Claire Beaugrand, University of Exeter

This chapter is part of POMEPS Studies 33: The Politics of Rentier States in the Gulf. Download the full PDF here.

According to the rentier-state theory (RST), the “externally-derived, usually unproductively-earned income resulting from natural resources or other natural or innate assets of an economy or of a state’s position or territory” impacts the state-society relationship in a way that makes the state less sensitive to society’s pressure.[1] Expressions such as “buying off political acquiescence” have been commonly used to describe the autonomization of the ruling sphere from the ruled society and the process of authoritarian resilience. Scholars have early on contested this supposed political inertia: in the case of Saudi Arabia, Gwenn Okruhlik[2] shows that the allocation of the rent or state expenses is eminently political and reacts to pressures from different parts of the society. Kuwait provides another example where state resources allocation has been carefully designed to respond to, or prevent and pre-empt, citizens’ grievances. Far from resulting in political apathy, rentierism has led to citizens putting strong demands on the state. I argue that the reason why nationals lay claim to the state resources is to be found in their feeling of entitlement, depending on each national situation.

Feeling of entitlement or belief in the validity of one’s claim was indeed at the heart of my analysis of the puzzling presence of biduns in Kuwait[3]: the biduns are quintessentially distinct from any overstaying foreigners, because the latter would hardly think of claiming entitlement to Kuwaiti nationality. The exclusionary citizenship law and the sponsorship or kafala system have both disciplined migrants into believing themselves to be temporary populations—despite the fact that this temporariness is historically a myth. Likewise, the feeling of entitlement is key to understand the dynamics of rentierism among nationals. How is it constructed in different polities? I argue, following analytical lines laid by Michael Herb,[4] that the particular historical path followed by Kuwait led to a discursive construction and perception of the rent characterised by a strong feeling of citizens’ ownership of the rent, be it oil or the revenues derived from it. Secondly, against the background of a small and non-extendable polity, different segments of the population lay claims to the state in continuous competition with each other.

Discursive construction and perception of the rent

Since it was first formulated in 1970[5] but most importantly fully theorised and made popular in 1987[6], the RST has proved the overarching analytical framework for what became known as Gulf Studies. While refined, adapted, and updated[7], the important thing is that its overall validity and prevalence has never really discarded until now—when the theoretical debate has shifted towards the “post-rentier” phase. From an epistemological point of view, oil rentierism in Gulf studies has morphed into what Appadurai[8] calls a “theoretical metonym”, encapsulating the quintessential and dominant question of interest in the region. The knowledge production of the Gulf region has been dominated by this metonym.[9] This metonym has been fundamental in shaping the projected identity of the region from outside but also essential in the process of self-identification.[10]

Oil is not only a world-traded, strategic commodity; it is also a perception. For the Marxist political economist Adam Hanieh in Capitalism and Class in the Arab Gulf States, oil is a “commodity embedded in a set of (globally determined) social relations.” Oil is endowed with a particular meaning conferred by the capitalist world market as a commodity centrally located within the reproduction of the system as a whole. Hanieh further quotes Marx who “warned of “commodity fetishism”—an attempt to explain patterns of social development through the presence or absence of a commodity rather than understanding the significance given to the commodity by the social relations within which it is situated.”[11] For anthropologists equally, oil is a perception. As noted by Mandana Limbert in the case of Oman, “oil means something to people: the understanding people have of its presence shape the way people act in the world.” [12] It does so, more emblematically than any other “natural or innate asset” or “state-position in a territory”, like the revenues drawn from the Suez Canal’s crossing by the Egyptian government, or even more than in the case of aid recipient states that, it is argued, also can qualify as rentier economies for deriving the majority of their revenues from external unproductive sources, like Jordan. The rent, in those cases, seems more detached from people’s imaginaries and world of representations. Differences appear in this world of representation: while Limbert highlights the threat of the abstract notion of depletion hanging over the future of Omanis,[13] from which derives the imperatives of post-rentierism,[14] Kuwait has, as for her, been characterised by the “image of unlimited goods” in the words of anthropologist Sulayman Khalaf.[15]

If we take into account both Hanieh’s analysis of oil as reverberating unequal social relations at the global level and the entry into the capitalist logic as well as the anthropologist view on the construction of meaning, the presence of oil revenues has come to be interpreted over time in Kuwait in a way that reflects a feeling of ownership by its citizens/subjects, as a sort of patrimonial asset.

Kuwait’s legal idiosyncrasies

This feeling has its roots in some historical contingencies specific to Kuwait. First the 1962 Constitution enshrines several principles pertaining to property and entitlement: in part II on the “Basic Foundations of the Kuwaiti Society”, articles 16 and 17 mention notions of “ownership”[16] and “public property”[17]; article 18 ensures that “private property is safeguarded”; article 21 states: “All of the natural wealth and resources are the property of the State. The State shall preserve and properly exploit those resources, heedful of its own security and national economy requisites.” In the part I, article six states: “Sovereignty is vested in the Nation as the source of all authority”, differentiating also between State and ruling family.

Second, and even before the 1962 Constitution, the land acquisition policy of the rulers of Kuwait has also given to the citizens a form of role—if passive—in the management of state resources. The government’s plan to transform Kuwait city from an old town into a modern city had required the purchase of large tracts of land for public development projects. To do so, it paid, in a transactional manner, phenomenally large prices for land located in the old mud-walled center resulting in the constitution of private fortunes overnight. According to Khalaf, “It has been estimated that between 1957 and 1962 close to US$ 840 million of public money was spent on land.”[18]

Thirdly, if we get back to the way oil rent perception has shaped people’s behaviours, we will find that the idea of the rent as Kuwaiti nationals’ asset, managed by the rulers and entitlement linked to a form of autochtony, has had concrete economic and socio-political implications as it shaped the definition of the size of the citizen body. The feeling of entitlement to revenues of oil being linked to autochtony or proximity is common wisdom if we just think as the way the disgruntling of Shiites of the Eastern province is portrayed or the current mobilization of Basrawis and inhabitants of the Southern province in Iraq who do not benefit from the revenues of the oil pumped near their place of abode. My research on statelessness has traced the origin of the conception and practice of nationality in Kuwait.

Kuwait has had two laws defining nationality: the first was issued in 1948 while the second, still in effect but amended several times, dates back to 14 December 1959. The existence of the 1948 Nationality Law bears testimony to the contingency of the national identity as constructed on the basis of the 1959 Law. The main difference between the two laws lays in the inclusion of the jus soli in the 1948 Law, absent in the 1959 law, which would have made the Kuwaiti polity look very different from the one we know now. As a matter of fact, the 1948 Law identified Kuwaiti subjects as ruling family members, those permanently residing in Kuwait since 1899, the children of Kuwaiti men and the children of Arab or Muslim fathers also born in Kuwait.[19] At the time, the inclusion of jure soli envisioned by the Emir Ahmad al-Jabir and drafted by his trusted secretary ‘Izzat Ja‘far, could allow a progressive sedentarization of tribespeople and naturalisation of Arab foreign expertise, like Ja‘far himself, a Lebanese/Egyptian national. Eleven years later, the significance of Kuwaiti oil exports and the regional context—the rise of Arab nationalism and the fall of the Iraqi monarchy—led to the dropping of the jus soli in the law, the restriction of naturalizations and political rights, so as to keep the number of citizens and voters as limited as possible.

Citizens as shareholders

The assumed link between redistribution and exclusive and static vision of citizenry has solidified over time. The internalizing of the rent as an asset owned (internalizing linked to the pervasiveness of oil as a theoretical metonym) is clearly formulated and documented in the later debate regarding the possible solutions to the protracted issue of statelessness in the country in the 2000s. Those opposing naturalization would point at the economic cost of integration, known as taklifa/kulfa maliyya or iqtisadiyya. Naturalization for those who evaluate its cost would constitute a “liability on future generations that they cannot morally create.”[20] The adverse economic shock would require adjustments that, they emphatically fear, would jeopardize their own privileges and precipitate the end of the subsidized provision of water, electricity, and food, a return to market prices, as well as an uncertain future for free domestic phone calls, education and municipality services (street cleaning or waste collection).

Longva[21] underlines that the hostility towards integration of newcomers/foreigners in citizenries is typical of any welfare state in the world. Yet, one of the specific characteristics of what Michael Herb calls the “extreme rentiers”[22] among the GCC rentier systems, as opposed to rentiers in general, is the size of their citizenry.  In Kuwait citizens feel they have a stake in state assets and expected the rulers to manage them the best way possible.

From very early on, in Kuwait, the oil rent has been managed as an asset geared toward investment and growth, with the due diligence of “a good householder”. This is how the Kuwait Investment Authority, formerly Kuwait Investment Board, portrays itself: “The oldest sovereign wealth fund in the world” established in 1953, eight years before Kuwait’s independence, with the mission to “achieve a long term investment return on the financial reserves entrusted by the State of Kuwait, providing an alternative to oil reserves, which would enable Kuwait’s future generations to face the uncertainties ahead with greater confidence.”[23] The emphasis placed on future generations is asserted in 1976 with the creation of the Future Generations Fund (FGF), the “intergenerational saving platform” created with half of the General Reserve Fund with obligation by law for the state to transfer 10% of all its revenues and 10% of the GRF net incomes. The fund has built itself a reputation as a “responsible and stable shareholder and owner.” If partially a retro-narration, the idea that there is a responsibility on the part of the rulers to manage the rent on behalf of future generations exists early on. While the oil metonym persists, the reality is that the rent has gradually changed in nature as the revenues are drawn as much from the hydrocarbon as from the returns on interest: the financial cushion accumulated by investment funds amounts to $592 billion nowadays.

Much has been written on the “rentier mentality” that emerged from the rent. Some analysis linked specific behavioural attributes to the rentier condition. This mentality pointed towards the inability to enter productive employment and the pursuit of rent-seeking behaviours—Beblawi using the illustration of the suq al Manakh attitude of financial speculation.[24] Yet my ethnographic work would rather describe this behaviour as capitalist “shareholder/owner mentality”, that is, a logic according to which assets should yield returns. Citizens’ expectations then turn into injunctions, which is only possible due to the size of the citizenry, the clientelist system, and the very close if not parochial monitoring of redistribution between citizens/client communities. In Kuwait, the limited size of the citizenry makes the allocation and advantages conceded to some immediately known and envied.

The shareholder mentality thus has two consequences: first, it translates into the idea of getting a fair return on one’s share. Famously it is through its role as an owner and regulator in the economy that the political elites at the summit of the state exert strong informal control and thereby create the extensive interpersonal dynamics that are so ubiquitous in the political economies of the Gulf states. Conversely, groups in Kuwait that see themselves as disadvantaged by the rulers’ clientelist practices put claims that are in essence relative claims. This is illustrated, for instance by the request to bail out citizens’ debts: this claim for redistribution by middle-class people is founded on the perception that the merchant or economic elite part of the society has been unduly advantaged, be it the public markets attribution and the handling of public tenders made public or even more emblematically, the bailing out of banks by the government as was the case in the aftermath of the 2008 financial crisis. Second, the shareholder mentality creates a pressure for more returns. The ruling elite is placed in a position where its development and investment policy is expected to perform, what Gray[25] terms “late rentierism” or the “new state capitalism”. This imperative of rent maximising is comparable to that of the economic elites themselves involved in the global pursuit of returns on investment.

 

[1] Gray, Matthew “Theorising politics, patronage and corruption in the Arab monarchies of the Gulf” in Laura Ruiz de Elvira, Christoph Schwartz, Irene Weippert-Fenner Clientelism and Patronage in the Middle East and North Africa, Routledge, 2018. P.54

[2] “Rentier Wealth, Unruly Law, and the Rise of Opposition: The Political Economy of Oil States”, Comparative Politics 31, 3 April 1999: 295-315

[3] Stateless in the Gulf : Migration, Nationality and Society in Kuwait, London : IB Tauris, 2018.

[4] The Wages of Oil: Parliaments and Economic Development in Kuwait and the UAE, Ithaca, NY: Cornell University Press, 2014.

 

[5] Mahdavy, Hossein “The Patterns and Problems of Economic Development in a Rentier Stare: The Case of Iran” In M. A. Cook (Ed.), Studies in Economic History of the Middle East. Oxford: Oxford University Press, 1970.

[6] Beblawi, Hazem and Giacomo, Luciani The Rentier State, London/New York, Croom Helm, 1987.

[7] Gray, Matthew “A theory of late rentierism in the Arab States of the Gulf” Center for International and Regional Studies, Georgetown University, 2011. The buzz word of post-rentierism is yet the latest version of the evolution of RST.

[8] “Theory in Anthropology: Center and Periphery” Comparative Studies in Society and History, Vol. 28, No2 (April 1986) 356-361.p.357.

[9] The 1986 book title of Muhammad Al-Rumaihi Beyond Oil: Unity and Development in the Gulf is somehow emblematic of the tendency that made the Gulf the showcase of the specific issue of oil-rent development.

[10] See, by way of example, the recent theatre play by British-Kuwaiti writer, Sulayman Al Bassam, whose setting and main plot evolves around a petrol station :  Petrol Station, London : Oberon Books, 2017

[11] Capitalism and Class in the Arab Gulf States, London, New York : Palgrave Macmillan, 2011, p. 16.

[12] Futures, Sovereignty and Policing: An Anthropological View of Gulf Studies, Gulf conference, Exeter, 3 July 2018.

[13] In the Time of Oil: Piety, Memory, and Social Life in an Omani Town Stanford University Pres, 2010.

[14] Masdar City for instance with its potential to provide political legitimacy is an exercise in political anticipation.

[15] Khalaf, Sulayman N. “Gulf societies and the image of unlimited goods.” Dialectical Anthropology, vol. 17, no. 1, 1992, pp. 53–84.

[16] Art. 16 “Ownership, capital and labor are the mainstays of the State’s social entity and of national wealth.”

[17] Art. 17 “Public property is inviolable and its protection is the duty of every citizen”.

[18] Ibidem p.65

[19]  My emphasis. Naturalisation was possible after ten years of residence in Kuwait with employment and proficiency in Arabic, and also by special order for those offering valuable services

[20] interview, Kuwait, 2007.

[21] ‘Neither autocracy nor democracy but ethnocracy: citizens, expatriates and the socio-political system in Kuwait’, in Paul Dresch and James Piscatori (eds), Monarchies and Nations: Globalisation and Identity in the Arab States of the Gulf, London: I.B.Tauris, 2005,pp. 114 – 35.

[22] Michael Herb, The Wages of Oil: Parliaments and Economic Development in Kuwait and the UAE, Ithaca, NY: Cornell University Press, 2014.

[23] See KIA official website http://www.kia.gov.kw/en/ABOUTKIA/Pages/MissionVision.aspx

[24] “The Rentier state in the Arab world” in The Rentier State ed. Hazem Beblawi and Giacomo Luciani, IAI, 1990, 49-62.

[25] Ibidem.

Oil metonym, citizens’ entitlement, and rent maximizing:  Reflections on the specificity of Kuwait