If the Gulf monarchies pursue the top-down, neo-liberal reforms that have been announced, these are likely to foster tensions related to the definition of the new social contract.
- The pre-eminent role of nationalized oil and gas resources in the six Gulf monarchies has resulted in a private sector that is highly dependent on the state. This has crucial implications for economic and political reform prospects.
- All the ruling families – from a variety of starting points – have themselves moved much more extensively into business activities over the past two decades.
- Meanwhile, the traditional business elites’ socio-political autonomy from the ruling families (and thus the state) has diminished throughout the Gulf region – albeit again from different starting points and to different degrees today.
- The business elites’ priority interest in securing and preserving benefits from the rentier state has led them to reinforce their role of supporter of the incumbent regimes and ruling families. In essence, to the extent that business elites in the Gulf engage in policy debate, it tends to be to protect their own privileges. This has been particularly evident since the 2011 Arab uprisings.
- The overwhelming dependence of these business elites on the state for revenues and contracts, and the state’s key role in the economy – through ruling family members’ personal involvement in business as well as the state’s dominant ownership of stocks in listed companies – means that the distinction between business and political elites in the Gulf monarchies has become increasingly blurred.
- Under current uncertain political and economic conditions, existing patterns of clientelism and the business sector’s dependence on the state will not undergo significant changes. In these circumstances, the business elites are unlikely to become drivers of political reform.
- In the context of persistently low oil prices, growing tensions related to the definition of the new social contract and the content of structural reforms in the Gulf monarchies are likely to provoke renewed popular frustrations and considerable turmoil.