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The Political Economy of Gulf States: Beyond Oil

Panel II-20, 2021 Annual Meeting

On Tuesday, November 30 at 11:30 am

Panel Description
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Disciplines
N/A
Participants
  • Dr. Mehran Kamrava -- Chair
  • Dr. Edward A. Sayre -- Presenter
  • Dr. Jocelyn Sage Mitchell -- Presenter
  • Dr. Robert Mogielnicki -- Presenter
Presentations
  • Dr. Jocelyn Sage Mitchell
    How does Qatar, the richest and smallest rentier regime in the world, challenge conventional explanations about how domestic politics works in the modern rentier state? Rentier states such as Qatar accrue their wealth from external sources, like the sale of oil and gas. Rentier state theory (RST) posits that this financial self-sufficiency gives the state much more political power over society than is normally seen in non-rentier states. This imbalance of power, so the theory goes, enables the rentier state to pursue domestic policies without the kinds of typical state-society interactions. In short, the conventional answer to the question of how domestic politics works in a rentier state is: The citizens bargain away their political voice in exchange for state-distributed wealth. While RST is still used regularly to explain the domestic politics of the Gulf Arab monarchies, more recent studies of domestic rentier politics have challenged this theory. In line with these analyses, this paper uses the case study of Qatar to contend that this quintessential rentier state’s domestic politics cannot be explained by RST’s focus on material transactions alone. Original, nationally representative survey data reveals that Qatari citizens are not as economically satisfied with top-down material distributions as RST predicts, due to deep tensions between different societal groups in Qatar that the top-down distribution of wealth exacerbates, rather than smooths over. What else, then, is needed to make domestic politics work in Qatar? This paper looks closely at an area of study overlooked by classic RST: top-down narratives of identity and nationalism to bolster state legitimacy. Qatar expends huge resources on nation-building narratives that target citizens and expatriate residents alike, as it cultivates popular support for its domestic policy agenda. Yet these efforts are by no means met with unquestioning buy-in. There is no more striking example of this than the new National Museum of Qatar, where state-promoted definitions of heritage, tribalism, and belonging contrast with deep societal concerns. Utilizing a mix of survey data, fieldwork, and ethnographic interviews, the paper builds on the unexpected economic dissatisfaction among citizens to highlight the importance of national identity—and the ongoing contestations between the state and multiple societal groups over the definition of this identity. In sum, the findings presented suggest that making domestic politics work in a rentier state may require a give-and-take between state and society that far transcends the rentier bargain, expanding our knowledge both empirically and theoretically.
  • Dr. Edward A. Sayre
    This research project analyzes the expectations mismatch between employers and employees so that policymakers, businesses, and educators can create better strategies for human capital development of Qatari nationals. The lack of incentives and the associated skills mismatch continues to be a hindrance to Qatarization. Despite educational reform, there remains a significant challenge in developing a national workforce that is willing and able in skills to deliver on the aims of Qatarization. Qatarization policies seek to reduce Qatar’s dependency on foreign workers and allow more nationals to benefit from economic growth. This project uses a mixed methods approach, combining long form interviews, focus groups and qualitative surveys with a statistical analysis of a nationally representative labor force data set to develop a full picture of the issues surrounding Qatarization and the expectations mismatch. In terms of qualitative data, this project interviewed human resource managers, Qatarization coordinators, and relevant Qatari policymakers to understand the expectations mismatch from the employers’ perspective. Our qualitative research demonstrates that the planning and implementation process for labor force nationalization is most advanced in the oil and gas sector. While companies in other sectors, such as construction and real estate, offer customized programs for national recruits and detailed career development plans. Using quantitative data we developed a social network analysis model of the education and career decision making process in order to better understand the job search and match process. This paper concludes by reviewing the implementation of reforms to the Kafala system in 2020 and how the Covid-19 pandemic and the 2017 Qatar diplomatic crisis with Saudi Arabia, Egypt, UAE and Bahrain affected the economic outcomes for Qatari national workers and expatriate workers.
  • Dr. Robert Mogielnicki
    Privatization initiatives are a central component of ongoing economic diversification efforts in the oil- and gas-producing member states of the Gulf Cooperation Council (GCC). The Abu Dhabi National Oil Co. – the largest energy producer in the United Arab Emirates (UAE) – raised more than $10 billion in 2020 by selling a 49% in its gas pipelines. Government-related entities (GREs) in other regional states have considered taking similar steps. Recent natural gas discoveries across the Gulf region present new opportunities for privatization initiatives and related commercial partnerships with the private sector. However, volatile gas prices and uncertain global energy demand have forced prospective investment partners to proceed with caution. This paper argues that domestic factors influence the trajectory of natural gas asset privatizations in Gulf Arab states as much as global market forces. GCC policymakers and officials pursuing privatization initiatives must grapple with controversial issues related to public resources. Privatizations also possess direct implications for state revenues in a region wherein the oil and gas sector often accounts for more than 70% of total government income. Guaranteed, one-off transactions must be weighed against greater commercial control over uncertain revenue streams in the future. The imposition of new tax regimes and persistence of subsidies reduce the profitability of Gulf gas assets and likewise affect their value on international markets. Moreover, the aims behind various pushes to develop self-sufficiency in natural gas consumption do not necessarily align with privatization objectives. This paper adds a new scholarly dimension to two related fields: i) the political economy of energy dynamics in Gulf Arab states and ii) state-business relations in the Middle East. Natural gas is considered a bridge energy source in the transition from oil to cleaner, renewable energy sources. Therefore, natural gas dynamics within gas-producing states are central to understanding the nature of energy transitions globally. The political economy approach of this paper is inherently interdisciplinary and thus relies on insights from economics, political science, and law. However, the work is predominantly shaped by a political science lens that emphasizes the interplay between institutional frameworks and human (and firm-level) behavior in order to explain local development outcomes. The paper relies heavily upon personal interviews with leading gas and energy experts in the U.S., Europe, and Gulf Arab states. A version of this paper will be a chapter in an edited volume, Natural Gas and Global Energy Transitions, that Palgrave MacMillan intends to publish in 2022.