April 11, 2011
Out of all the countries rocked by revolts and revolutions, one group stands apart. Its members are rich in oil and gas reserves and derive most of their national income not from the taxes levied on their citizens, but from the proceeds obtained from oil and gas exports. This fiscal peculiarity is not restricted to Arab countries. Other states, such as Russia or Venezuela, are in a similar, if not identical financial position.
When the budget of a state depends on taxpayers’ money, the political leadership can, at least in theory, be held accountable for the way it redistributes them. Not so in the oil-rich countries. Their leaders are corrupt and unaccountable to their citizens, whose protests tend to be more brutally repressed than anywhere else, if Libya, Iraq and Algeria are any guide.
Regardless of how the political leadership came to power in these countries, its members almost invariably end up developing mafia-like structures that monopolise the redistribution of oil and gas revenues. Even if initially some of these states appear to perform their redistributive function well, by building hospitals, schools and embarking on major infrastructure projects, they ultimately become inequitable and repressive. They are either led by powerful military juntas (Iran, Algeria and to some extent even Venezuela), or by dynastic, absolutist rulers (Saudi Arabia, Kuwait or Libya).
The reason behind such negative political developments lies not as much in these states’ political history, religion or culture. It is geopolitical in nature. By this I mean that the political systems of oil and gas-rich countries, their lack of truly functional democratic institutions and their repressive regimes are, to a significant degree, determined by a geographical factor – in this case, the abundance of oil and gas reserves. At first, oil-producing nations tend to regard their resource wealth as a blessing. In time, they come to realise that the blessing is in fact a curse in disguise, as it attracts internal and external predators.
For the political scientist, correctly identifying the nature of the problem facing these societies is essential for recommending appropriate policies. It would be futile, for instance, to approach the Libyan crisis with the same criteria used for analysing developments in Tunisia or Egypt. The oil money is the main reason behind Gaddafi’s desperate efforts to retain control. Oil is also a powerful weapon in his diplomatic dealings with resource-poor Western countries. As the population of an oil-rich country has a strong interest in protecting its national oil and gas assets from falling under foreign control, it rarely challenges the will of its leader.
In Libya’s case, therefore, the UN-sanctioned military intervention should not, under any circumstances, lead to an Iraq-style occupation of the country, even if at some point ground troops will eventually be used to oust Gaddafi. Occupation and the possible partition of the country are currently being recommended to a Republican-dominated US Congress by the American oil lobby. Libyans, however, want to decide their future without outside interference – as their Interim National Council has already made it clear – and to keep their oil production in Libyan hands.
The “oil and gas curse” rule can prove a useful tool in understanding and forecasting the behaviour of the political leadership in resource-rich states. The experience accumulated with the military-backed regimes in Algeria and Iran, for example, might provide useful clues about future developments in Venezuela. Initially, the Algerian and Iranian revolutionary regimes, too, justified their legitimacy by the need to reduce poverty, eradicate illiteracy and foster economic development. Twenty years on, the beneficiaries of these regimes are almost exclusively members of the military or the revolutionary guards. These groups make sure that no civilian opposition to their highly lucrative monopoly emerges and that protests are met with extreme violence.Florian Pantazi