Fuelling the status quo in Mideast
Brian Whitaker
LONDON: "The problem," Dick Cheney once told an oil industry conference, "is that the good Lord didn't see fit to put oil and gas reserves where there are democratic governments."
Having moved on from running the Halliburton oil company to become vice-president of the US, Mr Cheney, along with others in the Bush administration, is now seeking to rectify the situation - although blaming the good Lord is not the most promising way to start.
It is true that oil and democracy do not mix well: countries that rely heavily on their resources of oil, gas and other minerals are usually undemocratic. They also develop more slowly than others, and are more likely to suffer civil wars.
This applies almost everywhere in the world, but it is a particular problem in the Middle East, where 10 of the 15 most oil-dependent countries happen to be located. Any attempt to bring democracy to the region therefore has to take into the account the oil factor and its anti-democratic effects.
Possession of vast mineral wealth produces governments that have little or no need to raise money by taxing their citizens. As much as we may dislike taxation, it is a central part of democracy - people who are forced to pay taxes will, sooner or later, demand a say in how that money is spent.
The cry of "no taxation without representation" spurred the American revolution in the 18th century, and a quarrel between King Charles I and his parliament over tax helped to trigger the English revolution in the 17th century.
Charles managed to rule for 11 years without parliament, generally making himself unpopular, but eventually - mainly as a result of military adventures - running into a financial crisis and being forced to seek parliament's approval for taxes.
Instead, parliament set about restricting the king's powers. The ensuing civil war ended in 1649 with Charles having his head chopped off. It is interesting to consider how different English history might have been had Charles, like many Arab rulers today, had been able to draw on other financial resources, such as oil.
He would, most probably, have stayed in power, regardless of his unpopularity, and genuine parliamentary government in Britain would have been delayed for several centuries.
In oil-rich countries today, low or non-existent taxes are one of several factors behind the lack of pressure for accountable government. Regimes that have access to vast mineral wealth are able to shower their largesse on the populace. In some cases, the benefits are truly remarkable. In Qatar, for example, they extend to providing university education abroad, and even paying for citizens' local phone calls.
At best, this produces a forelock-tugging culture in which benevolent autocracies maintain power through displays of their "generosity" and corresponding expressions of gratitude from the public. Essentially, however, it is nothing more than a conjuring trick, because the regimes give citizens the "privilege" of sharing in national resources that already belong to them by right.
Less benevolently, oil-rich regimes can use the money to buy off or co-opt potential opponents, or to discipline recalcitrant regions by depriving them of funds.
The distinction between national resources and the private property of kings and presidents is also often a blurred one. It is widely rumoured - although almost impossible to prove - that five per cent or more of the oil revenues in the Middle East usually go directly into the ruler's pocket.
While some of this money may go on building palaces and maintaining a suitably regal lifestyle, it is basically a slush fund for keeping trouble at bay. Less benevolently still, there is also, according to some researchers, a "repression effect". In theory, oil-rich regimes have more money to spend on internal security, thus minimizing opposition and weakening democratic aspirations.
Whether they actually spend more than other non-democratic regimes is debatable, but there is certainly evidence that ethnic, religious and tribal conflicts have been exacerbated by oil.
Mineral wealth is often concentrated in certain parts of a country, which can give rise to internal conflicts if the areas with the resources are inhabited by ethnic minorities or other marginalized groups.
This has been a major cause of trouble in parts of Africa - Congo and Nigeria for example - but in the Middle East it was also a factor in Yemen's north-south civil war of 1994, and it underlies the Kurdish-Sunni-Shia tensions in Iraq.
Modernization Effect: Finally, there is what some researchers describe as the "modernization effect", arguing that oil-dependent countries have less incentive to develop other sectors of their economy, which in turn impedes social and political development. This is an issue that most oil-rich Arab governments are aware of, although their success in addressing it has been patchy.
Inevitably, the importance of these anti-democratic factors varies from country to country according to local circumstances, but - when they are taken as a whole - there is ample evidence that dependence on oil does impede democracy. The other side of the coin, of course, is the way in which western powers - especially the US - treat the regimes of oil- rich countries.
Dependable oil supplies are of great strategic importance to all industrialized countries and, historically, the west has tended to support oil-producing regimes that are stable internally and compliant internationally, without worrying too much about whether they are autocratic or repressive. To this we might add that they are now also expected to show co-operation in the "war on terror".
At the same time, oil producers, with their vast supplies of ready cash, provide a lucrative market to which western arms companies can peddle their wares. In 2002, the 22 Arab states spent almost $50 billion on weaponry, and about 70 per cent of that was by oil-rich Gulf states - much of it unnecessary, except as a means of keeping the military happy.
In some cases, the importance of these countries as arms purchasers can be almost as great as their oil-producing role, with predictable political consequences. The British government, which views Saudi Arabia as one of its major customers for high- technology weapons, is always careful to avoid making disparaging remarks about the Saudi regime.
In theory, the new US policy under President Bush is to promote democracy everywhere in the Middle East, but, as in the past, the attitude to undemocratic regimes that have plenty of oil and are well-disposed towards the US is rather gentler than it is towards others.
In his speech announcing the democratization policy last November, Mr Bush praised Saudi Arabia and other Gulf states for taking steps towards reform, while condemning Syria (which is also taking steps towards reform) as a dictatorship with "a legacy of torture, oppression, misery, and ruin".
This suggests that democratization in the Middle East, rather than being a goal for its own sake, may turn into a form of punishment meted out to regimes that the US perceives as being uncompliant or having a negative strategic value.
The problem of oil and democracy does not invite swift or ready-made solutions, although its effects can be lessened over time. Oil-consuming countries could make a start by reducing their dependence on this strategic commodity - and this applies particularly to the US. Americans, per head, consume more than twice as much oil as the British, Germans, French and Italians do.
The need in oil-rich countries, meanwhile, is to take the oil wealth out of the hands of the regimes. One route to that is privatization, although its effects can be socially damaging.
A better way would be to put the oil directly into the hands of the public, either by giving every adult citizen one share in a national oil company or by placing the oil in the hands of a publicly-controlled trust (as currently happens in Alaska with 25 per cent of the revenue).
The effect of this would be to pay handsome dividends to the citizens while leaving their governments virtually penniless, just like King Charles I, and needing to raise money from taxes.
The public, with the benefit of their oil dividends, would be able to pay its taxes but, in return, would want a say in how the money was spent - leading eventually to democratic government. The snag, of course, is that no oil-rich regime is going to give up its wealth without a struggle. -Dawn/The Guardian News Service.
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