Oil and democracy
Petrodollars have the potential to expedite democracy in Arab world
Let's take a look at the Arab Muslim arena: The three fragile democracies – in Lebanon, Palestine and Iraq – are somehow surviving. The elected Lebanese government has succeeded in warding off a coup by Hizbullah; Mahmoud Abbas and his cronies managed to confine the Hamas fire to the Gaza Strip, and under the leadership of a reliable prime minister they are making an effort at renewal; in Iraq there are growing indications of normalization - normalization under the auspices of the American army, but also under the auspices of the fatigue of murderous Iraqi terror perpetrated by marginal organizations.
This is not yet the democratic Middle East that George Bush doesn't tire of addressing in his speeches, yet in the summer of 2007 there is room for cautious optimism.
The hundreds of billions of petrodollars are also, as of now, strengthening democratic trends. The wealth of oil has crisscrossing influences. Dark and tyrannical regimes can use it to bribe the people, quell opponents, and establish their rule for a few more years. More open and enlightened regimes can use it to open up to globalization, exploit its advantages, invite foreign investors, and along with it foreign cultures – and in so doing raise the population's standard of living.
Ostensibly, there is no way of knowing in advance which influence would take precedence. Economic research that examined the relationship between oil wealth and democratization found a negative statistical correlation between additional oil fields and the implementation of democratic institutions.
I would like to propose a reverse argument here (also contrary to my own theories in the past): Petrodollars could expedite democratization of the Muslim world; they are already making a change. The billions of petrodollars have turned the countries of the Persian Gulf – with the exception of Iran – into a paradise for their people.
The young generation is preoccupied with planning investments and in shopping sprees, not in organizing terror. The internal risk to their stability has waned and the not-quite democratic regimes can allow themselves a significant democratic boost.
Iran fears Qatari model
In parallel, the blatant repressive regimes, headed by Iran, are failing miserably in the use of their oil money. Not only do they lack financial acumen and are (generally) boycotted by international communities, they are also actively conducting a radical and populist economic policy that is impoverishing the public coffers without improving the lives of the population.
A year ago a group of Iranian economists dispatched an open letter to their president warning him against delusional economic measures he sought to take. He recently received another letter, harsher than the previous one; the disciplined Iranian media concealed the letter and the fate of several of the undersigned.
However, developments on the streets of Iranian cities cannot be hidden: Unemployment has reached 25 percent of the workforce, inflation cannot be measured because of a distorted pricing and subsidy system, the government deficit is at a peak, manufacturing efficiency is zero, and oil reserves are dwindling quickly.
Despite an annual income of some $40 billion derived from oil, economic and social unrest in Iran is on the rise. There is no better testimony than this to demonstrate the anti-democratic persecution sweeping the country. Partial freedom of speech has been completely wiped out, members of the Islamic Revolutionary Guard are running wild in population centers, and the prisons are overflowing with opposition members and members of protest movements.
The reign of the ayatollahs has lost its remaining popular support and exists solely through violence and cruelty.
When a fearful and repressed Iranian citizen looks at what's happening in neighboring Qatar or Abu Dhabi, he sees growth and prosperity that are the outcome of market economy, acceptance of globalization, openness to the West and an expedited democratization process.
The incumbent Iranian government is more afraid of the Qatari model than it is of an Israeli attack on its nuclear facilities.
The wealth derived from oil in the Arab and Muslim world is a clear cut proof of the preference of a democratic rule and a liberal economy. In an age of multiple Arabic-language TV channels, which are open and critical and provided through satellite, other options cannot be concealed from the Iranian people.
When repressive and revitalized regimes exist side by side, the model of revitalization will ultimately overcome the repressive model. Particularly when both have money and only one is putting it to good use. Therefore, in the summer of 2007, we can be a little more optimistic.
