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Ed Webb

The Coronavirus Oil Shock Is Just Getting Started - 0 views

foreignpolicy.com/...-shock-is-just-getting-started

energy oil economy pandemics Russia China US USA KSA Saudi Iran Iraq Algeria Angola Nigeria markets climate

shared by Ed Webb on 05 Jul 20 - No Cached
  • People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.
  • If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.
  • In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire
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  • In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category
  • The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment
  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • Ecuador is the second Latin American country after Argentina to enter technical default this year.
  • Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.
  • Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue
  • The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.
  • Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.
  • Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages
  • The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply
  • The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.
  • Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.
  • In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?
  • The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.
Ed Webb

The Oil for Security Myth and Middle East Insecurity - MERIP - 0 views

merip.org/...h-and-middle-east-insecurity-2

opinion analysis MENA oil energy security US USA war military

shared by Ed Webb on 03 Jul 20 - Cached
  • Guided by the twin logics of energy security and energy independence, American actions and alliances in region became a self-fulfilling prophecy. The very thing the United States sought to eliminate in the Middle East—insecurity—became a major consequence of America’s growing and increasingly militarized entanglement.
  • In effect, the essential relationship of dependency between the United States and the Middle East has never been “oil for security.” It has in fact been oil for insecurity, a dynamic in which war, militarization and autocracy in the region have been entangled with the economic dominance of North Atlantic oil companies, US hegemony and discourses of energy security.
  • Oil’s violent geopolitics is often assumed to result from the immense power its natural scarcity affords to those who can control it. Recent developments in global hydrocarbon markets, which saw negative prices on April 20, 2020 have once again put this scarcity myth to bed
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  • Although the destabilizing contradictions of this dependency have now undercut both American hegemony and the power of the North Atlantic hydrocarbon industries, the oil-for-insecurity entanglement has nonetheless created dangerously strong incentives for more conflict ahead.
  • In a series of studies that began in late 1980s, economists Jonathan Nitzan and Shimshon Bichler charted the extent to which the world’s leading oil companies enjoyed comparatively handsome rates of returns on equity—well ahead of other dominant sectors within North Atlantic capitalism—when major wars or sustained unrest occurred in the Middle East.
  • When oil prices began to collapse in the mid-1980s, the major oil companies witnessed a 14-year downturn that was only briefly interrupted once, during the 1990-1991 Gulf War.
  • The events of September 11, 2001, the launching of the global war on terror and the 2003 Anglo-American invasion of Iraq reversed the fiscal misfortunes of the North Atlantic oil companies in the previous decade. Collectively, they achieved relative returns on equity several orders of magnitude greater than the heyday of 1979 to 1981. As oil prices soared, new methods of extraction reinvigorated oil production in Texas, North Dakota, Pennsylvania and elsewhere. In effect, war in Iraq made the shale oil revolution possible
  • fracking—not only benefitted from sky-high oil prices, generous US government subsidies and lax regulation, but also the massive amounts of cheap credit on offer to revive the economy after 2008
  • In response to the Soviet invasion of Afghanistan and the Iran hostage crisis, the Carter Doctrine declared America’s intent to use military force to protect its interests in the Gulf. In so doing, Carter not only denounced “the overwhelming dependence of the Western democracies on oil supplies from the Middle East,” but he also proposed new efforts to restrict oil imports, to impose price controls and to incentivize more fossil fuel extraction in the United States, all in conjunction with solidifying key alliances (Egypt, Israel and Pakistan) and reinforcing the US military presence in the region.[5] In effect, America would now extract geopolitical power from the Middle East by seeking to secure it.
  • What helps make energy security discourse real and powerful is the amount of industry money that goes into it. In a normal year, the oil industry devotes some $125 million to lobbying, carried out by an army of over 700 registered lobbyists. This annual commitment is on par with the defense industry. And like US arms makers,[9] the revolving door between government, industry and lobbying is wide open and constantly turning. Over two-thirds of oil lobbyists have spent time in both government and the private sector.[10]
  • A 2015 report by the Public Accountability Initiative highlights the extent to which the leading liberal and conservative foreign policy think tanks in Washington—the American Enterprise Institute, Atlantic Council, Brookings, Cato, Center for Strategic and International Studies (CSIS), Council on Foreign Relations and Heritage Foundation—have all received oil industry funding, wrote reports sympathetic to industry interests or usually both
  • For some 50 years, the United States has been able to extract geopolitical power from Middle Eastern oil by posing as the protector of global energy security. The invention of the concept of energy security in the 1970s helped to legitimate the efforts of the Nixon, Ford and Carter administrations to forge new foundations for American hegemony amid the political, economic and social crises of that decade. In the wake of the disastrous US war efforts in Korea and Southeast Asia, Henry Kissinger infamously attempted to re-forge American hegemony by outsourcing US security to proxies like Iran under what is referred to as the Nixon Doctrine. At the same time, regional hegemons would be kept in check by “balancing” competing states against each other.
  • The realization of Middle Eastern insecurity was also made possible by the rapid and intensive arms build-up across the region in the 1970s. As oil prices skyrocketed into the 1980s, billions of so-called petrodollars went to purchase arms, primarily from North Atlantic and Soviet manufacturers. Today, the Middle East remains one of the most militarized regions in the world. Beyond the dominance of the security sector in most Middle Eastern governments, it also boasts the world’s highest rates of military spending. Since 2010, Middle Eastern arms imports have gone from almost a quarter of the world’s share to nearly half in 2016, mainly from North Atlantic armorers.
  • For half a century, American policy toward the Middle East has effectively reinforced these dynamics of insecurity by promoting conflict and authoritarianism, often in the name of energy security. High profile US military interventions—Lebanon in 1983, Libya in 1986 and 2011, the Tanker Wars in the late 1980s, the wars on Iraq in 1991 and 2003, Somalia in 1993, Afghanistan since 2001, the anti-Islamic State campaign since 2014 and the Saudi-Emirati war on Yemen since 2015—have received the most scrutiny in this respect, alongside the post-2001 “low intensity” counterterrorism efforts worldwide
  • cases abound where American policy had the effect of preventing conflicts from being resolved peacefully: Trump’s shredding of the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement with Iran comes to mind; the case of the Israeli-occupied Palestinian territories and the Moroccan-occupied Western Sahara have likewise become quintessential “peace processes” that have largely functioned to prevent peace.
  • the myth of authoritarian stability
  • A year after the unexpected 2011 uprisings, the IMF’s former director Christine Lagarde admitted that the Fund had basically ignored “how the fruits of economic growth were being shared” in the region
  • In denouncing certain governments as “pariahs” or “rogue states,” and in calling for regime change, American policy has allowed those leaders to institute permanent states of emergency that have reinforced their grip on power, in some cases aided by expanded oil rents due to heightened global prices
  • From 2012 to 2018, organized violence in the Middle East accounted for two-thirds of the world’s total conflict related fatalities. Today, three wars in the region—Syria, Iraq and Afghanistan—now rank among the five deadliest since the end of the Cold War. Excluding Pakistan, the Middle East’s share of the worldwide refugee burden as of 2017 was nearly 40 percent at over 27 million, almost double what it was two decades prior.
  • profound political and financial incentives are accumulating to address the existing glut of oil on the market and America’s declining supremacy. A major war in the Middle East would likely fit that bill. The Trump administration’s temptation to wage war with Iran, change Venezuela’s regime and to increase tensions with Russia and China should be interpreted with these incentives in mind.
  • While nationalizing the North Atlantic’s petroleum industries is not only an imperative in the fight against climate change, it would also remove much of the profit motive from making war in the Middle East. Nationalizing the oil industry would also help to defund those institutions most responsible for both disseminating the myths of energy security and promoting insecurity in the Middle East.
Ed Webb

Avoiding the Curse of the Oil-Rich Nations - opinionator.blogs.nytimes.com - Readability - 8 views

www.readability.com/...owsifegb

rentier rentierism oil economy politics corruption opinion

shared by Ed Webb on 14 Feb 13 - No Cached
  • resource curse
  • Oil concentrates a nation’s economy around the state. Instead of putting resources into making things and selling them, ambitious people spend their time currying favor or simply bribing the politicians and government officials who control oil money. That concentration of wealth, along with the opacity with which oil can be managed, creates corruption
  • Money given out to citizens, of course, is money that the government can’t use to build schools, roads and health clinics. Spending it that way might improve social welfare even more than simply passing out cash — or it could if the government were actually doing it. But governance tends to be so poor in oil-rich countries, so inefficient and corrupt, that social welfare programs end up never reaching the poor
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  • The big exception is Norway, which had the foresight to become wealthy and democratic before striking oil. As almost all the world’s untapped oil reserves now lie in the developing world, Norway is not likely to have much company
  • Governments often try to save for lean years by paying a portion of oil revenues into a walled-off, legally untouchable fund. Unfortunately, temptation is often more powerful than the law. Venezuela’s oil fund, for example, has been raided6 (pdf, p 16) by Hugo Chavez, dropping from $6 billion to $3 million in the last decade — during a time of record-high oil prices
  • Taxes create accountability — citizens want to know how the government is spending their money. Substituting oil revenues decouples government from the people
  • Oil-to-cash programs are essentially unconditional transfers financed by oil. They can be targeted at the poor — like the cash transfers we know — or universal. It is obviously cheaper to pay only the poor. But universality helps the second goal of oil-to-cash: creating better government. If you want citizens to become effective watchdogs, it helps to include people with clout. Governments tend not to respond to the clamors of the poor
  • you want people to know they are paying taxes, and know exactly how much. “That’s exactly the point,” says Moss. “It creates accountability and forces tax authorities to build a sound, transparent system.” (This is plausible, but there is no evidence either way just yet that oil-to-cash programs would lead to better governance.
  • Distributing oil money to citizens is a big step, and oil countries and companies have rejected much more modest ideas that might put limits on their abilities to manipulate oil revenues. One that is gradually gaining ground is the Extractive Industries Transparency Initiative13, now implemented by 37 countries. Under the EITI, oil companies disclose what they pay to governments, and governments disclose what they receive. The EITI then compares and reconciles these figures
  • oil-to-cash is probably easiest to do in countries just starting to exploit oil — that way there aren’t entrenched interests guarding business-as-usual
  • Ed Webb on 14 Feb 13
     
    Thanks to Meri for drawing this to my attention
Ed Webb

There will be pain - With oil cheap, Arab states cannot balance their books | Leaders |... - 0 views

www-economist-com.envoy.dickinson.edu/...tes-cannot-balance-their-books

opinion MENA oil energy economy GCC Algeria KSA Saudi Oman Jordan Lebanon Egypt

shared by Ed Webb on 17 Jul 20 - Cached
  • Peak demand for oil may still be years away, but covid-19 has given the Middle East and north Africa a taste of the future. Prices of the black stuff plummeted as countries went into lockdown. The region’s energy exporters are expected to earn about half as much oil revenue this year as they did in 2019; the IMF reckons their economies will shrink by 7.3%. Even when the virus recedes, a glut of supply will probably keep prices down. Faced with budgets that no longer add up, Arab states must adapt.
  • in May the Algerian government said it would cut its budget by half. Things are no better in Iraq, a big oil exporter, which is nearly broke. Even stable producers such as Oman and Kuwait are living beyond their means. Saudi Arabia, the world’s biggest oil exporter, has been burning through its cash reserves for months. Money that was meant to smooth the kingdom’s transition to a less oily economy is now propping up the old petrostate.
  • Egypt exports little oil, but over 2.5m of its citizens work in oil-rich countries. Remittances are worth 9% of its GDP. As oil revenues fall and some of those jobs disappear, Egypt will suffer, too. The same is true of Jordan, Lebanon and the Palestinian territories, which have long relied on the Gulf to absorb their jobless masses.
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  • Around a third of exports from Jordan and Lebanon go to oil-rich states, which send back wealthy tourists. Kuwaitis, Saudis and Emiratis account for about a third of tourist spending in Lebanon.
  • The bad news is that these states are moving too slowly. Some have cut their bloated bureaucracies and pared back subsidies. Saudi Arabia recently tripled its value-added tax. But the public sector is still the region’s main employer. Despite talk of diversification, the Gulf’s economies continue to revolve around oil
  • these reforms will be painful and are harder in bad times
  • The plans put forward by leaders like Saudi Arabia’s Muhammad bin Salman are tearing up the social contract. Saudis wonder why he doesn’t sell his $550m yacht instead of raising taxes. Anger is growing across the region. For the past century Arabs have been ruled by abusive leaders who hoarded their country’s wealth. Now these leaders are asking their people to make sacrifices and giving them little say in the matter. That is a recipe for continuing unrest and brutal suppression. If Arab rulers want citizens to pay their way, they will need to start earning their consent.
Ed Webb

Will Saudi Arabia's private sector be able to hold up during a pandemic? - Atlantic Cou... - 0 views

atlanticcouncil.org/...e-to-hold-up-during-a-pandemic

authoritarianism politics economy analysis opinion KSA Saudi pandemics

shared by Ed Webb on 05 May 20 - No Cached
  • Due to the lockdown and curfew implemented since March 25, most businesses in Saudi Arabia are either suspended or have reduced their activities. As a result, employees have become a heavy burden for companies, as most cannot afford to pay them wages while they stay home. Several companies announced the closure of their branches, entirely, including Taiba Investments, Saudi Airlines Catering, and Al-Andalus Property Company SJSC.
  • The Saudi government announced the consequences of coronavirus as a force majeure. And, on April 3, the government issued a royal decree allocating $2.4 billion to compensate Saudi citizens who work in the private sector in facilities affected by the pandemic. However, such bounteous support might only reduce the problem, not solve it.
  • the question is how long this generous support from the Saudi government will continue. Oil prices are still lower than what the Saudis need to support Vision 2030, which is expected to have a budget of no less than $54 billion. Oil prices are currently affected because of the decline in demand due to the pandemic and the oil war with Russia, which ended on April 12, after OPEC agreed to an output cut of 9.7 million barrels per day.
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  • analysts expect oil prices to remain below $40 for the foreseeable future, while the national budget balance requires $80-85 a barrel. The future of the oil market is getting worse, since the June contracts collapsed by more than 45 percent.
  • oil war is urging the Saudi government to limit or, even, cancel its excess spending and yet, the government chooses to increase public spending to support its citizens and residences.
  • the coronavirus might serve as a vehicle of legitimacy for the absolute monarchy that takes responsibility for its citizens as democracies are struggling to help their own.
Ed Webb

'Apocalypse soon': reluctant Middle East forced to open eyes to climate crisis | Climat... - 0 views

www.theguardian.com/...to-open-eyes-to-climate-crisis

climate energy economy GCC Gulf UAE KSA Saudi Kuwait Qatar Oman Bahrain

shared by Ed Webb on 14 Nov 21 - Cached
  • In Qatar, the country with the highest per capita carbon emissions in the world and the biggest producer of liquid gas, the outdoors is already being air conditioned.
  • The Gulf States are still highly reliant on oil and gas exports, which remain more than 70% of total goods exports in Kuwait, Qatar, Saudi Arabia and Oman, and on oil revenues, which exceed 70% of total government revenues in Kuwait, Qatar, Oman, and Bahrain. In Vision 2030, published in 2016, the Saudi crown prince, Mohammed bin Salman, promised to turn the country into a diversified industrial power house. The reality is very different. The World Bank shows Saudi Arabia is still 75% dependent on oil exports for its budget.
  • The Middle East is warming at twice the rate of the rest of the world. By the end of the century, if the more dire predictions prove true, Mecca may not be habitable, making the summer Haj a pilgrimage of peril, even catastrophe
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  • The ruling elites are all dependent on oil rents for the survival of their regimes. They need the oil business to stay alive for them to stay in power. Their system is based on continued oil rent, but ultimately, the citizens’ long-term interests are with a liveable climate
  • The precise point oil demand will peak has been contested, and depends on a myriad of assumptions about regulation, technology and consumer behaviour. But many people say demand will peak in about 2040, and then decline.
  • the International Energy Association’s report Net Zero by 2050, by contrast, proposed oil demand fall from 88m barrels a day (mb/d) in 2020, to 72 mb/d in 2030 and to 24 mb/d in 2050, a fall of almost 75% between 2020 and 2050. It argued that the Gulf has all three elements needed to switch to renewables: capital, sun and large tracts of vacant land.
  • Opec’s own projections suggest oil demand will rise in absolute terms through to 2045, and oil’s share of world wide energy demand will fall only from 30% to 28%. Hardly a green revolution.
  • In the United Arab Emirates it is estimated that the climate crisis costs £6bn a year in higher health costs. The salinity of the Gulf, caused by proliferating desalination plants, has increased by 20%, with all the likely impact on marine life and biodiversity.
  • Aramco, the Saudi company with the largest carbon footprint in the world, is not trying to diversify at the rate of Shell or BP. Indeed, it has just announced an investment to increase crude capacity from 12m barrels a day to 13m barrels by 2027
  • If you see the lifestyle in the UAE, Saudi Arabia and Qatar, it is based on endless consumption
  • The region is responsible for only 4.7 % of worldwide carbon emissions, dwarfed by the pollution from Europe, America and China. The oil that the Middle East exports is logged against the carbon emissions of the users, not the producers.
  • The Gulf’s self-proclaimed first mover, the UAE, was the first country in the region to ratify the Paris agreement and is now the least dependent on oil for government revenues. Last week it announced a “net zero initiative by 2050” to be begun with $163bn (£118bn) of investments and a new minister for climate change and the environment, Mariam Almheiri. The announcement came after the UAE ordered an 80-day brainstorming session in every government department from June. It was the first petro-state to embrace net zero in domestic consumption.
  • Gulf states are deeply competitive, so a flurry of news is emerging. Qatar has appointed a climate minister; Bahrain is targeting net zero by 2050; Kuwait has a new emissions plan.
  • Fossil fuels shipped abroad are not on the Saudi’s carbon ledger, owing to UN accounting rules, and the promised internal reduction in emissions is dependent on a heavy bet that unproven blue hydrogen and carbon capture technology will work.
Ed Webb

OPEC Is in its Death Throes | Foreign Policy - 0 views

foreignpolicy.com/...arabia-united-states-oil-shale

Saudi KSA economy economics OPEC oil energy Russia Iran Iraq Venezuela Kuwait UAE

shared by Ed Webb on 21 Oct 16 - No Cached
  • In February, OPEC called for an oil production “freeze” to raise crude prices in conjunction with Russia. But this effort collapsed at a meeting in Doha, Qatar, in April when Iran refused to join any freeze in order to regain the pre-2012 production levels of close to 4 mbpd it enjoyed before U.S. and European Union nuclear sanctions were imposed, following the removal of certain sanctions after the 2015 nuclear deal. A similar proposal failed at the OPEC meeting in June, again following Iran’s refusal, despite outreach by the Qataris.
  • OPEC again called for a form of output cut on Sept. 28 at an extraordinary meeting in Algiers. Markets bit on the news, with Brent prices rising sharply by about 15 percent in the following week, from $46 to $52 per barrel.
  • Can action by the cartel sustain higher crude prices over the long term? Probably not. Like a desert mirage, the image of an OPEC resurrection vanishes when approached.
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  • The massive fall in oil prices from over $100 per barrel in early 2014 to under $30 by January 2016 was caused primarily by then-Saudi Minister of Petroleum Ali al-Naimi’s strategy to gain market share for the kingdom and hurt the U.S. tight oil (or “shale”) industry by allowing the market, not OPEC interventions, to set prices.
  • While Riyadh has cranked up its production from mid-2014 to today by over a million barrels a day (to a peak of 10.7 mbpd in August this year), its fiscal position has taken a serious blow, with the budget deficit rising from 3 percent of GDP to 16 percent in 2015
  • The resilience of U.S. shale makes the argument that OPEC has experienced a resurrection a fragile claim. The cartel can probably raise prices in the short term through an output cut, but it will only be so long, perhaps already by mid-2017, before the U.S. shale industry revives and grabs any market share conceded by OPEC in a higher price environment. This will ultimately bring prices lower again, all else being equal.
  • Within OPEC, while other Gulf Co-Operation states, namely Kuwait and the United Arab Emirates, may be prepared to make a small cut to their production, key producers like Iraq and Venezuela are in too difficult a fiscal position to agree to any major cut.
  • Outside OPEC, Russia reached a production record of 11.1 mbpd in August, eclipsing Soviet levels. Being so close to the maximum anyway, Russia has little to lose by supporting the OPEC output cut and agreeing not to raise production further. Yet the Kremlin is unlikely to impose actual cuts on the range of oil companies that operate in the country.
  • In the short term, it seems Riyadh’s fiscal position was under such pressure from low oil prices that something had to give. While the kingdom has eased the fiscal pressure by starting to issue sovereign debt, the burn rate through its foreign reserves has been relentless (from about $740 billion in mid-2014 to $550 billion today) as it has attempted to defend the currency in the face of substantial capital flight from the country since the oil price crash in 2014.
  • Climate change will plainly be a major problem of the 21st century, and the world is moving away from fossil fuels: game over for an unreformed Saudi Arabia.
  • Saudi Arabia will face hard years ahead as the oil market increasingly looks to U.S. shale, not OPEC, as a handrail to oil prices on the supply side. However, this might well be the jolt that Salman needs to push through painful but necessary reforms
Ed Webb

Saudi Arabia, China Sign Deals Worth Up to $65 Billion | Foreign Policy - 0 views

foreignpolicy.com/...elt-one-road-saudi-vision-2030

KSA Saudi China economy energy oil trade investment FDI diversification

shared by Ed Webb on 16 Mar 17 - No Cached
  • Saudi Arabian King Salman traveled to China Thursday to deepen economic ties between the world’s biggest oil exporter and the world’s second-largest oil consumer. It’s a key stop in the king’s six-week trip to Asia that comes as Riyadh struggles with a slumping oil market and a desperate need to diversify its economy.
  • up to $65 billion worth of economic and trade deals, spanning sectors from energy to space
  • more than 20 agreements on oil investments and in renewable energy
  • ...4 more annotations...
  • China even discussed taking a stake in Saudi Aramco, the state-owned oil firm, which is preparing for a public listing
  • King Salman, and especially crown prince Mohammed bin Salman, have launched an ambitious campaign to shock the country out of oil-dependency and diversify the economy under the auspices of its Saudi Vision 2030 plan. It’s culminated in the unusual six-week trip to Asia that includes stops in Japan, Malaysia, Indonesia, Brunei, and the Maldives as Salman courts foreign investors
  • Xi couched China’s future role in the Middle East in purely economic terms, citing his country’s ambitious One Belt One Road initiative, China’s state-run Xinhua News reported. He stressed China would continue its longstanding policy of non-interference in the Middle East, in contrast to the United States and European counterparts
  • But China has steadily ramped up involvement in the region as its dependence on Middle Eastern oil grows. Beijing began building its first overseas military outpost, a naval base in Djibouti on the Horn of Africa, in 2016. And it funneled thousands of peacekeepers to U.N. missions, including in oil-rich countries like South Sudan.
Ed Webb

'Five years ago there was nothing': inside Duqm, the city rising from the sand | Cities... - 0 views

www.theguardian.com/...ity-sand-luxury-hotels-housing

Oman economy trade investment infrastructure China OBOR culture beduin oil

shared by Ed Webb on 07 Sep 18 - No Cached
  • a long line of plans stretching back to the 1980s aimed at developing and populating barren parts of Oman. Around 70% of the country’s population resides within a thin 150-mile-long coastal strip in the north near Muscat. The government now sees its hundreds of miles of unused coastline as full of economic potential.
  • “Duqm is a huge industrial city being built out of thin air,” says Manishankar Prasad, a local researcher who worked on the new city’s environmental and cultural impact assessments. “It will essentially change the locus of industrial activity from the northern parts of the country, which are heavily urbanised. [Having this] huge geographical expanse with this sparse population and no industrial activity is really not the way forward.”
  • We are in the midst of an era of new cities – with more than 200 currently under construction. Remote deserts all over east Asia, the Middle East and parts of Africa are being urbanised. There’s Nurkent in Kazakhstan, Aylat in Azerbaijan, New Kabul City in Afghanistan, New Baghdad in Iraq, Rawabi in Palestine, King Abdullah Economic City in Saudi Arabia, New Cairo in Egypt … Morocco has nine new cities in the works, and Kuwait has 12.
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  • Oman is desperate to diversify away from its oil and gas dependency. Research by the US Energy Information Administration puts Oman’s known crude oil reserves at 5.6bn barrels. While this is only enough to rank the country 21st in the world, its economy is disproportionately dependent: oil and gas accounts for nearly half of the country’s GDP, 70% of exports and between 68% and 85% of government revenue.
  • “Several dozen new cities are being constructed in the Middle East, mainly to transition away from the petroleum industry to a variety of other industries, including tourism, manufacturing, education and hi-tech,” says Dr Sarah Moser, a McGill University geography professor and author of an upcoming atlas of new cities.
  • Duqm sits on the Arabian Sea near the Strait of Hormuz, the gateway to the Persian Gulf – and the world’s most glaring oil supply chokepoint. Nearly a fifth of the world’s oil currently flows through this passage, ever prone to disruption. If the Duqm project succeeds, the shipping industry would be able to dock at the gates of the Middle East without needing to go all the way inside.
  • attracted the attention of Beijing’s much heralded Maritime Silk Road. More than three-quarters of Oman’s crude oil exports go directly to China.
  • While Duqm was never very densely populated, around 3,000 Bedouin – mostly fishermen and semi-nomadic herders – called the area home before the bulldozers arrived. These villages have now been demolished and the Oman government has built a new, modern town for them to relocate to. The houses look as if they were copied and pasted from Muscat – bright, white buildings two storeys high with garages and ornate gateways. There is a mosque in the centre. The houses stand empty. The local Bedouin prefer their traditional way of life – and want space to keep camels.
Ed Webb

Saudi Arabia and the UAE Could Spoil Oman's Smooth Transition by Fomenting Regional Ins... - 0 views

foreignpolicy.com/...arabia-uae-mbs-stir-up-trouble

Oman economy KSA UAE UK Britain US USA Saudi Yemen GCC Iran youth transition

shared by Ed Webb on 26 Jan 20 - Cached
  • Oman remains vulnerable to both foreign and domestic sources of instability as Saudi Arabia and the United Arab Emirates seek to expand their regional influence. Potential causes of domestic unrest—including high unemployment, budget deficits, and dwindling oil reserves—lack clear-cut solutions. Sultan Haitham faces multiple challenges even without the threat of foreign meddling, yet Oman’s neighbors may view the death of Qaboos as a unique opportunity to advance their own expansionist agendas.
  • Oman resisted Saudi Arabia’s attempts to use the Gulf Cooperation Council (GCC) as a tool to serve the Saudis’ foreign-policy agenda, most visibly when Oman’s minister of state for foreign affairs publicly rejected King Abdullah’s plan to deepen the GCC into a Gulf Union in 2013, and was the only GCC state to not participate in the Saudi-led military incursion against Yemen that began in 2015.
  • Sultan Haitham comes to power at a time when the Trump administration has repeatedly signaled its support for Saudi Arabia and antipathy toward Iran. The belated naming of low-ranking U.S. officials to attend the official ceremony honoring Sultan Qaboos was widely interpreted as a slight against the Omanis; the U.K., in contrast, sent both Prince Charles and Prime Minister Boris Johnson to pay their respects.
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  • Saudi leaders likely hope that Sultan Haitham will be more amenable to a Saudi-led Gulf, and without U.S. support, Oman may feel pressure to acquiesce or face potential repercussions. Omani officials have privately expressed concerns that Oman could be the next target of a Saudi- and Emirati-led blockade
  • Despite precipitating the world’s most urgent humanitarian crisis in Yemen, Saudi Arabia has used its military presence there to declare its intention to build a pipeline through the Mahra region and construct an oil port on the Yemeni coast. Saudi Arabia currently ships oil through the Strait of Hormuz and the Bab el-Mandeb strait, whereas the proposed pipeline would allow direct access to the Indian Ocean.
  • Mahra has close links to the adjacent Dhofar region of Oman, which has long viewed the province as an informal buffer from the instability in other parts of Yemen. Sultan Qaboos offered aid as well as dual citizenship to residents of Mahra as a means of eliminating the potential for another conflict resembling the Dhofar War of 1963-1976, which drew cross-border support from the People’s Democratic Republic of Yemen operating from Mahra into Dhofar
  • Inhabitants of Mahra have expressed frustration with the presence of both the Saudis and Emiratis, given that these kingdoms’ alleged foes—the Houthis as well as al Qaeda in the Arabian Peninsula—are not present in Mahra
  • The UAE has taken control of the Yemeni island of Socotra, building a military base in a unique ecosystem nominally protected by UNESCO. The UAE is also building bases in Eritrea and Somaliland as part of a plan to develop a “string of ports” that will allow it to project power and escape possible pressure from Iran in the Persian Gulf.
  • Other Emirati ambitions include the Musandam Peninsula, an Omani enclave that forms the narrowest point in the Strait of Hormuz. The inhabitants of the peninsula have close ties to the UAE, as Musandam connects geographically to the emirates of Ras al-Khaimah and Fujairah, rather than Oman. Oman’s control of the strategic chokepoint reflects the sultanate’s history as an empire whose territory once stretched from southern Pakistan to Zanzibar. 
  • The border between Oman and the UAE was only formally demarcated in 2008, but Omanis see a circle of potential threats arising from Emirati activity in or possible designs on Musandam, Mahra, and Socotra.
  • the UAE may feel that Oman’s new sultan may be more receptive to alignment with Emirati objectives than his predecessor
  • Oman has failed to significantly diversify its economy
  • As in many oil-dependent economies, unemployment is high, especially among young people
  • During the popular uprising of 2011, which brought thousands of Omanis to the street for the first time, the government used its nest egg to pay for a massive expansion of the government payroll.
  • there are no available resources to try to finance a transition away from oil, and the low price of oil has further impeded the government’s efforts to meet its obligations
Ed Webb

Saudi Arabia's Crown Prince MBS Is Right Where Trump Wants Him - Bloomberg - 0 views

www.bloomberg.com/...is-right-where-trump-wants-him

KSA MBS Saudi Trump USA US oil economy politics diplomacy

shared by Ed Webb on 05 May 20 - Cached
  • There came a moment during Donald Trump’s April 2 phone call to Mohammed bin Salman when Saudi Arabia’s crown prince and de facto ruler, apparently stunned by what the American president had just said, asked his aides to leave the room. No courtiers were present when their master, no slouch at intimidation himself, was apparently bullied into submission.
  • Trump had, in effect, threatened the complete withdrawal of American troops from the kingdom if the Saudis didn’t slash oil production.
  • the crown prince must now recognize the limitations of his ill-judged strategy to base relations with the U.S., the kingdom’s indispensable ally, exclusively on the cultivation of the first family. Previous Saudi rulers would have been able to rely on friends in Congress to plead with the White House for leniency. But MBS has few friends in Washington — and the army of lobbyists he maintains there is of limited use in a crisis.
  • ...5 more annotations...
  • the prince is as close to a pariah as a senior member of the royal family has ever been in the 75 years of the Saudi-American alliance
  • broad, bipartisan support in Washington for punitive actions against Riyadh
  • MBS’s dependence on Trump — and the White House veto — to override this antagonism made him highly vulnerable to presidential strong-arm tactics.
  • The prince is now in a bind. He desperately needs to rebuild bridges with Congress, but that will be harder now that he has injured U.S. oil interests. Nor can he easily submit to pressure from American lawmakers on other issues without losing face at home and in the Arab world. 
  • The timing of his humiliation by Trump is especially unpropitious: The twin blows of the oil war and the coronavirus pandemic have greatly damaged the Saudi economy and undermined his ambitious reform agenda at home. His cherished plan to build a futuristic megacity on the Red Sea coast is facing unexpected opposition. Much effort and cost will be required to extricate Saudi Arabia from the Yemeni quagmire with a semblance of dignity.
Ed Webb

Saudi Crown Prince Asks: What if a City, But It's a 105-Mile Line - 0 views

earther.gizmodo.com/at-if-a-city-but-it-1846046352

KSA Saudi MBS cities environment future sustainability dystopia opinion

shared by Ed Webb on 14 Jan 21 - Cached
  • Vicious Saudi autocrat Mohamed bin Salman has a new vision for Neom, his plan for a massive, $500 billion, AI-powered, nominally legally independent city-state of the future on the border with Egypt and Jordan. When we last left the crown prince, he had reportedly commissioned 2,300-pages’ worth of proposals from Boston Consulting Group, McKinsey & Co. and Oliver Wyman boasting of possible amenities like holographic schoolteachers, cloud seeding to create rain, flying taxis, glow-in-the-dark beaches, a giant NASA-built artificial moon, and lots of robots: maids, cage fighters, and dinosaurs.
  • Now Salman has a bold new idea: One of the cities in Neom is a line. A line roughly 105-miles (170-kilometers) long and a five-minute walk wide, to be exact. No, really, it’s a line. The proposed city is a line that stretches across all of Saudi Arabia. That’s the plan.
  • “With zero cars, zero streets, and zero carbon emissions, you can fulfill all your daily requirements within a five minute walk,” the crown prince continued. “And you can travel from end to end within 20 minutes.”AdvertisementThe end-to-end in 20 minutes boast likely refers to some form of mass transit that doesn’t yet exist. That works out to a transit system running at about 317 mph (510 kph). That would be much faster than Japan’s famous Shinkansen train network, which is capped at 200 mph (321 kph). Some Japanese rail companies have tested maglev trains that have gone up to 373 mph (600 kph), though it’s nowhere near ready for primetime.
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  • According to Bloomberg, Saudi officials project the Line will cost around $100-$200 billion of the $500 billion planned to be spent on Neom and will have a population of 1 million with 380,000 jobs by the year 2030. It will have one of the biggest airports in the world for some reason, which seems like a strange addition to a supposedly climate-friendly city.
  • The site also makes numerous hand wavy and vaguely menacing claims, including that “all businesses and communities” will have “over 90%” of their data processed by AI and robots:
  • Don’t pay attention to Saudi war crimes in Yemen, the prince’s brutal crackdowns on dissent, the hit squad that tortured journalist Jamal Khashoggi to death, and the other habitual human rights abuses that allow the Saudi monarchy to remain in power. Also, ignore that obstacles facing Neom include budgetary constraints, the forced eviction of tens of thousands of existing residents such as the Huwaitat tribe, coronavirus and oil shock, investor flight over human rights concerns, and the lingering questions of whether the whole project is a distraction from pressing domestic issues and/or a mirage conjured up by consulting firms pandering to the crown prince’s ego and hungry for lucrative fees. Nevermind you that there are numerous ways we could ensure the cities people already live in are prepared for climate change rather than blowing billions of dollars on a vanity project.
Ed Webb

How Iraqi Oil Is Changing the World - By Stephen Glain | Foreign Policy - 0 views

www.foreignpolicy.com/...raqi_oil_is_changing_the_world

oil OPEC diplomacy Iran Iraq KSA

shared by Ed Webb on 17 Mar 10 - Cached
  • For decades, Saudi Arabia has served as the world's central banker of oil supplies. In unstable times, most famously in the wake of Iraqi's 1990 invasion of Kuwait, it has drawn from its spare production capacity of some 1 million barrels to bring prices to heel.
  • Iraq's revival as a prominent oil exporter is bound to reshuffle a careful power balance in the energy-rich Arab world, particularly between bitter rivals Saudi Arabia and Iran. Saddam Hussein's 2003 toppling created a vacuum that both sides rushed to fill, for example deploying proxy forces at the height of Iraq's sectarian civil war. OPEC is another battlefield for the Saudi-Iran rivalry, and the Saudi kingdom is in no hurry to lose its uncontested status as No. 1. Now, as Iraq stabilizes politically and slowly rebuilds its oil-production capacity, both sides will have to accommodate a more assertive Baghdad. Even if oil production doesn't reach the Iraqis' goal, it will likely be higher than the approximately 1.7 million barrels per day that Iraq was producing just prior to the U.S. invasion.
  • quota smashers like Iran and Venezuela, who routinely oversell to pay for their costly entitlement programs
Ed Webb

Mohammed bin Salman Isn't Wonky Enough - Foreign Policy - 0 views

foreignpolicy.com/...d-bin-salman-isnt-wonky-enough

KSA Saudi economy reform demographics analysis

shared by Ed Webb on 02 Apr 18 - No Cached
  • Like Western investors, the kingdom’s elites are uncertain about what the new order means for the country’s economy. The new Saudi leadership has indeed created new opportunities, but many of the deep structural barriers to diversification remain unchanged. The bulk of the public sector remains bloated by patronage employment, the private sector is still dominated by cheap foreign labor, and private economic activity remains deeply dependent on state spending. Addressing these challenges could take a generation — and it will require patience, creativity, and a clearer sense of priorities.
  • While a band of Al Saud brothers used to rule collectively with the king as a figurehead, decision-making has now become centralized under one man
  • ruthlessness and willingness to take risks radically at odds with the cautious and consensual political culture of the Al Saud clan
  • ...13 more annotations...
  • New policies and programs are announced constantly, while the delivery capacity of the sluggish Saudi bureaucracy continues to lag. Below the upper echelons, the Saudi state remains the deeply fragmented, bloated, and slow-moving machine that I described in my 2010 book. The government seems to have no clear strategy for reforming this bureaucracy
  • While space for political opposition arguably has narrowed, women will soon be allowed to drive and the religious police force that once harassed them has been almost entirely neutered. By relaxing religious controls over the public sphere, the crown prince is seeking to attract more foreign investment and facilitate diversification into tourism and entertainment
  • Saudi Arabia has tackled fiscal reforms more vigorously than most local and international observers expected, introducing unprecedented tax and energy price measures, including the introduction of a 5 percent value added tax, new levies on foreign workers, and increases in electricity and transport fuel prices. The government is now experimenting with new non-oil sectors with an increased sense of urgency, including information technology and defense manufacturing.
  • As limits on government employment kick in, young Saudis will increasingly have no choice but to seek private jobs. But they will face tough competition on the private labor market where employers have become accustomed to recruiting low-wage workers from poorer Arab and Asian countries
  • public sector employment remains the key means of providing income to Saudi nationals. Cheap foreign labor dominates private sector employment, thereby keeping consumer inflation at bay and business owners happy. Citizens, however, are parked in the overstaffed public sector. Out of every three jobs held by Saudis, roughly two are in government. The average ratio around the world is one in five. Public sector wages account for almost half of total government spending, among the highest shares in the world
  • Local economic advisors fear that the majority of private petrochemicals firms — the most developed part of Saudi industry — would lose money if prices of natural gas, their main input, increase to American levels.
  • Saudi wage demands will have to drop further if private job creation is to substitute for the erstwhile government employment guarantee. For the time being, private job creation has stalled as the government has pursued moderate austerity since 2015 in response to deficits and falling oil prices
  • The government has also underestimated how dependent private businesses are on state spending. The share of state spending in the non-oil economy is extremely high compared to other economies. Historically, almost all private sector growth has resulted from increases in public spending
  • As long as oil prices remain below $70 per barrel, the goal of a balanced budget will cause pain for businesses and limit private job creation. This will pose a major political challenge at a time when an estimated 200,000 Saudis are entering the labor market every year. More than 60 percent of the population is under 30, which means that the citizen labor force will grow rapidly for at least the next two decades.
  • It would be far more prudent to gently prepare citizens and businesses for a difficult and protracted adjustment period and to focus on a smaller number of priorities
  • The key structural challenge to non-oil growth is the way the Saudi government currently shares its wealth, most notably through mass public employment — an extremely expensive policy that bloats the bureaucracy, distorts labor markets, and is increasingly inequitable in an era when government jobs can no longer be guaranteed to all citizens. A stagnating economic pie that might even shrink in the coming years must be shared more equitably.
  • A basic income would not only guarantee a basic livelihood for all citizens, but also serve as a grand political gesture that could justify difficult public sector reforms. A universal wealth-sharing scheme would make it easier to freeze government hiring and send a clear signal that, from now on, Saudis need to seek and acquire the skills for private employment and entrepreneurship. The government could supplement this scheme by charging fees to firms that employ foreigners while subsidizing wages for citizens to fully close the wage gap between the two.
  • Focusing on such fundamentals might be less exciting than building new cities in the desert or launching the world’s largest-ever IPO — but they are more important for the kingdom’s economic future. No country as dependent on petroleum as Saudi Arabia has ever effectively diversified away from oil
Ed Webb

Is Oman's model of governance about to shift? - 0 views

www.al-monitor.com/...ft-oil-prices-coronavirus.html

Oman economy GCC rentierism reform pandemics oil energy policy

shared by Ed Webb on 10 Apr 20 - Cached
  • Like other Gulf states, Oman does not grant citizens freedom of expression or the right to choose their leader, but it does provide citizens a range of material advantages: public sector jobs, subsidies, free health care and education, a free plot of land, a pension and no income tax.
  • Oman’s public debt has skyrocketed since oil prices declined in 2014, going from less than 5% of Oman's gross domestic product to nearly 60% last year. Until 2023, annual budgets were already expected to be in the red. But the 2020 fiscal deficit is expected to be four times higher than previously forecasted because of the double shock of the COVID-19 pandemic and plunging oil prices, credit rating agency Fitch estimated.
  • the cash-strapped Omani government is expected to cut down on public expenditures and impose austerity measures. But such a move would revamp the model of governance that has prevailed since the late Qaboos bin Said ascended to the throne in 1970
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  • Public taxation is also increasing. A sin tax was implemented in June 2019 on products like sugary carbonated drinks and tobacco, and a serially delayed 5% value-added tax is expected in 2021. According to Salmi, electricity and water subsidies could soon be slashed and, in the long term, Omanis could see an income tax.
  • Above all, reforming the labor market — an unpopular move — would be the cornerstone of a post-Qaboos welfare state. About 43% of Omanis work for public entities. Abousleiman recommended economic diversification to foster private sector job creation and to further "relieve the expectations on the government to provide employment."
  • Following a field visit to Oman in 2019, the International Monetary Fund (IMF) suggested that the wages and benefits of the private sector need to align more closely with the public sector to make employment in the former more appealing.
  • Omanis who talked to Al-Monitor, as well as Mukhaini, believe any upcoming austerity measures "should not make the poor poorer and the rich richer," Mukhaini said.
  • According to rating firm S&P, the new ruler will face “a difficult trade-off” in the coming months to address high unemployment among youths, weak growth, and fiscal and funding pressures
  • Defense and security expenses account for over a quarter of Oman's annual budge
  • Oman — rated junk by the three major rating agencies — has several other options to fund its short-term ballooning deficit: Go further into debt; deplete its sovereign wealth fund; sell state assets; devalue its currency; and seek assistance from neighboring countries or international organizations.
  • Analysts believe Oman should build a model of governance tailored to the post-oil era. Along with a more stringent budget environment, the new leadership pledged to implement structural reforms to diversify the rentier economy and foster private sector-led growth.
  • To ensure political and social stability, Sultan Qaboos avoided controversial measures that could have triggered short-term political unrest
  • In 2011, at the height of the Arab uprisings, Sultan Qaboos promised to create 50,000 jobs and institute unemployment benefits in an attempt to defuse unprecedented nationwide protests.
  • the lack of economic reforms did not stop Omanis from loving the monarch, who built a modern state out of a medieval-like society he inherited in the early 1970s
  • Sultan Haitham bin Tariq "is already planting the seeds by cutting the royal expenditures tremendously,"
  • The relationship between state and society that Omanis have known for decades will likely never be the same
sean lyness

Libya's regime at 40: a state of kleptocracy | openDemocracy - 2 views

www.opendemocracy.net/...e-at-40-a-state-of-kleptocracy

Libya state terror

shared by sean lyness on 27 Apr 10 - Cached
  • Tripoli the "Green House", until its English gardening connotations were pointed out.  More reminiscent of other revolutionary trajectories was his renaming of the months of the year (the Roman words being too reminiscent of the Italian imperial yoke), and his attempt to replace all English words by Arabic (even such good friends of the people as "Johnny Walker" [Hanah Mashi] and "7 Up" [Saba'a Fauq].
  • after 9/11, when Libya took a strong rhetorical stand away from its earlier use and endorsement of state terrorism;
  • Since the early 2000s it has become common to argue that Libya is changing. Libya has for sure altered its foreign-and defence-policy course: many countries do in the course even of a long period of rule by a single leader - even Joseph Stalin's Soviet Union or Kim Jong-il's North Korea, for example. But at home, and the regime's heart, the changes are cosmetic.
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  • Arbitrary arrest, detention, torture, and disappearance still take place
  • no constitutional system
  • Moreover, it is clear is that for all the rhetoric about "revolution" and the "state of the masses" the Libyan leadership has squandered much of the country's wealth twice over: on foolish projects at home and costly adventures abroad.
  • Libya, with a per capita oil output roughly equal to that of Saudi Arabia, boasts few of the advances - the urban and transport development,  educational and health facilities - that the oil-endowed Gulf states can claim
  • Libya has not introduced significant changes to its political system, and especially not with regard to human rights or governance. The Jamahiriyah remains in 2009 one of the most dictatorial as well as opaque of Arab regimes. Its 6 million people enjoy no significant freedoms
  • The improvement in Libya's international profile in recent years reflects the abandonment of the regime's nuclear-weapons programme and its policy of hunting down Libyan dissidents living abroad (including their kidnap and murder).
  • For Libya's reputation among other Arab states and peoples is abysmal, if the state is not actually an object of contempt.
  • Libya is far from the most brutal regime in the world, or even the region: it has less blood on its hands than (for example) Sudan, Iraq, and Syria
  • ruled for forty years with no attempt to secure popular legitimation.
  • The Libyan people have for far too long been denied the right to choose their own leaders and political system - and to benefit from their country's wealth via oil-and-gas deals of the kind the west is now so keen to promote. 
  • sean lyness on 27 Apr 10
     
     despite a reputation for random arrests and tortures and a public denied the benefits of its country's oil wealth, Libya maintains permissible international image through "cosmetic changes" (?), dropping their nuclear weapons program, and abandoning its policy of "hunting down Libyan dissidents living abroad (including their kidnap and murder)."
Ed Webb

Iran's Revolutionary Guard Corps expands role in sanctions-hit oil sector - 0 views

www.washingtonpost.com/...AR2010050405130.html

Iran IRGC oil authoritarianism sanctions

shared by Ed Webb on 10 May 10 - Cached
  • "The Revolutionary Guards are smiling at the idea of new sanctions against Iran," said a Western executive who represents one of the world's largest oil companies. "Sanctions against the industry or preventing foreign companies from selling gasoline to Iran will mean more money, power and influence for the Guards," he said.
  • Under President Mahmoud Ahmadinejad, the Guard has vastly increased its business activities. Working through its construction-sector arm, the Guard operates Tehran's international airport, builds the nation's highways and constructs communications systems. It also manages Iran's weapons-manufacturing business, including its controversial missile program. Iran's leaders view the Guard's involvement in the oil industry as normal and say the elite military branch is merely helping to develop a nation under sanctions. The Guard's construction arm acts as a commercial company, but it is unclear how its revenue is handled. Commanders say the Guard's income is transferred to the national treasury, but no public records detail the amounts.
  • The Guard, whose Khatam ol-Anbia arm is the biggest construction contractor in the country, publicly boasts of its growing experience in huge oil projects. "Today, the Revolutionary Guards are proud to have such knowledge and capability that we can easily replace big foreign companies like Total and Shell in taking over big projects at Asalouyeh," senior commander Yadollah Javani told the semiofficial Iranian Labor News Agency last weekend. Western analysts say that on major projects, however, the Guard typically subcontracts the most complex work to foreign companies, most of them now from China.
Ed Webb

Middle East Report Online: Dead-Enders on the Potomac by From the Editors - 0 views

www.merip.org/...mero012911.html

Egypt US USA diplomacy politics authoritarianism democracy democratization

shared by Ed Webb on 29 Jan 11 - No Cached
  • Arab populations have heard a variation on Washington’s long-standing theme: “The Obama administration seeks to encourage political reforms without destabilizing the region.” That sentence, taken from the National Security Network’s January 27 press release, says it all: Democracy is great in theory, but if it will cause any disruption to business as usual, Washington prefers dictatorship.
  • The reasons for this stance have changed little over the decades since the US became the superpower in the Middle East. Strategic interest number one is the flow of oil from the Persian Gulf to the world economy, unimpeded by a rival hegemon or a regional upstart that might raise prices dramatically or deploy the oil weapon to extract political concessions from the West. Number two is the security of Israel. But third -- not to be confused with tertiary -- is the stability of satrapies that Washington can trust to safeguard its other interests and initiatives, whether the US-sponsored “peace process” between Israel and the Palestinians (and the blockade upon Hamas that Egypt helps to enforce) or the campaign to curtail Islamist movements for which Tunisia’s Ben Ali so eagerly signed up. The US rewards its clients with cash and copious armaments, with scant regard for their records on democratization or human rights. After the Yemeni regime canceled elections in 2009, its aid package was quintupled. There have always been numerous dissenters within the US foreign policy apparatus who know the damage that is being done, but they are resolutely kept out of positions of real authority.
  • Amidst the hand wringing in the mainstream media over Obama’s “limited options” in Egypt, through whose Suez Canal cruise oil tankers and the warships of the US Fifth Fleet, the truth is that the entire debate over democracy promotion in the Arab world and greater Middle East has been one long, bitterly unfunny joke. The issue has never been whether the US should promote democracy; it has been when the US will stop trying to suppress it. The bargains with tyrants lay a “commitment trap” for Washington, which must solemnly swear allegiance to each strongman lest others in the club have second thoughts about holding up their end. The despots, in turn, assume that the Marines or their equivalents will swoop in to the rescue if need be. Most, like Ben Ali, are mistaken, if nothing else because an ambitious underling is often waiting in the wings. Meanwhile, just as Iranians have not forgotten the Carter administration’s eleventh-hour loyalty to the Shah some 32 years later, neither will Pakistanis soon forgive the US for standing by Gen. Pervez Musharraf.
  • ...1 more annotation...
  • When it comes to the aspirations of ordinary Arabs for genuinely participatory politics and true self-determination, those vaunted American values are suspended, even when “special relationships” and hydrocarbon riches are not directly at issue. And the anti-democratic sentiment is bipartisan: On this question, there is less than a dime’s worth of difference between “progressive” Democrats and Republican xenophobes, between pinstriped State Department Arabists and flannel-clad Christian fundamentalists, between oil-first “realists” and Israel-first neo-conservatives. There is none.
  • Ed Webb on 29 Jan 11
     
    Harsh. Possibly fair.
Ed Webb

Debt is No Way For Non-Oil Arab States to Grow - Bloomberg - 0 views

www.bloomberg.com/...or-non-oil-arab-states-to-grow

Egypt Jordan Tunisia Morocco economy investment FDI debt remittances integration regionalism analysis opinion

shared by Ed Webb on 01 Aug 19 - Cached
  • many of the non-oil exporting nations in the Middle East and North Africa are undergoing a process of redefinition of how they are linked with the global economy. It is not going well.
  • Egypt, Tunisia, Morocco and Jordan are becoming more dependent on external borrowing than on foreign direct investments compared to the pre-2008 period. This is visible with declining ratios of FDIs to GDP, in contrast with increasing ratios of foreign debt to GDP and total exports
  • The relative political stabilization in all four countries as of 2014/2015 did not allow them much room for full-fledged recovery due to the global economic slowdown. This made it harder for all of them to achieve export-led growth and attract FDI, leaving them with foreign borrowing as the only viable option. Foreign debt accounts for much of the apparent recovery, as expressed in growth rates.
  • ...5 more annotations...
  • The ratio of external debt to total exports of goods, services and primary incomes was even more dramatic for all four countries. This is a proxy of the capacity of these economies to service their growing external obligations. Between 2010 and 2017, the ratio increased from 75%, 99.6%, 97.6% and 125% for Egypt, Tunisia, Morocco and Jordan re2spectively, to 190%, 178%, 125% and 198% in 2017. All the figures exceed the 77% limit that, in the World Bank’s reckoning, foreign debt has a negative impact on growth.
  • In Egypt, the ratio of external debt to GNI more than doubled from 17% in 2010 to 36% in 2017. The change was as pronounced in Tunisia, were the ratio jumped from 54% to 83%. In Morocco and Jordan, the ratios changed as well from 65% and 29.6%, to 47% and 75%.
  • International capital markets are unstable and global trade is contracting. Governments should instead target local investment in brick-and-mortar sectors that can deliver real growth, create jobs and possibly reduce the dependency on some imports
  • better use of the net inflows of capital they have received for years in the form of remittances. Instead of channeling them into non-tradable sectors like real-estate, as has been often the case, they should be used to finance investment in more productive sectors
  • trade-oriented regional integration, opening markets in oil-rich countries. There might be room also for adding a regional dimension to plans for industrial diversification by Saudi Arabia and the United Arab Emirates, by coordinating flows of investment and technology and skill transfers in sectors like petrochemicals and hi-tech services.  Such measures would generate growth and employment for poorer allies and cement regional geopolitical arrangements
Ed Webb

The impact of the global energy transition on MENA oil and gas producers - ScienceDirect - 0 views

www.sciencedirect.com/...S2211467X19300902

energy MENA oil climate economy

shared by Ed Webb on 20 Feb 20 - Cached
  • MENA hydrocarbon producers' socio-economic structures continue to heavily rely on oil rent.•The low-carbon transition may imply sustained pressure on their development models.•Since the 2014 oil price drop, they adopted new, ambitious, economic diversification plans.•Such diversification plans never worked in the past, due to a lack of real incentives.•Job creation needs and low-carbon transition could foster diversification plans' implementation.
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