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I always see this line of thinking being bandied about, often about Dubai in particular, but it just isn't my experience.
I see an elite that's desperately trying everything they can to not rely on oil revenue, making massive bordering on insane investments in technology and infrastructure.
You could say this line about the Saudis, but the Emiratis? They've purposely build the most diversified economy of the region. They've been reaching for literally every single trick they can use to not rely on oil, from banking, to gaming, to diplomacy, to even colonization.
Oil is still a fourth of the GDP at the end of the day (down from a third in 06), but man I wish my elites were lazy like that.
The simplest way I can describe the problem is that they're elites trying to build the roof of a great house before the foundation and the walls: creating a future of which their own descendents will not be able to sustain. They're trying to move forward while looking back, trapped in islamist trappings: wealth without modernity. Impossible, like driving a car by looking through the rearview window. Regression to the mean is inevitable.
No middle eastern countries except perhaps Iran and Turkey have the native human capital to sustain a competitive modern economy. If I were them I would rather copy the Emiratis and bootstrap my development by importing foreign talent and becoming a financial hub than simply coasting on oil money until it runs out. At least the former would have a slightly higher chance of durably improving the living standards of my people.
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Is your contention that one needs a native erudite population that's somewhat locked to the land to have a sustainable industrial economy?
(not OP but)
In a nutshell, yes, this is my understanding.
An initially-poor but erudite population—or more precisely, one with bourgeois values and at least enough erudition to succeed in the world of commerce—without any particular ties to the land can pick up stakes and succeed as a “market-dominant minority” somewhere less shithole-y so long as that place has a semblance of property rights and rule of law (cf. assimilated Ashkenazim in Europe before the Holocaust and in the northeastern US for most of the 20th century; Lebanese in Mexico; Indians in East Africa; Chinese in Southeast Asia)
But these peoples are middlemen, arbitrageurs, rootless symbol-manipulators par excellence. I say this as someone whose own parents immigrated to the West from South Asia in pursuit of precisely this sort of opportunity. That’s not to say these peoples provide no economic value—they obviously do, else they wouldn’t get rich under mercantile capitalism—but you don’t see advanced manufacturing or even agriculture above subsistence level coming from a people who lack a deep, abiding attachment to the very soil where their fathers died, or the soil for which they shed blood in the hopes of securing its bounty to their kinfolk and their descendants, forever and ever.
How would you then compare the UAE to, say, Singapore?
I am no expert on Singapore in particular, but the vibe I get is that most of Singapore’s success comes from its position as Southeast Asia’s financial hub, which itself is partly a gift of geography (much like the UAE’s oil, really) and partly due to the aforementioned property rights, rule of law, and Sinosphere-descended culture of hard work and education.
I am not aware that Singapore is at all a hotspot of advanced indigenous industry/manufacturing. A decent number of multinationals have a Singapore office, typically for Asia-Pacific sales or finance—as I said, Singapore is the financial hub of Southeast Asia—but I’m only aware of a couple with any engineering or product development presence in Singapore. Both are FAANGs/software shops (software being a perfect fit for symbol-manipulator types, naturally) which are (in)famous for using the Singapore office as a staging area for Indian and Chinese engineers while finessing the American immigration system for H-1B visas.
Nor do I know of any homegrown Singaporean companies that have become globe-striding household names, a la Samsung, Sony, or TSMC (the latter, I suppose, being a household name only in the nerdiest of houses)
They do all kinds of things, plus there's Singapore Airlines like how the UAE has Emirates as their airline.
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I think expecting a city-state to have the same sort of industrial manufacturing capacity as nations 4 to 20 times its size is a bit unfair. It's precisely for this reason that Singapore, and Hong Kong before it, intentionally specialized in finance and not in building cars or integrated circuits. The UAE is in a similar position and has chosen the same path. Perhaps being a bank is in some moral sense inferior to being a factory, but if the choices are between that and remaining poor I know what I'd pick.
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Singapore has a pretty large chemical refinery business, although the plants are operated by multinationals.
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Let me state the contrapositive: no nation has ever succeeded by being built and operated by foreigners. Those foreigners either become like you (ideally) or your country collapses from the contradiction of misaligned interests. The Emiratis are aristocrats playing at being a nation-state, with a economy of servants to work its trappings. They have no interest in investing into a native workforce and neither do the natives have an interest in doing hard work.
So everything is done by outsiders: either at the high end (foreign expat technocrats) or at the low (Indian slave labor.)
Having a workforce that has no stake in the long-term venture of a nation-state is bad, obviously bad. There is probably no solution to it.
I see what you mean, but just for the sake of argument can you actually substantiate how that's bad? A more aristocratically minded analyst, like, say, Richelieu, might not be that keen on the virtues of education and instead argue that it destabilizes states and hands them to "quibblers".
The West has massively materially benefited from local bourgeois rule, but if we look at history, it's not that obvious to me that it is a necessary or beneficial inherently.
A lot of even Western nations have had long periods of their history being operated by foreigners actually. Periods so long those people even stopped being foreigners.
The big contention here seems to be that of industry, which makes those older kinds of customs presumably obsolete, but I'd like to see someone actually make that case if you don't mind.
You get the foederati problem in that a majority of the population is only loyal to money: they have no love of your nation and will betray it if it is in their self interest.
Now, the Qatari and UAE may not be as stupid as to man their armed forces with foreigners, but having an entirely foreign proletariat begs the question. If they strike... what are you going to do about it? Factory workers are not easily cowed like domestic servants. You can't appeal to them for love of country or a shared religion.
You can only maintain such a state of affairs through authoritarian force, which will lead to abuse... industrialization will create a class of workers that has power that the state can't easily crush. It's why it's a dead end. Miserable slaves that will never rebel are not productive workers, not for the kind of industry that matters in the modern world.
The secret to deportation is to register every single migrant entrant and have strong relationships with the origin countries of these migrants. Remittances incentivize India to cooperate with UAE in cataloging and receiving deportees so that surplus labor can continue to be exported from India. The imbalanced power dynamic is a feature, not a bug, that the domestic population actively supports.
The only breaking point is if there are illegal migrants, but the secret the UAE has is strong border agreements with neighbors who are equally if not more hostile to migrants than they are. No Ethiopian is crossing into the UAE when the Saudis shoot them on the border first. What few ever make it there have no reason to stay because imported labor keeps demand for illegal low wage labor low.
The imports will immediately overthrow the UAE rulers if they could. The calculus for the UAE is that the imports are disincentivized from doing so because the only value the UAE provides, stability (tax safety income or other), is precisely what the imports lack in the lives they came from.
Oh, the final secret: citizenship is restricted. The great mistake the Europeans and Americans made was giving citizenship and family reunification to what should have been temporary imports. The khaleeji get to be stupid and decadent, and all they have to do is endure the disrespect of seething activists.
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