Violence, repression and the perils of black gold

By making oil the keystone of his analysis of the recent history of Algeria, Iraq and Libya, Luis Martinez misses some other factors that are just as pertinent.

British soldiers move between burning oil wells in Iraq in March 2003, during the campaign to remove Saddam Hussein. Giles Penfound / AP

A few decades ago, Luis Martinez writes in this timely and troubling study, much of the Middle East regarded black gold as "the weapon of mass destruction" that was capable of overcoming the interrelated bogeymen of underdevelopment, imperialism and Zionism. For the Algerian president Houari Boumediene it was "the people's blood", for Libya's Muammar Qaddafi the "fuel of the revolution" and for Iraq's Saddam Hussein the energy needed to become a regional power.

Just how catastrophic the political and economic leadership has been in some of the more notable oil autocracies and dictatorships of the world can be gauged by the fact that many in these countries now regard oil as a curse, not a blessing.

In Algeria, Libya and Iraq hopes for widespread prosperity have been so comprehensively shattered in the past 40 years that they now lie in tatters. In almost a decade since the fall of Hussein, the embryonic democratic leadership in Iraq has amply demonstrated that it is both venal and sectarian. It has also exhibited ominously authoritarian tendencies, including a willingness to countenance levels of violence against the opposition that, although deeply disturbing, are grimly familiar to anyone with a working knowledge of Iraq's blood-soaked history.

The failure of the regimes in Algiers, Tripoli and Baghdad to provide their populations with an equitable stake in their nations from the vast "oil rent" available has been so stark that human development indicators differ little from those of authoritarian regimes without oil. Thus in 1992 (it would have been nice to have seen more recent figures), Libya ranked 26th, marginally ahead of Tunisia (27th) and a long way in front of Syria (79th), Iraq (100th), Algeria (109th) and Morocco (111th).

Even when times were easy, the leaderships failed to come up with the goods. The great, unexpected windfall arising from what Martinez calls the "third oil crisis" of 2003 to 2008 swelled coffers so dramatically that foreign reserves in Algeria reached a whopping US$140 billion (Dh367bn) in 2008, compared with $100bn in Libya and $40bn in Iraq.

Yet for all this cash sloshing about, and putting aside the political stagnation in Algeria and Libya, how much meaningful reform had there been to translate short-term windfall into sustainable economic development? One answer could be found in the 2009 World Economic Forum on Global Competitiveness, which rated Algeria 83rd out of 133 countries, slightly ahead of Libya in 88th place. As Martinez argues, both countries had among "the most rigid labour markets in the world, a deplorable education system and a lack of transparency in state expenditure".

The theory of the "oil curse" is superficially attractive. Look at the concentration of oil reserves around the world, take a corresponding check against democratic and development indicators, human rights and economic performance and the results speak for themselves. Or do they? Is there anything about Algeria's Front de Libération Nationale, Libya's Jamahiriya or Iraq's Baath party to suggest they would have exercised power more democratically without oil? The theory denies agency to political leadership. It doesn't have to be like this. Indonesia, as Martinez notes, has joined the club of "oil democracies", while Malaysia represents "the successful cohabitation of a rentier economy and an authoritarian political system".

One of the most interesting aspects of this book is Martinez's powerful, counterintuitive argument that a policy of selective economic mismanagement has been fundamental to regime survival in all three countries. Whereas good governance is an essential prerequisite to raise national wealth and well-being in democracies, not to mention getting re-elected, in oil-rich authoritarian regimes the proceeds from hydrocarbon exports are not used to increase economic efficiency but to maintain and reinforce the systems of patronage - and security - that sustain the regime.

For decades the FLN, Qaddafi and Hussein proved themselves past masters at surfing the waves of political and socioeconomic crisis by appropriating oil revenues as personal assets. Iraqis today recall with horror how Hussein used to allocate funding to pet projects and ministries as though it was a personal gift, buying loyalty through misappropriated funds. Thus the common observation that the economies of Algeria, Libya and Iraq failed over the past four decades belies the unsavoury truth that the regimes themselves succeeded, success being measured simply in terms of survival - until Hussein's and Qaddafi's undignified deaths.

Martinez argues that the examples of Iraq under Hussein and Algeria after its failed transition in the 1990s do not augur well for a peaceful outcome in Libya. He identifies numerous challenges facing the fledgling democracy: to "de-Qaddafise Libya without falling into the excesses of post-Saddam Hussein Iraq; to reconcile Libya; to demilitarise the militias; and to rebuild relationships of trust with the Algerian army, who must feel uneasy in the new situation".

The challenges for Libya after Qaddafi are indeed numerous and include some of those Martinez mentions, along with many others. State-building in a country virtually devoid of the institutions of state will be a formidable test. Yet it is not always clear from this book that Martinez is fully up to speed with the new realities of transitional Libya. During half a dozen visits to the country during the past 14 months, I have yet to meet a Libyan who either speaks of Algeria with any warmth or considers rebuilding trust with its generals a priority. Libyans will long remember Algeria's siding with the Qaddafi regime during the revolution and its harbouring of Qaddafi family members at its denouement.

As for the risks of Libya plumbing the violent excesses of post-Hussein Iraq, while numerous abuses have indeed been perpetrated - and continue to be, for instance against the inhabitants of Tawerga - one should be very careful about making easy parallels between Libya and Iraq. Libya has a small population without a sectarian divide. Iraq has a much larger population, which for 1,300 years has been riven by devastating divisions between Sunni and Shia, not to mention the periodic violence against Jews and Christians. While Libyan history has not always been plain sailing, extreme violence is arguably written into Iraq's DNA. During several years researching a history of Baghdad, I have been constantly struck by the sheer ferocity of its population, especially its leaders, dating right back to the Abbasid caliph Mansur. Founding the city in 762AD, he bowed before no one and displayed an enthusiasm for severing heads.

Martinez is right to observe that, unlike Tunisia and Egypt, Algeria does not depend on tourist revenue, foreign aid or rent from the Suez Canal. To a very great extent its oil rent therefore makes it "immune to any pressure that the international community might exert". Like Saudi Arabia, it has loosened the purse strings in an effort to buy off dissenters, increasing civil servants' salaries in the bloated public sector. Having 200,000 well-compensated policemen doesn't hurt, either.

If there is one central criticism of this book, it is that the predominant focus on oil inevitably downplays other factors influencing the political and economic trajectories of Algeria, Libya and Iraq, particularly their history, society and culture and how these differ. It also downplays the question of political leadership and its many shortcomings in all three countries, especially, as Martinez accepts, because oil is no guarantee of either success or failure.

Readers may find the translation a little clunky at times, although this may be a feature of the early proofs rather than the finished version. One hopes that this is also true of occasional anachronisms such as the line, "like Qaddafi's regime, Bouteflika's Algeria has the means to resist the wave of democratic protest". Such carping aside, The Violence of Petro-dollar Regimes is a very welcome addition to the field of studies on political change in the Middle East and the formidable challenges awaiting a new generation of leaders.

After decades of dire leadership, improving governance will be perhaps the greatest challenge of the Arab Spring. Martinez concludes on a sombre note, wondering whether the democratic wave sweeping across the region will come up against - and, he intimates, be overcome by - "the violence of the oil rent". Let us hope that it does not.

Justin Marozzi is a senior adviser at Albany Associates. His history of Baghdad will be published by Penguin in 2013.