Rocky royalty: An expert says that the Gulf monarchs have had it. A premature judgment? After the Sheikhs: The Coming Collapse of the Gulf Monarchies

Rocky royalty: An expert says that the Gulf monarchs have had it. A premature judgment?

Nov 2nd 2013 |From the print edition

After the Sheikhs: The Coming Collapse of the Gulf Monarchies. By Christopher Davidson. Oxford University Press; 304 pages; $34.95. Hurst; £29.99.Buy from Amazon.comAmazon.co.uk

IT IS bad luck that “After the Sheikhs”, which came out in Britain last year and is only now being published in America, went to press before the forces of revolution in the Arab world suffered their recent string of reverses. In 2012 the Muslim Brothers in Egypt, the most populous and pivotal of the countries in the region, were riding high. The Syrian opposition seemed to be winning. And the wind of change had begun to buffet the rulers of the Gulf, the butt of this book. Christopher Davidson’s message, implicit in the title, is that their number is up. It is just a matter of when rather than if they fall. “Most of these regimes—at least in their present form—will be gone within the next two to five years.” This is a bold proposition, to put it mildly. In the past few months the forces of reaction have been fighting back.

Mr Davidson, who has lived in Ras al-Khaimah, one of the poorest of the seven statelets that make up the United Arab Emirates (UAE), is one of the most knowledgeable academics writing about the region. He sets out his scenario of monarchical doom with authoritative and often riveting detail. He shows how the rulers of the six countries under his gaze—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE—have managed to keep their people under control.

In varying degrees this sextet is awash with oil and gas, enabling its rulers to lavish largesse whenever economic times get rough or the rumblings of democracy elsewhere in the region become audible at home. Moreover, each of the six regimes is underpinned by an apparatus of coercion. Since the Arab spring began three years ago, the balance between co-option and coercion, Mr Davidson contends, has shifted towards the latter. In some places, patently in Bahrain but also in the UAE, about which the author is most revealing, the mood has turned unusually nasty. Today the compact between rulers and ruled is, he argues, much less cosy than it used to be.

The day when oil runs out is approaching faster than official figures suggest, he asserts. The rise of youth unemployment may outstrip the royal rulers’ ability to pay people off with welfare and perks, especially in Saudi Arabia, where some 47% of Saudis are reportedly under 18 and 80% under 30. Poverty, alongside obscene levels of wealth among the elite, is growing, as is dissent. The ruling family is hamstrung by an almost permanent succession crisis, whereby the crown is still being passed from one geriatric brother to another. The key country of the six, Saudi Arabia is “prone to implode within the next two years…the kingdom is now looking very brittle.” If the House of Saud were to fall, the knock-on effect on the Gulf’s other monarchies would, he implies, be menacing, if not rapidly terminal.

Some are more vulnerable than others. The prospects for Bahrain’s king (pictured) are by far the bleakest and the outlook for the royal family of Kuwait “is perhaps just as bleak”. At the other end of the spectrum, thus far only Qatar, currently the richest Gulf state per head of its citizens, “has avoided such heavy-handedness” in its handling of dissent. Nonetheless, writes Mr Davidson, even Qatar is prone to coups and squabbles within the ruling family.

Plainly he is right that each of the monarchs has cause to worry. In 2011, he notes, 27m Arabs—perhaps a fifth of the adult population—were said to be on Facebook; only a year later the number had leapt to 45m. The monarchs can no longer hope to control what goes on in the minds of their people.

Yet the Gulf monarchs’ imminent downfall has often been predicted before. The author is surely right that if they refuse to budge in the face of popular demands for more of a say, their chances of survival will shrink. But these families are on the whole a shrewd as well as ruthless lot. The timescale for their demise suggested by Mr Davidson looks a lot too short. Still, who in 2010 would have predicted the turmoil still sweeping through the Arab world today?

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: