What are we there for?

Tom Stevenson

  • AngloArabia: Why Gulf Wealth Matters to Britain by David Wearing
    Polity, 275 pp, £15.99, September 2018, ISBN 978 1 5095 3203 2

It is a cliché that the United States and Britain are obsessed with Middle East oil, but the reason for the obsession is often misdiagnosed. Anglo-American interest in the enormous hydrocarbon reserves of the Persian Gulf does not derive from a need to fuel Western consumption. Britain used to import considerable quantities of Saudi oil, but currently gets most of what it needs from the North Sea and hasn’t imported much from the Gulf since the 1980s; Saudi oil currently represents around 3 per cent of UK imports. The US has never imported more than a token amount from the Gulf and for much of the postwar period has been a net oil exporter. Anglo-American involvement in the Middle East has always been principally about the strategic advantage gained from controlling Persian Gulf hydrocarbons, not Western oil needs. In 1945, Gordon Merriam, the head of the State Department’s Near Eastern Affairs division, made this clear: the Saudi oilfields, he said, were first and foremost ‘a stupendous source of strategic power’. The assistant secretary of state, Adolf Berle, sketched out what remains US strategy: the US and Britain would provide Saudi Arabia and other key Gulf monarchies with ‘sufficient military supplies to preserve internal security’ and ensure that they were permanently guarded by Western navies.

Other parts of the world – the US, Russia, Canada – have large deposits of crude oil, and current estimates suggest Venezuela has more proven reserves than Saudi Arabia. But Gulf oil lies close to the surface, where it is easy to get at by drilling; it is cheap to extract, and is unusually ‘light’ and ‘sweet’ (industry terms for high purity and richness). It is also located near the middle of the Eurasian landmass, yet outside the territory of any global power. Western Middle East policy, as explained by Jimmy Carter’s national security adviser, Zbigniew Brzezinski, was to control the Gulf and stop any Soviet influence over ‘that vital energy resource upon which the economic and political stability both of Western Europe and of Japan depend’, or else the ‘geopolitical balance of power would be tipped’. In a piece for the Atlantic a few months after 9/11, Benjamin Schwarz and Christopher Layne explained that Washington ‘assumes responsibility for stabilising the region’ because China, Japan and Europe will be dependent on its resources for the foreseeable future: ‘America wants to discourage those powers from developing the means to protect that resource for themselves.’ Much of US power is built on the back of the most profitable protection racket in modern history.

The developed Asian economies are heavily reliant on Persian Gulf oil and Qatari natural gas. Three-quarters of Gulf oil exports go to Asian economies, and the five largest importers of gas from Qatar are Japan, South Korea, India, China and Singapore. US dominance in the Gulf gives it decisive strategic influence over any potential Asian rival. The US has a huge military presence in the region: United States Central Command is based at al-Udeid airbase in Qatar, the largest air force base in the world, with more than ten thousand US troops. Bahrain is the permanent dock of the Fifth Fleet, as well as having a US airbase and seven thousand US military personnel. The US has five thousand permanent troops, two naval bases and an airbase in the United Arab Emirates. In Kuwait, it has access to three army bases and an air force base. In Oman, it has four airbases and two naval bases. In Iraq, the US still has troops stationed at al-Asad airbase north-west of Baghdad (once nicknamed ‘Camp Cupcake’ for its luxuries). In Saudi Arabia itself, the US operates a military training mission based in Eskan village. Only Iran, which broke away from the US system in 1979, houses no American military bases.

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An agreement signed by British representatives and the Omani sultan in 1798 made Oman the British Empire’s first satrapy in the Middle East (it was also Britain’s last colonial possession in the Gulf). The East India Company had in 1763 established a trading post in Bushehr, now in Iran, from which the empire’s growing Gulf business was managed. In 1819, to subdue the coastal Arab sheikhdoms and establish a protectorate over the Trucial States – now the United Arab Emirates – the British navy bombarded and laid siege to Ras al-Khaimah. By 1917, Britain had established dependencies in Kuwait, Bahrain, Qatar, Iraq and parts of Iran. Thousands died during Ibn Saud’s conquest of the central Arabian peninsula in the first decades of the 20th century; he received a monthly stipend from the British government throughout. When the new Saudi regime was threatened by a rebellion in 1929, British troops helped put down the mutineers. Britain bankrolled the Saudi monarchy (after 1943 with the help of the US) until the oil industry ended the need for subsidies.

The Suez crisis is generally treated as the decisive moment in the transition from British to US dominance in the region, but David Wearing shows that, in spite of Suez and other setbacks for Britain on the periphery (the 1958 coup in Iraq, the civil war in Yemen in the 1960s), British influence in fact increased in the core Gulf states over the next 15 years, with successful palace coups backed by the British government in Saudi Arabia in 1964 and Sharjah, one of the Trucial States, in 1965. Qatar, the Trucial States and Oman remained British protectorates, their currencies pegged to sterling. Wearing makes a strong case that it was the cost of the military ‘protection’ of the Gulf that forced the end of Britain’s formal empire there in 1971, and the beginning of US hegemony.

Before withdrawing from its dependencies, the British government placed retired military officers as advisers to Gulf monarchs it had for the most part installed in order to protect ‘oil and other interests’ and a ‘very profitable market in military equipment’, in the words of the then foreign secretary, Michael Stewart. Even now, a striking number of Middle East rulers are graduates of Sandhurst, including the kings of Bahrain and Jordan, the sultan of Oman, the emir of Dubai, the emir and crown prince of Abu Dhabi, the emir of Qatar, and the late emir of Kuwait. Most Saudi leaders are educated in the US but the former heads of the Saudi National Guard and the General Intelligence Service, as well as members of the Allegiance Council and a former defence minister, also attended Sandhurst. A skeleton British military presence remained behind in the Gulf. In 2016, Theresa May pledged to increase Britain’s military commitments there, ‘with more British warships, aircraft and personnel deployed on operations than in any other part of the world’. In April last year, the Royal Navy reopened HMS Jufair in Bahrain – the base had been taken over by the US after Bahrain became independent in 1971. Another naval base is set to open in Oman later this year.

Britain’s residual influence in Saudi Arabia meant that during the oil crises of the 1970s the kingdom secretly broke its own embargo to supply Britain. Saudi Arabia also continued to pump much of the massive surplus generated by oil sales into British financial institutions. It finances around a fifth of the UK current account deficit. A ten-person team in Whitehall, known as Project Falcon, manages the UAE’s investments in Britain. During the financial crisis in 2008, Gordon Brown appealed to the Gulf to provide private bailouts for British banks. In a deal subject to a current Serious Fraud Office investigation, Barclays received £4.6 billion from Qatar and £3.5 billion from the UAE, helping it to avoid nationalisation. Qatar’s investments in the UK are many and conspicuous: Harrods, the Shard, the London Stock Exchange, Heathrow Airport. Saudi Arabia and the UAE’s portfolios of UK bonds and equities are exceeded only by their US investments.

The US’s inherited mastery of the Gulf has given it a degree of leverage over both rivals and allies probably unparalleled in the history of empire. Washington has established a highly conservative regional order through alliances with successive military dictatorships in Egypt and an ethno-nationalist Israel. Its overwhelming military control of the region ensures that Japan, South Korea, India and even China must deal with the US in the knowledge that it could, if it wished, cut them off from their main source of energy. It is difficult to overstate the role of the Gulf in the way the world is currently run. In recent years, under both Obama and Trump, there has been talk of plans for a US withdrawal from the Middle East and a ‘pivot’ to Asia. If there are indeed such plans, it would suggest that recent US administrations are ignorant of the way the system over which they preside works.

The Arab Gulf states have proved well-suited to their status as US client states, in part because their populations are small and their subjugated working class comes from Egypt and South Asia. The 1973 oil embargo is probably the only example of a backlash from the periphery to the imperial centre, although it was a dispute over profit-share rather than an example of jacquerie: Western oil companies had been extracting huge profits while the Gulf states received little more than an allowance. These companies have less power now, except in Oman, where Royal Dutch Shell still owns a third of the main oil company. There are occasional disagreements between Gulf rulers and their Western counterparts over oil prices, but they never become serious. Even on the subject of Israel, Saudi Arabia follows the US line. Saudi Arabia’s helotry to the West was one of al-Qaida’s preoccupations but the US-Saudi alliance has if anything strengthened since the group’s founding. The extreme conservatism of the Gulf monarchies, in which there is in principle no consultation with the citizenry, means that the use of oil sales to prop up Western economies – rather than to finance, say, domestic development – is met with little objection. Wearing describes the modern relationship between Western governments and the Gulf monarchs as ‘asymmetric interdependence’, which makes clear that both get plenty from the bargain. Since the West installed the monarchs, and its behaviour is essentially extractive, I see no reason to avoid describing the continued Anglo-American domination of the Gulf as colonial.

Saudi Arabia and the other five members of the Gulf Co-operation Council are collectively the world’s largest buyer of military equipment by a big margin. Most of their arms are supplied by the US, but both Britain and France make substantial contributions. In 2017, the US and Saudi Arabia signed the largest arms deal in history, estimated to be worth $350 billion. Between 1985 and 2006 Britain signed a series of contracts (the Al Yamamah deal) worth tens of billions. Sales stepped up dramatically when the war in Yemen began: Britain sold Saudi Arabia arms worth £3.3 billion in 2015, compared to £107 million the year before. The deals are highly profitable for Western arms companies (Middle East governments account for around half of all British arms sales), but the charge that Western governments are in thrall to the arms companies is based on a misconception. Arms sales are useful principally as a way of bonding the Gulf monarchies to the Anglo-American military. Proprietary systems – from fighter jets to tanks and surveillance equipment – ensure lasting dependence, because training, maintenance and spare parts can be supplied only by the source country. Western governments are at least as keen on these deals as the arms industry, and much keener than the Gulf states themselves. While speaking publicly of the importance of fiscal responsibility, the US, Britain and France have competed with each other to bribe Gulf officials into signing unnecessary arms deals.

Control of the Gulf also yields less obvious benefits. Until 1971 the Gulf states pegged their currencies to sterling, which competed with the dollar as an international reserve currency. After the loss of its Gulf protectorates, Britain had to concede to the global hegemony of the dollar. There were mixed feelings about this in Washington. Under the Bretton Woods agreement the US dollar was pegged to gold and economists feared that even the US gold reserves would prove insufficient as a base for the world’s financial system. The gold standard was finally abandoned, and in 1974, the US Treasury secretary, William Simon, secretly travelled to Saudi Arabia to secure an agreement that remains to this day the foundation of the dollar’s global dominance. As David Spiro has documented in The Hidden Hand of American Hegemony (1999), the US made its guarantees of Saudi and Arab Gulf security conditional on the use of oil sales to shore up the dollar. Under Simon’s deal, Saudi Arabia agreed to buy massive tranches of US Treasury bonds in secret off-market transactions. In addition, the US compelled Saudi Arabia and the other Opec countries to set oil prices in dollars, and for many years Gulf oil shipments could be paid for only in dollars. A de facto oil standard replaced gold, assuring the dollar’s value and pre-eminence.

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For the people of the region, the effects of a century of AngloArabia have been less satisfactory. Since the start of the war in Yemen in 2015 some 75,000 people have been killed, not counting those who have died of disease or starvation. In that time Britain has supplied arms worth nearly £5 billion to the Saudi coalition fighting the Yemeni Houthis. The British army has supplied and maintained aircraft throughout the campaign; British and American military personnel are stationed in the command rooms in Riyadh; British special forces have trained Saudi soldiers fighting inside Yemen; and Saudi pilots continue to be trained at RAF Valley on Anglesey. The US is even more deeply involved: the US air force has provided mid-air refuelling for Saudi and Emirati aircraft – at no cost, it emerged in November. Britain and the US have also funnelled weapons via the UAE to militias in Yemen. If the Western powers wished, they could stop the conflict overnight by ending their involvement. Instead the British government has committed to the Saudi position. As foreign secretary, Philip Hammond pledged that Britain would continue to ‘support the Saudis in every practical way short of engaging in combat’. This is not only complicity but direct participation in a war that is as much the West’s as it is Saudi Arabia’s.

The Gulf monarchies are family dictatorships kept in power by external design, and it shows. The Gulf principalities may not match the extremes of Saudi repression but are no less authoritarian. Yet until the assassination of Jamal Khashoggi at the Saudi consulate in Istanbul last October, crown prince Mohammed Bin Salman, the de facto ruler of the kingdom, was widely talked about as an enlightened reformer. When Germany suspended arms sales over the incident, Jeremy Hunt urged them to reverse the decision. The main threat to Western interests is internal: a rising reminiscent of Iran’s in 1979. To forestall such an event, Britain equips and trains the Saudi police force, has military advisers permanently attached to the internal Saudi security forces, and operates a strategic communications programme for the Saudi National Guard (called Sangcom). In Bahrain, described in 2013 by the Royal United Services Institute as Britain’s closest Gulf ally and ‘the equivalent of an aircraft carrier permanently in the Gulf’, demonstrators inspired by the Arab Spring were forcibly dispersed from the Pearl roundabout in Manama in 2011. The crackdown began in earnest two days after the US secretary of defence, Robert Gates, had visited the country. Saudi and Emirati security forces crossed into Bahrain over the King Fahd causeway in British-made Tacticas armoured personnel carriers to support Bahrain’s security apparatus.

As Wearing argues, ‘Britain could choose to swap its support for Washington’s global hegemony for a more neutral and peaceful position.’ It would be more difficult for the US to extricate itself. Contrary to much of the commentary in Washington, the strategic importance of the Middle East is increasing, not decreasing. The US may now be exporting hydrocarbons again, thanks to state-subsidised shale, but this has no effect on the leverage it gains from control of the Gulf. And impending climate catastrophe shows no sign of weaning any nation from fossil fuels, least of all the developing East Asian states. US planners seem confused about their own intentions in the Middle East. In 2017, the National Intelligence Council described the sense of neglect felt by the Gulf monarchies when they heard talk of the phantasmagorical Asia pivot. The report’s authors were profoundly negative about the region’s future, predicting ‘large-scale violence, civil wars, authority vacuums and humanitarian crises persisting for many years’. The causes, in the authors’ view, were ‘entrenched elites’ and ‘low oil prices’. They didn’t mention that maintenance of both these things is US policy.