Co-operation Council for the Arab States of the Gulf

Lord Luce Excerpts

Thursday 10th October 2013 Grand Committee

Asked by

[Lord Luce]

To ask Her Majesty’s Government what is their assessment of the United Kingdom’s relationships with the countries of the Co-operation Council for the Arab States of the Gulf.

[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.