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COMMENTS

The First Law of Petropolitics


without representation'. The motto of the
BY THOMAS [L the higher the average global crude oil petrolist authoritarian is 'no representation
FRIEDMAN ccording
price rises,tothe
themore
First Law of Petropolitics,
free speech, free without taxation'. Oil-backed regimes that do
press, free and fair elections, an independent not have to tax their people in order to survive,
Iran's president judiciary, the rule of law, and independent because they can simply drill an oil well, also
denies the political parties are eroded. And these negative do not have to listen to their people or
trends are reinforced by the fact that the higher represent their wishes.
Holocaust, Hugo the price goes, the less petrolist leaders are The second mechanism through which oil
Ch6vez tells sensitive to what the world thinks or says about dampens democratisation, argues Ross, is the
'spending effect'. Oil wealth leads to greater
them. Conversely - according to the First Law
Western leaders of Petropolitics - the lower the price of oil, the patronage spending, which in turn dampens
to go to hell, and more petrolist countries are forced to move pressures for democratisation. The third
towards a political system and a society that is mechanism he cites is the 'group formation
Vladimir Putin is more transparent, more sensitive to opposition effect'. When oil revenues provide an
cracking the whip. voices, and more focused on building the legal authoritarian state with a cash windfall, the
and educational structures that will maximise government can use its newfound wealth to
Why? They know their people's ability - both men's and women's prevent independent social groups - precisely
that the price of - to compete, start new companies, and attract those most inclined to demand political rights -
investments from abroad. The lower the price from forming. In addition, he argues, an
oil and the pace of crude oil falls, the more petrolist leaders are overabundance of oil revenues can create a
'repression effect', because it allows governments
of freedom always sensitive to what outside forces think of them.
I would define petrolist states as those that to spend excessively on police, internal security
move in opposite are both dependent on oil production for the and intelligence forces that can be used to choke
directions. It's bulk of their exports or gross domestic product democratic movements. Finally, Ross sees a
'modernisation effect' at work. A massive influx
and have weak state institutions or outright
the First Law of authoritarian governments (e.g. Azerbaijan, of oil wealth can diminish social pressures for
Petropolitics, and Angola, Chad, Egypt, Equatorial Guinea, Iran, occupational specialisation, urbanisation, and
Kazakhstan, Nigeria, Russia, Saudi Arabia, the securing of higher levels of education -
it may be the axiom Sudan, Uzbekistan, and Venezuela). trends that normally accompany broad economic
to explain our age One of the most trenchant analyses I have development and that also produce a public
come across into how an abundance of oil that is more articulate, better able to organise,
wealth, in particular, can reverse or erode bargain and communicate, and one that is
democratising trends is the work of UCLA endowed with its own economic power centres.
political scientist Michael L. Ross. Using a The First Law of Petropolitics tries to build
statistical analysis from 113 states between on such arguments, but also takes the link
1971 and 1997, Ross concluded that a state's between oil and politics one step further. What
'reliance on either oil or mineral exports tends I am arguing with the First Law of Petropolitics

'61s it an to make it less democratic; that this effect is not


caused by other types of primary exports; that it
is not only that an over- dependence on crude
oil can be a curse in general, but also that one
can actually correlate rises and falls in the price
accident that is not limited to the Arabian Peninsula, to the
Middle East, or sub-Saharan Africa; and that it of oil with rises and falls in the pace of freedom
the Arab world's is not limited to small states.' in petrolist countries. The connection is very
What I find particularly useful about Ross' real. As the graphs overleaf demonstrate, the
first and only analysis is his list of the precise mechanisms by pace of freedom really starts to decline as the
which excessive oil wealth impedes democracy. price of oil really starts to take off.
real democracy First, he argues, there is the 'taxation effect'.
happens not Oil-rich governments tend to use their revenues An axis of oil?
to 'relieve social pressures that might otherwise The reason this connection between the price
to have a lead to demands for greater accountability' of oil and the pace of freedom is worth focusing
from, or representation in, the governing on today is that we appear to be at the onset of
drop of oil? J9 authority. I like to put it this way: the motto a structural rise in global crude oil prices. If that
of the American Revolution was 'no taxation is the case, this higher price level is almost

024 1 THE ECOLOGIST


COMMENTS

Cru Oilma
d

certain to have a long-term effect on the nature oil. Without a dramatic move toward
of politics in many weak or authoritarian states. conservation in the West, or the discovery of
That, in turn, could have a negative global an alternative to fossil fuels, we are going to
impact on our current post-cold war world. be in this $40-to-$60 range, or higher, for the
In other words, the price of crude should now foreseeable future.
be a daily preoccupation of the US secretary of Politically, that will mean that a whole
state, not just the treasury secretary.
Since 9/11, oil prices have structurally
shifted from the $20-$40 range to the $40-$60
group of petrolist states with weak institutions
or outright authoritarian governments will
likely experience an erosion of freedoms and
' 4The lower
range. Part of this move has to do with a an increase in corruption and autocratic,
the price of crude
general sense of insecurity in global oil markets antidemocratic behaviour. Leaders in these oil falls, the more
due to violence in Iraq, Nigeria, Indonesia, and countries can expect to have a significant
Sudan, but mainly appears to be the result of increase in their disposable income to build up petrolist leaders
what I call the 'flattening' of the world and security forces, bribe opponents, buy votes or
z
the rapid influx into the global marketplace of public support, and resist international norms are sensitive
4 three billion new consumers from China, Brazil, and conventions. One need only pick up a
a•
India, and the former Soviet Empire - all newspaper on any day of the week to see
to what outside
dreaming of a house, a car, a microwave, and evidence of this trend. forces think
a refrigerator. Their rising energy appetites are Consider a February 2005 article in The Wall
enormous. This already is, and will continue to Street Journal about how the mullahs in Tehran of themY
be, a steady source of pressure on the price of (who now are flush with cash thanks to high

THE ECOLOGIST 1 025


cOME
-Tl

oil was around $25 a barrel. Today, with oil at


' oil prices) are turning their backs on some
The link foreign investors instead of rolling out the $60 a barrel, Obasanjo is trying to have the
welcome mat. Turkcell, a Turkish mobile phone constitution amended to allow him to serve a
between oil prices operator, had signed a deal with Tehran to build third term. A Nigerian opposition leader in the
the country's first privately owned cellphone House of Representatives, Wunmi Bewaji, has
and the pace of network. The deal looked good: Turkcell agreed alleged that bribes of $1 million were being
offered to lawmakers who would vote to extend
freedom is so to pay Iran $300 million for the licence and
invest $2.25 billion in the venture, which would Obasanjo's tenure. 'What they are touting now
tight in some have created 20,000 Iranian jobs. But the is $1 million per vote,' Bewaji was quoted as
mullahs in the Iranian parliament had the saying in a March 11, 2006, article by VOA
countries that contract frozen, claiming it might help News. 'And it has been coordinated by a
foreigners spy on Iran. All Ansari, an Iran expert principal officer in the Senate and a principal
even a far-sighted at the University of St Andrews in Scotland, officer in the House.'
During a visit to Washington in
leadership can told The Wall Street Journal that Iranian analysts
had long been arguing in favour of economic March, Clement Nwankwo, one of Nigeria's
be diverted from reform. 'In actual fact, the scenario is worse leading human rights campaigners, told me
now,' said Ansari. 'They have all this money that, since the price of oil has started to climb,
reform by a spike with the high oil price, and they don't need to 'civil liberties [have been] on a huge decline -
do anything about reforming the economy.' people have been arbitrarily arrested, political
in crude pricesy Or, how about the February 11, 2006, story opponents have been killed, and institutions of
in The Economist about Iran, which stated: democracy have been crippled.' Oil accounts
'Nationalism is easier on a full stomach and Mr for 90 per cent of Nigeria's exports, added
Ahmadinejad is the rare and fortunate president Nwankwo, and that explains, in part, why there
who expects to receive, over the coming Iranian has been a sudden upsurge in the kidnapping of
year, some $36 billion in oil export revenues to foreign oil workers in Nigeria's oil-rich Niger
help buy loyalty. In his first budget bill, now Delta. Many Nigerians think they must be
before parliament, the government has stealing oil, because so little of the revenue is
promised to build 300,000 housing units, trickling down to the Nigerian people.
two-thirds of them outside big towns, and to Very often in petrolist states, not only do
maintain energy subsidies that amount to 10 all politics revolve around who controls the oil
per cent of [gross domestic product].' tap, but the public develops a distorted notion
Or consider the drama now unfolding in of what development is all about. If they are
Nigeria. The country has a term limit for its poor and the leaders are rich, it is not because
presidents - two four-year terms. President their country has failed to promote education,
Olusegun Obasanjo came to office in 1999, innovation, rule of law, and entrepreneurship.
after a period of military rule, and was then re- It is because someone is getting the oil money
elected by a popular vote in 2003. When he and they are not. People start to think that to
took over from the generals in 1999, Obasanjo get rich, all they have to do is stop those who
made headlines by investigating human rights are stealing the country's oil, not build a society
abuses by the Nigerian military, releasing that promotes education, innovation, and
political prisoners, and even making a real entrepreneurship. 'If Nigeria had no oil, then
attempt to root out corruption. That was when the entire political equation would be

Russia, Iran,
Nigeria and Freedom House Natrom in Transit Ranki.9s, vs. Crude Oil Prices Freedom to Trade Intern ationally vs, Crude Oil Prices

Venezuela
have displayed
a clear inverse
correlation
between the
$30 1
pace of freedom ove $25
OilPr,as I'Medo. 1,0
TW
and the rise in I~0

oil prices over


$20L
recent years

026 1 THE ECOLOGIST


different,' said Nwankwo. 'The income would difference between Putin when oil was in the
not be coming from oil and therefore the
diversification of the economy and private
$20-$40 range and now, when it is $40-$60.
When oil was $20-$40, we had what I would
'iAs more
enterprise would matter more, and people call 'Putin I'. After their first meeting in 2001, and more oil piles
would have to expand their own creativity.' President Bush said he had looked into Putin's
Indeed, the link between oil prices and the 'soul' and saw in there a man he could trust.
If up in petrolist
pace of freedom is so tight in some countries Bush looked into Putin's soul today - Putin II,
that even a far-sighted leadership can be the Putin of $60 a barrel - it would look very countries, it
diverted from the path of economic and black down there, black as oil. He would see
political reform by a sudden spike in crude that Putin has used his oil windfall to swallow
could begin to
prices. Consider Bahrain, which knows it is (nationalise) the huge Russian oil company, distort the very
running out of oil and has been a case study of Gazprom, various newspapers and television
how falling oil revenues can spur reform - even stations, and all sorts of other Russian character of
it has not been able to resist the temporary businesses and once independent institutions.
seduction of higher oil prices. 'We are having When oil prices were at a nadir in the early the post-cold
good times now because of high oil prices. This
may lead officials to be complacent,' Jasim
1990s, even Arab oil states such as Kuwait,
Saudi Arabia and Egypt, which has substantial
war world 77
Husain All, head of the University of Bahrain's gas deposits, were at least talking about
economic research unit, recently told the Gulf economic reform, if not baby-step political
Daily News. 'This is a very dangerous trend, as reforms. But as prices started to climb, the
oil income is not sustainable. [Bahrain's] whole reform process slowed, particularly on
diversification may be enough by Gulf the political side.
standards, but not by international standards.' As more and more oil wealth piles up in
No wonder an Iranian journalist once remarked petrolist countries, it could really begin to
to me while we were strolling in Tehran: 'If only distort the whole international system and the
we didn't have oil, we could be just like Japan.' very character of the post-cold war world.
When the Berlin Wall fell there was a
Geology trumps ideology widespread belief that an unstoppable tide of
With all due respect to Ronald Reagan, I do not free markets and democratisation had also been
believe he brought down the Soviet Union. unleashed. The proliferation of free elections
There were obviously many factors, but the around the world for the next decade made
collapse in global oil prices around the late that tide very real. But that tide is now running
1980s and early 1990s surely played a key role. into an unanticipated counter-wave of petro-
(When the Soviet Union officially dissolved on authoritarianism, made possible by $60-a-barrel
Christmas Day 1991, the price of a barrel of oil oil. Suddenly regimes such as those in Iran,
was hovering around $17.) And lower oil prices Nigeria, Russia, and Venezuela are retreating
also surely helped tilt the post-communist Boris from what once seemed like an unstoppable
Yeltsin government toward more rule of law, process of democratisation. Instead, elected
more openness to the outside world, and more autocrats in each country are using their
sensitivity to the legal structures demanded by sudden oil windfalls to ensconce themselves in
global investors. And then came Russian power, buy up opponents and supporters, and
President Vladimir Putin. Think about the extend their state's chokehold into the private

C'd
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P-o,a
Freedom House Freedom in the World Rankings vs. Crude Oil Prices
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THE ECOLOGIST 1 027


sector, after many thought it had permanently altering the amounts and types of energy we
66Thinking receded. The tide of democratisation that consume. By 'we', I mean the US in particular,
which consumes about 25 per cent of the
followed the fall of the Berlin Wall seems to
about how to have met its match in the black tide of world's energy, and the oil-importing countries
petro-authoritarianism. in general. Thinking about how to alter our
alter our energy Although petro-authoritariansim does not energy consumption to reduce the price of oil
represent the sort of broad strategic and is no longer just a hobby for environmentalists.
consumption ideological threat that communism posed to It is a national security imperative.
to reduce the the West, its long-term impact could still Therefore, any American democracy-
promotion strategy that does not also include a
corrode world stability. Not only will some of
price of oil is the worst regimes in the world have extra cash credible and sustainable strategy for finding
for longer than ever to do the worst things, but alternatives to oil and bringing down the price
no longer just decent, democratic countries (India and Japan, of crude is utterly meaningless and doomed to
for instance) will be forced to kowtow or turn fail. Today, no matter where you are on the
a hobby for a blind eye to the behaviour of petro- foreign-policy spectrum, you have to think like
environmentalists authoritarians (such as Iran or Sudan) because
of their heavy dependence on them for oil.
a Geo-Green. You cannot be either an effective
foreign-policy realist or an effective democracy-
It is a national That cannot be good for global stability. promoting idealist without also being an

security77 Let me stress again that I know that the


correlations suggested by the graphs on the
effective energy environmentalist.

Thomas L.Friedman is a columnist for The New York


previous pages are not perfect and there are, no
doubt, exceptions. But I do believe they Times and author of, most recently, The World is
illustrate a general trend: the rising price of oil Flat:A Brief History of the Twenty-First Century
clearly has a negative impact on the pace of (New York: Farrar, Straus &Giroux, 2005).
freedom in many countries, and when you get
enough countries with enough negative Reprinted with permission from FOREIGN POLICY
impacts, you start to poison global politics. 154 (May/June 2006) www.foreignpolicy.com.
Although we cannot affect any country's Copyright 2006, Carnegie Endowment for
supply of oil, we can affect its global price by International Peace

"[In Endgame] Derrick Jensen, as always, iseloquent in his use of


language, profound in his examination of the way we live, and impossible
endgame to ignore ifwe care about human society and the natural world."
-Howard Zinn
lovingly, "[Endgame] forcefully, lovingly, despairingly, and tirelessly describes
how human civilization-with its global capitalism, plutocracy, and
oil-based economy--is destroying planet earth.... Jensen's assertive,

despairingly, aphoristic style demands reader response."


-Utne Magazine

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TITLE: The First Law of Petropolitics


SOURCE: The Ecologist 36 no7 S 2006
PAGE(S): 24-8
WN: 0624403501005

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