UK prepares a new approach to the Gulf

14 July 2010

Queen Elizabeth II heads a host of top UK figures coming to the Gulf this autumn. It’s the start of a new era in Britain’s relations with the region

The UK has a special relationship with the countries of the Gulf. The story started in 1798 when Britain established diplomatic relations with the sultan of Muscat. The sultanate was the UK’s ally in its assault on the Al-Qassimi stronghold in Ras al-Khaimah at the end of 1819. The following January, the Sheikhs representing most of the emirates that now make up the UAE signed a peace treaty that legitimised British interference with the affairs of the people of the lower Gulf. Bahrain was drawn into the system in 1860 and Kuwait followed in 1899. The Al-Saud, now rulers of Saudi Arabia, became Britain’s allies in 1915. Qatar accepted British protection in 1916.

Like their counterparts elsewhere in Britain’s Middle East empire, the people of the region resented meddling foreigners. Oman and Saudi Arabia were always sovereign states, but the rulers of other parts of Arabia’s Gulf littoral were regularly reminded that the boss was British. Complete independence from the UK – when it was achieved between 1961 and 1971 by Bahrain, Kuwait, Qatar and the UAE – was nevertheless achieved peacefully. Relations never suffered the strains caused by the violent struggle for freedom seen elsewhere in the British Empire.

Creating the UAE was partly a British idea. Initial plans called for the UAE to comprise nine states: The seven that are in the federation plus Bahrain and Qatar. They foundered on Iranian insistence that Bahrain, which it then claimed, should not join a new country that Tehran believed would be controlled by the UK. Once Bahrain dropped out of the federation, Qatar was bound to follow because of unresolved maritime border issues with Manama. And when the federation was formally declared in December 1971, only six emirates were members. Ras al-Khaimah, rattled by Iranian assertiveness in the lower Gulf and Tehran’s seizure of the two Tunb islands and half of Abu Musa, joined in early 1973.

Britain therefore played a seminal role in the early stage of the processes that led in 1981 to the establishment of the GCC, an association connecting Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Almost 30 years after the GCC came to life, the dreams some had about its future remain unfulfilled. Border disputes and petty rivalry continue to slow progress. Nevertheless, business views the GCC as a single market of remarkable promise.

Its combined GDP is likely to recover to about $1 trillion in 2010, more than half that of the entire Arab world. Strong growth is expected for the indefinite future as the countries of the region invest in infrastructure and new industries. By 2030, the GCC economy may have doubled in real terms.

Britain’s Conservative-Liberal Democrat coalition government wants to capitalise on the opportunities the GCC represents. UAE Foreign Minister Sheikh Abdullah was the first foreign official William Hague spoke to after he was made UK Foreign Secretary in May. David Cameron made an unannounced visit to Abu Dhabi on 12 June to call on UAE President Sheikh Khalifa while he was on his way to Afghanistan. This is just the prelude for a host of top-level UK government visitors this autumn. They will include Hague, Chancellor of the Exchequer George Osborne and Business Secretary Vince Cable. It will all climax with the visit of the queen herself.

The last time she came was in February 1979 when she opened the World Trade Centre in Dubai, then on the outskirts of the southern limits of the city. The Iranian revolution had just taken place and the UAE would become part of the frontline of the Iran-Iraq war just over 18 months later. Today, the region has been at peace, though sometimes uneasily, for seven years. Dubai and the UAE have been physically transformed.

The message from London is that the UK still counts and remains the GCC’s natural partner in tackling challenges the region faces from the Iranian nuclear programme and the Israel-Palestine deadlock to privatisation. But the time has come for Britain to recognise its approach to the region needs modernisation. The best way to promote UK exports of goods and services is to deal with the GCC as a single market, not six. That requires concentrating limited government resources strategically and addressing the sectors with the greatest opportunities. For the UK, after finance, that must be projects, where UK professional skills continue to be well regarded and in demand.

By the end of the year, it will be clear how David Cameron plans to start a new era for UK relations with the Gulf. The benefits for everyone could be greater than anything that has gone before.

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