Submitted by Claude Salhani of OilPrice.com [8],
The discovery of oil in the Middle East around the 1930s has had a drastic effect on the lives of the people in the region. In most instances this black gold buried under the sands of Arabia has impacted the lives of the people in a rather positive manner. But not always.
The wonders accomplished by some of the oil rich sheikdoms of the Gulf region is nothing short of amazing where they have in a very real sense, made the desert bloom, and then some. Oil, there is no question, has changed forever the way people live and work today. And these changes have for the most part been positive. Look at cities such as Dubai or Doha and the marvels they have achieved; how the governments with the help of oil revenues have managed to raise the level of living for the vast majority of their citizens. And at the same time they have created thousands of well paying jobs for foreign workers.
The governments have used their oil revenues to build schools, hospitals, road infrastructures, electric grids and everything else that goes with running a modern state. In other words oil revenues have helped propel these countries from a medieval existence into modern times. Look at Muscat, the capital of Oman, where until the 1970s the previous ruler, Sultan Said bin Taimur, had decreed that the city gates be close at sunset and reopen at sunrise and that anyone walking in the city at night without a lantern held face-high, would be shot. Girls were banned from going to school and the country, slightly smaller than the state of Kansas, had a single hospital and a few miles of paved roads. The country also faced a serious communist-backed insurgence in the southern Dhofar region.
However, the sultan’s son, Qaboos, educated at Britain’s prestigious Sandhurst Royal Military Academy, overthrew his father in a palace coup in 1970, and using money that had started to pour in from oil sales, began to modernize the country.
But not all aspects of oil and the revenues it generates have always been put to good use. Take the case of Syria or Iran where billions of dollars have been squandered on military hardware.
Syria’s economy today is but one example where oil did not impact the country in a positive manner. A study by the United Nations carried out in 2010 estimated that about 32 percent of Syrians were living in poverty, surviving on less than $2 a day. And that, according to the well informed Syria Comment web site, was before the Syrian currency had lost more than 50 percent of its value.
“That was before the currency had fallen by half, the economy collapsed, strict economic sanctions were placed on Syria, and fighting engulfed the country. In all probability, a conservative percent of Syrians living in the direst poverty has surpassed 50 percent,” reports Syria Comment.
That means that some 11 million people are affected.
What is particularly disturbing is that although the amount of oil Syria produced was rather modest especially when compared to larger oil producing countries such as Iran, Iraq or Saudi Arabia, it was still enough to begin turning the economy around. With a population of only 22 million people it should not have been too difficult for Syria to sustain its initial progress which began when the son, Bashar, replaced his father Hafez, after his death in 2000.
Indeed, the arrival of Bashar Assad at the helm, accompanied by some mild reforms which the young president managed to implement gave people the hope of a brighter future, especially so when they began to see signs of things starting to change. The level of life in Syria had just begun to improve and could have continued to flourish had the government followed up on its promises to introduce some basic reforms and put the revenues towards better use than spending much of it on the purchase of Soviet era army surplus equipment.
Instead the government began to clamp down on all opposition, refusing to let go its iron grip. What little progress was achieved was very quickly reversed. The Assad regime reacted harshly against demands for less government control in their daily lives.
That failed to happen and as we have seen everything took a turn for the worse. Less than two years after the UN report the situation in Syria today is far more dismal. What little money there was finding its way through the sanctions is being squandered on weapons in a war that has ravaged the country, wreaked havoc on the economy and created a new refugee problem of enormous proportions.
Syria today is burdened with the largest refugee crisis in the world according to the Internal Displacement Monitoring Center, an international organization that monitors displaced people worldwide. Indeed, most of Syria’s refugees are displaced internally. A clear indication of population shifts. And as population shifts so too do demarcation lines, with the rebels claiming now to be in control of some of the oil producing sites. Will the opposition fare any better once they manage to get the oil facilities to operate once more? Or will they also contribute towards making the people who sell guns all that richer?
How will they use the revenue if the manage to operate the facilities?