Blog Post on Rentierism
One could argue that since the first discovery of oil in the Middle East, in Iran (then Persia) in 1908, the political and economic history of much of MENA has been dominated by the huge oil wealth of various nations in the region, roughly 80% of the world’s oil reserves in total. The nations of Saudi Arabia, Iraq, Iran, Kuwait, and the United Arab Emirates are the top oil producers in the region. Before the end of the Second World War, US President Franklin Rosevelt met with Saudi King Ibn Saud in the Suez Canal, where FDR promised the Saudi kingdom US protection in exchange for easy access to the vast oil reserves in Saudi Arabia. In 1953, the United States and Great Britain conspired to overthrow the Iranian Prime Minister Mohammad Mosaddegh and replace him with the Shah, who was a lot more likely to work with the West. Officially, this was done to prevent Communism from spreading to Iran. The real reason was that Mosaddegh had nationalized Iranian oil, causing alarm in the UK, which was a previous shareholder in Iranian oil. During the Iran-Iraq War, most of the world did not get directly involved to stop the conflict, until the war started to affect the movement of oil via shipping through the Persian Gulf, which in turn got both the US and the Soviets involved, leading to a ceasefire shortly after. In 1990 Iraq invaded Kuwait because it sought to expand Iraqi power in the region and to seize control of Kuwait’s oil reserves. And in 2003, the United States invaded Iraq because they suspected the Iraqi leader Saddam Hussein possessed weapons of mass destruction, later proven to be false. Many also believe that another reason for the invasion was to simply get rid of Saddam so that foreign oil companies could get access to Iraq’s large oil reserves. Although this cannot be completely verified, many would believe it, with some even joking that the initial code name for the invasion was supposed to be Operation Iraqi Liberation, before someone realized that the acronym would spell out oil. My point in bringing these historical events up is to highlight the pivotal role that oil has played in MENA since the 20th century going forward to the present. It has created a huge amount of conflict, with many more examples present but will not be mentioned here due to time. Oil has dominated the headlines in the region. According to many studies, when nations see incomes rise, their governments generally become more democratic. However, when that income rise can be traced back to oil wealth, according to many political scientists, the chances of democratization get smaller and sometimes disappear completely. But why is that?
Huge oil reserves have allowed countries to invest heavily in new infrastructure, more advanced public works, and improved technology with plenty of other improvements thanks to the large revenue created by oil production. This revenue has also enabled many states to improve their security and military apparatuses as well. Countries such as Saudi Arabia and Iran have spent vast sums on extending their control over their citizens with security personnel getting better surveillance technology and the military becoming more able to be deployed to deal with mass uprisings, if that were to occur. I believe that having these vast oil reserves has allowed authoritarian regimes in MENA to fund large scale modernization programs while keeping a tight lease on political freedoms within their respective borders. These nations control huge oil reserves and have the backing of powerful nations that will support them in both military and economic affairs and will mostly look the other way when it comes to crimes perpetuated by the state in domestic affairs. This is because they simply don’t want to run the risk of another oil embargo, such as the huge embargo that was launched by members of OPEC against the United States and other nations that had supported Israel in the 1973 Yom Kippur War. A great example of this is when senior journalist Jamal Khashoggi was brutally murdered in the Saudi consulate in Turkey on the orders of Prince Mohammad bin Salman, who is widely seen as the defacto head of Saudi Arabia. There was a slight period of tension between the West and Saudi Arabia over this, but besides that no real consequences occurred for the kingdom. It can be summarized in a sentence. More money equals more power. And when you control a significant portion of a natural resource that without most global economies would struggle to function normally, then your power faces few limits.