Not a Curse at All: Why Middle Eastern Oil States Fail and How it can be Prevented

Abstract

Western scholarship has often noted that oil states in the Middle East are affected by the ‘resource curse’. Thus, such states are to eventually fail due to their plundering of resources and their neglect of the social contract with their citizens. However, this is not the case, as oil states are neither failed states, nor fully democratic. They hover in a middle ground in which they assure security through coercion, but lack representation and legitimacy. Due to the events of the Arab Spring, a pragmatic, insightful and comprehensive review of oil states in the region is necessary. Although oil states in the region thus far have remained stable, change can be expected in the future. How will oil states deal with the pressures of a more demanding society and an ever-challenging economic atmosphere? Furthermore, what can history teach us so that state failure can be averted?

Keywords:

• Middle East
• Arab Spring
• oil states
• state failure
• democratization

Notes on Contributors

Rolf Schwarz is Political Advisor for the Middle East, North Africa and the Gulf region at NATO Headquarters in Brussels. Prior to that he was Professor at the NATO Defense College in Rome where he wrote this article. He holds a PhD in International Relations from the Graduate Institute of International Studies in Geneva where he specialised in security studies and the Middle East. The views expressed in this article are those of the author alone. ([email protected])

Miguel de Corral is a student at Northeastern University in Boston where he studies International Affairs with a concentration in Middle East Studies. Previously he worked at the NATO Defense College as a research assistant in the Middle East Faculty. He is a commentator on political and security developments in the Middle East and has published articles in Europe, the Middle East and the United States. ([email protected])

Notes

1 Interestingly, recent scholarship has suggested that oil states that are led by revolutionary governments are more prone to use their natural resources for war making as their leaders are more risk accepting (Colgan 2010). In the Middle East this points to a classic distinction between revolutionary regimes and conservative monarchies, and indeed some scholars have asked whether the stability of the Gulf States, which we describe, might not be explained by the fact that they possess greater political flexibility when facing deep and widespread demands for political and social change. This is an interesting point, which goes beyond the scope of this article, but certainly merits further academic research.

2 See, for example, Fukuyama (2004), who claims that ‘weak or failed states are the source of many of the world's most serious problems’, or Spanger (2002, p. 2), who posits: ‘Now the US and its allies are obliged to recognize the distinct threat from the spreading chaos of failed and broken states. Pariah states can be deterred and, if necessary, defeated. … Afghanistan is but one example of the new threat: havens where criminals, drug barons and now terrorists have stepped in when the authority of the state has fractured. Think of Somalia, Liberia, Sierra Leone, Chechnya, the vast drug plantations in South America.’

3 Rentier states are those states in which revenues from rents contribute well over 40 per cent of the state's overall revenues. Rents are understood to be income generated from the export of natural resources, usually oil and gas, but also income from bilateral or multilateral foreign aid payments, such as development assistance of military assistance.

4 Sometimes a repression effect is added to this list, whereby scholars argue that rentier states use natural resources to fund their apparatus of repression. This argument is not convincing, as even the well-equipped armies of rentier states could not avoid state failure in Iran under the Pahlavi regime (Skocpol 1982), nor in Iraq under Saddam Hussein (Schwarz 2008a). In Iraq, to the contrary, the army—and the economic burden it represented—contributed to, rather than avoided, state fragility.

5 Part of the problem so far has been that academic scholarship has analysed the impact of natural resources through the lens of ‘transition to democracy’ (regime change) or through the lens of ‘stability of democracies’ (regime survival) and thereby created two parallel bodies of literature. It is the hope that this article helps to focus on the advantage of natural resources in mitigating social conflict and thereby opens pathways to understanding both transitions and stability.

6 A difference exists of course between European foreigners and those coming from India, Pakistan or Bangladesh. Although both are largely excluded from the welfare benefits and allocations, the two groups are not treated equally and benefit to varying degrees from rights.

7 In that sense, Libya resembles another rentier state that chose war making as a strategy of state-building: Iraq under Saddam Hussein, with remarkably similar results, namely state failure and collapse.

8 See Robertson and Glanz (2009) and Siddiqi (2009) for forewarnings of this.