Stability, productivity and rentierism

13-06-2021 12:51 PM

BY Yusuf Mansur

The modern state is based on increased productivity; that is, people unite together to form a state because they believe that they will be better off as a larger collection of people and institutions. Failing to address the enhancement of productivity and, thus, welfare, gives rise to calls for reversal of the status quo. However, productivity requires a thriving private sector and an involved government.

Productivity requires an all-inclusive economy that is based on merit whereby payments and compensations are commensurate with effort and merit, regardless of the person’s origin, perceived loyalties or kinship to the ruler, race, heritage, gender, religion or other non-production related factors. Because productivity is rewarded, the modern state survives and thrives; and so do its citizens. A wise and forward looking state would ensure that it avails to its citizens the means to train and become better skilled producers, and provides them with the opportunity to gainfully employ such skills.

On the other hand, some states may claim modernity without being productivity based and rely instead on rentierism. A rentier state derives all or a considerable portion of its revenues from foreign individuals, concerns or governments for the sale of a natural resource such as oil — an example is the oilrich Arab states (known also in the literature as capital surplus countries); and can thus afford to pay its citizens for loyalty and maintenance of the status quo without increasing the productivity of its citizens. Such states believe or at least act as if they have no compelling reason to focus on productivity; and they continue to survive with the money (rent) from oil they pay to their citizens.

Other states, such as those that do not have an ample natural resource base to draw revenue from and have not managed to enhance productivity, are called “semi-rentier”. They use their political or geographic position to receive aid (rent) from other countries, and distribute some form of rent (non-merit based payments) to their citizens. The rent they distribute is limited by the amount of aid that they receive. Since productivity is relegated to the back burner in such states; should the aid decrease, the stability of such countries, and Jordan is not an exception, is ultimately threatened unless they resort to loans to finance the demand for rent — currently, over 15 per cent of the government domestic revenues in Jordan go to service the debt.

I do believe that the adverse events of the last three months are connected to the cessation of aid from certain countries in recent years. When viewed together, their ultimate goal is to destabilise Jordan or force upon it the Deal of the Century. Yet, those who designed such a myopic, superficially premeditated scheme ignored that the stability of Jordan rests not only on economic factors but also on a popular desire to maintain unity under the current leadership. Hence, no matter what suffering has occurred (and exacerbated by the onset of COVID-19), it is the collective aspiration of the vast majority of Jordanians (whether due to anthropology, history or institutions, or simply due to observations of the outcomes of instability in neighboring countries) to maintain Jordan as the most stable country in the Arab world.

The collective wisdom of the people of Jordan, however, is not a panacea or an invitation to respond neither lethargically nor rashly to recent conspiracies and developments. Jordan must ultimately shed its semi-rentier status by moving carefully towards becoming a productivity-based modern state while ensuring that some relief is provided by policies at the very beginning of the reforms. It is an arduous road, but it is possible, and it is also correct; let’s not wait too long!

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