The ‘oil curse’ explains Iraq power struggle better than Sunni-Shiite divide
I’ve wasted too much time over the past couple of decades trying to figure out Iraq by reading about the theological differences between Shiite and Sunni Muslims. I should have paid even more attention to the growing body of fascinating research into the peculiar – and sometimes violent – nature of nations that depend mainly on exporting oil.
In 1997, a remarkable professor at Stanford named Terry Lynn Karl published The Paradox of Plenty: Oil Booms and Petro-States; since then, she and others have elaborated on her original findings. If the arrogant Bush administration and their cheerleaders in the mainstream press had looked into her work back in 2003, the history of Iraq might have been different.
Professor Karl noticed that even though petro-states earned billions of dollars for their oil exports, almost none of them were able to use their earnings for sustained, balanced growth. Instead, they ended up in chronic economic crisis, with collapsing agriculture, nonexistent manufacturing sectors, very high unemployment, enormous debts to Western banks, growing political instability, and in some cases, ferocious violence. Number-crunching economists like Paul Collier came up with an astonishing finding; most of the oil producers would have been better off if oil had never been discovered on their territory at all.
What is remarkable is that this “oil (or resource) curse” characterizes countries that otherwise appear quite different: Venezuela, a Catholic nation in South America, has many features in common with Nigeria, in Africa, or Islamic Iran.
Karl and the others have worked to explain the paradox of plenty, and a short summary cannot do justice to their theory. It does turn partly on how governments finance themselves. Over the centuries, European governments, and later the United States, consolidated power by taxing their people, (at first largely to pay for wars). It took time, but the people who paid the taxes insisted on their governments being accountable. Governments gradually grew responsive, even eventually democratic.
In some of the third world, the same halting process is underway. But in the oil producers, the relationship between governments and people is quite different. Petro-states do not have to tax their citizens. Instead, nearly all their revenue comes from oil companies – 95 percent in Iraq’s case. The petro-state is what professor Karl calls a “honey pot” – an external source of money to be raided, not the site of genuine, long-term political bargaining.
So small ruthless groups (like Saddam Hussein’s fragment of the Baath party) seize control of the petro-state, much like pirates boarding a fleet of gold-bearing galleons. Saddam’s rise was parallel to the Shah of Iran consolidating control across the Persian Gulf, or the succession of generals who ruled Nigeria. Saddam’s (mis)use of Arab nationalism, and later of Islamic symbols, was not altogether irrelevant, but the source of his income was more important than ideas in shaping Iraq’s political system.
At first, the petro-dictators thrive, particularly when oil prices are high and they can buy off some of their people with populist spending, including grandiose infrastructure, and repress the rest with a lavish military/police apparatus, with many thousands of informers. On the surface, Saddam Hussein appeared to preside over a terrible but effective totalitarian state. In the international arena, his control of big strategic oil reserves, along with billions of well chosen arms purchases from big Western manufacturers, earned him immunity from criticism, including that warm visit on December 22, 1983 from Donald Rumsfeld, Ronald Reagan’s special representative.
Over time, though, this iron control weakens. In the Introduction to Oil Wars, professor Karl and two colleagues, Mary Kaldor and Yahia Said, point out that by the 2000s the Saddam Hussein regime was starting to disintegrate from within, following the same pattern as other petro-states – in part because the world oil price had fallen. They explain, “. . . there were important indicators of loss of government control, even before Saddam Hussein’s removal, including underground movements and parties, efforts to create new public space, and especially the growing resistance of both Sunni and Shi’ite mosques, which began to develop a strategy of ‘quiet strangulation’ of the regime reminiscent of the Catholic Church in Poland and Chile.”
Of course, the American invasion interrupted all this. Karl and her colleagues do not speculate, but it is possible to imagine an Iraq transforming itself from within, not entirely unlike the collapse of the Soviet Union and its satellites in eastern Europe. Any change in Iraq would certainly have included terrible violence, but it would not have been complicated by the American invaders, who found themselves in an impossible situation as both the targets of certain Iraqi factions and as prospective allies – in some cases by those very same factions.
It is possible that Iraq would have been less violent if Iraqis had been left to make their own history. At least one thing is certain; thousands of young American service men and women would still be alive, and thousands more would be uninjured.
(Karl and her colleagues also remind us of an enormous truth, conveniently forgotten today by those who cheered on the invasion; the hawks promised that Iraq’s oil would pay for the war!)
Today, Iraq is still under the oil curse – which helps us to understand the endless, tedious articles about political factionalism and the failure to form a new government there. Karl, Kaldor, and Said argue: “Public debate is less about the long-term future of Iraq and more a competition for access to oil rents. . . This rent seeking cannot only be explained by the removal of an oppressive ruler. It is in part a result of the disappearance of any unifying idea – a commitment to a shared commons – combined with the belief that Iraqis can get rich both from oil and from the influx of billions of dollars of donor monies.”
The oil curse theory is not precise, and some critics, although recognizing its value, say it tries to explain too much. But the theory is clearly more helpful than all those Orientalist analyses that try to explain Iraq today as the consequence of the Sunni-Sh’ite schism more than a millennium ago. We don’t try and explain the recent Conservative victory in Britain by bringing up Henry VIII’s split with Rome, do we?
1 August 21, 2010 at 5:07 pm
it’s the age-old story: when the few hoard the wealth misery for the many follows
the solution is so simple – spread the wealth and enshrine it in a nation’s founding articles
2 August 22, 2010 at 9:31 am
Oil is not necessarily a curse, as I think UK and Canadian, even United States, experience shows. Riches attract predators and factions, of course, but I wouldn’t blame the riches themselves that much. When factions see themselves as standing for all that is best against all that is worst in humanity the resulting conflict is usually very terrible and intractable. The Germans tore themselves apart in the seventeenth century without any great prize at stake, just for ideology. The United States did endure a civil war but after that the opening up of the staggering riches (oil very much included) of ‘the West’ created only minor violence among the white population – the ‘County Wars’ etc. – and indeed produced an enormous sense of national pride and unity. Iraq is more like Germany c.1640.
(Karl and her colleagues also remind us of an enormous truth, conveniently forgotten today by those who cheered on the invasion; the hawks promised that Iraq’s oil would pay for the war!)
Which is strikingly similar to the recent “discovery” of $2 trillion in natural resources in Afghanistan, which was promoted to a weary nation as justification for our continued presence in that country. The spoils of war — apparently, if we invade a country, we’re entitled to strip its natural resources to repay ourselves for the price of invading said country.
{ 17 comments… read them below or add one }