Decolonizing “Investments”: Does Britain Loot the Gulf in Plain Sight?
The "investments" provide Gulf monies with a veneer of financial respectability, global marketing propaganda, and to conceal the daylight neo-imperial robbery in plain sight.
The recent Saudi Arabian purchase of English Premiership football club, Newcastle United to the tune of £305 million came hot on the heels of the United Arab Emirates pouring £10 billion in the British economy on the pretext of ‘investing’ in infrastructure projects. This latest round of fabulous amounts of Gulf money, pouring into the British economy is indicative of the continued British influence in the region. Strip away the overwhelming American military presence and attendant military havoc it’s caused (in conjunction with Britain) over the last several decades and one is face to face with a veritable British regional underprint. Central to this underprint is the fact that every single nepotistic dictator ruling a Gulf Cooperation Council (GCC) state owes its provenance to the now officially defunct British Empire. As such, this essay provides an overview of the historical and imperial meaning of GCC “investments” pouring into Britain.
Newcastle United Football Club was officially purchased by a tripartite consortium, financially led by a Saudi Arabian Sovereign Wealth Fund (SWF) called the Public Investment Fund (PIF) which will hold 80% of the club. The other two partners in the consortium will hold 10% each. The PIF is largely funded by surplus oil receipt profits (or “petrodollars” as they are more popularly referred to) and is owned by the de facto ruler of the Kingdom of Saudi Arabia (KSA), Prince Muhammad bin Salman, the son of King Salman. Dr. David Wearing’s book AngloArabia: Why Gulf Wealth Matters provides some guidance to understand Britain’s financial relationship with the GCC. Wearing refers to Dr. Saleh M. Nsouli, former director of the European Office at the International Monetary Fund, who states that oil-producing states recycle petrodollars into the world economy in two ways. Firstly, there is an Absorption Channel, that is for domestic purposes based around domestic consumption and investment and secondly, there is a Capital Account Channel for, inter alia, overseas projects. Sovereign Wealth Funds fall into the latter category and each of the British established dictators in the GCC possesses their own Sovereign Wealth Funds (SWF).
Who says where and when these SWFs deposit and recycle petrodollars are decisions supposedly made by the despots of the GCC. Dr. Sara Bazoobandi, an expert on SWFs provides some clarification in her book, The Political Economy of the Sovereign Wealth Fund on how these decisions are made, “It is unlikely that the governments of Kuwait or Saudi Arabia will find it easy to diversify their financial strategies from their political alliances with the former colonial powers that assisted them in creating their sovereignty. After all, there would have been no SWF if there was not a sovereign.”
The notion of “former colonial power” mainly assumes there was a pre-existing state and imperial Britain overwhelmed the hitherto rulers and occupied it. This was not the case with Saudi Arabia. Britain was much more than a “colonial power” for the Saudi tribe. It literally played the decisive role in creating the “sovereign” that became the KSA. Britain indirectly armed the Wahhabi Saudi clan while they were in exile in a territory known as “Kuwait” and with these weapons, the Saudi clan established itself in Riyadh in 1902 in the middle of the night by slaughtering the current rulers while they were asleep. Britain then facilitated the Wahhabi clan’s expansion across the Arabian Peninsula in accordance with British imperialist interests, finally naming the Wahhabi clan’s new territory, Kingdom of Saudi Arabia in the early 1930s. Likewise, none of the other Gulf states existed before the arrival of the British Empire. For example, the original reason behind the British Empire creating the nucleus of the “Kuwait” sovereign was to prevent a proposed Berlin to Baghdad railway line extending into the Gulf and establishing a rail hub on the coast. In effect, Britain set up an informal empire in the Arabian Peninsula by using the most pliable tribes to do its bidding. Last centuries' pliable piratical tribes are today’s Gulf “local elites” with Sovereign Wealth Funds supposedly at their independent disposal.
More so, Wearing notes the recycling of petrodollars is done within a “relationship established in and from the days” of the British Empire and is “central to UK-GCC relations today.” According to recent research, the British Empire extracted no less than $45 trillion out of India alone over an almost 200 year period. Coterminous with this wealth extraction from India, tens of millions of Indians perished due to famines and impoverishment. The economist and Nobel Prize winner, Dr. Amartya Sen noted that towards the end of British rule in India the average life expectancy was no more than 32 years old. The loot extracted from India was used to enrich Britain. British rule ended in 1947 leaving behind it a bitterly divided and a dirt poor India. As such, ever since Britain formally militarily entered the Middle East region at the end of World War One, it has been in a state of intermittent warfare rooted in Britain and its allies securing their financial interests. Whether Britain was bombing Iraq in the 1920s, laying the basis for the destruction of Palestine in the 1930s, overthrowing Iranian democracy in the 1950s, fighting for the slave-trading Omani dictatorship in the 1970s, or waging war on Iraq in 2003. The Middle East steadily replaced India as a showcase for Britain’s imperial mission to subjugate an indigenous population to meet the economic and existential needs of its ruling elite and imperial metropole.
When the very legitimacy of the British concocted states of the Gulf and wider region was brought into question, challenged, and even threatened in the 1950s and 1960s by then an ascendent Arab Nationalism, various left-wing movements and others with their vision of a united Arabia in West Asia and North Africa to be financed by the resources of the region, the United States raised its profile and came to the defense to secure and consolidate the British imperialist underprint. The United States needed an economically thriving Western Europe as an ally against the post-war appeal of the Soviet Union and communism. Britain had already bled the Indian nation dry to enrich itself over the last many centuries, was now committed to plundering west Asia, a.k.a ‘Middle East’ to rebuild its economy after World War Two. As President Eisenhower stated in the late 1950s after Nasser’s Suez victory, the Americans need to ask, “What must we do in Europe and then the question, how do we square this with the Arabs?” The British Prime Minister in this period Harold MacMillan acknowledged that “without oil” and “the profits from oil” Britain would be lost and not able to economically survive. Rather than allowing these states to be integrated into the wider regional project, the United States superpower hegemony guaranteed and secured the British imperialist scheme of a divided and cantonized ‘Middle East’ to be maintained.
As the creator of GCC sovereigns, it is, therefore, no surprise, as Wearing and Bazoobandi, argue, Britain is the destination of choice for the Gulf “local elites” to stash away a consequential proportion of oil profit surplus. In effect, the partitioned geographical segments on the coast of the Gulf littoral became purposed to deliver back the wealth to the imperial metropole. This would be the equivalent of a major power i.e. China carving out a piece of littoral on the northeast of England, naming it the Kingdom of Northumberland whose territorial waters would include the North Sea and then surprise the “local elites” of Kingdom of Northumberland and deliver a good proportion of the North Sea oil profits to China via some clever financial “vehicle”, say a Sovereign Wealth Fund, which is owned by the nepotistic descendants of a pliant clan ruler an imperial China originally placed on the throne many decades previously.
It is on this geopolitical basis, the deliverance or transfer of petrodollars back to the former imperial metropole is categorized as “investment”. This categorization provides Gulf monies with a veneer of financial respectability, global marketing propaganda, and to conceal the daylight neo-imperial robbery in plain sight.
The purchase of Newcastle United by a Saudi Arabian SWF is simply the mere tip of the GCC “investment” portfolio in Britain. Billions, possibly hundreds of billions, are poured into the British economy in the name of “investments” to secure financing for a wide array of government projects and businesses. Whether these businesses are in the British financial sector, infrastructure, environmental, shipping, real estate, manufacturing, retail, technological, sporting corporations, and of course the equestrian industry, the funds of the GCC dictators can be counted on to furnish the necessary monies to keep them ticking over, prevent the specific business from bankruptcy and employ thousands of Britons in the process.
More often than not, the British media and certain politicians poetically self-gift wrap these GCC investments as a “show of confidence” in the UK economy. As if the pliant despot has any choice but to confer some variant of ‘confidence’ in the British economy. So according to Britain’s Kuwaiti Ambassador, Michael Davenport in a speech in 2019, when Kuwait established the Kuwait Investment Office in London in 1952, it showed “a resounding vote of confidence in the United Kingdom as a sound place to invest”. Former Secretary of State for International Development, Dr. Liam Fox in a speech in 2017 declared that the Qatari Emir has “continued faith in the UK economy” and of course the billions of Qatari petrodollars pouring into the UK are a “strong vote of confidence”. When the Qataris agreed to fund one of the tallest buildings in the United Kingdom, the Shard, it was partly because they were ‘confident’ in London’s commercial real estate market. On the other end of the political scale, GCC investments provide another batch of media commentators and politicians with an opportunity to showcase their moral humanitarian posturing and ask probing questions about whether it is morally legitimate to accept money from countries that commit horrendous human rights abuses as if there is an alternative to GCC largesse pouring into the British economy. The latter, for some reason always conveniently overlook these countries partly exist, to underpin and guarantee British prosperity after the end of its formal Empire. In what can be interpreted as a show of historical contempt for the people of western Asia as well as a victory for British imperialism, the British historian Professor Michael Burleigh has argued that the £10 billion the UAE despots have poured into Britain is “pushback” against the Chinese economy. His argument seems to be that it is better this money is used to build up British infrastructure, environmental projects, and telecommunications, rather than spent in business deals with the Chinese. For this reputable historian, the people in the wider region literally don’t get a second thought.
In conclusion, GCC investments clearly help allow Britain to be universally considered a major world economy. The very geopolitical foundation of these investments is a divided and cantonized west Asia region. The more unstable and communally fractious the wider region becomes, the less a challenge to these “investments” being poured into the British economy will ever materialize again. As seen, these investments are part of the Capital Account Channel for recycling petrodollars. There is also the Absorption Channel for recycling petrodollars which no doubt also has its own distinctive benefits for the British economy. Aside from these combined “investment” channels are GCC states own distinctive domestic spending for the maintenance of their monarchies, including spending on British weaponry. Whether all these combined benefits to Britain have yet to match the $45 trillion looted out of India during the era of formal British Empire is for more economically trained experts to decide.