The more oil that countries in the Middle East have, the more effectively their governments have crushed democratic movements. In advance of “Will Oil Drown the Arab Spring?” , a Zócalo event about the connection between oil and repression, we asked leading thinkers on the region to consider what might change in the absence of oil revenues. What would oil-rich Arab states look like if no one needed their oil?
States with mid-level production are vulnerable
The relationship between political turmoil in the Arab world and hydrocarbon wealth has traced an inverted U-curve since December 2010.
The truly oil rich Arab states of the Gulf, which include all six members of the Gulf Co-operation Council other than Bahrain, have had comparatively few manifestations of political protest. At the other end of the curve, Arab states with no hydrocarbon resources, including Morocco, Jordan, and Lebanon, have similarly avoided widespread political unrest. Tunisia, also lacking such resources, of course kicked off the Arab Spring. But the comparative level of violence there was much less than in other “Arab Spring” countries, such as neighboring Egypt and Libya, as well as Syria and Yemen.
In the middle of the curve–where the level of unrest and violence has been greatest–are those countries with some hydrocarbon resources, but with revenues substantially less on a GDP per capita basis than in the wealthy GCC oil exporting states. This middle category of Arab states includes Algeria, Libya, Egypt, Yemen, Syria, Bahrain, and Iraq. Of them, only Algeria has not experienced an upsurge of internal unrest, but it had seen an insurgency in the 1990s. The level of violence in Iraq has been steadily climbing in the face of repression by the regime.
In sum then, a lot of oil and gas, or none of it, is associated with political stability. Countries with moderate amounts of those hydrocarbons have experienced, in all cases other than Algeria, profound instability since early 2011.
Does this “hydrocarbon political curve” support the proposition of an “oil curse”? In a word, yes, although with a slight wrinkle. Countries not cursed with oil have been relatively peaceful. Those states with real hydrocarbon wealth have succeeded in buying off their populations, hence ensuring political stability. It is only the countries in the middle of these two realities that are cursed. In sum, the “oil curse” afflicts most profoundly those states that surrender to the siren call of hydrocarbon rents, but have insufficient revenues to support a real rentier state. Caught in the middle, they rely more heavily on repression.
Robert Springborg is a professor in the Department of National Security Affairs of the Naval Postgraduate School and Program Manager for the Middle East for the Center for Civil-Military Relations. The views expressed are his and do not necessarily reflect those of the Department of Defense or U.S. government.
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This what-if doesn’t tell you much
Although I think “what-if” history–even when it’s dressed up in the academic robes of “counterfactual”–is worthless, let’s imagine. What if nobody wanted the oil of the Arab countries? Perhaps this is because we’ve invented solar power or hydrogen fuel cells. Or perhaps it’s because although lots of people do want oil, the world’s trading system has broken down, and people aren’t buying and selling based on comparative (or any other kind of) advantage. Like in a major depression. That doesn’t sound like much fun.
I guess you could mean there would be just as much oil as now but it would be scattered in other places so that Saudi Arabia, Kuwait, Iraq, Libya, and possibly Egypt and Syria as well wouldn’t have any oil at all. Saudi Arabia, Kuwait, and Libya would probably be as massively impoverished as they were in 1938. Pearling and dates aren’t enough to support modern societies with complete literacy for men and women, which is true of these three countries. Iraq, Egypt, and Syria wouldn’t necessarily look all that different because oil hasn’t been such a primary factor in their development. Well, except for the war the U.S. inflicted on Iraq in order to deprive it of the weapons of mass destruction its oil economy made possible. Oops.
Or perhaps the oil is there but nobody wants it because nobody has quite figured out how to use it. In that case, Europe, Japan, and probably India and China would be populated mainly by coal miners struggling to produce enough hydrocarbons to keep industrial society going. Only the U.S. would have enough oil to keep its industry and shipping working efficiently as well as using those new-fangled aeroplanes. Perhaps in the future some bright person will realize all that black stuff in the ground can turn the European and East Asian economies into something that provides an American standard of living. And, a bright political economist who’s used to thinking in counterfactuals will tell them, not only will it benefit Europe and Japan, but it will transform those backward and impoverished economies of the Persian Gulf into modern, well-educated, constitutional monarchies. Or at least that’s the news from the best American thinkers in the world of “what-if” history around 1946.
Ellis Goldberg is a professor of political science at the University of Washington.
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They would lose wealth and people
If we assume today’s Arab oil-exporting states and take away the oil income, then the effects would constitute not only a fundamental disruption of the global financial system but also a political watershed event for the Middle East.
It is important to note that access to oil, by itself, did not determine the politics or societies of the Gulf Arab states or the Middle East generally. Rather, the pre-oil societies and the timing of the arrival of significant oil revenues combined to shape what came after. Therefore, the effects of no oil revenue would have different consequences.
Bereft of oil money, the smaller Gulf Arab states would experience massive economic contraction, capital flight, and the expulsion of millions of foreign workers. Ultimately, strategies for emigration would become national policy (much like the Maldives). Given larger and more diverse populations, Saudi Arabia, Iraq, and Algeria would be in much more trouble in the short run since oil revenues have been deployed in the last decades to mollify growing unrest, and clearly emigration is not an option. Furthermore, non-oil Arab states like Jordan and Morocco would be directly affected by declining aid from the Gulf. But we should not limit the effects of oil revenue loss to the region since the oil “market” is a global network. Consider that the massive amount of Western weaponry and technology positioned in the Gulf countries was originally intended to protect the ruling families who control the oil. What might those regimes do with these assets now that they are in need of new things to export? Or consider the fact that oil exporters collectively are the fourth largest holders of U.S. treasury securities. Withdrawal can be a nasty process.
Pete Moore is associate professor of political science at Case Western Reserve University and serves on the board of directors of the Middle East Report.
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Oil-rich states would change, mostly for the better
If no one needed their oil, the oil-rich states (or “petrostates”) would have very different international relations and domestic politics, mostly for the better.
Petrostates would be able to buy fewer weapons and would spend less on their militaries. Their ability to fund foreign insurgencies would decline. They would be less likely to be the targets of conquest, as Kuwait was in 1990. Less oil income would mean they could offer a lot less foreign aid, too. While the valuable humanitarian and development work sometimes funded by oil would be lost, petrostates also would be less capable of spreading their version of Islam around the world. Saudi Arabia in particular would have a harder time spreading its ultra-conservative Wahhabism to other countries. For better or worse, the news channel Al-Jazeera, funded by oil-rich Qatar, might have to shut up shop–or at least find alternative funding mechanisms.
Domestically, petrostates that suddenly couldn’t find markets for their oil would face dramatic political challenges. Oil funds have been used to prop up autocratic regimes for decades, and a new wave of democratization might emerge if that oil income disappeared. Patriarchal societies living off of oil rents might no longer wish to shut their women out of the workplace. Unable to afford chauffeurs, they might let women drive cars. Yet while these beneficial changes might occur in the long run, the loss of oil would probably be highly destabilizing in the short-term, and potentially quite violent. A world free of its oil-dependency is a worthy goal, but it is not an unalloyed good.
Jeff Colgan is assistant professor of International Relations at the School of International Service at American University in Washington, D.C.
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Poorer, but not necessarily freer
Saudi Arabia is the world’s largest exporter of oil. The petroleum sector accounts for around 80 percent of the country’s revenue, 45 percent of its GDP and 90 percent of its export earnings. Agricultural production is less than 3 percent of the economy in this vast desert. Dependence on foreign labor is high. Wealth is concentrated in the hands of a few thousand men, with around 20 percent of the national population estimated to be living below the poverty line, although official statistics are not available.
Saudi has never held national elections, maintains a tight control on media, and lacks a modern criminal justice system. It consistently ranks at the bottom of democracy indexes. Human Rights Watch cited the government for its “unflinching repression” of recent protests by the country’s Shia’a minority.
If Saudi did not have oil, its population would be poorer but not necessarily freer. A complex pursuit of geopolitical objectives that reach beyond hydrocarbon access has driven US foreign policy in the region for decades. These objectives include Israeli security, counterterrorism, Iranian containment, and commercial interests.
Jordan is not oil rich, but it is the fourth largest U.S. aid recipient after Columbia, Egypt and Israel, with the majority of assistance directed at military financing. Jordan may rank higher on the democracy scale but it has weathered growing demands for accountability without substantial reforms or external criticism.
The U.S. purchases 1 percent of Saudi’s daily oil production, but counts the country as a major arms client, with annual sales in the billions. Saudi also sits at the nexus of the standoff with Iran, Syria’s long revolution, and shifting regional alliances. Saving the Arab Spring will require more than a re-think of oil wealth.
Leila Hilal directs the Middle East Task Force at the New America Foundation.
*Photo courtesy of akshaydavis.