Oil. For some countries it is a curse. When a country strikes oil the inflow of the
dollar can lead to a sharp appreciation in the local country. For non-oil sectors like agriculture an d
manufacturing will be less competitive in world markets, making the economy of
oil dominate. Countries with a history
of corruption will sink its population further into poverty as the ruling elite
will bankroll oil revenues to the wealthy.
On the other hand, oil can be a god send for a country. Countries are able to disburse oil revenues
to its citizens. They can send money
offshore for funds for future generations.
Many things come from the curse of oil.
A better economy. More employment
opportunities. An emerging middle
class. And a country would not have to
import oil and the price of gas would decrease.
The curse of oil creates greed.
It is considered the leading cause of war. http://www.economist.com/node/11921647
D. Colgan October 2013. Competition over
shipping lanes and pipelines. Which
claimed by Native Americans in Iowa and the Dakotas that the pipeline would
threaten sacred burial grounds as well as the quality of water in the area. https://daplpipelinefacts.com/
European oil-rich nations tend to be more
stable with less conflict. There is less corruption and their countries are
more developed. European oil revenue is
put into a continuous process of development.
The biggest difference in the contrast of oil-rich nations is that most
of the countries that are not benefitting from oil are that they received their
independence in the 20th Century and are still considered developing
countries. South America, Africa is plagued
with corruption from the ruling elite for when it comes to the disbursement of
oil revenues throughout the country. In
the South American country Venezuela prior to nationalization the government
collected 80 cents of every dollar of oil exported. When their oil was nationalized it dropped
due to wells running dry, aging machinery and the reinvestment of revenue to keep
up with production. If oil revenue has
to go through the state, the chances of corruption is greater. The most tragic difference of them all is
Africa. Not only is corruption seen monetarily
but civil war is also created over oil.
While the poor deal with famine, starvation and economic despair they
have to deal with leaders that steal any chance of a better life from them
while living lavishly from oil revenues.
In Southwest Asia countries like the United Arab Emirates and Qatar
citizens see the benefits of oil revenues like no other. Every citizen is given free health care and
education. The UAE, Qatar and other Gulf
Cooperation Council countries give newlyweds a marriage fund to assist them in
the formation of a family. https://www.thenational.ae/uae/government/uae-marriage-fund-issues-grants-to-newlyweds-1.104410
This would not be available if it was not for the enormous oil revenues they
The European union is over 30 members and receives oil
and gas from Norah Africa, Russia and the Caspian Sea. Pipeline routes have been opened transporting
oil and gas from Libya, Algeria, Azerbaijan to Europe. Europe is creating allies while the U.S. is
creating enemies. Europe has decided
that instead of trying to be the world’s police they can work with countries
economically. China is focused on the
development of its country. China is not
distracted by what is going on in the Middle East. China and the European Union are working with
oil rich countries making resource and investment deals. Countries in the Persian Gulf are
diversifying their currency into Euros.
Iran’s former President Mahmoud Ahmadinejad wanted to stop pricing its
oil in dollars. When a country becomes a
hub for oil other countries are willing to do business. They tend to not just be export countries.
They know they have a commodity and will broker for imports that they may not
have normally received. If a superpower
wants to maintain influence they will have to invest heavily and relocate productive
assets. The old day of having to rely on
the Super Powers like Russia for oil are over.
Europe is receiving gas from North Africa and Oil from Azerbaijan which
lowers the dependency and allows Europe to change its political game with
Russia. Turkey which is more aligning
itself with the E.U. in projects with Azerbaijan in the Caspian Sea. This allows Turkey to have a more power
military and economically over other the Arab and Persian countries.
Militarily the battle for oil is at an all-time
high. When people think of the war for
oil they only think about what happens on the ground. Shipping channels and sea lanes are what gets
the oil to countries for use. Powerful
countries place military bases strategically to protect their assets. China believes that the United States and
Japan so hostilities have been increasing with Taiwan who they believe are a
breakaway province. http://www.bbc.com/news/world-asia-34729538.
Pakistan which has a rough relationship
with India created a Naval relationship with China. Countries that would not normally create maritime
alliances do so because of an enemy’s influences or military changes. They do this to place themselves at a
strategic position in a particular region.
Now that China and Pakistan Navies work together China provides half of
Pakistan’s military hardware and is willing to transfer technology to
them. Pakistan has no choice but to align with China
as they cannot defeat India’s Navy which includes aircraft carriers and
nuclear-powered submarines. The Straits
of Hormuz and Malacca are closely watched by China. The military moves to Mauritius and the
Seychelles makes them uneasy. China
recently opened a Naval base in Djibouti to defend its own energy supplies
passing through the Indian Ocean choke points. All of this is due to the tug of
war between the countries projected to be the leading economies of the world
during this century, China and India.
concepts in the World Systems Theory impact this discussion many ways. Core countries are considered the most
industrialized countries. They have
benefited the most with oil and gas revenues.
They are more developed than other countries that export oil. They are more likely to control the global
market. The semi-periphery regions play
a major role in mediating economic, political and social activates between core
and peripheral areas. Semi-periphery
regions are not as industrialized as Core countries but they do have the same
resources. This similarity allows them
to play a role in world affairs. These
countries are perceived as being to an extent underdeveloped despite achieving
great levels of industrialization. They
have a connection with low income countries which helps with the world-trade
system. Periphery countries are those
that are less developed than the other countries. They are dependent and exploited by more
developed nations. Periphery countries
tend to have weak state institutions are more likely to be corrupt. Core countries can exploit them for resources
which is known as dependency theory.
Stronger countries interfere with their politics which will leave them
vulnerable to economic instability. Core
and semi-periphery countries exploit them for the sole purpose of gaining
profit which allows the world market to gro.
Periphery countries exports decrease which will make unemployment
increase which makes the stronger countries more prosperous. Periphery countries do have oil but as long
as other countries increase taxes on them, place trade embargoes on the price
of imports will be high and the will not benefit from the exports that they
send to more industrialized countries. Core
and semi-periphery countries are dependent on periphery countries for their
natural resources. Africa has some of
the world’s most useful natural resources but have been exploited since
Colonial times. If a country is powerful
they know that poorer countries have less of an influence globally and treat
them as such. When it comes to the World
Systems Theory a country that is labeled as a periphery country would take
centuries to move into another category.
The leaders of that country would have to have the same mindset for
generations. The United Arab Emirates is
a perfect example. When the received the
independence from Great Britain the leaders decided to take a massive construction
program, building schools, housing, hospitals and roads. All instead of sending oil profits to their
private bank accounts like another periphery country Zimbabwe. By doing so the UAE has a seat at the table
in international trade discussions and maritime security.
curse of oil. If world leaders could put
aside their differences everyone on this planet could benefit from oil
revenues. Instead of one or two
countries trying to control the flow of oil and occupying another country to do
so we should think about the future of our planet. Corruption, occupation, war, economic
development, job development and wealth can all come with the “Curse of Oil”.