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The Rentier State in the Gulf

Panel 092, 2010 Annual Meeting

On Friday, November 19 at 04:30 pm

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Presentations
  • Across the Persian Gulf, rentier arrangements have reinforced pre-existing political establishments. Based on the state's access to rent revenues and its ability to filter them down to the population, three broad types of rentier states can be found in the Persian Gulf: high rentier states (Qatar, the UAE, and Kuwait), mid rentier states (Oman, Bahrain, and Saudi Arabia), and poor rentier states (Iran and Iraq). This typology is supported by data on the state's per capita expenditures on its citizen (national) population. As the empirical evidence demonstrates, rentierism needs to be politically contextualized. In much of the current literature on rentierism, focus has been on arrangements in the political economy of governance, and the consequences of those arrangements between specific economic actors and the state. This does not take into account variations in the rentier states' institutional make-up and functions (the multiple and different ways in which rent revenues have been distributed to--or trickled down to--the population), society-specific dynamics such as sectarian divisions and tensions (as in Bahrain and Saudi Arabia), or national peculiarities such as confederate arrangements (as in the UAE). This paper offers a typology of states in the Persian Gulf by dividing them into the three categories of high, mid, and poor rentier states. Based on this typology, Persian Gulf states in each of the categories are likely to experience, respectively, absence of socially-generated pressures for political change, occasional pressures for political (marginal) reform, or frequent bouts of political instability.
  • Miss. Ingrid Krüger
    In this paper I make an empirical study of the question whether less democratic oil rich countries use the oil revenues of the state to please the public by subsidizing gasoline. The German Technical Corporation (GTZ) provides biennial data on domestic gasoline prices, displaying large discrepancies in gasoline prices between countries. In GTZ's data set from 2008, all ten countries at the bottom of the gasoline price ladder are crude oil exporters. Six of these ten countries are countries in the Gulf Region. Other crude oil exporters, however, such as Norway, find themselves at the other end of the gasoline price ladder. It has been hypothesized in the natural resource curse debate that economic deterioration in oil rich countries follows from mismanagement of resources, and that this mismanagement of resources follows a political logic. The gasoline subsidization in the Gulf Region calls for more attention to the study of this region in the natural resource curse debate. In addition to the gasoline price data provided by GTZ, I include economic variables from the World Development Indicators, the United Nations, and the Energy Information Administration (EIA). I also include political variables from Freedom House and the Center for Systematic Peace. I make a comparative analysis utilizing this panel data set, with observations from the years 1998 -2008. I run regressions with the domestic gasoline price as my dependent variable. Since the effect on the domestic gasoline price of higher crude oil exports might depend on the level of democracy, I include an interaction term between Freedom House's democracy score and crude oil exports per capita. I also include a range of control variables that possibly affect the domestic gasoline price. An interesting finding from my regressions is that to move from being 'free' via 'partly free' and to 'not free', as defined by Freedom House, has a negative estimated effect on the domestic gasoline price, and the larger the crude oil exports of the country are the stronger is this negative effect.
  • In all of the states of the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the UAE), foreigners constitute the vast majority of the private sector labor force and a substantial proportion of the overall population, sometimes even comprising the majority of residents. It is this demographic context that makes foreign labor a politically salient issue. I am interested in the construction of distance as a way to define citizenship in these six states. Questions about the integration or distancing of foreign laborers are especially provocative in the new spaces of globalization like Free Trade Zones, mega-construction sites and burgeoning industrial and economic "new cities." In my view, this is because local populations and governments are still struggling with the substance of rights of national citizenship in a territorial state even as new globalized spaces and actors are evolving beyond it. Labor migrants are symbolic markers of larger issues. I demonstrate that overwhelming dependence on foreign labor fosters layers of confrontations and multiple modes of distancing. I articulate seven types of each that are now evident in the Gulf. Distance and confrontation have become more pronounced due to the confluence of spiraling inflation, lower profit margins for corporations and diminishing wage differentials between home and host countries. My purpose is to systematically relate confrontation and distance back to constructs of citizenship and to compare patterns between the six countries. An analytic focus on distance and labor builds bridges between debates about citizenship and the growing research on new, globalized spaces of contestation. How foreign labor is treated is intimately related internally to ideas about gender, ethnicity and cultural security and externally, to global markets. While the oil states are integrated into the capitalist economy through oil and labor, they remain internally fragile in many ways. I demonstrate how this internal fragility plays out in distance and notions of belonging. State efforts to construct distance are not only a way to control foreigners but also to make up for the absence of political rights. The greater social and economic privilege that can be attached to "being local," the less emphasis there is on meaningful political rights as a component of citizenship, however one defines it.