What is the rent economy?

What is the rent economy?

Rents economy

The rent economy is the difference between what is considered as a factor of production such as capital , land and what can actually be earned. [1] The rent economy is defined as the financial return of a productive resource such as labor and land, Greater than the amount required to maintain resource production. [2] Other definitions of rent economy are the additional money that exceeds the expected amount of money, and a positive difference between the actual amount received and the amount expected to be paid in advance for work. [3]

Characteristics of the rent economy

The rent economy is characterized by a number of characteristics:

• The rent economy depends on the existence of external financial resources that are not associated with the productive process, leading to the emergence of rentier behaviors that do not encourage the continuation of local production. [4]

• Revenue is concerned with obtaining revenues from overseas markets. [5]

• Income is usually the main source of revenue for the local economy . [5]

• The rent depends on the economic activity of the population and is associated with the redistribution and consumption of rents rather than contributing to its production. [5]

Types of rent economy

External rent

The external set of sources is: [6]

• Proceeds from gas and oil : is rentier income resulting from the sale of oil and gas; because there is a clear difference between the cost of acquiring them and the price sold, this difference does not reflect the nature of the special effort for companies in Astkhrajhma, and justify this difference that the oil and gas wealth depleted; any non-renewable; Therefore, a financial allowance must be paid for not renewing its source.

• The proceeds of minerals : is based on selling metals income, and is relatively less in size than the proceeds of oil and gas, and shows the difference between them in the nature allocated to extract them all operations, and is the proceeds of minerals from the types of rents that have emerged as a result of higher prices compared to the cost of the production.

• The revenues of the strategic transport lines are the income from the transport channels and corridors, such as the maritime transport channels, the gas and oil transmission lines through the territory of the countries, the railway and road transport, and the passage through these passages is mandatory; It is therefore part of the rent income.

• The proceeds of tourism : is the income which constitutes financial returns to countries in exchange for the tourism sector services; as tourism services contribute to the provision of income rentier high countries, and also generate tourist facilities income up more than the value of effort and investments their own, as revenues from the tourism sector is an important part of The national product of many countries of the world.

• Foreign remittance revenue is the income from foreign remittances that are part of the important financial flows of countries. Recipient countries do not make any financial efforts to collect this income.

• Foreign assistance revenue is the income generated by the regular receipt of aid by States, either from other countries or from international organizations. Such external assistance constitutes an essential part of the financial budgets of the recipient countries; therefore, it is classified as a kind of economic rent; Or may be considered financial rewards as a result of political or strategic positions.

Internal rents

The internal flow of sources is: [6]

• Revenue of services for the activities of countries: the rents resulting from economic intervention in the economic cycle of developing countries ; either directly through government property or indirectly through legislation and budgets, and the Government's expenditure policy is the final determinant of economic activity.

• The proceeds of financial speculation are the rents of contemporary economic systems. They are clearly reflected in financial speculation. The main reason is related to the speculative mindset that deals with quick profits. Financial institutions and the financial system contribute to the system of speculation by providing speculators with liquidity for Low interest rates, with unintentional or intentional absence of government regulatory legislation, and some governments may seek to establish a kind of financial rent; by relying on the issuance of financial bonds known as treasury bonds and associated with very high financial benefits; Which contributes to making the public debt a source of rental income, with no production efforts, and often holders of these bonds from foreign and local banks, which are keen to market to customers.

• Real estate speculation is the rent income from real estate speculation, which is the result of rising real estate prices and rising rents. This type of speculation can produce fatal crises for productive investment . The service sector is the revenue generated by various economic sectors and is divided into three sectors: services, industry and agriculture .

• The services sector has become an independent sector as a result of economic developments, especially in terms of trade; There is no rent income when the relationship between the service or the product and the consumer is directly without intermediaries, and if the relationship is indirect, that is, relying on the presence of intermediaries, thereby increasing rent income, with intermediaries receiving a monetary price for the product or service.

How to get rent

Access to rent is linked to one type of monopoly , such as monopoly of the site or monopolization of property or other types of monopolies, and all make the owner impose his conditions on the use of ownership within the monopoly , for example, the rent is income to the owner of the land; Such rents; only after the provision of a certain allowance depends on the assessment of the nature of the land. [7]

References

1- ↑ "economic rent" , Business Dictionary , Retrieved 26-4-2017. Edited.
2- ↑ "economic rent" , dictionary.com , Retrieved 26-4-2017. Edited.
3- ↑ "Economic Rent: Definition & Example" , Study.com , Retrieved 26-4-2017. Edited.
4- ↑ Naji Hussein (2006 - 2007), Analytical Study of the Investment Climate in Algeria , Constantine - Algeria: Mentori University, p.
5- ^ A b T. Abdulla - Janahi (17-3-2014), "civil society in the face of risks to the Bahraini family," the newspaper center in Bahrain , No. 4209, WORD file page. Acting.
6- ^ A b d. Ghassan Ibrahim, The Social Dimensions of the Rental Economy in Syria , p. 4, 5, 6, 7. Behaving.
7- ↑ Mtanius Habib, "Al-Re'iy" , the Arabic Encyclopedia , see it on 27-4-2017. Acting.

By Mohamed Marwan