The Gulf region is a complex and constantly evolving region that involves very different levels of uncertainty and risk. This net assessment attempts to address the underlying problems and pressures shaping the risks in the region and each Gulf country using official data and data from key international institutions like the UN, World Bank and the IMF. It identifies overarching trends and key issues, before focusing on each Gulf country in turn.
The region has radically changed since the 1950s, with greater urbanisation and higher levels of education among the population, as well as of employment outside of rural and pastoral roles. A major issue the region is currently facing is its youth bulge. Most states have failed to create the conditions that can offer its young men and women jobs and career opportunities. The region is heavily dependent on petroleum and a “rentier” social contract that has become critically dependent on high petroleum prices and export revenues.
Southern Gulf states all have low to medium governance and economic risk. Petroleum wealth has been a key factor in providing this level of stability, and the drop in export revenues since 2014 is having a major impact. Saudi Arabia and UAE have built up strong military forces, and all of the Southern Gulf states continue to improve their forces, and their internal security. However, Saudi Arabia does still face a significant threat from Al Qaeda in Arabian Peninsula (AQAP) and from Houthi-led threat on its border with Yemen. Saudi Arabia, Bahrain and Kuwait also face threats from tensions between the Sunni and Shi’ite populations.
Iran, Iraq and Yemen are all high risk states, for varying reasons:
- Iran is a Shi’ite-dominated state that has steadily increased its influence in the region and over Lebanon, Syria, Iraq and Yemen as a result of its steadily growing missile and rocket development and its intelligence services.
- Iraq faces continued serious threat from ISIS, which still occupies areas in the West of the country, but also faces deep divisions between a Shi’ite majority, a Sunni minority and the country’s Kurd population. Levels of governance are poor and its government is ranked as one of the most corrupt in the world. Its economy is weak as a result of ongoing conflict, political turmoil and the recent ‘crash’ in petroleum prices and export revenues.
- Yemen has long been caught up in power struggles, facing ineffective governance and failing to develop its economy or its water issues. Its narco-economy further limits its wealth and development. The ongoing civil war between its Houthi and Saleh faction of its elected government, and a Saudi-UAE led coalition has put even greater pressure on its already weak economy and continues to pose huge humanitarian risk to its population.
There are several power struggles within the region, including:
- Arab-Iranian competition for influence over Syria and Iraq, as well as in the Levant, Bahrain and Yemen.
- The rise and expansion of Kurdish movements and territorial control (in Turkey, Iraq and Syria) over Arab areas create a growing risk of new forms of ethnic conflict on the boundaries of the Gulf region.
- Efforts of ISIS and of other Islamist extremist groups to gain power have created a mix of conflicts involving terrorism and insurgency. .
- The continuing civil war in Yemen draws in a number of actors from across the region, with Houthi rebels and Saleh forces on one side and Saudi, UAE and the Yemeni government on the other.
The assessment also identifies the Israel-Palestine issue and the strategic commitments of the US as factors that will shape the region’s stability. The paper goes on to assess each country’s risk status, outline their politics, governance and demographics, and explore various context-specific factors.