The recent history of the Gulf – the decades since the 1950s or so – has been written in large measure by oil. Oil, and later gas, was integral in funding the transformations of Gulf societies; transformations that in many respects have been nothing short of spectacular. Oil and gas rents deliver advantages to incumbent rulers and elites and have also defined the nature of these economies for both better and worse. The oil-rich Gulf states have world-class infrastructure, high quality of life indicators, and possess many of the trappings and luxuries of economic development, all paid for largely by hydrocarbon rents. Yet the same rentier dynamic has made these economies less competitive in non-energy areas, created large, even bloated, public sectors, enabled leaders to coopt society and helped them avoid substantive democratic reforms and accountability.

At the same time, there is much more to the Gulf than oil and gas. Even with the enormous cooptive and repressive means that regimes can purchase with rents, elites and societal forces still have agency. Oil and gas are global industries, and are susceptible to shocks and fluctuations. Earlier, the Gulf’s pre-oil history set the stage for many of the political, economic and social structures and interactions that characterize these political economies today. The oil era is a continuation of some historical dynamics, such as the cooptive, personalized nature of politics and ruler–merchant relations, but in other ways oil has caused a divergence from the past, as with the dramatic development that rents have bought or the dual labour market that it has funded. As context for the dynamics that are the focus throughout the book, this chapter provides a historical survey of the Gulf. The aim is to highlight the key events and dynamics of both the pre-oil era and the oil era, with an emphasis on economic factors, showing the historical continuities, deviations and oscillations that have occurred and how they have shaped the Gulf’s modern political economies.

THE HISTORICAL EVOLUTION OF THE REGION

According to archaeological evidence, the Arabian peninsula hosted animal herders at least 7,000–8,000 years ago, and pearl diving had been established by around 5,000 BCE.