The Economic Contracts of New Gulf Citizenships

In an effort to diversify their revenues before the end of the oil era and to attract economic talent, Saudi Arabia and the United Arab Emirates are now granting citizenship to hand-picked expatriates, ignoring the large mass of foreign workers, even those who have been in the country for several generations. This strategy risks creating a two-tier citizenship.

Bar Zar, a bar in Dubai

When in 2013, a prominent Emirati social commentator called for the need to introduce a pathway to citizenship for expatriates in the UAE, his well-argued opinion piece was met with mass outrage. An Arabic hashtag, “This writer does not represent me,” vehemently opposing his views trended on Twitter around that time, indicating that the commentator’s suggestion to naturalise expatriates who had contributed to the country’s development was neither popular, nor accepted.

In January 2021, however, UAE’s Prime Minister and ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum, took to Twitter to announce that the country is amending its citizenship laws to allow for “investors, specialised talents and professionals including scientists, doctors, engineers, artists, authors and their families” to be granted UAE citizenship. The new amendment, said the Prime Minister, aims “to attract talents that contribute to [the UAE’s] development journey.” Yet, unlike the uniform rejection with which the Emirati commentator’s original idea was received in 2013, the Prime Minister’s announcement predictably garnered no public discussion on the matter. Despite the sullen public silence, questions about the implications of the new citizenship law amendments on issues of “national identity” and the economics of expanding the constituency base of the rentier state have gained renewed relevance.

Maintaining a homogeneous identity

Scholars familiar with the Gulf states recognise the inherently tiered nature of citizenship in the region. Tribal distinctions, as well as the geography and timeline within which the native populace of each Gulf Arab state has found itself, largely determined aspects of their formal membership to the state.

Much of the discussion on citizenship in the Gulf states centre around its exclusive members-club form of association, wherein citizens receive privileged access to state welfare that is generated from oil rents. This oversimplified understanding of what constitutes citizenship in the Gulf region has obscured the differences between each Gulf state, which, considering new citizenship laws, raises distinct questions regarding what these new changes entail both across Gulf states and across different strata within each Gulf state.

For example, when Saudi Arabia announced in November 2021, that it too will be granting citizenship to “outstanding” expatriates, it followed the announcement by sharing the names of its newly minted citizens. The number of naturalised Saudi citizens appears to be small, relative to the size of country’s population, and homogenous insofar as the grantees were Arab and Muslim—two differences that sets its social trajectory apart from the UAE’s and highlight how citizenship schemes can impact the social contracts of each Gulf state differently. Whereas Saudi Arabia has chosen to extend citizenship to professionals who are identifiably Arab and Muslim, despite its own cosmopolitanism by way of Hajj, the UAE reservedly withheld the names of new citizens, some of whose identities were selectively revealed through national media, while others chose to post about their pride of having received the UAE citizenship. Another group of recipients, however, were the unsuspecting individuals, who had pictures of their UAE passports circulating through instant messaging applications, indicating by way of their non-Arab names that some grantees were likely to be non-Muslim.

These citizenship announcements should be viewed in the larger context of other social and legal reforms, which the UAE and Saudi Arabia have recently generated headlines over. Effective January 2022, the UAE will formally institute major social and legal reforms, which it has been announcing at intervals over the past months, with Abu Dhabi spearheading the legal overhauls by introducing secular family laws, which will allow for non-Muslim judges to preside over cases involving non-Muslims. Although these reforms have been explained primarily as measures taken to attract foreign talent, there is an overlooked element concerning the government’s attempts to liberalise and secularise their legal codes such that new non-Muslim citizens could easily be integrated. What these citizenship schemes in both the UAE and Saudi Arabia have in common, however, is the economic incentive behind the unconventional move to naturalise expatriates.

New economic agents

The drive to diversify Gulf states’ economies is a recurrent headline, which serves as a periodic reminder of the imminent post-oil future looming on the horizon. Perhaps the most evident examples of the uneasy transitions towards post-oil economies lie in the last decade’s changes to the social contracts in some Gulf states. Whereas in the past, citizenship demanded mere acquiescence, obedience, and loyalty to state leadership, the introduction of military conscription stipulated a new duty towards the state that was not in turn reciprocated by any added perks. Instead, Gulf citizens have had to adjust to cutbacks on privileges that had once generated additional income for individuals, namely through the Kafala system1. With the scrapping of foreign investors’ and business owners’ needs to find local sponsors, substantial revenues that were made through Kafala have dried up for Gulf citizens, whose tolerance towards the influx of foreign workers was formerly mitigated by the promise of economic rewards.

For citizens of the Gulf, however, it is the state’s selective expansion of its membership through the granting of citizenship to foreign talent that has been most perplexing. While citizens in the wealthier Gulf states perceive the naturalisation of expatriates to further shrink the pie, the state sees naturalised citizens as economically productive and independent of state welfare, and thus, useful. Unlike Gulf natives who are born into their patrilineal citizenships, new citizens are hand-picked by the ruling elites in recognition of their economic merits on which Gulf post-oil economies will increasingly depend. Their inclusion is thus meant to incentivise citizens to emulate their example.

Although many Gulf citizens are primarily concerned with the extent to which naturalised citizens will have equal access to state benefits, their apprehensions are likely misplaced because they assume the continuation of existing tiered citizenships, which are defined by social categories such as tribes. But the new hierarchy will be based on citizens’ economic utility for the state, defined by a citizen’s ability to pay taxes and make do without welfare handouts.

Who Benefits from a Gulf Citizenship?

Not all Gulf citizenships are equal, however. While some Gulf citizenships are meant to provide security by guaranteeing residential longevity, others—like UAE’s citizenship—affords extra benefits, such as visa-free travel to Europe and many parts of the world. This aspect may appeal to many investors and talented individuals, especially those who hail from the Middle East or other countries for whom acquiring visas to countries in the Western hemisphere is an arduous process.

But Gulf citizenships are precarious in their revocability. To assuage this common anxiety, Gulf states broke from the traditional rigidity against allowing their citizens to hold dual nationalities, assuring prospective citizens that they can retain their existing citizenships. Allowing naturalised citizens to hold dual nationalities sets a precedent for the formation of a dual social contract, which new citizens will be able to opt out of should it cease to benefit them. This dual social contract will afford naturalised citizens the advantage of political and economic mobility that many native citizens lack due to state-imposed restrictions that legally prevent them from holding dual nationalities. Additionally, decades of state-provided employment and subpar education systems have consistently failed to equip generations of Gulf citizens with internationally marketable job skills. These restrictions render native citizens economically immobile outside of the Gulf region.

The economic entrapment that Gulf citizens are slowly waking up to is further exacerbated by the growing competition they face in the local job market. It appears that a quick resolution to perceived citizens’ aversion to working in the private sector will increasingly be redressed through “nationalising individuals” rather than “nationalising positions”. Naturalised citizens, especially those whose new membership was celebrated in the national media, are promoted as skilled and productive members of society, who have contributed to the prosperity of the Gulf states in which they reside.

The emphasis on their labour and economic utility suggests that not all labour is valued equally. The nationalising of skilled, white-collar professionals and entrepreneurs is reflective of the racial and economic hierarchies characteristic of the Gulf region. In fact, citizens of the Gulf states have not been apprehensive about the existence of large numbers of migrant labour, as their presence was not perceived to be threatening, nor do they compete for the same jobs that citizens desire. The construction and service sectors in the Gulf states, for instance, continue to be dominated by low-paid workers, who, like imported labour in the rest of the world, perform jobs that citizens in these states are unwilling to do, especially following the proliferation of mass education and higher education in these countries.

Talented expatriates, on the other hand, are increasingly viewed as the favoured competitors in the job market, and particularly within the private sector. The most common reasoning repeats a half-truth suggesting that skilled expatriates are favoured due to their willingness to take on lower paid jobs than the costly citizens; a half-truth because the job market is no longer as neatly tiered in favour of the citizen. But the naturalising of expatriates could put that argument to test should the private sector choose to attract naturalised citizens to fill quotas and avail government incentives.

Opening up citizenship to foreigners is a long overdue step towards increasing the economic resilience of Gulf states, but it is not a panacea for the impending economic and social problems of the region. Most pressingly, these waves of new citizens may begin to provoke anxiety and resentment amongst segments of Gulf societies, whose concerns about the details of the new arrangements remain so far unanswered. What is further disconcerting to many native citizens is whether naturalised citizens will be expected to demonstrate equal loyalty, or perform duties towards the state, such as the military service.

1Editor’s note. Sponsorship system whereby the government delegates to employers the management of foreign workers and their residence permits. It also requires each foreign investor to partner with a local national who must be the majority shareholder of the company.