Political Science
Jueun Choi

The Politics of Rentier Benefits and Permanent Residency in Qatar

  • Faculty Advisor

    Jocelyn Sage Mitchell

Published On

May 2017

Originally Published

NURJ 2016-17

Abstract

The rentier benefits the Qatari government provides to its nationals, such as free healthcare, free education and scholarships, free or subsidized housing, unemployment insurance, utilities, municipal services, tax exemptions, among other benefits, may create an unproductive mentality among the recipients and affect their motivation in their education and career. The generous provision of the government may cause Qataris to be less competitive than expatriates in job markets and hinder the Qatar National Vision 2030 of human development, which is to create a capable, motivated local workforce. Scholar Christopher Davidson argues that an allocative state causes a “rentier mentality” in the UAE. I argue that Qatar shares the same problems that Davidson observed in the UAE. To solve this problem, I suggest providing permanent residency for long-term, high-skilled expatriates, which would increase locals’ motivation through competition and bring long-term economic benefits to Qatar.

The Qatari government provides extensive, “cradle-to-grave” social services to its citizens including “health care, education, housing, food, unemployment insurance, utilities, and other municipal services.”[9] Citizens do not pay tax. Ironically, the social services and financial benefits the Qatari government provides its nationals, based on nationality rather than merit, have the unintended consequence of reducing their motivation in education and career. Although many experts acknowledge this problem, few provide clear solutions. I argue for providing permanent residency for long-term, high-skilled expatriates as a solution to low Qatari motivation. I suggest that providing long-term residency permits would counter rentier pathology by encouraging more competition in the job markets for nationals. This policy would also lead to more entrepreneurship and encourage expatriates to remain in the country for longer, which would reduce labor turnover and increase Qatar’s economic productivity.


I will first shed light on the problems of rentier pathology in Qatar and delve into education and employment opportunities that the government provides but are not effectively utilized by locals. Expatriates who do not receive state support perform better than many locals who do. Next, I will suggest permanent residency as the solution to counter rentier pathology. I will discuss the limited rights of expats that may prevent high-skilled expats from staying in Qatar for a long time and decrease entrepreneurship, outline requirements to obtain the residency status, rule out citizenship as an inferior policy compared to permanent residency, define benefits included in the status, describe economic benefits this would bring to the country, and evaluate the risks of the policy.

9. Foley, Sean. The Arab Gulf States: Beyond Oil and Islam. Lynne Rienner Publishers, 2010.

The problems of the rentier mentality in Qatar

The government of Qatar uses its rich oil wealth to provide for its citizens–job security, free medical care, access to free college education and scholarships, land allotment, retirement benefits, and marriage allowances.[15] Qatari citizens acquire these benefits not based on merit but solely based on their nationality.

15. Mitchell, Jocelyn Sage. "Beyond Allocation: The Politics of Legitimacy in Qatar." PhD diss., Georgetown University, Washington D.C., 2013.

The government’s purpose of providing for its nationals is to maintain their power by satisfying popular demands.[21] People are less likely to support a monarchy that does not provide any benefits, requires tax payments, and has absolute power and control over the economic and political system in the country. To maintain political stability, the government must provide for its citizens. Yet the irony is that these benefits produce an unproductive mentality among locals. Christopher Davidson, in his book Dubai: The Vulnerability of Success, argues that an allocative state causes a “rentier mentality” in which locals are voluntarily unemployed since they are financially comfortable It also creates a generation with no experience of an extractive state and will thus not come to terms with any demand of extraction in the future. In general, citizens are used to receiving benefits without fostering a sense of responsibility or gratitude that would motivate them to give back to the state through taxes and hard work. Another rentier-induced problem is national overconsumption. Shopping is a popular hobby for most local men and women in Dubai, which increases imports and leads to a strain on the balance of payments.[5] Davidson sums up these problems as “rentier pathologies.” Rentierism develops a potentially dangerous habit of receiving too much without paying back, and the nationals become too dependent on the government for economic resources. If the natural resources run out and the state benefits decrease, the nation may destabilize.

21. Ross, Michael. The Oil Curse: How Petroleum Wealth Shapes the Development of Nations. Princeton University Press. 241, 2012.

5. Davidson, Christopher. "Chapter 5 The Dubai Paradox." In Dubai: The Vulnerability of Success, 177-182. New York: Columbia University Press., 2008.

The benefits also contradict another important goal for the government: the long-term development of its labor market. Only when the citizens strive to maximize their potentials in their education and their career can they contribute to the development of Qatar. These potentials are essential for Qatar to continue its stability when natural resources begin to run out. Davidson’s discussion of the “rentier pathology” problem in Emirati citizens is very similar to those in Qatar. Many Qatari youths have an unproductive mentality and cannot compete with expatriates in schools. Despite the government’s efforts, Qataris prefer public sector jobs because they can work less and get paid more in an “already sprawling and inefficient state bureaucracy,” which leads to negative economic consequences.[15]

Education

The importance of the human development as a national goal is evident through the Qatari government’s generous financing of the education of national students. Qatar’s laws have given its citizens the right to free education at all levels.[26] The Supreme Education Council’s Higher Education Institute (HEI) is in charge of providing scholarships to nationals who pursue university education. They not only provide full scholarships to students who have been accepted into one of the approved 675 universities, but they also provide allowances, plane tickets, new computers, among many other privileges.[23] Completing an academic year with a high GPA would also allow bonus of fifty thousand Qatari Riyals for those with "Hamad bin Khalifa Al Thani" scholarship.[24]

23. Supreme Education Council. "Academic and Financial Controls for the Students of Missions." http://www.sec.gov.qa/ar/SECInstitutes/HigherEducationInstitute/Offices/Pag es/AcademicRules.aspx

24. Supreme Education Council. "Scholarship Programs." http://www.sec.gov.qa/en/secinstitutes/highereducationinstitute/offices/pages/missionsan dscholarships.aspx.

26. Zahlan, Rosemarie Said. 1979. The Creation of Qatar. London: Croom Helm.

Despite the efforts of the state to encourage local students to excel in their studies, the lucrative incentives do not seem to have a visible, or at least immediate, impact on improving Qatari students’ academic performance. This result is directly linked to the rentier pathology, especially of its young male citizens. A study conducted by Organization for Economic Cooperation and Development (OECD) showed that Qatar ranked 68th place among 76 countries when representative samples of 15-year-olds were tested on math and science tests. Qatar ranked worse than most of the regional and international countries of comparison.[25] To show off its rising modernity, Qatar and other Gulf states have used their oil wealth to purchase costly physical infrastructure and the latest knowledge. Education City in Qatar is a prime example of a Gulf state importing world-class education into its region using oil wealth. These reforms, however, have failed to bring significant change in quality of education, and specifically, student achievement on international assessments.[20] “So many young Qataris do not go to school. What will they do in their future?” said a South Korean expatriate who has been working in Qatar as a businessman for the past 14 years.[3] While other factors may contribute to the inferior academic achievement of Qataris, such as the quality of teachers, curriculums, and parents’ attitude toward their children’s education, the lack of motivation among locals, stemming from the rentier mentality, may be the most important contribution to the problem.

25. Walker, Lesley. "Report: Qatar Ranks in Bottom 10 of Education Index, but Shows Potential." Doha News. May 14, 2015. http://dohanews.co/report-qatar-ranks-in-bottom-10-of-education- index-but-shows-potential/.

20. Ridge, Natasha. "Education and the Reverse Gender Divide in the Gulf States" Teachers College, Columbia university 2014.

3. Anonymous South Korean expatriate in Qatar, interview with the author, September 29, 2015.

Employment

Aside from education, providing full employment to Qataris is one of the top priorities of the state. Public-sector employment, by law, must prioritize Qatari applicants over those from other countries.[17] Qatarization policies have been enacted in private sector as well. Although the Qatari government is capable of adding and paying for extra unnecessary jobs, [6] the government wants its citizens to obtain private-sector jobs for reasons beyond income.[15] In the state’s human development goals of its Qatar National Vision 2030, it lists “a capable and motivated workforce: Increased and diversified participation of Qataris in the workforce” as one of its goals.[19] Yet there is a national preference for public sector employment. Compared to private sector jobs, public sector jobs demand fewer working hours and consist of easier tasks.[18] These public sector jobs provide little financial benefits for locals as they would not have sponsors in private companies like the white-collar expats do. Sponsors provide white-collar expats with accommodation, education for their children, healthcare, annual airline tickets for the whole family, and more. None of these would apply for locals.[16] In an already inefficient bureaucratic system, this preference—which originates from the rentier mindset—is creating economic problems. Althani writes, “we have young men whose main goal is just to secure whatever job they can, especially in the public sector, and do as little work as possible while enjoying the good life.”[1]

17. Al-Nasr, Tofol Jassim. 2010. “Qatarisation in Theory and Practice.” The Peninsula. September 15. http://thepeninsulaqatar.com/tofol-jassim-al-nasr/126300-qatarisation-in-theory-a- practice.html.

6. Davidson, Christopher Michael. After the Sheikhs: The Coming Collapse of the Gulf Monarchies. Oxford University Press, 112-21. 2012.

18. QNB Economics. Qatar Economic Insight 2013. Report. 8. September, 2013. http://www.qnb.com/cs/Satellite?blobcol=urldata&blobheader=application/pdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1355518653483&ssbinary=true.

16. Al-Nasr, Tofol Jassim. 2010. “Qatarisation in Theory and Practice.” The Peninsula. September 15. http://thepeninsulaqatar.com/tofol-jassim-al-nasr/126300-qatarisation-in-theory-a- practice.html.

1. Althani, Mohamed A. J. The Arab Spring and the Gulf States: Time To Embrace Change, “My Memories of Change in the Gulf.” xiv-xxiii. London: Profile Books, 2012.

The rentier mentality creates a destructive cycle in the skilled workforce of the country. The lack of a skilled, experienced local workforce creates the influx of expatriate employees in the country, which then threatens employment opportunities for locals. Qatarization, which was implemented to minimize local unemployment as much as possible, has still left some locals unemployed. For many Qataris, seeing expats working in their country while some of their local friends, families, or even themselves are jobless is a sign that expats are threatening their employment opportunities. Their concern is valid because many private companies prefer expat workers who require less salary, work more efficiently, and are easier to fire.[15] The South Korean expatriate mentioned above agrees that locals are unattractive employees in private workplace. He said, “there’s no efficiency for locals in workplace. Other people usually come to work and then leave when it’s time to leave. Qataris [in my company] come in the morning and leave at around noon. Then they come back at around 4 p.m. and leave at 7 p.m. They lose efficiency because they waste their time on the road.”[3] A heavy proportion of expats filling in the Qatari private sector is an inevitable method the state must utilize to fill the gap of the small number of capable locals. In order for locals to develop their professionalism, work ethic, skills, and efficiency to the level of expats, the locals need to be in more fair competition with them. I discuss a practical solution to satisfy this need of competition, in the next section regarding permanent residency for expatriates.

A solution: Permanent residency for expatriates

It is only human desire to get used to what they are receiving and expect the state benefits to increase,[15] but it is problematic when locals’ education and career performance decrease because of these benefits. I think financial benefits and social services can impact the Qatari society positively when they are rewarded based on merit, rather than nationality. I suggest here that the way to create this positive impact is to focus on increasing equality with expatriates in the workforce, which will encourage healthy competition and an emphasis on meritocracy among Qataris in the workforce, as well as increase Qatar’s economic productivity.


Since expatriates make up a heavy majority of Qatar’s population, they maintain the fast-growing economy of Qatar and provide stability. Qatar cannot function without their expertise and labor. However, no matter how beneficial their contribution is for the country’s development, they can only remain foreigners without citizenship or permanent residency according to the current law. They will remain expatriates with laws that restrict their business activities and travel, while intensifying the feeling that they do not belong in this country. Since losing expertise and labor of expatriates would hurt the country, the state can prevent the loss by maintaining a permanent base of expats in Qatar. Providing permanent residency to skilled, long-term expats is the best solution to retain expats that would benefit Qatar’s economy.

Qatari nationals made up for only 12 percent of population in the country in 2013.[22] The rest of its inhabitants, the foreigners, find Qatar a great place to earn money but not a place that provides a high quality of life. A recent survey on expatriates living on foreign lands showed that Qatar ranked very highly in financial gain (5th out of 39 countries), but for overall quality of life, its ranking is much lower–13th out of 39 countries in 2014, which fell to 22nd in 2015.7 A South Korean recent graduate from Northwestern University in Qatar said, “For a foreigner living in a foreign country, this country can never be my home even if I live here.”[4] The Kafala system, which ensures nationals’ dominance over expatriates, is an inefficient bureaucracy that limits expats in setting up their own business in Qatar. Some expats are also discouraged from setting up their business into success, like the father of Huda Barakat, a Syrian student at Northwestern University in Qatar who was born and raised in Qatar. Expatriate entrepreneurs or company owners not only have to obtain a Qatari sponsor and pay them for being their sponsor, but they also fear deportation that would force them to abandon their companies at any time. Providing permanent residency would help them feel more secure and establish long-term goals, such as establishing and expanding businesses, which are essentially beneficial to Qatar’s economy.

22. Snoj, Jure. "Population of Qatar by Nationality." BQ Magazine. December 18, 2013. http://www.bq- magazine.com/economy/2013/12/population-qatar (Links to an external site.)

4. Anonymous South Korean recent graduate at Northwestern University in Qatar, interview with the author, December 3, 2015.

Requirements to obtain permanent residency

Permanent residency would be a form of status for non-Qataris, putting their hierarchy higher than ordinary expatriates but lower than citizens. Permanent residents should be allowed to keep their nationality. Despite the economic benefits this idea may bring, it has never been implemented because citizenship is a culturally and politically sensitive matter, and changes are slow in Qatar. To determine eligibility, applicants of permanent residency should pass a basic level of Arabic proficiency test in both written and oral tests so that they can at least communicate in the local language. They should have worked in Qatar for a certain period of time (e.g. at least 10 years) in executive positions in industries that are considered vital to Qatar economy such as education, security, army and politics, planning, management, engineering, medicine and scientific research.[12]

12. Khatri, Shabina, and Peter Kovessy. "Qatar Emir: Government Can No Longer ‘provide for Everything’." Doha News. November 3, 2015. http://dohanews.co/qatar-emir- government-can-no-longer-provide-for-everything/.

Two reasons that permanent residency is a better policy than citizenship

Permanent residency is a better solution than providing full-on citizenship. First and foremost, permanent residency is more realistic than citizenship. Ever since the discovery of oil in the Gulf, citizenship has been an exclusive right for nationals. Unlike how many Western countries provide citizenships to eligible foreigners, Qatar and most other Arab Gulf countries, except for the UAE, do not provide citizenship to even the half nationals, the children of national mothers.[11], [13] When people with local blood struggle gain citizenship, it is difficult to imagine that foreigners can obtain it. Furthermore, in the Gulf, “adding an additional citizen does not increase the total amount of oil revenue available but instead increases the number of citizens among whom a fixed sum of oil revenues must be divided.”[2] I think the Qatari government does not want more non-national citizens to further divide its resources.

11. Issa, Wafa. "Children of Emirati Mothers, Expatriate Fathers Offered Citizenship." The National. November 30, 2011. http://www.thenational.ae/news/uae-news/children-of-emirati- mothers-expatriate-fathers-offered-citizenship.

13. Kinninmont, Jane. "Citizenship in the Gulf." The Gulf States and the Arab Uprisings, 2013, 47-54. "Law No. 8 of 2009 on Human Resources Management." Al Meezan: Qatar Legal Portal. www.almeezan.qa/LawView.aspx?opt&LawID=2644&language=en.

The second reason that permanent residency is better than citizenship is because it takes into account social factors: foreigners who become citizens may dilute the local culture by influencing national identity, religious values, and traditions. Foreigners cannot transform into Qataris just because they have a legal residency status. The locals will not accept new Qatari citizens as fellow citizens, which can lead to social alienation according to Maryam, a 21-year-old Qatari female university student. She said, “a lot of Qataris here think about citizenship as more than just a passport and a last name. They think the more popular or more Arab your last name is, the better you are and higher you are in a hierarchy of class. So let’s say if other people get the citizenship, they would not be Qataris who are classified as high in the hierarchy of class. These expats with citizenship are not going to be accepted into the community as Qataris.”[14] She added that expats with permanent residencies are more likely to be accepted. Faiz Furqan, a 25-year-old Indian who has lived in Qatar all his life, said “personally, I don’t speak fluent Arabic, nor can I experience the local customs and tradition so I would feel out of place if I were to be made a citizen.”8 Instead, if he had the choice, he prefers to gain permanent residency rather than citizenship.

14. Maryam (a Qatari female university student), interview with the author, Doha, Qatar, December 4, 2015.

Benefits for permanent residents


Regarding benefits for permanent residents, the scale and amount of financial benefits should be less than those for Qatari citizens. This policy would still keep Qataris the main priority of the state and not cause extensive burden on the state resources. For example, permanent residents would not receive allowances or bonuses for marriage, while Qataris do. Unlike ordinary expatriates, permanent residents should be exempted from some rules in the Kafala system and be allowed to have full ownership of companies in any industry. They should be allowed to purchase homes and land as well. In terms of employment opportunities, permanent residents should be treated equally with Qatari citizens because this would increase competition for the locals and support a corporate culture of professionalism and meritocracy.

Economic benefits for Qatar


Qatar’s long-term economic goal is to make its citizens contribute to the diversification of its economy at the same level of expatriate workers in education and motivation so that the country will achieve economic and political stability and survive when oil runs out.[15] If the Qatari government wants its citizens to be as competitive as expatriates, the government should encourage citizens to compete with the expats who are permanent residents by giving the latter equal employment rights.


Many Qataris who struggle to get jobs attribute their problem to employed people’s wasta and/or discrimination.[15] Mitchell’s study found that 20 percent of Qatari participants say they are not very or not at all satisfied with the opportunities for unemployment in the country. “Some Qataris react to unemployment or underemployment by seeing it as unfair discrimination rather than a fair assessment of their qualifications for the job”[15]


I think such reaction occurs because people are not used to competing one another. The push to compete impartially with fellow locals as well as permanent residents, in the long term, may motivate more locals to challenge themselves to reach their maximum potential. Wasta culture would gradually die down, and the most capable workforce that experienced real competition will take charge of the country and grow its economic efficiency. Diligent locals will ensure the future of the country and reduce dependence on natural resources.


Another economic benefit is that when expats become permanent residents, they will invest more in Qatar’s economy through entrepreneurship. They will have more security to set up their own businesses without constant fear that one day they might be deported and may have pursued wasted endeavors. Furqan said, “My heart belongs here, my memories belong here… yet I live in constant fear of leaving all this behind with no more than an exit stamp on my passport.” Huda Barakat, a Syrian female university student, spoke about her father’s car business in Qatar: “Ever since I was born, he was working in the same place. His place was not very well built. I’d ask dad ‘why don’t you rebuild it? Why don’t you make it look better? His answer would always be: ‘I never know when I’m leaving. They can kick me out of the country. So why bother?’”[10] The success of companies in Qatar can increase the GDP of the country and increase exports. When expatriates are free from the financial burden of paying their sponsor under the Kafala system, more businesses will be set up, and fewer of those are likely to fail. The success of local businesses in the country set up by permanent residents can also help Qatar’s tourism industry, as there would be a greater variety in shops, restaurants, and services. An increased number of services available would raise the quality of life for expats as well. For example, a Chinese expat setting up more Chinese restaurants may make Chinese expats enjoy their lives in Qatar more. More Moroccan tea shops may satisfy the Moroccan community in Qatar. More choices will make life better for everyone.

10. Huda Barakat (Syrian female university student), interview with the author, December 3 2015.

Risks of permanent residency


The idea of granting permanent residency to expats definitely has some risks. If more people become long-term members of the society, there will be more strain on healthcare, traffic, and other infrastructure in the short term. However, in the long term, when more skilled people are present to directly manage the construction of more hospitals, roads, and infrastructures, Qatar would be able to welcome more people in more sustainable, efficient ways by removing bureaucracy and speeding up the process. Moreover, there is no guarantee that the highly skilled expats would want to have permanent residency if they have more strategic passports. Furthermore, even though the state would provide them fewer benefits than Qataris, the locals are highly likely to show dissent over the decision as they would wonder why national wealth should be shared with foreigners on top of the high salaries they receive. Lastly, designing and implementing permanent residency will take many years, considering the fact that the Kafala system takes many years even for small changes to be implemented. By the time permanent residency is available, the foreign investment situation may have changed. For a permanent residency policy to work, a team of very efficient experts should work together to minimize a bureaucratic process.

Conclusion

I have argued that permanent residency is a better method than citizenship, to bring economic benefits to Qatar by motivating its local population. Permanent residency can encourage more investment of permanent residents in the local economy. Most importantly, increased competition for jobs would push the locals to fight against the toxic rentier pathology and help the nation accomplish the Qatar Nation Vision 2030. Although providing permanent residency is not the easiest solution, I believe it is worth the efforts because it can prevent rentier pathology from hindering the Human Development Goals set forth by the Qatari government to turn into reality in this nation.

ABOUT THE AUTHOR

Research and Analysis: Social Science Winner

ACKNOWLEDGEMENTS

I would like to express gratitude to professor Jocelyn Sage Mitchell from Northwestern University in Qatar for providing insightful comments that greatly improved the research paper.