Shortly before the Libyan people won their battle against Muammar Qaddafi and his former regime, I wrote a column with “three advices for the new Libya.” I urged the Libyans to liberate themselves from the addiction of cheap labor and to break with tribalism. I also urged them to make sure they form a small government with limited responsibilities but that is very efficient.
My friends in Libya received my column with acceptance, and I found it published in several Libyan websites, which encourages me today, now that Libya has succeeded in its first free elections and in forming its executive government, to offer Libyans a fourth advice: Liberate yourselves from the oil and its curse.
Since the 1960 and following a flurry of national consciousness in the Arab oil States, the syndrome of “oil, development, and rule,” has preoccupied the thinking and the activity of the educated generation of young people in those states. Many of these young people have returned from the West with high education degrees that gave them access to leading positions in the oil industry, side by side with the Westerners, who discovered oil, established its industry, then unjustly exploited it. The rulers, as well, were preoccupied with the complicated issue of oil. As such, a trio of “rulers, nationalist technocrats, and oil companies,” was formed and its parties entered into a complex relationship characterized by cooperation at times and disharmony, distrust and greed at other times. The primary goal was to regain sovereignty over oil, or to liberate it from Western corporations, mainly American and European, which took too much oil and gave very little money in return. Following the 1973 war, oil prices were freed and most countries completed nationalizing their oil industry.
Western companies at the time were the “visible enemy,” with blue-eyed Western ladies, private compounds, and the rest of the privileges they enjoyed. Some people naively thought that expelling Westerners and taking over their positions at work in private clubs will ensure for the “nation” the income it needs to develop itself. But this did not happen. There weren’t any strict rules on how to use oil revenues for development. There was no democracy and no transparency at the first place.
Some oil countries have reached tremendous level of development and witnessed major changes, including social ones. Some of these countries witnessed urban sprawl, extended cities, towering buildings, advanced infrastructure, universities, industrial zones and desert farming. They experienced wars, helped brothers and scamps and wasted large sums of money on extravagance and cartoonish projects. This is because these countries were not developed politically and did not establish the rules to define their relationship with oil.
Qaddafi’s Libya was worse due to the nature of its regime and its ruler. During that period in which ignorant young man Muammar Qaddafi reached power in 1969, Norway was putting forward strict regulations on how to deal with oil it had just discovered.
Ironically, the man who helped Norway draft those regulations, which were eventually voted on as a law, was an Iraqi. He was part of a cohort of students who were sent to study petroleum science. He returned later to his country with the ambition of a nationalist technocrat.
Farouk al-Qassim did not stay in his country, Iraq, for long despite his position at the Iraqi oil company. He resigned in 1968 and settled in Norway, the country of his wife whom he met during his studies in London. He says he resigned and went to Norway to get medical treatment for his son. But 1968 was not a good year for Iraq anyway as it witnessed a coup that brought the Baathists to power and experienced massive brain drain as well.
The story of Qassim in Norway is exciting and was told in various media reports, including a Financial Times’ piece titled: The Iraqi who saved Norway from oil.
Libyans today, after having had the second chance for development, need to review and study al-Qassim’s “white paper” which he wrote in 1971 (two years after Qaddafi took power) and was presented to the Norwegian government to be turned into law later.
Based on his experience, Qassime realized that oil is often accompanied by a “curse.” Former Saudi minister of oil Ahmed Zaki Yamaani once lamented to a Western journalist: “All in all, I wish we had discovered water instead.”
The curse of petroleum makes an oil state either under the mercy and exploitation of Western oil corporations or makes it prone to massive corruption of the political life and within the ruling class. The oil money can also lead to the destruction of other productive sectors, which, even if originally weak, comprise the pillars of the real economy horizontally extended. The oil-based economy, in contrast, is vertical, class-based and does not touch all the people in society. Even national companies become corrupt the moment they replace a foreign company in a business, unless there is a party that strictly watches over their activities.
Qassim laid the foundation in Norway for a law that balances between calls for opening up the oil industry to national companies and the (socialist) government’s desire to lead the oil policy. More about Qassim’s paper and its details are left to specialists. Let’s look at the results. Norway became an oil state but it does not rely on oil. Despite that it is the fifth biggest exporter of oil in the world, oil revenues do not make up more than 20 percent of the country’s GDP, which relies on other industries, some of which are traditional like ship building.
In Norway, unemployment is very low and people there do all kinds of jobs despite that they enjoy the world’s second highest per capita income.
Another great idea Qassim gave to Norway was establishing a “generations’ fund.” Since 1996, revenues of oil are put in a sovereign fund that has become one the biggest in the world. These are great ideas which oil Arab states were supposed to adopt, but they did not? Qassim tried to serve his country by bringing together several Iraqi oil experts in 2004 and drafted a similar law he drafter for Norway. Iraqi politicians, however, rejected the draft in its original form and added amendments to it. And even then, it was never adopted. Iraqi politicians are too busy with their political and sectarian disputes and their corruption as well.
I do not know Farouk al-Qassim in person but I am certain that if he is invited by the new Libyan government he would be ready to offer them his expertise. God has given you a second chance for development, so use it well.