As Maass argues, if most of the world’s oil reserves were located in developed and stable countries like Norway and Canada, where corruption is low and rule of law well-established, oil would not be such a debilitating commodity. But sadly for its victims — many of whom we meet in this book —
fate, or geography, would have
it otherwise.
In many of the cases explored, oil-rich countries suffer from what has come to be known as the “Dutch disease,” which can be roughly characterized as a country’s over-reliance on a single or a handful of primary resources for its revenues. In other words, even when oil wealth isn’t plundered, the sudden influx of money generated by the discovery oil can, in the long term, turn into a curse (another unfortunate consequence of the Dutch disease is that the large revenue created by the primary resource tends to drive up the currency, which makes locally produced goods more expensive for export and can consequently wipe out other sectors of the economy).
Countries with an over-reliance on oil, such as Saudi Arabia and Venezuela, among others, will often embark on massive and hugely expensive infrastructure projects (or, as in Venezuela’s case, a Bolivarian revolution fueled by oil money). As long as oil prices are relatively high, they will be able to afford it. But as the recent global financial crisis so painfully showed us, when the economy slows down, so does oil consumption and demand, which drives prices down. The result? A fabulous airport in the Saudi desert has turned into a hollow castle in the sand, and schemes similar to ones that foundered years ago are being unleashed by Venezuelan President Hugo Chavez.
Despite the utterly depressing tone of the first 200 pages, Crude World concludes on a more optimistic — if perhaps a little naive — note, with mention of the opportunities created by renewable energy and programs, such as Publish What You Pay, to encourage governments and oil firms to become more transparent. Whether these would be sufficient to diminish our dependence on oil and bring good governance to Big Oil and oil-inebriated governments, however, remains to be seen and will be contingent on human nature’s ability to transcend its most basic desires. Maass’ book does little to convince us that this is possible.
Crude World is a great read, but would have been more complete if it had had a section on the impact that China’s entry in the oil business — especially in Africa — will have on those countries both fortunate and unfortunate enough to have rivers of black gold flowing through their veins.
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