While natural resource wealth explains the survival and stability of the Gulf monarchies, it has also allowed their substantial outreach on the regional and international stages over the past decade. The economic power which Qatar, the United Arab Emirates, and Saudi Arabia have accumulated through the dividends of the oil boom since early 2004 has arguably provided these countries with a new advantage in their relations with external partners – particularly against the backdrop of the global financial crisis since 2008, and of the regional disorder since 2011. The leaders of these monarchies have been repeatedly using their financial capital as a bargaining chip to elicit concessions –or at least acquiescence– from their regional and international partners, as they implement strategies that are coherent with their own interests and founded upon their own perceptions of power dynamics in the region. Such natural resource wealth increasingly deployed abroad as a tool of statecraft suggests a need to examine an international scope of rentierism, which I label “Globalized Rentierism”. This paper will explore how the dynamics of Globalized Rentierism play out in arms trade, which is considered to illustrate such dynamics particularly well. For the monarchical regimes of the Arabian Peninsula, defense procurement has been about much more than acquiring the means to address internal and external threats per se: the purchase of state-of-art military arsenals has also served purposes of nation-building and state-branding. Moreover, and perhaps most importantly, lucrative arms deals have been a way to secure continued interest, support, and protection by external partners. Recently, the strategic importance of exporting weapons dramatically increased for Western arms-supplying states because of changing economic circumstances and shrinking defense budgets. This has provided client states in the Gulf region with a growing “reverse influence” that they can exploit to augment their bargaining power vis-à-vis their arms suppliers. Globalized Rentierism is considered a particularly important research agenda because it elucidates a broader shifting of the dependency logics between the Gulf monarchies and their Western protectors. The Gulf states’ rising relative advantage in their previously established interdependent relationship with their external partners seems not only to bolster their power and assertiveness, but also to deprive the external partners of their capability to convince their client states to behave in compliance with their own strategies to ensure regional security and stability – as clearly shown in the Qatar crisis since its outbreak in June 2017, for instance.

This paper is an attempt to start exploring the internal diversity in the transforming rentier state in Saudi Arabia. It particularly questions if its peripheries, rural areas, are readier for post-oil economy than its urban centers which are considered to be the cores of the distributive state. The urban-rural divide appears to matter a great deal to Saudi Arabia which is home to the largest local population (i.e. excluding foreigners) among the GCC countries, at over 21 million, and has broad rural areas that spread across the Arabian Peninsula, in addition to the three urban centers (Riyadh, Jeddah and Makkah, and the Eastern Province). These rural areas are home to over a third of the all Saudi households. The Saudi rentier state, as its distributive capacity declines due to the low oil prices and the local population growth, is increasingly selective in distribution: while maintaining distribution to the urban centers, it is less able to cover rural areas, particularly some regions in the north and the south, as indicated by higher unemployment rates in the latter. Given that unemployment has been a major driver of economic diversification in Saudi Arabia over the past quarter century, these less distributed rural areas are, in theory, considered to be bridgeheads for the country’s transition to post-oil economy in which the private sector employs a greater local workforce. Nevertheless, in reality, labor localization rates are lower in rural areas despite local citizens’ more limited access to public-sector jobs and lower wage levels of these jobs there.

Traditional assumptions within rentier state theory (RST) suggest that the accrual of resource rents by the state weakens civil society, allowing the state to coopt or repress independent associations. However, the civil society concept itself has been only rarely discussed in the RST literature, which is problematic for elucidating clear causal mechanisms between rents and the weakening of such society. In particular, the transnational and international dimensions of civil society in rentier states have been neglected, with the focus instead being on the cooptive capacity of the state on wholly domestic civil society organizations. This paper argues that by introducing a transnational and international understanding of civil society to RST, we can better conceptualize how the co-optation and repression mechanisms impact civil society groups differently, depending upon their access to international networks. It finds that while rentier states have been effective in some cases at coopting or repressing formal, domestic civic organizations, they have had less success shaping the political activity of organizations with substantial links to transnational and international networks. The paper focuses particularly on in-depth case studies of civil society groups in Bahrain, but also draws more broadly from over 120 personal interviews conducted across the Gulf region and among diaspora communities in the UK and US. It finds that previous instances of repression are important to the formation of an internationalized opposition community, comprised largely of political exiles from previous uprisings and their extended families, that contribute to the maintenance of political advocacy even as repressive or cooptative governance strategies are implemented domestically. At the same time, this internationalization can also cause a transformation in the nature of the civil society organization itself, and the paper discusses how certain Bahraini political organizations have started to fragment internally as their domestic space for operations shrank after 2014 and they were forced to rely more on their transnational networks, which in turn had differing ideas about how to pursue political reform. The paper thus understands the impact of transnational and international civil society as dynamic, and traces the development of these relations over time, both in terms of how they impact the resilience of civil society in the face of repression and cooptation, and in terms of their effect on the political attitudes and internal cohesion of the organizations themselves. Ultimately, these dynamics contribute to an enhanced understanding of civil society in modern Gulf rentier states.

Several institutional characteristics impair the Gulf rentier economies’ ability to implement economic reform that will support the large youth cohort imminently ready for employment. One salient issue that arises when evaluating political obstacles to economic reform in the case studies of Qatar, Kuwait, and Bahrain is the interplay of political and economic institutions in light of the economic reforms needed to attain the demographic dividend. In this study, through 46 semi-structured interviews and a comparison of three case studies, I highlight the difference between a state-dominated rentier-based private sector, such as that of Qatar, and a business elite-dominated rentier-based private sector, such as in Kuwait, in order to shed light on the obstacles to economic reform needed in different rentier economies. I first conclude that the more dominance the business elite have in the private sector, the more influence they have over state institutions to counter economic reform. The case studies demonstrate varied responses to private sector economic reforms: In Kuwait implemented reforms were often reversed; in Bahrain they were significantly diluted after the state-business negotiation process; and in Qatar the push and pull for reform was minimal compared to the two other states, and reforms were more swiftly passed. Second, I conclude that a binary relationship materializes between two powerful actors in the private sector—the state and the business elite—and within the scope of these rentier economies’ narrow choices, the best chance for the economic reform needed to successfully attain the demographic dividend is through state-led capitalism.