Oil Millionaires THE SHEIKS OF THE PERSIAN GULF

Press, Volume XCVI, Issue 28372, 3 September 1957, Page 12

Oil Millionaires THE SHEIKS OF THE PERSIAN GULF

[By a Correspondent of the “Financial Time*”] [Reprinted by Arrangement}

Recent events in the Oman have shown the importance which can be attached to the personality and competence of a Middle Eastern ruler. The challenge of a rival for the throne—as in the Oman —is, of course, nothing new. But there has also developed in recent years in many States a movement aiming at some form of popular government. These movements have usually been Cairo-inspired, and Muscat and Oman’s Persian Gulf neighbours, the sheikhdoms of Kuwait, Bahrein, and Qatar, have to varying extents been affected in this way. The United Kingdom is linked to the three States by treaties, but more important is the fact that about 60 per cent, of the United Kingdom’s total annual import of crude oil supplies comes from these three sheikhdoms. The greater part of the United Kingdom total (just over 50 per cent.) comes from Kuwait, the most northerly of the sheikhdoms. Kuwait’s oil production last year reached 54,000,000 tons, and the Kuwait Oil Company (jointly owned by B.P. and Gulf Oil of the United States) is currently paying the ruler of the country more than £100,000,000 annually as his half-share of the company’s profits. The man to whom this £100,000,000 is paid is 63-year-old Sheikh Abdullah as Salim as Sabah, K.C.M.G., K.C.1.E., who became ruler at the beginning of 1950, and is now in his early sixties. Rulers in Kuwait Since 1756 His family has ruled Kuwait since 1756, and it comes from the same Arabian stock as the Al Sa’ud family of Arabia and the Al Khalifah ruling family in Bahrein. Oil revenues started in 1946, but they assumed a very high level only at the beginning of , the present decade. As a result the large-scale development programme which has completely

changed Kuwait is regarded as Sheikh Abdullah’s policy. It is the sheikh’s avowed intention to make Kuwait town tne “best and happiest” in the Middle East, and to provide every Kuwaiti with free, up-to-date education and medical services as well as full employment with high salaries. There are now 56 State schools. There are two State hospitals with another being built, in addition to numerous clinics, a massive sea-water distillation plant to solve the hitherto pressing problem of water supplies, and electricity. Sheikh Abdullah, however, has shown no sign of allowing any move towards Western political ideas. He does, by frequent daily meetings with all classes of his subjects and his Ministers, keep well abreast of affairs. But any decision is his to make, and once a decision has been made, there is no argument. He is aided in the task of government by his numerous relatives, who normally run the 20 or so government departments with the aid of Kuwaiti civil servants. Family’s Role In Government His family generally is as astute and as competent as he, but noone more so than his uncle (although he is younger than Sheikh Abdullah), Sheikh Abdullah as Mubarak, the Head of Public Security. Mubarak has over the last few year equipped his force with armoured cars, 25-pounder guns and mortars in addition to light arms. As a result disturbances which took place at the time of Suez were quickly put down. With the discovery of oil at Raudhatain in northern Kuwait oil revenues may double over the next 10 years. Despite Sheikh Abdullah’s welfare policy there is some indication that the wish for popular government will grdw. For example, through the Sheikh’s educational policy, he has had to turn to the only source of Arab teachers —Egypt—and although the ruler claims that the Egyptian teachers do not disseminate Egyptian ideas, this is doubted. The development policy pur-

i sued in Kuwait is paralleled—, i although on a lesser scale—in ’ Qata and Bahrein. Qata, the • largest of the three sheikdoms, 1 but with the smallest population ! —29,ooo—is a country unusually ■ barren, even by Arabian standj ardsA Until the oil revenues 5 began, pearling was the main oc- ‘ cupation. Oil was discovered ■ in 1939, but commercial production began only in 1949 by the Qata Petroleum Company, a ’ subsidiary of I.P.C. Oil revenues t amount to about £l3m annually, ’ and Qata has the highest oil inJ come per capita in the world—t about £450. Despite this, the cur- > rent reserves of 200 m tons or so I represent only 25 years’ supply. [ The search irt other areas of Qata i by the Q.P.C. has so far yielded negative results. I It has been the policy of the • ptesent ruler—Sheikh Ali bin • Abdullah al Thani, K.B.E.—to de- . vote a large proportion of his in- ■ come to development proi grammes. Whereas just a few J years ago there were no schools —save for Koran lesson schools ’ —there are now 11 primary ’ schools open for boys (only) and also a secondary school. Lowcost houses are being provided . for the lower-scale Government I employees, and in February last, , a £3,500,000 hospital was opened ’ which, although described by a f European doctor as “a nursing - home on a scale for millionaires,” is free. Unexpected Power L Sheikh Ali, now aged 55, came • to the throne in 1949, when his I father retired. It seems that, not » brought up in the expectation of - succeeding his father, when his i, elder brother, Hamad, died in i 1948, Sheikh Ali faced his future f somewhat reluctantly. He is a t tall, heavily-built man who, al- - though he wants to use the oil / revenues to good purpose, prefers

to concern himself with the affairs of State as little as possible. His father, who died a short time ago, was the forceful figure: since then, Sheikh Ali has tended to leave an increasing proportion of State affairs to his son, Sheikh Ahmed. He now spends much of his time in a palace recently finished for him situated in isolation a few miles south of the capital of Doha.

Of the three sheikdoms, Bahrein was the first in which oil was discovered, (in 1932) and it seems likely that it will be the first to run out. Production is at the rate now of some 30.000 barrels a day, and unless new fields are discovered, production will have ceased completely within about 20 years. The Bahrein Petroleum Company (jointly owned by the United States companies. Standard Oil of California and Texas Company) has just completed a 10-months’ seismic survey but it is too early for the result to be known. Reforms v. Unrest The ruler of Bahrein, Sheikh 1 Sulman bin Hamad al Khalifah, K.C.M.G., K.C.1.F., advised for 30 years until June of this year by Sir Charles Belgrave—is 63, and has been on the throne since 1942, when he succeeded his -father. Part of his annual income of £4,000,000 —most of which comes from oil production—has been devoted to development and to investment abroad. But inevitably development and the wealth accruing to Bahreinis was much lower —the population is 120,000—than in either Kuwait or Qatar.

It was therefore not unexpected that an organised movement, led by the “Committee of National Union,” appeared in 1954. Sheikh Sulman was forced to appeal for the aid of British troops to restore his authority. As a result, the Committee was dissolved and its leading members imprisoned, but not before the ruler granted some concessions—although stopping short of the demand for a legislative assembly. Since that time, British troops have been stationed in Bahrein.

THE SHEIKHS’ OIL WEALTH OUTPUT (m. tons) Qatar Kuwait Bahrein 1956 . 5 9 55 0 1.5 1955 . 55 54 8 1.5 1953 .. 4.1 43 3 1.5 1950 ifi 17 3 1.5 REVENUES (Jim.) 1956 . 13 n i won Ost. 1 1955 . 13.1 100.0 (est.j 1953 . 40 68.5 1.8 1950 . 0.4 4.0 0.7