Crystal A. Ennis
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Said Al-Saqri
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Oil price collapse and the political economy of the post-2014 economic adjustment in the Sultanate of Oman
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How can we understand the economic responses of rentier states to the oil price downturn in 2014? Through the case of the Sultanate of Oman, this chapter answers this question on the present with a view of the past. With a longer view of economic adjustment since the 1980s, the authors unsurprisingly find that economic adjustments mirror oil market fluctuations. However, fiscal restraint does not adjust as steeply during contractions in the oil market. This illustrates the difficulty in cutting expenditure in spaces where both state and economic life are deeply tied to each other and to oil-supported government spending. The authors examine a selection of economic policies and initiatives Oman is using in response to its contracted fiscal position, including government borrowing, labour market regulation, subsidy reduction, the tanfīdh programme, and changes in taxation regimes. The authors argue that the government is caught between socio-economic demands and financial realities, understanding that a disruption in one can lead to undesirable financial or social instability. These findings have implications for the literature on rentierism and demonstrate conditions under which rentier states are more sensitive to social pressures and therefore less autonomous from society than often purported.

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Oil and the political economy in the Middle East

Post-2014 adjustment policies of the Arab Gulf and beyond

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