The Limits of Gulf Arab Aid: Energy Markets and Foreign Policy

Abstract

The Arab Gulf States (AGS), or the member states of the Gulf Cooperation Council (Saudi Arabia, Kuwait, Oman, Bahrain, Qatar and the United Arab Emirates), have historically used foreign aid and humanitarian aid as a quiet tool of their respective foreign policies within the wider Middle East. More recently, however, we have seen targeted financial aid and military assistance by these states, particularly Saudi Arabia, Qatar and the United Arab Emirates, towards neighbours in crisis. The UAE, Saudi Arabia and Qatar have used financial and military aid to jockey for influence within Egypt’s evolving political leadership, to attempt to remove Syria’s Assad from power, to counter the growth of Islamic State movement in Iraq, to influence political battles in Libya, and even in newly democratic Tunisia. Windfalls in wealth generated from the rapid ascent of oil and gas prices between 2009 and 2014 allowed budgets to expand for both military expenditure and financial aid. The dramatic fall in oil prices in late 2014 raises questions about the ability of these states to continue their generosity and the exercise of economic statecraft in the MENA region. The article tracks the expansion of Arab Gulf State aid in the wider region after 2011, with attempts to correlate the movement of oil prices with financial aid and more interventionist foreign policy historically since the 1970s. From this it engages with theoretical debates about how effective aid can be as a foreign policy tool. We would expect as Gulf aid is dependent on the ability of states to earn income from natural resources, the price of carbon energy should have some effect on aid allocations. The evidence presented here reflects a more nuanced relationship between energy markets and Gulf Arab state aid. The politics of Gulf Arab state aid is, above all else, strategic. Political goals can override economic prudence.

Read More

This article was originally published in the European Centre for Energy and Resource Security ‘Reflections’ Working Paper Series – Volume 1, Summer 2015.

The views represented herein are the author's or speaker's own and do not necessarily reflect the views of AGSI, its staff, or its board of directors.