A blue helicopter flies out over the harbor at Nice, landing gently on an enormous yacht of teak and mahogany, swaying gently at anchor. The passengers step out: A correspondent and photographer from the Spanish photo magazine Hola! are arriving to get a feature story on ‘Adnan Khashoggi, flamboyant Saudi millionaire, reputed to be one of the world’s richest men. Khashoggi emerges to greet them in a white suit, then shows them around his plush vessel, introduces his beautiful Italian wife and gestures to the many white telephones from which he does business all over the world. Amid the grandeur, Khashoggi admits he has recently had a few setbacks: A business deal in Salt Lake City has lost some $70 million. But overall business is prospering, he reports. To underscore the good times, he tells his visitors he has just changed the lettering of his yacht’s name from gold to platinum.

More than anyone else, Khashoggi embodies the myths of the Gulf businessman in the era since the big oil price hikes: confidant of princes, broker of deals, jet-setter, rich beyond the dreams of avarice. Son of the personal physician of the Saudi king, he parlayed his connections into huge commissions on arms deals in the mid-1970s and has since invested in businesses and real estate worldwide.

Though other Gulf millionaires like Ghayth Far‘oun and Mahdi Tajir fit the same pattern, the new bourgeoisie of Saudi Arabia and the Gulf are not all clones of Khashoggi, rich on commissions. Neither are they royalty, able to command stipends of $25 million (the emir of Kuwait) or $50 million (the king of Saudi Arabia) each year. Their accumulation has been the work of shrewd and classic business acumen, helped by managers trained in London banks and American business schools. They knew how to take advantage of the exceptionally favorable business conditions of the oil boom to establish their fortunes, helped by governments which did everything to promote their rise. There now has emerged a real class of functioning capitalists in something like the classic mold. Its investments go beyond dealerships for Western companies. They include banks, construction firms, transportation companies, and even extensive manufacturing enterprises. ‘Umar ‘Aqqad and Sulayman ‘Ulayan, two of Saudi Arabia’s wealthiest and most successful manufacturers, are examples of this new breed.

A dozen major Gulf banks have arisen in the past ten years and today they claim some 10 percent of the Euromoney market. They also are active in direct foreign investments, including new financial subsidiaries, that totaled nearly $5 billion in 1981. A number of new Gulf bankers like Kuwait’s ‘Abd al-‘Aziz Saqar have risen to international prominence, joining the Amman-based Palestinian banking giant ‘Abd al-Majid Shuman. In an increasingly open and fiercely competitive world market, and especially in the difficult times since the oil prices have begun to decline, business success has by no means been guaranteed. But the aggressive business style and wide international connections of these new banks suggest that many will continue to prosper.

Is this new bourgeoisie “nationalist” or “comprador”? The question today seems almost irrelevant. Like their older cousins in Turkey and Egypt, the new bourgeois of the Gulf are ready to wave the nationalist banner when it suits them, but nearly all are intimately linked to international capital through investment partnerships at home and abroad. By law, local businesses must be majority-owned by nationals — this is the nationalist side of the coin; but the vital minority partner is often a foreigner — this is the international side.

The development of capitalism in the Gulf and the Middle East is not just a matter of big business, of course. Capital is emerging in many forms — small and medium-sized as well as big. The prosperous farmer, the garage or restaurant owner, the merchants investing in local stocks. Capital also requires a new class of wage workers. In the Gulf, these workers have mostly been foreigners with no local political identification or rights of any sort. Today many foreign workers are leaving, but several million will remain. Together with a growing number of indigenous workers, they will be the new proletariat that is the necessary complement of the new bourgeoisie. The Gulf bourgeoisie is still underdeveloped. But times are changing and ‘Ulayan’s cargo ships are more a sign of the future than Khashoggi’s yacht. No one should underestimate the significance or the power of this new class, either in the Gulf or in the region as a whole.

The following profiles of Gulf multimillionaires do not fully reflect the difficulties of the last two years, when values of holdings in the Gulf have sharply declined. In most cases, however, the persons profiled have extensive foreign holdings and they have been able to reorganize their local businesses on a new and still profitable basis.

Saudi Arabia

’Abd al-Latif Jamil, founder of the United ’Abd al-Latif Jamil Group, began representing Toyota in Saudi Arabia in the early 1960s, at a time when sales were relatively modest. His two sons, Yusuf and Muhammad, helped to develop this dealership into the kingdom’s second largest merchant group, with a turnover estimated at over $1 billion in the early 1980s and profits on sales of at least $100 million. The Toyota dealership still accounts for some 90 percent of the group’s income. The family invested heavily in real estate north of Jidda in the early 1970s, land it sold off at a great profit 10 years later. An investment arm has been set up, based in Monte Carlo and run by Yusuf, which has given the family an international portfolio especially strong in real estate and shipping. Estimated wealth is currently $500 million.

Ahmad Juffali began working as a teenager for the family trading firm in the early 1940s. The family made breakthroughs as representatives of the British electronics firm GEC and as supplier of electricity to the city of Ta’if. The company hired the very talented Palestinian manager ‘Umar ‘Aqqad, and secured the Mercedes dealership in 1960. Soon Juffali and Brothers, had a near monopoly on truck sales in the kingdom. Its 1982 turnover on wholly-owned businesses, estimated at $1.5 billion, made it the largest merchant group in Arabia. The group now includes 60 sales agencies representing Siemens, Massey-Ferguson, Michelin and IBM, though the Mercedes dealership is still the centerpiece of the family fortunes. Juffali also holds important shares in a number of joint ventures including two of Saudi Arabia’s biggest cement plants, a wire mesh factory, an air conditioner factory, a truck assembly plant and other ventures with Fluor, Siemens and L. M. Ericsson. Juffali and Brothers also owns real estate in the kingdom and abroad and $100 million in assets abroad, including holdings in the United States.

Khalid Salim Bin Mahfouz‘s father, Salim Ahmad, came to Mecca in 1915 and worked for many years for the Ka‘aki family, who were foreign exchange dealers. In 1949, Salim joined the Ka‘akis as a partner and in 1954 persuaded King ‘Abd al-‘Aziz to grant permission to make this partnership the kingdom’s first bank. The National Commercial Bank was chartered in 1954. The Bin Mahfouz family today owns 51 percent and the Ka‘aki family owns the rest. Salim, now in his late seventies, still serves as chairman of the bank; Khalid is the deputy general manager in charge of the international department, and has a net worth of $1 billion. He owns properties in Saudi Arabia and abroad, including real estate in Texas and Florida and a large holding in the Mercantile Texas Corporation, as well as a share of the National Commercial Bank. Another brother, Muhammad, is also active in the management of the bank, which itself owns many Saudi companies in such fields as electricity supply, the manufacture of cement, gypsum and fertilizer, insurance and real estate. The bank also participates in 11 other banks, mostly international, including the Arab Jordan Investment Bank and the Arab Latin American Bank. Earlier this year the bank announced it had set aside $189 million to cover bad debts, though at the same time it announced a profit of $27 million.

Sulayman ‘Ulayan is perhaps Saudi Arabia’s most diversified and modern businessman, with an estimated wealth of $1.2 billion. He attended an American missionary school in Bahrain and started work in business contracting for Aramco. The ‘Ulayan Group includes import agencies for sales and service of cars, construction equipment and electric engines, importing and distribution of packaged foods, transport, insurance brokerage, real estate, equipment leasing and tug boats. A pioneer in joint ventures, the ‘Ulayan Group now has over 50 with some of the major international corporations, including ventures in metals fabrication, plastic pipe and drilling services. Group holdings also include substantial real estate, both in Saudi Arabia and abroad. The Saudi firms ‘Ulayan fully owns had a turnover of $500 to $700 million per year in the early 1980s, and estimated annual profits of $60 to $100 million. His foreign investments include real estate and securities portfolios in Europe and the United States amounting to over $500 million, held in an elaborate maze of offshore tax havens. ‘Ulayan’s major investment vehicles are Competrol, reportedly owned 50/50 with Prince Khalid Bin ‘Abdallah, which owns 1 percent of Chase Manhattan, 8 percent of First Chicago and 17 percent of Donaldson, Lufkin and Jenrette. Thirty percent of Competrol’s investments are in banking, with substantial other blocks in oils and high tech. ‘Ulayan’s 1 million shares of Mobil Oil Company won him a seat on Mobil’s board from 1980-1983. ‘Ulayan is a man of simple tastes, without a yacht or private planes. His group is the most institutionalized, least personal and best managed in the Middle East.

Sulayman and Salih al-Rajhi started a foreign exchange business in Qasim in the 1930s. They soon were joined by their brother ‘Abdallah and moved to Jiddah, Medina and Mecca to do business with the pilgrims. They also acted as early financial advisers to the late King Faysal. The Al-Rajhi Company for Currency Exchange and Commerce was founded in 1978 by merging the banking interests of the three brothers with the contracting business of a fourth brother, Muhammad. The firm, worth an estimated $7 billion in the early 1980s, is the giant of the family firms of the kingdom. It controls enormous real estate holdings and very large interests in industry as well. The exchange/banking part of the business has 160 branches throughout Saudi Arabia and maintains an office in London. Sulayman is the wealthiest, with a 42 percent stake in the company. His $3 billion makes him a strong contender for the richest man in the world.

‘Abd al-‘Aziz ‘Abdallah Sulayman, was the son of the first Saudi finance minister, ‘Abd al-‘Aziz Sulayman. He inherited a fortune from his father, including the cement franchise for the Hijaz. He went on to make his own fortune in construction through Rolaco Services. Today his company has vast holdings in construction, services, banking and trade, including a quarter share of the lucrative Datsun agency. Group trading turnover was estimated at some $300 million in the early 1980s. Sulayman also has considerable holdings internationally, including in the US, in real estate, transportation, industry (cement plants in Nassau and Bermuda, among others) and shipping. His real estate holdings include various US hotels. He is also a shareholder of Petra Capital Corporation, the first Arab-owned investment bank in the United States. His wealth is an estimated $1.5 billion.

United Arab Emirates

‘Abd al-Rahim Bin Ibrahim and his brother ‘Abd al-Latif, from a prominent merchant family possessing fast dhows, accumulated their fortune by smuggling gold in the 1960s and 1970s. ‘Abd al-Rahim is chairman of Dubai Bank, in which he has a controlling interest with his brother. They also own Galadari Brothers, a trading and investment house, which owns the Dubai Intercontinental Hotel, several automobile dealerships, the Khaleej Times, an engineering and construction firm, and other hotel ventures, notably in Switzerland and Sri Lanka. ‘Abd al-Rahim owns 70 percent of Oriental Credit in London and also has minority shareholdings in Khalij Commercial Bank of Abu Dhabi and Arabian Investment Banking Corporation in Bahrain. A combination of bad management and the downturn in oil revenues has forced the Galadaris to ask international banks to reschedule loans worth hundreds of millions of dollars.

Mahdi Tajir, born in Bahrain, came to Dubai as a customs clerk in the days before the oil boom and initially took advantage of the princedom’s role as an entrepot for smuggling gold to India and Pakistan. Having become the main confidant of Sheikh Rashid, he negotiated Dubai’s oil concessions and acquired a reputation as an indispensable middleman. In the words of one banker in Dubai, “If you want to do business or get a contract, add 5 to 20 percent for Mahdi and it will happen. Otherwise, save yourself a trip.” He is also on close terms with Sheikh Rashid’s rival, Sheikh Zayid of Abu Dhabi. Reports of Tajir’s wealth ranged as high as $5 billion in the mid-1970s, though financial experts consider this sum exaggerated. His commissions are not limited to deals involving only the United Arab Emirates: Tajir also gave, for a fee, final approval for civilian and military aircraft purchases by Egypt and Syria that involved UAE funds. While serving as UAE ambassador to France and Britain, Tajir entered a partnership with Kamal Adham, confidant of King Faysal, head of Saudi Arabia’s intelligence and national security affairs and a manager of the Saudi king’s fortune. Among other accomplishments, Adham was the key go-between in Faysal’s urging Sadat to dismiss Soviet military advisers in 1972, and he then arranged for Saudi-financed European arms sales to Egypt. The joint Tajir-Adham enterprise, known as the Sara Fund, is also owned by the London-based Lonrho. The fund served as a discreet investment venture “for prominent Egyptian personalities who do not want to be publicly identified with their investments.” Tajir and Adham both went to Victoria College, an elite boarding school in Alexandria, as did Arabia’s most flamboyant money man, ‘Adnan Khashoggi.


Yusuf Ahmad al-Ghanim comes from a merchant family trading in timber and gravel. Yusuf went to school in Scotland, and expanded the family’s business into foreign deals in contracting and shipping. He won a host of new agency contracts for the firm in Kuwait. The keystone of the business was the General Motors dealership. Yusuf eventually turned the firm over to his third son, Qutayba, who has a degree in business administration from Berkeley and who has reorganized and rationalized the business. Interests now include auto, truck and heavy machinery dealerships, electronics, consumer durables, food importing, air freight, car rental and travel services. Qutayba bought Kirby Industries of Houston, Texas, in 1975 — a maker of prefabricated steel buildings. This firm now has a factory in Kuwait which exports throughout the Gulf. The firm’s annual turnover was about $500 million in the early 1980s.

Khalil ‘Uthman is a veterinarian who emigrated to Kuwait from Sudan and set up a Gulf International Company with Sheikh Nasir of the ruling Sabah family. Gulf International by 1975 included 28 companies in 14 countries, ranging from fishing in Senegal to match factories in Nigeria to air taxis in the Gulf. Ten of these firms are in ‘Uthman’s native Sudan. He owns the majority share and manages the Sudan branch himself. Gulf International, in the 1970s, purchased more than 20 percent of the stock of Lonrho, a London-based multinational whose extensive African mining interests prompted former British Prime Minister Edward Heath to denounce the firm as the “unacceptable and unpleasant face of capitalism.”

‘Abd al-‘Aziz Hamad Saqar is from an old Kuwaiti merchant and shipowning family. His father, Hamad ‘Abdallah, was responsible for temporarily forcing the ruler to accept a council in the 1920s, later served as speaker of the National Assembly, and recently headed the Kuwaiti Chamber of Commerce — the de facto spokesman for Kuwait’s merchant community. ‘Abd al-‘Aziz was schooled in Bombay and founded the National Bank of Kuwait in 1959, serving as chairman until 1965 and vice chairman since. He was also instrumental in creating the FRAB-Bank, the first Euro-Arab banking consortium, in 1969. He is worth an estimated $200 million.

Sources: Institutional Investor, June 1983, pp. 137-138, and August 1984, pp. 32-35; Michael Field, The Merchants (London: John Murray, 1984); Fatima Babiker Mahmoud, The Sudanese Bourgeoisie (London: Zed Books, 1984); “Arab Money Men,” Washington Post, September 14-19, 1975; New York Times, July 22, 1983.

How to cite this article:

James Paul "The New Bourgeoisie of the Gulf," Middle East Report 142 (September/October 1986).

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