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Unfolding the Economics behind French Arms offsets and the Louvre Abu Dhabi

Its looks like the Sheikhs in the Arabian Gulf are determined to keep all kinds of power and autocracy limited within their control and do not want even a piece of this power concentration to go in the hands of the old middle classes — the merchants and civil servants. The second generation of rulers are now governing most of the Persian Gulf but only a negligible amount of bureaucracy is allowed to get actually involved in decisions of the state.

A demonstration of this mindset and ideology can be seen through the deep interests developed by the Sheikhs in the internationally recognized cultural monuments and events. The Gulf rulers are warmly welcoming the iconic cultural architectures inside the dome of Arab Culture. Prestige is sought to be shared between global superpowers of Europe and the Middle East.

Emirati Capital and ambitious Cultural Project

In the case of the United Arab Emirates (UAE), the art events on Saadiyat Island over the last decade have become genuinely popular with Emiratis.

France’s president, Emmanuel Macron had a great diplomatic welcome in the Emirati Capital when he came at the inauguration of the Louvre Abu Dhabi, received warmly by the Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.

It all started in the 2005 by the French foreign ministry under President Jacques Chirac. It was initiated in 2004 by the UAE’s then minister of information and culture, now foreign minister, Sheikh Abdullah bin Zayed Al Nahyan, and his older brother, Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi, the head of the armed forces and now the most powerful man in the emirate’s government.

Foreign investments in the UAE after arms sales

It has been nearly 13 years from the Louvre Abu Dhabi’s conception to its ceremonial opening as the Arab world’s first universal museum. From the first, it has been a matter of high state.

At the origin of Sheikh Mohammed bin Zayed’s capacity to pay for the museum planned for Saadiyat Island are the funds of the Offset Program Bureau (OPB), set up in 1992 to administer the sums that foreign governments are obliged to invest in the UAE when they sell it arms.

Inside view of Louvre Abu Dhabi.

This “financial niche” was given to Sheikh Mohammed by his father, the founder of the UAE, Sheikh Zayed bin Sultan Al Nahyan, before he died in 2004.

The OPB money enabled Sheikh Mohammed to create, in 2002, the Mubadala investment fund, which gave him power and independence from the other sovereign funds — the Abu Dhabi Investment Authority, the Abu Dhabi Investment Council, the International Petroleum Investment Company etc — which were all under the control of Sheikh Khalifa bin Zayed Al Nahyan, who succeeded Sheikh Zayed as ruler.

Abu Dhabi’s Mubadala

In 2008, at the opening of the exhibition Picasso Abu Dhabi, the director-general of the fund, Khaldoon Khalifa Al Mubarak, reminded the public of its commitment to the arts: “Mubadala is engaged in the diversification of the economy of Abu Dhabi and the creation of a flourishing society. We believe that supporting the arts and culture is an important part of this process.”

Abu Dhabi Tourism Authority (ADTA) sold part of its shares in the Tourism & Development Investment Company (TDIC), which was developing Saadiyat Island and the museums, to Mubadala. The flow of money from the Offset Funds to the museums via Mubadala has, therefore, been an act of patronage deriving from the arms purchases by the UAE.

The two universities, Sorbonne Abu Dhabi and New York University Abu Dhabi, and Masdar, the unfinished eco-city, are also financed out of Mubadala, which has a current asset value of $125 billion.

French Academic Conclusion

The Art Newspaper based in London and New York City has given insightful details about the linkage of Emirati and French cultural ties and the inside arms trade. As per the site, the deposition of the Shah in 1979 by the religious middle classes of Tehran had made the sheikhs begin to look with suspicion on their own wealthy, patrician merchants and start nudging them out of positions of power. Then came the Arab Spring in 2011, with its clamor for democracy, and this confirmed the sheikhs’ desire to keep the museum projects within their own families. Alexandre Kazerouni, a French academic of Iranian descent in his book Le miroir des cheikhs (the mirror of the sheikhs) holds a similar opinion about the fear from bureaucracy which has not left the minds of powerful Arab rulers.

However a question arises here. Are these cultural masterpieces a token for the billion dollar arms deals between the Middle East and West. The book does not consider whether the museums are beautiful or might have an educational and mind-broadening effect because Kazerouni believes there is an almost complete disconnection between them and the indigenous population.