Rentier wealth, unruly law, and the rise of opposition: The political economy of oil states

Comparative Politics

Volumn 31, Issue 3, 1999, Pages 295-315

  Okruhlik, Gwenn ^a  

^a NONE

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[No Author keywords available]

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EID: 0039066420     PISSN: 00104159     EISSN: None     Source Type: Journal    
DOI: 10.2307/422341     Document Type: Article

References (58)

1. Hazem Beblawi, "The Rentier State in the Arab World," in Giacomo Luciani, ed., The Arab State (Berkeley: University of California Press, 1990), p. 89.
2. Jacques Delacroix, "The Distributive State in the World System," Studies in Comparative International Development, 15 (Fall 1980), 3-21; Hootan Shambayati, "The Rentier State, Interest Groups, and the Paradox of Autonomy: State and Business in Turkey and Iran," Comparative Politics, 26 (April 1994), 307-31.
3. Jacques Delacroix, "The Distributive State in the World System," Studies in Comparative International Development, 15 (Fall 1980), 3-21; Hootan Shambayati, "The Rentier State, Interest Groups, and the Paradox of Autonomy: State and Business in Turkey and Iran," Comparative Politics, 26 (April 1994), 307-31.
4. Though they comprise almost half of the population, most expatriates have no political power or social status, have restricted access to the welfare state, and remain at the mercy of their local sponsors. Daily life is utterly different from that of a citizen. Their lives are separated by walled, self-sufficient housing compounds grouped largely by nationality.
5. The external nature of revenue prompts concerns about reliance on foreign actors for military security. Foreign actors with interests tied to the flow of a resource may prop up a rentier state. This important research problem goes beyond the limits of this paper.
6. Hossein Mahdavy, "The Patterns and Problems of Economic Development in Rentier States: The Case of Iran," in M. A. Cook, ed., Studies in the Economic History of the Middle East (London: Oxford University Press, 1970), pp. 428-67. The nonoil rentier condition was developed by Smith, Marshall, Ricardo, and Marx.
7. Various assumptions are made about the nature of this rent. It is variously measured as percentage of GDP, of revenues from abroad, of government budget, or of foreign exchange earnings derived from crude oil or refined products. It is also applied to states that depend on the receipt of external government aid or upon the remittances of citizens working abroad and is used in reference to the regional circulation of oil wealth.
8. Alan Gelb, Oil Windfalls: Blessing or Curse? (New York: Oxford University Press, 1988); Hossein Askari, Saudi Arabia's Economy: Oil and the Search for Economic Development (Greenwich: JAI Press, 1990); Michel Chatelus and Yves Schemeil, "Towards a New Political Economy of State Industrialization in the Middle East," International Journal of Middle East Studies, 16 (May 1984), 251-65.
9. Alan Gelb, Oil Windfalls: Blessing or Curse? (New York: Oxford University Press, 1988); Hossein Askari, Saudi Arabia's Economy: Oil and the Search for Economic Development (Greenwich: JAI Press, 1990); Michel Chatelus and Yves Schemeil, "Towards a New Political Economy of State Industrialization in the Middle East," International Journal of Middle East Studies, 16 (May 1984), 251-65.
10. Alan Gelb, Oil Windfalls: Blessing or Curse? (New York: Oxford University Press, 1988); Hossein Askari, Saudi Arabia's Economy: Oil and the Search for Economic Development (Greenwich: JAI Press, 1990); Michel Chatelus and Yves Schemeil, "Towards a New Political Economy of State Industrialization in the Middle East," International Journal of Middle East Studies, 16 (May 1984), 251-65.
11. Hazem Beblawi and Giacomo Luciani, eds., The Rentier State (London: Croom Helm, 1987).
12. This observation is stretched to an absurd limit by those who seek to attach behavioral attributes, like the absence of a productive outlook, antiproductive bias, risk aversion, and at worst laziness, to the economic conditions of rentierism. Beblawi; Chatelus and Schemeil; Monte Palmer, Ibrahim Alghofaily, and Saud Nimir, "The Behavioral Correlates of Rentier Economies," in Robert Stookey, ed., The Arabian Peninsula (Washington, D.C.: Hoover Institution Press, 1984). The purported "disdain for manual labor" among rentier citizens is often attributed to indigenous tradition. More likely, the pronounced activity in trade is indicative of economic incentives and political constraints, not an absence of initiative.
13. See Kiren Aziz Chaudhry, The Price of Wealth: Economies and Institutions in the Middle East (Ithaca: Cornell University Press, 1997); and Terry Lynn Karl, The Paradox of Plenty: Oil Booms and Petro-States (Berkeley: University of California Press, 1997).
14. See Kiren Aziz Chaudhry, The Price of Wealth: Economies and Institutions in the Middle East (Ithaca: Cornell University Press, 1997); and Terry Lynn Karl, The Paradox of Plenty: Oil Booms and Petro-States (Berkeley: University of California Press, 1997).
15. Theda Skocpol, "The Rentier State and Shi'a Islam in the Iranian Revolution," Theory and Society, 11 (May 1982), 265-83.
16. Lisa Anderson, "The State in the Middle East and North Africa," Comparative Politics, 20 (October 1987), 1-18.
17. See ibid; Beblawi and Luciani, eds.,; Jill Crystal, Oil and Politics in the Gulf: Rulers and Merchants in Kuwait and Qatar (Cambridge: Cambridge University Press, 1990); Samuel Huntington, The Third Wave: Democratization in the Late 20th Century (Norman: University of Oklahoma Press, 1991); Luciani, ed.; and Jean François Seznec, "The Politics of Financial Markets in Saudi Arabia, Kuwait and Bahrain" (Ph.D. diss., Yale University, 1994).
18. See ibid; Beblawi and Luciani, eds.,; Jill Crystal, Oil and Politics in the Gulf: Rulers and Merchants in Kuwait and Qatar (Cambridge: Cambridge University Press, 1990); Samuel Huntington, The Third Wave: Democratization in the Late 20th Century (Norman: University of Oklahoma Press, 1991); Luciani, ed.; and Jean François Seznec, "The Politics of Financial Markets in Saudi Arabia, Kuwait and Bahrain" (Ph.D. diss., Yale University, 1994).
19. See ibid; Beblawi and Luciani, eds.,; Jill Crystal, Oil and Politics in the Gulf: Rulers and Merchants in Kuwait and Qatar (Cambridge: Cambridge University Press, 1990); Samuel Huntington, The Third Wave: Democratization in the Late 20th Century (Norman: University of Oklahoma Press, 1991); Luciani, ed.; and Jean François Seznec, "The Politics of Financial Markets in Saudi Arabia, Kuwait and Bahrain" (Ph.D. diss., Yale University, 1994).
20. See ibid; Beblawi and Luciani, eds.,; Jill Crystal, Oil and Politics in the Gulf: Rulers and Merchants in Kuwait and Qatar (Cambridge: Cambridge University Press, 1990); Samuel Huntington, The Third Wave: Democratization in the Late 20th Century (Norman: University of Oklahoma Press, 1991); Luciani, ed.; and Jean François Seznec, "The Politics of Financial Markets in Saudi Arabia, Kuwait and Bahrain" (Ph.D. diss., Yale University, 1994).
21. Giacomo Luciani, "Allocation vs. Production States: A Theoretical Framework," in Luciani, ed., p. 76.
22. Seznec, pp. 16, 23.
23. Beblawi and Luciani, eds., The Rentier State, do so but then hypothesize that development policies and the structure of expenditure are a function of the structure of revenue. The nature of the state is defined in terms of its size relative to the economy (measured by the ratio of state expenditure to GDP), the sources and structure of its income, the destination of its expenditure, and the laws and regulations affecting economic life.
24. See Riyad Krimly, "The Political Economy of Rentier States" (Ph.D. diss., George Washington University, 1992); and Shambayati.
25. This case study is based largely on one year of field work in Saudi Arabia (1989-1990) that was funded by a Fulbright Grant. The primary source of information is a series of 118 structured, open-ended interviews conducted in the cities of Jeddah, Riyadh, Dammam, Dhahran, al Khobar, and Jubail. All sources remain confidential but are systematically broken down by region, gender, economic activity, and social status. They are supplemented by forty interviews in Washington, D.C., in 1991 and 1995, North Carolina in 1993, and London in 1997 and by continuing correspondence with Saudi Arabian intellectuals, businesspersons, and dissidents. All unattributed quotations are from personal interviews with individuals who must remain anonymous.
26. Identity with one's region is strong despite the government's efforts to foster a sense of national identity. The regions were officially renamed in 1985. The traditional names (Najd, Hejaz, Asir, al Hasa) were replaced by their geographical location (Central, Western, Southern, and Eastern provinces). The regions retain their own architecture, ethnicities, family networks, and economic activities. The Najd is composed primarily of indigenous tribal groups. The Eastern province encompasses Shi'a and has a history of population migrations with the oil industry. Many families in the Hejaz derive from pilgrims from Persia, Pakistan, India, and other Arab states. No matter how many generations they have been settled in the Hejaz or what their contributions to society, some Najdis will refer to them in a derogatory sense as "leftovers from the hajj." Historical differences have now been accentuated by the inequitable distribution of resources. Economic policies which give priority to the center engender regional discontent. There is no vocal separatist movement, but animosity simmers just below the surface. Some suggest it may be tempered with the spread of branch business offices and occupational mobility.
27. Najdi citizens now enjoy the lion's share of political, civil service, military, and religious appointments. Over the last ten to fifteen years Fahd has empowered the Najd even more with the urbanization and settlement of bedouin.
28. Up to the Gulf War there was an active attempt to create an "all-Hejazi private sector" that was not dependent upon government contracts. It did not involve secession, but rather voice within the state.
29. See Kiren Aziz Chaudhry, "The Price of Wealth: Business and State in Labor Remittance and Oil Economies," International Organization, 43 (Winter 1989), 101-45.
30. Gwenn Okruhlik, "Debating Profits and Political Power: Private Business and Government in Saudi Arabia" (Ph.D. diss., University of Texas, 1992).
31. Abulaziz ibn Baz heads the Supreme Authority of the Council of the Assembly of Senior Ulama. Ulama authority is also expressed in the Administration of Scientific Study, Legal Opinion, Islamic Propagation, and Guidance. The ulama oversee the activities of the Committee for Encouraging Virtue and Preventing Vice, which is in charge of the so-called religious police (muttawwa'in).
32. See Al Haram Revolt (Islamic Revolution Organization in the Arabian Peninsula, 1981); Joseph Kechichian, "Islamic Revivalism and Change in Saudi Arabia: Juhaiman al-Utaibi's 'Letters' to the Saudi People," The Muslim World, 70 (January 1990), 1-16; and Jim Paul, "Insurrection at Mecca," Middle East Report, 91 (October 1980), 3-4.
33. See Al Haram Revolt (Islamic Revolution Organization in the Arabian Peninsula, 1981); Joseph Kechichian, "Islamic Revivalism and Change in Saudi Arabia: Juhaiman al-Utaibi's 'Letters' to the Saudi People," The Muslim World, 70 (January 1990), 1-16; and Jim Paul, "Insurrection at Mecca," Middle East Report, 91 (October 1980), 3-4.
34. See Al Haram Revolt (Islamic Revolution Organization in the Arabian Peninsula, 1981); Joseph Kechichian, "Islamic Revivalism and Change in Saudi Arabia: Juhaiman al-Utaibi's 'Letters' to the Saudi People," The Muslim World, 70 (January 1990), 1-16; and Jim Paul, "Insurrection at Mecca," Middle East Report, 91 (October 1980), 3-4.
35. Dissent emanated from Umm al Qurra University; participants included members of the tribes of Mutair, Yam, Qatan, and Uteiba.
36. Kings Faisal, Khalid, and Fahd have all proposed an appointed consultative assembly. Each announcement was preceded by a crisis: 1962 (war with Yemen), 1970 (attempted air force coup d'état), 1975 (assassination of Faisal), 1980 (takeover of al-haram in Mecca), 1982 (death of Khalid), and 1991 (Gulf War). Construction of the assembly building was completed in Riyadh in 1986, but it was officially opened in 1993 when Fahd finally appointed a majlis.
37. To emphasize this role, Fahd changed his title in 1984 from "his majesty" to "servant of the two holy places" (khadim al haramayn).
38. See "Saudi Arabia - Religious Intolerance: The Arrest, Detention and Torture of Christian Worshippers and Shi'a Muslims" (New York: Amnesty International, September 1993).
39. One dissident recalled his history lessons as a school boy. When he was young, his uncle called him over and said: "Ibn akhi [son of my brother], do not believe anything that is written down. History is written by those in power. Do not believe the texts, especially those on religion." In addition to religious and social identity, there are strong Arab nationalist strains in the Shi'a community.
40. Agence France-Presse News Release, Jan. 10, 1998, Nicosia, via Clarinet.
41. Such spending fosters two phenomena: resentment among those who received fewer of the benefits of rentier wealth than others (Shi'as of the Eastern province and people of the southwestern provinces) and intense debate on ideological and social grounds among those who benefitted from unequal distribution (Sunni Islamists, the bureaucrats, the business community). The al-Saud regime is in the unenviable position of being challenged from all sides, from those it has rewarded and from those it has punished.
42. The al-Saud have sought to retain the original alliance of 1744 by designating spheres of authority for themselves and the ulama. The al-Saud control the military and international affairs, internal security, and the budgetary process. The ulama control the judiciary, education system, media, public behavior, pilgrimage, and waqfs (Islamic trusts). In the economic sphere the al-Saud and the ulama wrangle over questions of interest, commercial regulations, legal proceedings, monopolies, and products or activities deemed prohibited.
43. A Hadrami businessman in the Hejaz discounts the attempts. "Anything that is written is false. We tell our history to our children. The al-Saud are just babies. They are very young, and they will go. When they do, my family will still be here."
44. The national guard is responsible for maintaining internal security and is dispatched to deal with internal demonstrations. It is a counterweight to the regular army, whose responsibility is external threat. Military positions have become informally hereditary. During the Gulf War conscription was often discussed but never required.
45. Popular political participation is limited. The most effective participation is informal, private, and individual. Institutions, formality, publicity, and groups are all threatening to the regime. Theoretically, all citizens have access to a majlis (council, audience). Senior princes and amirs in smaller towns meet with their subjects on a regular basis. At their best, the majalis serve as forums for wide-ranging discussion, submission of complaints, and petitions. At their worst, majalis are now limited both in the subjects that can be discussed and in the rank of the participant allowed inside. Real influence over decision making is limited to the highest ranks of the al-Saud and the ulama.
46. See Gregory Gause, Oil Monarchies: Domestic and Security Challenges in the Arab Gulf States (New York: Council on Foreign Relations, 1994); and Hrair Dekmejian, "The Rise of Political Islamism in Saudi Arabia," Middle East Journal, 48 (Autumn 1994), 627-43.
47. See Gregory Gause, Oil Monarchies: Domestic and Security Challenges in the Arab Gulf States (New York: Council on Foreign Relations, 1994); and Hrair Dekmejian, "The Rise of Political Islamism in Saudi Arabia," Middle East Journal, 48 (Autumn 1994), 627-43.
48. Variously referred to as the business, secularist, nationalist, or liberal petition.
49. Arabia Monitor (Washington, D.C.: International Committee for Human Rights in the Gulf and Arabian Peninsula, February 1992).
50. See various issues of Middle East Economic Digest.
51. Response faxed to author by member of the International Committee for Human Rights in the Gulf and Arabian Peninsula, March 1, 1992. The statement quotes "a spokesperson for the opposition, Tawfiq al Shaikh."
52. Two years later, in October 1994, the king established a Supreme Council of Islamic Affairs and a Council for Islamic Call and Guidance. Both were attempts to regulate the activities and functions of mosques and Saudi Arabians abroad "over and above the incumbent Ulama's authority." Joseph Kostiner, "State, Islam and Opposition in Saudi Arabia," MERIA, 2 (June 1998), via internet.
53. It is important to understand that human rights are defined within a particular context. In early writings, women were accorded fewer freedoms than men, and one of its founding members, Shaykh Jibreen, supported the killing of Shi'a as nonbelievers. Such subtleties have been lost on some major international human rights organizations.
54. From his web site >www.miraserve.com<.
55. CACSA is located at >www.saudhouse.com<.
56. These events have brought to light several forces including the Combatant Partisans of God Organization, the Tigers of the Gulf, the Hizbollah Kahleej, the Legion of the Martyr Abdullah al Huzaifi, and the Islamic Change Movement - Jihad Wing of the Peninsula. The latter issued fax no. 1 in April 1995 which threatened militant activities against western forces if they did not depart from the peninsula by June 25, 1995.
57. Timothy Mitchell, "The Limits of the State: Beyond Statist Approaches and Their Critics," American Political Science Review, 85 (March 1991), 77-96; and Krimly.
58. It is also posited that rentier investors display a bias for prestige projects and enormous infrastructural developments. Though evident during the boom, the continuation of prestige projects is now ascribable to political pressures. For example, the state would not allow the Juffalli family to close down an unprofitable Mercedes Benz manufacturing plant because it was a high profile item.