DUBAI: It was the 19th-century British statesman Lord Palmerston who coined the maxim that nations have no permanent friends, simply permanent interests. And rarely in recent times has that adage been so nakedly displayed as near here in the tiny Gulf petro-kingdom of Bahrain, the first place in the Middle East where the West indulged its obsession with oil.
This week, with the world distracted by Japan’s mounting calamities, the remote Bahraini royals sent their armed forces into central Manama to crack the democratic heads that have reared recently in what last year was a most unlikely theatre of discord.
They were well supported by the militaries of neighbouring monarchies in Saudi Arabia and the United Arab Emirates. Bahrain’s crackdown wasn’t quite Gaddafi-esque but the state brutality was cut from similar cloth. Protesters guilty only of wanting a say in how their country and its wealth is managed were cut down by the state. Many more were beaten and maimed, as they retreated to the bosom of sympathetic mosques. Bahrain’s ruling house of al-Khalifa, one of the world’s richest dynasties, now has blood as well as petrocarbons on its hands.
The silence from Western countries has been deafening, a marked contrast with the revulsion delivered in spades to the wacky Gaddafis further west in Libya.
Bahrain hosts the US Navy’s Fifth Fleet, the armada that secures America’s oil interests in the Middle East. It is just 20 kilometres across a causeway to Dhahran, the Saudi boomtown that has reasonable claims to be the world capital of Petrolistan. A short drive south of Dhahran is the Ghawar Field, the world’s most abundant oil deposit by some measure. Ghawar accounts for about half the oil output of Saudi Arabia, the world’s biggest oil producer, which exports most of it to the US.
Dhahran is also headquarters of the world’s most valuable company, the state-owned – which means the Saudi royal family – Saudi Aramco, which owns Ghawar and its brace of sister fields. Based on Saudi Aramco’s oil reserves, the company is worth $7 trillion, 40 times the size of Royal Dutch Shell. For all the trillions in its foreign exchange stash, the world’s biggest cash hoarder, China, would have to borrow to buy Saudi Aramco. And those values were estimated a year ago – the oil price has risen 30 per cent since then.
These eye-watering numbers, and Dhahran’s proximity to turbulent Bahrain, help explain the limp-lettuce scolding that Washington gave the al-Khalifas as they killed a few of their subjects. And likewise the miss-it-if-you-blink warning meted out to Riyadh after it dispatched an ”invited” force across the causeway to help Bahrain’s crackdown.
It was in stark contrast with the language meted out to Muammar Gaddafi for bombing and slaughtering his constituents with similar abandon, to near-universal condemnation. Instead, the message to Manama and Riyadh from Western leaders like US President Barack Obama and British Prime Minister David Cameron was to ”exercise restraint”, a warning that was promptly ignored. Our own Rambo, Foreign Minister Kevin Rudd, who’s been raining fire and brimstone on Gaddafi in urging no-fly zones, only advised Australians against travelling to Bahrain.
For all the West’s rhetorical support for a flowering of popular will across the Middle East, these regional intifadas come at a particularly inconvenient time for the West. Much of the euro zone remains stagnant if not still in recession from the 2008 global financial crisis. Spain and Portugal wobble as accidents-in-waiting, threatening to collapse as have Ireland and Greece. The US struggles, threatening Obama’s re-election prospects next year.
The last thing these mature economies need at this stage of this precarious recovery is the $US200-plus-a-barrel oil price many observers predict will arrive if the Middle East uprisings spread to Saudi Arabia, regarded by many analysts as the most seething of these desert autocracies.
After a decade hovering at about $US30 a barrel, the oil price peaked at a once-inconceivable $US145.29 in July 2008, spurred on by Chinese and Indian demand. Difficult though it was, the world found itself able to live with this new petro-reality, as oil prices settled at double the 1990s-2000s average. Now the recent Middle East turmoil has pushed oil up to near three-year highs, to $US111-plus a barrel this week. Respected energy economists such as Moody’s Chris Lafakis predicts ”catastrophic consequences” if Saudi oil production is disrupted by political turmoil.
The genuineness of the Egyptian uprising has mostly thrilled us, and the world seems inclined to take a glass half-full view that Cairo will change for the moderate better, and keep Islamist cranks at bay.
Emerging regional economic powerhouse it may be, but Egypt doesn’t have oil, so its easier for Western leaders to parade their democratic credentials there. It’s more palatable to Western tastes for revolutions to convulse places like Libya, and Egypt and Tunisia to point fingers at brutal dictators. True, Libya does have oil, but relatively little compared with the Gulf potentates and not so much of it is exported to the US. As he emerged from the diplomatic cold in the mid-2000s, Gaddafi was allowed to acquire strategic tracts of significant European businesses – he owns a good swag of the Financial Times’ parent, Pearson. That spending has made it briefly inconvenient for politicians and fat cats in London, Paris and Rome as they explain away why they dealt with this devil. But the murderous Gaddafi’s crazy-like-a-fox buffoonery makes it impossible to look the other way as he destroys his fief in order to keep control of it.
But, further east, as the once-reliable Western-friendly oil-rich Gulf convulses to put the developed West’s recovery at risk, pragmatism – some might say hypocrisy – seems reserved for other remote oil-drenched tyrants, the friendlier permanent interests who really matter.