The previous article in this series discussed the sense of malaise prevailing in large parts of the Arab world. This article presents an opposite set of feelings in small parts of the region, primarily in the Arabian Peninsula.

Whether in the different Gulf emirates or in Saudi Arabia, visitors to the Arabian Peninsula these days feel a sense of positive expectancy. That is, large sections of the societies, particularly amongst the youths, seem agile to grab opportunities emerging in the economy and society, and seem to expect the future to bring more opportunities.

That is not to say there are no clear problems. Various challenges are on the horizon. There is a clear understanding that the basis upon which the Arabian Peninsula’s economies have been built - oil and gas revenues - are already on a long term downward trajectory. There is a youth bulge, and generally much higher levels of good eduction per capita than in most other parts of the Arab world. But that youth bulge is far from bringing a youth dividend. Research and development and serious innovation are still very limited, particularly if compared to the colossal investments put in the past two decades in various economic sectors. Politics are stable, but there are underlying questions concerning the domestic political economies. And there is a realisation that, amidst the progress and development and glamour, there is a major difference between being able to buy and import first rate technologies versus making and mastering these technologies.

And yet, despite the gravity of these issues, there is a prevailing sense of being able to confront these challenges, and more importantly, to effect a major evolution in the Gulf’s developmental path.

Wealth helps. Informed sources estimate that the countries of the Gulf Cooperation Council have circa four trillion US Dollars under active management, of which about a half in the coffers of the Gulf countries’ various sovereign wealth funds, and the rest in the hands of semi-state-controlled investment arms. This is in addition to internationally-managed investment portfolios, built over at least a half century, since the first meteoric rise in oil prices following the 1973 war, which have enabled many key circles in the Gulf’s political economy to develop deep and serious connections to the world’s leading investment groups. This history, and the level of personal familiarity and trust that come with decades of cooperation, give the Gulf’s leading political economy circles access to investment opportunities that are not only lucrative, but also of major value in understanding consequential trends in politics, economics, and technology-development.

This access, along with the existence in the past two decades, of a number of assertive and highly ambitious leaders in different countries of the Arabian Peninsula, who have surrounded themselves with serious advisors with world-class knowledge and experiences, meant that these countries led transformative projects within their own societies, and often in key dossiers in the Arab world’s political economy as a whole.

Access to the world’s most advanced circles in economics, finance, and technology, and a decent exposure to the world’s leading centres of arts and culture, has enabled a level of sophistication that was much higher than the norms in the Arab world. This has manifested itself not only in economic thinking and financial investing, but in various other domains, from geopolitical planning to marketing one’s country.

Surroundings affect the psyche. Whereas in the vast majority of the Arab world, the airs of wars, displacements, economic pressures, or outright deprivation have burdened the minds and subdued the souls, in large parts of the Arabian Peninsula, the airs of plenitude and the exposure to world-class services - and importantly, ideas - have opened the minds to possibilities and have enriched the psyches with belief in the society, in the future, and in oneself.

Almost certainly, these advancements and the mindset and feelings they have engendered will fuel the ambitions of some countries in the Gulf to go much farther than they had already gone. And amidst the economic pressures the West is undergoing, some political and economic and financial circles in the Arabian Peninsula will manage to create valuable opportunities that would catapult their influence and reach much higher. Some of the challenges highlighted above might get resolved as the Arabian Peninsula’s societies follow their upward developmental path. Yet some of these challenges might fester. Irrespective, however, of how the different Arabian Peninsula’s societies will attend to the major opportunities and the difficult challenges they face, their paths are increasingly diverging from those of the rest of the Arab world.

This is an important development. The Arab world has always had haves and have-nots. The Arab world has also always had different ways of living that were often opposing to each other. But the current situation is starker. There is a high-probability scenario in which parts of the richest, and currently most advanced part of the Arab world - the Arabian Peninsula - would be heading towards futures in which their links to the rest of the Arab world would be tenuous. This would return the Arab world to a situation it was in at the end of the nineteenth century, before the rise of the initial forms of Arab nationalism, and before the idea of a collective Arab identity took form. The next, and final, part of this series will look at the implications of this situation on the Arab world in the foreseeable future.