Lebanon Report – July and August
September 4, 2019
Between the Wall and Security: An Impossible Palestinian State
October 1, 2019

GCC Economic Diversification: End of Rentierism & Rise of Nationalism?

The six countries within the Gulf Cooperation Council (GCC) are all currently working towards the fulfilment of largely similar economic “visions”. These economic plans promise decreased dependence on the region’s finite oil reserves, increased employment for Gulf nationals, and greater economic diversification, led by the private sector. United Arab Emirates’ (UAE) Vision 2021, Bahrain’s Vision 2030, Saudi Arabia’s Vision 2030, Qatar’s Vision 2030, Kuwait’s Vision 2035 and Oman’s Vision 2040 all acknowledge the Gulf’s economic vulnerability, and lay out plans for the long-term consolidation of the GCC’s prosperity. A stark reminder of the importance of these economic plans came in 2014, when the oil price crash caused huge economic difficulties across the Gulf. Real GDP fell, and budget deficits shot up across the region, as the US Energy Information Administration estimated that GCC export revenue in 2014 and 2015 fell by almost half[1]. The crisis prompted a range of economic measures to be taken in order to reduce the Gulf’s dependence on oil, including the introduction of 5% VAT in Saudi Arabia, UAE and Bahrain[2], the introduction of a tax on tobacco products and soft drinks in Oman[3], and an increase in the export of non-hydrocarbon goods across the GCC[4]. Nevertheless, oil-related products continue to be the principal source of revenue for GCC states, and economic transformation will not be easy, particularly in light of the potential political ramifications.

The political economies of the GCC have largely been studied through the lens of Rentier State Theory (RST) and have been labelled by many as rentier states. Rentier states are resource-rich states whose governments use the wealth accrued from the sale of their natural resources in order to provide services for citizens without levying income tax, thereby alleviating pressure on government accountability[5]. Gulf citizens have benefited from services such as subsidised education, healthcare, land grants and public sector jobs, and have not had their incomes taxed[6] as a result of the vast wealth that oil revenues have brought the region. These services have helped Gulf governments to form modern bureaucratic states out of tribal societies, and have effectively worked as a means to guarantee the citizens’ political acquiescence[7]. As a result of the relatively small number of citizens and  high oil revenues following the 1973 oil embargo, GCC states have been able to operate with this economic model until very recently. However, the long-term viability of the current regimes has been brought into question as a result of growing populations, continued vulnerability to oil price volatility,  weak private sectors and overinflated public sectors. Moreover, the depletion of oil reserves and the global shift towards more sustainable energy sources has made it clear that the rentier state model is no longer sustainable. Economic reform is essential, but in reforming the rentier state system, the Gulf leadership may risk facing political resistance. As GCC governments attempt to make up the fiscal deficit, citizens will see new taxes, cuts in state-provided services and a decrease in public sector jobs. The governments allocative role will be diminished, and doubts may rise over the acceptability of authoritarian leadership. The leaders of the Gulf have noted the risks of reform, and are preparing to defend themselves accordingly with not only economic means, but also an ideological defence mechanism – nationalism. Encouraging nationalism is of course not the only means that Gulf leadership will employ in order to ensure its citizens’ support, but it is an important state-building tool, and its rise alongside the implementation of economic reform warrants further study. This paper shall explain the theoretical link between authoritarianism and the rentier state, inspect the details of GCC economic reform, look at how nationalism is being encouraged in the GCC, and analyse the potential risks of reinforcing nationalism as the Gulf distances itself from the rentier state model.

RST and Authoritarian Leadership

Since the 1970’s, RST has been widely used to explain the political economy of the oil-producing Arab states and the lack of democracy within them. Giacomo Luciani, one of the early proponents of RST, writes that the rentier state model separates state from society, given that the state has a purely allocative role in the domestic economy of a rentier state and is therefore not accountable to its citizens[8]. Michael Ross goes further in examining the exact mechanisms of the rentier state in his 2001 study of 113 states and the relationship between oil-wealth and democracy. Ross concludes that oil hinders democracy and that one of the key causal links for this is the “rentier effect”. The ‘rentier effect’ is multi-faceted, and consists of a “taxation effect”, “spending effect”, and a “group formation effect”. The “taxation effect” essentially follows the “no taxation without representation” paradigm, meaning that citizens who are not taxed are less likely to demand government accountability. The “spending effect” is the effect of government spending on citizens’ demands for democratization. By spending heavily on patronage networks, governments put downward pressure on any democratic movements. An example of this is the employment of  many GCC nationals in the public sector[9] who receive high government salaries and are therefore unlikely to challenge the status quo. The “group formation effect” is a theory that governments use their wealth to prevent the formation of independent groups that may demand democracy[10]. One might consider oppressive internal security measures to be part of this effect. One might also see the building of a homogeneous national identity and a nationalist government rhetoric to be part of the “group formation effect”, as a strong sense of nationalism should prevent the formation of dissident groups. Although RST has been criticised by more contemporary academics for over-simplifying the relationship between rents and authoritarianism[11], there is no doubt that rents have fundamentally changed how state and society interact in the GCC, and Ross and Luciani provide us with a good basis from which to further examine the rentier state model and how it is changing in the GCC[12].

The Gulf monarchies have, in spite of rapid social and economic development, remained unchanged politically – a fact that supports the majority of the academic literature on RST. However, recent events suggest that political stability is no longer a certainty under the rentier state model. The 2011 Arab Spring was a clear sign of growing dissatisfaction with the authoritarian regimes, and the nature of the response to the protests in Oman, Bahrain, and Saudi Arabia makes the promises made in these states’ “visions” seem highly unrealistic. Bahrain’s Vision 2030 was published in 2008, and purportedly aims for a “a just, thriving society” and a “safe and secure environment” for its citizens. The legitimacy of these aims was destroyed when, in 2011, Bahraini security forces responded violently to civilian protesters, killing at least 13 civilians in conflict, and another 5 via methods of torture[13]. Whilst these are the figures according to the Bahrain Independent Commission for Inquiry, some sources have reported as many as 80 deaths caused by the protests[14]. Oman did not respond violently to protesters, but they still managed to undo their “vision” – quelling the demonstrations by raising public sector salaries and increasing unemployment benefits, and thereby showing that the government’s legitimacy is still totally dependent on clientelist mechanisms. Saudi Arabian leadership also demonstrated its reliance on rentier state mechanisms, as a range of new subsidies, public sector jobs and other financial benefits were issued in order to dampen the revolutionary spirit of the Arab Spring[15]. These measures were partially successful and initially prevented protests, although protests did eventually take place in the Shia-dominated Eastern Province. These protests were shut down by oppressive internal security measures that led to hundreds of arrests and around 10 reported deaths[16], in what we may see as an example of the rentier state’s “group formation effect”. These examples  highlight the GCC’s reliance on rentier state mechanisms in order to prevent rebellion against the monarchy, and thereby raise questions over the viability of the authoritarian regime once Gulf citizens start to see changes in the benefits they receive from the state. Indeed, reports by the World Bank and leading scholars on the Gulf have drawn attention to the issues that the new social contract proposed by the GCC’s “vision” publications may bring about for the leadership of the GCC[17]. The next section of this essay shall examine the details of the GCC’s economic plans in order to give an understanding of how exactly the Gulf rentier states’ political economies are going to transform, and how the regimes will defend themselves against any backlash from these changes.

What does each Economic Plan Entail?

In order to lower their dependency on oil revenues and create a stronger private sector, the GCC states are following a number of similar measures. The education, healthcare and social services sectors are key areas of focus under the new plans in order to promote human development and create a more productive workforce. Saudi Arabia has increased expenditure on domestic education by 82% in the last decade, and has altered regulations surrounding private investment in schools, to encourage growth in the private education sector[18]. The GCC states hope that an improved educational system will encourage innovation and entrepreneurship, leading to a more competitive private sector, and in turn creating a diverse and fiscally sustainable economy. Favourable legislation will help to encourage entrepreneurship, and the GCC states are taking steps towards greater government transparency, which will inspire business confidence and attract foreign investment. In 2018, Qatar committed USD $2 billion to attracting new companies to the Gulf, offering free office space, tax incentives and seed capital to cover five years of operational expenses for new companies that set up a hub in Doha and commit to ten years of operating from Qatar[19].

Whilst the necessary investment to stimulate private sector growth will come from overseas, the Gulf states want the private sector workforce to be homegrown, as it is no longer fiscally sustainable for the public sector to continue to absorb the growing national workforce[20]. In Bahrain, there are only 1,100 Bahrainis working in the private sector with monthly salaries of more than BHD 500 (USD $1,326). With young populations who are increasingly well-educated and are no longer able to get government jobs, the GCC states are aiming to incentivize private sector companies in employing Gulf nationals in order to decrease pressure on the government’s salary budget and tackle unemployment. Oman has gone beyond incentivization, and has in fact banned expat work visas in certain sectors such as sales and marketing in order to get more Omani citizens into the labour force[21]. Measures are also being taken to encourage female participation in the labour force, particularly in Saudi Arabia and Qatar, as Saudi Arabia recently offered 140 jobs to females in their passport department, and further job opportunities for women in public prosecution[22].

As the private sector grows, the public sector will be reduced and streamlined, and certain government services across the GCC will be privatized. The privatization measures will both increase efficiency in these services and raise capital for the Gulf’s ambitious reform plans. Perhaps the most significant of these state-run enterprises to be sold, at least partially, is Saudi Arabia’s state-run oil company Aramco, the most profitable company in the world, with a reported USD $111.1 billion profit in 2018[23]. Whilst many doubts have been cast over the fulfilment of Mohammad Bin Salman’s (MBS) plan to sell 5% of the company’s shares[24], the world’s largest oil company Aramco is still being used as an effective financial instrument, as its issuance of $12 billion in bonds in April was one of the most oversubscribed debt offerings in history[25]. Although the GCC’s economic “visions” are dominated by plans for diversification, foreign direct investment (FDI), and labour reforms, there is also a great deal of importance given to the maintenance of national and Islamic values. Whilst these chapters about “cultural identity” may seem to be typically nationalistic bits of propaganda in a government-produced document, they in fact represent an extremely important part of the GCC’s economic plans[26].

Promoting Nationalism in the Gulf

As the social contract in the GCC changes, the rulers of the region aim to promote nationalism as a means of creating a homogenous, loyal population which will not question the political legitimacy of the state. A number of initiatives are being pursued across the Gulf to promote a unified national identity, including military conscription in Kuwait, Qatar and the UAE[27], measures to reduce the size of the expat population in Oman[28], and the opening of new national museums and galleries across the Gulf. Through these initiatives, the Gulf leadership hopes to defend their states’ national identities both from the external threat of mass immigration, and also from the internal threat of tribal and sectarian loyalties dividing the national population. If these perceived threats are dealt with correctly and a sense of nationalism is successfully instilled in the population of the GCC, the path to economic reform will be made far smoother.

The military is a key instrument in promoting nationalism in the Gulf. A strong military can produce symbols that boost patriotic feeling, and can also bring together young men and women from a variety of socioeconomic and sectarian backgrounds and instil shared nationalistic values within them. In Qatar and Kuwait, in 2013 and 2017 respectively, it became obligatory for men aged 18-35 to undertake one year of military service, whilst the UAE, in 2014, made military service obligatory for men aged 18-30 for a period of nine months to two years, depending on their education level[29]. Although the introduction of conscription laws may be a response to regional instability, there has been a distinctly nationalist tone to this new military growth. Since 2017, military demonstrations have been performed across the UAE accompanied by patriotic music and images of Emirati leaders, and Qatar’s annual National Day includes an increasingly large military parade year on year[30]. Moreover, soldiers are framed as heroes, as Sheikh Mohammed bin Rashid of the UAE described protecting the nation as “a sacred national duty” and military service as “an honour… graduating from there is heroic”[31]. Whilst these outward displays of military glory project a sense of nationalism to the public, nationalist thinking can also instilled within the soldiers themselves, as conscription provides an excellent platform for indoctrinating young people into certain beliefs. Qatar’s Minister for Defence, Major-General Hamad bin Ali al-Attiyah, said that military service would help young people to become “ideal citizens”, underlining the fact that the program is about civic education as much as it is military training. Servicemen and women must attend lectures on national history, security and citizenship as part of the Qatari national service program, and the UAE and Kuwait also include civic education as part of their national service programs[32]. The leadership of the UAE, Qatar and Kuwait will hope that these programs produce patriotic young people who are unlikely to rebel against the state, even when such state-provided services as were previously granted to them are no longer available. Moreover, as was discussed at the World Economic Forum in 2013, military conscription will give young people assets such as communication skills and discipline[33], thereby making them better employees, and helping to create a workforce that is both productive and loyal to the regime, as imagined in the GCC’s economic “visions”. Although there is no conscription in Saudi Arabia, the military still plays a key role in boosting the nationalist identity, as the state’s vast military budget helps to frame Saudi Arabia as a regional leader and a strong state that cannot be threatened by Iran or any extremist groups. In 2018, Saudi Arabia’s military spending reached an estimated $67.6 billion[34], enough to compete with the state’s ability to fund the reforms of Vision 2030[35]. Saudi Arabia’s military spending is the third highest in the world, and this boosts its power projection capabilities, whilst also making the state’s sovereignty hard to challenge. According to theoretical examinations of national identity building, the idea of total state sovereignty is highly important is boosting nationalism[36], and it is therefore possible to  conclude that building a strong military is important to the GCC both in defence, and in the fulfilment of their ideological aims.

Loyalty to the GCC regimes can also be promoted by the building of a strong national and cultural identity within each member state. Many authors have argued that historical and cultural education is extremely important in building national identity[37], and the Gulf leadership has heavily subscribed to this view. State funding has propelled cultural projects forwards in the Gulf since the 2009 announcement of a GCC culture campaign[38], and maintaining cultural heritage is a part of all of the GCC states’ “vision” documents. Doha hosts the largest collection of Islamic art in the world in its Museum of Islamic Art[39], a museum that was built on a man-made island 60 metres offshore, specifically so as to prevent new developments in land from blocking the museum’s sunlight[40]. The city is now also home to the Qatar National Museum, a museum that spreads over 1.5km, is dedicated entirely to Qatari history, and cost the Qatari government an estimated $434 million[41]. The UAE has also invested heavily in the arts, and has emerged as a global arts centre after opening Louvre Abu Dhabi in 2017 and beginning construction on Guggenheim Abu Dhabi in 2019[42]. The opening  of both of these museums is part of the multi-billion dollar development of Saadiyat Island, a new Gulf tourist centre 500 metres off the coast of Abu Dhabi which will house the cultural district[43]. Saudi Arabia is following in Qatar and the UAE’s footsteps, as the building of three new Islamic museums in Mecca was recently approved in a step towards Vision 2030’s goal of promoting national culture[44]. Oman also opened a new national museum in 2016, which the Times of Oman announced under the publication’s “#OmanPride” category[45]. All of these projects highlight the GCC’s desire to draw the world’s gaze and boost national pride. Their success is not guaranteed of course, as questions have been raised over issues of local relevance and the meaning of buying culture[46], but the vast investment in these projects clearly indicates how seriously Gulf leadership takes the building of a national identity.

Foreign policy and the narrative surrounding it has also been an important tool in the promotion of a nationalist rhetoric in the Gulf, particularly in the GCC’s wealthiest states of Saudi Arabia, the UAE and Qatar. One of the most notable examples of this has come from the increased economic and diplomatic ties between the GCC and Africa. Saudi Arabia and the UAE were both involved in the 2018 signing of a peace agreement which ended 20 years of border conflict between Ethiopia and Eritrea[47]. The agreement was subsequently named the Jeddah Peace Agreement, and was a symbolic moment for Gulf diplomacy, marking their growing global influence and reputation as power brokers. Indeed, sub-Saharan Africa has seen Qatar build 11 new embassies between 2013 and 2015 while the UAE, Saudi Arabia, and Kuwait opened nine, six, and two respectively between 2010 and 2018[48]. Further to their diplomatic effort, the UAE, Qatar and Saudi Arabia have all made substantial investments into energy sector and infrastructure projects in Africa, and Gulf companies’ expertise in these sectors have made them particularly attractive as investors. By offering their expertise, the Gulf is able to portray itself as a leader in international development. Charitable efforts are also an important part of the GCC projecting a positive international image of itself, as state-sponsored Islamic charities have undertaken significant development projects in both Africa and South-East Asia[49]. By providing charitable services to people in need in Africa and South-East Asia, the Gulf states are able to fortify their positive reputation as Islamic philanthropists amongst Muslims both inside and outside of the Gulf. These activities draw attention to the good aspects of the Gulf regimes, and distract from reports of corruption and human rights abuses that come from the authoritarian states.

Whilst this more positive, liberalist form of foreign policy in Africa helps to boost Gulf nationalism, GCC states have also utilised more combative foreign policy to bolster nationalism. This can be seen on both sides of the Qatar diplomatic crisis. Since Saudi Arabia, the UAE and Bahrain severed diplomatic ties with Qatar in 2017, there has been a significant increase in the number of images of the Qatari emir, other members of the royal family, and the Qatari flag throughout the capital’s public areas. These images have been backed up by Qataris on social media, and state-owned Qatar Airways even produced an advert which carried the tagline “no borders, only horizons”, and criticised the blockade by saying “the world is all of ours to explore, and it is a strange thing for us to be apart”. By producing this defiant narrative, refusing to capitulate to the Saudi-led coalition’s demands, and continuing to grow economically[50], Qatar has demonstrated its sovereignty and strength, qualities which will boost nationalist feeling across the state and soften any criticism that may be directed towards the government’s economic reforms. Conversely, the Qatar diplomatic crisis has given Saudi Arabia the opportunity to promote MBS’s brand of a more secularist nationalism, which is important in his control of Saudi Arabia owing to the sectarian and tribal divides within the country. By taking measures against Qatar, MBS has displayed his strong opposition to Islamist groups, of which the allegedly Qatar-sponsored Muslim Brotherhood is considered the most threatening[51]. Saudi Arabia has listed the Muslim Brotherhood as a terrorist organisation[52], and MBS plans to ‘destroy’ extremist ideas and promote a more moderate form of Islam in Saudi Arabia[53]. Through the spreading of this anti-extremist narrative, MBS is both attempting to improve his reputation in the West, and also rallying Saudi citizens around the idea of defending the nation against radicalism. Historically, conflict has often been accompanied by a surge of nationalism[54], and as such it is important for MBS to maintain his anti-radicalism narrative in order to support Vision 2030.

The nationalisation of the workforce in the Gulf is another key policy area in bolstering state loyalty. By incentivising private sector companies to employ Gulf citizens, the GCC states can placate discontent stemming from unemployment, which is particularly high amongst Gulf national youths. Saudi Arabia and Kuwait have the highest rates of youth unemployment in the GCC, as unemployment in 2016-17 in the 15-24 age group was estimated at 25% in Saudi Arabia and 16% in Kuwait, a far greater rate than the global average of 12.6%[55]. The long-term success of the GCC’s economic plans hinges on being able to provide high quality private sector jobs to young people, and as such, all six of the GCC states are running workforce nationalisation schemes. These have taken various legislative forms, as Oman has extended its expatriate visa ban[56], Saudi Arabia has implemented its Nitaqat scheme which forces private sector companies to employ Saudi nationals[57], Kuwait has stopped the issuance of work permits to foreign graduates under the age of 30[58], and Bahrain has reformed its National Employment Programme so that a government body subsidises Bahraini wages in private sector companies for up to three years[59]. These are all nationalist policies, which will increase the participation of Gulf citizens in the workforce, and should therefore be supportive to the survival of the GCC’s economic “vision”. However, some analysts have suggested that the labour market is one area where Gulf nationalism may be misplaced. This next section shall discuss why the nationalisation of the workforce may present risks for the Gulf leadership, and shall also assess the broader risks associated with an emboldened national rhetoric in the GCC.

The Dangers of Nationalism

The GCC states’ labour reform initiatives present two key problems to the implementation of economic reform and the survival of the current regimes. Firstly, labour reform may damage private sector growth. Private companies who are forced to comply with government nationalisation quotas may find maintaining their efficiency standards problematic, as a result of GCC nationals’ lack of skills, qualifications, and range of experience[60]. Companies wanting to attract the best talent in order to encourage rapid growth may be frustrated by having limits imposed on their recruitment schemes, and this may discourage them from setting up in the GCC. Education and training programmes for GCC nationals are, of course, the answer to this problem, and indeed the educational system is being reformed across the Gulf. However, the benefits of educational reform may take years to become visible, and young people must be incentivised to work hard and not continue to rely on the region’s vast hydrocarbon wealth. The second problem presented by labour reform in the GCC is the risk of politically mobilizing the workforce. Benedict Anderson argues that using mass immigration to construct a workforce is a means of creating an “impotent working class” that is marginalized from national society and thereby has no political traction[61]. Kuwait’s nationalist policy of demographic adjustment will decrease the size of this marginalized migrant working class, making political quietism less prevalent. The decrease in migrant labour will be accompanied by an increased number of GCC nationals participating in the private sector workforce, and this too may prove to be problematic. Holding citizenship whilst no longer being reliant on public sector jobs may permit GCC nationals to start asking questions of the regime, questions which could gain political traction and start to threaten Gulf leadership, particularly if certain industry workers unionize.

The recently emboldened nationalist rhetoric in the GCC may also indirectly threaten the region’s leaders through the negative effects it is having on GCC foreign relations. The recent murder of Saudi Arabian journalist Jamal Khashoggi and the connections between the murder and Saudi ruler MBS temporarily spelt disaster for Saudi Arabia’s international reputation, and many states threatened to introduce economic sanctions against Saudi Arabia for this crime. Saudi national newspaper Al-Arabiya cast major doubt over the legitimacy of the sources that reported the murder of Khashoggi[62], in stark contrast to the international response to the news which heavily criticised the Saudi regime. Such a strongly biased nationalist narrative puts Saudi Arabia in a bad light, and risks preventing Saudi Arabia becoming a hub for international economic activity, as it seeks to according to Vision 2030. Nationalism in Bahrain has resulted in an even greater threat to state security and prosperity. Al-Khalifa, the ruling family of Bahrain, has attempted to create a nationalist rhetoric by framing the 2011 protests in Bahrain as a foreign plot, and amending the citizenship law in 2014 to allow the Interior Ministry to strip the citizenship of any Bahraini who “causes harm to the interests of the Kingdom or acts in a way that contravenes his duty of loyalty to it”[63]. This legislation has particularly targeted the Shia community, as can be seen in the April 2019 mass trial of 139 Shiites, 138 of whom had their citizenship revoked for allegedly setting up a cell with links to Iran’s Revolutionary Guard[64]. In its aggressive defence of national sovereignty, Bahrain has rendered hundreds of Shiites stateless and has done further damage to its relationship with Iran. The growing number of stateless Shiites in Bahrain, combined with Iran’s proven ability to mobilize disenfranchised minority groups in the region may result in increased civil unrest in Bahrain. Bahrain’s nationalist movement and its impact on the state’s international relations may therefore be highly damaging to state security.

Though Gulf leaders are hoping that a swell of nationalism will increase their citizens’ loyalty, nationalism itself could perhaps overcome monarchist loyalty, as citizens may begin to venerate the nation rather than its ruling house. Former Saudi rulers saw nationalist thought as a danger to royal hegemony, and although nationalism existed in Saudi Arabia, religion was used as the main vehicle to peddle loyalty to the state[65]. Asking Saudi Arabian citizens for loyalty to national interests invites increasing civic engagement with what, exactly, the national interests are – a question that until recently has been answered only by the royal family. As nationalism ascends, Saudi public opinion stands to grow more complex and less easily motivated by religious scruples and state-provided benefits, and this may prove to be especially problematic as GCC government spending falls and public sector jobs become less readily-available. Nationalism and patriotism are ideas that have more often been associated with values of civil liberty and republicanism rather than loyalty to an authoritarian monarchy, and as such, the GCC leadership must reinforce the associations between their governments and the identity of the GCC states themselves.


Economic diversification is the only way to ensure the GCC’s continued prosperity, but its implementation will spell the end of the rentier state in the Gulf. Two of the three elements of the “rentier effect” shall face changes, meaning that the authoritarian regimes of the region may be threatened. Whilst there are no signs of the implementation of income or wealth tax in the GCC, the implementation of VAT across the six GCC states seems certain[66], and a number of new taxes have been levied on goods deemed to be unhealthy or sinful[67], meaning that the “taxation effect” shall no longer be such a powerful guarantor of political acquiescence. Perhaps more threatening to authoritarian leadership in the Gulf is the damage that economic reform shall have on the “spending effect”. The privatization of the health and education sectors will severely damage the GCC states’ patronage networks, as will the efforts to streamline the public sector. In an economy led by the private sector, the governments’ patronage networks will no longer be able to guarantee loyalty to the state, and as such, the GCC is being forced to manufacture loyalty by other means. Through foreign policy, military proliferation, cultural programmes, and labour reform, the GCC states are building their national identities and the nationalist rhetoric, creating a new and different type of loyalty to the state. Whether or not these efforts to construct a national identity will be successful remains unclear, but given the scale of the investment and policy changes that have been made, it seems that the GCC’s leaders view boosting nationalism as one of the keys to defending their regimes. The Gulf has a history of rapid and successful transformation, and it seems as though the GCC states will use shrewd economic policy and a strong nationalist rhetoric to once again transform, this time into less oil-dependent, more liberal economies. Nonetheless, it is important to note the problematic aspects of these top-down nationalist initiatives. Whilst intending to boost loyalty to their states in transition, the Gulf monarchies may inadvertently undermine themselves, damage their international relations and hinder private sector growth.


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[5] Malik, Adeel. “Rethinking the Rentier Curse”, International Development Policy: Revue internationale de politique de développement [Online], 7, February 2017. http://journals.openedition.org/poldev/2266

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[9] Hertog, Steffen. “The GCC’s National Employment Challenge” LSE Middle East Centre Blog, July 2014,  https://blogs.lse.ac.uk/mec/2014/08/06/the-gccs-national-employment-challenge/

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[12] Malik, Adeel. “Rethinking the Rentier Curse”.

[13] Bahrain Independent Commission of Enquiry, “Report of the Bahrain Independet Commission of Inquiry”, November 2011, http://www.bici.org.bh/BICIreportEN.pdf

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[17] The World Bank, “Towards a New Social Contract”, MENA Economic Monitor, April 2015, http://documents.worldbank.org/curated/en/202171468299130698/pdf/956500PUB0REVI020150391416B00OUO090.pdf;

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[18] Al-Ghalayini, Basil M.K., “The Saudi educational sector: Where are the opportunities?” Arab News, September 2018, http://www.arabnews.com/node/1372571

[19] Mohammad Sergie, Archana Narayanan, Giovanni Prati, “Qatar Sets Aside $2 Billion in Bid to Rival Dubai Financial Hub”, Bloomberg, October 2018, https://www.bloomberg.com/news/articles/2018-10-08/qatar-sets-aside-2-billion-in-bid-to-rival-dubai-financial-hub

[20] International Monetary Fund, “The Economic Outlook and Policy Changes in the GCC Countries”, December 2017, https://www.imf.org/en/Publications/Policy-Papers/Issues/2017

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[22] Arabian Business, “Saudi prosecutor to hire women investigators for first time”, February 2018, https://www.arabianbusiness.com/culture-society/389775-saudi-prosecutor-to-hire-women-investigators-for-first-time

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Henry Henderson
Henry Henderson
Henry Henderson was a research intern at the Middle East Institute for Research and Strategic Studies. He is a current undergraduate student at the University of Edinburgh in the United Kingdom, and is studying towards an MA in Arabic & Spanish. His research focuses on the politics and international relations of the Levant region, and he hopes to continue to work in research following completion of his undergraduate degree.