Rentier States and MENA

According to Beblawi's Four Points, rentier states rely on an economy that is predominately focused on external income, with those generating this 'rent' being a very few number of people. The majority of people within rentier economies distribute or utilize the rent, not create it. In addition, Beblawi states that rentier incomes mainly go to the government when all is said and done. These characteristics are not supportive of healthy economies, and we can see this through the usage of the rentier state formula in the MENA region.

For the majority of actual rentier states, this type of economy does not benefit the people because most income is coming from foreign investments and most of the income itself is not going to social and economic programs within the country. When an economy relies so much on foreign dollars, how can a country support itself and develop into a strong economy through the creation of local business and transaction? In an international crisis, will the rentier state collapse due to the reliance on foreign capital? On top of this, many governments within the region don't invest in economic and social development programs that can benefit much of their populations. They instead spend much of the rent on the military, high government positions, and the elite. Charles Tilly says rentier states are not healthy because citizens don't pay many, if not any, taxes, which is also not good for developing beneficial state programs within the country. There can also be dissent among the populace due to the fact that their government is controlling very large amounts of money that don't seem to be going to things that benefit the public. The state and the people are virtually acting on totally separate economic fields, which can lead to greater disconnect and greater elitism.

There are multiple states within the MENA region that could qualify as a rentier state. Egypt, of which Beblawi is himself, is one of those. It is the most populated country in MENA and has one of the largest economies. Much of its rent comes from foreign aid (heavily invested in the military) and tolls on the Suez Canal. Unlike a 'traditional rentier state', Egyptians do pay some taxes, but not enough that it competes with foreign investments. Even if Egypt's economy were to rapidly grow and become extremely successful overnight, the people would not reap the benefits. There is too much of a gap between state's wallet and the people's wallet. This, along with the many other risks of heavily relying on foreign investment, is what is wrong with the rentier formula. It hurts the populace because  the decisions of the citizenry rarely get taken into account, all while the state continues to benefit economically (of which they are not spending on the actual people).