The curious case of small Gulf states

I’m in Dubai for meetings of the World Economic Forum’s Global Agenda Councils, which provide some of the background information and agenda setting for Davos and other WEF activities. I’ve been assigned to the group assessing "geopolitical risks" for 2013, so I’ll be spending the next two days trying to figure out where dire things might happen in the next year (and where they won’t).

Dubai itself is sort of like Disneyland-on-steroids, and I won’t try to embellish on all the other descriptions of the place. But as I rode in my taxi to the hotel last night, I was also struck by the thought that the UAE (of which Dubai is a part) and other states like Qatar and Brunei, might be something of a realist anomaly. The puzzle is this: How is it possible for very small, very rich, yet militarily weak countries to retain their independence? Why haven’t rapacious great powers or greedy neighbors gobbled these countries up long ago, and seized all that valuable oil and gas for themselves? If the world is as dog-eat-dog as realists depict, why are these states still in business?  

There are several possible explanations. The most obvious is that these states have enjoyed great power protection for a long time, originally from Great Britain and subsequently from the United States. Their rulers have accommodated their protectors in most ways, in exchange for implicit or explicit security guarantees. In short, realism does explain a lot of why these states have survived: It was in the interests of some powerful countries to keep them safe and secure.

But why didn’t Britain or the United States take these places over and keep all that oil wealth for themselves? Simple. It turned out to be easier to let local elites run these societies, instead of turning them into sullen and resentful colonies. In the British case, moreover, the emergence of the Gulf as a major oil-producing center coincided with Britain’s imperial decline, signified by the Suez debacle in 1956 and the decision to withdraw military forces east of Suez in 1967. So Britain was in no position to take these places over anyway.  

The United States has never been a very enthusiastic colonial power, and U.S. leaders wisely preferred to exercise influence indirectly and keep U.S. ground forces out of the region. As the experiments with "dual containment" in the 1990s (which helped fuel the rise of al Qaeda) and the invasion of Iraq in 2003 showed, getting too heavily engaged trying to run the region directly is not something the United States is very good at. Nor was it necessary.

A second reason for the peculiar stability of the Gulf is the absence of a regional great power with the capacity to absorb the others, which in turn makes it possible for balance-of-power politics to work. The Shah of Iran did some minor muscle-flexing and territorial expansion in his day, but he never made a grab for any of his oil-rich neighbors. Saddam Hussein is the exception that proves the rule, and look what happened to him. Moreover, the militarily weak but oil-rich Gulf states all understand that trying to gain more wealth at someone else’s expense was both unnecessary and bad for business.  

The third reason why these states retain their independence is the norm of sovereignty. It may be an accident of geology that the UAE, Qatar, Kuwait, and others ended up with so much wealth underneath their soil, but once a country’s government and borders have been recognized by others, the status quo takes on a life of its own and efforts to overturn it face an uphill fight. Saddam Hussein tried to convince the world that Kuwait was Iraq’s "19^th province" in order to make his invasion seem more legitimate, but nobody bought the argument and his invasion was seen as naked aggression. Because altering borders via force has become less and less legitimate over time, states can be really rich and really vulnerable and still be somewhat protected. 

Finally, small countries like Dubai enhance their security by making themselves more valuable to others as independent entities than they would be as colonies. Dubai has established itself is a financial center, entrepot, cultural oasis, and diplomatic hub, which is precisely why the WEF is here this week. It has close ties with the West, but still has formal and informal dealings with others, including states such as Iran. In the broadest sense, the global community is probably better off with a few countries occupying this sort of niche, just as Switzerland did for decades, and that means that most countries would rather have it be independent than out of business.

Which is not to say that security in the Gulf is guaranteed, or that realism can’t account for these states’ survival (see #s 1 and 2 above). Given the diplomatic stalemate with Iran, in fact, it’s easy to imagine scenarios where the present Gulf order would come under significant strain. But I’m betting it won’t, if only because hardly anybody really has much interest in that happening. Now if only one could be confident that sensible self-interest would always prevail….