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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Andrew C.R. Biddle who wrote (42372)	4/9/2002 2:40:34 PM
From: Axxel	Respond to of 50167

goat trading is us-Axxel

To: Andrew C.R. Biddle who wrote (42372)	4/9/2002 6:44:16 PM
From: IQBAL LATIF	Read Replies (3) \| Respond to of 50167

The stillborn ‘oil’ embargo of Saddam!! Iqbal Latif & Rehan Latif In the latest episode of high drama in Saddam Hussein’s long and notorious reign, the decision of an immediate one-month suspension of Iraq’s oil exports has sent shivers down the spines of international observers who fear similar repercussions from other aggressive oil producing nations and a comparable scenario to the 1970’s oil crisis. This decision was announced in protest to continued Israeli assault within Palestine and does appear to have won the support of the ordinary Arab on the street from Libya to Jordan and indeed even in Kuwait, where memory banks seem to run a little short. It is however the latest political manoeuvre from the Middle Eastern Houdini, who is playing for the Arab gallery in a desperate attempt to win over his neighbours and secure his increasingly shaky hold as the American war machine roar ever so close by. Iraq, a country with the second largest reserves of oil, is one of the poorest in the world in terms of human development index and inequality in distribution of wealth causing extremes of poverty. Saddam has done more damage than any other international leader to destabilise the Middle East, launching two destructive wars causing well over 200 billion dollars of damage to her neighbours: Iran, Saudi Arabia and Kuwait. Saddam now sees an opportunity for someone who can fill in the shoes of Osama. The sudden demise of Osama and his cohorts have left quite of huge opening at the global headquarters of terror Inc. Who else but Saddam can fancy his chances! This recent oil ‘embargo’ is for the consumption of the millions of strong militants on the Arab streets. The growing frustration and a feeling of impotence gnawing the Muslim general public over Israeli intrusions, Saddam decision to play his hand will last very short due to the inherent contradictions. The Arab streets conscious of the loss of colossal political assets, after the failure and sudden disappearance of the twin challengers of ‘Caliphate’ Mullah Omar and Osama and their catastrophic terror campaign, are in search of a new Caliph. Saddam interpretation of events is that by capitalising on recent Islamic-Judeo rivalry he has a chance to capture a new Pan-Arab status, what he cold not achieve with war he could make it through jingoistic hullabaloo. Arab streets can discover within him someone in the Middle East who could challenge the United States without consideration of the consequences. Omar and Osama of Afghanistan did that post September and bore the brunt but no intelligent leader in Arab world is prepared to get his country pulverised. Hence, Saddam has got the best shot, someone who has distinctively squandered opportunities and created heaps of rubble with wars that could have been easily averted. He has nothing to lose; rather he stands to gain from the political support of the disenchanted Arabs in the Middle East. The upping of the ante to the prospective suicide bomber families from 10,000$’s to 25,000$’s and 30 days oil embargo are twin acts towards achievement of the status of Pan-Arab Nasser of the new millennium. His lasting legacy is a wasted nation, squandered opportunities and a notorious reputation. With nothing to lose, he maintains the ability to take the political gamble to achieve the status of the new Caliph at the expense of 30 days of food and medicine supplies for his impoverished nation. Out of total of 5 billion$ Iraq gets for UN oil for food programme, Saddam’s palaces end up consuming a cool billion and half. The ‘Tirkities’ dozen get 35% of the total UN supervised oil for food programme while the other ordinary 18 million Iraqis claim the inadequate balance. Saddam has an uncanny knack of sensing personal glorification opportunities and this latest Israel- Palestine crisis has provided him with an occasion to pursue his self-ambition. Filling the shoes of Osama is too tempting for a man who loves to call the principal surrender of his forces on 26th Feb. 1991 as the ‘ mother of all victories.’ However, in my opinion, his calculations are erroneous and perhaps he may have expedited his removal if anything. The global economy is no longer a hostage to oil and its use as a weapon has greatly diminished since the 1970’s especially against the US, The fact remains that today the US receives just 12% of its oil from the Middle East and hence no longer chained to the oil policies of the Arab nations. Another point to be raised is Saddam’s crucial ridiculing of ‘Arab leadership’ during his embargo speech. According to him, they are nothing more than stooges of the US and this statement may have tripped on Prince Abdullah’s toes. The kisses of Izzat Ibrahim in Beirut just two weeks ago are now a forgotten past, illustrated today by the Saudi announcement that they will make up for the shortage. Action speaks louder than words and this was nothing short but a reprimand and clearly renders his tactics useless. It must be said that the threat of oil sanctions from Iraq was enough to drive the price of a barrel of crude through $28, the highest level in the last 6 months and with it the uncomfortable similarity during the oil crisis of 1970’s. The Arab countries announced an oil embargo to punish the West for supporting Israel in the Yom Kippur War and it was only a matter of time before oil was brought into the equation and used as a political bargaining instrument. Today oil has once more been brought onto the table but the question remains, will the impact be the same to the Western world as the previous two-oil crisis or has the OPEC lost their trump card? There are two major factors that may explain why oil may no longer be as fearsome an economic threat as it used to be. The real price of oil has to be taken into account when looking at the previous oil crisis. For example the first oil shock may have taken the price up to $11.50 but in real terms it was over $40 a barrel. The second Opec shock in 1979 took prices to a relatively similar level as today, but in real term's that is $80 a barrel. So if we take $20 a barrel as the starting point now, to deliver an equivalent blow to the world economy, oil prices theoretically would have to rise to $60 a barrel! Furthermore, the world is proportionately less dependent on oil now as substitution has kicked in and service industries, which utilise less energy, have become more dominant in Western economies. Perhaps most significantly, the world today is far less dependent on Arabian oil than it used to be. OPEC supplies around a third of the world's oil now, down from over 50% in the 1970s. Russia is the latest major oil supplier, with projected output overtaking Saudi Arabia's this year. President Putin has so far refused OPEC's requests to cut production and has promised to supply any shortfall arising from the Middle Eastern crisis. In return, Russia wants the Western world to carry on ignoring the conflict in Chechnya. OPEC will soon meet to discuss whether to persist with the production cuts it began two years ago. Then, the oil price was less than $10, and the organisation had learned that engineering an oil shortage also produces a glut in its wake. A sustained price over $25 would only encourage new supplies from the former Soviet Republics, Nigeria and Alaska and this would further reduce OPEC’s control of the oil supplies. The fall-off in oil demand has also led OPEC to effectively abdicate its self-appointed role as guardian of the oil price, until such time as it can secure cooperation from producers outside the cartel. The major problem is not the fact that there is no oil, indeed the American Petroleum Institute on US commercial stocks show there are more than 820m barrels of oil at refineries, which is above average. Therefore the current rise in price for crude oil is not based on a physical shortage, merely increasing on a bet by speculators that there may be a shortage later in the year. The bet is political, not economic. The Middle Eastern countries would do well to realise that their oil has lost its previous magnetism to the West and with so many supply fields cropping up around the globe, its use as it as a political weapon can only do so much. Saddam will have achieved little more from his latest gimmickry other than a handful of kudos from other hardliner nations and perhaps a chance to engage in some more self worship, but with American planes hovering uncomfortably closer, we may be witnessing one of his final acts of defiance before the curtain falls.