June 8,2004 Morteza Aminmansour
Seattle, WA, USA
U.S. Oil policy and corrupt regimes in Persian Gulf Countries:

Currently, US domestic oil production supplies about 50% of total U.S. consumption. Foreign sources provide the rest, primarily Canada, Venezuela, Mexico and several African countries.

The U.S. is strongly committed to production Persian Gulf oil, although only about 10% of oil used in the U.S. is imported from the region. During the cold war, U.S. strategy was primarily aimed at ensuring that Persian Gulf oil did not fall into hostile hands.
Persian Gulf oil was and remains important because of its impact on the global economy. U.S. competitors in Japan and Europe depend more on Persian Gulf Oil than the U.S. does.
30% of European oil imports and nearly 80% of Japan’s come from the Persian Gulf. The U.S. exerts significant influence on these countries through control of Persian Gulf Oil.
The Persian Gulf corporation council states (Saudi Arabia, Qatar, UAE, Kuwait, Bahrain, Iran, Iraq, Oman jointly posses 64% of the world’s proven oil reserves.
The most important among Persian Gulf states is corrupt Saudi Arabia, which alone controls 27% of the world’s oil supplies.
Oil represents the backbone of the Saudi economy. But despite its small population and its oil revenues reaching $45 billion, in the 1990-93 period Saudi foreign domestic debt climbed to $ 70 billion. Most of this was the result of arms purchases, largely from the United States. The rise of opposition forces within Saudi Arabia is linked to this pattern of arms spending as well as the corrupt practices of the monarchy. The stability of this region is baffling and discrimination against Shi’a Muslims has been rampant in several countries such as UAE and Saudi Arabia. Anti government religious militancy has grown .The Persian Gulf political Systems appear an anachronism, the last holdout of this system in a modern world. The region itself is in turmoil. Persian Gulf states are using variety of government’s strategies to promote social order. The Persian Gulf countries are using a combination of several strategies: strong security service; Divide-and rule measures; ideological flexibility; token participation; accommodative diplomacy. These strategies preserve these states of social peace in an area of turbulence.
In an era when democracy is the world’s dominant political system, Persian Gulf regimes are traditional autocracies. Political alienation and corruption are widespread. Family members or those close to them dominate all-important positions –those that control spending, internal security, and military. The traditional checks on government authority a free press, an independent judiciary and a strong civil society are either lacking or kept intentionally weak in the Persian gulf states. The alienation of social and economic elites appears to be particularly dangerous. Oil wealth has empowered the ruling families that control the state.
Corruption and unaccounted for government spending levels are quite high. Money derived from the sale of oil noted in balance of payment statement often fails to appear in oil revenues reported in the state budget.
In recent years, from 18 to 30 percent of the revenue from petroleum exports was not reported in budgets in Persian Gulf countries such as UAE, Oman, Qatar, and Saudi Arabia. This missing money – billions of dollars a year enriches the ruling families. The Opposition groups frequently criticize the regimes for allowing ruling families mismanage the country (UAE). They are accused of squandering the wealth of the nation. Al SAUD family members are blamed for corruption and contributing to the country’s economic woes. The per capita incomes of many Persian Gulf residents have plummeted. Saudi Arabia has perhaps 20,000 princes and princesses, all of whom received stipends from the Saudi state that range from thousands to millions of dollars a month.
Bahrain’s AL KHALIFA, while fewer in member, also maintain an extravagant lifestyle and are perceived to interfere regularly in business for their own enrichment.
Al Persian Gulf governments are remarkably skilled at using economic control to ensure their power. Oil wealth allows the states to dominate the economy.
In Kuwait and Saudi Arabia, perhaps 90% of citizens work for the government.

For the last decade Persian Gulf monarchies have invested higher percentage of oil profits in land, hotels, real estate, factories and other enterprises in the U.S., Japan, Europe. Increasing income of the oil –exporting states is linked to profits from unrelated businesses in oil –importing states rather than from the sale of oil itself. . This gives the Persian Gulf oil States some stake in keeping oil prices moderate. Because they share the financial interests in the oil-importing countries. The diversification also provides the Persian Gulf countries additional leverage to manipulate oil prices and production. The result is that monarchies can manipulate the world oil markets while remaining relatively protected.
Despite their high dependence on Persian Gulf oil, neither Europe nor Japan plays a major role in strategic defense of the region.
U.S. policy in Persian Gulf ignores some fundamental realities:
For example Iranian regime was not isolated forever. European countries, China, Russia, and other countries with interests different from U.S
Is all abandoning U.S policy to consider trade with Iran?
The attempt to exclude Iran from influencing regional politics is unrealistic.
The uncritical U.S support for corrupt Persian Gulf regimes and their human rights abuses have weakened both U.S. Policy and oil countries. The members of the Persian Gulf’s ruling elite have a strong perception that the U.S. is forcing them to buy weapons that they do not need and not allowing them to diversify their weaponry by purchasing arms from Europe.
Persian Gulf oil could be protected is economic rather than military means eliminating the military and political costs of dual containment. And could provide more jobs for people.
The rulers of UAE and Saudi Arabia are greedy and corrupt, have not trained their people for life after the oil bonanza.
Nearly all Gulf Arab men work for their corrupt governments, leaving productive labor almost entirely to foreign labors from East Asia, The Indian subcontinent, and poorer Arab countries. In 1981, the PGCC residents had an average per capita income of $28,000. Today is just $12,000.
Meanwhile, the PGCC countries face daunting bills to renovate the infrastructure built during the oil boom. Due to the population explosion and aging Ryiadh has to deliver drinking water to poor neighborhoods with trucks. Cutting back on monarchical privileges would free up money for infrastructure and debt payments. But the corrupt leaders continue to insist that a revived market will save them and in this they are almost certainly mistaken. Only one of the royal family in Saudi Arabia invested $13 billion in foreign companies, because of the financial systems in the PGCC countries, almost none of his wealth -or that of the $800 billion in assets held by PGCC nationals abroad –will come soon.
The economics of the Persian Gulf are likely to complicate the politics of the Persian Gulf. Nervous monarchies will be eager to appease the Islamists after all, they’d rather not have a revolution to put down and that in turn, will often run counter to U.S. interests.

U.S. protection of Persian Gulf oil supplies should focus on internal threats resulting from the monarchies because of their denial of human rights and political participation and democracy in corrupt countries such as UAE, Qatar, Oman, Bahrain, and Saudi Arabia.

U.S. should consider negotiation with country Iran.
U.S. should support and respect Iranian integrity and territorial right of Abu Musa, greater TONB and lesser TONB and policy in fighting aggression of corrupt regime (UAE) for unacceptable behavior after a UAE vessel allegedly entered Iranian waters around a disputed Persian Gulf islands and opened fire at an Iranian fishing boat and detained its crew. Iran had demanded an explanation.
Emphasizing defense of the oil states from external threats ignores the more serious problems of domestic instability and political opposition to the corrupt ruling Persian Gulf regimes such as UAE, Saudi Arabia.
Certainly Iran differs with the U.S. on many issues as the Middle East process, but Iran can be engaged on other issues such as Persian Gulf security.
Western oil companies had no interest in territorial conquest and oil production placed few political demands on rulers and society , while the financial benefits from this industry allowed the state to silence the tribal challenges from the periphery . In some cases , such as Saudi Arabia , the foreign oil company, in the absence of a local entrepreneurial class, helped the state not only to defend itself against external challenge, but also begin a broad effort to modernize and eventually to control its own industry.

Literatures :
Daniel .L. Byman and Jerrold D. Green (the enigma of political stability in the Persian gulf monarchies .
Peace and political reform in Persian gulf (the modern Middle east).
Daniel yergin Oil the strategic prize ,
Joe Strok , Middle east oil and the energy Crisis .
F. Gregory Gause, oil monarchies.
Micheal Field, inside the Arab world.