United Arab Emirates' Politics - Research Paper Example

Introduction The country’s background Saudi Arabia According to Peterson, the of Saudi Arabia was formed followingthe conclusion of 30years of fight by Ibn Saud to consolidate the main tribes of Arabia. After a struggle, Ibn Saud establishes a monarchy with his family and him in control. The current ruler is one of the Ibn Saudi sons, King Fahd. However, due to old age that has incapacity him from ruling the daily operation are under crown prince Abdullah, one of his brothers. United Arabs Emirates In year 1971, six state came together to form United Arab emirate (EAE). The states are Abu dabi, Ajaman, Al Fujayrah, Ash Shariquah, Uumma al Qywan and Dubbay. Later, Ras al khaymah joined the six States in 1972. The country has high GDP. It is comparable to some of the leading western Europeans nations. Due to its high oil revenue, high diversified economy and its moderate foreign policy is crucial in the affairs of the region. For more than three decades, UAE economy was driven by oil and global finance, however, in the recent past, its leaders have implemented broad economic focus. The economy has diversified to other sectors like mass communication, tourism, shipping and finance. Unlike many other of its regional peers, like Saudi Arabia, who have developed unstable and stagnant regimes, oil dependant economies, UAE has diversified its economy to become politically stable center for commerce. Consequently, UAE has resisted the regional economist analysis and were a clear outlier from the gulf(Lidstone and Digby 39) The UAE Development Trend The development outcome created by UAE is quite unusual for the Persian Gulf. It is unique because of because of its liberal social altitude its economic dynamism and its political stability. In the country, people can openly wear out western style dress and alcohol consumption is widely accepted in contrast with Saudi Arabia, a different regional regime. There is a regional police, which enforces rigid social law among the expatriates. Unlike other neighbors, the power transitions within UAE government are smooth. In UAE, there are no violent domestic opposition movements. Moreover, finally the UAE economic development has outperformed Saudi Arabia’s and other neighboring countries in term of sustained growth and diversification. The Research Question This observation has led to the puzzle of this thesis: why has UAE defied the economist expectation and become so politically stable and economic developed. Why have its peers like Saudi Arabia failed to do so? Have oil curse and Arabs and Islamic culture that is expected to fail the development of the gulf countries played part? Background Understanding why UAE has succeeded in achieving its development outcome will shed light on the relevant, weakness and strength of development theories. A review on the UAE development approach will also show the specific policies that the emerging states should take on the scheme of their development As the foundation of the analysis, the first chapter will analyze the factors that fail the development of the Gulf States. The first body of the literature is the ‘oil curse’. This theory claims that the countries that depend on external sale of nonrenewable hydrocarbon resource express a poor GDP growth, political repression, and political stabilities. The other theory that seek to explain poor development in the Persian Gulf region, insist on the cultural factors. Specifically Arab ethnicity and its Muslim religious industry although this theory are debatable the study identifies that cultural characteristics have played a big role in the regions internal political unrest, economic malaise and its repressive atmosphere(Krane and Jim 230). The next chapter will provide the overview of the UAE development history. This overview examines the social, economic and political force of the region regime. The observation will be that although all the country has improved their citizen living standards, most of the regimes are oil dependent politically unstable, repressive and economically stagnant. This section wail pays attention to the UAE development history. From the result, we will identify that the country has experienced stable political stability. We shall also be able to identify that the state has experienced economic growth and diversified it economic. From the review of the UAE development analysis, the study will provide a comprehensive argument capable of explaining the development outcome. To understand the factors that have led to UAE development further, we shall compare it with said Arabia. Comparison with Saudi Arabia is appropriate as the countries share many UAE characteristics such as religion, Arabic ethnicity, its monarchic, authoritarian political system and its oil rents. Despite all this similarity, the paper will identify why Saudi Arabia had much higher political instability and a comparatively weak economy. Following the study above the study will conclude the section that examines the strength of the UAE development outcomes. The conclusion of the study will be relevant to policy makers in the other gulf countries like Saudi Arabia in their pursuit to development. Literature Review of the Gulf Development Most of the Gulf States have exhibited a weaker macroeconomic record and considerably more political instability. The economist has offered several theories to explain the shaky development experienced in the gulf countries. Oil Curse Theory This theory place the blame for gulf development deficiencies on their reliance on the unearned oil rents. According to the theory, the rent negatively distorts the economy and result to political insatiability. The negative ramification stem from the fact that the oil revenues alive inform of economic rent. The rents are capable of distorting the economy when their owners earn tremendous benefit without any concurrent increase in efficiency of investment (Lucian 29). This is the case with the oil producing nation- they can receive a substantial increase in revenue due to favorable oil prices in the world market. This affects the GDP in the end, because most of the incentives to productivity are removed when their states start to distribute the oil earning to its citizen. The state normally allocates the earning to goods such as infrastructure and health. According to the research when the citizen realizes that paying for such goods is optional, they will receive them whether they work hard or not. The state then shifts from a ‘production state’ to ‘allocation state’. This creates a national mentality characterized break in the work reward causation. Another dangerous political consequences occur when the budget are dominated by oil revenues; the state is political unstable. The political instability manifests itself in the following ways. When the price of the oil dramatically reduces leading to sub-sequential reduction in the government spending. In order to maintain the expenditure in the wake of low earning, the government increases its taxes. The shift to taxation often leads to citizen reacting violently. Although UAE is classified as a typical reinter state, it has not experienced the above trends. The country GDP has been steadily increasing. Additionally, the oil earning contribution to GDP has been decreasing as it has diversified its economy into industries such as mass communication and tourism. Also, UAE appears to be politically stable due to diversification and economic growth. Indeed the economic development of UAE stand out as it has not experienced economic stagnation and political instability as the supporters of the oil curse theory expect. The Arab and Islamic Culture The other theory that analyst expect to delay the economic development of the gulf countries is their Arabs and Islamic cultures. According to the analyst, the weak development of the gulf state is due to their Islamic religion and Arab ethnicity. Some analyst argues that Arab tradition and Muslim altitude and Arab tradition are not conducive for to economic growth. Some other theories the Arab mind and Islamic as a religion are inherently bellicose and thus the course the people to be prone to violence. They claim that that the culture aspect has led to Arabs and Muslim toward political repression. The recent national economic bureau of economic research publication is an example of the argument that Muslim does not have an economic altitude favorable for growth. According to the publication by CNN, Christians’ religion is more positively associated to altitude conducive to economic growth. The Muslim is the most anti-market. According to the report, Islam has a negative correlation with economic altitudes that are propitious for sustained economic growth. A supporter of this theory believes that Muslim do not foster creative thoughts. This is because Islam prohibits its believers from doubting and challenging traditions. This view is supported by scholar who argues that Islamic extremist and fanatics endows its adherent with a disaster for risk and entrepreneurism which in turn decrease the proclivity for innovation among Muslims. The mindset of Arab culture is not open to change because of its traditionalism. According to the scholar, this contempt to change has hinders development by fostering reluctance to embrace western technology in the Arab world. For instance, the practice of subordinating women common with Arabs contributes to dismal economic performance. Other than economic growth some analyst argues that those Islamic and Arab societies are prone to a higher degree of political violence. To support this tendency for violence, Lewis argues that the reason to why Arab societies are more militarized than another civilization is that Islam religion is more violent. He points out that Prophet Mohammed was more violent than Jesus or Buddha. Furthermore, he argues that the nature of the current demographic shift in the Arab countries, where the birth rates are rising, have resulted to the large number of unemployed youth population. This has contributed to the region political instability and violence. Another scholar argues that the Arab culture creates the place large emphasis on the family. Due to this any slight unwanted act to an individual is taken very seriously. A retaliation act to protect the family member is considered immediately. As a result of this small dispute between the individual can expand rapidly into larger conflicts. In this way, the analyst argues that the Islamic and Arab culture has contributed to higher proclivity for violence. Although these Arab Islamic pressures are expected to predict the economic condition for UAE, they have not. In terms of it economy it has displayed growth and movement toward modernization. Furthermore, the UAE leaders have not been closed to new ideas they have embraced many western culture and technology. The economy performs contrary to the expectation of Arab Islamic literature that predicts that the psychologies and tradition culture would not allow steady economic goal. The country is yet to experience political violence. Internally the atmosphere is very calm. There is no domestic unrest as compared to other gulf countries like Saudi. Additionally, The government has permitted social liberalizations. They have made steps to promote women roles, expatriates allowed to wear bikinis, and that drinking alcohol is allowed. The purpose of exploring the Arab and Islamic cultural and the oil curse literature is to describe some of the major schools of thought that seeks to explain the trend of the gulf. The UAE Development History From the onset of the state formation in the 1960s, the UAE the rulers begun an economic program that was designed to diversify the economy. For instance, Dubai shortly after its cessation into federation, its ruler decided to focus on building a base for future economic growth. The first such program was the dredging of the Dubai creek. Larger ship started to dock in Dubai. The result of this was an improvement of the trading capacity. To further modernize the Dubai city, the ruler commissioned the construction of an airport. This project improved further the city trading capacity with the rest of the world. The rulers continued this investment on the infrastructure development. In order to diversify the economy, he invested further construction of aluminum desalination plant -in non-oil sector. Such industries, enabled Dubai attract foreign investors and fuel its economy. It also allowed Dubai to market itself as a potential for expansion into a wider variety of industries. Rashid continued this investment development with dramatic growth in the tourism sector. The hotel capacity drastically increased during this period. After his death in 1990, his son continued this aggressive development strategy. He continued to promote tourism by establishing sport and other events like Dubai summer classic and annual Dubai shoppers. Additionally he promoted the construction of Dubai iconic hotel Burj al Arab hotel. Because of this tourism remains Dubai biggest sector. Tourists are attracted by its warmer climate. Additional the leaders encourage and promoted western cultures. They also created free trade zone like media city and internet city to promote communication and technology sectors respectively. These enticements have allowed multinational companies such as dell, Sony, and IBM to settle there. Dubai has, and the large UAE has also begun to market itself as the regional center for finance. Unlike other banks, In Arab word the banks in UAE lend capital equally to state and private entity. Construction of the world financial center is currently under way This effort is clear indication that UAE has succeeded in setting up a more diversified economy. Other than economic development, the state is known as having high level of political stability. It has experienced very little volatility from its expatriate workforce. It citizen are also happy. The political stability is evidenced by the fact that there is no antigovernment Islamic movement in the state. The stability is also shown by the smooth transmission of power from one ruler to another. Again, the state monitors all mosque and Islamic organization. The entire imams are employee of the federal government under the ministry of justice. The appropriate weekly topics are issued by the Islamic affairs. This ability to control the activities of the Islamic organization indicates a strong desire for the state to control public spaces that are often foster destabilization of the political stability in other countries like Saudi Arabia. The state also monitors expatriate workers; this is also believed to be another source of volatility. To foster its security in the wake of external force like Iraq, UAE, has formed an alliance with other strong nation such as Britain. The state falls under the umbrella of western mill tally protection. Unlike other Arab nation, UAE tolerates western culture. The visitors are allowed to dress quite liberally, and alcohol consumption is allowed. The state has extended western way of life. The presence of western form of amusement, the shopping festivals, park theme demonstrates a degree of permissive western culture. The effort has resulted to the creation of a dynamic and resilient economy. The UAE GDP increased from $2.2 billion in 1975 to 17.5$ billion in 2014. Comparison Saudi Arabia development history To understand fully the gulf development history, it is necessary to compare its history with that of another gulf country, Saudi Arabia. In terms of political structure, two countries are authoritarian monarchies. Fiscally they are dependent on the oil rents. Unlike UAE, Saudi Arabia has experienced the higher degree of political repression and political instabilities. The country has failed to diversify its economy significantly and thus it has not integrated its economy into the global economy outside the oil sector. Socially the state offer free service such as housing, medical services and education to its citizens. Despite this the country experience significantly high social problem rapid population growth, high rates of unemployment and an influx of foreign labor. Despite the similarity, we find that Saudi Arabia had had different development result with the UAE. The country developments outcomes are as expected by the supporters of the oil curse theory. The country has suffered a high degree of political instability and experienced political instability as mentioned earlier. This is attributed to the country’s leadership, as it has not shown serious commitment to peruse economic modernization. The lack of commitment is attributed to the regime bargains with the countries conservative religious establishment where authority over education and cultural affair has been traded with political support. Other factors are: the general resistance to modernity, massive oil reserve which has failed to provide an incentive to diversification and massive corruption in the government. All this factors are sharp contrast with the case of UAE. Moreover, explain why the country has failed to achieve political stability. The current ruler of the Saudi Arabia is alsaudi family. The main source of the political legitimacy of the family is its alliance with the Wahhabi, An Islamic sect. The sect emphasizes on the return to the most strict and unspoiled interpretation of the religion. The Saudi family has accepted the interpretation of the sect version of Islam as the ideological basis of the Saudi Arabia. The sect offers the family political support in return. The government support for the conservative culture notably increased in 1980s when a religious militant seized mosque of Mecca in 1979. Many conservationists act such as the prohibition of women on television begun during this time. However, the greater support backfired in 1990s when Arab afghan returned from the Afghanistan and rivaled the domestic opposition to the regime. In the recent past, the Saudi Arabia has instituted several political reforms to appease its citizen and international opinion. For instance in 1993, Majlis al shura was established. This is a consultative council composed of official appointed by the ruling family. Further effort of democratizations was seen in year 2005, when election was held in 37 cities and region. The Saudi people hold quite conservative Islamic view. This is despite many of them having trained in western countries. The conservative nature is attributed to two factors, one the Saudi education system that has inculcated citizen with Wahhabism fundamentalism. Two, the fact that Saudi Arabia is the site of Islamic birth. In fact, research by the Saudi government revealed the fundamentalism point of view still exists to date. According to the survey, about 49% of the Saudi support Osama bin laden s idea. Furthermore, a large number of Saudi despises united state for its support of Israel. Compared to the citizen of UAE Saudis emphasizes religion much more in their lives. The recent studies on Arab opinions showed that the 27 percent of the UAE, support-maintaining tradition over changing with the times while 39 % favored maintaining tradition in Saudi. The study also suggests a greater likelihood of support for modernization and development strategies in UAE than Saudi Arabia. In the 70’s, Saudi Arabia embarked on development plans. The project purpose was to enhance the state infrastructure in the view that such undertaking would diversify the economy. The development project was however marred with corruption and inefficiency. The deficiencies stemmed from the fact that oil rents that accrued to the government allowed it to promote the proliferation of illiberal business, practices. The business process included widespread use of bribes as well as the proliferation of exclusive patronage network. Most of the development projects were informed by political calculations as this served to further patron client relationship. The Saudi Arabia could trade the inside development information and in returns could receive construction kickbacks that were in some cases up to 25% of the construction cost. Unlike UAE, Saudi Arabia failed to institute proper regulation to guide the state and private business interaction during the development programs. The outcome of this was development program that could not diversify the Saudis economy. Large project that were unnecessary were created. The resource was thus wasted on unnecessary undertaking. Due to this widespread corruption up-to-date, the Saudi Arabia infrastructure is inadequate. In fact, even necessities like electricity are still in short supply. Another major problem is with Saudi economy is unemployment. The rate is estimated to be above 14% the Saudi per capital income in year 1981 was, $28,600 in 2002 dollar, today it has fallen to $8000 per year in 2002 dollars. This is because the population growth in Saudi Arabia is too high. The youth population in Saudi has almost tripled since the 1980s. The large numbers of unemployed youth have created a huge problem to the government. The idle youth tend to engage in disorderly behavior. Some of them are swayed to militant fundamentalism. This contributes to the regime instability (Prokop and Michaela 209). The current political state of Saudi Arabia is harmful to the political growth. In the recent past, the cases of suicide booming and bloody assault by armed gunmen have increased. This is pushing away potential investors, and making the multinational already in Saudi Arabia worried. Because of the tension, some companies such as WSBC are now giving their expatriate employee flak jackets. Others are offering retention bonuses to their expatriate employees. More and more companies are reducing their workers and may families have been moved to a safe location outside the kingdom. To overcome the trouble the Saudi government has provided a solution, to this end, new strategies have been employed. First the Saudi government is pursuing several strategies to diversify its economy. The government is pursuing the option of expanding petrochemicals such as the polyethylene. In February 2001, the government finished constructing the world largest polyethylene plant at Yanbu. Privatization of companies such as the national company for cooperative insurance (NCCI), Aramco – a company that had a monopoly right on Saudi upstream oil- are some of the of the government economy diversification efforts. In order to supplement the oil revenue, taxation of on business and individuals citizens and expatriate is another option that the government is exploring. The government has however been slow on exploiting the taxation option due to high oil revenues. This is creating a disincentive to exploring alternative government revenue option. As we can see the development outcome of the Saudi Arabia is different from that one of UAE in several ways. The UAE economy is more diversified than that one of Saudi Arabia. While the FDI of Saudi is 0.1% of its GDP, that of UAE is 10%. Furthermore, the political atmosphere is more stable in UAE than in Saudi Arabia. As a matter of fact, many expatriate family member moved out of Saudi Arabia were relocated in Dubai. In addition, the state of business relation is more corrupt in Saudi Arabia than in UAE. A recent corruption survey of 145 countries, listed UAE, as 29th least corrupt nation, while Saudi Arabia was listed as 71th. Other than corruption and lack of diminishing oil incentives, the fraction of Saudi Arabia that resist modernizations has largely influenced the lack of political commitment among the Saudi Arabia ruling family. As indicated earlier the forces manifest its self in two areas- large segment of Saudi populace and the wahhabi religious sect. The groups blackmail the ruling family If the government goes too far in embracing western modernizations, and increasing links with global economies, it may face a domestic backlash. The family fears that If the wahabbis turns against them, they could expose corruption. Also, the religious inspired anger from the people of Saudi Arabia could result to even greater strife. These groups, therefore, pose a greater obstacle to modernization. The factor is one of the greatest causes of the lack of political will for modernization. In contrast, the UAE does not face such numerous religious constrains. Although leaders in UAE apply religious imagery in legitimizing their rule, they do not have a symbiotic relationship as the ones in Saudi Arabia. The UAE religious institutions are subjective to the state. The states control all the religious institution within its bounder. The government does not depend on the support of the religious institutions and their leaders. Additionally, the people of UAE are less religious than their counterpart, in Saudi Arabia and thus they are less likely to strife against government due to modernization. The decrease in oil revenue incentives in UAE has lowered level of corruption unlike in Saudi Arabia. It is important to note that lack of religious constraints has enabled leaders embrace globalization that is driven by the need to seek new source of the revenue. The leaders of UAE have developed their countries infrastructure, exploited the recent global economic opportunities and diversified their economy. Therefore, the UAE has so far escaped the oil curse effects. In a sharp contrast, the Saudis have not experienced such development outcomes. Their leaders have lacked the motivations to develop massive oil wealth (Perkins 340). The widespread corruption and unwillingness to alienate religious motivated forces endangers the regime survival. Because of these two radical development trajectories, UAE is relatively developed while its counterpart, Saudi Arabia, has experienced a relatively slow economic growth. Also, its economy has continued to depend on the oil rents and the rates of unemployment among the youth has sharply risen. The unemployed youths in turn join the militant group further worsening the situation. The outcome has contributed to the substantial political instability; therefore, the people of Saudi Arabia lack economic security in contrast to UAE citizens. Conclusion The UAE development outcome is indeed unusual in comparison to other Arab states such as Saudi Arabia. Contrary to the expectation based on the local trends as well as region development literature, the state has achieved diversified economy and economic stability. The paper attributes the results to the countries willingness to take advantage of the benefits that arise from increased integration of the country economy to the global economy. The process was enhanced by factors such as, the countries decreasing oil revenues, cohesion of the leaders in response to this problem and finally the ability to deliver high-quality service to the countries citizen. On the other hand, the Saudi Arabia has not experienced such development outcomes. Largely, bad leadership is to blame. Their leaders have lacked the motivations to develop massive oil wealth. Its economy has continued to depend on the oil rents and the rates of unemployment among the youth has sharply risen. Works Cited Krane, and Jim. "Dubai Tower to Bring Worlds Tallest Structure to Middle East." Associated Press: March 30, 2005. Lewis, and Bernard. "Islam and Liberal Democracy: A Historical Overview." Journal of Democracy: April 2009. Lidstone,and Digby. "Hitting Home." Middle East Economic Digest: June 4,2004. Lucian W. "Political Science and the Crisis of Authoritarianism." The American Political Science Review: March 2010. Perkins and John L. "Human Development in the Arab World: Islam is blocking progress."Free Inquiry: April-May 2004. Perkins, John L.. "The Next Generation in the Gulf." The Washington Quarterly: Autumn 2007. Peterson, J. E. "The United Arab Emirates: Economic Vibrancy and US Interests." Asian Affairs: July 2003. Prokop and Michaela. "Saudi Arabia: The Politics of Education." International Affairs: no. 79,2007. Read More