In the seventies, Juan Pablo Pérez Alfonzo, Venezuela’s oil
minister and one of the founders of OPEC famously said that oil was not black
gold but that it was the devil’s excrement and brought a curse to those
countries that had oil reserves.
Pérez Alfonzo’s insight has been rigorously tested over the
last forty years and economists, environmentalists and political scientists
have confirmed that he was correct in saying that oil did not bring all the
benefits that governments, and people, expected. Studies have shown that the
economies of resource-rich countries grew at a slower rate than those that do
not have abundant minerals or raw materials to export and, even if the natural
resources fuelled growth, it was rarely accompanied by the expected full social
benefits. It could be said that a surplus in wealth from natural resources has had
a negative effect on the development of other sources of wealth such as
agriculture, manufacturing and a country’s human resources. Those countries
that proved to be an exception, e.g. Norway and Malaysia, used the bonus of oil
resources wisely. Desert countries e.g. Gulf States and Libya, had no
significant agriculture or industry prior to the discovery of oil and the
riches that the Americans and Europeans extracted from under their feet brought
wealth beyond their dreams, while wealthier countries such as Iraq, Iran,
Nigeria and Venezuala, that already had other resources and industry, oil was a
bonus. However the bonus still carried the curse and, over time, it has not
proved to be a ‘God given’ gift.
The recent drastic fall in the price of oil has had a devastating
effect in Venezuela where the country’s economy is now heavily reliant on oil.
In 2014, oil brought in $75 billion to the economy of this oil rich country
where Pérez Alfonzo served as Minister of Oil, but today the value of a barrel
of oil is less than a third of its 2014 price. The result is a shrinking
economy and rising inflation accompanied by a food crisis that is hitting every
Venezuelan. The country had become reliant on its income from oil to provide
food for its growing population but now the government cannot pay for the
imports of flour, milk, eggs and other basic staples that the population
depends upon and many supermarkets, especially those that are state subsidised,
have empty shelves. Inflation is estimated to be 700%, (The Times, London,
12.02.2016), there are long queues outside any shop that has food supplies
while crime rates are rising. The country has also been hit by drought which is
being blamed for the drop in hydro-electric power and the enforced daily power
cuts. Now the Venezuelan government is urging everyone to do their bit towards
seeing their country through the current emergency.
This year, President
Maduro of Venezuela announced the formation of a new Ministry for Urban
Agriculture. Emma Ortega, the Minister for Urban Agriculture, recently said
“people have to solve the current emergency by cultivating in any available
space. We just need sun, water and earth. Currently our cities are just food
consumers and parasites.”
President Madura has said that by growing their own food
people can survive the economic collapse and that he and his wife were keeping
50 backyard chickens in their effort towards food security. “It’s time to
develop a new culture of production”, he said. While the government is urging
its people to return to agriculture the country’s health services are breaking
down as doctors try to stop the rapid spread of the zika virus, in the absence
of the drugs they need but have no means of obtaining. It is a sorry state of
affairs for this oil rich country.
What has brought Venezuela down is the result of its
successive governments believing that the oil revenues would always be
sufficient for the country’s needs and little emphasis was placed on the
development of other avenues of income while wealth always attracts the
dishonest and the corrupt who seek to line their pockets. Corruption can be
found in any country but sadly the combination of oil wealth and developing
countries results in corruption and nepotism on an excessive scale.
I was a student in Britain when the Ba’athists turned their
attention on my family and, after obtaining my doctorate, I was able to get
employment in Tripoli University Libya followed, a few years later, by work
with the Food and Agriculture Organisation (FAO) of the U.N. When I retired
from FAO my work had involved livestock and agriculture development programs in
all the countries of the Middle East and North Africa yet the opportunity
for work in Iraq only came when Saddam
was overthrown and I had reached the UN retirement age. Six years ago I was
asked to take up the post of adviser in food security and agriculture to the
KRG’s Prime Minister I readily took the opportunity to play a role in the
development of Iraqi Kurdistan. I believed that I would be contributing to the
redevelopment of farming communities destroyed by Saddam’s troops, improving
agriculture and developing food security for the benefit of Kurdish people in
Iraq.
I had not been in Erbil for long when I realised that sadly
this was nothing but a pipe dream and that, unfortunately, the fatal
miscalculations made in Venezuela were being repeated in KRG and Iraq.
The reality was that all the ideas, recommendations, advice,
observations and reports that I made were simply ignored. It did not matter if
it involved increasing poultry production, improving slaughterhouse facilities
and meat inspection, control of livestock imports, silos and wheat production,
vaccination programs or safeguarding water and agricultural lands – no one was
interested. The first Prime Minister I was asked to advise took one report I
offered him and threw it onto his desk saying “We do not need this, we have
oil!”, I was never called to meet his successor. By chance I attended
international discussions held by the Blue Peace Organisation on water supplies
in the Region and I was appalled to discover how Turkey were damming the Tigris
and Euphrates rivers and reducing the waters flowing into Kurdistan and Iraq.
It was made perfectly clear by the Turks that they regarded water as a
commodity and they used the phrase ‘Water for oil.’ No one in the KRG government, including
President, Prime Minister and Speaker of Parliament, expressed concern and
Turkey’s exports were welcome in the markets to be sold in direct competition
with any locally produced goods.
It seemed that agriculture
and food production was regarded as being unimportant when the bright, new
petrodollars could buy everything they wanted. Instead of being used to develop
our agriculture and industries the oil revenue was used to buy cars, food,
freezers, electronic goods or clothes or to build anything from cement plants
to tourist villages or invisible factories on prime agricultural land. As long
as there was enough oil money available to maintain imports, pay salaries and
pensions everything was fine. Or was it? The sad truth was that the entire
government was being run by ruling parties that took power in turn and
allocated ministerial posts to the requisite number of party members
irrespective of ability while nepotism was rife. It is a sorry state of affairs
when only one of the seventeen Ministers of Agriculture that have served the
KRG was an agriculturist and sadly the same can be said of the central
government in Baghdad. For thousands of years the lands of Kurdistan and Iraq
were referred to as the birthplace of agriculture and civilisation yet since
the discovery of oil the entire area has been blighted by the greed of men who
ignored the value of fertile land and water and saw only the money that oil produced.
Kurdistan, like Venezuela, is now on the brink of an economic
crisis caused by the drastic reduction in the values of the petrodollar, the
squandering of agricultural land, failure to rejuvenate villages and
communities, to safeguard water supplies and the development of a society that
is entirely dependent on imports.
I wrote ‘we cannot drink oil’ in the article I doubt if any
government official read it!
http://www.iraqswaters.com/2014/09/we-cannot-drink-oil.html#links
Talib Murad Elam
Wales
16.2.2016
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