For residents of the tranquil United Arab Emirates, the sight on June 17 was surreal: the emir’s court in Sharja surrounded by battle-ready soldiers in trenches and jeep-mounted guns, with helicopters buzzing overhead, snipers on the roof and sandbags on its marble balconies. It was the first coup in a Gulf Arab state since the oil boom. For four days, Sheikh ‘Abd al-‘Aziz bin Muhammad al-Qasimi held out at the diwan with a few hundred emiri guard mercenaries, claiming he was rightful ruler of Sharja. “I entered with a white dishdasha [man’s robe] and will leave with a red one if I have to,” he is said to have told a visitor.

The short-lived coup was a painful reminder to Gulf rulers of how social and economic strains caused by the collapse in oil prices can threaten stability. The pressure of neighboring Dubai and Saudi Arabia to quash it showed how those rulers need to preserve the status quo — or at least a consensus on how to accommodate change.

Passed over for the succession when his eldest brother, Sheikh Khalid, was murdered in 1972, ‘Abd al-‘Aziz became one of the emirate’s wealthiest businessmen, president of its chamber of commerce and commander of the emiri guard. His daring bid for power reflected his own frustrated political ambitions but also those of other recession-hit merchants and disenchanted Sharja sheikhs.

‘Abd al-‘Aziz acted on June 17 while the ruler, his younger brother Sheikh Sultan, was on one of his many private trips to Britain. He announced through the official emirates news agency, WAM, that Sultan had stepped down at the request of his family after admitting to gross financial mismanagement. Sultan’s wife quickly denied the report and Sultan himself flew back to Dubai with the full support of its ruling family, which issued a statement the same night calling events in Sharja “totally unacceptable.”

If the coup attempt came as a surprise to most UAE residents, few informed observers would deny conditions were ripe. Third largest of the seven UAE emirates, with a population of about 220,000, Sharja piled up debts of around $1 billion, fulfilling development plans way out of proportion to its meager oil and gas revenue. Cash flow problems had been chronic for years, but when oil prices plummeted in 1986, the government defaulted on virtually all debt to local contractors and banks — a sum totaling some $800 million according to bankers. (Sultan’s advisers put the international debt at $340 million and local debt at $540 million.) Oil and gas income fell to some $220 million last year from some $450 million in 1985 while scheduled debt repayments totaled about $150 million each year, bankers say.

Revenue comes from condensate and gas sales from the onshore Sajaa field, crude oil sales from the offshore Mubarak field and a newly commissioned LPG plant fed by Sajaa gas. Unlike other emirates, Sharja was unable to increase oil production levels to compensate for lower prices.

The UAE boasts the world’s highest per capita income, but nearly all its wealth is concentrated in Dubai and Abu Dhabi, the two largest emirates. A federal budget funded 80 percent by Abu Dhabi poured money into the poorer northern emirates in the 1970s and early 1980s, but these funds have since shrunk drastically, adding to Sharja’s woes.

The central theme of ‘Abd al-‘Aziz’s revolt was the need for more rational economic management with greater input by the people. “How I have cried when I see the state of many of you,” he told Sharja residents in a message dropped by helicopter on June 19. “My rule will never be arbitrary in taking decisions and implementing them. Rather there will be democracy to bring us out of this crisis.” He decreed the establishment of an appointed parliament or consultative council and a formal cabinet (executive council) similar to those existing in Abu Dhabi but lacking elsewhere in the UAE.

Ironically, Sheikh Sultan is one of the Gulf’s most progressive rulers, and certainly its most educated. He once proposed a partially elected parliament for the emirate — unheard of in the Gulf outside Kuwait — and was drawing up a system of neighborhood advisory councils when the coup took place. Sultan’s undoing was his lofty and autocratic style, lax financial management and increasingly long absences, often for historical research. A Ph.D. from England’s Exeter University, he was working on a history of the Portuguese colonial era in the Gulf. “When the money dried up Sultan took off in another direction to higher studies, leaving the emirate to sink into debts until they reached $1.4 billion,” ‘Abd al-‘Aziz complained.

Sultan’s 1985 ban on alcohol, the first in the UAE, stirred resentment among the business community, which saw a fledgling tourist industry nipped in the bud and restaurant and hotel business lost to Dubai.

‘Abd al-‘Aziz said Sultan refused to even let him know oil and gas production levels. Corrupt advisers squandered state money on the gambling tables of Europe and the United States while — as he put it — widows suffered, employees went without salaries, and debtors were thrown in jail. By Gulf standards, it was an astonishingly frank and articulate critique of power. But it soon became clear that the message was falling on deaf ears. ‘Abd al-‘Aziz gained little support from either his natural constituency in Sharja or any outside power.

Abu Dhabi appeared to support him at first. UAE president and Abu Dhabi ruler Sheikh Zayid bin Sultan al-Nahayan was exasperated by having had to pay virtually all of a $200 million Euroloan to Sharja guaranteed by Abu Dhabi in 1978 (he covered the last $9 million installment in May). Shaikh Zayid may also have sought to break the two-year old rapprochement between Sharja and Dubai, an alliance which reduced Abu Dhabi’s weight within the federation. Most observers believe he gave ‘Abd al-‘Aziz the green light, authorized the transmission of his takeover announcement on the Abu Dhabi-based WAM, then backed down when the rebels’ isolation became clear.

‘Abd al-‘Aziz reportedly named members of his new executive council, but nearly no one accepted — either out of mistrust or fear he would not succeed. Senior al-Qasimi shaikhs streamed into Dubai’s guest palace to pledge loyalty to Sultan while the two biggest regional powers — Iran and Saudi Arabia — also backed a return to the status quo. According to one diplomatic source, Iran briefly moved troops into the UAE side of Abu Musa island in the Gulf, which it jointly administers with Sharja, to back a call for a quick resolution.

Seeing the opposition to ‘Abd al-‘Aziz, Shaikh Zayid brokered a compromise, sanctioned by the UAE Supreme Council on June 21, under which Sultan would return as ruler and ‘Abd al-‘Aziz be given the new title of crown prince.

The alternative would have been a prolonged standoff straining the fragile federation by pitting Abu Dhabi and Dubai against each other and opening up the possibility of foreign intervention. Sheikh Sultan himself warned of a “Central American situation in the Gulf.”

The deal satisfied the UAE rulers’ desire to uphold legitimacy while giving ‘Abd al-&lquo;Aziz a foothold and — theoretically at least — new political powers. The emiri guard was to have been dissolved into the federal UAE army and an executive council formed. However, at this writing little of the accord appears to have been implemented. The 2,400-strong emiri guard has been split into three groups — those loyal to ‘Abd al-‘Aziz, those loyal to Sultan and those who have joined the federal army. Sultan, protected now around the clock by Dubai emiri guards, has yet to give ‘Abd al-‘Aziz any formal powers, and tension between the brothers remains high.

How to cite this article:

Christian Huxley "“A Central American Situation in the Gulf”," Middle East Report 148 (September/October 1987).

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