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    Middle East
     Feb 21, '14

Gulf's collaborative colonialism is here to stay
By Hossein Askari

Oil and the Persian Gulf are words that are almost inseparable. It is tough to mention one without the other. Over the past 75 or so years, most significant developments in the region are in some way related to oil - inefficient institutions, the absence of the rule of law, corruption, economic failure, wars and conflicts, foreign interference, foreign relations, and more.

How did the countries of the Persian Gulf end up this way? How have the political, religious, and social structures of these societies affected the way oil has been exploited, and in turn, how has oil affected these societies - their human, political, and economic development and their relations with the outside world?

Before the discovery of vast quantities of oil in the Persian Gulf, the countries (or in some cases sheikhdoms) were poor

(especially those that had few non-oil natural resources, such as Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), politically and socially backward, and looked to the West for direction and guidance. Great Britain and France treated them as de facto colonies - controlling their every move and exploiting their oil resources for their own benefit.

Today, nearly a century later, the countries of the region are much the same but with a facade of unimaginable wealth and ostentatious living on the part of rulers and their supporters - especially in the countries that have extraordinary per capita oil (and natural gas) wealth.

There are more regional conflicts and more foreign meddling than ever before in the affairs of the region. While most former colonies around the world have been cut loose, countries of the Persian Gulf, though technically not colonies, have been pulled in the opposite direction and arguably reined into a different colonial relationship, with the United States as the colonialist in charge.

Although all Persian Gulf countries were exploited by the governments of colonial and neo-colonial powers in the past, the pattern has evolved and has taken a more ominous form, making it more difficult to break. Beginning about 40 years ago, the United States, Great Britain and France began to realize that it was becoming increasingly difficult to confront hereditary rulers and to exploit them as had been done with traditional colonies. The sensibilities of the world had changed. Collaboration was the way to go.

The collaborative colonialists could take on this new mantle because the rulers were corrupt and wanted to maintain their hold on power to enrich them. Foreigners could simply collaborate with them, not confront them, supply military support services and share in the riches.

It was a marriage greased with oil. Most of the rulers had little or no legitimacy, were weak, and were only too happy to solicit the support of their former colonial masters, their current and former senior government officials, their multinational companies, and their influential lobbyists to exploit their own countries for personal gains.

Similarly, with so much wealth at stake, foreigners did not have to give up control of these countries (though not technically colonies), as they more or less had to with other former colonies around the world.

This collaborative relationship has evolved, could be here to stay for years to come, and in time may be seen as the one that trumped traditional colonialism for decades. Simply said, if and when a ruler is deposed, the new ruler will jump into the breach and gain immediate hold on power with foreign support as long as he reciprocates and protects the foreigners' interests.

What has been the political and economic manifestation of oil - the political economy of oil - that has shaped the region in this way? Will the future necessarily be the same?

This collaborative relationship, the corrupt rulers and the vast oil wealth have prevented institutional development. Weak institutions cover the landscape of the region, as effective institutions would undermine corrupt and illegitimate rule. The absence of institutional development has harmed citizens politically, socially, and economically, possibly leaving some countries worse off than had oil never been discovered on their land.

While a number of these countries may appear to have been transformed with high levels of per capita GDP today, their economies are fundamentally unsustainable (built upon the depletion of oil) and unstable (with an unjust foundation and little popular backing). Oil has not only hindered the development of good institutions but has skewed the interests of rulers and elites to such an extent that they actively prevent the creation of effective institutions.

If the management of oil and the foreign role is not changed, and changed soon, history will witness a few rich families, with riches beyond compare, and millions of bitter citizens with little to support their development and livelihood.

Hossein Askari is Professor of Business and International Affairs at the George Washington University.

(Copyright 2014 Hossein Askari)




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