A trillion-dollar catalyst for change in the Arab World

The Middle East's oil wealth has the potential to become the key driver for change and innovation in

At the end of the 19th Century, Lord Curzon, the then British Viceroy of India, described Iran and its Arab neighbours as "pieces on a chessboard upon which is being played out a game for the domination of the world".

Throughout history, the geostrategic importance of the Middle East, with its immense oil wealth, has shaped the policies of colonial empires, secured the longevity of autocratic regimes and given rise to religious elites. The 'game of chess', as described by Lord Curzon, promises great riches and influence for the players involved, but has often come at a huge cost for the majority of the Arab people.

Indeed, oil wealth, so narrowly shared between the region's ruling minorities, has historically presented a barrier to democracy and left a vacuum of inequality and lost opportunities in many Arab societies. It is no coincidence that the citizens of Arab countries with limited fossil fuel reserves have enjoyed greater freedom over the years than their oil-rich neighbours.

Now, however, the uprisings of the Arab Spring present a unique opportunity to use the wealth of the region to reinvest in the future prosperity and wellbeing of the Arab people. It is an opportunity which must be grasped before history repeats itself and, as with recent events in Cairo, the transition to democracy is derailed.

Fuelling progress

While the Arab world is no stranger to revolution - Egypt, 1952, Iran, 1979 - this time around the stakes are higher than ever. With oil prices climbing to above $100/barrel, the Arab Peninsula is currently generating export oil revenues of $1 trillion dollars a year. But the conventional reserves and production capacities of oil-rich Arab countries are finite and slowly depleting. This means there is a narrowing window of opportunity to leverage the region's resources for the benefit of the people.

What's more, the ease of wealth creation from oil readily attracts those whose sole interests lie in personal profit, religious agenda or geopolitical power. If such forces emerge triumphant from the Arab Spring, oil wealth will continue to line the pockets of the few, rather than meet the needs of the many.

With these scenarios in mind, the new emerging Arab leadership needs to create genuine democratic expectations as a bulwark against corruption and oligarchy. In many countries across the region, the euphoria of revolution will soon give way to the on-the-ground realities of reconstruction. Amid the many challenges and complexities of state-building, it is critical that these countries recalibrate their socio-economic systems in a way that provides enhanced economic and human prosperity.

Diversification and development

The new Arab leadership also need to focus on transforming oil-based economies into information-based economies supported by firm democratic foundations and social equity. And this can only be achieved through the reinvestment of petrodollars into manufacturing, technology and intellectual capital. The development of mass-transit systems, solar energy conversion, water desalination or passive cooling technologies, for example, will be of long-term value to Arab societies, providing new employment and export opportunities in a warming world.

By harnessing the region's potential for alternative energy from sunlight, and by enhancing their non-oil based productive capacity, countries will be able to project themselves onto a path of sustainable and inclusive economic development. The decentralisation of oil wealth will also break up governments' ownership of petrodollar wealth and lead to improved transparency, good governance and trust among the Arab people.

Levelling the playing field

The Middle East's oil wealth, then, has the potential to become the key driver for change and innovation in Arab countries. To ensure a more sustainable model for the future, states' natural resource wealth should be saved for export, and foreign oil companies should only be awarded oil contracts once they partake in third-party monitored bidding rounds.

But other issues also need to be addressed to enable long-term wealth creation in the region - not least the record number of 75 million illiterate adults, the fatal mismatch within the labour market and, most importantly, the gender inequality in both education and employment. At present, 50 per cent of the talent base is excluded from society and the workplace, and the Middle East's long-term growth strategy must address all parts of an inclusive wealth-creation framework. Such a strategy should be based on a home-grown path for change, and provide inclusive and broadly shared development gains. One trillion dollars a year could serve as sufficient investment to achieve these goals.

In Egypt, we've already seen how easily interim leaders can renege on their promises. Without doubt, new governments with old mindsets will undermine all progress made so far in the Arab Spring. For this reason, the calls for democracy, transparency and accountability currently sweeping the region need to be answered with genuine commitment. If they are not, the sacrifices and achievements of the younger Arab generation will be squandered. Leaders must also take a long-term approach to the management of oil wealth to ensure the region can meet the challenges of food and water shortages, rising population levels and global warming.

The Arab Spring presents an opportunity not only to reset the pieces on the chessboard, but to level the playing field entirely. The new Arab leadership needs to show strength and vision to take this opportunity in the months ahead.

Tara Shirvani and Sir David King
Smith School of Enterprise and the Environment, University of Oxford

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It's time for Jeremy Corbyn's supporters to take on the unions

The union support for expanding Heathrow reflects a certain conservatism. 

The government’s announcement that it will go ahead with a third runway at Heathrow seems to have unlocked an array of demons. It has also created some unlikely alliances. Zac Goldsmith, the pro-Brexit mayoral candidate whose campaign was widely condemned as racist, is seeking to re-invent himself as an environmental champion, campaigning alongside fellow Heathrow MP John McDonnell. And the Richmond byelection which he is triggering could yet become a test case for Labour’s progressive alliance enthusiasts.

But perhaps the most significant position is that of the major unions. To the shock of many less seasoned activists on the left, Unite, the largest trade union in the UK and a consistent supporter of Corbyn’s leadership, has loudly called on the government to “be bold and build” the new runway, even now urging it to accelerate the process. Far from being a revelation, Unite’s position on Heathrow is longstanding – and it points to the lasting power and influence of an establishment trade unionism.

In August, the TUC co-ordinated a joint statement from five unions, urging the government to go ahead with the third runway. Like the rest of the unions’ lobbying efforts, it was coordinated with other pro-expansion stakeholders like the CBI, and it could just as easily have been authored by the business lobby. Heathrow expansion will, it says, “deliver at least £147bn to UK GDP and 70,000 new jobs”. “Trade unions and their members”, said Frances O’Grady, “stand ready to work to help the government successfully deliver this next major national infrastructure project”.

The logic that drives unions to support projects like Heathrow expansion – and which drives the GMB union to support fracking and Trident renewal – is grounded in a model of trade unionism which focuses not on transforming the workplace, but on the narrowly-defined interests of workers – job creation, economic growth and a larger share of the pie. It views the trade union movement not as merely antagonistic to employers, but as a responsible lobbying partner for business and industry, and as a means of mediating workers’ demands in a way that is steady and acceptable to the state and the economic system. This model, and the politics that accompanied it, is why, historically, trade unions were a conservative influence on Labour’s internal politics.

Nothing could be more at odds with the political, environmental and economic realities of the 21st century. It is not in the interests of workers or ordinary people to live on a planet which is slowly becoming uninhabitable. To avoid catastrophic global warming, we need to leave the vast majority of fossil fuels in the ground – that probably means shrinking the aviation industry, not expanding Heathrow’s passenger capacity by 70 per cent. All of this is implicitly recognised by Jeremy Corbyn’s environmental and industrial strategy, which aims to create a million new jobs and build a million new homes while switching to renewables and democratising the energy industry.

The gap between Corbyn’s policies and the policies of many major trade unions tells us something deeper about the challenges facing the left. If Corbynism is an unfinished revolution in the Labour Party machine, it is one which has barely started in the wider labour movement.

The gradual leftward shift in many unions’ political allegiances has broadened the alliance around Corbyn and given him strength in numbers and resources, but it is often as much about internal union politics as it is a deep conviction for what Corbyn represents. Unison general secretary Dave Prentis did back Corbyn’s re-election following a ballot of members, but is hardly a left-winger, and the union’s votes on Labour’s NEC are not safely aligned to the left.

The political radicalisation of the unions has been matched, if anything, by a decline in coordinated industrial action. The national strategy that fuelled the anti-austerity movement in 2011 and 2012 is only a memory. The democratic and organising culture in many unions, too, remains bureaucratic and opaque. Trade unions have played a key role in Corbyn’s coalition, but without a significant shift in their internal culture and a shift away from their role as respectable partners of industry, they could easily scupper the project as well. 

The expansion of Heathrow airport is a step backwards for the future of the planet and the interests of ordinary people – and yet, if it happens at all, it will have been made possible by the concerted efforts of key trade unions. This is not an aberration but a reminder that, despite their rhetorical flourishes in support of Corbyn, Britain’s trade unions are also in need of change. Any project that aims to transform the Labour party and wider society must also aim to transform the whole of the labour movement – from the shop floor to the corridors of power.