Political and economic situation
Historically, the Arabian Gulf region was comprised of city-states, called Shaykhdoms, each ruled by a dominant family. The current Gulf oil-states are an expansion of these city-states with the historical ruling families in power until the present. This is the case with the Al-Khalifa family which has ruled Bahrain since 1870s; the Al-Thani family in Qatar since 1820s; the Al-Sabah family in Kuwait since 1718; the Al-Sa‘ud family in all the three historically Saudi states; the Al-Bu Sa‘id family in Oman for over 250 years; and the ruling families of the Shaykhdoms which make up the UAE. Hence, the GCC countries are new states with traditional long-life regimes. With the exception of the two holy Muslim cities in the Hejaz region, Mecca and Medina, from both economic and geo-political points of view, the Gulf region was marginal to the Ottomans. Consequently, they never implemented a direct rule in the area. Neither did the British, which ruled much of the area following World War I. Hence, prior to the beginning of the oil era - first in Bahrain in 1932, then in Saudi Arabia and Kuwait in 1938, in Qatar in 1940, in the UAE in 1952 and lastly in Oman in 1967 - the Gulf region was one of the poorest areas worldwide, with its economy mainly based on pearl diving, subsistence agriculture in the coastal areas, international trade in the coastal cities and a traditional nomadic economy in the interior areas. In the early 1930s, the economic situation in the Gulf region became even worse due both to the collapse of the pearling industry and to the Great Depression.
As a result of its poor socioeconomic condition, the Gulf region was sparsely populated prior to the beginning of the oil era. At the end of World War I, the population of the area of present day Saudi Arabia numbered approximately 1.5-2 million, the population of Bahrain, Qatar and Kuwait together numbered approximately 175,000, about half a million people lived in present day Oman and another 80,000 in the present day UAE (Owen and Pamuk, 1999:76). The only foreigners who were present in the Gulf prior to the beginning of the oil era were merchants from the neighboring Gulf regions and from India who traded with the Gulf merchants. In addition, there were some workers from neighboring areas who came to work on a seasonal basis in the fishing and pearling industries (Baldwin-Edwards, 2005:4).
Following the discovery of oil, however, the marginality status of the Gulf disappeared at once. One of the immediate results was the beginning of rapid population growth. This was brought about mainly by increasing the number of foreign labor in order to fill the professional occupations in the oil industry and later in the rapidly expanding public sectors. In the case of Bahrain - the first among the Gulf states to extract oil - as early as 1941 the foreign population amounted to 15,930, representing 17.7% of the total population (Bahrain, CIO, SA-2000:table 2.01). Kuwait’s population in 1949 (both nationals and foreigners) numbered approximately 100,000 compared to only 60,000 in 1930 (Ismael, 1982:117; El-Shalakani and Al-Sabah, 1993:107). In the other Gulf oil-states, the same pattern of rapid population growth occurred. Overall, in the early 1970s, prior to the “oil boom,” the number of foreigners in the Gulf oil-states was estimated at between 800,000 and 1.25 million, including both workers and their accompanying family members (Winckler, 2009:134).