1 - State formation and oil

Summary

A few short decades ago Kuwait and Qatar were British dependencies, little known outside the Middle East. Today their oil resources and strategic location astride the globe's principal energy routes have brought them the attention of the world. In the intervening years Kuwait and Qatar have experienced a radical but apparently smooth transition from pearling to petroleum, poverty to prosperity. Oil revenues have fueled the development of new economic structures, new welfare systems and radically different and materially better lives for their inhabitants. Yet these rapid changes have been accompanied by remarkable political continuity at the apex of the systems: these two countries continue to be ruled through monarchical institutions of long standing. Despite the obituaries regularly written for these regimes, their rulers have survived the arrival and departure of Britain, the trials of independence, the challenge of populist Pan-Arabism and radical Islam and, finally, the demands of oil wealth.

This continuity has been achieved because of oil, not despite it. However, apparent stability on the system's surface has been accompanied by powerful transformations in the distribution of power just below the surface. The development of oil in the postwar years has led to the withdrawal from formal political life of the merchants, the group which historically pressed its claims most effectively on the state. Merchant claims have not been put forward because of a tacit arrangement between the rulers and the trading families: a trade of wealth for formal power.