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- Whither Rentierism Following the 2014 Oil Price Decline: Trajectories of Policy Adjustment in the Arab Gulf
Martin Beck / Thomas Richter
Whither Rentierism Following the 2014 Oil Price Decline: Trajectories of Policy Adjustment in the Arab Gulf
Energy Research and Social Science | 2022
Abstract
This paper looks at key trajectories of policy adjustment across member states of the Gulf Cooperation Council (GCC)—a region shaped by state-controlled income from exporting hydrocarbons—since 2014, the year in which the price of crude oil dropped significantly. We argue that despite a wide range of policy responses, no deep, structural reform has been initiated in any of these countries. We highlight, however, the importance of several crucial trends shedding light on the future of reforms in the region. First, while coordination between oil producers was successful at the global level in the context of OPEC+, similarly gainful policy coordination has been largely absent within the GCC. Second, migrant workers from the Global South have been the biggest losers from post-2014 adjustment policies, while citizens of the Arab Gulf states—most of whom are employed in the well-paid public sector—were able to maintain their privileges. Third, as typical for rentier states, adjustment policies were characterized by institutional weakness. Differences between GCC countries can be explained by looking at distinct institutional configurations relevant to policy formulation and decision-making. Fourth, adjustment across public hydrocarbon industries reveals initial preparations to cope with an energy transition while there is no indication that ruling families have softened their traditional control over economic activities. Based on the discussion of these four empirical trends, we emphasize the importance of state-class relations and the role of institutions in explaining policy responses during periods of declining hydrocarbon income within rentier states.
Regional Institutes
Research Programmes
Journal
Energy Research and Social Science
Number of Pages
9
Volume
91
