10 January, 2008: In the May/June 2006 issue of Foreign Policy, New York Times columnist Tom Friedman coined the term the “First Law of Petropolitics” and posited that “the price of oil and the pace of freedom always move in opposite directions in oil-rich petrolist states.”
This law has become perceived wisdom and there is certainly evidence to support the stipulation. If prices hold above $90 a barrel, oil producers’ coffers will swell by hundreds of billions of dollars. The up-tick in oil and natural gas prices have already been a boon to some of the West’s least favorite and least democratic leaders. Vladimir Putin—who was named Time’s Person of the Year for 2007—can attribute much of his own power and his country’s economic recovery to ballooning energy prices. The same can be said for Venezuela’s Hugo Chavez, who was recently defeated in his quest for expanded presidential powers. Even the generals in Myanmar can thank their natural gas supplies for protecting them against a stronger international response to their crackdown last fall; Following the National Intelligence Estimate (NIE) on Iran, China signed a $2 billion deal with Iran. Bulging treasuries have allowed many states to pursue policies that fly in the face of Western liberal traditions and run counter the U.S. and Europe’s foreign policy ambitions.
And yet, as oil reaches $100 a barrel, there are signs that some petrolist countries are shifting away from recalcitrant anti-Americanism and anti-democratic practices. In Russia, Putin might have handpicked his successor, but he chose Dmitry Medvedev, someone who is seen as more pro-Western and more liberal. In Tehran, despite his best efforts to install his supporters in key positions, Mahmoud Ahmedinejad is losing the support of Iran’s supreme leader, Ayatollah Ali Khamenei, largely because of the economic weakness of the country. (I acknowledge that I’m writing this only a day after Iranian Revolutionary Guard boats confronted and threatened the U.S. navy in the Straits of Hormuz.) Ayatollah Khamenei last week even suggested ties might be possible with the U.S. in the future. Even in Saudi Arabia, in the words of the New York Times, “modern ideas” are taking root with the establishment of a new graduate research institute, the King Abdullah University of Science and Technology (Kaust), where students of different genders and ethnicities will study side by side, something previously banned in the kingdom. In fact, the $12.5 billion facility would never have happened were it not for petrodollars.
So what’s the deal? Surely the reverse should be happening with further crackdowns on liberty and democracy in oil-endowed states. Surprisingly, there is evidence that Western nations are cutting the “pace of freedom” and eroding civil liberties; in a new Privacy International survey, the U.S. and Great Britain were ranked among the “endemic surveillance societies.”
It is not that Friedman’s argument is wrong per se. I would question the use of the term “law” as far too strong; there are no real “laws” when it comes to predicting foreign affairs. Rather, at the moment there are a number of other forces that are coming into play from the struggle against Islamist extremism to economic weakness.
Firstly, there are elections on the horizon in both Iran and Russia. Thus, the sanctions on Iran—which have wounded the country’s banking sector—and the NIE have strengthened moderates, while Putin is looking to continue the system that he created. Even Chavez went to the polls in search of expanded powers.
Secondly, the global economy has been hit by a strong one-two combo: high commodity prices and the sub prime crisis in financial markets. When Friedman was writing in 2006, the global economy was booming, both in emerging and established markets. It could be that oil and natural gas exporters are wary of continuingly high prices that could undermine the international economy and fuel innovations in alternative energy. Consequently, Friedman’s rule should be adjusted: the pace of freedom does not “always” have an inverse correlation with oil prices. Indeed, there may be a ceiling where petrolist states begin to feel uncomfortable with their position. And thus we can edit the original “First Law of Petropolitics” and add two new rules, or “laws” to use Friedman’s parlance.
- “The price of oil and the pace of freedom
always move in opposite directions in oil-rich petrolist states.”
- The inverse relationship breaks down as the international economy weakens.
- The inverse relationship between freedom and the price of oil is true only as long as leaders of oil-rich petrolist states can maintain an established and certain domestic position of power.
Do you agree? What other factors are at play?
Send us your thoughts at editors@diplomaticourier.org.
--------
COMMENTS
1 Comments
Jesse, New Jersey, U.S.
11 January, 2008 – 09:46 EST
These three rules are easily extended to several more basic conclusions.
It has been successfully established that high oil prices enable petrolist dictators to placate populist desires, especially in places without many other opportunities for economic growth. Given the difficult choice to embrace true individual freedom and self sufficiency or leech the meager benefits passed on from state controlled exports it is clear that the latter is preferable. Hence, rule 1.
Popular demand for greater individual freedoms increases when dictatorial complacency is no longer sustainable (i.e. in the face of an economic down turn.) Hence, rule 2.
Rule 3 is interesting. By 1 and 2 we conclude peoples’ desire for freedom may be muted by satisfying their most basic needs and visa versa. However, rule 3 suggests that there exists a tipping point where a measure of economic advantage among people will encourage further desire for individual growth and freedom. There is evidence to confirm this conclusion.
For instance, this is the predicament China, a heavy export nation, finds itself in as it attempts to maintain central control in the face of increasing popular affluence. Iran and Venezuela may also be approaching this tipping point. The difference between them is that Ahmadinejad can retain power and control through the fear of a perceived threat on Iran’s doorstep in Iraq while Chavez may in fact be starting to lose his grip due to the lack of a clear rallying cry.
|
