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The impact of the oil crisis on security and foreign policy in GCC countries : case studies of Qatar, KSA and UAE
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Al-Marri, Fahad (2017) The impact of the oil crisis on security and foreign policy in GCC countries : case studies of Qatar, KSA and UAE. Arab Center for Research and Policy Studies .
An open access version can be found in:
Official URL: https://www.dohainstitute.org/en/Pages/index.aspx
Abstract
The Gulf Cooperation Council (GCC) is a group of six Arab Middle East countries that form a union to cooperate on economic and security matters. All six countries are largely dependent on oil revenues to meet their national budget. Their monarchical regimes and the large oil revenues that flow as a result of the region possessing at least 30% of the proven oil reserves of the world have led to the development of a mostly rentier state model in which money derived from their hydrocarbon exports are redistributed to citizens as a means of ensuring their loyalty. However, the growing population of GCC (which is predominately youthful) as well as the lower and more volatile price of oil has made the maintenance of such a model unsustainable.
Lower and more volatile oil prices have also impacted on the security and foreign policies of GCC countries. Since 2014 the price of oil has dropped at times by up to 70% from its peak. Although there has been a small recovery in prices, this has not been sufficient to reach the breakeven prices at which GCC countries expect to export their oil and balance their budgets. This has led to some changes in the rentier state model of collecting vast oil revenues and redistributing them to citizens in the form of guaranteed well paid public service positions as well as cuts to various subsidies such as water, electricity and gasoline. In Saudi Arabia for example, cuts to subsidies led to a 60% increase in the chargeable rate for water and electricity to some high value properties and industries. Saudi Arabia one of the biggest buyers of arms in the world but has cut 15% from its military budget. Given the austerity measures being undertaken by the GCC countries in order to meet budgetary requirements in the face of lower and more volatile oil prices, it is expected that other GCC countries will also cut their military budgets. The cutting of military budgets and possible cutting of aid to neighbouring countries as in the case of Egypt indicates how low and volatile oil prices are affecting the foreign and security policies of the GCC.
| Item Type: | Report | ||||
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| Subjects: | H Social Sciences > HB Economic Theory J Political Science > JA Political science (General) J Political Science > JC Political theory J Political Science > JZ International relations |
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| Divisions: | Faculty of Social Sciences > Politics and International Studies | ||||
| Publisher: | Arab Center for Research and Policy Studies | ||||
| Official Date: | 17 November 2017 | ||||
| Dates: |
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| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Open Access | ||||
| Copyright Holders: | Arab Center for Research and Policy Studies | ||||
| Open Access Version: |
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