Skip to footer

Oil’s fall may be democracy’s rise

The biggest oil producers, which are trying to prop up global prices, are also among the last countries to make reforms that will lift them from a ‘resource curse.’

|
AP Photo
Saudi women shop at a mall in Riyadh, Saudi Arabia. Saudi Arabia is racing to attract more investment and overhaul its economy as low oil prices expose it to urgent domestic challenges.
  • By the Monitor's Editorial Board

Three of the world’s largest oil producers, Russia, Venezuela, and Saudi Arabia, agreed on Tuesday to freeze their output as long as other major producers did the same. This market-manipulating move is a desperate attempt to prop up petroleum prices, which have fallen 70 percent over the past two years. But it is revealing on another level. The three countries, which have let themselves become highly dependent on a single material export, are also among those most in need of political and economic reforms.

Like the receding tide, the fall in oil prices has exposed which commodity-rich nations have learned how to avoid the so-called resource curse and which have not. Countries such as Norway and Bolivia have effectively sidestepped many of the pitfalls of easy resource wealth, such as corruption, reckless spending, or autocratic rule. Some have set aside oil money in prudent savings for future generations. Others plow their proceeds into long-term investments, such as education and high-tech innovation. The best ones ensure transparency and accountability – qualities that require democracy – in their oil industry and government.

The good news from lower oil prices is that it is driving reform, helping turn a curse into a blessing. Newly elected governments in Nigeria and Indonesia, for example, appear to be tackling corruption related to commodity exports. Brazil’s leaders are now under even more scrutiny after a scandal hit the state-run oil company, Petrobras, and led to unprecedented prosecutions of high-level officials. The price fall is forcing wealthier nations with large oil reserves, such as Canada, Australia, and the United States, to focus more on sustainable industries for growth.

Meanwhile, the autocratic rulers in Russia, Venezuela, and Saudi Arabia are trying some reforms. Russia plans a 10 percent cut in public spending. Saudi Arabia hints it might allow private investment in the kingdom’s oil company Aramco. And in Venezuela, President Nicolás Maduro is under extreme pressure to reform the economy. A recent election there saw the pro-democracy opposition win big in parliament.

“Just as the oil curse had a beginning, it could also have an end,” predicted Michael Ross in a 2012 book, “The Oil Curse: How Petroleum Wealth Shapes the Development of Nations.” With many experts forecasting low commodity prices for years, perhaps the world will see more resource-rich nations drill down on needed changes in governance.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Oil’s fall may be democracy’s rise
Read this article in
https://www.csmonitor.com/Commentary/the-monitors-view/2016/0216/Oil-s-fall-may-be-democracy-s-rise
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe