At a time of relative retrenchment of the United States from the Middle East, a new force is exerting itself throughout the region and reshaping regional life in a variety of ways—from its urban and built environment to its food security to the outcomes of civil and international wars, from Libya to Syria, and from Yemen to the Horn of Africa.

The Arab states of the Gulf Cooperation Council (GCC), led by Saudi Arabia, the United Arab Emirates (UAE) and Qatar, in particular, are playing an unprecedented role in shaping regional developments, largely on the basis of their financial clout. Gulf states deposit billions of dollars in Egyptian, Yemeni and Sudanese central banks to “stabilize” these regimes; emissaries of the UAE hold trade meetings with regime-linked Syrian businessmen to formulate plans for Syrian reconstruction; Saudi-led forces continue to wage war in Yemen while the UAE maintains control over globally decisive maritime trade routes, ports, and logistics hubs across the Red Sea, with GCC rivalries now playing out across the fractured states of the Horn of Africa.

Gulf capital is also reinventing itself as a global force to be reckoned with. Saudi Arabia’s sovereign wealth fund pours billions into American tech companies and acquires important European companies. Gulf capital continues to strengthen significant portions of American and British financial industries. In 2008, British Prime Minister Gordon Brown even appealed to the Gulf states to use their financial capital to mitigate against the worst effects of the global financial crisis.[1] In East Asia, the Gulf states form one of the region’s biggest trading partners. In 2016, trade volume between China and the GCC reached $117.5 billion, with a significant portion of China’s energy supply coming from the GCC.[2] But these relationships are not confined exclusive­ly to the oil and gas sectors. Earlier this year, the UAE announced $3.4 billion in investment deals with China in relation to the use of Dubai’s Jebel Ali Free Zone as part of China’s ambitious Belt and Road Initiative.[3]

The rise of Gulf capital as a regional and even global power broker is shrouded in opacity and obscurity.  As states that lack necessary channels for political transparency and public accountability, one is left only with traces in business papers, financial documents and government vision statements. But it is the great virtue of Adam Hanieh’s Money, Markets, and Monarchies: The Gulf Cooperation Council and the Political Economy of the Contemporary Middle East to weave these disparate threads together, fusing granular empirical detail with a wider analytical scope. Through eight chapters, Hanieh’s analyses range from a theoretical discussion of regional scales, to empirical studies of real-estate, financial, agribusiness and telecommunication sectors, to envisioning future trajectories of further Gulf dominance across the Middle East. Taken together, the book provides a sophisticated framework for understanding how and why Gulf capital has come to hold such a prominent place in regional and global dynamics.

Money, Markets, and Monarchies is Adam Hanieh’s third book examining the importance of Gulf-based capital in shaping the political and economic dynamics of the Middle East. Building off his first two works, Capitalism and Class in the Gulf Arab States and Lineages of Revolt, this book is a culmination of Hanieh’s deep intellectual and empirical engagement with Middle Eastern political economy, crystallizing his efforts at charting the growing centrality of the Arab Gulf states and Gulf-based capital.

The Arab states of the Gulf Cooperation Council (GCC), led by Saudi Arabia, the United Arab Emirates (UAE) and Qatar, in particular, are playing an unprecedented role in shaping regional developments, largely on the basis of their financial clout.

Hanieh’s book is a valuable and timely work for academics, researchers, and journalists interested in understanding the growing power of Gulf monarchies across the Middle East. The book carefully details the inexorable links between regional economic liberalization, the expansion of Gulf capital and the entrenchment of monarchical power across the region. It scrupulously researches the remaking of a wide variety of sectors under the increasing concentration and centralization of Gulf capital; constructively insists on complicating the divide between private and state capital in the GCC; and most importantly, develops a regional approach to understanding the influence of Gulf capital and the intensification of socio-economic pressures that preceded the uprisings of 2011. As a result, Money, Markets and Monarchies, provides the basis for future critical thinking and research about the increasing weight of Gulf states regionally and globally and is essential reading for those interested in the political economy of the Middle East.


Finance as a Conduit of Gulf Capital

Hanieh’s analysis of the imperious rise of Gulf capitalism centers largely on the growing weight of finance in global capitalism. The perfect handmaiden to globalization, finance is hypermobile and relatively frictionless. Acting as a kind of glue, financial markets circulate capital through various sites of accumulation, helping to bridge a range of private and public actors, activities, sectors and scales together. Finance sutures together geographically disparate national capitals to forge an increasingly integrated world market. Yet its very movement has profound impacts on the production of uneven geographic space and scale. Some cities, countries, and regions are embedded within financial circuits, whereas others are excluded from them.

Through painstaking research Money, Markets, and Monarchies details the influence of Gulf-based finance on the political economy of Middle Eastern countries. As the center of Middle Eastern finance moved from Lebanon to the Gulf, finance has been an important conduit through which Gulf capital has expanded throughout the region. As Hanieh pithily writes, “GCC financial markets are a critical space around which capitalism in the Middle East as a whole increasingly pivots” (101).

The overwhelming majority of foreign investment in the financial sector in nine non-GCC Arab countries (Algeria, Egypt, Jordan, Iraq, Tunisia, Libya, Syria, and Yemen), for example, originate in the Gulf. In Lebanon, just over 50 percent of the country’s bank assets are held by GCC-related banks, in Palestine this figure is 63 percent, and in Jordan it is as high as 86 percent. Wherever state-owned banks hold a small percentage of total bank assets, the share held by GCC-related banks is higher. Moreover, there is a high degree of Gulf investment into existing Arab banks. Bank Audi, Lebanon’s biggest bank, is now home to four Gulf investors who hold around 30 percent of the bank’s shares. Conversely, many non-GCC Arab firms have chosen to list their companies on Gulf stock markets, thereby “deepening the interlocking of ownership structures across the regional scale” (101).

Thus, the liberalization of the financial sector in the Arab world has opened the door to the primacy of Gulf capital. Not only does this allow for the internationalization of Gulf capital, but it also harmonizes domestic accumulation structures across the Arab world to the rhythms and tempos of accumulation in the GCC.

As a consequence, the centralizing effects of Gulf capital have serious consequences for Middle Eastern societies. Across the Arab world, there is a high degree of private and pubic debt—often a result of increasing financialization, expanding credit markets, volatile commodity prices and food insecurity. According to a UN Habitat report, 40 percent of the income of the active population in Tunisia goes towards paying mortgage debt. In Lebanon, 38 percent of the budget is spent on debt servicing. In Egypt, interest repayments on domestic debt account for 27 percent of government expenditure. With much of this debt flowing to banks and other financial institutions, Hanieh argues that “the Arab state thus increasingly mediates the transfer of national wealth to large Gulf-related banks” (192).

But debt also forecloses alternative socio-economic structures and constrains political possibilities. Indebted governments are compelled to intensify a politics of austerity, further trapping these societies in cycles of debt. Investments in social programs or infrastructural developments are often stalled. Popular movements are unable to realize their demands at the state level due to the requirements of foreign creditors and domestic capitalists. The ensuing scenario is one where alternative politics are asphyxiated and increasingly circumscribed by an atrophied status quo.

In addition to regional expansion and dominance, Gulf capital also underwrites a significant portion of international finance capital. While many would associate the Gulf solely with oil and hydrocarbon exports, the important role that Gulf financial surpluses have played in underpinning the current phase of neoliberal globalization has been rather understudied.

Gulf capital has come to strengthen US debt and capital markets, sustaining high US current account deficits through the continual purchases of US treasury bonds. It also plays a pivotal role in enabling the UK banking sector to function as a key node within the global web of financial markets and the offshore banking system. In the post-2008 financial crisis period, the Gulf remained a viable source of effective demand in financial markets. Gulf investors took high-profile positions in some of the world’s biggest firms through foreign direct investment and mergers and acquisitions. Companies such as Credit Suisse, Barclays, Volkswagen and British Airways all witnessed major investments from Gulf-based investors. The region is also an important consumer of commercial services, military imports, machinery and transport equipment and luxury goods. It is estimated that the average Qatari citizen spends $4,000 per month on luxury products. More concerning, however, is the colossal sum of money dedicated to military imports. The GCC has become the largest market for weapons in the world, the consequences of which are most palpable in war-torn Yemen.

Not only does Gulf capital uphold the current arrangement of neoliberal globalization, but it also remakes it in its own image. Being a major logistical and transport hub, the Gulf has made significant financial investments in this sector. For example, SoftBank’s Vision Fund—financed in part by Saudi Arabia’s Public Investment Fund—recently announced a $1 billion investment in Flexport, a software-focused freight forwarding startup.[4] DP World acquired Denmark-based Unifeeder Group, one of the largest logistics companies in Europe, to the tune of $750 million.[5] The Gulf’s financial energies accelerate “the turn time of commodity trade, enabling the Gulf’s deeper integration into the global accumulation circuits that stretch from East to West” (64). As such, the increasing financialization of Gulf economies provides some of the lifeblood of neoliberal globalization while altering the form it takes.


Rethinking the Gulf States as a Region

Financial flows form a critical component in Hanieh’s approach to developing “the regional” as a distinctive scale in Middle Eastern and global political economy. Central to Hanieh’s project in Money, Markets, and Monarchies, is an understanding of the Gulf as a region consisting of different political hierarchies and axes, as opposed to the simple agglomeration of individual states.

Focusing on transnational relations, Hanieh strongly urges researchers to resist the temptations of “methodological nationalism”—an underlying assumption undergirding much of social science research that fetishizes the nation-state as a hermetically-sealed container of socio-political relations. Whereas previously he sought to overcome this by focusing on class formation, Hanieh devotes significant attention to the question of scale, as developed by critical geographers such as Neil Brenner and Erik Swyngedouw. But instead of moving away entirely from a focus on class formation, Hanieh reformulates and embeds his analyses of class formation and capital accumulation within questions of social space, scale, and territory. As such, spatial political economy, and the concept of scale, in particular, are foregrounded in this book.

Some critics, however, may argue that Hanieh’s focus on the regional scale ultimately fetishizes this scalar unit, enacting a form of “methodological regionalism.” His work, however, makes clear that a focus on the formation of the regional scale is not the simple insertion of yet another sub-division of the scalar spectrum, stretching from the individual to the global. Rather, Hanieh’s inquiry draws on the question of how the Gulf constitutes global capitalism. By investigating and examining the relations between the Gulf and the global economy from different vantage points, Hanieh seeks to reveal qualitatively new insights into the nature of global capitalism, including financialization, the commodification of agriculture and the urban built environment as modes of accumulation.

Drawing upon the concept of “internal relations,” developed by Bertell Ollman, he argues that these different scales are constituted precisely through their relations with one another. Put differently, the arrangement of scales that produce the global economy must not be conceived of as distinct scales that merely interact with one another. Instead, the scales themselves are constituted through their very relations—regional scales develop through global processes, and vice versa. Paying attention to these relations, Hanieh writes, “puts an emphasis on process, practices, and interconnections, rather than on the supposedly bounded, pre-given and discrete spatial units through which we are accustomed to viewing the world” (18). Herein lies the fundamental point. Examining how such scales are produced requires attention be paid to processes such as capital accumulation and class formation—all of which take place in real geographic space.


Gulf Capital and Neoliberal Restructuring

Central to Hanieh’s analysis is the inexorable link between neoliberal reform and Gulf capital. We cannot fully understand the neoliberal reforms that swept the Arab world in the 1990s and 2000s without examining the role of Gulf-based capital. From telecommunications to real estate, and from urban development to agriculture, neoliberal reform and the internationalization of Gulf capital have traversed the Arab world together, hand in hand.

When Egypt carried out a series of liberalization reforms under President Mubarak, for example, Gulf-based companies became major stakeholders in Egyptian agribusiness firms, sometimes acquiring them altogether. These reforms, initiated by President Sadat and intensified under the IMF’s structural adjustment program, were a precondition for the influx of Gulf capital, which in turn, acted to deepen liberalization itself. What could also be termed “primitive accumulation,” the Gulf undoubtedly played a central role in driving this dynamic.

The result was that “Egypt became the major platform for Gulf agribusiness firms in the Arab world” (135). Not only have Gulf conglomerates purchased large swathes of land in Egypt, but food production has also become increasingly integrated into Gulf supply chains, from farm to shelf. But this presupposes Egyptian farmers and landowners, and Gulf agribusiness, logistics and retail firms also being vertically integrated into regionally-articulated structures of capital accumulation. As such, national scalar processes, such as class formation, become increasingly tethered to regional and international accumulation dynamics. For the majority of people in the region, however, this means that food security is largely circumscribed by the requirements and profitability of Gulf capital.

The Arab built environment is also a key site where neoliberal reform and Gulf capital accumulation act symbiotically. From real-estate contracting to development, Gulf conglomerates are major players in these sectors throughout the Middle East. GCC companies often own, develop and build large-scale real estate projects; or alternatively, local companies are financed by Gulf-based capital (sometimes diaspora capital, especially in Lebanon and Palestine) as minority stakeholders. Gulf capital expands where housing developments have become privatized and as governments find themselves increasingly cash-strapped. As such, both Middle East real estate developers and government authorities pivot their economic and political life toward the requirements of Gulf capital, further interiorizing “Gulf capital within other Arab class structures” (157). In a sense, Gulf capital not only shapes urban space in the Middle East—altering the nature of social and biopolitical life—but also the nature of capital accumulation and class formation in these countries.

Hanieh takes a broad view of the ‘built environment’ to include the telecommunications sector and infrastructural development, such as water and electricity. It seems somewhat surprising, however, that he doesn’t delve deeper into the logistics sector and port development. Gulf capital undoubtedly dominates Middle Eastern logistics and is responsible for financing port developments throughout the Middle East and the Horn of Africa. While it may be a topic of deeper interest to his colleagues, an analysis of this sector reveals certain nuances that complicate Hanieh’s narrative.[6]

Hanieh sometimes leaves the reader with the impression that Gulf capital takes on an omnipotent, even phantasmic character. Where Gulf capital travels, it marks its tracks imperiously.

Yet analyses of Gulf capital must also take into account failure, negotiation and compromise. The agreement brokered by Rafic Hariri between the Dubai Port Authority (DPA) and the Lebanese government to run the Beirut Port in 1998, for example, was gradually derailed by domestic Lebanese contractors.[7] It ultimately collapsed in 2001 and a compromise was reached that was more palatable to opposing sides. That fractions of Lebanese capital were able to sideline DPA and use the agreement as a political bargaining chip serves as a useful illustration of the messy, multilayered terrain in which Gulf capital operates—or more broadly, the politics of friction under global capitalism.

Even the recent nationalization of DP World’s Dolareh Container Terminal by the Djibouti government has forced the UAE to look to Somaliland, Puntland, and Eritrea for opportunities for port investment in the Red Sea littoral. These developments offer a stark reminder of the contested relationships between privatization, Gulf capital and local political actors.

The Place of Labor?

For a book about capitalism and class, some readers may be perplexed that the question of labor never materializes. The Marxist retort may be that “capital is a social relation of production,” and therefore, labor is necessarily embodied within the category of capital. A more measured approach may be that labor falls outside of the scope of the book. All are correct, yet none are satisfactory.

The seeming relegation of labor to a few passing discussions, however, does provide an entry point into thinking more critically about what Hanieh’s framework has to offer. Once we begin to problematize the role of labor under financialization, we can ask the following questions: Who’s labor is exploited? Is finance capital simply abstract?

There seems to be two approaches to the question of labor under conditions of financialization. The first approach is to emphasize the labor of finance itself. Within the GCC, there is an expansive professional, managerial class responsible for reproducing and expanding systems of finance. Coming from different parts of the globe—though often structured racially—they consist of state bureaucrats, sellers and traders, accountants and consultants, lawyers and economists. Not conforming to romanticized notions of proletarian labor, this class nonetheless performs the labor of finance and is ultimately worthy of study. They are the essential embodiment of the Gulf economy, being consumers and investors in the region’s real estate, financial and transportation sectors. In fact, they are often the public face of branding campaigns to make Gulf cities appear cosmopolitan and global. Glossing over their role would be to skip this important chapter of financialization.

The second approach follows more directly from Hanieh’sregional-centered framework. Building off his edited volume, Transit States: Labour, Migration, and Citizenship in the Gulf, we can conceptualize regionally-articulated labor regimes in South Asia being intimately connected to neoliberal policies across the Middle East. Concomitantly, financial profits can be recycled regionally and globally, rather than being invested back into a transient and exploited migrant working class. 

The book’s regional-centered framework also generates an understanding of the effects of financialization that stretch beyond national boundaries. If property bubbles burst in Dubai, Nepal may bear the brunt of the crisis. Conversely, wages in Pakistan begin to affect Egyptians working in the Gulf, and therefore, the flow of remittances. From rural crisis in India to gentrification in Lebanon, Gulf capital stitches together far-flung regions into a dizzying patchwork of ‘globalization. Exploring labor this way helps us understand how the social costs of accumulation are displaced territorially. Far from being abstract, financialization further subsumes labor under capital by transforming existing geographies, making Kerala and Cairo closer than they seem.

Crisis as Opportunity

Eight years after the Arab uprisings of 2011, and as the Arab world suffers under the maelstrom of destruction, violence and counterrevolution, the GCC and Gulf-based conglomerates, Hanieh argues, are envisioning crisis as an opportunity. For Hanieh, crises are also moments of opportunity by states to “restructure and push forward change in ways that were previously foreclosed” (201).  Although some have interpreted the increasing violence sweeping the region; intra-GCC conflict; and the fall in oil prices as indicators of diminishing Gulf influence, Hanieh boldly predicts that “the policy response to the economic downturn will strengthen the weight of the large GCC conglomerates within their national and pan-GCC contexts” (201).

Examining how Gulf governments have responded to the changing economic environment, specifically the 2008 great depression, decline in oil revenue and the Arab uprisings of 2011, Hanieh focuses on the set of vision documents promulgated by various Gulf governments. These vision documents seek to court private investment into state projects, often through Public-Private Participation schemes. Rather than being simply technocratic, these documents represent the interests of various class forces in expanding their power during moments of crisis.

Instead of rigidly distinguishing private from state capital, these documents also demonstrate how privatization affects decision-making processes within the state. For example, Saudi Arabia’s Vision 2030, assisted by international consulting companies such as McKinsey and Bechtel, carries “a marked discursive resemblance to market-oriented economic planning found in other parts of the world” (207). More importantly, these recent policy shifts “have involved a centralization of decision making within dominant institutions of the state,” to the benefit of large Gulf conglomerates (210). As political power and capital are intertwined in the Gulf, instead of decentralizing power, these forms of privatization concentrate power by forging new political alliances and networks. Thus, the much-discussed Crown Prince of Saudi Arabia, Muhammad bin Salman, is less a liberal reformer promising fundamental reforms than a ruler seeking to command and coordinate a new conglomeration of interests of capital and institutions of the state.

What must be obvious at this point is that these changes are by no means confined to the Gulf; they are shaping the future of the wider Middle East.

Rather than being a setback to GCC expansionism and influence, the current conflicts are in fact opportunities for Gulf states to position themselves as pivotal actors in regional and domestic affairs. War-torn and cash-strapped governments turn to the Gulf monarchies for badly-needed credit. Numerous reconstruction contracts are carried out by Gulf companies. Conditional loans and forms of aid can serve to intensify neoliberal policies, creating unprecedented levels of Gulf influence over domestic affairs. Even in active conflict zones in which GCC countries are involved, Gulf-based logistics firms are pairing with international humanitarian organizations to deliver aid. For example, the International Humanitarian City in Dubai focalizes these logistics firms through humanitarian provision, while also “consolidating Dubai’s logistics and transport facilities as the backbone of regional commodity flows” (264). Novel forms of capital accumulation are taking place, not despite conflict, but precisely because of it.

It remains to be seen whether Gulf capital will truly dominate the regional reconstruction processes, especially in Syria and Yemen. International power struggles, diverging local interests and popular backlash may create a playing field more messy than Hanieh’s book suggests.

Nonetheless, if scholars, researchers, journalists and policymakers are interested in grasping the rise of the Gulf Arab states as pivotal players in Middle Eastern and global political economy, it is vital to explicate the relationships between economic liberalization, the expansion of Gulf capital, and deepening political power in the GCC. This, as Hanieh demonstrates, begins with a careful study of the banking, logistics, telecommunications, oil and gas, real estate, agribusiness and financial sectors, among others. Taking a regionalized view of these sectoral developments helps to generate an understanding of the GCC as a political and economic core in the global economy around which Middle Eastern capitalism increasingly pivots. In this regard, Money, Markets, and Monarchies is essential reading.




[1] Jolly, David, “Persian Gulf States Asked to Increase Global Bailout Financing,” The New York Times, November 2, 2008.

[2] Gao, Haihong, “Beyond Energy: The Future of China-GCC Economic Ties,” The Arab Gulf States Institute in Washington, October 1, 2018.

[3] “Mohammad Bin Rashid announces $3.4 billion UAE-China investment deals,” Gulf News, April 26, 2019.

[4] Konrad, Alex, “Freight Startup Flexport Hits $3.2 Billion Valuation After $1 Billion Investment Led By SoftBank,” Forbes, February 21, 2019.

[5] Arnold, Tom, “Dubai’s DP World acquires Danish logistics firm Unifeeder,” Reuters, August 7, 2018.

[6] I refer to the work of Rafeef Ziadah and Laleh Kahlili at SOAS University of London.  See Rafeef Ziadah “The UAE and the Infrastructure of Intervention,” Middle East Report 290 (Spring 2019).

[7] Advani, Rohan, “Port Politics: A Political Economy of the Beirut Port in the Post-Civil War Period,” (Masters Thesis), New York University, 2018.

[8] See Labban, Mazen, “Against Value: Accumulation in the Oil Industry and the Biopolitics of Labour under Finance.” Antipode 46, no. 2 (2014): 477-496.

How to cite this article:

Rohan Advani "The Imperious Rise of Gulf Capitalism," Middle East Report Online, August 28, 2019.

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