Saturday, 19 March 2011

It’s the oil, stupid

Something Colonel Gadhafi said on Tuesday seemed to be tipping point for a Western push for military action in Libya. He said: “We do not trust their firms, they have conspired against us...Our oil contracts are going to Russian, Chinese and Indian firms.” In other words, if Gadhafi was to stay in power, Libyan oil would no longer go to Europe but to BRIC (Brazil, China, Russia, India) countries instead.

Currently no less than 85% of Libya’s oil is sold to European Union (EU) countries. Libya is the largest oil economy in Africa with at least 46.5 billion barrels of proven oil reserves. That is 3.5% of global output. It has the potential to dramatically increase its daily output of oil and cost of production is very low at roughly $1.00 per barrel. All of this makes Libyan oil extremely attractive.

It’s interesting to note which countries voted in favour of the United Nations Security Council (UNSC) resolution approving “all necessary measures,” including imposition of a no-fly zone over Libya. The resolution was passed with 10 members, including the US, France, the UK and Lebanon, voting in favour and five — Russia, China (both permanent members with veto rights), Brazil, Germany and India — abstaining. Brazil and Germany had voiced their scepticism about military action; but in the case of Russia, India and China other (energy) motivations may have been at play.

It seems pretty obvious to me that oil did play a major role in the decision for Western intervention in Libya. Added to this are concerns about Libya being a major gateway for African migrants to get into Europe. Then there are those US/EU arms firms who likely to profiteer too. But the case for war has been sold as a humanitarian mission to help the beleaguered people of Libya being oppressed by Gadhafi. What about military intervention in Bahrain where the current Sunni ruling elite, along with their Saudi allies, are brutally cracking down on the local Shia population? The difference is Bahrain is ruled by a pro-western Sunni regime, which is home to the US Fifth Fleet, while in Libya everything is up for grabs.

There are major risks associated with implementing a no-fly zone, and it has every chance of backfiring. The big unknown is what Gadhafi will do. His minister of defence has already warned that all aerial and naval traffic in the Mediterranean is at risk, and every civilian and military target is fair game.

STRATFOR, a leading global intelligence company based in the US, warned that “war as a humanitarian action should be undertaken only with the clear understanding that in the end it might cause more suffering than the civil war. It should also be undertaken with the clear understanding that the inhabitants might prove less than grateful, and the rest of the world would not applaud nearly as much as might be liked — and would be faster to condemn the occupier when things went wrong. Indeed, the recently formed opposition council based out of Benghazi — the same group that is leading the calls from eastern Libya for foreign airstrikes against Gadhafi’s air force — has explicitly warned against any military intervention involving troops on the ground.”

There’s something eerily reminiscent of Iraq here. What is ostensibly sold as a humanitarian mission has the underlying signs of strategic interests being the real issue. There is the possibility that things may not go according to plan, which could lead to civilian casualities and a very unstable situation in Libya – something the West may learn to rue.


Amrita said...

Oh yes India abstained from th e UNSC vite and we had 18,000 workers there many have been evacuated.
Tha t man is mad. I am glad finally the world is taking action .

JI said...

Hi Amrita,

I agree with you about Gadhafi. He is a tyrant. However, I'm very uncomfortable with this military intervention. I fear it will only cause more civilian causalities, not decrease them. I am also very sceptical whether the intention is really a humanitarian effort but is, as I suspect, regime change for the sake of securing Libya's oil and gas reserves.

The endgame is not clear either. The UN Resolution calls on member states to use all means necessary (except ground forces) to establish a no-fly zone and to "protect civilians and civilian populated areas under threat of attack". Where do you draw the line, particularly if the parties on the ground do not agree to a cease fire? Was violence the last resort? I don't think all peaceful alternatives were exhausted. It seems like a re-run of Iraq.

Best wishes,

Joseph Pulikotil said...

Hi JL,

This is a very interesting post.

While I agree with your views, I feel it is time Gadhafi left the scene. He has been a dictator too long.This is too bad not only for Libya but also for the world.Dictatorship is an out dated system of government.People suffer under a dictator. There is no rule of law except the whims and fancies of the dictator.

Now the people are trying to throw out the dictator and the world should certainly help. India is always wishy washy in its foreign policy and can never solve any problem including the problem with our neighbors.Only with the help of US we are able to stop Pakistan from creating more trouble in India.

Best wishes,

JI said...

Hi Joseph,

Like you I have no love for Gadhafi. He's definitely a ruthless dictator, but you have to remember this guy has managed to stay in power for 40 years, and he can't have done that without considerable support. Libya, like many Arab countries, is a tribal society and Gadhafi simply played one tribe against another.

As for western powers and their motives for getting involved, I am highly sceptical that their hearts are in the right place. Ivory Coast is on the verge of civil war. Yeman is in turmoil. And in Bahrain the ruling Sunni elite are brutally suppressing the majority Shia population. Why is intervention in Libya absolutely necessary? I think it's mainly down to one thing: oil. Libya has the potential to become the Saudi Arabia of Africa.

Now we're in the era of "humanitarian" bombing. One mustn't forget there will be loss of life and considerable damage with every bomb dropped. Only we just don't see it on our tv screens. The ultimate aim seems to be regime change even though that hasn't been publicly stated. What kind of Libya will emerge after that? It could be even more unstable than it is today just like Afghanistan and Iraq. That will be more of a nightmare to the world, especially for Europe which only has the Mediterranean separating it from Libya.

Best wishes,