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Sunday, March 21, 2004

Oil, Iraq and Civil War 

Here’s something to throw into the conversation next time you get into an argument about the Iraq war: yes, oil is a factor in understanding the dynamics we’ve witnessed, but not for the reasons most people suggest. Whether or not last year’s war on Iraq was "really about oil," next year’s war in Iraq almost certainly will be. While imposing democratic institutions on a foreign country is never going to be easy, Iraq's oil wealth may cause the upcoming internal struggle to be rougher, longer and more violent than we'd otherwise expect.

Around this time last year, trying to explain the "real reasons" for the Bush administration's decision to launch an invasion of Iraq had developed into something of a cottage industry. Although there was widespread skepticism about the President's stated purpose for the war (to rid the world of the threat of Saddam Hussein's weapons of mass destruction) there was hardly universal agreement on the U.S.'s actual intent.

One school of thought held, generally in a somewhat murky way, that the actual purpose of the invasion was to secure control of Iraq's oilfields either for the U.S. government or for U.S. oil companies. Another, more cogently developed and well-documented argument held that the invasion of Iraq was actually the first stage in a long-developed plan to completely reshape the political landscape of the Middle East, imposing democracy by force on one country, then watching as a demonstration effect led other Arab (or even Iranian) peoples across the region to rise up and institute democratic rule in their own countries.

Some new scholarship suggests, however, that if the “demonstration of democracy” reasoning played any part in the administration’s calculations, Iraq’s enormous oil reserves made it a singularly bad place to serve as a beacon to other nations. Over and above the suspicion that the association of the words “oil” and “war” tends to generate among the conspiracy theorists in our midst, the best available evidence appears to show that countries with abundant natural resource wealth (like Iraq’s oilfields) are more likely to collapse into civil war, and that these breakdowns are more intense and longer-lasting than civil wars in resource-poor countries. In short, if the Bush administration was trying to forge a new democratic order in the Middle East by overthrowing a dictator and developing a stable democracy, it may well have done better choosing Syria as its target.

Political scientists and reporters covering foreign conflicts often make references to civil wars being fueled by diamonds (Sierra Leone), drugs (Columbia) or oil (Nigeria), but we don't usually hear exactly how these valuable items are related to civil war, and whether they cause wars to happen or just get worse. Instead, the close coincidence of war and resources is simply noted and the next topic is raised. Fortunately, articles in the most recent issues of the academic journals International Organization and AJPS, actually look at recent history for some guidance as to how accurate these guesses might be. Their findings are somewhat disturbing because of what they suggest could be in Iraq’s future. But they also point out some non-obvious ways that Iraq's governors can try to head off future civil conflicts.

First, there is some convincing evidence that resource wealth, particularly oil wealth, can lead to the onset of civil war. This seems particularly true when the resources are located in a region with separatist ambitions (as with the Kirkuk oilfields in Kurdish northern Iraq). This could work in one of two ways: first, as has happened in the Indonesian province of Aceh and in Sudan, the possibility of grabbing full control of the resources can provide a major incentive for rebel activity and provide an invaluable advertising campaign for rebels looking for support from a conflict-averse populace ("Stop letting those Arabs steal your oil! You could be rich beyond your wildest dreams if you support us!").

Second, there's some evidence that oil wealth allows political leaders to lose sight of what's going on among their citizens, which could conceivably lead to festering resentments going unaddressed, or to the flow of funds to rebel groups going unnoticed. Oil revenues from nationalized production facilities or lucrative contracts with private oil firms provide a nice, comfortable cushion for politicians trying to keep a state afloat, but since there's no immediate need to develop a high-quality taxation system, with the requisite careful collection of statistics and auditing of accounts, it's harder to develop a high-quality state that's responsive to social needs and capable of sniffing out corruption. It's probably worth mentioning here that this is clearly a double-edged sword; in the short term, oil wealth can allow a state to buy off malcontents (as the Saudis have done for years). Furthermore, Norway, the only developed democracy among the world's major oil exporters, is hardly a hotbed of civil turmoil. The important point here is that the roar of oil and money flowing around Iraq may keep attention away from the delicate processes of developing a functioning democracy, and may serve to drown out whispers of a growing insurgency.

John B. Judis's article in the March 31, 2003 issue of The New Republic makes a related point, giving a good account of why oil-rich states like Iraq (other than Norway) have typically evolved authoritarian institutions, although it's tough to see how his arguments apply to the sui generis case presented by the birth of Iraq's new ruling order. The mechanisms he describes explain why authoritarian leaders have found it easy to avoid democratizing, so his arguments aren't an exact fit for Iraq's current situation, where (hopefully) the starting point is a set of democratic institutions, however shallow and poorly-formed.

"But wait," you may be thinking, "isn't there already a civil war going on in Iraq?" Maybe so. It's hard to say whether the bombing campaign we're now witnessing will continue after power is transferred this summer. It's also hard to tell who's doing the bombing, and whether sectarian or ethnic separatist groups will adopt new tactics once the U.S. begins its withdrawal. But the same scholarship described above lends credence to fears that any civil war that does break out will be longer and possibly more intense than would be the case in a country without Iraq's oil wealth.

While the evidence isn’t crystal clear, it seems that oil can prolong civil wars by providing insurgents with a source of revenue. Although it's tough to loot an oil well as compared to, say, a diamond mine, rebels in Africa and South America have blackmailed private firms by threatening to blow up pipelines or kidnap technicians. There's also some intriguing evidence that insurgent groups can sell what basically amount to futures contracts for oil they'll take possession of after winning control of disputed territory. And when considering the possible loss of oil-rich territory, central governments have an incentive to pre-emptively and violently repress separatist movements, which is exactly what we saw under Saddam. It's tough to imagine how this dynamic wouldn't repeat itself in a federal Iraq if Kurdish or Shi'a separatist movements seem to be gathering enough strength to succeed.

Over and over again, the key element in making civil wars more likely and worse in oil-rich states seems to be the presence of separatist movements. This is a key insight in analyzing the results of the attempts to create a constitution for a new Iraq. Hopefully Paul Bremer, Ayatollah Sistani and the other players in this process are taking it into consideration.

UPDATE: Crooked Timber has more.

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