Monetary statecraft in the service of counter-revolution: Gulf monarchies’ deposits to Arab states’ central banks 1998–2022

Gulf Cooperation Council (GCC) monarchies have deposited several tens of billions of dollars in other Arab states’ central banks since 2011 to prop up recipients’ currencies. GCC currencies do not themselves have the ‘currency power’ for the exercise of such monetary statecraft. Gulf monarchies deploy ‘petro-dollars’. Previous analyses had found that petro-dollar ‘recycling’ in the 1970s and 1980s had been directed by ‘the hidden hand of hegemony’ to serve US empire. The character of recent exercises of Gulf monetary statecraft differs. I compile a dataset of GCC states’ deposits in other Arab states’ central banks and analyse their politics using Armijo and Katada’s taxonomy of financial statecraft as an analytical framework. Gulf deposits to Arab states’ central banks were instances of offensive and bilateral financial statecraft aimed at influencing politics in recipient states. The effect of monetary statecraft was not systemic: Deposits reproduced the global role of the dollar as a reserve currency and donors largely worked in tandem with the International Monetary Fund. Yet the Gulf states were deploying their petro-dollars for their own regional political agenda rather than goals defined by Washington: This was monetary statecraft in the service of counter-revolution to the Arab uprisings.