How the structure of global oil markets fuels authoritarianism and war

How the structure of global oil markets fuels authoritarianism and war

by Zack Beauchamp

Almost every day, even if you don’t own a car, you probably buy something made from oil. Usually we don’t think about where that money goes – because the answer, at least some of the time, is that it ends up lining the pockets of some of the world’s deadliest people.

The problem, in fact, may be bigger than we think. According to a new book by Leif Wenar, the chair of philosophy and law at King’s College London, the way the global oil trade is set up means that oil isn’t just passively funding bad guys – it actively encourages them.

Leif Wenar. Oxford University Press

Leif Wenar. Oxford University Press

In his book Blood Oil, Wenar sets out to explain a striking fact: much of the world has seen a decline in authoritarianism and war, but oil-rich countries have been left behind. Wenar blames the oil itself: Its profits allow authoritarian states to more effectively repress dissent than non-oil states, and helps militant groups fund their war machines.

Wenar argues that the problem with oil goes beyond the fact that it’s so valuable. It’s also partly because of the structure of the global oil market. He traces the root of the problem to a part of international law he calls “might makes right”: anyone who controls oil can sell it on the global market, regardless of whether they took it by force. It’s not a formal rule so much as a custom that no one has really bothered to change but that Wenar blames for many serious problems.

I called up Wenar to expand on these themes: to explain just how the global oil market spreads violence and why “might makes right” is the core of the problem. What follows is a transcript of our conversation.

 

You and a lot of other scholars talk about oil as the root cause of authoritarianism, state killing, civil wars, and militia violence. Why do you think that is?

Let me give you one summary fact. You know a lot about the amazing strides the developing world has made in the past 35 years in terms of democratization, poverty reduction, and declines in violence, and it has been extraordinary – except for the oil states. The oil states, as a whole, are no richer, no freer, and no more peaceful than they were in 1980, and that’s just remarkable. There’s something about being a major oil exporter in the developing world that is tremendously hazardous for your political economy.

Basically, now there are huge reservoirs of money underground, and whoever can control the hole in the ground by force gets a gigantic revenue stream from the world, with which they can do whatever they like. They can use it for buying weapons and starting or continuing a civil war; they can use it for coercion, or to stay in power. The money comes with no strings attached, it never has to be paid back, and it can be used for whatever the coercive actors want.

My view is that it’s this old, bad view of “might makes right” that is causing a lot of the trouble.

What exactly is that rule? How does it work, and why does it lead to all the ills that you were just talking about?

It’s a law of every country that says, “For the natural resources of other countries, whoever can control them by force can sell them to us.” For example, when Saddam’s Baath party took over Iraq in a coup, the world started buying Iraq’s oil from them, and then later, when Isis took over wells, the world started buying oil from them too. Then you can think of Libya: Qaddafi takes over in a coup, and then when the rebels in the Arab Spring took over the wells from Qaddafi, the world started buying Libya’s oil from the rebels.

Whoever can seize it can sell it to us, and that means our money that we pay at the pump and in the stores goes back through the world’s supply chains to whoever can be most successfully coercive. That’s why oil, especially, and other natural resources, too, correlate with authoritarianism and armed conflict.

That’s a great deal of explanation of why these countries are so disordered.

 

Source: Vox

Date: February 2016

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