Bahrain, UAE (where Dubai is), and Qatar are all moving ahead of the rest of the region. Capitalism and the rule of law has taken place in the coastal persian gulf states (except for Kuwait). I was stationed in Doha, Qatar for three months back in the spring and it is progressing rapidly. Vistually the entire Nation is "under construction". Qataris claim that they are striving to be the next Dubai, while those in Dubai are striving to leave the rest of the Arab world in the dust. Dubai is now a major tourist attraction for Europeans and even Americans (European celebrities have multi-million dollar villas in Dubai and there's even a massive amusement park, DubaiLand). Dubai also has a booming stock market.
I believe Capitalism and Democracy are inextribably linked. In countries where capitalism exists and democracy has not taken root, democracy is merely around the corner (think of Taiwan and South Korea 20 - 30 years ago).
The Gulf States, along with Iraq, will pull the Arabs out of the 9th Century.