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1. Gulf financial aid and direct investment: Tracking the implications of state capitalism, aid, and investment flows

Author:
Karen E. Young
Publication Date:
08-2020
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Much energy has focused on China’s Belt and Road Initiative and the debt-trap diplomacy it represents. But there is another set of players on the scene whose growth and influence in this sphere have been largely ignored. Gulf Arab states, particularly Saudi Arabia and the United Arab Emirates, have increasingly embraced an aggressive growth, investment, and development model for the broader Middle East. This report and the accompanying Gulf Financial Aid and Direct Investment Tracker are an effort to understand the breadth and scope of Gulf aid and financial intervention into a representative set of cases in the Middle East, the Horn of Africa, and West Asia. The objective is to demonstrate the competitive landscape for foreign investment in the receiving case countries and indicate the growing strength of Gulf capital investment, as it measures against a perception of Chinese capacity in the wider Middle East and emerging markets broadly. Most important, the comparative data here also demonstrate how private capital flows from the United States, United Kingdom, and European Union compete against flows of capital from state capitalism sources such as China and the Gulf.
Topic:
Foreign Direct Investment, Belt and Road Initiative (BRI), Investment, Strategic Competition, and State Capitalism
Political Geography:
China, Middle East, and Gulf Nations

2. Mapping economic diversification across the Gulf Cooperation Council

Author:
Karen E. Young
Publication Date:
09-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The economies of the Gulf Cooperation Council (GCC) remain heavily reliant on natural resource revenue as a source of government spending and a driver of growth. Diversification efforts now often include new ways to generate revenue through state investments in energy projects abroad (including refining and petrochemical production) and national oil companies. Since 2015, the GCC countries have become more competitive with each other in altering their policy landscapes to streamline fiscal expenditure and attract foreign investment and resident investors. There is significant variation in policy approaches to foreign labor and tax. Each of these governments faces enormous strains on public finances and challenging economic outlooks, due to depressed oil prices, demographic pressures, high unemployment rates, and a lack of economic diversification. Debt has become a tool of choice, but the capacity to repay and the capacity to grow are both beginning to differentiate the GCC states.
Topic:
Foreign Policy, Defense Policy, Government, Natural Resources, and Economy
Political Geography:
Middle East, Gulf Cooperation Council, and Gulf Nations

3. Attribution, intent, and response in the Abqaiq attack

Author:
Frederick W. Kagan
Publication Date:
10-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The Yemeni al Houthi movement claimed the drone and missile attack on Saudi oil facilities on September 14, 2019, but the attack on Abqaiq was planned and executed by Iran. The al Houthi claim to have conducted the attack diverted the Western discussion away from Iran’s role and focused instead on the war in Yemen and on Saudi Arabia’s misdeeds. The Iranian attack on Abqaiq was part of a pattern of Iranian military escalation in response to the Trump administration’s “maximum pressure” campaign. The US should conduct a military strike to deter continued Iranian military escalation. Refraining from retaliation will embolden Iranian proxies and allies and encourage the regime to stand fast with its nuclear program, regional activities, and repression of its own people.
Topic:
Foreign Policy, Terrorism, Military Strategy, and Houthis
Political Geography:
Iran, Middle East, Yemen, Saudi Arabia, United States of America, and Gulf Nations

4. Beyond 2030: Economic growth in the Middle East and North Africa

Author:
Karen E. Young
Publication Date:
05-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Energy-dependent growth in the Middle East and North Africa (MENA) region, whether in traditional oil and gas exports or petrochemical production and global refinery operations, will be sensitive to shifts in Asian economies and new technology and efficiency innovation. Without structural reforms to subsidies and labor markets, a reliance on debt finance now kicks the can down the road toward difficult fiscal choices in the future. MENA economies are becoming more integrated into emerging markets not by increased trade but through state-led development partnerships and the use of aid and economic statecraft.
Topic:
Foreign Policy, Development, Energy Policy, and Economic growth
Political Geography:
Middle East, North Africa, Gulf Cooperation Council, and Gulf Nations