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Mideast Democracy and the Control of Oil

Lee Lane

Iran and Saudi Arabia are locked in two grim proxy wars — one in Syria, and the other in Yemen. And in recent days, the long-running hostility between these two regional powers has blazed higher still. The Saudis executed a Shiite cleric for his role in fomenting the insurgency in the Kingdom’s Eastern Province — the heart of its oil industry. Iran sides with the insurgents, and Tehran has virulently condemned Riyadh for executing the cleric. Angry mobs in Iran sacked two Saudi diplomatic posts there, and the Saudis believe that Iranian authorities were complicit in the attacks. In response, Riyadh severed diplomatic and trade ties with Iran. Allied monarchies in the Gulf Cooperation Council (GCC) have Followed the Saudi lead, relaxing in varying measure their ties to Tehran.

From a U.S. standpoint, this conflict raises a critical issue: how to prevent Iran from expanding its control of the vast oil reserves in the Persian Gulf. In 2014, GCC members produced nearly one-quarter of the world’s crude oil, and they held more than one-third of all proven reserves. Iranian control over even a portion of this wealth could alter the regional balance of power. The Islamic Republic has shown itself to be an implacable foe of U.S. interests, while Saudi Arabia is a longtime U.S. ally. Logically, then, Washington should oppose any shift toward Iran in the balance of power in the Gulf.

Yet Obama, rather than supporting the Saudis, responded to the current crisis with a renewed call for liberal change in Saudi Arabia. This response doubtless reflects the President’s strained relationship with the Saudi monarchy. It also reprises a recurring theme in Washington’s approach to the Mideast-North Africa (MENA) region — its demand that the region’s governments adopt liberal reforms. But this effort too often yields highly unwelcome results. President George W. Bush’s plan to oust the Iraqi Baathists led to a government that hovers between being a failed state and becoming a puppet of Tehran. Libya remains immersed in the anarchy into which NATO’s aerial bombardment plunged it. The Arab Spring ignited civil war in Syria and Iraq, and in doing so, it spawned the Islamic State group and greatly worsened the chaos in Yemen. The regime that finally emerged in Egypt is both less secure and less pro-American than that run by former President Hosni Mubarak, whom the Arab Spring deposed. Finally, as pockets of anarchy have proliferated, regional powers have increasingly relied on identity politics to fill the resulting power vacuums. In the process, they have further fanned the flames of sectarian conflict.

Hopes that democracy will soon take hold are almost certainly vain. Securely democratic states typically rest on economies that feature complex and interdependent exchanges across internal social boundaries. Such exchanges knit society together. They also raise the expected costs to any group of resorting to violence within their country’s borders.

But no Muslim-majority MENA economy is structured in this way. The oil-exporting states may be wealthy, but oil exports do not create the kind of complex internal linkages required to incubate stable democracies.

Instead, MENA states maintain order through robust armed forces and strong security services. They also use welfare programs, bloated public sector bureaucracies, and pervasive cronyism to buy the support of groups that might otherwise resort to violence. With so many of their resources diverted to conflict control, these states have limited opportunity to foster the economic progress from which more interdependent economies might emerge. Some leading scholars dub this conundrum the violence trap, and MENA states have no obvious way of escaping it.

Efforts to graft liberal institutions onto societies caught in this trap quickly weaken the existing props of domestic order. As repression crumbles, for example, angry publics are apt to target their unrest at domestic cronyism and at the security services. But pervasive cronyism and the security apparatus are mainstays of public order. In the short run, there is nothing to replace them.

Plainly, the United States is not going to stabilize the Persian Gulf by turning the Gulf monarchies into liberal states. Of course, these states may benefit from adopting some prudent liberal reforms. And Saudi institutions both political and economic are evolving. Obama appears to believe that Washington can guide this process better than Riyadh. But the historical record of his and his predecessor’s efforts in this regard testify forcefully to the contrary. And clinging so tenaciously to this failed approach bespeaks ideology — not statecraft.

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