Will Oil Drown the Arab Spring?
Apart from an uncreative title, there was several important questions which arose as I began reading the current issue of FOREIGN AFFAIRS. Michael Ross, the author, is a professor of political science at UCLA and has just written a book called “The Oil Curse: How Petroleum Wealth Shapes the Development of Nations.” The main thrust of the article is that countries producing large quantities of oil are less likely to adopt democratic forms of government than those which do not.
The author briefly explains that initial oil exploitation was performed almost exclusively by western oil companies. This limited the amount of wealth delivered to the governments of these states. One presumes that the rents were extremely cheap. This addressed my initial concern that the article was going to neglect the influence that western powers had in limiting the development of civil society in these areas as economies came to rely exclusively on the rentier-state model.
Out of resentment, OPEC was formed and oil companies were nationalized. Autocrats were then able to do three things: buy domestic goodwill without the bother of taxation, keep national revenues secret, and buy the loyalty of their armed forces. It is the combination of these three tactics which has deterred the democratization of states with more oil production than Venezuela.
Ross makes recommendations. More transparency, privatize the national oil companies, offer dividends to citizens.
My concern is this: how willing will international firms be to allow democratic society to flourish if it means that the cost of doing business in the country goes up as a result? What happens when the state has to begin providing pensions and healthcare and all of the other bothersome administrative and infrastructural costs that accompany a new democracy? If the standard of living goes up (which you would hope would happen if the people are free to govern themselves) will foreign companies continue to do business with them? Or will they insist that prices stay obscenely low to compete with the remaining oil producing dictators?
I only bring it up because, while Arabs have been fighting and dying for self-governance, most people I talk to just bitch about the price of gas and then blame the President for not making more jobs in his magic oil and job factory.
