(10 years, 7 months ago)
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Lord Luce (CB)
My Lords, this debate provides an opportunity to focus on the Government’s relationship with members of the Gulf Co-operation Council. I look forward to the contributions of noble Lords and to the Minister’s response. Much of the Middle East is in serious turmoil at a time when Britain’s role in the world has become more modest. It makes sense, therefore, to concentrate on areas and issues which best serve Britain’s interests. The stability and prosperity of the GCC states are a clear British interest, and I commend the Government for their positive approach to this region.
The Gulf is of major international economic importance. It is likely to remain so, even as international flows of oil and gas change with time. The GCC states possess 30% of the world’s crude oil reserves and 23% of natural gas reserves. Their sovereign wealth funds hold up to $1.5 trillion of assets. GCC investment in Britain was more than $2.25 billion in 2012. Our exports to these countries are more than £10 billion per annum and are increasing steadily. We have 166,000 British ex-patriots in the GCC working to strengthen our links in many areas. There are tens of thousands of students from the GCC studying in Britain.
In the wider Middle East, GCC states are now playing a major and influential role. Saudi Arabia, the UAE and Kuwait are key backers of the new Egyptian regime. Saudi Arabia and Qatar have provided vital support to elements of the Syrian opposition. Oman’s dialogue with Iran has recently taken on new significance. Britain’s relationship with these six states remains unique. We have historic connections going back, in some cases, more than 200 years. When Britain finally withdrew from responsibilities in the Gulf in 1971, there were many who forecast a quick demise of the new Gulf states, and that Iran under the Shah would be the strong, stable nation in the Gulf. As we know, the out-of-touch Shah was overthrown in 1979, to be replaced by a theocracy. The rulers of the GCC have not only survived, but remained reliable allies safeguarding the flow of oil and recently providing vital staging facilities for operations in Iraq and Afghanistan.
I first visited the Gulf in 1959. I still find it hard to grasp the scale of the transformation from traditional societies with just a few outward-looking trading ports to nation states with unimaginable wealth, modern cities and influence in the world. It is as though they had jumped like a grasshopper out of an historic Middle East into the modern world. In recent years, my only interest in the Gulf has been as patron of the Sir William Luce Trust at Durham University, where we have worked since 2005 with Chatham House and Ditchley Park to try to understand the pressures for change in the GCC and how those countries are dealing with it.
Earlier this year, I accompanied Richard Muir, the chairman of the trust, on a tour of Gulf countries. This visit, two years after the Arab spring, reinforced many of our conclusions since 2005. These monarchies and peoples are our historic friends; for the most part the rulers still command the confidence of those who live in their state. We must continue to give them our strong support. However, this should not be uncritical, provided we speak as friends to friends and with an informed understanding of the task and dilemmas these rulers face in bringing about change.
We need at the same time to acknowledge that each Gulf country is different. The events of spring 2011 sent a shockwave through the Gulf. Some have called it a “youthquake”, as 50% of GCC citizens are under 30. These events were a catalyst for these young people for the first time openly to question, criticise, challenge and aspire to play a role in their countries. Each Government had their own reaction. A combination of political, economic and, in some cases, repressive moves has for the time being preserved order, and these states remain basically stable. Saudi Arabia has injected $130 billion into its public sector and offered funds to help Bahrain and Oman take similar action. However, the underlying challenges for Governments are today greater than ever before. Resources of oil, gas and water are finite and being rapidly depleted, while subsidies drive up demand. Low-cost imported labour, mainly from Asia, is becoming controversial. At the same time, there is still high unemployment among the indigenous population, particularly the young, with a sharp contrast between wealth and poverty, job discrimination and some corruption.
Money on its own cannot satisfy aspirations, and Syria shows the path down which repression can ultimately lead. The GCC Governments all recognise that further political as well as economic change is an essential part of the way forward. As Lampedusa wrote,
“If we want things to stay as they are, things will have to change”.
Each of these states is seeking to evolve, each in its own way and at its own pace.
Kuwait faces a challenge as to how its Government and lively Parliament can reconcile their respective roles constructively. In Saudi Arabia, 30 women have been appointed to the Shura Council, and women will participate in the next municipal elections. Qatar might benefit from a little less foreign venture and more constitutional development, led by its new ruler. The UAE, in addition to constitutional development at state and federal level, faces the need to develop a fully independent judiciary and transparent mechanisms for handling human rights cases. Oman continues to evolve its two-chamber Parliament, which can now propose legislation and review audits. Oman has given its judiciary and national human rights commission independence and authority.
Bahrain is at a most critical stage and perhaps provides the real litmus test for peaceful evolution. That country has an historic tradition of tolerance between religions and sectarian groups, but faces a major challenge to remove discrimination against the Shia majority to enable all political parties in its Parliament to play a constructive role and, above all, to complete implementation of all the recommendations of the Bassiouni Independent Commission of Enquiry, so bravely set up by King Hamad. Its national dialogue between government, political parties and civic society must continue to be strongly encouraged by the British. I invite the Minister to comment on those developments.
The GCC states cannot be immune to the cross currents of the Middle East, ranging from turmoil and civil conflict in Egypt and Syria, historic Sunni-Shia tensions, the Persia-Arab rivalry, particularly between Saudi Arabia and Iran, and the broad struggle between political Islam and theocracies and secular forces. Inevitably, all these events may strengthen the voices of those who are opposed to further change. People in the Gulf value stability and are aware that they are living in young states never previously at peace within stable borders and which have moved within a generation from tradition to modernity and from poverty to great wealth. They know, too, that they are an integral part of a region still full of raw, secular, sectarian and tribal tensions.
But things cannot and do not stand still. During my tour of the Gulf states in February, I was impressed by the quality of some of the key institutions that have already evolved—including elected and appointed assemblies—the recognition by some key Ministers, parliamentarians and officials of what needs to be done, and the frankness of many of them, including some in very senior positions, in private discussion about the enormous challenges they face and their need to face up to them.
As we have recently seen elsewhere in the region, change when it comes can be violent, and violent change does not guarantee a democratic outcome. I share the view that successful transformation requires a long haul. After all, we have experienced our constitutional development over 500 years and it is hard to disagree with those in the Gulf who advocate continuous dialogue as the only means to make progress, and that this must take into account at all stages the Arab experience of the tested Majlis or Shura system of consultation. Our interest is to support this approach along a path of relentless and constant constitutional evolution and to seek to assist wherever we can with ideas, encouragement and practical help. However, we should also recognise that our action will be far more effective if it is against a background of strong friendship built on mutual respect and confidence, and that the most valuable advice may be that given in private. An absolute key is to develop a personal rapport with the leadership in all these countries and to be constructive in our relationship. The Foreign Secretary has set a good lead on this and our Arab Partnership Fund is a good framework within which HMG can work positively with our friends. I look forward to hearing from the Minister how this important strategy is working.
Baroness Falkner of Margravine (LD)
My Lords, I thank the noble Lord, Lord Luce, for the opportunity to have a debate on the countries of the Gulf Co-operation Council, and the United Kingdom’s relationship with them. This is not a frequently debated topic in our House: we spend a lot of time on the Middle East, but not so much on this particular part of the Middle East, which is, as the noble Lord pointed out, one of the most interesting, particularly during its current transformations.
I begin with some personal reflections. This morning I was involved in a seminar with a group of young Arab PhD scholars, because I sit on an advisory board which is facilitating higher education from these regions into the UK. It is led by President Martti Ahtisaari, the Nobel prizewinner and former President of Finland. When we started on this venture a few years ago, at the time of the Arab awakenings, we wanted to build capacity for leadership. The need for that was evident in the countries we were looking at in the MENA region—Tunisia, Libya, Syria, Egypt—rather than in the Gulf, where we thought that state finances were such that they did not need help. In this area we were looking to instil leadership through education, by opening mindsets.
This morning, as we were talking to the 20-strong group of scholars from universities across the UK—though principally London ones—what came home to us was that two and a half years ago, when we started this venture, these countries were in transition to democracy. Today they are all in a state of actual or impending conflict. I share that observation because it leads me to the three things I want to say about the Gulf Co-operation Council region.
The UK’s relationship with countries in this region, following our colonial past, has been seen through the prism of three substantive issues. One is energy: our energy needs, and their economic productivity through the output of oil wells and so on. The second is the region’s economics and in particular trade. The third is its security needs, and that comes back to our trade with them in terms of defence co-operation and so on.
That is all very good, although there are problems lurking in all three areas, which I will touch on briefly. However, it is because we have these narrow silos in our approach to the region that we fail to see the need for strategic depth in the most important and overarching issue in this region, which is political and constitutional governance and the requirement for reform in those areas.
In energy, particularly after its early, and I would say easy, phase of development—when infrastructure, roads, airports and so on were built—the region has failed to invest its enormous oil wealth in strategic development. Yes, you have glittering towers, but the substantive development of social and economic capital—investing in people—has not happened in the way that it might have done, given that the region has had 40 years of the enormous largesse of oil coming out of the ground.
The region is incredibly hungry in terms of its own consumption of hydrocarbons. People’s lifestyles are predicated on many gas-guzzling cars, air-conditioned public buildings and private homes, and so on. According to a House of Lords research paper, the UAE and Qatar have the highest per capita energy consumption in the world.
If Saudi Arabia continues with its current hydrocarbon needs, given the developing energy self-sufficiency of the United States—which, through fracking and further oil exploration, is moving closer than we expected—there will be a real budgetary crisis in the region. All countries reacted to the Arab spring or awakening—whatever word you use to describe it—by hugely increasing public subsidies and public expenditure. If one were to be kind, one would say that it was an attempt to ensure that their populations did not become restive. Some might say, more cynically, that it was an attempt to buy off unrest. The result of the dramatic increase in public expenditure is that by 2030 Saudi Arabia will require an oil price of $320 a barrel. Bahrain, which has far more significant problems—as the noble Lord, Lord Luce, mentioned—would require an oil price of $112 per barrel to break even. The oil price over the past six months has been in the range of $100 to $105 a barrel. Therefore, this is clearly not a sustainable method of continuing to evaluate development.
On the economic needs of the region, the demographics suggest an emerging crisis—an iceberg, if you will—with 50% of the population between 25 and 30 years old. Those in the 50% are far better educated than their predecessors, are accustomed to modernity and have access to information in a different way to the old, hierarchical systems that existed in the region. Coupled with this demographic time bomb is the budgetary problem of the lack of an income tax base in the region, and the problem of citizens’ employability in the private sector, which is fairly low, for a less than entirely obvious reason. It is low because it is easier to hire in the experts you need than to grow your own. Productivity in both the public and private sectors is significantly lower than in private sectors where non-nationals are employed.
There is also the issue of ghost jobs, where quotas are put in place by some of these countries to ensure that employers have to hire a certain number of nationals. That is done in terms of bookkeeping, but the nationals are not really hired; they are paid money to stay at home. The incentives are focused on numbers, which tends to distort the results. A good example was given in a Chatham House paper of a Saudi student who chose to read philosophy in order to sit on a waiting list for a public sector job. He could show that as a philosopher he could not get a private sector job but would wait for a public sector job, which would give him a better lifestyle: one-third more generous in terms of salary, and with far more time off, security of tenure, and so on. Moreover, the legal system, which requires nationals to act as agents for international companies, results in pure rentier behaviour in economic terms. Why would you engage in productive employment if family connections enabled you to get the contract to allow a foreign firm to be based in that country?
The final issue is the prism through which we see the region as a security dilemma. Iran has been mentioned but I wonder if too much weather has not been made of the threat from Iran. My own view is that Iran has been used as a means of ever greater defence purchases rather than as a real attempt to find peace. Surely if we do get a de-escalation of the crisis in Iran the peace dividend should result in these countries being able to look towards improving some of the other things I have mentioned.
In conclusion, I would argue that the region appears superficially to have a veneer of stability, indeed a gloss of prosperity and well-being, but a clearly defined path of economic and social development is critical. I accept the need for incremental moves and I understand that Arab society is evolutionary and not revolutionary. Unless we have moves towards better governance, greater constitutionalism and, above all, the rule of law and a respect for human rights—again, I am not asking for something revolutionary—alongside the things that these countries have pledged through the Arab charter on human rights, we will not see a stable future in the region.
Lord King of Bridgwater (Con)
My Lords, I join in congratulating my noble friend Lord Luce on showing a proper hereditary interest in this region in which his family’s involvement is well known. I also congratulate him on his timing. Everybody who knows the Gulf Co-operation Council and our many friends within it, with whom we have had the pleasure of working over the years in many different roles, will recognise that this is a critically important time for it. I also congratulate the Government, including the Prime Minister, the Foreign Secretary and the much regretted Alistair Burt. I am sorry to see that he has moved because I think he was extremely energetic in the work that he did but I wish Hugh Robertson well in the new responsibilities that he takes on. The Prime Minister gave a lead when he became Prime Minister in recognising and improving the contacts that had lapsed a little too much with this vital region.
It is impossible to overstate the seriousness of the present situation. One of the leaders, who had better be nameless, of one of the countries involved said that his worry was that there would be a conflagration that would split on sectarian grounds all the way from Beirut to Mumbai. Actually, I think he was wrong because the threat runs from Mali to Mumbai. The situation in Libya, echoed in the news today with the kidnapping of the Prime Minister, and the chaos in Egypt with the suggestion that ex-President Morsi might be executed, show what a tragically difficult situation those countries face. And the situation in Syria looks increasingly awful in terms of the refugee numbers, which are becoming overwhelming. They pose a real threat to Lebanon and to Jordan—not just the question of whether you can feed and nurture and provide health cover for the enormous number of refugees, but the fact that many of the refugees coming over the border into Jordan are taking any jobs they can get at any price and thus causing unemployment in Jordan to rise quite sharply. There are obvious tensions in that area. We have lost the stability of a major regional power in Egypt. Iraq gives us not much cause for confidence at the present time. At the moment, by and large, the GCC countries have managed to maintain their stability but they obviously face very real pressures—both the demographic pressure of the number of young people there and the threat of unemployment. I recall that when the original demonstrations took place in Tahrir Square in Egypt a huge number of people there were demonstrating about unemployment and the lack of jobs. Of course, we know that the chaos and confusion since have made their prospects vastly worse then they were even then. That will be reflected across other countries as their populations and the number of young people have increased. They face major challenges.
There are those demographic challenges, and then the challenges of what we might call social networking. Now, for the first time, whether it is Facebook, Twitter or the internet, a whole lot of people who previously were completely isolated from any adequate method of communication suddenly have these new channels of communication which are described in a very good brief from the Lords Library as “irreversible” and are a major challenge.
It is against that background that this country has an important role. There is no question that the relationship of some of these countries in the Gulf with the United States has changed. I do not know whether one is reading too much into the refusal of Saudi Arabia to make a speech at the United Nations or whether it is a sign of great displeasure with the United States’ failure to, as Saudi Arabia sees it, support it both in Egypt and in Syria. That is a new development. Of course, if it is true that the effect of shale gas and oil discoveries will be that the United States is exporting more oil than Saudi Arabia by 2020, and given the fact that China has now become the major customer for Saudi Arabia, there will undoubtedly be some change of commercial interest. It is against that background that our position and long-standing relationships give us a particularly important role to play. We must support serious reform, as my noble friend has said, but we must try to ensure that it comes without the catastrophic collapse that has imposed such great hardship on the people of the countries affected.
It is against that background that we must make progress through diplomatic means. I welcome the peace conference in Geneva on the Syrian issues, and hope that it will be successful. How much better than bombing Syria to see people sitting down to a peace conference; I hope that that can make progress. I am delighted that, in the next debate, my noble friend will renew the pressure on United States Secretary of State John Kerry to launch now the initiatives to get real progress on Israel and Palestine. I also welcome very much the new initiative of my right honourable friend the Foreign Secretary, William Hague, for his proposal to establish a relationship with Iran.
I know that our friends in the Gulf will have the greatest concerns about that initiative. They may fear that we are somehow going to betray them or let them down. Of course, one must be aware of the challenges and dangers. We must do this with our eyes open and not necessarily believe everything that Iranian leaders may say at this time. However, we must make the effort, and I warmly congratulate the Government on taking that initiative. I hope that that is one of the items that might add to future stability. Any countries with continuing governance all have a continuing interest in greater stability in that region. We should try to bring them all to the table and work as closely as we can with them all.
Lord Stirrup (CB)
My Lords, I, too, am most grateful to the noble Lord, Lord Luce, for securing this debate. The UK has long had important relationships with the Arab states of the Gulf Co-operation Council, and our interests remain as heavily bound up in that region as ever.
Our relationships are, of necessity, conducted largely on a bilateral basis with the states involved. The Gulf Co-operation Council, despite its name, is as much a vehicle for competition and rivalry as it is for co-operation. Nevertheless, it fulfils an important function and deserves our full support.
There are many dimensions to the UK’s relationships with the GCC states, but at the moment two issues seem to me to stand out from the rest. The first is the domestic situations in those states and the concerns within them over the continuing political developments within the region. I am thinking here less of the member states’ reactions to the events around them and more of their own political pressures although, of course, these are closely linked.
The status of the Shia majority in Bahrain—which the noble Lord, Lord Luce, has covered—is the most obvious example but the other states are experiencing their own pressures to varying degrees, as we have already heard this afternoon. The question is whether and how these internal political issues should shape our approach to the various states concerned.
We could adopt a boisterous, cheerleading approach and wave the flag for democracy. This would be a mistake, for many reasons. First, democracy can take many forms and mean different things to different peoples. After all, we cannot even agree between ourselves quite what it means. Secondly, too heavy a hand when dealing with the internal affairs of another nation can have unintended and quite counterproductive consequences. We need to tread warily. On the other hand, I do not accept the argument made by some that democracy, even in its loosest definition, has no place in certain societies and cultures. If, by “democracy”, we mean a stake in and some degree of say in the governance of a country, it seems that this is a near universal aspiration in developed and developing societies.
The shape of that democracy, however, is quite another thing. Anyone starting with a blank sheet of paper would not come up with our model. It works for us—after a fashion. Any system needs to grow from and be rooted in the culture it serves. Our understanding of the cultures of the Gulf states can be rather superficial.
It seems that we can best serve both our interests and the interests of the international community by being supportive rather than condemnatory; by being gently persuasive rather than hectoring; and by focusing more on long-term progress than on short-term moralising.
I am not suggesting that we turn a blind eye to repression and to abuses of human rights. However, I am suggesting that our responses should be more nuanced than has sometimes been the case. To those who would say that such an approach ignores our moral responsibilities, I would reply that it is about ways and means. Do we want to achieve our strategic objectives in the region, including our hopes and aspirations for the peoples concerned, or are we just interested in scratching tactical itches? For my part, I vote for the strategic approach.
The second issue, which is external to the GCC states, is their concern—their very real concern, I believe—over Iran. The status of Iran’s nuclear programme is very much in the news, and is certainly the wolf closest to the sledge. It is, however, a symptom of a wider regional tension over the perceived development of a Persian hegemony. Religion plays into this and increasingly manifests its role through a burgeoning Sunni-Shia cold—and sometimes not so cold—war. However, that is not the only fissure between Iran and the GCC. For the regimes in the smaller states it is an existential issue. For Saudi Arabia it is more about regional dominance.
We are all concerned about Iran, but the GCC countries see the issue through a different prism from us—and, indeed, in many cases, from one another. It is important that we understand this. We all hope that recent developments within Iran, and between Iran and the international community, will produce positive results—although we would be wise not to get carried away by the more acceptable face that Iran is seeking to present to the world.
In all of this, however, we should remember our partners in the Gulf and recognise how much more closely all of this touches them. I hope that we are talking to them regularly on these developments and, more importantly, listening to them. We have expended much effort over recent years in trying to persuade our friends in the region that we have their interests at heart, that their security matters to us and that we take seriously their concerns over Iran and its nuclear programme. Those reassurances will ring somewhat hollow if we neglect their views and opinions on recent and future developments.
There are many other issues on which we should be, and frequently are, engaging with the GCC countries. However, the final point I should like to make takes my earlier plea for a more strategic approach to political development into the wider arena. It probably seems quite clear to most of us that our crucial national interests are not only closely engaged in this region today but have been so for a great many decades. But if we were to examine the practical handling of our relationships within the region over those decades, would we reach the same conclusion? Far too often we have sent conflicting signals in this regard. We have engaged, disengaged and re-engaged. We have busied ourselves, distanced ourselves, and then dived in again. Is it any wonder that some of our friends in the region get a bit confused about where we actually stand?
If we are serious about the region, and I think it is in our national interest that we should be, then we must take a more strategic, longer-term view of our relationships within the region. Just as important, we must give such an approach practical effect on the ground. If we want to have real presence, to have real influence, then our friends must believe that we are not only there, but there to stay.
Lord Triesman (Lab)
My Lords, I join others in congratulating and thanking the noble Lord, Lord Luce, for providing this opportunity and for the fine analysis which he provided—as, indeed, have other noble Lords. I, too, have visited the region many times and been struck by the amount of change that one sees almost visit by visit. I share with the noble Lords, Lord Luce and Lord King, the view that turmoil in the region is due to a very apparent set of difficulties. Indeed, I have avoided using the words “Arab spring” because I am not sure that I see it as a short-term seasonal, flowering thing; there is a very long-term set of issues to be resolved, which possibly go back to the collapse of the Ottoman Empire and other factors.
However, these are nations that are key allies. We have perhaps given them too little attention, and that may well have been true in almost the whole period from 1981 onwards. They are under stress from their neighbours and the crisis in the neighbourhood; that is clear. Yet these nations are also strategically vital for the region and for potential conflict resolution in the region. It has been said this afternoon—and it is plainly right—that economically they are important; more than half the world’s oil and gas resources are there. That is especially important for the economies of India and China, and their development in the world economy.
Everyone seems to think that this region represents a vital energy issue for the United States, but when I look at the patterns of energy supply and consumption in that country I very much doubt that that is true. West Africa—as well as fracking and issues to do with other important resources—is probably a rather more significant issue for the United States. However, the region must be important for the United States, because the state of the world economy in general is important for the United States, as we all try to trade together successfully.
Over the years I have also observed the degrees of difficulty and competition between Saudi Arabia and Iran. I suspect that since Iraq ceased to be the quarantining environment in which Iran operated, we are also seeing some traditional geopolitical issues regarding regional domination being played out. We often describe it as being simply a Sunni and Shia issue. Actually, I suspect that there is rather a more orthodox and traditional geopolitical contest going on, in which Qatar has also involved itself.
The issues may well become tighter. The noble Baroness, Lady Falkner, talked about the price of a barrel of oil. Some people in the futures market are predicting that we may be looking at prices way below $100, perhaps going down to the $50 to $60 range—a matter which will concern the Russians as much as anybody else. I do not know what will happen in those economies in those circumstances.
The members of the co-operation council often have grand plans, but have those plans been realised to any significant degree? It took until 2008 to create any version of a common market, and it is not a strong current theme. Diversification has not been particularly successful, as has been shown by some recent LSE studies, and the members’ external trade relationships outside the energy sector remain very difficult. Perhaps the discussions between the European Union and the co-operation council, which have not prospered so far, may be one of the ways in which international trade relations could be improved. Is it the Minister’s view that this country’s best interests are served by bilateral discussions or through the European Union’s attempts to get a common arrangement; and does she think that that will have an impact on the way in which sovereign wealth funds are deployed given the opportunities which may be present in a much wider setting? There seems to be no prospect of agreement on a common currency. I do not advocate it but it obviously makes trade relations in the council area more of a possibility.
Security is plainly vital to the council. It has obviously no wish to remain wholly dependent on the United States, but it is also significantly divided on what its common interest is and how that interest could be deployed in the region. There is no co-ordination as yet. Does the Minister have a view on that and on whether the tensions which I observe between, for example, Saudi Arabia and Qatar about who they should involve themselves with in Syria are not creating greater division than co-ordination? The possibilities for discussing political reform referred to by the noble Baroness, Lady Falkner, and others seem to me very important. They have proved to be a source of difference. The shape of reform is obscure but what is plain, as has been said today, is that it is a key strategic issue. Some of the methods used in the Gulf to impose order have revealed what one might describe as the default methods of ensuring that things remain stable. I say with great respect to the noble and gallant Lord, Lord Stirrup, that it is inevitable that we will comment on some of those human rights issues. I think he said that too. We could hardly do otherwise given the kind of Parliament that we have.
What view should we take? A stronger organisation would be of great benefit to the United Kingdom. It would also be of great benefit to the European Union if we think of it in terms of the broader economic circumstances. For the strategic reasons that have been identified this afternoon, I suspect that we would all wish to see further steps taken in modernising and evolving, particularly in constitutional arrangements, which may in the long term and with a much younger population help create the circumstances for greater stability. Young populations often do not respond as well to repression as they do to understanding what their status and location are in the organisation of the country in which they live. I hope that the Minister will identify the top few objectives of the United Kingdom Government. As I said earlier, would they be best handled by the United Kingdom or would they be handled more appropriately by the EU? I am not making this point to reawaken our discussions on the European Union but rather to consider what gives us the best opportunities to create the circumstances in which we might all advance. Without seeking to interfere in the affairs of these countries, are there areas where we could more appropriately offer friendly advice on security co-ordination or economic co-ordination? What might we learn from the countries? I do not think that giving advice is a one-way street. You often get a lot of advice, which is just as valuable if we take it as seriously as the advice that we might tentatively offer to others.
I conclude by saying that I hope that we can make real progress. I do not know whether the ambassadors from the Gulf states get together in London. There is a great depth of experience. The Kuwaiti ambassador has been the Dean of the Diplomatic Corps for a great many years and is a very knowledgeable ambassador. It may be that some of the fora in this country might help us in these developments. I certainly hope so, and I believe that that would be to the benefit of us all.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, I should like to start by thanking the noble Lord, Lord Luce, for calling this debate. It has provided a welcome opportunity to take stock of the UK’s relationship with a region that is of enormous importance to this Government, and with which we are very close friends and partners. I pay tribute to the noble Lord for his constructive engagement with countries in the region, and my noble friend Lady Falkner and the noble and gallant Lord, Lord Stirrup, for contributing so insightfully to today’s debate. I also thank my noble friend Lord King for his warm words for my colleagues, especially Alistair Burt, who we shall all miss. This debate is also timely for me personally, having recently returned from a visit to the United Arab Emirates, Bahrain, Kuwait and Qatar, which served to highlight again that our relationships with the Gulf countries are as strong and diverse today as they have been for generations.
The debate has also served to demonstrate the complexities, contrasts and opportunities that the region presents. Over 160,000 of our nationals currently call the Gulf their home. We work with our Gulf allies on energy security, we value their help in the fight against terrorism, and they represent one of our largest global export markets. The region is home to over a quarter of the world’s sovereign wealth, a significant portion of which is invested in the UK. This shows the strength of the bilateral relationship, but of course we support discussions with the Gulf Co-operation Council at the EU level to benefit trade between the two blocs. However, our bilateral relations remain strong and important.
In response to the noble Lord, Lord Triesman, we meet regularly as a bloc. In fact, my right honourable friend the Foreign Secretary hosted his GCC counterparts at a lunch at the end of September, and the GCC ambassadors meet on a regular basis to connect with each other and with parliamentarians. I have been invited to a number of those occasions. We also work with the Governments of the Gulf to help us achieve our foreign policy priorities in Libya, Syria, Egypt and Yemen, to name just a few examples. So ours is a multifaceted relationship and, as the variety of issues raised today shows, one to which an hour-long debate can hardly do justice. However, I shall try to deal with some of the broader issues.
The UK’s engagement with the Gulf is at a high point. Through the cross-Whitehall Gulf Initiative, launched by my right honourable friend the Foreign Secretary in 2010, we are expanding our co-operation to unprecedented levels across the full range of issues, from culture to defence, commercial interests to education, and of course on regional security issues. We are engaged at the highest levels, with over 150 royal and ministerial visits to the region over the past two years, and frequent visits by our Gulf counterparts in the other direction, not least of which have been state visits to the UK by the President of the United Arab Emirates in May this year, the Emir of Kuwait in November 2012 and the then Emir of Qatar in October 2010. Our engagement with the region has been strengthened by the launch of formal dialogues with the UAE, Kuwait, Oman and Bahrain as part of our Gulf Initiative. Visits and dialogues are a substantial commitment, but they are a vital investment and I am pleased that they are already bearing fruit. In a highly competitive global landscape we are building strong links between our businesses, our educational institutions and our militaries. I have taken note of the words of the noble and gallant Lord, Lord Stirrup, who said that we have to take a long-term approach.
Your Lordships have heard today that the Gulf states represent a growing market for our goods. Since 2010, our trade in goods with every country in the region has increased by up to a quarter. It was worth over £11 billion last year in the region as a whole, £5 billion of that with the UAE alone. Since 2009, we have increased our exports in goods by 10%.
Gulf countries are building their infrastructure, improving their healthcare and investing in education. They are doing all of this with the help of British companies. I should add that it is over and above the normal day-to-day business support campaigns that UKTI teams in our embassies are working on to deliver British business success in that region. Inward investment, too, is growing substantially. Qatar alone has invested over £22 billion in the UK, creating jobs here and bolstering our economy.
The Government are constantly seeking new and innovative ways to work together to increase prosperity on both sides. I am delighted to say that the UK will play host to the ninth annual World Islamic Economic Forum in London at the end of this month—the first time this meeting has been held outside the Muslim world. This is an important step in our commitment to cementing the UK’s reputation as a centre for Islamic financial services.
I discussed the forum meeting and broader Islamic finance issues with Ministers, senior officials and finance professionals across the region during my recent visit. In Dubai, Abu Dhabi, Doha, Manama and Kuwait City, the message was clear: the potential for Islamic finance is huge and growing. The interest in working with the UK is there. I am committed to ensuring that the UK benefits from this growing market.
Of course, our prosperity goals will be best achieved in a secure and stable environment. Our Gulf allies sit in a troubled region. The problems were eloquently set out by my noble friend Lord King and the noble and gallant Lord, Lord Stirrup. We are proud to have stood by our Gulf allies at times of crisis and need, most notably in Kuwait in 1991. We have strong defence relationships, with military assets and personnel based across the region. The UK continues to provide expertise and equipment. We value the contribution that Gulf countries make to our security too, particularly through our close co-operation on counterterrorism issues. We share a common threat from international terrorism, which we deal with together. Gulf countries are showing leadership in countering the threat. Both Saudi Arabia and Abu Dhabi have established impressive models. We are also expanding our co-operation in international aid, working on joint aid projects with Qatar in Sudan and with the UAE in Somalia and Afghanistan, to name but a few.
Our strong friendship with Gulf nations enables us to have open and honest discussions where our views differ, in particular on the important issue of human rights and democracy. We are always ready to speak out as a matter of principle, and the Foreign Office’s annual report on human rights pulls no punches. We continue to press, at every level of diplomatic engagement, for practical, realistic and achievable reforms to improve the human rights situation across the region. Gulf states were not immune from the growing hopes which spread across the region in 2011. Countries in the Gulf, as elsewhere in the world, are finding ways to adapt to the changing aspirations of their people.
I agree with the noble Lord, Lord Luce, that the Bahrain Independent Commission of Enquiry was an unprecedented move by the Bahrain state, and King Hamad in particular. We are committed to supporting a Bahraini-led reform process, and have provided assistance in torture prevention, the judicial process, community policing and civil service capacity building, to name but a few. We welcome the progress that has been made, but we are also clear there is still more that needs to be done. We will continue to press the Bahraini authorities for further action.
Since the Arab spring we have emphasised to our Gulf partners the importance of stability based on the building blocks of democracy: a voice, a job, an independent media and the rule of law. We are constantly pressing for progress—I know because I have done so myself—and we are supporting our Gulf colleagues when we see it. However, we also understand that reform takes time. We are seeing Kuwait building a more vibrant Parliament; Saudi Arabia has, for the first time, appointed 30 women to the King’s advisory council, and we are helping Bahrain by training the police and supporting the judicial system.
I am also grateful to the noble Lord, Lord Luce, for his kind words on the Arab Partnership Participation Fund. Through this fund, administered by the Foreign Office, we will provide UK expertise, technical support and seed funding to a variety of Gulf state countries to build the capability of public servants to respond effectively to the changing economic and political challenges facing the region.
Every time I visit the region I am struck by the genuine affection in which Britain is held. My Gulf counterparts speak fondly of the UK and their memories are long. Many of them have spent time here and see it as their second home. Our relationships have strong foundations of a shared history, but the focus of this Government is about making sure that we use those strong foundations to build a strong future. Our allies sit in a complex part of the world, one which is undergoing seismic shifts. It is a region of great diversity and of great promise, and we will continue to work tirelessly to ensure that the UK remains a key partner and a strong ally.