Some ME nations have seen the writing on the wall - A few Emirates, Qatar, Bahrain, etc. have undertaken a transformation from a strictly oil-based economy to a diversified service based economy, presumably because they realize that a) they’re oil will run out and b) technological development may dislodge oil from its perch atop the human energy system
Will they succeed?
Would it be presumptuous to suggest that many western nations only do business with the Middle East because they have to? Can you see Dubai (an oppressively hot climate, relatively non-progressive society even though they’re the most liberal the region has to offer, no real geographical beauty, no real cultural draws, etc) or any of the small city states (or even the larger nations) appealing to “Westerners” (and in this sense I include the East Asians) once there is no more (or no more need for) oil? I can’t.
You should look at what Dubai has been building! Besides, it’s been done before - tourist ghettoes where local law is not enforced. That is how Franco got foreign exchange for Spain.
According to wikipedia, natural gas and petroleum are 6% of Dubai’s total economy. So they appear to have already made the transition. Of course, it helps that they’re the banking center for a bunch of other rich arab states who still are dependent on oil revenues, so their current prosperity may be more oil driven then it at first appears.
And of course, the Middle East can only sustain so many urban banking and trade centers, not every country there can become a Dubai. So while I think some of the states there will make a transition in a similar fashion to Dubai, it’s pretty obvious that they all can’t do so, and some are going to have serious problems when the oil runs out.
I guess I skipped a few decades in my OP. Yes, the economies of some city-state in the ME are “diversified” now, but for precisely the reasons you mention: they are servicers to the oil exporters.
I’m talking more about Dubai’s goal (lets just use them as the example) as a global hub for commerce - commerce not oil-related.
Basically, will the ME matter once the oil runs out?
But people still move to Phoenix anyway. Bum-da-bum-ching.
If anything is going to do Dubai in, it will be its still erratic legal system and the fact that Western businesspeople are not immune from the vicissitudes of its operation. Nothing dries up foreign capital (monetary and human) than the sight of a Western PepsiCo executive disappearing into a Kafkaesque penal system after having posted a million dollars bail.
Second, when writing Middle East but really meaning the Gulf Petrol Monarchies, I think one should write, The Gulf.
Egypt, Lebanon, Syria, etc all have economies that have little to do with petrol per se. To posit then the “West” (or the global economy) only trades with them out of necessity (for petrol is the unstated subtext, I mean who deals with anyone except as needed) is stupid.
As for Dubai… relatively “non progressive”??? In what sense and what the bloody hell does that have to do with commerce? I trade with Red China as needed, doesn’t bloody well mean I like PRC’s social system.
You don’t trade with people because they live someplace pretty. You trade with them because they have something you want or need and are willing to give it to you in exchange for something you have that they want or need.
No, and that’s when it’ll start to grow economically. Right now 29 Arab countries’ combined GDP is less than the GDP of Spain. Oil-rich Arab countries pay their largely backward populations of predominantly religious conservatives to do non-jobs or no jobs. When the oil runs out, these people will have to work for a living. In the oil-poor (and oil-rich) countries they’re ruled by a dictator who generally runs a system of patronage – certain elite families get to run certain businesses, banking, cellphones etc. Because there’s no real competition you get a sclerotic economy. When the oil runs out we’ll stop propping up all these dictators, their current power structures will fall apart and some kind of organic economys will start. Probably we’ll keep propping them up for a while depending on how much likely Islamist governments would be to replace them, but Islamists in power have the same problems as other governments and would be asking us for economic aid, trade agreements etc. so they’d be manageable probably.
The middle east is important because of geography, it is a geographic tie up like no other. Other places have oil, they don’t have the importance of the mid east.
All the “other places” put together don’t have as much oil as the Middle East does. 61% of the world’s proven oil reserves are in the Middle East, and an even higher percentage if you consider only those reserves that can be cheaply exploited (cheaply = extraction cost is low relative to current oil prices)
Yes, if two-thirds of the world’s remaining cheaply recoverable oil was under the Sahara desert instead of the Arabian desert then the Sahara region would see its, uh, strategic importance jump a little. Maybe attract one or two military bases, or almost a quarter of foreign-based US military power just possibly. Tinpot little Saharan dictators would occasionally become credible threats to the national security of the United States requiring massive preemptive military intervention, while the Middle East would have the strategic and geographical importance that, say, sub-Saharan Africa currently does.
Nigeria has oil and its oh in Sub-Saharan Africa. Not much strategic value. There is a wonderful invention which I think you ought to look up, Its called a map. WHat is known as the Middle East sits next to and links up Europe, Africa, C Asia, S Asia and via sea lanes, the Far East. If you are in control there, you are in a poistion to influence and yes dominate all of these regions. It is for that reason that superpowers since the dawn of civilisaton have been fighting over it. Geography, not geology determines strategic value.
The Middle East became the world’s greatest strategic prize in the early twentieth century when the Brits first discovered oil there in Iran in 1907 and WW1 saw navies convert to oil-powered craft. The Brits you’ll remember were the world’s dominant power at the time and managed to dominate over a third of the world for a couple of centuries without any major involvement in the region apart from Palestine which was more on religious grounds than anything else and I suppose you can include the Suez canal but it wasn’t open until the latter half of the nineteenth century. Previously the Middle East had been dominated by the Ottoman empire and that had worked out so profitably for the Ottomans that they were financially crippled and in a debt compound trap with European (mainly British) banks by the early twentieth century.
We can see the evolution of the strategic value of the region through British government archives, most notably those of the Secretary of War (before we got Orwellian and changed it to Defense) Winston Churchill. Up till the discovery of oil there the real colonial action was all African and Indian as they had all the known global valuables at the time.
At the start of the war the Anglo-Persian oil concession had not yet begun to produce oil in significant quantities. Nonetheless, Britain quickly dispatch troops to protect it from Ottoman advances. This led to the seizure of Basra. The British occupation of Basra became a springboard for later advances into Mesopotamia (now Iraq). Britain negotiated an agreement with the French over what should happen to Mesopotamia after they had defeated the Ottoman Empire. According to the Sykes-Picot Agreement Mosul in north-eastern Mesopotamia, and an area suspected of having rich oilfields, was assigned to the French sphere of influence. The wartime shortage of petroleum led to an increased awareness of the strategic importance of oil. Sir Maurice Hankey, the Secretary to the war cabinet, wrote to the Foreign Secretary Arthur Balfour that, “oil in the next war will occupy the place of coal in the present war, or at least a parallel place to coal. The only big potential supply that we can get under British control the sea Persian and Mesopotamian supply.” He concluded that, therefore, "control over the these oil supplies becomes a first-class British War aim.” The last weeks of the war saw British troops racing to occupy Mosul before the date for the signing of the armistice between the Allies and the Ottoman Empire.
And so started the British/American domination of the region, the Brits giving way to America after WW2 and the Americans moving into the vacated British bases and building a few new ones.