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Oil, a Curse or a Blessing?

Oil, a Curse or a Blessing?

Monday, 5 March, 2018 - 10:30
Abdulrahman Al-Rashed
Abdulrahman Al-Rashed is the former general manager of Al-Arabiya television. He is also the former editor-in-chief of Asharq Al-Awsat, and the leading Arabic weekly magazine Al-Majalla. He is also a senior columnist in the daily newspapers Al-Madina and Al-Bilad.

There are two important dates in Saudi Arabia: the day when King Abdulaziz bin Abdulrahman established the kingdom and the date when the American company Standard Oil discovered oil on in the newly-established kingdom.

It’s been 80 years since the day that changed the future of Saudi Arabia following five years of failure. Their attempts to find resources finally yielded results when they discovered well no.7 which released a huge fountain of black oil in the sky.

If King Abdulaziz had not unified this huge country, there would have been smaller states fighting in the Arabian Peninsula. If oil hadn’t been discovered, the country would have suffered due to its weather conditions and rare water resources and pastures.

Before the Americans dug for oil, the British were in the kingdom exploring. However they were convinced there was no oil there so they left and gave up on cooperation with the king. Britain’s viceroy in India responded to the king’s letter himself after the latter proposed cooperation. He said Britain does not desire to cooperate with him and he must handle his affairs on his own, adding that all that concerns the British Empire is that no one obstructs its fleet’s navigation activity in Gulf waters.

After this harsh reply, the king went to the Americans who had nothing to do with the region. The Americans came from the end of the world to try their luck. It’s said that the Americans did not want to upset Britain for working in their traditional areas of influence so they told the British that they went to Saudi Arabia to help find water for the locals.

Although oil was discovered in Saudi Arabia in the 1930s, it was not exported and it did not become a financial resource until around 20 years later. This was due to international economic circumstances and World War II.

We are now entering a new phase as there are plenty of doubts regarding oil as a reliable economic resource. The state’s official policy is based on searching for other options that decrease reliance on oil. Those devising the new policy believe that resuming work according to the old logic – that oil is the only resource – may lead to the collapse of the entire national economy if it makes modest incomes due to dangerous shifts in the oil alternatives market. No one can assert anything yet but relying on oil is not a solution.

The true 'curse'

Some believe oil has been a curse on the region due to fighting over oil-rich areas and exporting it and because it brought superpowers from across the world and they ended up competing to provide it for their own markets. However, oil could have been a blessing for those who used it right. The region, and not just Saudi Arabia and Gulf countries, is lucky because around half of its countries are rich in oil and make easy incomes out of it. Unfortunately, the problem has always been related to how its wealth is managed.

There is no “curse of oil” but a curse due to the people whose lands are rich in oil as they squandered the greatest opportunities in the history of their countries. When we recall what Saddam Hussein did to oil revenues in Iraq and what Muammar Gaddafi did to oil revenues in Libya and what Qatar is doing now with its oil revenues, we feel sorry for what ignorant people have done to their countries’ resources.

These are depleting resources which lucky ones get the chance to make use of once in their history. If they use them wisely, they will change their sons’ future and their countries’ future for generations to come, and if they misuse them, they will destroy them and impoverish them making them poorer than they were before discovering oil!

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