The War Exposed the Fragility of the Gulf Economy
and the Hidden Economy of the UAE,
Confirming the Need to Leverage the Event for Arab Advancement
Dr. Adel Samara
Note: As the war was suspended for 14 days, the aggressors did not achieve their goals despite the fact that they destroyed a lot in Iran, but Iran did not defeated or fragmented. I wrote this article since April 2 and my emphasis was and still is that the Arabs must understand the lesson and grasp a lesson of it, let’s see.
No country after a war can remain as it was before it. While it is possible to record the start of a war historically, predicting its consequences, the changes that occur during and after it, and forecasting its results is a matter of luxury or wishful thinking.
Thus, the Arab citizen must be wary of the chaos of analysts, experts, and strategists who proliferate on screens, treating this as a once-in-a-lifetime opportunity for profit, saying whatever is asked of them without regard for their expertise or integrity—much like religious-political figures with their sectarian edicts, or intellectuals of the “sixth column.” All three exploit their “own little gatherings.” As Tolstoy said, “No one can predict the changes that result from war.”
This raises the question: why do you, I, or anyone write about the ongoing war/aggression against Iran and Lebanon? The answer, briefly, is that our homeland is a stage where aggressors and the attacked struggle. Beyond that, and more importantly, our engagement with the event is to use it as an opportunity, regardless of its outcome, in the project of inevitable Arab unity, which is the only salvation from our current predicament—namely, American domination of the region. This domination will not end without severe conflict, meaning the struggle is long, much like the current war.
Gulf regimes act individually in relation to war, whether as pawns, clients, or cowards standing aside. Each regime speaks only about itself, as do their “experts, analysts, intellectuals, and religious-political figures,” which is the most dangerous embodiment of internalized defeat. Very few address the Arab world as a whole, even though the current war offers lessons and opportunities to establish a minimum general Arab stance.
The continuation of each Gulf regime’s attachment to a regional or international power, alone or with some Arab states, perpetuates the current situation, keeping the Arab homeland a stage for conflict between the greedy aggressor and the oppressed. Any position or analysis that ignores the Arab dimension is dangerous and counterproductive.
Why focus on the Gulf alone?
This is a natural and valid question. The Gulf is adjacent to the battlefield, directly affected by war, and one of the launch points of aggression. At the same time, it is the “hen that lays oil for the West” more than any other Arab country. It will certainly not emerge from the war as it was before.
The West had to retain this barrel of oil. During the Nasserist wave in the Gulf—especially in the UAE, Qatar, Kuwait, and Bahrain—the region was engineered to suppress nationalist movements, particularly Nasserism, in the 1960s. Oman, fearing the Marxist wave from South Yemen, saw the Dhofar rebellion crushed by the Shah’s army, Britain, Oman, and Jordan. Note that Oman has a deeper historical connection with Britain and the U.S.
The Gulf was divided into its current fragments in the late 1960s and early 1970s—a repeat of the earlier Sykes-Picot division of the Arab Levant in 1916 and the protocols in North Africa in 1923 and 1956—designed to prevent the unification of the Greater Arab Maghreb. The division of the Gulf was orchestrated by Britain and handed to the U.S., with Britain retaining a share and role.
Imperialist Western interests required the establishment of family- or tribe-based regimes over small entities that would not unify, with minimal territorial consciousness and inherently anti-nationalist cultures—ensuring imperialist reliability.
The results of this deliberate division became evident after the first oil boom triggered by the 1973 October War, which revealed historically significant developments:
- Arabs could defeat the entity (Israel) even with a unified stance of just Syria and Egypt. Imagine the potential of a fully united Arab nation.
- The entity is merely a Western protectorate, confirming that the conflict is essentially with imperialism, including Israel.
- Oil is not a globally nationalized commodity; it belongs to whoever controls the Gulf, giving a portion to local regimes.
- Oil pricing in dollars ensured the dollar’s global dominance, allowing the U.S. to manage global surpluses.
Unfortunately, the 1973 victory was neutralized by sidelining Egypt from the Arab-Israeli conflict and strengthening the Gulf’s economic and political role, positioning Saudi Arabia as a substitute for Arab Egypt. This marked the decline of the Arab position and enhanced imperialist control over the Gulf and much of the Arab world.
Imperialism continued using oil revenues to bribe economically weak Arab regimes and eliminate Arab republics—starting with Iraq, then Libya, Syria, Yemen, and after weakening Egypt. The Gulf played at least two roles in this:
- Funding the counter-revolution with trillions of dollars
- Recruiting terrorist religious-political forces, Arab and non-Arab, under U.S. and Western logistical planning—what we can call “terrorist Orientalism.”
The Gulf: Wealthy but Structurally Fragile
Domestically, part of oil revenue was invested in urban modernization—roads, buildings, towers, shopping centers, even artificial islands. Luxury replaced traditional living, creating political apathy and diluting national identity. Consumption-focused lifestyles have weakened public rights, national consciousness, and class awareness.
For example, when asked why Qatar lacks democracy, Dr. Azmi Bishara replied: “Because people don’t demand it!” The Gulf’s lifestyle offers easy wealth, consumer indulgence, and spending on imported goods, including weapons. Surpluses were circulated globally under U.S. policies, as explained by John Perkins in Confessions of an Economic Hitman. Gulf surpluses also purchased U.S. treasury bonds and sovereign funds.
Gulf regimes turned to Western consultants in industries like aluminum and petrochemicals. The UAE transformed Dubai into a port and free trade zone. With no true capitalist private sector and governments holding liquidity, foreign companies were granted ownership up to 100% in industries. Incentives included cheap land, loans, energy support, and import exemptions. Aluminum, critical for industry and military, requires massive energy—readily available in the Gulf. Global aluminum prices track oil and gas costs.
The current war and Iran’s control of the Strait of Hormuz have sharply increased oil prices but disrupted exports, revealing economic fragility. Dependence on export-oriented, non-integrated industries, and imported goods worsens the situation. Even if essential goods were produced locally, low demographics limit market size. Luxurious consumption of imported goods compounds the problem.
If the war continues, the Gulf could face shortages—not because of purchasing power but due to global supply disruptions. Water scarcity is critical: 80–99% of Gulf water is desalinated. Strikes on desalination plants would cause catastrophic famine and thirst, affecting locals, foreign workers, and Western residents alike. Exploited labor is used for global markets, not domestic food production, enriching the ruling class without benefiting citizens.
Dubai: Gulf Lung or Hidden Economy?
Dubai is often praised as the Gulf’s economic lung, a free trade and tax-free zone with full foreign ownership and flexible capital transfers. Yet this ignores darker aspects: offshore finance, human trafficking, and sex trade facilitated by authorities—fundamental to the UAE’s ruling class economy. The UAE also leads in normalization with Israel, using sexual commerce for political influence, undermining Arab sovereignty.
The silence on these practices among intellectuals and activists is striking. Reports suggest the sex trade existed since the UAE’s founding, predating the Epstein scandal. It became a foundational part of the country’s economic and political structure.
This situation explains the UAE’s intimate ties with Israel, the weaponization of sex in politics, and its threat to Arab unity. Awareness of this history is crucial for understanding Gulf strategies and vulnerabilities in the context of ongoing conflicts.
April 2, 2026
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The opinions and views expressed in this article are the author’s own and do not necessarily reflect the opinion of Kana’an’s Editorial Board.