According to U.S. National Intelligence Council’s (NIC) “Global trends 2030 – Alternative worlds”[1], the world’s current roughly 50-percent urban population will climb to nearly 60 percent, or 4.9 billion people, in 2030. Urban centers are estimated to generate 80 percent of economic growth; the potential exists to apply modern technologies and infrastructure, promoting better use of scarce resources.

Significantly, one of the main “alternative worlds” models developed by NIC is the “Non-state world”, in which non-state actors – nongovernmental organizations (NGOs), multinational businesses, academic institutions, and wealthy individuals – as well as sub-national units such as the megacities, flourish and take the lead in confronting global challenges. An increasing global public opinion consensus among elites and many of the growing middle classes on major global challenges – poverty, the environment, anti-corruption, rule-of-law, and peace – form the base of their support.

The nation-state does not disappear, but countries increasingly organize and orchestrate “hybrid” coalitions of state and non-state actors which shift depending on the issue. Formal governance institutions that do not adapt to the more diverse and widespread distribution of power are less likely to be successful. Multinational businesses, IT communications firms, international scientists, NGOs, and others that are used to cooperating across borders and as part of networks thrive in this hyper-globalized world where expertise, influence, and agility count for more than “weight” or “position.”

In such a world, the scale, scope, and speed of urbanization – and which actors can succeed in managing these challenges – are critical, particularly in the developing world. National governments that stand in the way of these clusters will fall behind[2].

In this context, one of the most significant trends is the comeback of the city-state, not long ago considered a relic dating back to Antiquity or Renaissance times. Driven by massive growth in global trade, shifts in economic power and the rise of emerging ethnic groups, today’s new independent cities have witnessed a rapid economic growth and political-strategic importance.

The contemporary city-state has flourished primarily in two regions: the Persian Gulf and Southeast Asia. The development of Hong Kong and Singapore provided a critical stage for Southeast Asia, which has been home to the world’s greatest economic expansion. Hong Kong, now a quasi-independent part of China, competes with London’s West End as the world’s most expensive office market. Once known for their poverty and destitution, the Asian city-states now boast incomes comparable to many European and North American cities.

The Persian Gulf constitutes the other hotbed for 21st century city-states. Over the past decade, a string of once obscure cities, from Dubai and Abu Dhabi to Qatar and Bahrain, have risen to positions of global significance. Qatar, a tiny emirate with roughly 1.7 million people, will host the 2022 World Cup. Abu Dhabi, a desert metropolis of some 2 million people, is undergoing the largest cultural development project on the planet, including three massive museums: an outpost of the Louvre, a branch of the Guggenheim 12 times the size of the New York original, and a museum on maritime history. Dubai, a tiny fishing and pirate haven until modern times, with less than 400,000 residents in 1985, now has close to 2 million and became a city of superlatives: the world’s largest office tower; the Middle East’s largest port, airport and financial center.

These city-states may share religious and political affiliations, but like their Phoenician, Greek and Renaissance ancestors, they strongly compete with one another.


I. A History about Power and Globalization


Civilizations are born and flourish in cities. Some of the best known and most influential city-states that shaped Western Civilization developed on the coastline of the Mediterranean basin dating back to 1000 BC, with the emergence of the Phoenician city-states such as Byblos, Tyre, Sidon, and Arwad, on the Lebanese and Syrian coasts. Like all maritime city-states in history, the Phoenicians who mastered navigation and the building of fast ships, were the greatest traders of their time. The city-states that flourished later on in ancient Greece such as Athens, Corinth, and Thebes and later in medieval and Renaissance times in Italy such as Venice and Genoa owed much of their prosperity to maritime trade which necessitated the establishment of distant outposts and colonies.

Some of these city-states like Tyre, Carthage and Sparta were known for their military prowess, others like Athens were known for their production of knowledge and others like Venice for their art. The city-states, particularly those who belong to the same region and or culture, often let their economic competition lead to violent conflicts. The Peloponnesian war between Athens and Sparta shaped the subsequent history of Greece and the Western world.


Ancient city-states and archaic globalization

According to most definitions, city-states are independent or autonomous entities, not administered as a part of another local government, with their territory consisting of a city and, usually, its surrounding territory. A city-state can also be defined as a central city and its surrounding villages, which together follow the same law and form of government, and share languages, religious beliefs, and ways of life.

In ancient history, the best known city-states that evolved into bigger political entities were Rome, Athens and Carthage. Historical examples also include the oldest known Sumerian cities of Uruk and Ur, the Egyptian city states, Thebes and Memphis, the Phoenician Tyre and Sidon, the Berber city-states of the Garamantes and the other Greek city-states (poleis) – Sparta, Thebes and Corinth.

A recent survey – that included case-studies of 35 different city-state cultures, from Sumer more than 5,000 years ago to various west African polities as recently as the nineteenth century – revealed that, despite their dispersion in space and time, these city-states have much in common, notably the fact that they always occurred as part of larger city-state cultures: clusters of city-states that shared language, religion and other cultural features but were politically fragmented into a certain number of political units.

In terms of general trends, city-states tend to be associated with a number of historically distinctive features, one of which is republicanism. While many city-states were monarchies, a number of them were not, or moved from monarchical to republican regimes, most of them oligarchies but sometimes democratic. Examples include ancient Greece, Etruria, Latium, medieval Italy, Switzerland, the Netherlands, Mzab in Algeria, Swahili city-states on the coast of East Africa, Ibadan of the Yoruba, and Banda-Neira of the Malay. Moreover, even in monarchical city-states, voting councils and deliberative assemblies are frequently attested, as in Sumer, Assyria, Phoenicia, the Viking city-states in Ireland, Swahili states, the Niger Delta, and Spring-and-Autumn China.

Some historians stress the relationship between the ancient city-states and what is called the early (first) stage of globalization, or archaic globalization, which they placed during the Hellenistic Age. At that time, commercial urban centers were focused around the axis of Greek culture over a wide range that stretched from India to Spain, with such cities as Alexandria, Athens and Antioch at its center. Trade was widespread during that period, and it is the first time the idea of a cosmopolitan culture (from Greek “Cosmopolis”, meaning “world city”) emerged. Others have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire and the Han dynasty. The increasing articulation of commercial links between these powers inspired the development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome.

Other theories point out that the roots of modern globalization could be found as early as the Prehistoric period. Territorial expansion by our ancestors to all five continents was a critical component in establishing globalization. The development of agriculture furthered globalization by converting the vast majority of the world’s population into a settled lifestyle.

The city-states that are considered most relevant in the process of the archaic globalization were those where the favorable preconditions for republicanism actually led to this particular outcome and that subsequently acquired empires: Athens, Carthage and Rome.

City-states that embark on empire-building enjoy one advantage and face an obstacle. They benefit from the fact that their polity already constitutes a coherent metropolis whose resources are readily mobilized for war-making. At the same time, the fact that any particular city-state tends to be embedded in a larger city-state cluster imposes serious constraints on its expansive capacity.


At its peak, in the third century BC, the city-state turned to empire of Carthage is a significant example. The city-state of Carthage formed the political core, run by a government and a senate, controlled by a Court. An assembly of citizens with freedom of speech and the ability to banish officials provided an element of popular participation. The periphery consisted in four layers of dominated populations. The innermost layer was made up of the Punic city-states of North Africa (hyparchoi) which were entitled to self-government in exchange for the provision of tribute and troops. The second layer consisted of the African subjects of the Carthaginian state (hypekooi), which enjoyed local autonomy but faced a bigger tribute and provided military forces. The third layer of the imperial dominion was formed by the overseas territories under direct Carthaginian control: Sardinia, western Sicily, and, following the loss of the Sicilian possessions, coastal Iberia. Local communities were governed by local leaders and owed tribute and military manpower. The fourth layer was formed by assorted ‘allies’ of varying status (depending on the Carthaginian strength) in North Africa and Iberia: they were politically autonomous but presumably constrained and expected to offer hostages and mercenaries. In terms of supreme governance, these various layers were held together by 2 or 3 key officials, the strategoi, with their staffs, who directed military affairs in both core and periphery and functioned as the top executives of Carthaginian military control in all the layers of the empire.

In formal political terms, this arrangement permitted Carthage to remain a city-sized republic with a clearly defined citizen body and corresponding institutions of oligarchic governance and popular participation, as well as military mass mobilization. The imperial edifice existed for the sole purpose of rent-taking and war-making. This situation is considered as the main cause of the survival of Carthage, after the decisive defeat in 202 BC, and of its functioning as a state until its physical annihilation in 146 BC. This was the result of the development and co-existence of one set of offices for the core and another one for the periphery, only loosely held together at the very top. Strict political segmentation successfully coincided with imperial growth and attendant economic integration.


Compared to the Carthaginian empire, the institutional arrangements of the 5th century BC Athens were simpler, since the Greek city-state culture was much larger and fragmented and the empire-formation barely transcended this sphere. Athens’ attempt to create an additional layer of control beyond the city-state zone through its operations in Egypt and the Levant in the 450s BC failed, and the Sicilian invasion in the 410s was in fact confined to the Greek city-state cluster.

By the mid-fifth century, the Athenian dominion consisted of a core of Athenian citizens, an inner periphery of resident aliens (metics) in Attica, and a much larger main periphery of dominated city-states which owed tribute in cash and manpower. A more fluid outer layer of non-polis allies complemented this structure. The citizen core was governed by a set of democratic institutions which made decisions that could apply to the periphery as well. The main periphery, composed of a large number of self-governing city-states, was linked to the core by Athenian officers (the 700 archai), who represented the interests of the core, and by the top military leaders, the 10 strategoi.

Athensmay be definedas a hybrid of hegemony and empire. While the member states retained their governments and were not formally incorporated into the Athenian polis, they descended to the status of tribute-paying subjects who were increasingly subject to Athenian intervention in their internal affairs. Key decisions were made in the core and the constituent elements of the periphery were separate and subjugated rather than merely guided or fully incorporated into a unified state. Athens’ defeat in the Peloponnesian War interrupted this process of state formation.

The city-state character of Athens and the other Greek poleis was not necessarily a handicap for empire-building. As a participatory democracy whose imperialist project was underwritten by massive popular commitments, Athens was interested in retaining its system of governance and, preserving its institutions even as it increased its control over its subject city-states or expanded beyond this cluster. The most likely outcome would have been a complex system centered on a democratic citizen-core surrounded by a periphery of thoroughly dominated city-states and, presumably, a growing outer periphery beyond the city-state zone.


Rome started out as a city-state at the margins of the Latin city-state culture and in close proximity to the adjacent Etruscan cluster of city-states. An aristocratic republic with institutionalized popular participation, the Roman state initially grew by absorbing neighboring communities.

Its ascent to hegemony was favored by its coordination of the military activities of its native city-state cluster against external challengers, during much of the fifth century BC. Rome presumably assumed this role thanks to its relatively large size, an initial starting advantage that it shared with fifth-century BC Athens. Its position of dominance within the Latin group was enhanced by the acquisition of extraneous resources through the defeat and territorial absorption of the nearest Etruscan city-state of Veii that increased the size of Rome’s territory to some 1,600 These size constraints led Rome to expand by establishing a mixed periphery, including formally autonomous allied communities, as well co-opted or conquered communities and territories. These had local governance and their population was summarily converted into Roman citizens (with or without suffrage) and taxed in the form of military labor. These flexible arrangements, which were geared toward the coordination of collective defense and (increasingly) predation under Roman leadership, permitted Rome to extend formal or informal control over the entire Italian peninsula and harness its demographic resources for overseas plunder and conquest.

The Roman multi-layered imperial structure consisted of a citizen (inner) core surrounded by a gradated periphery. The ‘inner core’, which comprised the city of Rome and its hinterland, was participant in the metropolis politically, sociologically, economically and culturally. The formal extension of citizenship far beyond the original city-state core was a distinctive feature for Rome. Formally, the inhabitants of the newly enfranchised communities qualified as Roman citizens and were thus under the direct control of the Roman officials and assemblies. However, physically remote from the capital, they appear to have enjoyed considerable autonomy in local government and could be quite distinct from the population of the ‘inner core’ in terms of language and culture. Separated from the institutions and amenities of the city state core, these citizens represented the majority of all Romans from the late fourth century BC onwards. Life-cycle military service in the Roman legions constituted their principal or perhaps only link to the Roman state.

Additional layers of rule were created by expansion beyond the territory of Italy, with the formal imposition of direct rule in the provinces (in reality, an imbalanced mix of Roman governors and their tiny staffs and largely autonomous local self-government), the exercise of indirect rule via client kings, and the relationship with various ‘allied’ and ‘friendly’ polities (from Greek city-states tied by treaty to geographically marginal kingdoms and chiefdoms which retained full independence except in foreign policy). The citizenry territory in central Italy was surrounded by some 200 nominally autonomous allied polities in peninsular Italy under the hegemony of the Roman state, which were in turn surrounded by a ring of Mediterranean provinces ruled by Roman governors which were surrounded by outer layers of client states and independent allies. Thus, Rome exercised hegemony both within the imperial heartland and at the outer fringes of the empire, whereas direct rule was both concentrated at the center and spread out over the coastal regions of the Mediterranean.


Middle age city-states and the globalization process

The so-called Islamic golden age (7th to 15th century) is also considered an important early stage of globalization, with Jewish and Muslim traders established a sustained economy across the Old World resulting in a wide movement of merchandise, trade, knowledge and technology. Globally significant crops such as sugar and cotton became widely cultivated across the Muslim world, while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture.

The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China, greatly facilitated travel along the Silk Road (such as the case of Marco Polo). The Middle Age also witnessed the creation of the first international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the newly unified regions of Central Asia.

The Silk Road city-states and the European city-states of Venice and Ragusa (Dubrovnik), as well as Dublin (founded as a Viking colonial city state) and Russia’s Novgorod and Pskov prospered in the context of the developing trade relations. The same applied in the case of the city-states in the Northern part of the Holy Roman German Empire (the Free Imperial Cities), notably the “Free and Hanseatic Cities” such as Bremen, Hamburg and Lűbeck, and the Swiss cantons of Basel and Geneva, which became sovereign city states during the 19th century and continue to exist as city states within the federal states of Germany and Switzerland.

Up to the sixteenth century, even the largest systems of international exchange were limited to the Old World. However, city-states thrived also in Central America, with the Mayan, Aztec and other pre-Columbian city-states such as Chichen Itza, Tikal, Monte Alban and Tenochtitlan.

The Age of Discovery brought a broad change in globalization, being the first period in which Eurasia and Africa engaged in substantial cultural, material and biologic exchange with the New World. It began in the late 15th century, with the first exploratory voyages to the New World. Shortly before the turn of the 16th century, Portuguese started establishing trading posts (factories) from Africa to Asia and Brazil, to deal with the trade of local products like gold, spices and timber, introducing an international business center under a royal monopoly, the House of India. Global integration continued with the European colonization of the Americas, initiating the Columbian Exchange, the enormous widespread exchange of plants, animals, foods, human populations (including slaves), communicable diseases, and culture between the Eastern and Western hemispheres.

This phase (sometimes labeled “proto-globalization”), was characterized by the rise of maritime European empires, in the 16th and 17th centuries, first the Portuguese and Spanish Empires, and later the Dutch and British Empires. In the 17th century, chartered companies like the “British East India Company” (founded in 1600), often described as the first multinational corporation, as well as the Dutch East India Company (founded in 1602) may also be considered as early manifestations of the globalization in the private business.


Nation-states and modern globalization

If city-states were active in the “archaic” and “proto-“ globalization, the modern form of this process began in the 19th century and was shaped by the empires built around the nation-states. After the First and Second Opium Wars, which opened up China to foreign trade, and the completion of the British conquest of India, the vast populations of these regions became ready consumers of European exports. It was also in this period that areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. The conquest of new parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies, and the United States.

The first phase of the “modern globalization” was perturbed by the two world wars, after which many of the nation-states were involved in an institution-building process in order to improve trade and commercial integration. The first such move was the 1944 Bretton Woods conference, an agreement by the world’s leading nations to lay down the framework for international commerce and finance, and the founding of several international institutions such as the International Monetary Fund and the World Bank.

Subsequently, other multinational trade contracts and agreements have been signed, like the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), the European Union (EU) and the World Trade Organization (WTO).


II. The new power of the cities


While “devised” and facilitated by the nation-states, modern and post-modern globalization also brought about a new position of the cities and city-states as important international political actors.

Some analysts stress that in fact, cities are humanity’s first and oldest diplomatic actors. Ancient Mesopotamian and Anatolian cities engaged in regular exchange of envoys to establish mutual recognition and merchants who conducted trade missions. Medieval and Renaissance diplomacy was similarly dominated by city-states, particularly in Italy and northern Europe with the Hanseatic League, whose intense diplomatic competition and interactions helped to undermine the Holy Roman Empire, while fueling the commercial revolution and voyages of exploration across the Atlantic and to Asia. Even after the 1648 Treaty of Westphalia, widely marked as the transition to sovereign nation-states, diplomacy remained a heterogeneous affair all the way until the post-Napoleonic Vienna Convention on Diplomatic Relations in 1815. From a “city” viewpoint, nation-states have only been the (nearly) exclusive diplomatic actors for less than two centuries.

In the 20th century, some city-states flourished in Asia such as Hong Kong and Singapore, and since the 1960’s in the Gulf with the rise of Kuwait city and later on Abu Dhabi, Dubai and Qatar. And like all maritime city-states in history, they thrive on trade and on being centers of finance and banking as well as important energy producers particularly in the Gulf.

There are currently about 31 mega-cities around the world, most of which are old historic cities that have become the core of their respective nations, including New York, London, Paris and Istanbul. Alongside these great cities (often known as global cities) are those situated at the centre of the world’s most populous countries, such as Beijing, Mumbai, Cairo, Mexico City and Tehran. Their centrality within large and powerful nations has rooted their names in global conscience.

Only a handful of the existing city-states are also sovereign states, with some disagreement as to which states should and should not be considered city-states. A great deal of consensus exists in the case of Singapore, Monaco and Vatican City. Other states that often get cited as being modern city-states include Malta, San Marino, Liechtenstein, Andorra, Luxembourg, Qatar, Brunei, Kuwait and Bahrain.

Other cities enjoy a high degree of autonomy despite formal subjection to the sovereign rule of another country and therefore function in large-part as city-states, and have been identified recently as representative of modern city-states. Hong Kong and Macau, along with independent members of the United Arab Emirates, most notably Dubai and Abu Dhabi, often are cited as such.

Quite a few other non-capital cities such as Lagos or Mumbai have substantial international presence despite the dysfunction of their home nations. Over the past decade, many Indian and Chinese provinces have also set up their own trade and investment promotion offices worldwide, often as non-diplomatic and purely commercial ventures to attract tourism and investment.

Mega-cities and globalization

Globalization is being considered as much an inter-city phenomenon as it is about lowering national borders. According to a recent study, almost the entire world economy is represented by approximately 400 cities. Airline connections around the world depend on the development of robust “hubs” such as Chicago, London, Zurich or Singapore, which in turn magnify the reach of globalization inward to smaller cities in their regions. Stock exchange mergers also reflect this trend, with examples as the link between New York and Frankfurt via the 2011 talks, the negotiations between London’s and Toronto’s stock exchanges, and similar discussions between Sydney and Singapore, Chicago and Sao Paulo, Dubai and Mumbai or the Shenzhen-Hong Kong-Shanghai triangle, all of which indicate how global finance networks are being redrawn through emerging global cities.

Today, more and more cities have more economic weight, international connectivity, and diplomatic influence on the world stage than many nations. The rise of cities as transnational actors is also favored by the post-Cold War so-called phenomenon of “devolution”, marked by a major wave of new state births and a push for greater autonomy by sub-state and provincial authorities. Quebec, the Basque country, Flanders, Greenland, Scotland, and Catalonia are among the examples of provincial entities asserting their domestic autonomy and international credentials. Taken together, the separatist movements mentioned above and the sub-national economic diplomacy conducted from within even great powers point to a growing desire of urban-regions to be identified more as “global cities” than as subservient to national states.

Urban corridors

The Gulf city-states are linked by an urban corridor encompassing Dubai, Sharjah and the other emirates. Such an urban fusion is also occurring in other regions of great dynamism and productivity: San Francisco to San Jose (“Silicon Valley”), Tokyo to Osaka, Hong Kong to Guangzhou (the Pearl River Delta), and Shanghai to Nanjing, for example.

Urban corridors are a force multiplier, a source of great strength. Today the UAE is the most open, livable and prosperous society in the region, making it effectively the de-facto capital of the Arab world. Stable, diversified, and far-sighted, it is to the Arab world today what Baghdad and Damascus have been for centuries past. Iron “silk roads” are being built stretching from Shanghai to Istanbul, creating massive opportunities for commercial exchange and mobility. The GCC’s planned railway is another key infrastructure contributor to driving inter-city economics.

The rise of the small countries

The city-states’ growing power and influence is matched by another trend, frequently overlooked: the rise of small countries. Roughly 75% of today’s small countries were formed in the last 70 years, mostly as a result of broader democratic transitions and in tandem with trade growth and globalization. The more established small countries occupy nearly half of the top 20 positions in the United Nations Human Development Index.

The lessons to be learned from these cases are useful not only to new and potentially new small countries. Relatively young small countries in Africa, the Caribbean, and the Middle East can also benefit by examining the secrets of Singapore’s success, the causes and effects of Ireland’s property bubble, and Denmark’s decision to build strong counter-terrorism capabilities, despite its relative safety. Indeed, such considerations can help them to chart a path to economic prosperity and social cohesion.

Older small countries outstrip medium-size and large countries in terms of economic and social performance, openness to international trade, and enthusiasm for globalization.

Smaller countries spend more, as a percentage of GDP, on education and health care, and there is a strong positive correlation between the pace of economic growth and the so-called “intangible infrastructure” – the combination of education, health care, technology, and the rule of law that promotes the development of human capital and enables businesses to grow efficiently. Small countries account for seven of the top ten countries for intangible infrastructure.


III. Case Studies in the Arab World: Dubai, Qatar and Jordan


The latest cycle of violence in the Arab World is showing a more significant trend, with the beginning of the dissolution of the Arab nation-state, reflected in the growing fragmentation of Sunni Arabia. States in the Middle East are becoming weaker, as traditional authorities seem increasingly incapable of taking care of their publics. As state authority weakens, tribal and sectarian allegiances strengthen. Among the main causes of this trend is the legacy of the Arab Spring, especially the fact that the initial moves to oust authoritarian or monarchical regimes, lacking identifiable leaders and programs, led in many cases, to a similar political reality (the Muslim Brotherhood followed by the military in Egypt, Bedouin tribalism and sectarianism that destroyed the state institutions in Libya and Syria).

One of the common features of the traditional Arab centers is the diminishing importance and power of the monarchic conservatory dynasties that had become regional powers due to their military strength. This trend is matched by the corresponding ascension of the Gulf “modern”, neoliberal-type monarchies.

A typical example is Qatar’s Sheik, Tamim bin Hamad al-Thani, who took power in 2013, replacing his father and becoming, at 33 the youngest leader in the Arab World. Sheikh Tamim was born in Doha in 1980, and was sent to Britain for his education at Sherborne School in Dorset. After achieving his A-Levels, he followed his father’s example and attended the Royal Military Academy in Sandhurst. He graduated in 1998 and joined the Qatari armed forces, becoming deputy commander-in-chief in 2009. He also excels as a sports administrator, also being a member of the International Olympic Committee. Qatar Sport Investments, established by Sheikh Tamim in 2005, owns the French football club Paris Saint-Germain.

This trend is even more significant if one compares the erosion of the “hard power” of the traditional states and armies in Syria, Egypt and Iraq to the spectacular ascension of the small city-states of the Gulf, as well as the growing importance of small countries, as Jordan, that managed to become significant regional actors due to their so-called “soft power”, with its main three “weapons”: economy, diplomacy, intelligence.

Soft power: shifting from Arab traditional states to Gulf city-states

An old Arab saying was that “Cairo writes, Beirut publishes and Baghdad reads.” These three capitals, along with Damascus, were long the hubs of culture and education in the Arab world. However, as these traditional Arab capitals became more embroiled in civil strife, a new set of cities started to emerge in the Gulf, establishing themselves as the new centers of the Arab world.

Long before their formation into modern states, the cities of the Gulf were recipients of talent, skill and economic aid from the traditional Arab nation-states. For centuries the Kiswa, the black drapes of the holy Ka’aba in Mecca were supplied by Baghdad, Cairo or Sanaa as well as by Istanbul, cities that frequently were involved in protocol battles over the holy city.

The Egyptians’ loss of influence over Mecca to Saudi founder Ibn Saud in 1925 was an irreparable blow to Cairo’s mechanism of religious soft power and a significant advantage to the Al Sauds.

In the mass-media field, traditionally, media production for the Arab world was done in the traditional “leading” Arab states of Iraq, Syria and Egypt, as well as in  Lebanon. Today a significant portion of television production, recording and filming takes place in the Gulf cities of Dubai, Abu Dhabi and Doha. The Gulf states are also home to the most watched TV news channels in the Arab world, a significant mechanism of soft power in one of the most politically unstable regions. The Doha based Al-Jazeera and the Saudi owned and Dubai based Al-Arabiya compete for the hearts and minds of the Arab public. The soft power reach of these channels has become one of the main levers of soft power of the Gulf states.

Tourism, which has come to a standstill in Lebanon, Egypt, Syria and Iraq, has flourished in the Gulf states. Dubai attracts more tourists than any other Arab state and is the seventh most visited city in the world. Abu Dhabi, Doha, Muscat and a number of Saudi cities are undertaking massive airport and other infrastructure projects that will keep tourists pouring in. The Gulf cities have turned themselves into globally recognized brands, while traditional Arab cities such as Baghdad, Cairo and Damascus have become synonymous with turmoil and unrest.

While the traditionally culturally rich powers of the Arab world continue to face internal turmoil and fail to invest in cultural projects, the Gulf states continue to thrive. Abu Dhabi, Dubai, Doha and Sharjah are investing heavily in museums and education, attracting talent from across the Arab world and beyond.

During the 2000s, the Gulf states as a group emerged as far more visible actors in the global system of power, politics, and policymaking. Using their energy resources and capital accumulation during the 2002–2008 oil-price boom as leverage, GCC states became more active in international issues.

The global financial and economic crisis that began in 2007 accelerated the underlying shift toward interdependence in the international economy. It also provided an opportunity for the resource-rich Gulf states to increase their leverage in supranational institutions and layers of global governance. For example, Qatar joined with Switzerland and Singapore in the World Economic Forum’s “Global Redesign Initiative”, which was set up to channel the views of 28 small and medium-sized states into the G20 process.

1. Dubai: establishing itself as a global and Islamic financial hub

In many ways Dubai’s strengths are those of traditional city-states. Unlike other Gulf Arabs, the Dubai Emiratis have depended more on trade than oil for their wealth. Highly anxious to seize one of the most critical corridors of world trade, they have built the Middle East’s largest port at Jeber Ali and the massive Dubai International Airport, one of the largest and best-run on the planet.

And to an extent largely unmatched in the Arab world, Dubai and its ruler, Mohammed bin Rashid Al Maktoum, have fostered an environment well-suited for global trade. In 2013, Sheikh Mohammed bin Rashid al-Maktoum announced Dubai’s plans to become the capital of the global Islamic economy, focusing on financial services, food products, education and tourism, and to operate in those industries according to the Islamic guidelines.

The plan includes Islamic finance, Halal food industries, tourism, as well as to develop Dubai as a reliable center for Islamic standards and certification. The plan to lead the global Islamic economy had originally been set to be implemented within five years. However, Dubai’s ruler ordered the period to be reduced from 5 years to 36 months.

Another recent decision of Dubai is to set up a new body for the industry, the Dubai Islamic Economy Development Center. As part of the emirate’s goal of becoming the global hub of the Islamic economy, the center will provide legal and other services for the Islamic financial industry, including auditing services and an arbitration platform for conflict resolution.

The Dubai International Finance Center: global ambitions

The main “contributor” to Dubai’s becoming an international financial hub is the Dubai International Center (DIFC), Dubai’s free economic zone.

The DIFC, established in 2004, is now home to several hundred registered financial services companies and many others offering ancillary services. It is the current main financial hub of the region. Its leading position stems from a mixture of its own regulatory structure – including a court system based on international common law – as well as the strength of the city’s infrastructure and its position as a regional hub for trade, tourism and business.

As the Middle East’s main banking hub, the DIFC channels much of the region’s oil wealth into Western financial markets. Many banks have been using a model in which investments are arranged by a DIFC-based subsidiary but actually sold from a foreign centre. For some analysts, the DIFC is seen as having for the Arab League countries and the Islamic world, a similar stance as that of the European Bank for Reconstruction and Development (EBRD) for the European Union states (and, in both cases, not only for them). One of Dubai’s distinct features is given by its court system and its specific legal services.

In legal terms, the DIFC Courts are a strange phenomenon: an island of British- and American-style common law inside an Islamic monarchy. They operate in English; other business courts across the Middle East work almost entirely in Arabic and tend to follow the French civil law tradition.

The DIFC enjoys independent jurisdiction under the UAE’s constitution, with a legal framework separate from that of the rest of the country. Based primarily on English common law, as opposed to UAE civil law, the DIFC Courts administer civil and commercial disputes within the financial free zone.

In addition to its independent legal framework, the DIFC is governed by an independent regulatory framework under the Dubai Financial Services Authority (DFSA). In August 2013, the European Commission formally declared the DFSA’s audit controls to be of “equivalent status” to those of the Eurozone. In a new agreement reached with the European Securities and Markets Authority, companies in the DIFC will be allowed to market alternative investment vehicles, such as private equity and hedge funds, to European investors.

Recently, a ruling by the court system in Dubai’s financial free zone suggests the emirate is starting to influence the way international business disputes are resolved in the Middle East, partly taking over that role from London and New York. A court in the Dubai International Financial Centre (DIFC) recently found Switzerland’s Bank Sarasin had mis-sold $200 million of investment products to Kuwait’s prominent Khorafi family, ordering it to pay compensation.

The case is an example of how the DIFC is emerging as a major legal jurisdiction for business in the region, taking into account the fact that, only a decade ago, the dispute would probably have been handled by a court in Geneva, London or New York.

In a sign that some of Dubai’s economic rivals view the DIFC Courts as a success, Qatar established an international business court in 2009 and Abu Dhabi plans one.

Islamic bonds

In another recent move, the DIFC announced that it is planning to issue an Islamic bond worth around $700 million by the end of October to refinance old debt and fund infrastructure development.

The move comes amid a strong rise in company registrations at the DIFC, which was founded 10 years ago and serves as a point of entry into the Gulf Arab region for many international financial firms. There were 1,113 DIFC-registered companies at the end of June, according to the center’s statistics, up 7% from the end of last year.

The Islamic bond, or sukuk, is intended mainly to refinance existing debt, but also to fund infrastructure growth and improving the DIFC’s financial condition by retiring the secured syndicated loan and replacing it with the unsecured sukuk. Also, the sukuk paper is structured to abide by Islam’s ban on interest payments, typically by incorporating assets or cash flow in the underlying transaction. As a result of this, sukuk issuers are able to tap a different pool of investors than with more conventional bonds.

Dubai’s decision was promptly followed by an announcement in London, according to which an Islamic Market Index is set to be launched on the London Stock Exchange, while Britain is to become the first country outside the Muslim world to launch a sukuk. The proposed Islamic Market Index would track Sharia-compliant investments, while the UK Treasury is working on the issuance of a sukuk worth around £200 million ($322 million). The British Prime Minister David Cameron declared that he wants London to ‘stand alongside Dubai’ as an Islamic finance hub.

Islamic, Sharia-compliant, finance is growing in both scale and sophistication, a trend that is not yet matched by the expertise in the field.  Islamic finance studies have remained limited, hindering efforts by the Gulf state to challenge the established market leaders, Kuala Lumpur and London. At stake is a substantial and growing volume of potential business. According to a recent report by the ratings agency Standard & Poor’s, issuance of sukuk, or Islamic bonds, is projected to exceed $100 billion worldwide in 2014.  Total Islamic financial assets are growing 17 percent per year and are set to reach a value of $2.67 trillion in 2017, according to Pricewaterhouse Coopers.

A life for less than legitimate business

Like Dubai itself, the DIFC courts are entrepreneurial, actively seeking to attract more business because of the economic benefits to the emirate of hosting a big legal industry. In 2011, Dubai’s ruler moved to attract more legal business by allowing parties around the world to agree to refer their commercial disputes to the DIFC Courts, even if the disputes had nothing to do with the DIFC.

As in most trading cities, less than legitimate business also fuels Dubai’s dynamism. The city-state has been a convenient laundering center for money out of sanctioned Iran. And the crates on the ships going across the Gulf to the Islamic Republic may include not only consumer goods, but, according to some, even materials for Iran’s nuclear program. One may also find corrupt south Asian politicians, Russian Mafia lords or Southeast Asian drug dealers, who reside part time in the city and deposit their cash there.

Both the legitimate and the less legitimate business benefit from Dubai’s largely efficient authoritarian order. A safe place attracts all kinds of business, as was true back in the days when the Doges ran Venice.  Backed both by social order and monumental  infrastructure investments and high social order, Dubai now boasts the fourth most office space per capita of any large city on the planet–behind only New York, Paris and London.

Competition from other Gulf city-states

However, there are already competitors trying to tempt banks, brokers and others away from Dubai. Chief among them is the Qatar Financial Centre (QFC), which is not a free zone in the purest sense but offers many of the same advantages. Licensed firms are not restricted to a particular patch of land in Doha and can do business inside or outside the country. They benefit from a low tax regime and, similarly to the DIFC, the legal environment is based on English common law. In the past, the QFC has focused on a few key sectors, including reinsurance, captive insurance and asset management, but that appears to be changing and it is trying to broaden its reach to new areas, particularly non-financial services companies that don’t have to be approved and regulated by the QFC Regulatory Authority.

Another challenger is emerging in the shape of the Abu Dhabi Global Market (ADGM). The current focus there is on setting up the legal framework and judicial process, the regulator and the registrar. Once up and running, the ADGM is expected to concentrate on building a position in areas such as wealth management, asset management and private banking. It was also careful to stress that it will differ from the DIFC and fill a “black zone,” when most Asian, European, and Asian markets are closed. In addition, it will specialize in handling physical commodities, tasks not currently handled by the DIFC.

Riyadh has also been trying to improve its position in the market, with the development of the King Abdullah Financial District and the decision in July by Saudi Arabia’s Council of Ministers to allow foreign entities to invest directly in the local stock market, the Tadawul.

2. Qatar: natural gas and multi-level diplomacy

If, in the last decade Dubai and Abu Dhabi have been the dominant cities of the Gulf, Qatar’s Doha has aggressively pursued ways to break their monopoly and it managed to attract some of the attention from the two urban giants. It has used its huge wealth to build the city up as a global center for business and strives to add international finance, travel, real estate and tourism to its commercial interests. Through diversification, Qatar, the world’s richest nation in terms of per capita GNP, is ensuring that is has a future beyond oil and gas.

Qatar has spent on its LNG infrastructure more than $120 billion, most of it borrowed from banks and partners such as ExxonMobil. Its first export of LNG cargo took place in 1995, and by 2006 Qatar had overtaken Indonesia to become the largest exporter of LNG in the world. In December 2010, production reached the government’s developmental target of 77 million tons per year, by which time Qatar accounted for between 25 and 30 percent of global LNG exports.

The supply of gas to the United Kingdom and China best illustrates the extent to which Qatar has developed interdependencies with partners around the world. Dispatch of LNG cargoes to Britain began in March 2009, and by 2011 the United Kingdom had already become heavily reliant on Qatari gas imports. Similarly, Qatargas signed a twenty-five-year agreement in 2009 to provide 5 million tons of LNG a year to China.

If Qatar’s rise to a position of international significance is indeed rooted in its possession of the world’s third-largest reserves of liquefied natural gas (LNG), it has also excelled in making use of the policies designed to leverage those reserves. These policies were conceived and implemented during the rule of Emir Hamad (1995–2013) and foreign minister (prime minister between 2007 and 2013), Sheikh Hamad bin Jassim. They developed a strategy of internationalization that put Qatar on the map as a dynamic regional actor. The main regional foreign and security policies of Qatar were – and still are – the challenges of ensuring stability in a volatile region and addressing the vulnerabilities of a small state surrounded by larger and more powerful neighbors.

The combination of massive resource wealth and a tiny indigenous population gave Qatari officials considerable room to maneuver and freed the emirate from the socioeconomic pressures afflicting its larger neighbors in the region. Over time, it also translated into significant reserves of soft power and bolstered Qatar’s international reputation.

Maneuvering between the West and the Arab World

Diplomatic mediation became a key component of Qatar’s regional policy, setting Doha apart from its neighbors both in the Gulf and in the broader Middle East. Mediation was a prominent feature of Qatar’s constitution adopted in April 2003, with article 7 specifically mandating that Qatari foreign policy be “based on the principle of strengthening international peace and security by means of encouraging peaceful resolution of international disputes.” The three most high-profile instances of Qatari mediation took place in Yemen (2008 – 2010), Lebanon (2008), and Darfur (2008–2010), and Doha also worked to resolve disputes between Sudan and Chad (in 2009), and between Djibouti and Eritrea (in 2010).

Qatar and the Arab Spring

In the context of the Arab Spring, after an initial period of caution, Qatar’s leaders adjusted their policy, assuming a visible role during the early stages of the upheavals, mostly in favor of the opposition movements. Also, it decided to back regional Islamists, not only because of the Qatari practice of offering refuge to Islamists and political dissidents, but also due to close but controversial relationship with the Muslim Brotherhood – even though Qatar subscribes officially to Salafism and adheres to the Hanbali School of Islamic Law, whose emphasis on political obedience to the ruler differs radically from the populist and activist nature of the Brotherhood.

These ties began to develop when Muslim Brotherhood members fled persecution, from in Egypt in the 1950s and 1960s and from Syria in 1982. Qatar extended and diversified its ties with the regional branches of the movement and the prominent Egyptian-born cleric Yusuf al-Qaradawi, resident in Qatar since the early 1960s, and others were given a vocal platform on Al-Jazeera after the channel’s formation in 1996.

Al-Jazeera transformed itself in one of the most important tools in Qatar’s ascendency as an influential city-state. It also reflected the paradoxes and contradictions of Qatar’s foreign policy. Al-Jazeera publicly supported the Palestinian cause, while Qatar was establishing political and trade relations with Israel. Also, Al-Jazeera was harsh in its criticism of the American invasion of Iraq, while Qatar allowed the U.S. to use two air bases in its military operations in the region.

However, as the initial tumult of the Arab Spring gave way to renewed authoritarianism and greater social polarization across the Middle East, Qatar’s approach undermined its reputation for relative impartiality and Doha is now caught in the crossfire of regional blowback and is attempting, against considerable regional skepticism, to once again adopt a pragmatic approach.

Persistent rumors of Qatari involvement in the Islamist takeover of northern Mali in 2012 demonstrated the extent of the skepticism. As conditions in northern Mali worsened throughout 2012, attention began to focus on the activities of a small team from the Qatari Red Crescent. Because the Qatari Red Crescent was the only humanitarian organization granted access to the north by the Islamist separatists, suspicion of the group’s work soon met with wider concerns about Qatar’s policy of backing armed Islamist groups in Libya and Syria. The most vocal and sustained criticism of Qatar in northern Mali came from Algeria, whose relations with Qatar had deteriorated sharply since 2011, and France, where one allegation suggested that Qatari Special Forces were training rebels linked to Ansar Dine[3].

Renewing mediation activities with better results

Eager to regain its reputation as a useful mediator, the new Qatari leadership began a change on the foreign policy approach, trying to reassure skeptical regional allies and international partners that Qatar was not siding with one trend against the other. In 2013, Qatar mediated in conflicts in Egypt and Syria, and in October 2013, it was involved in a multilateral effort (together with Lebanese, Turkish, Syrian, and Palestinian interlocutors) for a complex prisoner exchange agreement in Syria.

Several developments in 2014 indicated a return of Qatar’s role as a facilitator of indirect communication between opposed parties. One of the main cases was Qatar’s involvement in arranging a prisoner exchange deal that saw five Taliban prisoners released into Qatari custody in return for the release of U.S. Army Sergeant Bowe Bergdahl, war prisoner in Afghanistan. U.S. President Barack Obama and Taliban head Mullah Omar both issued statements publicly thanking Emir Tamim for his assistance in brokering the deal.

In August 2014, Qatar helped secure the release of the American journalist Peter Theo Curtis by Jabhat al-Nusra, an al-Qaeda affiliate in Syria. “Done”, Qatari intelligence chief Ghanim Khalifa al-Kubaisi reportedly texted a contact – adding a thumbs-up emoticon – after the release was completed.

Another noteworthy development is Qatar’s involvement for a mediated solution to violence in Gaza. During the Gaza conflict that broke out in July 2014, Qatar engaged actively in a shuttle diplomacy, conveying messages between Hamas and the international community and facilitating confidence-building measures among the disputant parties.

Qatar also helped to negotiate the release of 45 U.N. Fijian peacekeepers taken captive by al-Nusra Front, and on September 12, 2014 it announced that it had successfully won the soldiers’ release.

While Doha has been especially vulnerable to the allegation that it supports ISIS and other radical Islamic groups, Qatar’s connections had their uses: Doha has carved out a niche as a broker of deals with groups shunned by the west.

Pressures from the Gulf

The mediating role Qatar has played in freeing Sgt. Bowe Bergdahl occurred in the wake of unprecedented public tensions between Qatar and its three immediate neighbors and fellow members of the Gulf Cooperation Council (Saudi Arabia, the United Arab Emirates and Bahrain) and following the major setbacks for Doha when MB Egyptian President Mohammad Morsi was ousted in a military coup, and when its allies in the Syrian opposition failed to dominate the newly formed leadership of the National Coalition for Syrian Revolutionary and Opposition Forces. Added to this may be an eventual proof that the allegations that hosting the 2022 FIFA World Cup had been secured through shady schemes and bribery.

These setbacks have led analysts and commentators to ask whether Qatar’s influence is waning or if it is suffering from the same ailment that afflicted ancient and medieval powerful city-states which punched way above their weight.

In the context of the U.S. efforts to build a coalition to fight the Islamic State jihadists, and to improve the relationship to its Gulf partners, recently Qatar bowed to pressure from Saudi Arabia and the UAE and agreed to expel some senior leaders of the Egyptian Muslim Brotherhood and to rein in Al-Jazeera TV. Recently, the Qatari authorities suspended al-Qaradawi’s weekly Al-Jazeera program, Sharia and Life. Qaradawi is also no longer preaching in Doha’s Grand Mosque. Further, Sheik Tamim recently announced that he will be launching a new London-based, Arabic-language television channel (AlAraby Television Network), supposedly to counter Al- Jazeera.

Local observers note that even if, quietly, Qatar is shifting, Doha does not want to be seen be to backing down under external pressure. In private, the Qataris say that they will not support the Brotherhood, but nor will they oppose it.

Qatar and the United States: mutual interests

The quiet shift in the relationship with the MB added to the mediation successes and Qatar’s economic capabilities and geostrategic location (between Iran and Saudi Arabia), and increased the tiny country’s importance for global actors, especially the United States.

Qatar hosts the US Central Command’s forward headquarters, is home to the largest US Air Force base in the Middle East, and recently signed a huge contract of some $11 billion to purchase advanced US weapons (including Apache helicopters and Patriot and Javelin defense systems).

The United States needs Qatar, especially since the status of the United States in the region took a downward shift. Qatar can serve as a mediator between the United States and various radical outfits such as the Taliban, ISIS, and Hamas. Recently, the U.S. State Department released a fact sheet that describes Qatar as “a valuable partner to the United States” and mentions that it plays “an influential role in the region through a period of great transformation”.

The biggest reason for which Qatar is likely to remain in good favor with Washington isn’t money or influence, but necessity. As the United States ramps up a coalition against the Islamic State militants, it will need first and foremost its air base in Qatar, which is serving as the command center for operations, as well as the cover of Arab support. With Syria and Iraq in chaos, both countries are in the hands of extremist actors with whom Washington won’t want to negotiate and the U.S. may benefit from Qatar’s 20 years’ tradition of using its wealth to buy influence and offer its services as a third-party broker. For its part, Qatar may benefit from this strategy to enhance its stature by making itself indispensable as a regional power willing to invest its financial might and diplomatic services to settle disputes.

Qatar and Venice

Some historians pointed out to the similarities between Qatar and Venice at the height of its influence and wealth as the greatest of Italian city-state in Medieval and Renaissance times. Both enjoyed fabulous wealth because of trade in the case of Venice and hydrocarbons in the case of Qatar. Both wanted to play major political roles in their region and beyond and both shared in the willingness to spend their resources to accumulate more influence and power. Both Venice and Qatar financed and used foreign powers and groups.

At its heyday, Venice acted like a superpower in the northern Mediterranean and competed commercially with Constantinople. In its drive to control more territory and to crush Constantinople, Venice financed the Fourth Crusade, ostensibly to land in Egypt then moves to wrestle Jerusalem from Muslim hands, but on April 13, 1203, the combined forces of the Crusaders and the Venetians “took possession of the greatest Christian city in the world.” The sacking and the looting and the fires that ensued were so thorough that the city never recovered its former glory, even after the Byzantines recovered it decades later.

Qatar’s funding of the Islamists in Libya and Syria and its direct military participation in the fall of Tripoli, while not on the same level as Venice’s role in the fall of Constantinople to the Crusades and the mercenaries, is emblematic of its intention to play a role incommensurate with its size and capabilities.

But there are also some differences. Venice developed a complex system of governance and although the Doge was powerful, he had to contend with the powerful merchant families. In Qatar, decision-making is in the hands of a few people. Venice developed indigenous art and distinct architecture and played a major role in the Renaissance; Qatar (like other Gulf cities) is trying to develop a culture, but it is, at least for the moment, mainly an “imported” one.

3. Jordan: small country, great intelligence

The kingdom of Jordan is another example of the growing influence of the smaller political players in the Middle East, although it does not share the enormous wealth of the Gulf city-states and it faces considerable internal economic and social challenges, to which one has to add the heavy burden of the refugee problem.

In fact, Jordan is a post-World War One creation, generated in the 1920s by Britain, in order to reward the help given by the leaders of the Arab Revolt against the Ottoman Empire. The sons of Hashemite leader Hussein ibn Ali (who had lead the Arab Revolt), Faisal and Abdullah, were made rulers of Mesopotamia and Transjordan, two territories captured by the British from the Ottoman Empire and awarded by the League of Nations to Britain as mandates. They were supposed to be held in trust for eventual independence, while the mandatory power built up the administration and infrastructure. To help the British, Faisal became ruler of the Hashemite Kingdom of Iraq, while Abdullah was Emir and then King of the Hashemite Kingdom of Jordan.

The Hashemite family descents from the Prophet Mohammed and were governors, or Sharifs, of Mecca for hundreds of years. Sharif Hussein ibn Ali launched the Arab Revolt against the Ottomans in 1916 in response to British promises of independence.

Although outsiders to Mesopotamia, the Hashemites arguably developed the administration and infrastructure in a country that had become a backwater in the former Ottoman Empire, and three generations ruled as Kings of Iraq for 37 years. The British-sponsored Hashemite monarchy continue to reign in Jordan, with Abdullah I (1921-1951), Talal (1951-1952), Hussein (1951-1999) and Abdullah II (from 1999). The Jordanian kings have successfully introduced modern concepts of the nation-state, administration and education.

Intelligence: a weapon and a profitable export commodity

The role of intelligence in the building of democracy and political stability in the Hashemite Kingdom of Jordan is crucial. Jordan, strategically located in the Middle East, presents a long-run import-export relationship. On the one hand, Jordan, a country of few natural resources, imports oil products and natural gas to meet its energy needs. On the other hand, Jordan exports a valuable resource which is security in terms of intelligence, geographic security, and stability.

Jordanian General Intelligence Department’s (GID), Dairat al Mukhabarat, primary objective is to defend Jordan from internal and external threats that target its political stability, violate its sovereignty, or undermine the security of its people. The focus of GID’s operations is the collection of intelligence pertaining to security issues within the Middle East, including surveillance of paramilitary groups and guarding borders to prevent an influx of terrorists from the wider region.

The agency is accountable to ministerial control, but in practice reports to the King briefing him on matters of national security. The GID also provides the Prime Minister with regular analyses of the kingdom’s political climate, and is committed to preserving the power of the Jordanian constitution when executing its duties.

On August 14 2014, the Jordanian government announced that it would ask parliament to approve two constitutional amendments giving the king sole authority to appoint the head of the armed forces and the director of the GID. Under the current constitution, the government recommends the appointees for head of the armed forces and GID director, and the king approves them through royal decree. In order to approve the amendments, the parliament was convened in an extraordinary session.

The decision came after the king’s 12 August request to the prime minister to “activate” the Ministry of Defense, whose portfolio has been handled directly by the prime minister for decades. In effect, the portfolio will now be. The king said the new ministry – to be managed by a civilian or a retired army officer – will handle “political, economic, legal and logistical duties related to national defense … and nonmilitary services … while allowing the armed forces to dedicate its time to professional military duties.” Critics of the move saw it as a violation of the constitution and a derogation of the general mandate of the government, an attack on the constitution and a challenge to the will of the people.

Close cooperation with the West

Jordan’s capacities in the field of intelligence are one of the main factors that helped Jordan secure its current position. GID is reportedly one of the most important intelligence agencies in the Middle East, and is considered one of the most professional in the Arab world. The Agency is also well-known for its cooperation with American, British, and Israeli intelligence and is believed to be the CIA’s closest partner after the MI6.

In 1999, tips from the GID alerted the CIA to plots by Bosnia-based terrorists against U.S. targets in Europe and the GID also warned the United States of the impending 9/11 attacks.

In late summer 2001, Jordanian intelligence intercepted a message implying that a major attack was being planned inside the US and that aircraft would be used. The message also revealed that the operation was codenamed “Big Wedding”, which indeed turned out to be the codename of the 9/11 plot. The message was passed to US intelligence through several channels.

Jordan also played a key role in helping U.S. intelligence hunt down and kill Abu Musab al-Zarqawi, the former leader of al-Qaeda in Iraq. Outside of Israel, Jordan’s intelligence service is widely seen as the most competent and the closest to U.S. intelligence organizations. Many of its senior staff members were trained by the CIA, former U.S. officials say. That has helped Jordan, despite its small size, craft an intelligence service capable of wins like annihilating Zarqawi and helping the Americans quell a Sunni insurgency in Iraq in 2006.

Since Jordan has a long experience in the fight against terrorism, it employs the intelligence agency to mobilize regional and international cooperation with sister agencies based on defensive, operational and intelligence strategies to counter the jihadist groups. Jordanian intelligence has foiled in 2012 a plot by an al-Qaeda-linked cell to bomb its shopping centers and assassinate western diplomats using smuggled weapons and explosives from Syria.

In late April 2014, the Jordanian air force destroyed vehicles transporting weapons to the kingdom from Syria. During the past year, Jordan’s GID has intensified action to alert friendly countries and strategic allies on armed jihadist organizations active in Syria and the possible infiltration of militants to neighboring countries, through unannounced visits and meetings with security strategy makers and implementers in Egypt, Saudi Arabia, Bahrain, the UAE, several European capitals and Washington.



Ally against the Islamic State: facing repercussions from both sides

Jordan is also expected to significantly contribute to the intelligence efforts against the Islamic State. A former U.S. intelligence official mentioned recently that “from an intelligence-collection perspective, Jordan has the geographic advantage, owing to its central location and borders with Iraq and Syria… A big part of what they’ll do for the U.S. will be intelligence collection” including running networks of spies and recruiting informants in Iraq and Syria to help root out Islamic State members and understand the group’s hierarchy and organizational structure.

Jordanian intelligence, which is known to have networks in Iraq which date from 2003, also has possibilities among some of the Iraqi Sunni tribes aligned with the Islamic State, and might eventually play a very important role in turning them away from the Islamic State.

Although Jordan is not a member of NATO, it is considered a Major Non-NATO Ally, meaning that it has a strong working relationship with the U.S. For months now, the U.S. has been using Jordan as a base for training vetted moderate opposition troops. It also relies on Jordan for intelligence.

Soon after the two amendments that gave the king the power to appoint the heads of the army and the GID, on 23 September, Jordan joined the anti-IS coalition and participated in an air attack, despite the reassurances of Prime Minister Abdullah Ensour that the kingdom wouldn’t take part in this battle. However, King Abdullah II mentioned that Jordan would be part of the war against terrorism a few weeks and days before the war even started. He reiterated this statement in his press conferences and his speech at the UN, two days following Jordan’s joining the war.

Currently, Jordan is directly involved in the war, as it is participating in the airstrikes, providing logistical support and exchanging intelligence information. It is also using GID’s capabilities among the Sunni tribes on Syrian borders against IS.

The joint intelligence operations of Jordan and the NATO may have triggered a targeting of Jordan by the Islamic State that, according to recent reports, may have infiltrated Jordan through its eastern border. According to Saudi media, Jordan has given some NATO members intelligence that describes a growing ISIS threat in the country.

Media in Saudi Arabia reported that Jordan contacted NATO security officials citing growing fear of possible attempts by ISIS to expand into its territory. The British ambassador in Amman said that the UK and NATO are ready to help Jordan face any threat from the Islamic extremist organization.

On the other hand, a recent decision of a federal jury in New York – that held Jordan’s most important financial institution, the Arab Bank, liable for supporting terrorism – is showing the West’s contradictory policies toward the Arab world, as well as the failures of America’s protection policies. The penalties, to be determined in separate proceedings, threaten the survival of Washington’s close ally in Amman.

Established in Jerusalem during the British Mandate, the Arab Bank quickly evolved into one of the region’s most respected financial institutions. With headquarters in Amman and fast-expanding regional business, the Arab Bank became Jordan’s most important economic institution by the 1980s. Today, the Arab Bank represents nearly one third of Amman’s shaky stock market and informal estimates suggest that its activities constitute at least one third of Jordan’s total economic output.

Since Jordan has currently one of the highest levels of debt in the world (18 percent of GDP in external debt and over 85 percent of GDP in public-sector debt), the penalties in the New York case have the potential to create havoc in an already tense country, further affecting Jordan’s already poor ability to attract productive investment.


IV. Medium-term assessments


One should not rule out Dubai or other Gulf urban areas like Abu Dhabi and Qatar as potential future great city-states. In a world where cross-cultural trade remains an ascendant phenomenon, we are likely to see the emergence of an expanding number of city-states over the coming years. Athens, Carthage or Venice may have constituted the great city-states of the past, but the 21st century is likely to create its own batch of luxuriant successors.

Drawback of the Gulf city-states: the population

While acknowledging the spectacular evolution of the Gulf city-states into major regional and international actors, analysts also pointed out that, on a long-term view, those city-states have a significant drawback, in the lack of indigenous human resources.

The Gulf cities, unlike their northern Arab counterparts, arose after the advent of the nation-state, which by nature restricts immigration and imposes a relatively narrow definition of who does or does not belong. The emergence of the Gulf nation-states in the early 1970s effectively blocked the centuries-old migration that led to a level of diversity in these cities. National identity was homogenized to make these new nations viable, and nationality – the right to belong – was restricted to the small group of people whose ancestors had ventured toward these lands from across the region. Any migrants from that point onward were considered guests who would eventually have to go home.

This system of importation continues, with millions of workers coming to the Gulf. Almost everything from people, ideas, academic institutions, museums, athletes and even bottled water was imported. In an effort to develop and quickly become competitive with Western hubs, they turned into replicas of those cities with little of their own to offer foreign visitors and tourists.

Today, in each of these “new Arab centers”, foreigners outnumber citizens. They became hubs for migrants, but the migrants in the Gulf have residency cards with expiration dates and they are continuously reminded that one day they will have to leave. In contrast, the citizens will continue to be a shrinking minority whose influence in these cities will progressively wane.

In contrast with the traditional Arab centers that exported literature, art, science and ideas to the world, there is little in these Gulf cities that can be considered organic. The achievements of expatriates, no matter how long they have lived there, are cast aside as non-indigenous and not celebrated with the fanfare that the most minuscule of achievements by the minority citizen population are. It is no wonder that some of the most celebrated Arab achievers were incubated abroad.

Gulf cities are likely to remain the economic centers of the Arab world for a long time to come. They will continue to attract millions of Arabs and non-Arabs alike, but it is unlikely that they will become any more than that if their refusal to indigenize continues.

Others flaws of the city-dominated model

The models in which the future lies with mega-cities and not with sovereign states, or even groupings of states such as the European Union, are criticized as having several drawbacks.

One of these drawbacks comes from the difference of status among the inhabitants of the mega-cities: although the UN estimates that 78% of the world’s population will live in cities by 2030, it also says that a third of those people will live in slums and will not be adequately represented in the democratic structures. The same would apply in the case of many people that work but do not live in the cities, where the residential population is a minority and its needs may be ignored in favor of the interests of business. Another drawback is that such a model does not take into account the population that would be still living in rural areas, and, in the situation of cities replacing states, would be disenfranchised and left without any form of social support or governance.

A city model also carries the risk of a return to the territorial disputes of the past. Cities need resources that the earth provides: water, food, fuel, minerals and raw materials for production. All cities therefore depend for their survival on the existence around them of swathes of productive land that they control. The city-states of the past fought for control of land, its resources and the workers associated with it. In the future, cities could still fight for control of land and its resources, and the possibility of the relationships between cities becoming destructively competitive rather than cooperative should not be ignored.

Even if the nation state in its current form may be on its way out, territoriality certainly is not. Cities are defined by the territory they control just as much as nation states. And growing cities need to extend their territory – which if they were independent city-states would be extraordinarily hard for them to do. In this situation, nation-states may even keep cities from destroying each other. They will also continue to be the focus of people’s historical and cultural allegiances. In the end, cities and nation states will continue to coalesce into supranational groupings that hold together until they become too big and too diverse, then fall apart.

The Ibn Khaldoun model: driven by the group feeling

In this context, many recall the model of the society’s evolution developed in the early 14th century by Arab philosopher Ibn Khaldoun, who was so often evoked during the Arab Spring, when the “young Bedouins” in the Arab world were exhorted to occupy the cities.

Abu Zayd ‘Abd al-Rahman ibn Muhammad ibn Khaldun al-Hadhrami (1332-1406) is viewed as a founder of modern historiography, sociology and economics.  His main work is a world history, the Kitab al-‘Ibar, (full title: Kitābu l-ʻibar wa Diwānu l-Mubtada’ wa l-Ħabar fī tarikhi l-ʻarab wa l-Barbar wa man ʻĀsarahum min Đawī Ash-Sha’n l-Akbār – “Book of Lessons, Record of Beginnings and Events in the history of the Arabs and Berbers and their Powerful Contemporaries”). The introduction of this book is a treaty in itself, namely the Muqaddimah (Prolegomenon, or Introduction). Such “introductions” were a recognized literary form at the time, and the Muqaddimah is, in fact, the repository of its author’s most original thoughts.

Ibn Khaldun explained in the “Muqaddimah” that historical change and the succession of dynasties are a function of the interactions between nomadic culture and urban civilization. He perceives history as a cycle in which rough, nomadic peoples, with high degrees of internal bonding and little material culture to lose, invade and take resources from sedentary and essentially urban civilizations. These urban civilizations have high levels of wealth and culture but are self-indulgent and lack both “martial spirit” and social solidarity. This is because those qualities have become unnecessary for survival in an urban environment, and also because it is almost impossible for the large number of different groups that compose a multicultural city to attain the same level of solidarity as a tribe linked by blood, shared custom and survival experiences. Thus, the nomads conquer the cities and go on to be seduced by the pleasures of civilization and in their turn lose their solidarity and come under attack by the next group of rough and vigorous outsiders – and the cycle begins again.

The key factor that generates such an evolution is social solidarity, called by Ibn Khaldoun ‘Asabiyya’ (group feeling). When he analyzed the correlation between ‘Asabiyya’, the social cohesion of a society, and political power, Ibn Khaldun argued that the strong social cohesion of tribal peoples enabled them to conquer urbanized regions and build regimes and civilizations. These conquests were undone by the tribes’ gradual loss of ‘Asabiyya’ in the urban setting, leading to new conquests by tribal peoples.

This is a lesson one may have to learn again, in an era without a single, dominant world power and a globe beset by crises – climate change, resource scarcity, food and financial crises, wars and failing states.

The ongoing economic crisis has accelerated the displacement of power, from the United States and Europe toward new power centers such as India, China, and Russia, as well as the Arabian Gulf states.

The new powers, including the megalopoleis, are growing closer together and the current financial crisis has shown how deep their ties have already become. These countries are neither enemies nor friends; they are “frenemies”, competitors for the world’s scarce resources. A potential “clash of futures” looms on the horizon of the multipolar world. Consequently, social solidarity needs to be revived and new forms of international cooperation, consultation, and compromise will have to play a central role in this multipolar world. The challenge will be to devise a new international framework and an organized balance of interests that is already called “change through rapprochement”.


“Rulers and dynasties are strongly entrenched. Their foundations can be undermined and destroyed only through strong efforts backed by the group feeling of tribes and families”. (Ibn Khaldoun)









Excerpt from: Global Trends 2030: Alternative Worlds

National Intelligence Council, NIC 2012-001, December 2012



In 2030 an historian is writing a history of globalization and its impact on the state during the past 30 years. He had done a doctoral thesis on the 17th century Westphalian state system but hadn’t managed to land an academic job. He was hoping that a study of a more recent period would give him a chance at a big-time management consultancy job. Following is a synopsis of his book, The Expansion of Subnational Power.


Globalization has ushered in a new phase in the history of the state. Without question, the state still exists. The continuing economic volatility in the global economy and need for government intervention shows that the state is not going away. However, it would also be wrong to say that the powers of the state have remained the same. During the past 30 years, subnational government authorities and the roles of nonstate bodies have greatly expanded. This has been especially the case in Western democracies, but the increase in subnational power has spread far and wide; the West no longer has a monopoly.

The expansion has been fueled by the formation of a transnational elite who have been educated at the same universities, work in many of the same multinational corporations or NGOs, and vacation at the same resorts. They believe in globalization, but one that relies on and benefits from personal initiative and empowerment. They don’t want to rely on “big” government, which they see as oftentimes behind the curve and unable to react quickly in a fast-moving crisis.

This “can-do” and “everyone-can-make-a-difference” spirit has caught on with the rising middle classes around the world, which are increasingly self-reliant. It’s fair to say that in a number of cases, the rising middle classes distrust the long-time elites who have controlled national governments in their countries. Hence, for the rising middle classes, working outside and around government has been the way to be upwardly mobile. Denied entry at the national level, many—when they seek elected office—see cities as steppingstones to political power.

This new global elite and middle class also increasingly agree on which issues are the major global challenges. For example, they want to stamp out cronyism and corruption because these factors have been at the root of what has sustained the old system or what they term the ancien régime. The corruption of the old elites has impeded upward mobility in many countries. The new elites believe strongly in rule-of-law as a way of enforcing fairness and opportunity for all. A safe and healthy environment is also important to ensuring quality of life. Many are crusaders for human justice and the rights of women.

Technology has been the biggest driver behind the scenes. With the IT revolution, all the nonstate bodies, from businesses to charities to universities and think tanks, have gone global. Many are no longer recognizable as American, South African, or Chinese. This has been disconcerting to central governments—particularly the remaining authoritarian ones— which do not know whether to treat them as friend or foe.

The technological revolution has, in fact, gone way beyond just connecting people in far-flung parts of the world. Owing to the wider access to more sophisticated technologies, the state does not have much of an edge these days. Weapons of Mass Destruction (WMD) are within the reach of individuals. Small militias and terrorist groups have precision weaponry that can hit targets a couple hundred miles away. This has proven deadly and highly disruptive in a couple of instances. Terrorists hacked into the electric grid and have brought several Middle Eastern cities to a standstill while authorities had to barter and finally release some political prisoners before the terror-hackers agreed to stop.

Many people fear that others will imitate such actions and that more attacks by ad hoc groups will occur. We have seen in the past decade what many experts feared for some time: the increasing overlap between criminal networks and terrorists. Terrorists are buying the services of expert hackers. In many cases, hackers don’t know for whom they are working.

A near-miss bioterrorist attack occurred recently in which an amateur’s experiments almost led to the release of a deadly virus. Fortunately, the outcry and panic led to stronger domestic regulations in many countries and enormous public pressure for greater international regulation. As an example of the enhanced public-private partnership, law enforcement agencies are asking the bio community to point out potential problems. In light of what could happen, the vast majority of those in the bio community are more than eager to help. However, most everyone has recognized that action at the country level is needed too. Thus, the original intent of the Westphalian system—to ensure security for all—is still relevant; since the near-miss bioterror attack, no one is talking about dispensing with the nation-state.

On the other hand, in so many other areas, the role of the central government is weakening. Consider food and water issues. Many NGOs sought central government help to institute country-wide plans, including pricing of water and reduced subsidies for subsistence farmers. There was even that huge G-20 emergency summit—after the wheat harvests failed in both the US and Russia and food riots broke out in Africa and the Middle East—which called for a new WTO round to boost production and ensure against growing export restrictions. Of course, all the G-20 leaders agreed, but when they got back home, the momentum fell apart. The momentum took a dive not just in the US and the EU, where the lobbyists sought to ensure continued subsidies, but also in places like India where subsistence farmers constitute important political constituencies for the various parties.

Five years later no progress has been made in restarting a World Trade Organization round. On the other hand, megacities have sought their own solutions. On the frontlines in dealing with food riots when they happen, many far-sighted mayors decided to start working with farmers in the countryside to improve production. They’ve dealt with Western agribusiness to buy or lease land to increase production capacities in surrounding rural areas. They are increasingly looking outside the countries where the urban centers are located to negotiate land deals. At the same time, “vertical farming” in skyscrapers within the cities is being adopted.

This effort of each megacity looking after itself probably is not the most efficient. Many people not living in well-governed areas remain vulnerable to shortages when harvests fail; those living in the better-governed areas can fall back on local agricultural production to ride out the crisis.

In general, expanded urbanization may have been the worst—and best—thing that has happened to civilization. On the one hand, people have become more dependent on commodities like electricity and therefore more vulnerable when such commodities have been cut off; urbanization also facilitates the spread of disease. On the other hand, it has also boosted economic growth and meant that many resources—such as water and energy—are used more efficiently. This is especially true for many of the up-and-coming megacities—the ones nobody knew about 10 or 15 years ago. In China, the megacities are in the interior. Some of them are well planned, providing a lot of public transportation. In contrast, Shanghai and Beijing are losing businesses because they have become so congested. Overall, new or old, governance at the city level is increasingly where the action is.

We’ve also seen a new phenomenon: increasing designation of special economic and political zones within countries. It is as if the central government acknowledges its own inability to forge reforms and then subcontracts out responsibility to a second party. In these enclaves, the very laws, including taxation, are set by somebody from the outside. Many believe that outside parties have a better chance of getting the economies in these designated areas up and going, eventually setting an example for the rest of the country. Governments in countries in the Horn of Africa, Central America, and other places are seeing the advantages, openly admitting their limitations.



[1] Global Trends 2030: Alternative Worlds, a publication of the National Intelligence Council, NIC 2012-001, December 2012, see

[2] NIC’s hypothetical “non-state world” is presented in the annex.

[3] See our previous paper, Terrorism in the Sahel and the Sub-Saharan Africa: More than a Regional Threat


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