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How Britain is a bad influence on the Gulf states – an interview with David Wearing

 Could Britain ever promote democracy in the Gulf? Only if it turns its own foreign policy away from neoliberalism and militarism, David Wearing argues in a new book.

Image: Saudi Crown Prince Mohammed bin Salman entering Downing Street in March 2018. Credit: NurPhoto/SIPA USA/PA Images, all rights reserved.

Ian Sinclair: You argue that the UK’s interest in the Gulf’s vast oil and gas reserves is not about “direct energy supply” to the UK. Can you explain why this is, and what the UK’s interest is really about?

David Wearing: Britain imported a lot of oil from the Middle East during the post-war years, but this tailed off significantly from the 1970s as North Sea oil came on stream. At this point, we import a little more than we export, and only about 3% of our imports come from Saudi Arabia, less from the other Gulf states. However, gas is an important part of the UK’s energy mix, and imports from Qatar comprise about 13% of our gas consumption.

Gulf oil does matter to the UK, but in different ways. First there’s the structural power in the world system that major states gain from control over hydrocarbons – the lifeblood of the industrialised world economy. Those sorts of geopolitical questions are slightly above the pay-grade of post-imperial Britain, but are of real relevance for the global hegemon, the United States, and the UK of course supports and complements US power in the Gulf. A reasonably stable flow of oil out of the Gulf is also important to the world economy (and thus to British capitalism, with its extensive global connections) since price shocks can be hugely disruptive. And Gulf oil remains a major commercial prize for two of the UK’s leading firms, BP and Shell.

What the UK is interested in above all is the wealth that Gulf oil sales generate, and how it can use the connections developed with the Gulf Arab monarchies during the imperial era to attract those “petrodollars” into the British economy and arms industry.

The move to neoliberalism, and the consequent growth of the City of London alongside the decline of manufacturing export industry, has left Britain with a large and growing current account deficit. Running such a deficit puts downward pressure on your currency, which can be offset in two ways: first, by finding areas of the world where you can run a trade surplus, thus narrowing the overall deficit, and second, by attracting foreign inward investment, by which demand for assets in your own currency “finances” the deficit, and keeps your currency stable.

While neoliberalism in the UK was becoming more entrenched, the Gulf states were enjoying a huge windfall from oil prices, starting in the early 2000s and continuing until very recently. Gulf demand for imports of goods and services rocketed, as did the sovereign wealth they had available for investment. So British neoliberal capitalism and Gulf rentier capitalism came to complement each other. The UK provided the goods and services and the investment outlet that the Gulf monarchies required, while the Gulf monarchies provided an export market with which it was possible to build a trade surplus, as well as a source of capital inflows that could help finance the current account deficit.

In addition, about half of UK arms exports go to the Gulf, mainly to Saudi Arabia. Britain’s post-war strategic objective to remain a global military power despite the loss of empire requires it to maintain its own arms industry. Arms exports make that industry more economically viable, especially when we’re talking about the major, sophisticated weapons systems – military jets and the supporting infrastructure – that the UK provides to the Gulf monarchs. Those exports are a very small part of total UK exports worldwide – less than 1% – ad alternative employment could certainly be found for arms industry workers. This is not about economic benefits for the British people but the strategic priorities of the British state.

So “Gulf wealth matters to Britain”, as the book title says, but to a specific neoliberal, militaristic Britain. Gulf wealth could matter a lot less to the UK if we ran our economy differently and reconfigured our foreign relations.

IS: During the 2010-11 ‘Arab Spring’ there were significant pro-democracy protests in the Gulf, most notably in Bahrain. What was the UK’s response to these events?

DW: Notwithstanding the nominal “concerns” expressed by Whitehall about state abuses during the anti-democratic crackdown, the UK effectively took up the PR line of the Bahraini government: that the violence was down to sectarian divisions, that any abuses were regrettable mistakes, and that “reform” was now underway – led by the regime – to resolve matters. In reality, the uprising was broad based and democratic, the abuses were the predictable response of an authoritarian regime to the threat of democracy, and the “reforms” were designed to whitewash the regime’s international image and consolidate its position after that threat had been substantively extinguished. British arms sales increased during this period, and strategic military ties deepened considerably, in what was a visible vote of confidence in continued monarchical rule.

This was entirely consistent with the preceding two centuries of Britain’s involvement in the region. The Gulf was originally brought under the control of the British Empire as part of a wider buffer zone around the Indian subcontinent. Local rulers were given British protection, and through the crucial decades of state formation and development, especially as the oil revenues came in, the UK and increasingly the US played a decisive role in entrenching monarchical rule and building up the body and muscle of the coercive apparatus that blocked any prospect of socio-political change (despite the brave efforts of many of the region’s people).

In light of this, one can only attribute the common association of democracy with especially “Western values”, and the belief that authoritarianism springs from the region’s “culture”, to a refusal to look at the history, together with a deeply ingrained set of basically racist assumptions that frame many people’s understanding of our relationship with this part of the world.

IS: How might the economic and political responses needed to combat climate change alter the UK’s relationship with the Gulf?

DW: It’s increasingly understood that global decarbonisation is now a matter of urgency. Fundamentally, the majority of the world’s oil has to stay in the ground. Most Gulf oil goes to East Asia, and China in particular is making massive efforts to decarbonise. The oil-dependent Gulf monarchies could well be sitting on stranded assets, which means the petrodollars helping to prop up British neoliberalism and post-imperial militarism could soon begin to dry up. The UK needs to adapt to these realities.

IS: In the short-term, arguably the best chance for making significant and lasting positive change to the UK’s relationship with the Gulf monarchies is electing a Jeremy Corbyn-led Labour government. How difficult would it be for a newly elected Labour government to shift the UK’s relationship with the GCC?

DW: These relationships are contingent, not inescapable. The Labour leadership’s aim of demilitarising UK foreign policy and transitioning away from neoliberalism fit well with – and would be decisive in making possible – a major rethink of UK relations with the Gulf Arab monarchs. The fact that it is achievable, however, does not mean that it wouldn’t be a challenge.

There are interests within the Labour Party committed to Britain maintaining a major arms industry, and its status as a military power. The 2017 manifesto was clearly a compromise between those interests and the Corbyn leadership. Sustaining that compromise results in the current line that Britain can compensate for ending arms sales to Saudi Arabia by selling an equivalent value of arms elsewhere. The reality is that alternative markets simply do not exist. Ending arms sales to the Gulf will undoubtedly impact on the UK arms industry and thus the UK’s ability to maintain its status as a military power. Corbyn and his allies will likely be fine with that, especially if they (correctly) believe that alternative jobs for arms industry workers could be created as part of the proposed industrial strategy. But they will be forced to stop triangulating on this issue area, and to take on and defeat the party right. If they frame that battle around what’s happening in Yemen they could mobilise the support of the mass membership and probably win.

On the wider economic dimensions, an export-oriented industrial strategy would over time obviate the need for petrodollar inflows to finance the current account deficit, but in the short and medium term that need might remain. The Saudis would have the option of retaliating against any cessation of UK arms supplies by pulling some of their investments, and Labour should at least be war-gaming such a scenario in advance of taking office. I suspect that, in their current position of weakness, especially after the Khashoggi murder, it’s doubtful that the Saudis would want to further alienate the Western allies upon whom they depend by taking such an aggressive action. I also suspect that a major programme of public investment under a Labour government would attract a good deal of foreign capital, which may well offset any withdrawal of Saudi and Gulf capital. But again, these are challenges that Labour would have to think through and prepare for.

The major misconception I’ve found when discussing my book in public and in the media is that the Gulf monarchs have decisive power over the UK and that there’s nothing policymakers can do about the relationship. That isn’t true. Recalibrating and disentangling these relationships is certainly possible. It won’t be easy, but the coming changes resulting from global warming make this challenge an inescapable one.

AngloArabia: Why Gulf Wealth Matters to Britain exploring the UK’s relationship with the authoritarian Gulf states is published by Wiley.

 

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