This House believes that oil has been more of a curse than a blessing for the Middle East
Tuesday November 15 2005
MOTION PASSED
by 63% to 37%
Transcript
Order of speeches
Introduction
TIM SEBASTIAN
Ladies and gentlemen, good evening and a very warm welcome to the Doha Debates sponsored by the Qatar Foundation. The world can't do without it; it's brought riches beyond belief, but also misery and war. Oil is the subject of our debate tonight, a topic that contains all the ingredients that fascinate and appal us: intrigue, corruption, greed, political infighting, economic muscle, and pure force. Where better then to discuss the subject than here in the Gulf, now raking in gigantic oil revenues from across the world. The motion before us is designed to address some of the most controversial aspects of oil. 'This House believes that oil has been more of a curse than a blessing for the Middle East.' Four speakers, as ever, to argue their case. In favour of the motion, Hossein Askari is the Iran Professor of International Business Affairs at George Washington University. He served as special advisor to the Minister of Finance in Saudi Arabia, and directed a team of experts in the 80's trying to design a long-term energy plan for the Saudi Government. Also for the motion, Dr. Carole Nakhle. Born in Lebanon, she advises the British parliament on energy issues and is a senior adviser to Middle East Consultants International. She is also co-authoring a book on Past Mistakes in World Energy Policy, so she has plenty of strong views on the subject. Against the motion, Nawaf Obaid. He's a national security and intelligence consultant based in Riyadh and an associate fellow at the Center for Strategic and International Affairs in Washington. And with him, Ramzi Salman, an Iraqi by birth with more than half a century in the oil industry. I'm sure he won't mind me saying that. For six years, he served as Deputy Secretary General of OPEC, and since 1997 has been adviser to the Minister of Energy and Industry here in Qatar.Ladies and gentlemen, our panel. So let me first of all please call on Hossein Askari to speak for the motion.
Hossein Askari
Speaking for the motionHOSSEIN ASKARI
Thank you, Tim. It is a joy to be in Qatar once again after so many years. Ladies and gentlemen, let me tell you that over the last 60 years, the Middle East has arguably had more conflict and turmoil than any other part of the world, and over the last 30 years, after taking in very close to about $4 trillion in revenues, the Middle East has had the lowest growth rate in really GDP per capita of any part of the world except sub-Saharan Africa. Why? To Carole and myself, it is because of oil. Let me explain. Oil has been used as a crutch in this part of the world to avoid the reforms that are needed to create a vibrant private sector which would give jobs, productive jobs, and generate revenues for the government. Instead, oil has been used to create less productive government jobs and to give subsidies which are wasteful in order to buy loyalty amongst the peoples of the region. Oil has also been used to buy very expensive and sophisticated weaponry, which has been used both internally and externally in the region. These weapons that oil has actually financed have been used, and you're all aware of that. Let me give you just a couple of very brief examples. In the case of Iraq, the Iran/Iraq War and the two Gulf Wars have cost by all estimates the Iraqi people more than all their oil revenues during their history. In the case of Iran, the Iraq/Iran War cost Iran most than its oil revenues over the last 25 years alone. And of course in all of this, the western world has meddled. Let me remind you. In 1953, the legitimate government of Iran, of Mohammad Mossadeq's, was overthrown. The western world has supported all manners of dictators in this part of the world - and it's not because of your wonderful good looks - but it's because of oil. Those three letters, oil has brought that up, and some people would like to blame all of the problems of this part of the world on Islam. Islam has nothing to do with it. Islam preaches hard work, education, and the eradication of poverty. At the core of this religion is economic and social justice. Tell me, is this part of the world overflowing with economic and social justice? Let me conclude by summing up, because I know my time is about up, and tell you that oil should have been and could have been a blessing. You don't need a PhD to know that the more resources you have, you're better off, but this oil has been mismanaged by the leaders and the governments of this part of the world, and the western world has also interfered and they also created problems. So on balance, what could have been has not been, and on balance, ladies and gentlemen, oil has been a curse. Thank you.
TIM SEBASTIAN
Hossein Askari, thank you very much indeed. You blame a lot on oil, lack of economic and social justice. Do you think without oil it would have all been sweetness and democracy in this region?
HOSSEIN ASKARI
I don't think all sweetness, Tim, and all that, but if you look at other parts of the world that have done well without oil ...
TIM SEBASTIAN
But we're looking at the Middle East, this is what we're focusing on.
HOSSEIN ASKARI
Yes, but I think we have to compare.
TIM SEBASTIAN
You're blaming the lack of economic and social justice on oil?
HOSSEIN ASKARI
Yes.
TIM SEBASTIAN
I'm asking you to think what it would be like without oil.
HOSSEIN ASKARI
I think we would have learnt more hard work, we would have relied more on educating our people.
TIM SEBASTIAN
Where would the pressure have come from for that?
HOSSEIN ASKARI
I think from the people themselves.
TIM SEBASTIAN
Without their contacts with the outside world that oil has given them, the trading contacts?
HOSSEIN ASKARI
From the mentality of the people that I've seen in this part of the world, and remember, this region just does not include Qatar. It is from Iran on. If you look at the people, they want handouts. They are not interested in hard work any more, and I think that has happened because of oil. We see our leaders taking oil money without doing any work, and we say, 'Why don't we get our share of it?' That's why.
TIM SEBASTIAN
So you think the pearl industry and the fishing industry would have, in the end, resulted in pressure to educate, pressure to advance?
HOSSEIN ASKARI
Look at South Korea, look at Chile, what they've achieved. They've done it without oil. In 1975 the GDP ...
TIM SEBASTIAN
What about their world voice?
HOSSEIN ASKARI
But Tim, it was lower than the GDP of this part of the world, four times lower. Today South Korea's GDP is more than all of the countries on the Persian Gulf put together.
TIM SEBASTIAN
What gives the Arabs their world voice? It's oil, isn't it? There's no doubt about that. Is that a blessing or a curse, to have a world voice?
HOSSEIN ASKARI
Here in the Muslim world, we had a voice before oil, we had a big voice in the world before oil. We don't need oil to have a voice in the world.
TIM SEBASTIAN
Hossein Askari, thank you very much indeed. Nawaf Obaid, let me ask you to speak against the motion please.
Nawaf Obaid
Speaking against the motionNAWAF OBAID
Yes, thank you. With all due respect to my distinguished colleague, I would beg to differ. If you look at it from just the economic and social development indictors growth-wise, over the last 50 years, specifically the GCC countries have had the largest by far increases not just of any countries but of any bloc of countries in the world. You just take for example the smaller Gulf states, Qatar, the United Emirates, Kuwait, although there are structural problems and this thing can be said about Saudi Arabia, their development has been monumental, in every single public policy issue, so more specifically if oil wasn't there, what would have happened? They would have been like any other of the other Middle Eastern countries, they would more or less today have been in the same social standing as they are, been in the same level of economic development, and more importantly, the main issue here is poverty. They would have actually been as poor as the other major Middle Eastern countries that do not have oil. On the second point, which is very important to bring up, is the issue that without oil, there wouldn't have been the infrastructure. You wouldn't have had the hospitals, you wouldn't have had the roads, you wouldn't have all the basic, necessary developments in order for a population, or for the human race, to develop and again today being in Qatar, I mean, you just see it. You just walk outside, get in your car, go out and you see what for example the Qatari government is doing. In Saudi Arabia, you can see what they've been doing over 50 years. There's been mistakes, there are structural problems and so forth, there's no doubts about it, but you compare it to the countries that don't have oil, and the comparison is not just striking, it's monumental today. And this is a fact that it would not have happened if it wasn't for the simple fact that certain countries are blessed with oil and certain are not. Undoubtedly there is waste, there is corruption and some of the points that my distinguished colleague alluded to are absolutely correct, but I mean, it's not because of oil that there's corruption and waste. There's been corruption and waste all over the world for centuries and centuries, and it's not oil specifically that brought this upon the people of this region or upon the governments of this region. So putting it into context, there are mistakes that were made, there are structural challenges that still remain, but if I can just conclude with bringing it to what is happening today, and this is very important. Today the region and more specifically the GCC are experiencing a huge economic growth, huge economic boom, and this is again due to where the price of oil is, and if you see what the governments are doing with the money, it's very different to what they did with it 20 years ago. They're putting it into education, they're putting it into major public policy issues, health care and so forth. Again, Qatar is a perfect example. You just go outside and you see where the money is going. It's going to real public policy tangible projects that will bear fruit in 5 to 10 years, Abu Dhabi, Dubai, Oman and you can go on, and I'll conclude by bringing you back to the main country in the region which is Saudi Arabia, where a lot of the criticism could be directed at, and again you see what's been done and put into context over the last couple of months, and you'll see that obviously the governments have learnt from their past mistakes and are using again this chance in order to change policies and to go forward, using the oil blessing. Thank you.
TIM SEBASTIAN
Nawaf Obaid, thank you very much indeed. Who owns the oil in Saudi Arabia?
NAWAF OBAID
The government.
TIM SEBASTIAN
Why does the government, why not the people? Doesn't it belong to the people of Saudi Arabia?
NAWAF OBAID
That's correct.
TIM SEBASTIAN
Well, so it's not the government, it's the people.
NAWAF OBAID
It belongs to, actually to be more specific, it belongs to the National Oil Company.
TIM SEBASTIAN
That holds it on behalf of the people.
NAWAF OBAID
That holds it on behalf of the government that rules the people.
TIM SEBASTIAN
On behalf of the people. Why don't you tell the people what you've done with the oil revenues in Saudi Arabia?
NAWAF OBAID
But they see it.
TIM SEBASTIAN
They don't.
NAWAF OBAID
Of course they do.
TIM SEBASTIAN
There are no proper figures published?
NAWAF OBAID
That's absolutely incorrect.
TIM SEBASTIAN
Where are the figures published?
NAWAF OBAID
On the Aramco website. You go to the Aramco website.
TIM SEBASTIAN
We don't know where the money goes.
NAWAF OBAID
You go to the Aramco website, you go to the ...
TIM SEBASTIAN
Doesn't tell you where the money is spent.
NAWAF OBAID
Yes it is actually.
TIM SEBASTIAN
Each item shows where all the money is spent?
NAWAF OBAID
You go to the Finance Ministry's last publishable data which is I believe two months ago, and it is itemised by issue.
TIM SEBASTIAN
By issue. But you don't know where the money is really spent, nobody knows where the money is spent in Saudi Arabia. The Majlis Al-Shura complained last week to the king that they didn't know what was happening with the oil revenues.
NAWAF OBAID
No, no. The Majlis Al-Shura did not complain, the Majlis Al-Shura wanted an itemised expenditure of where certain monies were going in the population.
TIM SEBASTIAN
Same thing. You're quibbling.
NAWAF OBAID
Well, you're actually correct. There are issues. I did say in my presentation there are structural problems.
TIM SEBASTIAN
But why not come clean? Why not come clean on the issue?
NAWAF OBAID
On what issue?
TIM SEBASTIAN
On where the money has all gone, where all the oil revenues have gone?
NAWAF OBAID
But it's clear.
TIM SEBASTIAN
How much has gone to the 22,000 members of the Royal Family, how much have they taken?
NAWAF OBAID
For example King Abdullah's last stimulus package that was announced a month ago, that had $35 billion of extra budget that was appropriated because of the oil windfalls, and this was put in the royal decree exactly in detail what subject gets what money and when. It's all there.
TIM SEBASTIAN
You have some of the richest resources in the world, you have three-quarters of a billion dollars a day coming in, you're ranked 58th in the world after Estonia and Uruguay in per capita GDP. That's not much to be proud of, is it?
NAWAF OBAID
No, that was two years ago, and you're absolutely correct, if I might just refer to figures. Saudi Arabia has expanded to a huge, if you're talking per capita, income.
TIM SEBASTIAN
These are the latest 2004 figures.
NAWAF OBAID
They're 2005, Saudi Arabia's economic growth is 30% in normal terms, and it's hallucinating.
TIM SEBASTIAN
You think 58 is a good figure to be?
NAWAF OBAID
I don't know.
TIM SEBASTIAN
58, with the world resources that you have?
NAWAF OBAID
We're up maybe into the 40's, but the problem, you're absolutely right, that ...
TIM SEBASTIAN
Well, that's not much to shout about either, is it?
NAWAF OBAID
If you compare it to what Saudi Arabia was before the oil, Saudi Arabia before the oil, we just did the statistics.
TIM SEBASTIAN
You have the richest resources of oil in the world and you're in the 40's.
NAWAF OBAID
You're absolutely right, structural problems we make, but compared to what we were, it's a huge development.
TIM SEBASTIAN
Waste? Looting by the elite?
NAWAF OBAID
Looting by the elite?
TIM SEBASTIAN
Yes.
NAWAF OBAID
But why is it just focused on oil exporting countries?
TIM SEBASTIAN
We're looking at Saudi Arabia, since you're from Saudi Arabia, do you want to answer the question?
NAWAF OBAID
Waste has been a problem forever. It's been an endemic problem for all countries.
TIM SEBASTIAN
Waste or corruption?
NAWAF OBAID
Both, both. But it's been there forever.
TIM SEBASTIAN
Nawaf Obaid, thank you very much indeed.Carole Nakhle, may I ask you to speak for the motion.
Carole Nakhle
Speaking for the motionCAROLE NAKHLE
Thank you, Tim. Good evening, ladies and gentlemen. One would expect that because they are sitting on much of the world's oil, Middle Eastern economy should be among the most successful emerging economies. However, according to the United Nations Human Development Index, Middle Eastern performance has been very poor, and the best performer which is Qatar ranks in at number 40. There have been plenty of oil revenues around, and yes, I do admit that some has been invested in education, in building hospitals and other infrastructure. However, very little has been invested in building a sustainable non-oil development, and in fact with more than $3,000 billion dollars, $3 trillion said the gentleman, one would expect to see not just the achievement that we see today, and I admit there are many, but much more than that. The reliance on oil exports, in terms of exports actually and government revenues, has generated significant challenges to the area. Of course as Professor Askari pointed out later on, economic growth has been disappointing, but it's not a question of economic growth only, it's also a question of volatile economic growth. The economy in the area still reflects the changes in the oil price, and we all know, ladies and gentlemen, that a healthy economy requires a steady sustainable growth, not this kind of spasmodic growth. Also, after more than half a century of oil activity, that justification is still limited. If you take the whole Middle Eastern area plus North Africa, with a population of more than 320 million, their non-oil exports are much less than what a single country like Hungary and Finland with 10 and 5 million people respectively can produce, and this is really bad news for the future, especially for employment. The region already suffers from high unemployment rate and it's going to get even more serious in the light of rapidly growing population and the increasing participation of women. This is really a serious problem, and I would like to talk about some jobs created by the government. I really have evidence for it, that the government cannot absorb the increasing population or the increase in the labour force in its already overstaffed ministries. There is a very interesting study I have, it's a very recent one, which says that in order to maintain the current employment rate, the government should create 80 million jobs in 17 years. Ladies and gentlemen, this hasn't been achieved anywhere any time. And it's not only you see a matter of creating jobs, it's also a matter of low productivity. Unfortunately in the Middle East, labour productivity has been in steady decline since 1974, after the first oil boom, and what's more, I'm sorry to say that the oil revenues have acted as, if you want, a security blanket that delayed significant fundamental reforms in the region. Ladies and gentlemen, don't take just my words for it. Let me finish with a quote from the late King Faisal of Saudi Arabia. He said, and I quote, 'In one generation we went from riding camels to riding Cadillacs. The way we are wasting money, I feel the next generation will be riding camels again.' While perhaps King Faisal was a bit too gloomy, I don't deny that oil can be a blessing as has been the case in Norway and Malaysia, but the way it has been handled in the Middle East, I'm sorry to say that it has been more of a curse than a blessing. Thank you very much.
TIM SEBASTIAN
Carole Nakhle, thank you very much indeed, thank you. Do you think Iraq would have been liberated if it hadn't had oil?
CAROLE NAKHLE
Liberated?
TIM SEBASTIAN
Saddam Hussein overthrown, free elections.
CAROLE NAKHLE
Well, Professor Askari pointed out that you see there has been high corruption in oil-producing countries.
TIM SEBASTIAN
No, could you answer the question? Do you think it would have been liberated, or Saddam Hussein would have been overthrown if it hadn't been for oil?
CAROLE NAKHLE
Well, oil is a major factor and that's what we're discussing here, the curse of oil, aren't we.
TIM SEBASTIAN
So has that been a blessing for the millions of Iraqis who were able to vote in free elections for the first time?
CAROLE NAKHLE
I'm not quite sure if you can say that Iraq is currently liberated, or a free country.
TIM SEBASTIAN
I asked if it was a blessing for the millions of people who were able to vote for the first time in their lives, was it a blessing for them, yes or no?
CAROLE NAKHLE
Well, it's definitely a blessing to allow people to participate in the elections, right?
TIM SEBASTIAN
Which they wouldn't have had without oil, because America wouldn't have gone in. Do you think America would be guaranteeing security in this part of the world if it wasn't for oil?
CAROLE NAKHLE
No, but that's what we're discussing here, that oil isn't bringing trouble.
TIM SEBASTIAN
Trouble or security, which?
CAROLE NAKHLE
No, I don't think so, Tim.
TIM SEBASTIAN
Qatar might argue with you that it's brought it security, a huge American base.
CAROLE NAKHLE
Yes, but I don't actually see that as a blessing, I don't see it as a blessing.
TIM SEBASTIAN
I think Qatar does.
CAROLE NAKHLE
I'm not quite sure about that.
TIM SEBASTIAN
I think the Iraqis who voted do, don't they?
CAROLE NAKHLE
I still don't feel it's a blessing or it has to do with oil.
TIM SEBASTIAN
But you don't think these are advantages, security, free elections? Those have come out of oil.
CAROLE NAKHLE
Tim, I still don't see how your argument sits with this motion.
TIM SEBASTIAN
Because I'm saying that without the oil, they wouldn't have been in that situation, would they? Saddam Hussein would still be in power.
CAROLE NAKHLE
But you have free people and democracy in many non-oil producing countries and other oil-producing countries.
TIM SEBASTIAN
But we're talking about the Middle East here, the specific circumstances here.
CAROLE NAKHLE
Yes, but you have also to look at other countries that have done better than the Middle East.
TIM SEBASTIAN
That's not the point, is it? It's brought some benefits, surely.
CAROLE NAKHLE
Yes, but you have to explain to the audience oil can be a blessing, but the way it was handled in the Middle East, I'm sorry to say it has been a curse, more of a curse than a blessing, to be fair.
TIM SEBASTIAN
Carole Nakhle, you'll stick to your argument.Thank you very much indeed. Ramzi Salman, can I ask you to speak against the motion please.
Ramzi Salman
Speaking against the motionRAMZI SALMAN
Thank Let me start by saying that this area of the Gulf has been blessed with more than 60% of world oil reserves and about 40% of world gas reserves. Now, what do you hate in that? This is a blessing, it's a gift of God and nature, and to look at it and say, 'This is a curse,' then I think that would be blasphemy. Seeing is believing and we see where we are here now. This wouldn't be possible without oil. Driving here, everything you see, for me, I look at it as oil and gas, because it's oil and gas changed, monetised to money so that money is used for this. This is all good. I mean, if you take Qatar as an example, they very wisely monetised their resources and used the income for development, for improving the standard of living, services, and even invested in items that will generate income in the future for future generation when oil and gas might not be there. This is a good case of management. Hossein mentioned at the beginning about the question of management. Of course if you have, as you have in certain countries in the area, when the management of the resources and the resources themselves monetised and then made to evil use, then it's not the resource which is evil, it's not the resource which is a curse, it's the management which is evil and it the curse. We cannot brand resources as a curse when we misuse them. That brings me to what the prophet King Solomon is reported to have said that, 'God has given me everything, given me power, given me wealth, given me the ability to do miracles, and that's a big responsibility, because it's me who will put that to evil or good,' so it's in all cases the responsibility of the management. When you talk about evil or a curse because it has attracted other countries to come and occupy this region, this has to be looked at in a different light. I mean, history is full of examples of countries invaded for gold, even for spices, but when it is oil it's a big wealth, so that aspect of thing, it's a natural thing, and if the oil was not attractive and those people have come in here, it would not have been developed as fast as it did, and we will probably be still travelling on camels. Thank you.
TIM SEBASTIAN
Ramzi Salman, thank you very much indeed. You think a few buildings and a few roads makes oil a blessing in this region?
RAMZI SALMAN
Anything which benefits the people is a blessing, and I'm not talking only about building, I can enumerate so many things.
TIM SEBASTIAN
Government is stuck, human rights are stuck, freedom of the press is stuck, education is stuck, highest illiteracy rates in the world and you think a few buildings make it a blessing?
RAMZI SALMAN
Yes. Tim, I've been in Qatar for eight years now, I've been working in Qatar for eight years, and the things I saw, I've been witness to, the development in every aspect of life including human rights has been staggering. I couldn't have imagined it the time I came here. You have to take things relative to a certain position, and in certain places you cannot make drastic changes. In this country, in Qatar, there are some changes which are not accepted by the old generation. You have to convince them that this is the right direction, but it will take time, it will take generation change for these things to be established.
TIM SEBASTIAN
So it's only the irresponsible acts of government and the wastage that men bring to it, it's not oil's fault, oil hasn't put them in a position to encourage this kind of behaviour, it hasn't let them play to their lowest common denominator?
RAMZI SALMAN
The curse is irresponsible governments, evil leaders, and educated people who misuse the cash they get.
TIM SEBASTIAN
But they don't vote, so they're not evil and irresponsible when they do that?
RAMZI SALMAN
When they do things which are good for the people, that's good.
TIM SEBASTIAN
Oh, so it's the people then. Either they're good or they're bad but it's nothing to do with oil itself, it's natural and blasphemy to say it's a curse?
RAMZI SALMAN
Yes, and it's eventually the people, the owners of the wealth, the people are the owners of the wealth, and the day they get the full benefit of that wealth, then we have reached a perfect situation.
TIM SEBASTIAN
Your team member thought it was the government, not the people.
NAWAF OBAID
Well, the people on behalf of the government.
RAMZI SALMAN
I hope in time that the government will represent the people and it will be from the people, for the people.
Audience questions
TIM SEBASTIAN
All right. Ramzi Salman, thank you very much indeed. I'm going to throw it open to the audience now. The motion is that This House believes that oil is more of a curse than a blessing for the Middle East, and gentleman in the front row. You, sir. We'll get a microphone to you. If you would just wait for the microphone, sir.
AUDIENCE Q (M)
One of the most perceptive remarks was told by the French statesman, Georges Clemenceau to Woodrow Wilson when oil was discovered at the early days of last century, 'One drop of oil is worth one drop of blood.' That is true. In spite of that, I speak against the motion because I see and I have witnessed the development in human education, in institutions. There was not a single university in Saudi Arabia before oil. But my question here is that, in spite of the monumental construction that occurred, including this Educational City, here in Doha, I was wondering if those who are in favour of the motion would comment - can you neglect all of these aspects because you are actually carried out by the word curse, and without having to take care of the other aspects that are educational and constructional?
TIM SEBASTIAN
OK, thank you very much. Carole, do you want to take that?
CAROLE NAKHLE
Yes. I really would like to agree with you that it's just theory and the whole thing, it's just a blessing. Of course we have investment, education, schools, hospitals, etc., but I don't understand how you can the highest unemployment rate, the highest among the developing region as a blessing. I don't understand how you can see the 60 million illiterate in the Arab world as a blessing. I still honestly cannot see how this lack of diversification can be a blessing and still don't see why more than 50% of the older youth want to emigrate because of the lack of opportunities in the Middle East.
TIM SEBASTIAN
She's got a point, hasn't she, Nawaf Obaid?
NAWAF OBAID
She's talking about the countries that don't have the oil in the Middle East. I mean, the question itself is a trick, because most countries in the region don't have oil, so we just have to focus on the countries that do have the oil, and in this way the characteristic that she just described is not. The Gulf States are major recipients of foreign labour vis-à-vis a major export of it, so we have to put into the context of what countries are we talking about and what governments have done what. Saudi Arabia, 20 years ago, excuse me, 30 years ago, had no university. Saudi Arabia is spending over $35 billion a year on education, with all the problems that come with it, oil ...
TIM SEBASTIAN
55% of graduates women and 95% unemployment is female.
NAWAF OBAID
95% unemployment? Where do you get those figures from? 95% is not the unemployment.
TIM SEBASTIAN
From the US government.
NAWAF OBAID
From the US government, on Saudi statistics? Tim, you can do better.
TIM SEBASTIAN
You don't like that? Can you do better than that?
NAWAF OBAID
I can do better. You don't go to the US government to get statistics on the region, come on.
TIM SEBASTIAN
You don't mind using them when they suit you. Question there.
CAROLE NAKHLE
One more point, just one point.
TIM SEBASTIAN
Briefly.
CAROLE NAKHLE
Yes. You keep on referring to building roads and bridges or whatever, but don't forget that Arabs, centuries ago, they were the first to build cities. Thank you.
TIM SEBASTIAN
Lady in the second row there.
AUDIENCE Q (F)
Hello everyone. When you say liberated Kuwait from the Iraqi invasion and the second Gulf War, I don't think that liberation was for free. I think the Gulf countries are still paying for that liberation, and they think that the oil has been a curse more than a blessing, because the Gulf countries are still paying for that liberation till this day, don't you think? And I address this question to Mr. Nawaf.
NAWAF OBAID
Well, if you're talking about monetary compensation, yes. I mean, Kuwait and Saudi Arabia had to basically foot most of the bill for the invasion at the time, that's absolutely correct, with other countries, but at the same time, oil is at the cause of having a man like Saddam Hussein and his regime out of power. There is hope, there is hope for 22 million people. There is hope for freedom, there are elections coming up next month and we can go on about it, so was it worthwhile? Yes, it was worthwhile. Is it worthwhile that Saudi Arabia will be maybe spending another couple of billion dollars in aiding the Iraqi people? Yes, it is worthwhile. Is it worthwhile that maybe Iraq could be used as an example for a potential democratic form of government and the key word here is potential? Yes, for the region as an example, yes, it is. So are we still paying for it? Indirectly I guess we are, but I think it's worth it. I think it's worth it that a guy like Saddam Hussein is out of power and regimes such as his are no longer acceptable in the world, and if you want to put oil as a cause of it, then oil, it is the cause of it and it's a blessing.
TIM SEBASTIAN
Hossein Askari, what comment do you make?
HOSSEIN ASKARI
As someone born in Iran, I can't let that go by. It was oil that gave Saddam Hussein the arms to invade Iran. It was oil that made the United States and the western world interested in supplying chemical weapons that were used on Iranians. It was oil money that Saudi Arabia and Kuwait supported Iraq with to the tune of $40 billion on the part of the Saudis, and $20 billion on the side of the Kuwaitis, and then to come and say oil money liberated it? It's like digging a hole and filling it back up again, ladies and gentlemen. That is wrong. Yes, it's the mismanagement of course. You don't need to be a genius to figure out that the more resources you have, the more options you have, that's a fundamental economics 101, you're better off. But if the way that you use it, and it's been used badly, if it's been abused and misused, that is not blasphemy.
TIM SEBASTIAN
Ramzi Salman, would you like to come in here?
RAMZI SALMAN
Yes. You're defeating your own arguments, because you're talking again of management, bad management. The bad management is the curse, not the oil, not the wealth, that's not the curse. The curse is the bad management, and you said it yourself.
TIM SEBASTIAN
That's just semantics, that's just splitting hairs, isn't it?
RAMZI SALMAN
Yes.
TIM SEBASTIAN
It's always the case of whether it's badly used or well used, isn't it? I mean, that's implied in the question.
RAMZI SALMAN
The curse is to have a bad leadership who misuse the thing. The other curse is to get a war to remove that bad leadership, with an effect which is much more evil than the curse of oil.
TIM SEBASTIAN
Nawaf Obaid, you wanted to say something.
NAWAF OBAID
A point on the professor's argument. Oil was one of the major components that defeated communism. Oil financed the ultimate collapse of the Soviet invasion in Afghanistan. Oil, through Saudi Arabia, financed the curtailment of the communist threat in Central America. Oil through Saudi Arabia financed the curtailment of the communist threat in Africa.
TIM SEBASTIAN
We're talking about the Middle East.
NAWAF OBAID
Well, I'm giving you an example, beyond the Middle East. Thank you.
TIM SEBASTIAN
The motion was specific. Gentleman up there has a question, right at the back.
AUDIENCE Q (M)
Mr. Salman is insisting that the problem is with management, bad management and bad governments. We are not naming names, but these governments did not come to power by election, and the people cannot overthrow them, and they will continue to abuse power so in this case it will continue to be a curse, because people have nothing to do with this. Thank you.
TIM SEBASTIAN
Is your point that the oil revenues allow them to stay in power and this is why it is a curse?
AUDIENCE Q (M)
No. The problem is that those governments did not come to power by elections, so if they abuse their power, people have nothing to do with this, so how come you say it is a blessing?
TIM SEBASTIAN
Ramzi Salman.
RAMZI SALMAN
I don't understand the question.
TIM SEBASTIAN
How come is oil a blessing if these governments are able to come to power without elections and stay in power presumably because of the oil revenues that keep them there?
RAMZI SALMAN
A sharp knife in a kitchen is a blessing when you want to cut something tough, but you can also use that knife to kill somebody, so the thing is there, it's how you use it. Oil is definitely a blessing. I owe my education, I owe everything to oil. If it wasn't for oil, I would never have the education I had. For me it's a blessing. For many countries, for monarchy people, it's a blessing, but if it's unfortunate case when it is in the wrong hands and misused, the income of it is misused, that's not the fault of the oil, it's the fault of the management.
TIM SEBASTIAN
Gentleman in the front row.
AUDIENCE Q (M)
Sir, I have a good question. For people who think that it's a curse, what do you think is the solution to change this curse into a blessing?
TIM SEBASTIAN
Yes, Carole Nakhle.
CAROLE NAKHLE
First of all I would like to clarify one thing. We're not saying it's either a curse or a blessing. Actually both me and Professor Askari, we said that it has been more of a curse than a blessing in the Middle East, because if you look at other countries again like Norway, the USA, Canada or Malaysia, oil over there has been more of a blessing than a curse because it's properly and productively invested. Now, if I would look at the Middle East, I would look at an area where oil revenues would be more productively invested in. It's not a matter of just simply generous government handouts, but it's really fundamental reforms that encourage the private sector, that encourage the small business, that really motivates people to invest and, you know, proceed and they increase their productivity.
HOSSEIN ASKARI
May I just add something to that as I'm on that side. I really agree with Tim and I think we're really splitting hairs. It is really the management of what is being done with this resource, and I really believe that if you want to talk about Islam, it is very, very clear in Islam, as I think Tim suggested earlier, that anything under the ground belongs to all generations. It is the responsibility of the government to make sure that oil in the ground, the same benefit is given to all generations of Qataris, Iranians, Saudis, whatever that might be. Now, you tell me, the way we are living in this part of the world, if all future generations are going to get the same benefit. Now, not to do that, that is against Islam, and as the Prophet Mohammad, peace be upon him, said that if one person has not his basic needs, it means in society that somebody has too much. That is one of the most famous sayings of the Prophet.
TIM SEBASTIAN
Nawaf Obaid.
NAWAF OBAID
Just very quickly following up on the two gentlemen's excellent questions without getting into religion because I don't think religion fits into all this, is that the real republican dictatorships that have maintained power through real blood are not the oil-producing countries. They're actually the countries that don't have the oil, so oil is really a silent issue again, because you have, without naming the countries, and they're all very obvious to all of us, the real dictatorships, the republican dictatorships are the ones that do not have the oil and they're still in power, so oil has nothing to do with it.
TIM SEBASTIAN
A lot of people would argue in this regulation in that plenty of dictatorships have oil.
NAWAF OBAID
Have oil, but the ones that don't have the oil are the most famous of them and are the harshest. But it comes back to the specific question, excellent question that the two students addressed.
TIM SEBASTIAN
Ramzi Salman, you wanted to ...
RAMZI SALMAN
The question that the oil in a country is the property of all the people and future generations, this is very true, and that's why when I mentioned wiser governments, they use some on defence, to invest in projects and things which will generate income for future generations, when oil is no longer there, and some countries will have no oil, and don't forget that there will be a time, there will be oil underground and there'll be no use for it. Only this year the major consuming countries invested $30 billion in finding alternatives to oil, $30 billion, a lot of money, only in finding alternatives to oil, so the question of oil, you cannot keep it underground for 2000 years because of future generations. You have to get it now, monetise it now, and a barrel which you produce today has a value of $50 or $60, that barrel, if you keep it for 200 years underground, the value of it is zero, the present worth of that barrel is zero, so you invest in projects which generate money for future generations.
HOSSEIN ASKARI
But my friend, monetising is not buying US jets that you cannot even use, that you have to get the US government to maintain for you. I'm sorry, that is not monetising oil. That is mismanagement.
NAWAF OBAID
But that was 10 years ago. Today you have Kuwait, you have the future generation. $35 billion, as Dr. Ramzi said for Kuwaitis. Even Qatar today I believe there ...
RAMZI SALMAN
There are a lot of projects.
TIM SEBASTIAN
So what's your point? Everything's OK now.
NAWAF OBAID
Not everything is OK, but there is a change.
RAMZI SALMAN
So they're moving in the right direction.
NAWAF OBAID
And they're moving in the right direction, that's all we were saying.
CAROLE NAKHLE
It's finally time for something to be done, to tell you the truth, after more than half-a-century.
NAWAF OBAID
Yes, oil is a blessing.
CAROLE NAKHLE
But it has been more of a curse than a blessing, right?
TIM SEBASTIAN
There's a gentleman at the back who has his hand up.
AUDIENCE Q (M)
My question is for the panel that's arguing for the motion. Don't you think that oil is a foundation in this region for development? I mean, as we've seen before, and I'm talking specifically for Qatar, the main industry here was pearl diving, and then our friends the Japanese managed to develop a way to make it cheaper. If we have such a strong natural resource here such as oil and gas, then why don't you use it for development? I mean, I do agree with those arguing against the motion, that it is mismanaged here, but oil is not a curse. Without oil I don't think you'll be having open education, I don't think you'll have open debates here and I don't think you'll have a new science and research centre just across the street there. Thank you.
TIM SEBASTIAN
Hossein Askari, you were shaking your head.
HOSSEIN ASKARI
Because I think that we are not here, as you said, Tim, we shouldn't be splitting hairs. It says, I think, the motion is very, very clear, for the Middle East oil has been more of a curse than a blessing. It is implied in that question how it has been used. Of course you don't have to be a genius to figure out that if you have something, you use it wisely, you benefit from it. We all know that, but it hasn't been used wisely. I agree with my friend, I will put my neck on the block, I agree with you wholeheartedly, and I will say the same thing if you ever saw that sharp knife of yours in the kitchen that's ready to cut. I will admit to you that if they use oil wisely, it's a benefit. We should have been investing this abroad, we should have invested it domestically to generate future income but we haven't done it, and that is why it has been more of a curse. We abused it to kill each other, that's what we've done.
TIM SEBASTIAN
OK, Carole Nakhle, very briefly.
CAROLE NAKHLE
Yes. You all referred to education. Just to remind you that Lebanon before the civil war had most probably the best schools, the best hospitals in the region, and they didn't need oil to do that.
TIM SEBASTIAN
Lady in white, right at the back, you had your hand up first.
AUDIENCE Q (F)
My question is for Ramzi Salman. You have said earlier in your statement that management is evil and is misusing oil. Don't you think that oil pushed management to be evil and misuse it, because they would like to keep all the benefits of oil to themselves and not benefit the people who originally owned the oil, so if you look at it from this way, oil is a curse?
RAMZI SALMAN
Now, do we keep on clarifying this?
TIM SEBASTIAN
Keep on clarifying it because maybe she's not buying your argument.
RAMZI SALMAN
Well, let me dress it differently, and I might be able to sell it. When we are talking about the oil itself, the resource, the valuable resource underground, this is a gift of God, this is something which is given to us. Now, how we use it is our responsibility. When I talk about management, you make that into money, and how do you manage this money? If you have evil management, like we had in cases where they spent on arms, on plots and what-have-you, then that's bad, but if we have good management, that good management will use that for good reasons.
TIM SEBASTIAN
When you have good management.
RAMZI SALMAN
If we don't have good management, we are starting to see some good management, we are going to see improvements, we have to work for getting good management. I mean, let's not mix the management and how we use the wealth with the wealth itself. The wealth itself is not a curse, that's the point. The curse which we are cursed with, the problem is the leaderships.
TIM SEBASTIAN
You'd like to come back on that, wouldn't you?
AUDIENCE Q (F)
Yes, because if you look back at other leaders, they have used the fortunes in a bad way. It does change the point of view of management having such strong fortunes like oil, so if you look at it from this point of view, it is a curse, because oil is a double-edged sword.
RAMZI SALMAN
Yes, but can you imagine, let's put it this way. Let's look at the Gulf area, the countries around the Gulf, what was their position say 50 years ago and what they are now? Look at Qatar, look at Doha. There was no electricity 50 years ago. There was only one hotel with seven rooms in Doha. What do we have now? Something different. The management has succeeded in developing something into something noticeable. Seeing is believing. We have seen these things, we are seeing them and they are there, and that's a blessing.
TIM SEBASTIAN
All right. She may have bought it or she may have, did you buy it this time, the argument? No, she didn't. You didn't convince her. We'd better move on because we've got a lot of questions. The lady in white, you raised your hand just a moment ago.
AUDIENCE Q (F)
Just a comment first. I think for any nation to develop, they have to start at ground zero. I mean, you can't just have the world's best education and city and the best universities and I mean still have people who are living under poverty level, so my question is to Mr. Nawaf that what happens when the Saudi resources run out in a couple of centuries, and why are still so many Saudis living in poverty? I mean, what is the distribution of resources?
NAWAF OBAID
Excellent question. We actually conducted a study specifically, myself, we went around to all the different regions of the kingdom and we did a study, an initial estimate based on what we were seeing about the level of poverty. What we were able to ascertain is, putting it into context, is that by Saudi standards, it is very sad, but by international standard, by regional standards, obviously you cannot compare. Saudi Arabia at the end of day is the largest recipient of oil money. There's a poverty alleviation programme that's been put in place where over the next five years, there's going to be approximately $15 - $20 billion depending on the year, going to the regions most affected by what you so correctly point out, which is the poverty level, and we were able to identify the region that most needed it. You have regions in Saudi Arabia that has a per capita income which is as high as Qatar, and then you have regions which have a per capita income which is ...
TIM SEBASTIAN
So your point is just that it's better than some other places, but there's still poverty?
NAWAF OBAID
Of course there's poverty, definitely.
TIM SEBASTIAN
Well, the questioner's point basically is that with the incomes that you're getting, you shouldn't have the poverty, isn't it? Is that your point?
AUDIENCE Q (F)
Yes, it is. The other thing I want to know is you have to start from the bottom to go up. You cannot have children who are born with a silver spoon to strive for excellence. I mean, how is that possible, for any developing nation...
TIM SEBASTIAN
Sorry, I'm not quite sure that that's on our theme, so you'll excuse me because I think Hossein Askari wanted to comment.
HOSSEIN ASKARI
Yes. I just would like to add, I think that it is true that, you know, the whole issue of poverty is very difficult to define, what do we mean by poverty? Everybody's been struggling with that, but I think just using one's eyes, one would have to say that in the Middle East region, around the Gulf, there is less of the traditional poverty than you see in Africa, but at the same time, the Middle East has one of the worst income distributions in the world by anyone's measure. The Gini Index for this part of the world is one of the worst, and you're absolutely correct, that there is no excuse for that.
TIM SEBASTIAN
OK, let's haves a question if we may for this side, those in favour of the motion. Who has a question for this side? Gentleman over there.
AUDIENCE Q (M)
I was wondering if you could comment on the effects of oil on economic and political institutional development among oil-rich nations in the Middle East within the context of the Rentier State Theory.
TIM SEBASTIAN
Do you want to explain what that is for people who might not know?
AUDIENCE Q (M)
It basically says that modern developing nation states who have natural resource wealth co-opt the political participation of their citizens by creating welfare states. So I want to know what you feel the effects of oil wealth has done upon the institutional development, economic institution and political institutions in the region.
TIM SEBASTIAN
Where are you on this side of the argument?
AUDIENCE Q (M)
I'm on the management side.
TIM SEBASTIAN
Meaning?
AUDIENCE Q (M)
Meaning it depends on how it's managed, if it's a blessing or a curse.
TIM SEBASTIAN
So, which way do you come down, I'm asking you.
AUDIENCE Q (M)
I feel it's been a curse.
TIM SEBASTIAN
You think it's a curse?
AUDIENCE Q (M)
The effects of oil have deprived institutional development in the Middle East for oil-rich nations.
TIM SEBASTIAN
OK. Carole Nakhle, you're preaching to the converted.
CAROLE NAKHLE
Actually I would like to give you a finding from the World Bank They had a recent study published in October this year, and according to the World Bank study, the reforms in the region have been the weakest in the world, if we're looking at the business climate or governors or various officials.
TIM SEBASTIAN
Right. There's a lady in red who's been putting up her hand frequently. I think it was you.
AUDIENCE Q (F)
As we all know, oil has attracted foreigners in the Middle East, so do you think that many years from now, the Middle East will be less dependent on the foreigners who come to work here?
TIM SEBASTIAN
Who would like to take that? Nawaf Obaid.
NAWAF OBAID
It's an excellent question. I mean, this proves how oil revenues have helped create an indigenous workforce. For example in Saudi Arabia, 90% of the Aramco employees that deal with the oil fields, the engineers, you know, the geologists, are Saudi. They've been trained abroad. They go on scholarships and so forth, but they ultimately come back and they're' Saudi. The ones that work on the fields are Saudi. We just finished doing an estimate and it shows how, again, very specific, in industry, the oil industry in Saudi Arabia, how due to this oil wealth, what it has created.
TIM SEBASTIAN
So what's the answer to the question?
NAWAF OBAID
There is less dependence, I mean, on the technical know-how, but because of the inter-operability of, you know, of the global community today, there will always be some form of relationship where obviously certain technologies will be created in the west and so forth, so the dependence is lessening but there'll always be a relationship. It cannot be otherwise.
TIM SEBASTIAN
Carole Nakhle, you want to say something very briefly.
CAROLE NAKHLE
Yes. You refer to the international company but don't forget that in the Gulf area and the Middle East in general, the private companies are really struggling to replace expatriates by nationals.
NAWAF OBAID
Other countries such as what?
CAROLE NAKHLE
Look around you, read the newspapers and you will see.
NAWAF OBAID
What countries, oil-industry countries?
CAROLE NAKHLE
Not only in the oil industry.
NAWAF OBAID
No, but she was talking about the oil.
TIM SEBASTIAN
Ramzi Salman, you wanted to say something.
RAMZI SALMAN
Yes. I think this is an element of the population. The population of the Gulf countries in 1969 was 43 million total, including Iran. Now it's 123 million, this is three times as many, so the more you have population growth and they develop, and then you will have less need for foreign labour. This is only a question, but in the past you did not have the population and you did not have the qualified people.
TIM SEBASTIAN
All right. Just to remind you of the motion that we have at the moment, 'The House believes that oil has been more of curse than a blessing for the Middle East'. We have a question from the gentleman in the front row.
AUDIENCE Q (M)
I guess it's hard to say the oil has been a curse or a blessing.
TIM SEBASTIAN
We need you to make up your mind one way or the other.
AUDIENCE Q (M)
I believe it's 60% blessing and 40% is a curse, but my question is to this side of the table (for the motion): what are you suggesting? I mean, are you suggesting that we are better off without the oil? Are we, as Middle East regional people, better off without the oil?
TIM SEBASTIAN
Hossein Askari.
HOSSEIN ASKARI
No, I think that to put this one to bed for once and for all, as I said, I think I would have to be a moron, absolutely mad, absolutely crazy, just let me just repeat that, and at least if I am so, Carole is not so. To have more of anything that is a resource, you're better off, but because of the way that this has been used, and the gentleman earlier asked about the Rentier State, the way this has been used, it has been used behind the people, it has been used to have wars. You take the case of Iran, you know, Afghanis, two million Afghanis doing work that the Iranians don't want to do any more. You take Saudi Arabia, your country that I'm very familiar with, there are a lot of jobs there that no Saudi is going to ever take, and I'm sure that's the same thing in Qatar. Oil itself, you would have to be stupid, that's not implied by the motion, that is a wonderful thing to have, but the way it has been used, whether it is, as the lady said, the income distribution, down the line, the way it has been used ...
TIM SEBASTIAN
Yes, but let me just ask the questioner whether he agrees with you.
AUDIENCE Q (M)
Well, I think people, like Ramzi said, people who are managing this natural resources could be the curse but not the natural resources itself, because you cannot blame, you know, you cannot say, 'I have money in my pocket, therefore it's a curse.' It should be a blessing if you know how to manage your money, and the way forward I believe for this reason is to get a proper type of management or proper type of managers or leaders who can really make use of this oil and make it toward the blessing side rather than the curse side.
TIM SEBASTIAN
All right. Lady in red and black, up there at the back.
AUDIENCE Q (F)
OK. It's been implied a number of times that without oil, the Middle Eastern countries couldn't have risen to power, so are you doubting that the Middle Eastern countries and the minds behind those countries couldn't rise to power without oil? That's for Mr. Nawaf.
NAWAF OBAID
That's an excellent point.
TIM SEBASTIAN
You always say that when it's very difficult. Please answer it.
NAWAF OBAID
Yes, absolutely correct. If it wasn't for oil today, you wouldn't have certain Middle East countries with the international clout, the political and economic clout that they have. Again, Saudi Arabia to date, at no time in its past has there been a Gulf country or actually Middle East country with that much international clout as today, because of the oil and because of the situation in the oil market, so you're absolutely correct.
TIM SEBASTIAN
Another question, lady in the middle there.
AUDIENCE Q (F)
Well, I'd like to address this question to Professor Askari. You had concluded that oil has been promoting weapons, use of weapons all around the world, but isn't it important to notice that well before oil was used, there was coal and other fuels which were used in the World War 1 or so, and if you look at the British Army, for example, the Navy, and they used to use coal, and then they had a contract with Shell and that's when they switched to oil. So don't you think it's simply blaming oil for that? I mean, there were weapons before that, and there were wars and everything. And you also said that we would not have been here, oil has not played any role for the Middle East countries to be standing in this position as we are right now, so what do you think, I mean, if we didn't have oil, where would we be standing?
HOSSEIN ASKARI
I don't mean to imply in any way that there would not have been war. Since the beginning of time, man has fought wars, but I think what oil financed was in fact more destructive weapons, and I think because of oil, it was the western world that both United Kingdom, Tim's country, and I know there are a lot of people here from the United States, my country, it was to our advantage to make sure that Iran and Iraq fought and fought and fought and fought, not because we hated them but because we had a policy, long-term policy towards oil. We didn't want those two countries to rise, and I think the Saudi Foreign Minister said at the Council of Foreign Relations recently said that the United States and Saudi Arabia made sure that these guys killed each other, and it was for oil. It was just a bit worse.
TIM SEBASTIAN
Lady very close, right at the back.
AUDIENCE Q (F)
I address this question to those speaking against the statement. Due to the increasing income of oil, people in the Middle East have concentrated a lot on the economy of oil, and they have concentrated less on developing other industries, and researchers have proven that in about 100 years, oil will cease to exist. What will the countries do then?
TIM SEBASTIAN
Ramzi Salman
RAMZI SALMAN
Well, oil will continue for some time. Oil, as you probably know, it's about 70-80% of the products which are derived from oil are used for transportation. Till now there is no good way of replacing that and finding something else, so oil will be there for some time. What I talked about was investing in other projects and other things to generate income for future generations. For example tourism, tourism is a big business now and it is developing, and the purpose is to have an alternative source of generating income for the people. Similar things will continue all the time, but we have to have something which is independent of the resource itself. The resource is there, we have to use it, and Hossein said, I hate to agree with him, he did mention that we have this, it's the property not of only our generation, of all the generations to come.
TIM SEBASTIAN
Carole Nakhle, would you come in on this?
CAROLE NAKHLE
Yes. First of all you say that we should do this. Yes, we have to invest in other alternatives or diversify our economies, so again you're agreeing I think with our motion, that it hasn't been done before, and this is a must. We know that the economy needs diversification in order to sustain its growth, right?
RAMZI SALMAN
Not necessarily.
TIM SEBASTIAN
Is that the strongest answer you can give on that? Let me just ask the questioner, how do you feel about the motion, blessing or curse, more of a blessing or a curse?
AUDIENCE Q (F)
I think it's a curse. I mean, oil is not an infinite resource. If one day it's not there anymore or whatever, what's going to happen to the economy?
TIM SEBASTIAN
Gentleman just a little way in front of you.
AUDIENCE Q (M)
What I would like to say is that blessing implies a religious kind of meaning, and if we're talking about the Middle East, we're talking about a predominantly Muslim region, so from that standpoint we have to ask what defines a blessing.
TIM SEBASTIAN
I don't think we want to split hairs here. It's either an advantage or a disadvantage.
AUDIENCE Q (M)
So what I wanted to say is that in Islamic teachings, it says that people can be tried by wealth, so if a region is wealthy, it's not necessarily blessed, so my question is to those against the motion, are all the people benefiting from the oil or just certain leaders, and if certain leaders are just benefiting and not all the Muslims or all the people in the Middle East, then is it really a blessing in the terms of its religious meaning?
TIM SEBASTIAN
Ramzi Salman.
RAMZI SALMAN
We come back to this theme. Hossein said it's a wonderful thing to have, oil is a wonderful thing to have, the only problem is the management. We come again, the only problem is the management. Not necessarily everybody is benefiting from that wealth.
TIM SEBASTIAN
Is that your only argument?
RAMZI SALMAN
And what we have to do is work to be blessed additionally with a better leadership that will distribute the wealth and everybody will get the benefit.
TIM SEBASTIAN
All right. Nawaf Obaid, maybe he has another argument.
NAWAF OBAID
We can keep on arguing about it. Let's give a real example. If it wasn't for oil, would the Saudi government have been able to invest over $50 billion in developing the holy places of Mecca and Medina for the billion-plus Muslims that come every year for Hajj and Umra?
TIM SEBASTIAN
Carole Nakhle, she's going to answer that.
CAROLE NAKHLE
I have another question for you. If oil has been so good to Saudi Arabia, why is Saudi Arabia in this case ranked as number 77 according to the United Nations Human Development Index, which measures a country's achievements in terms of education, technology, knowledge base, among others, and yes, why would that be following the poorest economy of Eastern Europe like Romania and Macedonia?
NAWAF OBAID
Excellent point.
CAROLE NAKHLE
Thank you.
TIM SEBASTIAN
And the answer is?
NAWAF OBAID
You ranked how much, 87 you said?
CAROLE NAKHLE
77.
NAWAF OBAID
But before oil Saudi Arabia was 170.
TIM SEBASTIAN
It's had oil for a very long time.
CAROLE NAKHLE
Exactly.
NAWAF OBAID
For 30 years. From 170 to 77, that's over 100 countries.
HOSSEIN ASKARI
But my friend, there weren't that many countries in those days.
NAWAF OBAID
There weren't? No, there were 150 in those days. Now there are 170.
CAROLE NAKHLE
So you would need another 30 years in order to reach the top 25, right, or 30?
NAWAF OBAID
No. It depends on how many countries and it depends how you measure it. On a serious note, it depends how you measure distribution of wealth. I've been inspecting the literature about it, I mean, there are so many questions about how they made this Human Development report and so much criticism.
CAROLE NAKHLE
I think it's a reliable source of history.
RAMZI SALMAN
It depends how fast we are blessed with better management.
TIM SEBASTIAN
Where, in Saudi Arabia?
RAMZI SALMAN
Everywhere.
TIM SEBASTIAN
All right. Lady in the third row.
AUDIENCE Q (F)
Throughout the whole debate, everyone's been talking about management all the time. Give me specific examples of how you want it to be managed, how do you want oil to be managed, both sides?
HOSSEIN ASKARI
Exactly. Can I go first?
TIM SEBASTIAN
Go on.
HOSSEIN ASKARI
Let me give you some examples. First of all to create a vibrant private sector, you have to get rid of these semi-subsidies in all of them, but don't please get upset at me (looks at Nawaf Obaid) because I had all the data on your country more than on Iraq, that's the only reason I'm going to pick on Saudi Arabia. In Saudi Arabia if you go to the year 1990 and you take the subsidies for fuel, electricity, for agriculture, for water, it amounted to 45% of its GDP, was being wasted on those subsidies. Now, what you do, you get of the subsidies, you have good governance, the rule of law and like in the United States, I've got to say something positive about the US, you let the private sector take over, that's what you do. We don't have time to go into more depth, but we haven't created the environment where the private sector feels safe to be able to do all this.
NAWAF OBAID
But that was back in 1990. Today we're in 2005. Non-oil private sector within Saudi Arabia today has to replace government sector growth. We're in 2005, subsidies have gone down. There is a generational gap here.
TIM SEBASTIAN
So have per capita incomes.
NAWAF OBAID
Per capita income is sky-rocketing.
TIM SEBASTIAN
They weren't two years ago, were they?
NAWAF OBAID
Well if I may finish, in Saudi Arabia, per capita income was $9200 and some, this year they're going to come in at $14,000, in two years.
TIM SEBASTIAN
And what were they 20 years ago? $27,000, something like that?
NAWAF OBAID
The Saudi economy represents over 50% of the GDP of the Middle East.
TIM SEBASTIAN
They've dropped enormously from their high a few years ago.
NAWAF OBAID
The Saudi economy is 50% of the Middle East today.
TIM SEBASTIAN
You don't want to acknowledge that they have dropped in years.
TIM SEBASTIAN
Gentleman in the second row.
AUDIENCE Q (M)
I think the question was, how do you get the management. Nobody mentioned democracy. Through democracy is the way to get the best management.
TIM SEBASTIAN
Nawaf Obaid, do you want to come back on that? True democracy in Saudi Arabia.
NAWAF OBAID
No, there will never be true democracy in Saudi Arabia. I mean, on a serious note, in Saudi Arabia or in the other Middle East countries.
TIM SEBASTIAN
How about a little more?
NAWAF OBAID
I mean, we're not going to kid ourselves about that.
TIM SEBASTIAN
Oh, good.
NAWAF OBAID
There will be a certain form of democracy, a certain form of democracy.
TIM SEBASTIAN
OK. We don't want to leave the gentleman standing in the second row there. Sir.
AUDIENCE Q (M)
OK, what makes oil a curse is causing fights and wars in the region. What would the region look like if there was not oil and people still fight for grass areas and water resources as they used to 70 years ago?
TIM SEBASTIAN
Well, we have sort of covered the topic already. Who would like to have a go at it? Hossein?
HOSSEIN ASKARI
Well generally I totally agree with you, that I think we would have fought over water, we would have fought over other resources, that's the nature of man, but I think that the wars would have been less costly. I mean, the poor Iraqis that died and the Iranians that died in that war, the two of them put together approached a million-and-a-half. Over 3 million people were injured. I don't think that if we had picks and shovels or the sharp knife of my friend even, we could have done that kind of damage.
TIM SEBASTIAN
OK, you want to come back on this.
AUDIENCE Q (M)
Yes. I think oil is what stopped that war for grass areas and water resources. For that I think oil is a blessing for the region.
TIM SEBASTIAN
Thank you.
CAROLE NAKHLE
I would like to comment on the war.
TIM SEBASTIAN
Briefly.
CAROLE NAKHLE
Yes. Maybe you'll be interested in these statistics from the World Bank, that the probability of a civil conflict is 0.5% in a country with limited natural resources, but 23% in a country where natural resources account for more than 25% of GDP.
TIM SEBASTIAN
All right, lady at the back.
RAMZI SALMAN
It's obvious, you only kidnap somebody who has money for a ransom.
TIM SEBASTIAN
Let her have a say.
AUDIENCE Q (F)
OK, this is a question for those against the motion. So America invaded Iraq on the grounds that they were liberating it, regardless of whether or not they had oil, but it's obviously that one of the main reasons that they invaded it was for the oil, so in this case was oil a curse or a blessing?
TIM SEBASTIAN
Ramzi Salman.
RAMZI SALMAN
Liberating a country. It's the word 'liberation', I don't know what liberation is really, I have to see it to see what liberation is. Liberating the country or is it liberating the oil, this is the question. I think the thing was liberating the oil rather than the country.
TIM SEBASTIAN
And what if the people benefited from it as well? I think your team-mate disagrees with you there.
RAMZI SALMAN
The people are the sacrifice.
TIM SEBASTIAN
Sacrifice or the beneficiaries?
HOSSEIN ASKARI
Why are they conquering here, that's no good of the British.
NAWAF OBAID
But at least something was liberated.
HOSSEIN ASKARI
Something.
NAWAF OBAID
So oil is the cause of some form of liberation of something, fair enough, so it is a blessing.
TIM SEBASTIAN
There's a lady over there who's had her hand up for a long time.
AUDIENCE Q (F)
Has the development in the production of oil led to a better relationship between different countries, like it's an example of globalisation which has led to inspiration and new ideas and things like that?
TIM SEBASTIAN
Has oil led to a better relationship between countries? What do you think?
NAWAF OBAID
Definitely.
TIM SEBASTIAN
Example?
NAWAF OBAID
Qatar Foundation.
TIM SEBASTIAN
Between countries.
NAWAF OBAID
Qatar Foundation. I'm from Saudi Arabia, he's from Iraq, Lebanon, from the US.
RAMZI SALMAN
I think there was a case in the 70's when the prices went up very high, there was a lot of help given to developing countries and that improved the relationship between countries, and today, if it wasn't for the oil and the money for the oil, you wouldn't see oil countries helping in tsunami and helping in disaster areas. This is something, it's all positive. I mean, look at the case now with Pakistan, and that I think it's all positive. I think oil, or rather the wealth and the money from oil, will help increase and link countries closer.
HOSSEIN ASKARI
But I think what the other side has not told you, they have not imagined, maybe they lack imagination, my friends over there, what would have happened if there had been no oil? Maybe we would have done other things.
NAWAF OBAID
Like what?
HOSSEIN ASKARI
Maybe the Iraqis and the Iranians, we would have done lots I think without oil. We would have worked harder, we could have done a lot of things.
NAWAF OBAID
But Professor, you would have still had a war, with oil or without oil, you would still have gone to war with each other.
HOSSEIN ASKARI
Why, because Saudi Arabia would have financed it?
NAWAF OBAID
There would have been no money. You would have fought over the piece of land you did. But Tim, if I may, the GCC countries, the oil countries, proportional to the GDP spend the highest amount per capita on foreign aid, because you love statistics too, there you go.
TIM SEBASTIAN
OK, all right, gentleman at the back.
AUDIENCE Q (M)
I would like to address this question to Mr. Nawaf. You stated earlier the countries in the Middle East that don't have oil are suffering from the most illiteracy rate and high rates of unemployment, while the truth is exactly the opposite, because the countries with the oil suffer from illiteracy and higher rates of unemployment, and specially the Gulf countries, no disrespect.
NAWAF OBAID
I didn't understand the last part.
TIM SEBASTIAN
If you could read the whole question again.
AUDIENCE Q (M)
OK. The countries with the oil suffer mostly from illiteracy and high unemployment rates, especially the Gulf countries.
NAWAF OBAID
Let me just give you a quick example, because this is actually incorrect. I mean, in Egypt, the government does its projection on 6 million people being economically viable. Now, Egypt has a population of 70 million. The point is, no, I mean, what you're saying, with all due respect, you know, I don't mean to offend you, but you're actually wrong. The countries that have the, proportionally speaking that have the largest amount of poverty and unemployment are the poor countries that have had no oil: Egypt, Syria, Libya which has some amounts of oil, so I mean, I could go into details, but no, that's actually incorrect.
AUDIENCE Q (M)
Yes, but just a second. Illiteracy in the Gulf is below the rate, below 50%. You won't find like many Gulf people literate I mean, it's the truth. You know like if you look at other countries in the Middle East without oil, you might find them to be like much more literate than people in the Gulf.
NAWAF OBAID
You're only correct on Saudi Arabia actually unfortunately. If you compare it to the United Emirates or to Kuwait or actually to Qatar today, you know, actually, they rank way above the others because of their small population and oil wealth.
TIM SEBASTIAN
Gentleman at the back.
AUDIENCE Q (M)
This is a question to the people who are going against the motion. You're saying that the bad management is actually the curse. Well, I want to ask you, would you give a car to someone who couldn't drive? Wouldn't you say the car is a curse to him and everyone around him? It's not the oil, it may be the bad management, that's what you're trying to say.
TIM SEBASTIAN
Do you want to answer that?
RAMZI SALMAN
Repeat the question.
TIM SEBASTIAN
Do you want to repeat it?
AUDIENCE Q (M)
Of course. I just wanted to say that you're saying that it's the bad management, not the oil, that's the curse. But I would say, would you give a car to someone who couldn't drive? Wouldn't the car be the curse? You wouldn't give a knife to the child, how you like to say, you wouldn't give the knife to a child and you wouldn't give the car to someone who can't drive. That would be the curse, so it's a curse that for the oil it's come to some people who can't manage it, even if they are in this country, but I'm not saying it to say against the Arabs or people in the GCC, where for example if someone in Malaysia or in Norway, they couldn't manage it properly, it would be a curse to them, the oil would be a curse, it won't be their management.
TIM SEBASTIAN
Nawaf Obaid.
NAWAF OBAID
So management is the curse, is it?
TIM SEBASTIAN
Is that your point?
NAWAF OBAID
Or management or the people that have it?
AUDIENCE Q (M)
No, I'm not saying that the management's a curse. I'm saying that one of them would actually be the curse.
TIM SEBASTIAN
If you gave it to somebody who couldn't use it, if you gave a car to somebody who couldn't drive, the car would be the curse.
RAMZI SALMAN
The car will be the curse.
TIM SEBASTIAN
That's your point.
RAMZI SALMAN
The car would be the curse.
TIM SEBASTIAN
All right, let's have a final question for this side of the house, please. Who has a question for this side of the house? Lady there.
AUDIENCE Q (F)
I favour the motion, it's a blessing, but I'm against it, but I'm also for it because it gives money to the world, to the Gulf Arab area.
TIM SEBASTIAN
So you want to have it all ways, do you?
AUDIENCE Q (F)
Wait. When you walk outside in the street, you see all the good things that it brings to the country. You know, I see the flowers, the trees, the European players who are retired coming to play in the clubs here, I see the palm trees, the hotels and the mosques. How about public schools, how about the hospitals? They're in bad condition. Aren't we helping them?
TIM SEBASTIAN
Carole. Let Carole answer, you haven't said anything for a while.
CAROLE NAKHLE
Actually I agree with what the lady's saying. She said that the public hospitals and schools are in a bad state, and we're relying on expatriates.
RAMZI SALMAN
Question of priorities.
TIM SEBASTIAN
But you don't support the motion, or against the motion, which?
RAMZI SALMAN
She is against the motion.
AUDIENCE Q (F)
No, I'm for the motion, but asking where does the money actually go? It goes to the trees and the flowers, the prettiness of the whole country, but how about the people who live here, the natives, the locals, the Qatari people?
RAMZI SALMAN
We are back to the same point. It's a question of the management. A good management will decide the priorities, and the priorities would be, as you said, the hospitals and the things which are more important than the trees.
AUDIENCE Q (F)
There are several different countries in the Gulf in the Middle East. Why are they all the same? Why do they all do the same things? They're all different countries, there are more than 10 countries in the Gulf, the region and upper Arab region. So why aren't they helping their own country as well?
RAMZI SALMAN
Well, it's simple actually, because they're used to the desert, they have a complex they want something green, so they spend more money on trees.
TIM SEBASTIAN
Hossein.
HOSSEIN ASKARI
I would like to, before I say what I was going to say in relation to this young lady, was that I loved your analogy about the car, you are absolutely correct. If, in the United States of America you give a car to someone who doesn't know how to drive, you're giving that person the car, so it's the car. If the car wasn't there, it would not have happened, but I think what this lady said, you're absolutely correct also. I remember the olden days when I used to go to Abu Dhabi, I was always warned, 'Run over a person but don't run over a tree because Sheikh Zayed would never forgive you for that.' So that is true. The trees in this part of the world, we haven't had them, so everybody likes water wherever they can, in the bedroom, everywhere, waterfalls and trees everywhere. It is understandable, because of our past deprivation, I'm sorry.
Vote result
TIM SEBASTIAN
On that happy note, we've come to the point in proceedings where we're going to take a vote on the motion: This House believes that oil has been more of a curse than a blessing for the Middle East. Would you please take the electronic voting machines. If you want to vote for the motion, please press button one, the yellow one. If you want to vote against it, button two, the red one, and would you please do that now. You only have to do it once, you don't have to keep holding the button because due to the magic of technology, it will record and register your vote. Thank you very much indeed. And here we have the results coming up on the screen. 63.3% for the motion, 36.7% against. The motion has been resoundingly carried. Thank you. Congratulations to the winners, my commiserations to the losers. Thank you to the audience as well for participating. We will be back here next month. Please join us then. Please stay in touch with us on our website. We appreciate all your suggestions and ideas. Thank you very much for coming, have a safe journey home.
Good night.
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