Thursday, May 15, 2008

Wealth but no political power

Go to Original

Arab oil producers are awash in wealth. They have never been so rich. But the paradox is that, in spite of their great and growing wealth, their political weight in the world remains small, even derisory. They have not - or, at least, not yet - converted their wealth into political influence on a global scale.

This is particularly striking in the Arabs' own Middle East region. Why, one wonders, have the Arabs not been able to resolve the grave crises in Iraq and Lebanon, which are tearing their region apart? Why have they allowed the US to neglect Arab interests in the festering Arab-Israeli conflict, and tilt so decisively in Israel's favour? Why have the Arabs not intervened to defuse the dangerous confrontation between the West and Iran which, if it were to escalate into a military clash, would be utterly disastrous for the Gulf?

Why do the Arabs seem to focus all their attention and all their energies on business - on getting rich and richer still - while leaving their political and strategic destinies very largely in the hands of foreigners?

Whatever the reasons - and they are undoubtedly many and deep-seated - the Arab world projects an image of impotence, even where its own vital interests are concerned.

Yet, the wealth is there - and in most other societies, wealth means power. But not in the Arab world - or, at least, not yet. It is worth recalling the figures. On December 12, 1998, the price of oil collapsed and was quoted at $10.76 (BD4) a barrel. In January last year, it had recovered to a comfortable $58 a barrel. Then, to universal astonishment and alarm, the price soared on January 2 this year to a then all-time record of $100.

But that was not the end of it. This past week, oil surged to $126 a barrel - an 11 per cent rise on the month - and some experts even predict it could rise to $200!

We are living through what looks like the first great crisis of the 21st century. Quite apart from oil, foreign exchange and commodity markets have also displayed huge volatility. Food prices, for example, have risen by 40pc - their sharpest rise since 1978. The price of wheat alone nearly doubled between March last year and this year, causing tremendous problems for countries like Egypt, which imports 50pc of the wheat it consumes.

At the same time, the US dollar, to which several Gulf currencies remain pegged has collapsed. The causes lie in the vast US budgetary, commercial and foreign trade deficits - themselves linked to the disastrous Iraq war - to alarming signs of recession in the US economy, and to a sharp fall in US interest rates.

Meanwhile, wealth and power are moving away from the once-dominant western world to China, India, Brazil and other emergent economies.Such is the world in which the Arabs live. Their oil is a non-renewable resource. They need to be careful not to waste a single dollar of their oil bonanza and invest instead in building a post-oil economy.

Above all, they need to translate their wealth - with vision, intelligence and determination - into political power, so as to resolve the many conflicts which sap their energies, afflict their people and prevent them from taking their proper place in the world.

No comments: