 years). For example, about 25% of
the GCC population is below 15 years of age. This, combined with
10 S. BAZOOBANDI
structural macroeconomic problems, has created a sensitive social chal-

lenge in the region that is shared both by hydrocarbon-exporting coun-
tries and those that do not possess natural resources. Based on the
traditional economic structure of most of the countries in the region,
the governments have been the main economic power for creating jobs
in the region. For example, in the case of resource-rich economies,
energy production has been the leading economic growth sector. It has
been either directly the source of job creation, or the proceedings of its
economic activities have been the financial engine behind employment
opportunities in other sectors. Given that the energy sector requires
heavy investments and offers a relatively small number of job opportu-
nities with specific skills, hydrocarbon wealth has been created in the
region without having a substantial impact on the young labour force.5
The energy sector in the GCC, for example, where most of the regions’
oil wealth is generated, has been least successful in absorbing the local
labour force. Most of the highly skilled workers’ employment positions
in the GCC oil and gas industry are filled by expatriates. Not many
jobs are allocated to the GCC nationals in this sector due to the lack of
required expertise amongst the local labour force.
The region’s longstanding social contract model, in which the state
had the financial means to distribute resources amongst the citizens in
exchange for political loyalty, has proven to be unsustainable. Various
governments across the region have started to test measures to alter the
existing social contracts. Such alterations will have major implications
for state–citizen relationships. As the reliance of the state on tax income
from the economic activities increases, the demand for greater transpar-
ency, accountability and fairer allocation of resources is likely to increase.
History of Planning in the Region

In the interviews I conducted for this book, poor planning and pol-
icy implementation repeatedly came up as the ‘root cause’ of most of
the region’s socio-economic problems. More or less all the countries
across the region, from North of Africa to the Persian Gulf, share this
issue. Experts and ordinary citizens from the region have frequently
acknowledged that their respective governments have failed to pro-
vide well-structured, long-term strategies to address long-standing
socio-economic challenges. Most of the decision-making has often been
short-term and reactive. Many also argue that even in cases where the
government had taken an initiative to provide long-term planning, the

implementation has been very poor and the results have not been satis-
factory. Long government project delays, poor budget management and
failure to provide fast and appropriate solutions to the socio-economic
challenges have become the norm in almost all the countries of the
region.
Some countries did not have economic development planning until
as late as 2008. In the GCC, for example, with the exception of Oman
and Saudi Arabia, where the first development plans date back to 1995
and 1970, respectively, planning has not been a part of the administrative
structure of the government. Over the past decade or so, all the GCC
states have started to incorporate development plans into their govern-
ment policy structure. The latest of these development programmes have
been introduced in the form of long-term country “Vision”. More or
less all of these visions are aiming to achieve similar goals, namely diver-
sifying away from natural resource income, strengthening new growth
sectors (i.e. finance, tourism and trade) in the national economy and
maintaining or improving living standards through job creation or wage
increases.
The means of achieving these country vision goals have been more
or less the same across the GCC. All the GCC states have demonstrated
intentions to apply a combination of policies that will encourage stronger
public–private partnership, investments in human capital and education
reforms.6 Although the role of the private sector in the success of the
development plans has been highlighted, the existing structure of the
national economies across the GCC will inevitably require heavy involve-
ment of the government in pursuing the national visions.
Another interesting example in the region is the history of planning
in Iran. Iran introduced development plans in the early 1920s.7 Since
then, the Iranian government has compiled a number of development
plans, with a range of different goals depending on the specific period
in which they were structured. Whilst pre-1979 plans focused on mod-
ernisation of the economy from an agricultural economy to an industri-
alised one, post-revolution plans concentrated on nationalisation of the
economy. After the Iran–Iraq War, reconstruction of the war damage
was amongst the key priorities of the government development plans,
and most recently, diversification of the economy from hydrocarbon
resources has been amongst the key themes. As noted above, one com-
mon issue in addressing the socio-economic challenges across the region
12 S. BAZOOBANDI
is that the Middle Eastern countries either have not had efficient plan-
ning strategies, or if they did, they have often failed to accomplish their
goals. Iran has been no exception in this respect. Although develop-
ment plans were introduced many decades ago in Iran, the country has
not been successful in achieving its long-term macroeconomic planning
goals. Particularly, diversification from hydrocarbon sector and devel-
opment of the non-oil industry has remained a major challenge for the
Iranian economy.
Diversification has become an important priority for most of the
energy-rich countries of the region. Particularly in the case of Iran and
the GCC, the economic pressure of fluctuating oil price in the global
energy markets and dwindling oil income magnified the importance of
economic diversification. In addition to the negative effect of low price,
at the current rate of domestic consumption, the prospect of low oil
income is rather alarming. The situation is more critical for the coun-
tries with larger populations (i.e. Iran and Saudi Arabia) with signifi-
cantly high domestic consumption. Further, diversification is central to
job creation in energy-rich countries of the region. Despite the press-
ing need for diversification from the hydrocarbon sector, the process
has been notably slow across the region. In some cases, in line with the
diversification plans, the governments have begun to support the non-oil
industries by using oil income. This, in most cases, has led to the imple-
mentation of trade restriction policies (in support of infant industries)
and heavy government subsidies. The aim of this line of policy has been
to allow the new industries to develop to a certain level, which enables
them to compete domestically, regionally and even globally. In prac-
tice, however, these industries have often delivered relatively low returns
and require continuous heavy government financing and subsidies. The
Iranian car manufacturing industry is the best example of such a case.
Comparing economic development plans in Iran and the GCC, there
are some obvious differences in terms of the outcomes. Although Iran has
had sophisticated planning strategies for a much longer period than the
GCC, the overall implementation results in Iran have been less successful
than in the GCC. Having said that, it is important to highlight that nei-
ther Iran nor any of the GCC countries has reached their economic diver-
sification targets. Comparing the non-oil growth sectors in Iran and the
GCC, though, some GCC policymakers have been much more successful
in identifying their competitive advantages. A good example is the recent
developments in the aviation industry in some GCC countries.8
Corruption, lack of efficient implementation strategies and struc-

tural socio-economic problems have been major contributory fac-
tors to unsuccessful implementation of development plans across the
region. In some cases, countries’ political and/or economic relations
at both regional and international level have also affected their success
in addressing socio-economic challenges. In the case of Iran, for exam-
ple, the country has been under various levels of international economic
sanctions since the Islamic Revolution in 1979. This has restricted eco-
nomic activities in Iran and, along with other factors, has hampered
Iran’s economic development. Comparing the civil aviation industries in
Iran and the GCC is a perfect example to measure the negative impact
of political and economic relations on the success or failure of the eco-
nomic activities. Iran’s national aviation company, Iran Air, was one of
the first and leading players in the region before 1979. As a result of the
economic sanctions, however, it has plunged to the bottom of the global
rankings over the past decades. Until recently, due to the economic sanc-
tions, Iran’s national airline did not have access to the global market to
renew or repair its existing fleet. The Iranian government was forced
to purchase second-hand supplies on the black market and through
back-channels. After the conclusion of the nuclear deal, Iran was allowed
to initiate deals with major aircraft producers such as Boeing and Airbus.
The future of the deals is closely linked with the US administration’s
sanction release regime.
Governance Crisis
The Middle East has lagged global trends in terms of technological,
economic and social transformation due to a combination of factors.
Widespread conflicts, lack of socio-economic development and poor
political institutions are amongst the key contributing factors for the
slow transformation of the region. In many parts of the Middle East, the
traditional social bargain in which the state was the sole provider of ser-
vices and jobs to the citizens in exchange for political legitimacy has been
in place for a very long time and it has begun to be challenged. Over
the past decade, the number of states that have lost territorial control to
non-state actors has increased dramatically and the more powerful states
in the region have progressively begun to interfere in the affairs of the
weaker ones.9
14 S. BAZOOBANDI
The dynamic interrelation between the state and citizens that exists
in functioning democracies is absent in the Middle Eastern countries.
Almost all the governments of the region have implemented policies that
have intentionally limited the citizen participation in governance. This
has had a range of negative socio-economic and political repercussions.
One of the key outcomes of such policies is the poor practice of law
especially when it comes to protecting citizenship rights. Without the
active involvement of citizens, governments in the region have abused
their power. Consequently, the political power has been used to benefit
only a narrow segment of society. Political affiliation, royal bloodline and
ideological belief are factors by which the governments across the region
have selected a small segment of the societies to whom to delegate the
main share of political and economic power. This has created an artificial
sense of superiority amongst certain groups of citizens and created divi-
sions in society.
These divisions have played a critical role in polarising the societies.
Moreover, as a result of such power distribution strategies, social dis-
satisfaction has increased across the region. Furthermore, the govern-
ments have put heavy-handed policies in place that limit citizens’ access
to information. The policymakers have conveniently abandoned trans-
parency, accountability and the fight against corruption. Transparent
and effective processes that help citizens’ involvement in preparation,
implementation and evaluation of government policies have remained
underdeveloped. The governments have clamped down on various
civic activities and often banned political involvement of certain inter-
est groups. As a result, party politics is considered political crime and a
threat to the national security in many Middle Eastern countries and the
civil society has been significantly weak.
These tendencies are also reflected in the large-scale centralisation of
power across the region. Governments have not favoured the distribu-
tion of power to local levels or outside of the core of the political elite
and the citizens often have been treated unequally in the eyes of law.
A paper published by Carnegie Endowment for International Peace in
2017 analyses the existing “bad governance” in the region and argues
that the underlying reason for this is the flawed education systems.
The paper rightly points out that the education systems of the region
do not encourage critical thinking and a healthy concept of citizenship
that teaches values of tolerance and appreciation for diversity.10 All in all,
poor education systems, combined with the political elites’ interest in
monopolisation of power, have led to the existing socio-economic and

political power balance across the region.
Finally, the notion of national security and the way in which the state
protects its national security interests is another reason for the existing
power structure in the Middle East. National security is often defined as
the security of the state and particularly the political elite. This has played
a critical role in the current governance crisis in the region. In most
countries, the political elite has created a complex security apparatus
formed of parallel “security agencies, and other paramilitary or coercive
state agencies”11 that often monitor or even interfere with one another.
It has also been a common practice in the region for different segments
of the security apparatus to have power over and exemption from their
respective legal systems. Existing security structures have not only fuelled
division and dissatisfaction across the societies, but also have become a
major obstacle to meaningful reform and the rule of law.
Women’s Economic Participation

Men have traditionally dominated the workforce in the region. The
male-controlled structure of the societies across the region has discour-
aged women’s participation in the labour force. Although women of the
region lag behind men in finding employment, they have been notice-
ably successful in improving their education level. United Nations sta-
tistics show that by 2012 more than half of the university graduates in
many Middle Eastern countries were women.12 Female literacy rate has
also improved significantly. World Bank data shows that the share of lit-
erate female population in the Arab world has increased from 41 to 69%
between 1990 and 2010.13 As the chart below shows, in most of the
countries in the region, the share of female university graduates is higher
than that of the male graduates.
However, the data proves that improvement in female education
level does not translate into a higher employment rate of women. Maha
El-Swais wrote a blog post for the World Bank in 2016 in which she dis-
cusses the reasons for low participation of women in the economy across
the MENA region. She states that despite the fact that women in most
of the MENA countries are outperforming the men academically, finding
employment remains a big challenge for them.14 Around 17.5% of the
adult female population, roughly less than one in five women, is working in
the MENA region.15 At the current unemployment rates, if all the working
16 S. BAZOOBANDI
age population in the MENA look for jobs, by 2050, the region will have
50 million unemployed men, and 145 million unemployed women.16
Over time, the gender-biased social and individual identities and role
definitions associated with such identities have been revised, particularly
amongst the middle class. This is partly due to technological advance-
ments such as access to satellite TV channels and smart phones. Cyber-
space has exposed women to new social and private life-styles and it has
encouraged new ideas, demands and initiatives. It has also offered new
platforms for female entrepreneurs.17 All in all, thanks to the fast-paced
electronic communication, the identity of women across the region has
begun to gradually change from the traditional role of stay-at-home
mothers to one of actively contributing to the economic welfare of the
households.
However, women’s revised identities have not led to significant
improvements in female employment figures. Although women’s desire
and motivation for more active roles socially and economically have
been strengthened, male-oriented cultures and economic structures of
countries across the region have excluded women in many areas of the
region’s economies. For example, whilst the care and education sectors
have been traditionally hospitable towards women, science and engineer-
ing have been less welcoming to female graduates in the region. This has
been the result of a complex combination of two factors:
1. The patriarchal bargain: regardless of religion, language or ethnic-

ity, this seems to be an integral element of the regional culture. It
creates an environment in which women’s emancipation is traded
for financial security provided by their male head of the households
(i.e. father, brother, husband).
2. The dominant role of the state in the economy: this is a regular
economic pattern across the MENA. Whether in oil-exporting or
oil-importing countries, the governments are the strongest eco-
nomic players providing the main share of employment opportu-
nities to their citizens, and are fundamentally partial towards male
employees.
Public employment is one of the key elements in the economic structure

of the region. In most countries, a high portion of the governments’
budgets is consumed by paying public sector salaries.18 Public employ-
ment, which is largely associated with short working hours and lavish
perks, has often been seen as an important component of social safety

nets across the region. In the GCC, for example, citizenship has tradi-
tionally encompassed a wide range of benefits and entitlements, one of
which is the promise of highly paid public sector employment.
The political uprisings of recent years have strengthened the exist-
ing social pact between the state and citizens of the GCC. Widespread
social and political unrest across the Middle East and North Africa was
mainly associated with unemployment and other economic difficulties.
Therefore, in order to implement preventative measures and to avoid
spill-over effects, GCC policymakers quickly responded to this issue by
providing public jobs (more than 300,000 new jobs in Saudi Arabia,
35,000 in Oman and 20,000 in Bahrain). In addition, public sector
salary increases, additional food subsidies, reduced public services’ fees
and new housing initiatives were announced across the GCC. The GCC
government policies that are put forward through national visions all
encompass strengthening public–private partnership and labour force
efficiency by investing in human resources and education. The gov-
ernment “giveaways”, however, are largely contradictory to the ulti-
mate aims of the visions.19 Women’s employment, for example, has not
received much attention amongst the GCC policymakers (Fig. 1.2).
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2012. http://www.cnn.com/2012/06/01/world/meast/middle-east-women-
education/)
18 S. BAZOOBANDI
MENA Region in a Globalised World

Reviewing the complex socio-economic challenges of the Middle East
shows that the region has not benefited from economic globalisation.
Hydrocarbon products have dominated regional trade leaving the oil-im-
porting countries behind in terms of economic growth and development.
The region has failed to adopt policies that encourage labour market
integration. It is easier for jobseekers from outside the region to obtain
permits to work in the region than those from the region. For example,
it is a lot easier for South Asians to find jobs in the GCC than it is for
Iranians, Egyptians or Iraqis. Although it is obvious for the policymak-
ers that an empowering environment for the private sector is necessary,
the private sector has remained marginalised across the region. Lack of
transparency, accountability and good governance across the region has
created inefficiency and demoralised citizens, particularly in the youth
cohort. The concept of meritocracy, which would improve the busi-
ness environment and encourage competition, has remained alien in the
region. Instead, personal and/or family connections as well as religious
and ideological affiliations are still defining factors for citizens’ success
across the region.
Whilst the Middle East and North Africa region does not benefit from
some of the positive impacts of globalisation such as transparency, meri-
tocracy and globally integrated labour market, it is exposed to some of
the disadvantages of a globalised world. Given the declining arable land
and scarcity of water across the region, the MENA region is heavily
dependent on food imports and therefore extremely vulnerable to fluc-
tuations in food supplies and prices. This presents the region, which is
already dealing with socio-political, ideological and economic tensions,
with fundamental socio-economic risks. Any rise of global food prices
or supply disruption can potentially lead to complex scenarios in which
domestic and regional conflicts will be inevitable.
Water–Energy–Food Nexus
The Middle East and North Africa region is the most water-poor region
in the world. Seventeen countries in the region are below the ‘water
poverty line’ defined by the United Nations. The region is home to
6% of total global population with only 1% of total global freshwater
resources. The MENA region is characterised by high population growth
(2% annually) and increasing urban population (expected to double by

2050 to nearly 400 million). The high rate of population growth, rapid
urbanisation, the impact of climate change and tensions arising from
cross-border water resource sharing have impacted access to water across
the region. As a result, various countries across the region rely on desali-
nation for their water supply. The region has the world’s largest desalina-
tion market with about half of the total global desalinated water capacity
(Fig. 1.3).20
Water scarcity, leading to food scarcity and food price inflation is an
important contributing factor to the socio-economic stability of the
region. Water scarcity can escalate instabilities and contribute to unrest.
According to the World Bank, 60% of the region’s population live in
highly water stressed areas and 70% of the region’s GDP is also gen-
erated in those areas. Many of the most fragile countries are suffering
from the greatest degree of water stress. Water security in the region is
not limited to the ability of communities to cope with water scarcity.
It involves delivery of affordable and good quality water to the citizens
of the region that reinforces the relationship between service providers
(states) and consumers (citizens). This process requires renewal of social
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Fig. 1.3 Global desalination capacities by region (Source CNN 2019)

20 S. BAZOOBANDI
contract, greater transparency and accountability of the service providers

by the consumers.
Amongst the challenges that the region is facing, the policymakers
are least prepared to deal with water challenges. The MENA region has
one of the highest projected economic losses (globally) caused by “cli-
mate-related water security” that is predicted to stand about 6–14% of
GDP by 2050. The predicted figures for Western Europe, Sahel and
Central Africa are about 0.01–0.02%, 0.82–11.7% and 0–7.8%, respec-
tively. Indeed, hydrological shocks can be expected to erode legitimacy
of governments and create socio-economic and political fragility across
the region.21
Water security in the MENA region requires major policy reforms in
order to achieve efficient water services and pricing mechanisms that reg-
ulate usage and wastewater discharge. Water prices across the region are
low and government subsidies for water services are the highest in the
world. These factors have contributed to the degradation of resources
and the accumulation of government budget deficits across the region.
The region has some of the highest water losses in agricultural, process-
ing, distribution and consumption. Water price increases are a politically
sensitive issue. However, at the current rate of consumption and given
the level of water loss in the region, water price reforms are necessary
across the region.
The region is one of the highest importers of so-called ‘virtual water’
in the world. The United States, Argentina, Australia and Brazil are
amongst the top exporters of virtual water to the MENA region. The
links between water, food and energy sectors create challenging trade-
offs for the region. Rising demand for water in agriculture in order to
produce food, leads to rising energy consumption, by desalination plants
and groundwater pumps, in order to produce usable water.22
According to the Food and Agriculture Organization of the United
Nations (FAO), the MENA region has one of the lowest levels of fresh
water resources globally. Over the past four decades, the resources have
diminished by two-thirds and are expected to decrease by 50% by 2050.
Agriculture sectors use up to 85% of freshwater resources in the region.
45% of the total agricultural land across the region is at risk of soil nutri-
ent depletion and wind water erosion.23
People of the region that are living in countries in conflict are suf-
fering from significantly high level of undernourishment. The level
of undernourishment in those countries is six times larger than the
non-conflict countries across the region. In Syria alone, the estimated

cost of the war for the agriculture sector is about $16 billion. More than
60% of the people in Yemen (17.8 million) do not have reliable sources
of food. About half of the women-headed households of Gaza are food
insecure and over half a million Sudanese children of under five years
of age suffer from critical malnutrition.24 Although, undernourishment
does not exist at such severe levels in other parts of the region, food
price inflation has affected people’s diet significantly in recent years. In
Iran for example, agriculture food prices have increased by 75% year-on-
year between March 2017–2018 (Iranian calendar year) in comparison
with the previous period.25 This level of inflation is due to a combination
of currency devaluation, increasing cost of agriculture production and
the rising cost of imported food; this has contributed to an increasing
share of population living under the poverty line. Food price inflation at
varying degrees has put pressure on the people from Egypt to Israel and
the GCC.
Despite the widespread food crisis, the MENA region has a high rate
of food loss and food waste. Estimates show that more than 30% of total
food consumed in the region is wasted or lost. In general, food loss and
waste can occur at any point from production to consumption. In the
MENA region, 68% of losses occur before the food reaches the end con-
sumer. Lack of access to suitable equipment for harvesting, storage and
transportation (i.e. lack of access to cold storage), poor marketing and
distribution systems are the key causes of such high level of food loss in
the region. According to the FAO, the resources that are used to pro-
duce wasted food in the region are equal to 42 cubic metres of water and
360 million hectares of land. The figures are extremely alarming, given
the scarcity of resources across the region.26
High energy consumption has become another critical socio-
economic challenge for countries around the region. The Middle East
is the largest oil producing region in the world. The region produces
34% of the global production which accounts for nearly half of crude
oil exports and about 30% of global Liquid Natural Gas exports. The
region has also one of the highest global energy consumption levels. In
2017, the region’s annual consumption growth was about 3.4%.27 That
is higher than Europe (2.1%), North America (0.7%) and whole of
Africa (2.9%).28 High electricity consumption is a major cause of such
increase in total energy consumption. It is estimated that the region’s
electricity demand will triple by 2050. Primary energy consumption is
22 S. BAZOOBANDI
expected to increase by only 36% in the same period. This has prompted
an increase in renewable energy investments in some parts of the region.
For example, Egypt aims to produce 42% of its electricity consumption
from renewables by 2025. Iran is also planning to produce 5 Gigawatt
of renewable electricity by 2020. Saudi Arabia is investing heavily in solar
and wind power and is aiming to provide 30% of the country’s electric-
ity consumption from renewable sources by 2023.29 Considering the
region’s population is expected to increase by 40% by 2050, the region
is in urgent need of finding alternative solutions to cover rapidly growing
energy demands.
According to the Energy Information Administration (EIA), as of
2019, the Middle East, Africa and Asia drive nearly all the world’s energy
consumption growth.30 Whilst various governments across the region
have indicated plans for increasing renewable energy production, there
is also an increase in investments for coal-fired power plants. The EIA
reports show a regional trend for increasing coal-fired electricity produc-
tion capacity in countries like Egypt, Oman, Iran, Jordan and United
Arab Emirates. Coal consumption across the region has been consider-
ably less than other fuels. It has formed less than 1% of the region’s pri-
mary energy production. Most of the coal-fired capacity in the region
is planned in collaboration with Chinese entities.31 With the EU push
for a global effort to control carbon emissions, it is not surprising that
China remains the most viable provider for the region to acquire rele-
vant technology to increase coal-fired electricity production. Considering
the urgent global need to cut down carbon emissions, moving towards
increased consumption of coal seems to be the least sustainable option
at both global and regional levels. However, there seems to be very little
interest amongst the region’s policymakers to critically assess the long-
term consequences of such investments for the region and for the global
community.
All in all, the socio-economic challenges that the MENA region faces
today stem from the failure of the old social and political structure in
which the governments established (a) large centralised administrations
to provide employment opportunities and social services for the citizens,
(b) various mechanisms to distribute rent across the society (including
substantial subsidy expenditure programmes) to buy citizens’ loyalty
and (c) strong security services and the armies to protect state security.
In today’s globalised world, moving away from the traditional socio-
economic models are necessary for resolving the existing challenges in
the region. Replacing old policies that formed state–citizens’ relationships

across the region with practical measures that requires more accounta-
bility for the states and allows for the unlocking human capital through
improved citizens’ economic and political participation, are needed to
maintain the region’s political, economic and social stability. In addi-
tion, the region is under serious environmental threats. Water and food
shortages have become serious challenges for almost all the countries in
the region. The region’s energy consumption is increasing at an alarm-
ing level. With growing urbanisation of the population, rising demand
for electricity has pushed the region’s energy consumption ahead of the
global trends. The policy response by the governments of the region,
however, does not seem to offer adequate and timely solutions to tackle
the pressing challenges they face.
Notes
1. Whitepaper, Arab Youth Survey, http://www.arabyouthsurvey.com/
whitepaper.html.
2. Arab Youth Survey, “Inside the Hearts and Minds of Arab Youth”,
8th Annual ASDA’A Burson-Marsteller Arab Youth Survey (2016),
h t t p : / / w w w. a r a b y o u t h s u r v e y. c o m / p d f / 2 0 1 6 - AY S - P r e s e n t a -
tion-EN_12042016100316.pdf.
3. Giacomo Luciani, “Allocation vs. Production States: A Theoretical
Framework”, in The Arab State, ed. Giacomo Luciani (Berkeley and Los
Angeles: The University of California Press, 1990).
4. Christopher M. Davidson, The United Arab Emirates: A Study in Survival
(Boulder, CO: Lynne Reinner, 2005).
5. Martin Hvidt, “The Development Trajectory of the GCC States: An
Analysis of Aims and Visions in Current Development Plans”, in Gulf
Politics and Economics in a Changing World, ed. Michael Hudson and
Mimi Kirk (Singapore: World Scientific Publishing Co., 2014), pp. 11–28.
6. Ibid.
7. Farhad Daftari, “Development Planning in Iran: A Historical Survey”,
Journal of Iranian Studies, vol. 6, no. 4 (1973), pp. 176–228.
8. Martin Hvidt, 2014.
9. Perry Cammack et al., Arab Fractures: Citizens, States, and Social
Contracts, Carnegie Endowment for International Peace (2016), http://
carnegieendowment.org/2017/02/01/arab-fractures-citizens-states-and-
social-contracts-pub-66612.
10. Carnegie Endowment for International Peace, “Arab Fractures
Citizens, States, and Social Contracts”, http://carnegieendowment.
24 S. BAZOOBANDI
org/2017/02/01/arab-fractures-citizens-states-and-social-contracts-
pub-66612#political.
11. Ibid.
12. Catriona Davies, “Mideast Women Beat Men in Education, Lose Out at
Work”, CNN, http://edition.cnn.com/2012/06/01/world/meast/
middle-east-women-education/index.html.
13. World Bank, “World Development Indicators: Adult Female Literacy”,
quoted in Perry Cammack et al. (2016).
14. El-Swais Maha, “Despite High Education Levels, Arab Women Still Don’t
Have Jobs”, World Bank, http://blogs.worldbank.org/arabvoices/
despite-high-education-levels-arab-women-still-don-t-have-jobs.
15. Ron Burder, “How to Encourage More Women into MENA’s Workforce”,
World Economic Forum, https://www.weforum.org/agenda/2015/05/
how-to-encourage-more-women-into-menas-workforce/.
16. Arne Hoel, “Missing Voices: Gender Equality in the Arab World”, World
Bank (2013), http://www.worldbank.org/en/news/feature/2013/03/
14/missing-voices-gender-equality-in-the-arab-world.
17. The Economist, “Arab Women Entrepreneurs, Untraditional Choice: The
Middle East Beats the West in Female Tech Founders”, http://www.
economist.com/news/business/21581740-middle-east-beats-west-fe-
male-tech-founders-untraditional-choice.
18. Hodson, “Distributional Structure in the Arab World”, quoted in Steffen
Hertog (2014).
19. Steffen Hertog, “Redesigning the Distributional Bargain in the GCC”, in
Gulf Politics and Economics in a Changing World, ed. Michael Hudson
and Mimi Kirk (Singapore: World Scientific Publishing Co., 2014),
pp. 29–54.
20. Katy Scott, CNN, “Can the Middle East Solve Its Water Problem?”
(2019), https://edition.cnn.com/2018/07/11/middleeast/middle-east-
water/index.html.
21. World Bank, “Beyond Scarcity, Water Security in Middle East
and North Africa” (2018), https://openknowledge.worldbank.org/
handle/10986/27659.
22. Ibid.
23. FAO “Near East and North Africa’s Water Scarcity Initiative” (2019),
http://www.fao.org/neareast/perspectives/water-scarcity/en/.
24. FAO, “Building Resilience for Food Security and Nutrition” (2019),
http://www.fao.org/neareast/perspectives/building-resilience/en/.
25. Eghtesad News, “Adad sazi emkan nadarad” (in Farsi) (2018),
https://www.eghtesadnews.com/‫شخب‬-‫دیف‬-‫یداصتقا‬-71/246910-
‫یزاسددع‬-‫ناکما‬-‫درادن‬-‫مروت‬-‫ییاذغداوم‬-‫رد‬-‫لاس‬-‫هب‬-‫دصرد‬-‫هدیسر‬-‫تسا‬.
26. FAO, “Tackling Food Loss and Waste in the Near East and North Africa”
(2019), http://www.fao.org/neareast/perspectives/food-waste/en/.
27. BP, “Regional Insight—Middle East” (2018), https://www.bp.com/en/
global/corporate/energy-economics/statistical-review-of-world-energy/
country-and-regional-insights/middle-east.html.
28. BP, “BP Statistical Review of World Energy” (2018), https://www.
bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/
energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf.
29. Ibid.
30. EIA, “The Middle East, Africa, and Asia Now Drive Nearly All Global
Energy Consumption Growth” (2019), https://www.eia.gov/todayine-
nergy/detail.php?id=37932.
31. EIA, “Countries in and Around the Middle East Are Adding Coal-Fired
Power Plants” (2018), https://www.eia.gov/todayinenergy/detail.php?id=
36172.
CHAPTER 2
GCC Oil Wealth: The Power and the People
Sara Bazoobandi and Rhiannon Alexander
Introduction
Across the GCC, oil has driven growth, development and the longevity
of the ruling families since its discovery in the first half of the twentieth
century. Oil incomes have enabled the ruling families to maintain a
Some material used in this chapter has been previously published in

Bazoobandi, S. and Jeffrey Nugent, “Political Economy of Sovereign Wealth
Funds in the Oil Exporting Countries of Ara Region and Especially the Gulf”,
Economic Research Forum, Working Paper No. 1143 (2017), available at:
http://erf.org.eg/wp-content/uploads/2017/10/1143.pdf, that has benefited
from a financial grant from the Economic Research Forum. The contents and
recommendations do not necessarily reflect the views of the Economic Research
Forum.
S. Bazoobandi (*)
Middle East Risk Consulting, Hamburg, Germany
Nonresident Senior Fellow at the Atlantic Council within the Global Business
and Economics Program and Global Energy Center, Washington, DC, USA
Nonresident Fellow at Arab Gulf State Institute in Washington,
Washington, DC, USA
R. Alexander
Oxon, UK
© The Author(s) 2020 27

S. Bazoobandi (ed.), The New Regional Order in the Middle East,
International Political Economy Series,
https://doi.org/10.1007/978-3-030-27885-4_2
28 S. BAZOOBANDI AND R. ALEXANDER
carefully balanced social contract between themselves and their citizens,

based on economic benefits in return for political acquiescence. However,
the weakening outlook for oil prices—along with a socio-political awak-
ening among certain constituencies following the spate of uprisings and
conflict across the broader region since 2011—raises uncertainty about
the sustainability of both oil-driven economic growth models and their
related social compacts. The oil market outlook has raised concerns
amongst policymakers and citizens that maintaining the current level of
government expenditure to sustain the social contract may not be pos-
sible in the future. As a result, pressure has been rising for some time
to reduce dependency on oil revenues by diversifying the economy and
instituting structural reforms. Demographic trends across the region will
compound pressure on regimes to diversify their economies in order to
lessen public wage bills and ensure that younger generations have viable
opportunities and a positive outlook in terms of expected living stand-
ards. This will be essential to ward off social discontent of the sort that
has toppled similarly authoritarian regimes across the region in recent
years. Sovereign Wealth Funds (which have become important tools for
the states to maintain their power across generations) are increasingly
being repurposed as buffers against lower oil incomes, in order to main-
tain the status quo. Their investment strategies have been rebalanced
towards domestic and regional needs and, whilst still very much active in
international markets, are also being readjusted to ensure sustainability in
terms of returns, income and operational capabilities.
GCC Oil at Home and Abroad

Over the past decades, the oil producers of the GCC have exerted a
powerful role in global oil markets. Their oil wealth has brought about
not only an astonishing level of economic development across the
states, but also made the states a leading presence on global oil markets.
According to the EIA, in 2017 Saudi Arabia, Kuwait and the UAE were
among the top ten oil producers in the world, with a share of total pro-
duction of 13, 4 and 3%, respectively.1 And despite growing challenges
to the role of GCC oil producers (along with other OPEC members) on
global markets from non-OPEC producers, the development of the shale
sector, and a shift away from oil to other energy sources in some areas,2
GCC producers’ oil rents continue to afford them a great deal of flexibil-
ity in facing both domestic and external challenges.
2 GCC OIL WEALTH: THE POWER AND THE PEOPLE 29
The GCC’s status in global energy markets historically has been

strong due to its decisive role within OPEC. Four GCC states are OPEC
members—Saudi Arabia, Kuwait, the UAE and Qatar—and Saudi Arabia
holds particular influence globally due to its ‘swing’ producer status.
It is widely expected that the bloc’s influence will wane in the coming
years. This is due to significant challenges imposed by non-OPEC pro-
ducers (including Russia, the US, Canada, Brazil) whose production
levels have increased significantly in recent years. Non-OPEC production
has had major impacts on overall supply and the global pricing mech-
anism. Such impacts have led to various price decline periods over the
recent years.
Global growth projections are expected to sustain oil prices over the
longer term. However, changes to supply and price formation will impact
GCC producers’ role in the market in the nearer term. Indeed, OPEC
itself estimates that whilst its role in the market is likely to decline in the
coming years due to non-OPEC and shale oil production, its stronger
reserves position and uncertainty around the viability of shale as a reli-
able source will lead to a revival of demand for OPEC exports in the
future.3
OPEC’s response to the arrival of shale oil on global markets in
around 2011 illustrates the increasingly complex market today. The
impact shale oil had on global production levels directly influenced
OPEC’s decision in November 2014 to abandon production targets in
order to regain market share. Although this had negative fiscal reper-
cussions in the GCC producer states (as their oil-funded budgets were
significantly impacted by lower oil prices), it suggests that OPEC mem-
bers saw maintaining market share as more important at this point.
According to the European Central Bank, shale oil production can be
expected to remain robust over the next fifteen years due to technolog-
ical improvements to production and distribution and the highly com-
petitive nature of the shale oil market. However, the Bank also cautions
against over optimism due to ongoing uncertainties over the longevity
of the so-called revolution and the factors (including geological condi-
tions and supply chain inefficiencies) that effectively prevent distribution
far beyond the US market currently.4 This assessment would seem to
support OPEC’s optimism about the future of oil demand.
The strong position of the GCC in the global oil market has also ena-
bled the GCC countries to gain US security guarantees, as a valuable
counterbalance against other key players in the broader Middle East

region. Uncertainties around the long-term viability of shale oil produc-
tion, as well as other mutual strategic interests in the region between
the US and the GCC, mean there is unlikely to be a departure from the
existing security arrangement in the foreseeable future. Indeed, deterio-
rating relations between the US and Iran since the election of President
Trump and the US withdrawal from the nuclear deal in May 2018 sug-
gest US–GCC relations could strengthen and that some military bases
in the region could even be expanded. To this end, there have been dis-
cussions of a more formalised US-backed regional security alliance in the
region, the Middle East Strategic Alliance.5
State-Building in the GCC: Oil and the Social Contract

The region’s oil wealth has enabled the ruling elites to develop an effec-
tive system of governance under which their authority has been under-
pinned by oil-funded spending on economic development and social
benefits. Impressive macroeconomic and development indicators since
the discovery of oil (along with very centralised systems which have ena-
bled bureaucratic flexibility during fiscally challenging periods) have been
at the root of the high levels of political stability across these countries.
Support between the GCC rulers has also been vital in ensuring sta-
bility across the bloc. The oil-rich states (Saudi Arabia, Kuwait and the
UAE) have extended financial assistance to the—relatively speaking—
oil-poor states of Bahrain and Oman, in order to support diversification
into non-oil sectors and during times of economic and political crisis.
So even for those GCC countries that are not directly dependent on oil
income, the broader GCC oil income remains a vital backstop.
The State–Citizen Social Compact

The establishment of the Gulf states in the nineteenth century was
followed by the introduction of a new social contract across the region
and a series of treaties with the British Empire.6 These treaties allowed
the newly established states to gain international recognition and assisted
the rulers in gaining the support of local tribes.7 In order to main-
tain the stability within the local communities and generate a sense of
unity amongst various tribes, the ruling families initiated arrangements
through which security, justice and economic support was guaranteed by

the ruling elite in return for loyalty of other tribes.
Oil revenues facilitated such strategies. The Arab ruling families across
the Persian Gulf gradually consolidated their power for their respec-
tive communities. In 1938 in Kuwait, the year that oil was discovered,
the ruler of Kuwait dismissed a parliament established by the mer-
chants. He then appointed members of his family to control most of
the a dministrative institutions of the government. With the exception of
Oman, since their establishment, in all the GCC countries, royal family
members have been appointed to control the most important and sen-
sitive government positions.8 The longevity of the ruling families across
the region has been in large part due to the distribution of oil wealth
throughout the society, as a condition for political compliance. As a
result, new definitions of national identity and citizenship emerged in the
region. This system has functioned smoothly for the most part, but given
its inherent lack of transparency and fairness, there may be growing calls
for reform towards a more transparent and meritocratic system in line
with the growing global trend of citizens holding their leaders to account.
In addition to social and cultural factors, citizenship and national
identity in the GCC are also shaped by the political economy of these
countries. One common characteristic across the Gulf countries is the
close link between citizenship and economic benefits. The distribution
of resources is the main mechanism for defining a unique social contract
in the region. There has been a conscious effort by the ruling families to
associate the economic benefits with national identity in order to encour-
age loyalty. The privileges that accompany holding GCC passports are
reflected in employment benefits, judicial protections and government
grants and payments. Being a local citizen of the GCC is associated with
higher public sector salaries and access to financial resources (in the form
of direct entitlements, as well as subsidised fuel and utilities). The access
to oil income had also until recently allowed the regimes to be tax-free,
and for oil wealth to be distributed amongst different local, tribal, eth-
nic or religious groups. Whilst in modern societies, political legitimacy
is gained through political mechanisms in which the government is held
responsible for the use of tax receipts, the social contract has been dif-
ferent in the GCC. Here, governments have gained political legitimacy
through large-scale distribution of resources amongst the various groups
in the society.
Oil-Based Economic Growth Models

Economic growth across the GCC countries has been directly correlated
with the boom and bust cycles in oil markets, with high levels of pub-
lic spending in the boom years and fiscal tightening at times of lower
prices. Notwithstanding price fluctuations, oil rents have continued to
fund governments’ socio-economic programmes of wealth redistribu-
tion and job creation. Since the establishment of the GCC states, public
employment policies have been the key channel for wealth distribution.
One of the main privileges offered to citizens has been secure and
well-paid employment opportunities (recent IMF estimates indicate that
public sector wages are two or three times higher than those in the pri-
vate sector across the GCC9). As a result, the number of Gulf nationals
employed in the public sector has historically been far higher than in the
private sector, where most employment opportunities are filled by for-
eign labour.
Subsidies and entitlements generally have been broad-based and an
important pillar of the social contract. Furthermore, since 2008, fiscal
stimulus packages across the GCC economies have supported local credit
markets and private sector economic activities. Additional spending
focused on wages and subsidies were announced during the 2011 Arab
Spring,10 some of which subsequently have been withdrawn or reined
in as falling oil prices made them unaffordable. Given that oil receipts
typically make up the bulk of government revenues across the bloc,
the whole social contract is highly vulnerable to oil prices falling below
‘breakeven’ prices needed to fund budget commitments.
A similar dynamic to the oil price cycle spending decisions (whereby
attempts to reduce reliance on oil revenues during periods of lower oil
rents give way to more exuberant spending once prices rise again) can
also be observed in attitudes towards economic diversification strategies.
Although there has been a general acceptance for decades of the need
to diversify away from the budgetary reliance on oil revenues, success in
doing so across the GCC economies has been varied. For example, on
the one hand the Saudi Arabian economy, including the private sector,
remains primarily focused on the oil sector and is therefore almost wholly
reliant on oil revenues to service its government spending. Conversely,
the constituent emirates of the UAE have successfully, and according to
relatively distinct strategies, diversified into other sectors. The concom-
itant improvements in institutional integrity and regulatory and legal
reforms also distinguish the UAE from other GCC states11 and have
created greater opportunities for future diversification and private sector

participation in the economy.
The Role of SWFs in State-Building

Historically, the ruling families in the GCC have used SWFs as a tool
to support state-building strategies and to boost national identity per-
ceptions. The GCC governments have sought international recognition
through acquiring trophy assets (i.e. Harrods, Chrysler Building, Ferrari)
to gain international recognition of their wealth—a strategy similar to
other relatively young counties seeking recognition on the global stage,
such as Singapore.
Moreover, SWFs have been important instruments in helping to
underpin the social contract. In most of the GCC countries ruling fam-
ily members have controlled the government investment institutions,
including SWFs. Whilst some of the SWFs do have clearly defined man-
dates, others do not. In such cases, their assets have been controlled and
used by the states wherever and whenever they see the need to protect
their interests or what they consider state interests. The role of Kuwait
Investment Authority (KIA), for example, in financing military oper-
ations to liberate Kuwait and post-liberation reconstruction has been
rather significant.
Finally, the asset accumulation strategy of the GCC funds has also
been crucial in prolonging the social contract. The control of national
assets in the Gulf by the ruling elites and those close to them has indeed
had an intergenerational purpose to it which is structured to transfer
the control of wealth to the next generation of the rulers, who there-
fore have the financial capacity to maintain the current social contract.
Sovereign wealth across the GCC has been vital, for example, in enabling
regimes to manage the additional spending pledges in the wake of the
Arab Spring in straitened fiscal conditions, where weaker oil revenues
impacted budgets and would have resulted in more severe deficits in the
absence of available sovereign funding mechanisms.
The Arab Spring: A Trigger for Reform?

Over the past decades, the political elite in the Arab world, including
the oil-rich GCC, has focused more on domestic and regional political
manoeuvring and has abandoned the deep-rooted economic and social
Another random document with
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[I thought of these words many a time after that short and
merry life had come to its miserable close, and that fair
head, with the crown it coveted and wrought for, lay
together on the scaffold. I did never believe the shameful
charges brought against her, by which her death was
compassed, but 'tis impossible to acquit her of great
lightness of conduct, and want of womanly delicacy, or of
the worse faults of lawless ambition and treachery against
her kind mistress, than whom no one need wish a better.
Though I am and have long been of the reformed religion,
my feelings have ever been on the side of Queen
Catherine.]
The next day we went across the moor, to see the woman,
Magdalen Jewell, of whom Dame Lee had told us. Mistress
Anne was not with us, pleading a headache as an excuse,
and I was not sorry to miss her company, but we had
Master Griffith instead, and a serving man, who led the
Queen's donkey. The rest of us walked; and oh, what joy it
was to me to feel the springy turf under foot, and smell the
fresh odors of the moorland once more! How beautiful the
world is! I can't think why God hath made it so fair, and
then set it before us as our highest duty to shut ourselves
from it between stone walls. "The earth is the Lord's and
the fulness thereof," we sing in the Venite, and all the
Psalms are full of such thoughts. But this is beside the
matter.
We had a charming walk over the high, breezy moor, and

Master Griffith entertained us with remembrances of his
own country of Wales, where he says the people speak a
language of their own, as they do in some parts of Cornwall.
The Queen riding before us, would now and then put in a
word to keep him going.
Presently the path dipped into a little hollow, and there we
saw the cottage at the foot of the Tor which had been our
landmark all the way. 'Twas to my mind more like a nest
than a cottage, so small was it, and so covered (where the
vine gave the stones leave to show themselves) with gray
and yellow lichens. A humble porch well shaded with a great
standard pear, and fragrant with honeysuckle and
sweetbriar, held the good woman's chair, wherein lay a
spindle and distaff.
Magdalen herself was at work in her garden, gathering of

herbs to dry, and attended by quite a retinue. There was a
very old dog lying blinking in the sunshine, and a motherly
cat with two or three mischievous kitlings, and also a lame
and tame goose, which attended her mistress' footsteps,
and now and then with hisses and outspread wings chased
away the kitlings, when they made too free. A more
important member of the party was the little orphan maid,
a child of some five years, who with grave and womanly
industry, was carrying away the cut herbs, and spreading
them in the shade to dry. A row of beehives reached all the
length of the garden wall, and before them a bed of sweet
flowers and herbs, such as bees love. On one side was a
field in which fed a cow and an ass, while on the other was
a small and old, but well-tended orchard, and at the bottom
of this a still, glassy pool. Behind all, rose the gray, steep
Tor, like a protecting fortress. It was a lovely picture, and
one on which I could have gazed an hour; but presently, the
woman catching sight of us, laid aside her industry, and
came forward to give us welcome, which she did I must say
somewhat stiffly at the first. But she presently thawed into
more cordiality under the charm of her Grace's manner, and
remarking that we had had a long walk, she busied herself
to provide refreshment.
"Pray do not incommode yourself, my good woman," said
the Queen: "we have come but from the convent yonder,
where I am at present abiding, and this is one of the young
pupils, whom I dare say you have seen."
"Not I, madam!" she answered, somewhat bluntly. "I have

no errand to take me to the convent since I desire no alms
at the hands of the ladies, and I have naught to sell but
that which their own gardens supply."
"You might go thither for purposes of devotion," said the

Queen: "'tis a great privilege to worship in a church
possessed of so many holy relics."
A strange look, methought, passed over the woman's face,

as her Grace spoke, but she made no answer to the Queen,
only to press us to eat and drink.
"And you live here quite alone, save this child?" said the
Queen, after she had asked and heard an account of the
little maiden.
"Aye, madam, ever since my old father died, some ten

years since, till this child was sent me, as it were."
"But had you no brother, or other relative?" Again the

strange look crossed Magdalen's face, as she answered: "I
had a brother once, and for aught I know he may be living
now; but 'tis long since I have seen or heard from him. Our
paths went different ways."
"How so?" asked the Queen.
"Because I chose to maintain my old father in his

helplessness, and he chose to bestow himself in yonder
abbey of Glastonbury, with his portion of my gaffer's
goods."
"Doubtless he chose wisely!" she added, with a scorn which
I cannot describe. "'Twas an easier life than tilling barren
land, and bearing with the many humors of a childish, testy
old man."
"You should not speak so of your brother," said the Queen,

somewhat severely.
"You are right, Madam;" answered Magdalen, softening.

"Scorn becomes not any sinner, whose own transgressions
have been many. Nevertheless, under your favor, I believe
my brother did mistake his duty in this thing."
"Yet you yourself have chosen a single life, it seems!" said

the Queen. "Why was that?"
"I did not choose it," she said quietly, but yet her face was
moved. "'Twas so ordered for me, and I make the best of it.
I doubt not many married women are happier than I; but
yourself must see, Madam, that no single woman, so she be
good and virtuous, can possibly be as miserable as is many
a good and virtuous wife, through no fault of her own; aye
—and while she hath nothing of which she may complain
before the world."
"'Tis even so!" said her Grace; and again saw the cloud
upon her brow. I wonder if she is unhappy with her
husband? After a little silence, the Queen fell to talking of
the child, and after some discourse, she offered to leave
with the parish priest such a sum of money as should be a
dower for the girl, whether she should marry or enter a
convent. Magdalen colored and hesitated.
"I thank you much for your kindness," said she, at last. "I
have never yet received an alms, but the child is an orphan,
and hath no earthly protection but myself; and should I die
before my brother, he, or the men with whom he has placed
himself, would take that small portion of goods which
belongs to me, and little Catherine would be left wholly
destitute. I believe Sir John, the village priest, to be a good
man, so far as his lights go, and anything you may be
pleased to place in his hands will be safe. I therefore accept
your offer and thank you with all my heart; and may the
blessing of the God of the fatherless abide upon you."
"That seems like a good woman," remarked Master Griffith

to Mistress Patience, after we had left the cottage.
"Yet I liked not her saying about the priest," returned Mrs.
Patience, austerely. "What did she mean by her limitation
—'A good man, so far as his lights go,' forsooth! What is
she, to judge of his lights? Methinks the saying savored
somewhat too much of Lollardie, or Lutheranism."
"Then, if I thought so, I would not say so," said Master

Griffith, in a low tone. "You would not like to cast a
suspicion on the poor creature, which might bring her to the
stake at last."
Whereat Mistress Patience murmured something under her

breath about soft-heartedness toward heretics being
treason to the Church; but she added no more. I think
Master Griffith hath great influence over her, and if I may
venture to say so, over his mistress as well; and I wonder
not at it, for he hath a calm, wise way with him, and a
considerate manner of speaking, which seems to carry
much weight. It was odd, certainly, what Magdalen Jewell
said about the priest, and also about her brother. It does
seem hard that he should have gone away and left her to
bear the whole burden of nursing and maintaining her
father, and yet, as we are taught to believe, it is he who
hath chosen the better part. Another thing which struck me
about this same Magdalen was, that she was so wonderful
well spoken, for a woman in her state of life. Even her
accent was purer than that of the women about here, and
she used marvellous good phrases, as though she were
conversant with well-educated people.
This was the last of our walks. To-morrow the Queen goes,
and then I shall fall back into my old way of life again, I
suppose—writing, and working, and walking in the garden
for recreation. Well, I must needs be content, since there is
no other prospect before me for my whole life. It will not be
quite so monotonous as that of the poor lady who lived for
twenty years in the Queen's room, and never looked out.
I ought to say, that when we returned from visiting

Magdalen Jewell, we found that a post had arrived with
letters for the Queen, and also a packet for Mistress Anne,
who seemed wonderful pleased with her news, and with a
fine ring which she said her brother had sent her.
"Your brother is very generous," said her Grace, (and I saw

her face flush and her eyes flash.) "Methinks I have seen
that same ring before. 'Tis not very becoming for your
brother to make so light of his Majesty's gifts, as to bestow
them, even on his sister."
"I trust your Grace will be so good as not to betray my poor

brother's carelessness to his Majesty," answered Mrs.
Bullen, with an air and tone of meekness, which seemed to
me to have much of mocking therein. "It might prove the
ruin of us both."
To my great terror and amazement, the Queen turned

absolutely pale as ashes, and put out her hand for support.
Both Mrs. Anne and myself sprang forward, but she
recovered herself in a moment, and her color came back
again.
"'Tis nothing," said she, quietly. "I think the heat was too
much for me. Patience, your arm; I will lie down awhile."
The glance which Patience cast on Mrs. Bullen in passing,

was such as one might give to a viper or other loathsome
reptile. Mrs. Bullen, on her part, returned it, with a mocking
smile. Presently I saw her in the garden in close conference
with Amice, as indeed I have done several times before. I
cannot guess what they should have in common, and it is
all the more odd that I know Amice does not like her.
CHAPTER XIV.
August 14.
HER Grace left us yesterday, and to-day Amice and I have
been helping Mother Gertrude to put her rooms to rights,
and close them once more.
"How lonely they look," said I, as we were going round

closing the shutters. "I suppose they will always be called,
'The Queen's Chambers,' after this; and will be looked on as
a kind of hallowed ground."
"They will always be hallowed ground to me, I am sure,"

said Amice, so warmly, that I looked at her in surprise.
"Well, well, I am not sorry they are empty once more," said
Mother Gertrude. "I trust now we shall go back to our old
quiet ways, and at least we shall have no more singing of
love songs and receiving of love tokens, within these holy
walls. Yonder fair Bullen is no inmate for such a place as
this."
"Why should you think of love tokens, dear Mother?" I

asked, feeling my checks burn, and wondering whether she
referred to me, though indeed I might have known she did
not. 'Tis not her way to hint at anything.
"Because Mistress Anne must needs show me her fine

diamond ring, and tell me in a whisper how it was a token
from a gallant gentleman, as great as any in this realm."
"She said it came from her brother," said I, unguardedly,

and then I all at once remembered what she had said in the
presence, and the Queen's answer. Can it be that her Grace
was jealous, and that she had cause for jealousy? However,
that is no business for me.
Mrs. Bullen must needs watch her chance and ask me

whether I had no message or token for my cousin? I told
her no—that in my position, it did not become me to be
sending messages or tokens: but I did not add what I
thought—that if I had any such message, she would be the
last person I should trust therewith.
"Well, well, I meant you naught but kindness," said she. "I
dare say our squire wont break his heart."
To which I made no answer.
Mother Superior gave me leave to write to my father by

Master Griffith, who kindly offered to carry a letter. When I
had finished, I carried it to her, as in duty bound. She just
glanced at it, and then opening a drawer, she took
therefrom poor Richard's packet and enclosed all together,
sealing them securely, and said she would give the parcel
into Master Griffith's hands, together with certain letters of
her own. My heart gave a great leap at sight of the packet,
and I must confess a great ache when I saw it sealed up
again, because I knew how sadly Richard would feel at
having his poor little letter and token returned on his
hands; and I am quite sure he meant no harm in sending
them, though it was ill considered.
The Queen gave magnificently to the Church and house on

leaving, and also bestowed presents on those members of
the family who have waited on her, mostly books of
devotion, beads, and sacred pictures. She hath also
provided for an annual dole of bread and clothing on her
birthday to all the poor of the village.
CHAPTER XV.
August 25.
WE have begun the general reformation which Mother

Superior promised us. I suppose, like other storms, it will
clear the air when all is done, but at present it raises a good
deal of dust, and makes every body uncomfortable.
Mother Gabrielle and Mother Gertrude still keep their old

places, the one as sacristine, the other as mistress of the
novices and pupils. But Sister Catherine is discharged of the
care of the wardrobe, and Sister Bridget, of all people, set
in her place. Sister Bonaventure takes Sister Bridget's place
in the laundry, and Sister Mary Paula is in charge of the
kitchen, which I fancy she does not like over well, though
she says nothing. Sister Mary Agnes has the accounts, and
Sister Placida the alms. As to Sister Catherine, she is
nowhere and nobody, which I suppose will give her all the
more time to meddle with everybody. She has been in
retreat for a week, and is still very mum and keeps quiet. I
have still charge of the library, to my great joy, and Amice is
by special favor appointed to help Mother Gabrielle in the
sacristy.
Our rules are to be more strictly enforced in future. No

more exclusive friendships are to be permitted. Silence is to
be rigidly enforced, and in short we are to turn over a new
leaf entirely. A great deal of needlework is to be put in hand
directly, including new altar covers for the shrine of Saint
Ethelburga in the garden, for which her Grace hath given
very rich materials. Besides we are to make many garments
for the poor against winter.
A good many wry faces have been made over all these
changes. For my own part I like them well enough. I think
people are always more comfortable when each one knows
his own place and his own work. Perhaps I should feel
differently if I had been put out of office, like Sister
Catherine, or set to work I did not like, as was Sister Mary
Paula. Poor Sister Catherine! She little thought how it was
to end when she used to talk about the enforcement of
discipline. I must say, that as far as the wardrobe goes, she
had no right to complain, for she did keep everything at
sixes and sevens, so that two whole pieces of nice black
serge were spoiled by her negligence, and many of the
spare napkins were moulded through and through. I
ventured to ask Mother Gertrude how she thought Sister
Bridget would succeed.
"Why, well enough, child," she answered. "Sister Bridget's

mind is not very bright, but she always gives the whole of it
to whatever she does."
"I have noticed that," said I. "If she is folding a napkin, or

ironing an apron, you may ask her as many questions as
you will, and you will get no answer from her till she has
done folding or ironing, as the case may be."
"Just so; and she hath another good quality, in that she will
take advice. When she does not know what to do she will
ask, which is to my mind a greater argument of humility
than any kissings of the floor, or such like performances."
Amice and I do not see as much of each other as we used,

but she is always loving when we meet. She appears to me,
somehow, very greatly changed. At times she seems to
have an almost heavenly calmness and serenity in her face;
at others she seems sad and anxious, but she is always kind
and gentle. She is much in prayer, and reads diligently in
the Psalter, which the Queen gave her. Sister Gabrielle has
grown very fond of her, though she was vexed at first that
Amice was assigned to her instead of myself; but she says
Amice is so gentle and humble, so anxious to please, and to
improve herself in those points wherein she is deficient, that
she cannot but love the child. I have, at Amice's own
request, taught her all the lace and darning stitches I know,
and she practises them diligently, though she used to
despise them. I am teaching her to knit stockings, an art I
learned of Mistress Patience, and we mean to have a pair
made for the Bishop against his next visit.
CHAPTER XVI.
St. Michael's Eve, Sept. 28.
IT is a long time since I have touched this book, and many

things have happened. Ours is now a sad household. Out of
the twenty-three professed Sisters and novices who used to
meet in the choir, but fifteen remain. The rest lie under the
turf in our cemetery. Mother Gabrielle is gone, and poor
Sister Bridget, and of the novices, Sisters Mary Frances and
Agatha. Mother Gertrude had the disease, but was spared.
Three others recovered. The rest were not attacked. The
disease was the dreadful Sweating sickness. It began first in
the village, in the household of that same Roger Smith, but
broke out in three or four other cottages the same day. The
news was brought to the convent gates the next morning by
some who came for alms, as they use to do on Wednesdays
and Fridays, and produced great consternation.
"What are we to do now?" said Sister Catherine, while the

elders were in conference by themselves.
"We shall do as we are told, I suppose," answered Sister

Bridget, with her wonted simplicity.
"But don't you suppose Mother Superior will order the gates
to be shut, and no communication held with the villagers?"
said Sister Mary Paula.
"I should certainly suppose not;" answered Sister Placida.

"Think what you are saying, dear Sister! Would you deprive
the poor souls of their alms, just when they are most
wanted? Methinks it would ill become religious women to
show such cowardly fears."
"Beside that I don't believe it would make any difference,"

said I. "Master Ellenwood, who has studied medicine, told
my father the disease was not so much infectious, as in the
air. I wish we might go out among the poor folk, to see
what they need, and help to nurse the sick, as my mother
and her women used to do."
"Rosamond is always ready for any chance to break her

enclosure," said Sister Catherine, charitable as usual. "She
would even welcome the pestilence, if it gave her a pretext
to get outside her convent walls."
"Sister Catherine," said Sister Placida, reprovingly, "you are

wrong to speak so to the child. Why should you be so ready
to put a wrong construction on her words? I am sure the
wish is natural enough. I had thought of the same thing
myself."
"O yes, I dare say," retorted Sister Catherine. And then,

with one of her sudden changes, "but I am wrong to answer
you so, Sister. It is my part to accept even undeserved
reproof with humility, and be thankful that I am despised."
"Nonsense," returned Sister Placida, who is by no means so

placid as her name, "I think you would show more humility
by considering whether the reproof was not deserved. As to
being thankful for being despised, that is to my mind a little
too much like being thankful for another's sin."
"How so?" I asked.
"Why, in order to being despised, there must needs be

some one to despise you, child, and is not contempt a sin?"
I do like Sister Placida, though she is just as often sharp

with me as Sister Catherine, but it is in such a different
way.
"Anyhow, I hope they wont shut out the poor folk," said
Sister Bridget.
"Who is talking about shutting out the poor folk?" asked

Mother Gertrude's voice, coming in sharp and clear as
usual, (by the way I ought to call her Mother Assistant now,
but I never can remember to do so.) "Children, why are you
all loitering here, instead of being about your business in
the house? Let every one set about her duty just as usual,
and at obedience, you will hear what has been decided."
[Obedience is that hour in a convent when the nuns

assemble with the Superior to give an account of their
labors, to receive special charges, and not seldom special
reproofs as well. In our house this gathering took place just
after morning recreation. Amice and I, not being even
regular postulants, had no business there, and since the
reformation in the house, we have never attended, but we
were called in to-day, and took our places at the lower end
of the line, and therefore next the Superior, who addressed
us in few but weighty words, which I will set down as well
as I can remember them.]
There was no doubt, she said, that the pestilence known as

the sweating sickness had broken out in the village, and we
might with reason expect its appearance among ourselves,
at any time. She said she had heard with sorrow that some
of her children had desired to have the gates closed against
the poor folk who used to come for alms. Such cowardliness
as this was unbecoming to any well-born lady, and above all
to religious, who were doubly bound to set a good example
of courage and resignation: but she was willing to think this
only a momentary failing, which a second thought would
correct; and she bade us consider that there would be no
use in shutting the gates now, since they were opened
yesterday, as usual.
Then she told us what she, with the advice of our confessor
and the other elders, had decided upon. The doles were to
be given out at the outer gate, by the proper officers, only
they were to be given every day, instead of Wednesdays
and Fridays. The two distributing Sisters were to be helped
by two others, taken in turn from the professed, to hand
the things as they were wanted. All embroidery, with other
unnecessary work of every kind, was to be laid aside, and
all were to employ themselves under the direction of the
Mother Assistant and herself in making linen and in
preparing food, cordials, and drinks for the poor. If any
Sister felt herself ill in any way, she was at once to repair to
the infirmary, and report herself to Sister Placida. Finally,
we were all to have good courage, to give ourselves as
much as possible to prayer, and such religious meditation as
should keep us in a calm, cheerful, and recollected frame of
mind, observing our hours of recreation as usual; and she
added that nobody was to presume to take on herself any
extra penances or exercises without express permission
from her superior or confessor.
"We are all under sentence of death, dear children, as you

know!" concluded Mother, "And it matters little how our
dismissal comes, so we are ready. Let us all confess
ourselves, so that the weight, at least, of mortal sin may
not rest on our consciences here, or go with us into the
other world. If we are called to suffer, let us accept those
sufferings as an atonement for our sins, considering that
the more we have to endure here, the less we may believe
will be the pains of purgatory hereafter. As for these
children," she added, turning to Amice and myself, who
stood next her, "what shall I say to them?"
"Say, dear Mother, that we may take our full share of work
and risk with the Sisters!" exclaimed Amice, kneeling before
her. "I am sure I speak for Rosamond as well as myself,
when I say that is what we desire most of all, is it not,
Rosamond?"
"Surely," I answered, as I knelt by her side: "I ask nothing

more than that."
"And what becomes of the Latin and Music lessons, and the
embroidery, and our learned librarian's translations?" asked
Mother Superior, smiling on us.
"They can wait," I answered.
"And surely, dearest Mother, the lessons we shall learn will

be far more valuable than any Latin or music," added
Amice.
"Well, well, be it as you will!" said dear Mother, laying her

hands on our heads as we knelt before her. "Surely, dear
children, none of us will show any fear or reluctance, since
these babes set us such a good example. Well, hold
yourselves ready, my little ones, and wherever you are
wanted, there shall you be sent."
That afternoon there was a great bustle in the wardrobe;

taking down of linen, and cutting out of shifts and bed-
gowns, and the like, and in the still-room and kitchen as
well, with preparing of medicines, chiefly cordial and
restoratives, and mild drinks, such as barley and apple
waters, and the infusion of lime blossoms, balm and mint.
This was by the advice of Mother Mary Monica, who has
seen the disease before, and understands its right
treatment. She says that those who on the first sign of the
disorder took to their beds and remained there for twenty-
four hours, moderately covered, and perfectly quiet, and
drinking of mild drinks, neither very hot, nor stimulating,
nor yet cold, almost all recovered; but that purges,
exercise, hot or cold drinks and stimulants, were equally
fatal. The dear old Mother has seemed failing of late, but
this alarm has roused her up and made her like a young
woman again.
Thus things went on for more than a week. We heard of

great suffering among the villagers for lack of nurses who
knew how to treat the disease, and also because from
selfish fear of taking the pestilence, people refused to go
near the sick and dying. One day Mother Superior was
called to the grate, and presently sent for me to the parlor,
where I found her talking through the grate to a woman
whom I at once knew as Magdalen Jewell of Torfoot. Hers is
not a face to be forgotten.
"This good woman says she believes you were at her house
with her Grace," says Mother.
I answered that I was so, and added that her Grace did
much commend the neatness of the place and the kindness
of Magdalen in taking the little one. I saw Magdalen's face
work.
"The babe hath been taken home!" said she, almost sternly.
"God's will be done! I have been telling these ladies that
there are divers orphan maids in the village (left so by this
sickness), who are running wild, and are like either to die
for lack of care, or worse, to fall into the hands of gypsies
and other lawless persons, whom this pestilence seems to
have let loose to roam about this wretched land."
"Are there so many dead in the village?" asked Mother

Gertrude.
"There is not a house where there is or hath not been one

dead!" answered Magdalen; "And the terror is worse than
the pestilence; children are deserted by parents, and they
in their turn by children, and 'tis the same with all other
relations. 'Tis a woeful spectacle!"
"Could not you yourself take these poor babes to your

home, since you have one?" asked Mother Gertrude.
"I cannot be spared, madam," answered Magdalen: "I must

nurse the sick."
"That is very good in you, and you must take comfort in the
thought that you are thereby laying up merit for yourself!"
said Mother Superior.
I saw an odd expression pass over Magdalen's face, but she

made no reply.
"And you think we might take these babes and care for
them, at least till the present emergency is passed?" said
Mother.
"Nay, madam, I did but state the case to you," answered

Magdalen; "'tis not for me to presume to offer advice."
"But what to do with them, if we took them?" said Mother

Superior, in a musing tone. Then catching my eye, which I
suppose ought to have been on the floor instead of on her
face: "Here is Rosamond, with a ready-made plan, as usual.
Well, child, you have permission to speak. What is brewing
under that eager face?"
"I was thinking, dear Mother, that I am used to young

children," said I. "Why could I not take these little maids
into one of the rooms called the Queen's room, and tend
them there? I suppose there are not many of them."
"I know of but five utterly friendless maids," answered

Magdalen.
"Then I am sure I could care for them, with some help and
advice," said I. "They would be away from the rest of the
family, and would disturb no one; and if we were kept in
health, I might teach them as well."
"'Tis a good thought, but we must do nothing hastily," said

Mother Superior. "We ought to have the permission of our
visitor, the Bishop, but he is now in Bristol, and some days
must elapse before we could hear from him, and this seems
a case for instant action."
"I am sure you would say so, madam, could you see the
state of these poor babes!" returned Magdalen.
"Well, well, come to-morrow, and we will see," said Mother.

"Meantime the holy relics are exposed in the church for the
comfort of the faithful in this trying time. You had better
visit them, and then go to the buttery and obtain some
refreshment."
However, she did neither—I suppose from want of time. The

next day she came again, and to my great joy, Mother
consented, the need being so great, to receive the five little
maidens, who were placed under my care in the Queen's

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The New Regional Order in the Middle

East: Changes and Challenges 1st ed.

Edited by Sara Bazoobandi

More information about this series at

The New Regional

ISSN 2662-2483 ISSN 2662-2491 (electronic)

Cover image: © RBFried/iStockphoto

in response to those strategies, countries such as Turkey and Brazil align

1 The Middle East North Africa Socio-economic Challenges 1

2 GCC Oil Wealth: The Power and the People 27

3 The Realignment of Regional Politics and the Future

4 Iran Nuclear Programme, a Brief History 69

5 The Role of External Powers: Global Actors (Part I) 93

6 The Role of External Powers: Regional Actors (Part II) 119

ADIA Abu Dhabi Investment Authority

OPEC Organisation of the Petroleum Exporting Countries

The Middle East North Africa

© The Author(s) 2020 1

review a number of key socio-economic challenges that face the region.

citizens by the states. The governments in various countries across the

Lack of Efficient Channels for Dialogue

(for example, through lack of clarity in the legal description of political

Absence of Social Mobility

by a lack of opportunities and by the restrictiveness of the socio-politi-

Exclusionary Public Policy

The recent wave of citizens’ demand for change in the regional

Delegitimised Democratic Institutions

efforts to delegitimise democratic institutions have had a negative impact

The Role of the Western Powers in the Region

The Issue of Social Contract

structural macroeconomic problems, has created a sensitive social chal-

History of Planning in the Region

government had taken an initiative to provide long-term planning, the

Corruption, lack of efficient implementation strategies and struc-

monopolisation of power, have led to the existing socio-economic and

Women’s Economic Participation

1. The patriarchal bargain: regardless of religion, language or ethnic-

Public employment is one of the key elements in the economic structure

perks, has often been seen as an important component of social safety

MENA Region in a Globalised World

(2% annually) and increasing urban population (expected to double by

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Fig. 1.3 Global desalination capacities by region (Source CNN 2019)

contract, greater transparency and accountability of the service providers

non-conflict countries across the region. In Syria alone, the estimated

the region. Replacing old policies that formed state–citizens’ relationships

GCC Oil Wealth: The Power and the People

Sara Bazoobandi and Rhiannon Alexander

Some material used in this chapter has been previously published in

© The Author(s) 2020 27

carefully balanced social contract between themselves and their citizens,

GCC Oil at Home and Abroad

The GCC’s status in global energy markets historically has been

counterbalance against other key players in the broader Middle East

State-Building in the GCC: Oil and the Social Contract

The State–Citizen Social Compact

through which security, justice and economic support was guaranteed by

ADIA Abu Dhabi Investment Authority

OPEC Organisation of the Petroleum Exporting Countries

Lack of Efficient Channels for Dialogue

Absence of Social Mobility

The Issue of Social Contract

1. The patriarchal bargain: regardless of religion, language or ethnic-

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^ŽƵƚŚ ƐŝĂ͕ Ϯ͘ϳй ƵƌŽƉĞ ĂŶĚ ĞŶƚƌĂů

GCC Oil at Home and Abroad

The Role of SWFs in State-Building

The Arab Spring: A Trigger for Reform?