Contrary to popular belief, American oil companies have not benefitted greatly from US presence in Iraq. (AFP photo/Essam al-Sudani)
Hussain Abdul-Hussain
While the abundance of oil in the Middle East has undoubtedly shaped the region’s history, with oil becoming a market commodity the importance of this resource in deciding the policies of Western governments has declined. The myth that oil dictates Western behavior in the region, however, lives on.
While many Arabs believe that controlling oil fields was the "actual" reason behind America's war in Iraq, nothing indicates that the US has had any say over oil resources in the country since the start of the occupation in 2003. America and its oil companies have not received any preferential treatment from the elected Iraqi government either, at least judging by the results of the several rounds of bidding for oil development and production.
Iraq is the home of the world's third-largest oil reservoir, with 115 billion barrels. Since the downfall of Saddam Hussein, Iraqi oil production has sat at around two million barrels per day. From day one, production was metered by the UN. Its crude is classified as “light sweet,” and can be easily transformed into gasoline. Extracting oil in Iraq is also relatively inexpensive.
Baghdad has held three rounds of bidding and is now gearing up for a fourth. During auction, Iraqi negotiators not only proved to be stalwarts, but were so strict in their contracts that many oil companies, including US giants like Exxon, saw little or no profit in certain auctions and withdrew their bids.
If the US occupation led to control of the Iraqi oil fields, either for free or at discounted prices, US companies would certainly have fared much better in winning contracts.
Iraq auctioned 20-year service contracts for its oilfields. British Shell and Malaysian Petronas won control of the huge field of Majnoon, beating a rival joint bid by French Total and Chinese CNPC after Shell-Petronas lowered their fee per barrel to $1.39.
But CNPC, together with Total and Petronas, won the smaller Halfaya field. America's Exxon Mobil, for its part, won a bid for West Qurna 1, charging a $1.90 fee per barrel produced, while Russia's Lukoil – together with Norway's Statoil – won West Qurna 2 for $1.15 per barrel.
Other national companies such as Italy's Eni and Angola's Sonangol were also in the game, showing that in Iraq, oil contracts went to the best bidders, American or not, and that oil prices are decided by the market.
Iraq is now preparing for a fourth round of licensing, this time for oil exploration. Although international companies prefer production-sharing contracts for exploration blocks, Iraqi oil officials said the deals would be based on service contracts, like in development and production, which means flat fees rather than shares in the resources.
Libya's Moammar Qaddafi, however, offered production-sharing deals instead of flat fees. His deals proved to be more tempting than Iraq's.
Libya also has light sweet crude, with 50 billion barrels in reserves. After making up with Washington, London and other Western capitals in 2004, sanctions were removed, and Tripoli offered its oil fields for development in order to increase production capacity.
Like in Iraq, the market decided oil prices in Libya, and companies had to bid for contracts. Perhaps feeling in the mood to make nice with Washington, Qaddafi allowed the awarding of contracts to tilt in America's favor.
In 2005 Libya auctioned 15 exploration permits. Three US companies—Occidental Petroleum, Chevron Texaco and Amerada Hess—won 11.
In Libya, Qaddafi had already opened his doors to Western oil companies. From a realpolitik perspective, NATO should have ensured Qaddafi's survival in order to guarantee its shares in the Libyan bids. If NATO's helping depose Qaddafi had motivations, oil was certainly not one of them.
In the Arab world, the myth that oil dictates Western behavior has further warped the already flawed Arab understanding of the world and its politics.
Hussain Abdul-Hussain is the Washington Bureau Chief of Kuwaiti newspaper Al-Rai
A poll by Zogby International claims to portray what Lebanese people believe on international affairs, but his numbers are skewed. (Haitham Mussawi/AFP)
Hussain Abdul-Hussain
NOW Lebanon
The majority of Arabs in five countries believe that Iran is playing a negative role in the region, according to the results of a recent survey by Zogby International, run by John Zogby, whose brother James is a consultant at the company. Only Lebanon, the survey found, has a majority that views Iran positively.
A closer look at the Zogby poll's methodology, however, shows that its numbers are flawed.
Zogby's Lebanese sample shows that Lebanon is 37 percent Shia, 26 percent Sunni and 37 percent Christian. Lebanon's demographic makeup, however, according to the US Department of State and Statistics Lebanon, is 27 percent Shia, 27 percent Sunni and 41 percent Christian. Population percentages are taken from the voter lists during parliamentary elections every four years. (There has not been a census since 1932, since the topic is too charged for another tally to be taken.)
Given Lebanon's sharp political divisions along sectarian lines, over-representing the Shia and under-representing the Sunnis, if not weighted in line with actual population parameters, produces skewed results.
Also in the poll, in response to a question on their views on Iran, 55 percent of Lebanon's Sunnis were favorable toward Tehran. In the question that followed, though, only 42 percent of those Sunnis who were favorable toward Tehran answered yes to the statement "Iran contributes to peace and stability" in the Arab world.
Why do Lebanon's Sunnis favor a country that they think contributes to instability? Either there was an innocent mix up in numbers, or some political agenda dictates Zogby's poll.
A third mistake in the Zogby poll was its overreliance on urban populations, as opposed to rural ones. Those familiar with Lebanon's Christian demographic know that rural Christians tend to endorse a tougher line against Iran than their urban coreligionists. With those left out, the poll showed Lebanon further tilted in favor of Tehran.
The errors in their poll did not deter the Zogbys from trying to market their findings as a God-given truth in Washington. Over the past three decades, James Zogby in particular grew accustomed to presenting whatever findings and political arguments he pleased without being challenged—until recently.
Zogby told the Washington Post in October that when he "came to Washington 30 years ago, there were four of us [in the country] doing this work." But not anymore. Today, Zogby seems unsettled with the growing competition that is breaking his monopoly on speaking on behalf of Arabs and Muslims. "[N]ow, on any one day, there are a couple hundred people doing this work," he said.
Zogby thinks he is the only bridge between America and the Arab world. In December, he organized a meeting between a group of self-styled Arab-American leaders and White House officials to discuss the indictment, impending at the time, by the Special Tribunal for Lebanon (STL), the court investigating the 2005 murder of former Lebanese PM Rafik Hariri and others. It just so happened that all of the participants Zogby had chosen were loyalists to the Syrian regime who have bashed the STL.
When news of the meeting broke out, Lebanese-American backers of the STL turned the heat up on Zogby. He ranted in an online Op-Ed against what he called the "exile political groupings" who represent a "fragmented Lebanon." The groups "claiming to represent the March 14 coalition," according to Zogby, issued a statement against the meeting. In retrospect, Zogby wrote that these groups misrepresented his "desire to convene a meeting to support Lebanon," which made him believe that he was "right to exclude them in the first place."
When it comes to representing Lebanon, Arabs or Muslims in Washington, Zogby gets to cherry pick his people. Even representing March 14 is a mere "claim" on the part of the "exile groupings," which Zogby depicted as fragmented, loud and rude, perhaps unworthy of an audience with US officials.
Zogby should realize that times have changed. Arab-Americans, whether naturalized or first generation, are well versed in the ways of Washington and its political system. Many of them even have the advantage of being bilingual and having lived in the Arab world, which gives them a deeper understanding of its society.
Arabs too are not as disconnected from the world as they were when Zogby's father Joseph first immigrated to the US. The Syrians who are disseminating news of the uprising there to the world, despite the regime's ban on foreign media, prove that exclusive inter-civilization bridges are things of the past.
When Zogby first started his lucrative business, he was a big fish in a small pond. Many Arab governments hired him to lobby on their behalf and showcase their perspectives. Now that many Arab rulers are either being challenged or have been deposed, there is no reason why Zogby and his gimmicks should remain on the scene in Washington.
Hussain Abdul-Hussain is the Washington Bureau Chief of Kuwaiti newspaper Al-Rai
Hussain Abdul-Hussain
The Huffington Post
In Beirut cafes, middle-aged men debate politics. They blame the Sykes Picot Agreement and the Balfour Declaration for all the Arab ills. They rant against colonial powers, Europe and later America. In Arab circles today, this has come to be known as the "Wooden Rhetoric."
Ussama Makdisi takes this Wooden Rhetoric and makes it into a book. He blames the West for its "Oriental" view of the Middle East, and America for taking Israel's side against the Palestinians. He introduces himself as a "bridge to cultural understanding" between America and the Arabs. He writes, "I am also entangled in [this] history."
For a starter, Makdisi's understanding of history sounds troubling. "The value of history stems from the lessons we draw from it," he writes (p. 16). History, however, is important for its own sake. When used as a "lesson," it becomes a tool for political legitimacy and thus invites the victor to dictate it.
Makdisi's claim to be the bridge between Arabs and America seems of little credence. There is no indication that he ever stepped out of his Beirut elite bubble, a problem that also tainted the views of his maternal uncle, the author of Orientalism, Edward Said.
Because Makdisi feels compelled to denounce colonialism, he expresses dismay over the British bombardment of the Iraqi revolution in 1920. Makdisi fails to notice that the Brits attacked Iraqis on behalf of King Faysal, the man Makdisi's grandfather met in Beirut and vowed to support. In fact, Makdisi dedicates a chapter to European betrayal of the Arabs, especially the British duplicity with Faysal.
"Iraqi nationalists, reacting to the British conquest of their land, also seized upon Wilsonian ideas and urged the United States government to help push for their immediate application in their country," Makdisi argues (p. 126-127). But who were these Iraqi nationalists? Were they the British-sponsored Faysal and his Sunni officers, or the rebels?
Makdisi conveniently, or unwittingly, leaves out the details of the Iraqi 1920 revolution, which was in fact a revolution of the Shiite tribes of the Middle Euphrates against the new Sunni rulers, with Iraqis who were former Ottoman army officers joining the Faisal monarchy under the wing of the British Empire.
But even if we assume that the Iraqis revolted against the British colonial rule in 1920, a few decades before the Arab-Jewish conflict in Palestine was making the headlines, the so-called revolution would prove that the Palestinian problem is not as central for Arab anti-colonial sentiment as Makdisi wants it to be.
While citing Egyptian, Syrian and Iraqi national aspirations, Makdisi dismisses Lebanese nationalists and call them pro-French, without qualifying his accusation: "Faysal and his followers knew that Maronite Christians from Lebanon advocated a pro-French nationalism that opposed their Arab project" (p. 148).
With no evidence to substantiate his pan-Arab claims other than the findings of the American King-Crane Commission, and some elite literature, Makdisi speaks on behalf of all the Arabs: "For Arabs, Sykes-Picot was a metaphor for Western imperialism" (p.177). Makdisi fails to realize that without Sykes-Picot, Palestine would have never come into existence. It would have either remained divided into marginal Ottoman states, or become part of a grand Arab autocracy under Faysal and the Hashemites.
Thankfully, however, Makdisi realizes that "[p]arts of the Arab world, such as Morocco and Algeria, were far more preoccupied with the struggle against French colonialism than with Israel ... for reasons of geography, history, and political context, [they were] more insulated from the fallout of the Arab-Israeli conflict than were Lebanon, Jordan, Syria, and Egypt" (p. 208).
In another fair observation alien to most of his tract, Makdisi added, "The degree and expression of the disillusionment with the United States varied across the diverse Arab world. Most Arabs understood that their relationship with the United States hinged on more than simply Palestine" (p. 208).
Despite admitting the priority of national issues over that of Palestine, Makdisi still points fingers at the Saudis: "As with his father in 1948, Faysal's relationship to the United Sates was ultimately more important to him than were the Palestinians" (p. 304).
Then yet another contradiction: "Americans never seemed to appreciate, moreover, that Arabs saw Palestine as a quintessentially internal problem and that Arabs in any case had already immersed themselves in intense self-criticism" (p.241).
Even though there is no evidence whatsoever in this book that the Arabs were "immersed" in "intense self-criticism," Makdisi uses this characterization to attack authors he disagrees with, such as Lebanese-American Fouad Ajami, known for his Arab self-criticism. The mildly critical words Makdisi employs for Gamal Abdel Nasser include accusing Nasser's republic of having some "flaws." Makdisi stays away completely from assessing the reasons behind the failure in experimenting with Arab unity between Egypt and Syria (1958-61), under Nasser.
Makdisi also leaves out the 19 years during which the West Bank and Gaza were under Jordanian and Egyptian rules, respectively. Why didn't the Arabs create Palestine over that part of the land until they could "liberate" the rest and annex it? The author conveniently remains silent there.
Makdisi again claims to speak on behalf of "all" the Arabs: "Although Saddam sought to portray Khomeini as a grave 'Persian' threat to the Arabs," he writes, "few Arabs regarded Iran as a greater menace than Israel, and fewer still were uncritical of the manner in which the United States had consistently turned its back on the Palestinians" (p. 324). From where did Makdisi get his numbers to corroborate these assertions?
Worse than speaking on behalf of the Arabs, Makdisi does not notice an ethical failure on his part.
When analyzing Saddam's invasion of Kuwait, he only views it from the prism of military confrontation with America and the "demoralization" of the Arabs because of his defeat. None of these demoralized Arabs seems to have cared that Saddam had actually invaded a country, Kuwait, and occupied it.
In Makdisi's words: "Saddam Hussein's inexplicable military challenge to the United States and the consequent crushing defeat to which his nation was subjected demoralized most Arabs outside the Gulf. Syrians, Lebanese, Palestinians, Algerians, Yemenis, and Egyptians had initially rallied around Saddam as a symbol of defiance of the West" (p. 335).
If you wonder who gave Makdisi the right to speak on behalf of "few," "fewer" and "most" Arabs, a bigger surprise hits you when he uses the "Arab press" to gauge the anti-Sadat feeling. "Sadat was condemned in the non-Egyptian Arab press as an 'agent of imperialism.' Syria, Algeria, South Yemen, Libya and the PLO were appalled and terrified at Sadat breaking ranks" (p. 315).
For those unfamiliar with the Arab world in 1979, except for a few Lebanese newspapers, there were no free Arab media outlets, most of which were owned and run by the different Arab governments. Still, Makdisi sees it as OK to use the "Arab press" as an impartial indicator.
By the end of the manuscript, Makdisi tries to use his "history" book to draw themes for political purposes. "That the Shia Hassan Nasrallah was able to sustain his popularity in the predominantly Sunni Arab world at a moment of extraordinary sectarian violence in Iraq is remarkable," according to Makdisi, who adds a footnote to see Amal Saad Ghorayeb, "What the Moderate Arab World Is," Al-Ahram Weekly, April 26-May 2, 2007.
Amal Saad Ghorayeb is a Lebanese analyst whose father runs a Hezbollah "polling" center. Regardless of her neutrality, and regardless of the fact that this is the only time in the book that Makdisi uses a poll to support any of his claims, Makdisi is using a 2007 poll to make a point in an epilogue he penned in 2010. "In his pan Arab appeal during Israel's 2006 war on Lebanon, Nasrallah appeared to be a latter-day Gamal Abdel Nasser and stood for the same secular desire for self-determination," he writes (p. 364).
If after more than 60 years of the Arab conflict with Israel, Makdisi still looks for a latter-day Nasser, the populist autocrat, to "liberate" Palestine, that's a disaster. Perhaps it might be better for Makdisi to call for the creation of Arab democracies that can decide what is the best way to deal with the Palestine question. Every Arab opinion, outside elected parliaments, is a mere claim, and this book has a lot of them.
Obama and Ford in the Oval office on Monday
President Barack Obama received US Ambassador to Syria Robert Ford in a show of presidential interest in the situation in Syria. The White House released the following statement:
The President took the opportunity today to consult with U.S. Ambassador to Syria Robert Ford, who is in Washington D.C. for meetings with the Senate and key Administration officials. The President thanked Ambassador Ford for his extraordinary service to the American people at a very challenging time in Syria. The President also reiterated his strong condemnation of the Syrian regime’s outrageous use of violence against its own people, and reaffirmed America’s support for the courageous Syrian people, and their demands for universal rights and a democratic transition.
But Secretary of State Hillary Clinton could not but show the world America's inexcusably mild reaction on Assad's massacres in Syria. In a statement, Clinton said that Assad is ensuring that he and his regime "will be left in the past."
So, from Clinton's perspective, Assad is not "in the past" yet. He is, however, still in the process of "ensuring" his place in the past.
The Clinton statement below:
The Syrian regime's violent assault on civilians continued today, even as Ramadan began, highlighting again the brutality and viciousness of the Assad regime. Yesterday, President Obama said that President Assad has shown that he is incapable and unwilling to respond to the legitimate grievances of the Syrian people. Today, as the campaign of violence continues, President Assad is further ensuring that he and his regime will be left in the past, and that the Syrian people themselves will be the ones to determine its future.
During what should be a time of prayer and family gathering, we mourn the deaths of all those killed, especially innocent children like Layal Askar, a one-year old killed by a stray bullet from a security officer’s gun in the southern city of al-Hirak. The United States stands with the Syrian people and we condemn the Assad regime's violent campaign against them. We call on President Assad to stop the slaughter now. We call on those members of the United Nations Security Council who have opposed any Security Council action that would call on Assad to stop the killing to reconsider their positions. And we call on the international community to come together behind the people of Syria in this critical time.
As I have said before, President Assad has lost his legitimacy with the Syrian people. Syria will be a better place when a democratic transition goes forward.
Hussain Abdul-Hussain
The National
The Syrian economy has been in ruins since mid-March. Tourism has come to a halt and foreign investments have stopped. The situation puts the Syrian currency, the pound, in a precarious position.
Adib Mayyaleh, the central bank governor, insists that the nation's monetary situation is sound, but the reality looks quite different. The imminent shortage of foreign exchange reserves threatens the value of the national currency.
The crisis has hit the economy hard. Since the outbreak of the uprising, Syria's tourism sector - which reportedly makes up 12 per cent of the economy - has almost completely stopped operations.
Another major earner, oil production, has also taken a hit. Syria produces 400,000 barrels of oil a day, and consumes 300,000, which in theory makes the country self-sustaining in this sector.
But there is a catch. Syria has the capacity to refine only 240,000 barrels a day. Until sanctions were enacted, Damascus shipped heavy crude oil to European countries for refining.
But now, with European sanctions, and because Iran and Russia are unable to refine this kind of crude, the Syrian domestic market has shortages. Export sales of oil have also declined.
Agriculture, once accounting for 18 per cent of Syria's annual GDP, has been in shambles for the fourth consecutive year, largely because of drought. Not coincidently, the hardest-hit areas, such as Deir El Zour and Hama, are the same ones that have been at the forefront of the uprising.
The protesters' frequent general strikes also add strain to the economy. Demonstrators have organised boycotts of businesses believed to be owned by regime pillars. These too disrupt the economy.
The uprising shows no sign of dwindling, and the longer people stay in the streets, the worse for the economy. Annual GDP - and state revenues - will certainly decline in 2011.
The unrest has also destroyed confidence among foreign investors. Many have already put projects on hold, freezing another revenue stream.
At the core of the problem undermining Syria's pound is the anxiety of its citizens. These are average people who make up the bricks and mortar of the economy and keep their savings in banks in Syrian pounds.
Yet these people now fear that the entity that stands behind their national legal tender, the Syrian government, might crumble. That would bring with it the collapse of the value of the pound.
In closed economies like Syria's, the government assigns its currency a fixed exchange rate against major world currencies. But when a government is at risk, people become unusually unwilling to hold the currency, and the black market soon comes to be a better measure of the actual worth of the paper money in question.
As of yesterday reports from Syria had it that the US dollar is worth 67 Syrian pounds on the black market, while the official rate is around 47.5.
Just as many Lebanese people did during the civil war, many Syrians have rushed to their banks in recent months and tried to exchange their pounds for foreign currencies, to preserve the worth of their savings.
This put exceptional strain on the foreign exchange reserves of Syria's central bank, which by May had seemingly run out of exchange reserves. That's when currency exchange prices on the black market began to depart substantially from the official rates.
Syrians are correctly expecting further devaluation of their national currency, and are accordingly racing to convert more pounds into dollars. The more pounds that are for sale, the more the currency's value decreases. The more dollars are in demand, conversely, the more their price increases.
In fact, Mr Mayyaleh admitted that the black market price is higher than the official one, but dismissed this market as a "small scale" operation.
In his defence of the monetary situation, however, Mr Mayyaleh offered what look like irrelevant arguments. He said that the bank had 600 billion Syrian pounds in reserve, and that deposits in Syrian banks had grown by 12 per cent to July 5. He denied reports that the government had defaulted on paying salaries.
Mr Mayyaleh's defence focuses on deposits in Syrian currency, but these do not alleviate fears that the Syrian national currency might be losing its value fast.
Syrian bank notes may soon not be worth the paper they are printed on. Syrians could see their savings vanish overnight, and salaries would become worthless. This is the problem the regime of President Bashar Al Assad is facing now.
Like anyone in his position, Mr Mayyaleh has had to show a steady hand, even if it meant that he had to bluff. The truth lies elsewhere.
Less than two weeks ago, Syria went to Kuwait asking for a loan of $105 million, which revealed a desperate need for foreign currency, perhaps not only to prevent hyperinflation but also to pay the growing bill for security forces and pro-regime thugs.
The Assad regime might not fall under pressure from mass rallies. But when it comes to the economy, it might find itself running on empty, and eventually might be forced to pull over.
Hussain Abdul-Hussain is a Washington-based analyst