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December 5, 2011 — New Left Project’s Ed Lewis interviewed Adam Hanieh about the international political economy of the Gulf Cooperation Council (GCC). Hanieh is a lecturer in development studies at SOAS, and is an editorial board member of Historical Materialism. He is the author, most recently, of Capitalism and Class in the Gulf Arab States. It is posted at Links International Journal of Socialist Renewal with permission.
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Ed Lewis: You see the six states of the Gulf Cooperation Council – Saudi Arabia, Kuwait, UAE, Qatar, Bahrain and Oman – as being at the centre of the Middle East economically and politically, but not simply because of their vast reserves of oil. What, then, is your account of how the Gulf states have come to be in this position of centrality?
Adam Hanieh: There are a number of factors involved here. First, of course, is the question of oil. The GCC’s supplies of oil and gas are among the highest in the world. There are various estimates here – and the assessment of oil reserves is highly controversial – but a commonly cited figure is that the GCC holds about 40-45 per cent of global proven oil reserves and 20 per cent of world gas. It currently produces close to 20 per cent of the world’s total oil production. Given the centrality of fossil fuels – both as an energy source and feedstock for the petrochemical industry – this gives the region a vital importance to the patterns of accumulation in the global economy.
A related factor is the huge levels of surplus capital that have accrued in the region as a result of sales of crude oil, gas and petrochemicals. These “petrodollars” have been a key feature in the development of the global financial architecture. This is not a new aspect; during the 1970s financial flows from the Gulf were an essential part of the development of the Eurodollar markets (US dollar deposits held in banks outside the United States) and also in supporting the purchases of US Treasury bonds (see David Spiro’s work on this). In this way, petrodollars have been key to buttressing US dollar hegemony and in sustaining the global financial imbalances that have characterised the world market over recent decades. The rapid financialisation of the global economy has thus been partly premised upon the integration of the GCC into the world market and its financial circuits.
What this means is that the way that the world market has developed over the last few decades, with complex production chains stretching from the manufacture of goods in low-wage zones to the sale of commodities in the advanced capitalist countries, depends heavily upon both the Gulf’s commodity production as well as its financial surpluses. In this sense, the nature of class and state formation in the GCC region has occurred alongside (and is very much linked to) the broader development of the capitalist world market.
These are the reasons for the GCC’s significance at the global scale. But within the Middle East and North Africa itself there have been some fundamental transformations over recent decades that cast a very particular character to the role of the Gulf within the region.
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