The future of the so-called Rentier States, countries with their economy based on extractive resources such as oil, gas or minerals, is under severe pressure. The impact of the Black Swan event Covid-19, the resulting oil and gas demand destruction and a possible moving forward of Peak Oil Demand scenarios is a cause of concern to the overwhelming majority of Gulf Cooperation Council (GCC) member states. In addition to the latter group, including OPEC producers such as Saudi Arabia, UAE and Kuwait, other countries in the MENA region are feeling the brunt too. From Morocco in the West to Iran in the east, the region is waking up slowly to a new reality threatening their normal way of working. Lower revenues, increased government budget deficits and higher unemployment are not only resulting in a larger call on hydrocarbon based revenue providers but also affecting their own financial institutions, such as Sovereign Wealth Funds (SWFS) and local banking systems.
The total pressure on governments, economy and society is expected to force new realities but it also potentially threatens the historical basis of the regime-societal frameworks. More instability could ensue very soon.
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