All of the small Arab states of the Persian Gulf are now well into their second decade as independent political entities. Bahrain, Qatar and the seven principalities making up the United Arab Emirates became independent in 1971. Kuwait’s independence goes back another decade. Oman, though never a colony, traces its present regime to the British-induced palace coup of 1970. Whether because of or in spite of the startling explosion of wealth in the 1970s, because of or in spite of the fall of the shah and the war between Iran and Iraq, they have survived as states and their regimes have displayed unanticipated continuity. The turbulence of the 1970s roared around them, as around the eye of a storm. The United Arab Emirates stayed united while Pahlavi Iran, the “guardian of the Gulf,” collapsed in a revolutionary paroxysm. None of the smaller states have experienced as serious a political tremor as Saudi Arabia did in November 1979, with the takeover of Mecca’s Grand Mosque. But neither were the small states insulated from the turmoil. Sabotage and demonstrations in Kuwait and Bahrain, ruling circle paralysis in the UAE and deportations of tens of thousands of “alien” workers up and down the Gulf have been regular features of the new age. It is not clear that survival of these states has been accompanied by any substantial degree of internal political consolidation, and the new strains and stresses of economic uncertainty, coupled with the emergence of social forces nurtured in the profligate environment of the 1970s, leave the political future of the Gulf surrounded by question marks.
The circumstances of the Gulf states in the mid-1980s are different in several respects from the preceding era. In the first place, they are operating in a phase of economic contraction. One thing not achieved in the wash of petrodollars was much diversification of their economic base, and today these economies are more tied than ever to the fortunes of the international oil market. From 1980 to 1983, the members of the Gulf Cooperation Council (the smaller states plus Saudi Arabia) saw their oil revenues drop by half, from $145 billion to $72 billion. Along with the constraints on trade and political uncertainties imposed by the Gulf war, this has helped to “shake out” some of the more speculative accumulation ventures. Numerous firms have gone bankrupt or simply disappeared. Recent months have seen a series of mergers among banks and investment houses in Kuwait, Abu Dhabi and Dubai as a result of “non-performing” loans and bad investments, consolidations that involve substantial government bailouts. The collapse of the unofficial stock market nearly three years ago still reverberates in Kuwait today. This incident may have cost the Kuwaiti treasury the equivalent of a year’s oil revenues.  Share values on the official Kuwaiti stock market and real estate values — two prominent investment havens — have dropped by half over the last couple of years, and many Kuwaiti experts feel they have not yet descended to levels representing true values. In Bahrain, commercial rents have dropped from over $26 per square foot to $8 or 9, and business people there are counting, perhaps unrealistically, on the soon-to-be completed causeway with Saudi Arabia to produce a new real estate boom. Throughout the Gulf, it seems, the money machines are not working like they used to.
Secondly, political chills have accompanied the cooling off of the economy. The Iranian revolution and the subsequent war with Iraq have further eroded the relative insulation of the Gulf states from the political currents traversing the region. Initially all the Gulf states quietly but unambiguously supported Iraq in the military conflict. They diverted tens of billions of dollars in “loans” to Saddam Hussein’s war treasury. Kuwait was Iraq’s chief port for shipments of war materiel, foodstuffs and other critical imports. Bahrain and Oman rashly offered their territories as staging points for Iraqi warplanes before Iranian threats and Saudi and American intercession dissuaded them. Iranian recovery on the battlefield, especially in 1982, prompted a panicky, barely disguised neutrality. Kuwait and the UAE in particular drew back from closer alignment with Iraq under Gulf Cooperation Council auspices. Kuwait, the most populous of the small Gulf states and the one with the most sophisticated economy, was also the most vulnerable geographically to both combatants. The UAE, and Dubai in particular, has important trading ties with Iran that proved useful to Tehran as well and encouraged the UAE to see itself as a potential mediator in the conflict. Bahrain, with its oppressed Shi‘i majority, was particularly susceptible among the Gulf states to the revolutionary appeal of the Islamic Republic, and there was frequent agitation and street clashes in the 1979-1981 period, culminating in the December 1981 arrest of some 73 young militants, on charges of plotting the violent overthrow of the Khalifa regime. 
The Gulf Cooperation Council
A third feature of the present period is the emergence of a new regional political system centered around the Gulf Cooperation Council (GCC). The GCC idea was motivated both by economic and security concerns. The member states of the GCC share traditional family regimes, based on tribal affiliations later cemented under British colonial domain, and have no history of sustained decolonization struggles. They have a combined population today of approximately 13 million, of whom 5 million are immigrant workers. This unique demographic structure is even more startling if Saudi Arabia is left out of the calculations: the small Gulf states have a population of 4.1 million, of whom 59 percent are foreign laborers. The largest numbers of these are Palestinian, Egyptian, Pakistani and Indian.
The growth of these immigrant communities may have peaked as the construction boom in the Gulf has leveled off, but their numbers and proportion are not likely to diminish appreciably, as the need for workers in every other sector continues. The governments have used the GCC framework to coordinate policies on immigration and to establish a common passport and naturalization system. They have built up their police and security apparatuses and exploited the vulnerability of the foreign workers to deportation. The last few years have been characterized by periodic purges of foreign workers. In June of 1982, for instance, the UAE arrested and deported 2,000 persons without proper papers, and Kuwait expelled more than 25,000 that November.  Kuwait has expelled thousands more in the two years since, especially after a series of Iranian-inspired bombings in December 1983. The last several years have been ones of great insecurity for foreigners.
The idea of a Gulf collectivity had been haphazardly advanced by Iran, Iraq and Saudi Arabia ever since the period of British withdrawal (1968-1971). But there was no enthusiasm among the smaller states for any framework whose main effect would be to advance Iranian or Iraqi hegemony in the Gulf. In 1975, Saudi Arabia, Kuwait, the UAE and Qatar set up the Arab Industries Organization, a joint effort to establish Arab-run armaments factories in Egypt, but this project was canceled in reaction to Camp David. Saudi Arabia continued to promote a political framework in which it would play the dominant role. Gulf tours by Saudi King Khalid in March 1976 and Interior Minister Prince Nayif in October 1976 led to a very low profile agreement to share intelligence and internal security information. In the economic domain, the Gulf Organization for Industrial Consultancy was formed, with Iraq as a member, in November 1976, and the idea of a Gulf common market was proposed a year later. The military and security aspects of cooperation took on greater urgency following the Iranian revolution, and Iraq began to participate in the intelligence-sharing process. Saudi Arabia took the lead in establishing bilateral security pacts with the small Gulf states, and set up security committees with Pakistan and Jordan, two states whose troops play key advisory and mercenary roles in the armed forces of all the Gulf states. The GCC was formally inaugurated at a first summit meeting on May 26, 1981. A “mini-common market” agreement went into effect in March 1983. Politically, the GCC has emerged as a bloc within OPEC and within the Arab League. It has superceded the Organization of Arab Petroleum Exporting Countries (OAPEC) in trade negotiations with the European Common Market, for instance.
A fourth feature of the Gulf in the 1980s is that the US has completed the process of replacing Britain as the paramount outside power. The fall of the Shah removed Iran as the chosen instrument for this transition. Working now through Saudi Arabia and Oman, the US military presence in the region is more pronounced and visible than in the 1970s. In both Saudi Arabia and Oman, the US has mapped out and supervised the construction of an enormous military infrastructure of bases, weapons systems, intelligence networks and joint commands. Secretary of Defense Caspar Weinberger, in a February 1982 visit to Riyadh, urged Saudi Arabia to assume an even more visible security coordination and assistance role in the GCC. Washington’s rationale is that GCC responsibility for internal security functions, and the bilateral agreements for joint intervention among the GCC member states, should minimize the need for direct US military intervention in the event of a coup or insurgency while at the same time maximizing the facilities and weapons inventories available for such intervention should it be required.
A key element here is the AWACS agreement with Saudi Arabia. This gave the Saudis the necessary military weight vis-à-vis Iran and Iraq to make credible its military linkages with the smaller states, while it avoided the issues of sovereignty and patriotic credibility that would be attached to any formal US basing structure in the Peninsula.  The Saudis have subsequently pushed the other Gulf states to contract for air defense systems that could be tied into the AWACS net. These involve an increased US military advisory role in those states. One of the problems in coordinating the military forces of the Gulf states is the variety of different weapons systems even within individual services, with little compatibility. The AWACS deal is one step towards an increased level of standardization, at least in this area of air defense.
Washington has made a virtue of the political constraints that prevent Saudi Arabia from granting formal US basing rights in its territory, but it has cultivated a more unrestricted relationship with Oman. Following a June 1980 agreement with Sultan Qaboos, the US has spent at least a quarter of a million dollars modernizing bases at Masira Island, Sib, Thumrait and Khasab and has held a series of joint military exercises — Bright Star, Jade Tiger and Beacon Flash. Sultan Qaboos, increasingly reclusive and autocratic by most accounts, has delegated most important decision making to a handful of American, British and Arab advisers linked to their respective intelligence services. The role of these foreign advisers, and the perception of widespread corruption within the sultan’s regime, has even some American officials worried about the longevity of this relationship, but for the present it has provided the US with its most secure military foothold in the Gulf region. 
The US also has a formal military presence in Bahrain. Ever since World War II, the US has had a small destroyer-led naval force, called MIDEASTFOR, based at the port of Jufayr. When the British withdrew, the US renegotiated this access with the Khalifa regime. The regime announced immediately after the October War of 1973 that it would terminate the agreement, but a new, more remunerative agreement was concluded in July 1975. More restrictions on the US presence were negotiated in June 1977.  Most recently, the US Central Command set up its “forward headquarters element” on the Bahrain-based fleet. According to Lt. Gen. Robert Kingston, head of Central Command, “This element serves as my liaison with our embassies and the nations of the region. It also aids in planning and coordinating joint exercises and performs other duties that benefit my command.”  The US also apparently has temporary emergency landing rights at Bahrain’s main airport and similar use of the big Jabal ‘Ali port outside Dubai. 
The Threat Within
Under the cover of a multilateral indigenous solution to potential external threats, the US has managed to extend its own military arm over the entire Arab side of the Gulf, and the rhetoric of “outside threats” has provided the necessary pretense for that military presence.
But the real threats are internal. The articles in this issue examine structural problems facing Bahrain and Kuwait, the two Gulf states whose economic and political institutions are the most developed and sophisticated, and whose social forces are most advanced. These two states, uniquely in the Gulf, share the experience of limited parliamentary politics. The ruling families in both instances abolished even these very restricted exercises in democracy — Bahrain in 1975, Kuwait in 1976. At least in the Bahraini case, Saudi pressure was a major factor. Kuwait reinstated its parliament in 1981 in an even more restricted format, but the elections in February 1985 and the assertiveness of the nationalist deputies has already astounded political circles in the region. The Kuwaiti minister of justice, a member of the ruling family, was forced to resign on May 5 when the parliament censured him for the laws compensating investors in the unofficial stock market crash: The minister’s 12-year-old son received $3.4 million as an injured “small investor.” The oil and industry minister, another ruling family scion, is now confronting sharp questions concerning the Kuwait Petroleum Company’s acquisition of the US minerals firm the Santa Fe.
Bahrain’s ruling family shows no signs of following its Kuwaiti counterpart in allowing the resumption of open politics. The Bahraini response to popular discontent has been to use Saudi financial contributions to strengthen the state’s repressive apparatus on the one hand and to increase the government payroll on the other. Bahrain’s ruling circles continue to stress Bahrain’s future as a “service station” satellite to the Saudi economy. With the expected completion of the causeway between the island and Saudi Arabia this fall, Saudi military access to and political influence in Bahrain will be even greater.
In the UAE, certain unresolved questions of how this consensual federation can move beyond mere political maintenance may soon come to the fore. Differences between the component princedoms, especially Abu Dhabi and Dubai, had been suppressed in the face of the dangers emanating from Iran and the Gulf war. Now Dubai’s Sheikh Rashid, prime minister of the UAE, is on his deathbed. None of his sons are politically competent to take his place. There are still some dozen border disputes among the emirates, and while no one feud threatens to destroy the union, their combination may leave the ruling families with little leeway to undertake necessary reforms.
With the very partial exception of Kuwait, there has been no maturation of political institutions in the Gulf consonant with the enormous social and economic changes that have occurred over the last two decades. Military and security forces have been lavished with equipment and mercenary troops, but each regime in the GCC has felt compelled to guard against potential coups by minimizing the means of coordination between, for instance, its own air force and land forces. “The most important military balance in most Gulf nations,” Anthony Cordesman observes, “is often the one that prevents their own military forces from seizing power.” 
At its fifth and most recent summit, in Kuwait in late November 1984, the GCC announced joint formation of a “joint force,” capable of intervening in any threat against a member state. The many conditions and qualifications attached to this “joint force,” after two years of debate and feasibility studies, testified to the still rudimentary state of cooperation among the Gulf regimes. Joint military maneuvers in Saudi Arabia just before the summit were described by diplomats as “haphazard and chaotic.” Under the new plan, there is a small headquarters staff in Saudi Arabia, and each country will designate certain units (totaling, by different estimates, anywhere from 3,000 to 13,000 men) for collective intervention. GCC Secretary-General ‘Abdallah Bishara described its “significance” as “more political and symbolic than military.”  Since the bulk of these designated forces are Saudi, the agreement may serve more as a license for Saudi intervention in the smaller states than any real joint effort. Kuwait has taken great pains to argue that this force cannot be used to counter “internal subversion,” when in fact this is its only conceivable utility.
To this point, the ruling clans of the Gulf have preserved their borders and their trappings of sovereignty. They have maneuvered through a number of nasty situations, but none have faced the sort of external or internal challenge that would certify their legitimacy and longevity. Their working classes are disenfranchised, isolated and vulnerable. Privilege and differential access to rentier wealth have moderated potential discontent among their citizenry. Nevertheless, it would be rash to assume that the dangerous combination of war and revolution has exhausted yet its potential on the Arab side of the Gulf.
 Financial Times, February 11, 1985.
 See the report by Eric Rouleau in Le Monde, April 4, 1982.
 Joseph Kechichian, “Demographic Problems Facing the Gulf Cooperation Council,” International Demographics, April 12, 1983.
 Anthony Cordesman, The Gulf and the Search for Strategic Stability (Boulder, CO: Westview Press, 1984), p. 568.
 See the two-part report on US-Omani links in the New York Times, March 24 and 25, 1985. Oman was the staging point for the abortive hostage rescue mission in Iran in April 1980 and again for a US commando team ready to intervene in the hijacking of a Kuwaiti airliner late in 1984. Oman reportedly also serves as a key logistical link for US covert aid to Afghan insurgents.
 See the account in Hussein Sirriyeh, US Policy in the Gulf, 1968-1977 (London: Ithaca Press, 1984), pp. 225-230.
 Lt. Gen. Robert Kingston, “Central Command Keeps the Vigil in Turbulent Mideast,” Army (October 1984).
 Washington Post, April 25, 1984.
 Cordesman, p. 495.
 See the report by Edward Mortimer in Middle East International, December 7, 1984.