Oil Wealth: A Blessing or a Curse for the Gulf States?

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There has been a raging debate whether oil has been a blessing or curse to the Gulf States. This stems from the comparison between the mineral wealth endowed in this region and the level of poverty experienced in the same region. It has been sad noting that although these regions are endowed with a lot of wealth and have higher GDP than most of the countries, their population is still poor. The price of oil has continued to rise in the world market which could have translated to improved lifestyle of the Gulf people. But the deteriorating levels of poverty in these regions leaves many wondering the value of oil compared to the life of the people in the gulf region.

But to argue logically, oil is not a curse or a blessing, it is merely a natural resource. A resources that is supposed to be exploited and used wisely to improve the life of its citizens. Oil is a precious natural resource that is highly priced by many people. With plenty of oil in the gulf it puts them in a position to earn more and improve the life of their citizens. But why is it that the lives of people in the gulf region continue to be poor amid plenty of oil and other natural resources?

According to Neuwirth (2004), countries in the gulf region depends on oil to drive their economy. In a way they control the world economy since a large portion of the world’s economy depends on crude oil products as a source of energy to drive the economy. This clearly shows that the gulf region is a major determinant on the growth of the world economy. Although there are other parts of the world producing oil, the gulf region remains the largest producer of crude oil.

It is recorded that a country like Iraq depends on oil for 95% of its foreign exchange earning. With a reserve of about 12.5 billion barrels and with a potential of more that 2000 billion barrels, Iraq should be one of the strongest countries determining policies made in the world. This is just one example of countries in the gulf region which portrays their mighty oil wealth. But is the oil richness a blessing or a curse to the people of the Gulf region?

Whether oil remains a blessing or a curse to the gulf region depends on how an individual view the whole issue and the unfolding events in the gulf. Definitely we can say that these oil reserves are a blessing in that they are supposed to drive the population out of poverty. Like other countries have been blessed with rich agricultural land and other mineral reserves, the Gulf is blessed with an arid land but with a lot of oil reserves. This oil has contributed immense to the economic development of this region. It has made a large contribution to the countries GDP and development in general. That is why the Gulf region should be proud for being the world largest producer of oil.

Being the drivers of the world economy, oil reserves have helped the gulf region play an important part in the world economy. It has helped the region to developed trade ties with other parts of the world. This helps them to acquire foods for the population. Hence in a way oil is a blessing to the region since it facilitates trade with the outside world. If the region had no oil reserves, it would be facing a hard time getting food supplies for the population since the region is arid.

Oil also comes with benefits in that it provides employment opportunities for the Iraq people. It is their main economic activity which helps people to feed and clothe their families. It is their main livelihood like any other economic activity in other parts of the world. To the people in the Gulf they cannot survive without oil.

But on the other hand, oil has brought a lot of suffering to the people in the gulf in equal terms as it has brought economic prosperity. They have painfully learnt that oil production and increased revenues is not a sea of good lives. In 1975, Juan Pablro Parez Alfonso, who was a founder of OPEC once said that petroleum is a devils excrement which only brings trouble. He cited the widespread corruption, waste, consumption and falling publics due to the mere fact that a country is endowed with oil reserves. In deed oil exporting countries including the Gulf have been faced with serious problems which has been explained in all literature terms like “The Dutch Disease”, “The paradox of plenty”, “ Flawed prosperity”, and many more. (Christine, 2003)

According to Bremer (2003), most of the oil-rich countries still underperforms not only economically but also socially and politically. From Venezuela, through Nigeria to the Gulf region, all these countries have experienced serious political and social problems which are all attributed to the oil. They are with problem of being scrambled for by industrialized nations who wants to dictate the price of oil they are getting from these countries.

The paradox of plenty explains that increased oil revenues during periods of rising petroleum prices eventually results to slow growth of the economy. It creates a dependency on oil to drive the economy such that the country forgets the need to concentrate on non oil economic sector. Oil prices in the world keep on fluctuating now and then and this hurts individual country economy. This phenomenon has brought a lot of economic woes to the gulf region especially in times when their trusted buyers run to other countries for the resources. It is recorded that non-oil producing countries in the region have recorded an economic growth rate double that of the oil producing countries. Most of them have recorded stagnated economic growth for a long time.

Oil rich economies are also faced with an administrative problem. Almost all countries which produce oil are under authoritarian rule or are semi-democratic. The easy revenues coming from sale of oils puts pressure of the need to establish democracy. Once the citizens are contented by getting the necessary needs from the government, they turn away their eyes on what is happening in the authority. This is a problem which has rocked the gulf region.

A country like Iraq was ruled with an iron fist by Saddam Hussein and it took the efforts of countries from the west to topple Saddam and establish democracy in the country. Iran is under an authoritarian rule and it is constantly rubbing the western countries on the wrong side on claims of nuclear weapon.

On political note, oil wealth is definitely a curse to the common citizen of the Gulf region. They live under oppression from the governments. In Iraq, the citizens are the one who are suffering as a result of war between the Americans and the insurgent militias. It has been claimed that the western countries attach that importance to the Gulf region due to its oil resources. Asking an Iraq citizen whether the oil is a blessing or a curse, they would definitely tell you that it is a curse as it has brought more and more suffering to them.

Oil resources in the Gulf have created a few powerful individual who have concentrated power around themselves and controls the life of the majority. In deed it has not brought the equality that such a resource is supposed to throw to the population.

We have said that oil provides an easy and highly priced source of income. It is a scarce resource that everybody in the world is fighting for. In that fight for the resources, few individual makes it to own it while the majorities are left scrambling for the few that remains. This has been evident in the Gulf region since majority of the population does not have a say in the way the country is run and the way resources are distributed in the population. The government amasses a lot of resources which enables it to crush the opposition or to buy them. That is why in the Gulf region, there are no countries which have stiff opposition to the government.

But perhaps the greatest woe that oil has brought to the people of the Gulf region is unending war. This region has been characterized by wars and crises for the better part of the last century and it is still rocked in conflict even in this century. It has led to death of a large number of the population. There have been constant conflicts since the creation of the nation of Israel in 1940s. Perhaps the greatest suffering that oil brought to the people of the Gulf region was in the 1970s when the Arab countries oil embargo was imposed. People suffered for the mere fact that their leaders could not agree with the rest of the world. It is evident all those conflicts in the Gulf region has been centred on oil resources.

Then there was the invasion of Iran by Iraq and the subsequent entry of American into the war. It is argued that the entry of America in the war was led by oil interests it had on Iran and which it had to protect. It did not stop there as the people of Iraq plugged into war immediately after felling their long time dictator Saddam Hussein. According to Thurstone (2002), the people of Iraq have suffered most because of having the most precious energy resource in their soil.

Hence oil can be said to both a curse and a blessing to the people of the Gulf region because it has enabled them to earn their living but at the same time brought suffering to them due the conflict of interest surrounding the black gold.

References

Bremer, P. (2003). Operation Iraqi Prosperity; Wall Street Journal.

Christine, E. Z. (2003). Dutch Disease: Too much wealth Managed Unwisely. Finance & Development.

Neuwirth, R. (2004). Oil- from Blessings to Curse. Web.

Thurstone, K. (2002). From Boom, Through Decline, to failure: A Post-September 11^th Examination of the Middle Eastern Rentier State. The Bologna Centre Journal of International Affairs.

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Oil Wealth: A Blessing or a Curse for the Gulf States?

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