Page 39 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

24 PART I Background and Context

Judging from their current appearance, it would be easy to forget that
the countries of the Gulf have long but modest histories. A look at the
business centers of Dubai and Doha, with their sleek skyscrapers,
slick roads, and fast cars, reveals hardly anything that looks more
than 15 years old. The financial centers of Bahrain, Kuwait City, and
Riyadh do feature edifices from the 1970s and 1980s, but these are fast
being eclipsed by new icons such as Riyadh’s Kingdom Tower. Even
the populations are strikingly young, with over 40 percent of the peo-
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ple in the Gulf being below the age of 15. All in all, the Gulf
Cooperation Council (GCC) is a region in which one is overwhelmed
by “newness” and signs of recent prosperity.
In truth, the countries that now make up the GCC have long his-
tories of commerce and trade. For centuries, trade has been pivotal to
sustaining the regional economy—the Gulf’s agricultural and live-
stock base is very modest, and therefore the trade of goods was
always crucial to developing the Gulf’s wealth. In the area that is now
the UAE, for example, the core economic sectors were historically
pearl production, fishing, (modest) agriculture, and herding. 4
Artisans produced some goods for local consumption, but the finest
goods were imported from the Levant region of the Middle East (bilad
al-Sham in Arabic, or what is today Syria, Iraq, Jordan, Lebanon,
Palestine, and Israel), North Africa, and South Asia. The sparse agri-
cultural endowments of the Arabian Peninsula and the reliance on
trade were even mentioned in the Qur’an. Abraham, when leaving
his family on the peninsula, prays, “O our Lord! I have made some of
my offspring to dwell in an uncultivable valley by Your Sacred
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House” —with the last phrase being a reference to Makkah.
Elsewhere, the Qur’an mentions “the journeys of the winter and the
summer”—a reference to the trade routes that sustained the region
for centuries.
The Gulf played an important role in the ancient trade route
known as the Silk Road. The term refers to a longstanding trade pat-
tern in which goods flowed between China, other parts of East Asia,
India, Persia, the Arabian Peninsula, North Africa, and Europe. In this
elaborate flow of trade, Gulf ports and the merchants therein were
important intermediaries and enablers. Along with the exchange of
goods came a mixing of cultures, ideas, and families, such that fami-
lies with a broad range of ethnicities settled in the Gulf, and mer-
chants from the Gulf settled elsewhere. Significant populations in
Indonesia and Malaysia, for example, trace their roots back to Yemeni
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traders. In contemporary times, observers like BusinessWeek have