Energy consumption and transition dynamics to a sustainable future under a rentier economy

Kaya, Abdullah; Choucri, Nazli; Tsai, I-Tsung; Mezher, Toufic

doi:10.4324/9781315174884-11

Cited by 3 publications

(3 citation statements)

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“…The economic diversification is referred to the substitution of imported tradable goods and services with domestically produced ones by domestic sectors denoted as non-rentier. There is no significant manufacturing of capital goods used for production (machinery and heavy equipment) in rentier states [17]. This has resulted in the imports of necessary capital goods from developed countries.…”

Section: A Theoretical Model For An Effective Economic Diversificatiomentioning

confidence: 99%

Economic Diversification Potential in the Rentier States towards a Sustainable Development: A Theoretical Model

et al. 2019

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This paper develops a theoretical model to analyze whether a rentier state can diversify its economy away from the rent revenue and hence sustain the economic development and preserve the status-quo. Considering the decarbonization process of the global economy and rapidly fall in economic value of hydrocarbons in the face of the supply glut, rentier states depending on oil and gas revenues urgently need to diversify their economies to avoid social backlash and political upheaval. There are three intertwining factors that determine an effective economic diversification away from the rent revenue: The profitability of non-rentier sectors, the size of the domestic economy to induce a “Big Push” for industrialization to non-rentier sectors, and the level of economic inclusivity. For an optimal level of economic diversification in a rentier state: (1) Non-rentier sectors should be attractive to private agents without the entry barriers; (2) domestic economy should be large enough to induce investment into non-rentier sectors; (3) the ruler(s) should have sufficient tolerance (inclusivity) for private agents investing into non-rentier sectors. Our findings indicate that a rentier state can achieve an optimal level of economic diversification provided that the conditions above are met even without any political change.

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Section: A Theoretical Model For An Effective Economic Diversificatiomentioning

confidence: 99%

Economic Diversification Potential in the Rentier States towards a Sustainable Development: A Theoretical Model

et al. 2019

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“…Populations of GCC members grow continuously and are expected to be doubled by 2030 (Kaya & Tsai, 2016; Kinninmont, 2009). Likewise, domestic consumption of the oil and gas reserves is increasing at the expense of potential exports (Kaya, Choucri, et al., 2017). The international oil prices have been persistently below $100 per barrel since 2013 due to excess supply from shale oil, tar sands, and lackluster demand (Baffes & Kshirsagar, 2016; Kilian, 2016; Ureta, 2020).…”

Section: Discussionmentioning

confidence: 99%

The Gulf Cooperation Council states: Crystallization of the regional cooperation and alliances amid dwindling resources

Tok

2021

Digest Mid East Studies

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The Gulf Cooperation Council (GCC) states can be divided into two main camps in terms of hydrocarbon endowment per capita which can partially account for differences in policy directions. Kuwait, Qatar, and the UAE (the rich triplet) have small populations while having large hydrocarbon (oil and natural gas) endowments compared to Bahrain, Oman, and Saudi Arabia. Kuwait, Qatar, and the UAE have been effectively using their excess wealth in the form of investment for domestic economic diversification and overseas investments through their sovereign wealth funds (SWFs). Therefore, the rich triplet perceives the upcoming threat of decarbonization of the world's energy system lighter than the remaining members of the GCC in view of their prosperity. The expected decrease in oil demand and revenue within the next decade will put further strain on the relationship between these states.

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“…The country had become the largest exporter of liquified natural gas (LNG) thanks to its state of the art supply chain, with the lowest costs on the planet [14]. The citizens of the country are now among the richest in the world thanks to a highly generous welfare system run by the state [15]. Therefore, Qatar's development trajectory does not include the challenges of the RCT or DDT; rather, Qatar is working to develop new industries by utilizing the resources garnered from the extractive sectors in a bid to diversify its economy [16].…”

Section: Introduction: a Resource-based State And Economic Diversificmentioning

confidence: 99%

The Incentives and Efforts for Innovation and Entrepreneurship in a Resource-Based Economy: A Survey on Perspective of Qatari Residents

Tok

2020

Sustainability

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This paper studies the local perspective on innovation and entrepreneurship in the resource-based state of Qatar. The effective utilization of abundant natural resources (oil and gas) have propelled the country’s rapid economic development over the last four decades. However, accelerating decarbonization efforts of the global energy system due to climate change put the future value of these hydrocarbon resources into doubt and hence the country’s revenue streams from international trade. Rapidly growing the local population adds further pressure to the social welfare system amid dwindling oil and gas revenues for the state. The argument for economic diversification and theoretical foundations of innovation and entrepreneurship in a resource-rich state are discussed. A survey to measure the attitude of the residents in Qatar towards innovation and state-led initiatives is prepared and conducted with people living in the country. The analysis of the survey shows that Qatari residents are relatively risk-averse and state-dependent in their pursuit of new entrepreneurial opportunities. We identify three possible reasons for such an outcome; they are, (1) the country’s unique economic structure (natural resource-based), (2) demographic structure (expatriates vs. citizens), and (3) lack of previous experience in innovation and entrepreneurship (path dependency) in a relatively young country. The country’s spectacular success in the last three decades has become its Achilles-heel in decoupling the current economy away from hydrocarbon dependence.

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Energy consumption and transition dynamics to a sustainable future under a rentier economy

Cited by 3 publications

References 1 publication

Economic Diversification Potential in the Rentier States towards a Sustainable Development: A Theoretical Model

Economic Diversification Potential in the Rentier States towards a Sustainable Development: A Theoretical Model

The Gulf Cooperation Council states: Crystallization of the regional cooperation and alliances amid dwindling resources

The Incentives and Efforts for Innovation and Entrepreneurship in a Resource-Based Economy: A Survey on Perspective of Qatari Residents

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