How Oil Discovery Changed the Society of Gulf States
Introduction
Gulf state is the name given to the six Arabian states within the Persian Gulf. The states within the Persian Gulf include Bahrain, Kuwait, Oman, Iraq, Qatar, United Arabs Emirates and Saudi Arabia (Vitalis 2004, p. 162). All these countries form the Gulf State except Iraq. Prior to the discovery of oil in the middle east, Saudi Arabia as well as other Gulf states were the countries with the lowest socioeconomic and political development in the whole world. With the climate condition in those area, they could do very little in the field of agriculture. However, after around late 1940s, most of the middle eastern countries discovered vast reserves of oil. With the discovery of oil, the Gulf States stated to experience an acceleration in the political economic and social spheres. Currently, the most of the middle eastern countries have some of the highest GDPs in the whole world. Saudi Arabia and other Gulf States alone produce almost 60% of the world’s supply of petroleum products (Al Fahim 1995, p. 9,). As a result, these countries have experienced a rapid creation of wealth. Apart from economic development, most of these states have experienced improved social and economic environment. The aim of this paper is to discuss the various changes in the political, social and economic changes that have resulted from the exploration of oil in Saudi Arabia and other Gulf States. It will involve critically examining various literature so as to come with a conclusion whether the oil exploration in the Gulf States was a capital or a cures.
The Brief History of the Middle East Oil Exploration
Oil was first discovered in Saudi Arabia in 5th January, 1902. The first commercial exploration of oil started in 1938 at a place called Dammam, currently known as Dhahran ((Fuccaro 2009, p. 192). Before the exploration, King Abd-al’-Aziz, conquered provinces such as al-Hasa, Nejd, and Hijas. Through this exploration, Abd-al’-Aziz ensured the Kingdom of Saudi Arabian territory expanded (Fuccaro 2009, p. 163). During the period of exploration, the stability in the Arabian countries, more so the Gulf states was in question. This was because most of the Gulf states had also discovered oil and were fighting for territories to expand their oil wells. There were several factors that triggered the search for and exploration of oil in the Gulf states as well as the other Arabian countries. First, the Anglo-Persia Oil Company had discovered oil in the north-west Persian mountains (Zahlan 1998, p. 186,) By then, many geologists believed that there was no oil in the Arabian Peninsula. Secondly, the World War I also made it necessary to produce more oil. Countries like Germany could not produce more aircraft and automobiles for war due to insufficient oil. France had to use taxi to ferry their troupes to the war front. It was therefore eminent that more oil was necessary (Al-Rasheed 2010, p. 73). The other reason why the oil exploration increased was the onset of the great depression. For example, in Saudi Arabia, Hijaz had to levy taxes from the merchants and the pilgrims to raise revenue (Zahlan 1998, p. 186,). After the onset of the depression, pilgrimage and trade reduced considerably thereby leaving the Arabian countries with no choice but to look for an alternative source of revenue.
Economic and Social Impacts
Saudi Arabia as well as other Gulf States claim most of its revenue from utilization and export of oil and other petroleum products. Since the exploration of oil in the Middle East in the mid-20th century there has been a robust growth in the oil revenue in countries such as Saudi Arabia, Bahrain, Kuwait, Oman, Iraq, Qatar, United Arabs Emirates among others. This, therefore, has resulted into unimaginable increase in the GDP in all these countries. The dramatic increase in the revenue and the GDP in the Gulf States reached its peak in the beginning of mid 1980s. Due to the increase in GDP, the govern expenditures have increased drastically, leading to unimaginable infrastructural and services development.
The mid-1980s is the beginning of the economic modernization of the idle Eastern Countries. During the 1960s the government started investing massively in education, health and infrastructure. They also started to develop state-owned industries which dealt in the processing and the manufacturing of oil and oil products. As a result, the underutilized capacities were put in place and industrialization started to boom. By late 1960s, the growth in the economic performance in the Middle Eastern countries was the highest in the world. Saudi Arabia recorded an economic growth of 6% per worker per year by the end of 1968, this was the highest ever recorded in the world (Al Fahim 1995, p. 13,). In the 1970s, the economic boom was experienced in the Gulf States, coupled with an improvement in the living standards of the citizens. With such rapid growth in the economy, economic modernization started in the Gulf States coupled with infrastructural developments such as the construction of new buildings, schools, hospitals, universities, among others. Currently, countries like the United Arabs Emirates have some of the most sophisticated architectural works in the world. This has led to an improvement in the public housing and tourism in the country as some people travel to cities of Gulf States to see these architectural works. Burj Khalifa is currently the tallest building in the whole world.
With the rapid growth in the economic sectors, there has been several gains in the social aspects of life. With the development of several companies and governmental parastatal, several employment opportunities were created. The Unemployment level in Saudi Arabia and other Gulf States have reduced significantly in the late 1980s (Al Fahim 1995, p. 29,). As a matter of fact, there is no much difference in the employment levels in the Gulf States compared to other advanced economies. With the increase in employment and high per-capita income, the purchasing power of the citizens have increased significantly. The governments of Saudi Arabia and other Gulf States have but sufficient infrastructures and social amenities to ensure improved live standards among the citizens. By late 1980s, there was dramatic increase in the life expectancy, a reduction in infant mortality, school enrolment increased to almost 100%, thereby increasing the literacy level to 40% among the adults and 60% in the whole population.
Some of the Gulf States have maintained this social and economic improvement up to today. For example, United Arabs Emirates has been having a higher GDP than United Kingdom since 1981. This therefore means that, up to now the discovery of the oil in Gulf States have resulted into economic modernization in these countries with an improvement is social, infrastructural and living conditions. However, in my opinion, the economic modernization in the Gulf States which resulted from the oil exploration is short term which does not guarantee economic stability in the long run. Saudi Arabia and other Gulf States, despite the revenue they accumulate from oil exploration, are still considered as Third World Countries. This is because of the absolute reliance in petroleum and gas coupled with weak production sectors. There are also other political issues such as corruption, lack of democracy, cronyism, among others. The gap between the poor and the reach is also still too wide. Basic economics states that a country which over rely on one product as their only means of revenue will eventually fail economically.
Political Impacts
Just like economic development, it is believed that the discovery of oil in Saudi Arabia and other Gulf States has led to political development (Vitalis 2004, p. 166). However, the truth, as believed by political scientists is that the large profits resulting from the vast reserve of oil in these countries has led to political stagnation. It is important to first understand what political stagnation means. Political stagnation is evident by the lack of democracy and the authoritarian rule. This is the case in the Gulf States as well as other Middle Eastern countries. Political stagnation is also brought about by the reluctance to political reforms as well as sticking to the old traditions of the rulings. The question is, is the political stagnation as a result of huge profits made from vast oil reserves or there are other reasons for this?
Conclusion
Putting all these facts into consideration, we can say that the exploration of oil in the Saudi Arabia and other Gulf States have led to economic and social improvement. However, with the kind of government they have, these improvements can just be short term. The huge profits from the oil reserves has created countries where the governments are not accountable for their deed. There is very little change in the type of ruling in the Gulf States. This has led to political stagnation. On the other hand, the corruption and embezzlement of public funds have led to a situation where the gap between the poor and the reach is too wide.
References
Al Fahim, M., 1995. From rags to riches: A story of Abu Dhabi. London Centre of Arab Studies.
Al-Rasheed, M., 2010. A history of Saudi Arabia. Cambridge University Press.
Crystal, J., 1995. Oil and politics in the gulf: Rulers and merchants in Kuwait and Qatar, Vol. 24. Cambridge: Cambridge University Press.
Fuccaro, N., 2009. Histories of city and state in the Persian Gulf: Manama since 1800 (No. 30). Cambridge University Press.
Vitalis, R., 2004. Aramco World: Business and Culture on the Arabian Oil Frontier. In Counter-Narratives (pp. 151-181). Palgrave Macmillan US.
Zahlan, R.S., 1998. The making of the modern gulf states: Kuwait, Bahrain, Qatar, the United Arab Emirates, and Oman. ISBS.
