No, I don’t want to bankrupt Saudi Arabia or trigger an Islamist revolt there. Its leadership is more moderate and pro-Western than its people. But the way the Saudi ruling family has bought off its religious establishment, in order to stay in power, is not healthy. Cutting the price of oil in half would help change that. In the 1990s, dwindling oil income sparked a Saudi debate about less Koran and more science in Saudi schools, even experimentation with local elections. But the recent oil windfall has stilled all talk of reform.There is some truth here, but Friedman pointedly tries to avoid making this an Arab issue and tries to generalize it to any authoritarian regime heavily dependent on oil.
That is because of what I call the First Law of Petropolitics: The price of oil and the pace of freedom always move in opposite directions in states that are highly dependent on oil exports for their income and have weak institutions or outright authoritarian governments. And this is another reason that green has become geostrategic. Soaring oil prices are poisoning the international system by strengthening antidemocratic regimes around the globe.
Look what’s happened: We thought the fall of the Berlin Wall was going to unleash an unstoppable tide of free markets and free people, and for about a decade it did just that. But those years coincided with oil in the $10-to-$30-a-barrel range. As the price of oil surged into the $30-to-$70 range in the early 2000s, it triggered a countertide — a tide of petroauthoritarianism — manifested in Russia, Iran, Nigeria, Venezuela, Saudi Arabia, Syria, Sudan, Egypt, Chad, Angola, Azerbaijan and Turkmenistan. The elected or self-appointed elites running these states have used their oil windfalls to ensconce themselves in power, buy off opponents and counter the fall-of-the-Berlin-Wall tide. If we continue to finance them with our oil purchases, they will reshape the world in their image, around Putin-like values.
You can illustrate the First Law of Petropolitics with a simple graph. On one line chart the price of oil from 1979 to the present; on another line chart the Freedom House or Fraser Institute freedom indexes for Russia, Nigeria, Iran and Venezuela for the same years. When you put these two lines on the same graph you see something striking: the price of oil and the pace of freedom are inversely correlated. As oil prices went down in the early 1990s, competition, transparency, political participation and accountability of those in office all tended to go up in these countries — as measured by free elections held, newspapers opened, reformers elected, economic reform projects started and companies privatized. That’s because their petroauthoritarian regimes had to open themselves to foreign investment and educate and empower their people more in order to earn income. But as oil prices went up around 2000, free speech, free press, fair elections and freedom to form political parties and NGOs all eroded in these countries.
The motto of the American Revolution was “no taxation without representation.” The motto of the petroauthoritarians is “no representation without taxation”: If I don’t have to tax you, because I can get all the money I need from oil wells, I don’t have to listen to you.
It is no accident that when oil prices were low in the 1990s, Iran elected a reformist Parliament and a president who called for a “dialogue of civilizations.” And when oil prices soared to $70 a barrel, Iran’s conservatives pushed out the reformers and ensconced a president who says the Holocaust is a myth. (I promise you, if oil prices drop to $25 a barrel, the Holocaust won’t be a myth anymore.) And it is no accident that the first Arab Gulf state to start running out of oil, Bahrain, is also the first Arab Gulf state to have held a free and fair election in which women could run and vote, the first Arab Gulf state to overhaul its labor laws to make more of its own people employable and the first Arab Gulf state to sign a free-trade agreement with America.
People change when they have to — not when we tell them to — and falling oil prices make them have to. That is why if we are looking for a Plan B for Iraq — a way of pressing for political reform in the Middle East without going to war again — there is no better tool than bringing down the price of oil. When it comes to fostering democracy among petroauthoritarians, it doesn’t matter whether you’re a neocon or a radical lib. If you’re not also a Geo-Green, you won’t succeed.
Obviously if dictatorships have the ability to act without worrying about the consequences, they will be emboldened to act in ways that will keep them in power.
But there is a flip-side to his observation that he doesn't want to mention: when enlightened societies become richer, their citizens and other nations benefit. The US is not only the richest nation but also the most generous, and this is a direct result of being built with ingrained ideals of freedom and democracy. Israel's economic might pays dividends to not only her citizens but also to the entire world in the areas of scientific research, help during disasters and anti-terror training.
Friedman is specifically applying this "rule" to oil-rich nations but it would apply to any nation with a fundamentally immoral outlook and access to any valuable resource.
Oil isn't the problem; it is the underlying mindset of the entire nation that encourages corruption.
Egypt and Jordan may indeed have been more amenable to signing a peace agreement with Israel because they do not have huge oil reserves, but the point is that acting in peaceful ways goes against their very nature and only economic incentives could push them into reluctantly abandoning their pan-Arab, anti-Israel "principles." While this is probably better than no peace at all, one must remember that it was not based on a natural longing for peaceful co-existence with their neighbor, but rather on external economic factors. This is starkly apparent in that Egypt is literally being paid off by the US to the tune of billions of dollars a year just to maintain the paper peace treaty with Israel.
So while I agree that economics, and specifically energy economics, is a hugely important vector in minimizing tyranny, it is fundamentally cosmetic and coerced. These societies, and specifically those that are based on Arab/Muslim honor/pride ideas, are inherently against transparency in leadership, freedom, equal rights and democratic principles and
Economic coercion is a tool but it will not fix the real problems they have.