At a time when economics has become a more central feature of international relations, the Arab Gulf states have raised their game in foreign economic policy, both in aid and foreign investment, to enhance and sustain their regional and global leadership. Having historically used foreign aid and humanitarian aid as a quiet tool of their respective foreign policies within the wider Middle East, Arab Gulf states, particularly Saudi Arabia, Qatar, and the United Arab Emirates, have more recently targeted financial aid and military assistance toward neighbors in crisis.

How does aid from Gulf states differ from conditional aid coming from traditional Western donors and how effective has it been as a tool of foreign policy? How has the dramatic fall in oil prices affected the ability of the Arab Gulf states to continue their generosity and the exercise of economic statecraft?

Panelists:

Jamal Abdullah, Researcher, Al Jazeera Center for Studies

Hessah Al-Ojayan, Visiting Fellow, Middle East Center, London School of Economics

William Bartlett, Senior Research Fellow, Europe Institute, London School of Economics

Afshin Molavi, Senior Fellow, Foreign Policy Institute, Johns Hopkins University

Karen E. Young, Senior Resident Scholar, Arab Gulf States Institute in Washington (Moderator)

The discussion began with Afshin Molavi, who covered the relations of China and the UAE. Currently, there are close to 3,000 registered Chinese companies in Dubai today and more than 50 percent of trade coming from the Gulf Cooperation Council states goes to east Asia with 40 percent of imports coming from east Asia. But the ties between east Asia and the GCC go deeper than trade. King Abdullah of Saudi Arabia made his first state visit ever to China, recognizing it as an economic powerhouse and important ally for the future. Hessah Al-Ojayan discussed the role of Kuwait as a generous donor. According to Ojayan, Kuwait has extended a significant amount of foreign aid but has since become disillusioned with the idea that foreign aid will help accomplish its goals. Kuwait has also established a development fund for building relationships within and outside of the GCC that is self funded and impervious to shifting oil prices. As far as donations are concerned, Ojayan sees Kuwait giving more targeted grants and loans instead of broadly giving as it has done in the past. William Bartlett opened with a quick history of UAE aid to the Balkans during the Yugoslavian war and the Kosovo succession and continued by describing the current relationship between Serbia and the UAE. According to Bartlett, the UAE has invested heavily in transport, construction, agriculture, and defense in Serbia. The UAE chose Serbia to receive funding to provide farming aid to the UAE despite its recent instability. Finally, Jamal Abdullah commented on Qatari and GCC policy stating that the GCC can’t be compared to the European Union regarding foreign policy because the EU has a unified foreign policy while the GCC has six foreign policies. Qatar in particular has three levels of foreign policy: the GCC, the greater region, and broad international. Qatar has recently made a transition between using soft and hard power specifically in Libya and supporting opposition troops in Syria.

After the opening remarks the first question was about Iran and the significance of its rise in the region. Molavi began by saying that Iran is seen as a huge trading opportunity while Saudi-Iranian relations were simultaneously at an all time low. Abdullah followed up by saying the key to future success of the GCC lies in Saudi-Iranian relations. Finally, Molavi called “the Dubai model” into question, stating that Dubai had become the Singapore of the Middle East and many African states are trying to emulate the trade hub role of Dubai to bring financial success to their countries.