By Najib Saab, Issue 37, April 2001

Natural resources in Africa and Asia are either yet to be discovered or already being consumed at prices much lower than their actual cost, within an international economic framework that puts the world’s resources at the service of industrial nations, according to its own set of rules. The Egyptian-American scientist Dr. Farouk El-Baz says that geological sciences originated in Europe, which is the only continent devoid of deserts, and that is why pioneer geologists were not concerned with the elevations of dry land and the desert environment. After the discovery of oil, the West’s interest became focused on gathering the information that will enable it to invest the resources of desert countries, cheaply and in accordance with its own interests.

One of the most prominent aspects of the lack of equity in dealing with natural resources is the price of oil. It is well known that the majority of oil reserves are outside industrial countries, specifically in Asia and Africa, and Arab countries draw the largest share. This explains why the price of oil on the market is always lower than its actual value, even though it is a limited natural resource subject to depletion. If oil were to be priced on the basis of availability, supply and demand, its price would have been many times more than it actually is.

If industrial countries had their hands on the majority of the world oil reserves, would they have been content to sell it to developing countries for prices that did not match international inflation percentages? Why doesn’t the price of oil change according to inflation and the progress of the market? Why isn’t it correlated to the purchasing power? The price of oil, according to its present levels that are deemed high, is not concurrent with the high cost of industrial, scientific and technological products and services that oil countries have purchased from industrial nations between 1973, for example, when one oil barrel cost an average of US$5, the nineties when it dropped to less than US$10, and nowadays as its cost has risen to around US$30. Despite all that, it is still lower than the inflation levels and service costs in industrial countries. When industrial nations demand an increase in oil production to lower its prices, do they not perceive that this is an exhaustion of international resources subject to depletion, and will upset the environmental balance; or is it that theories on the preservation of resources do not apply to developing countries? Why do industrial nations expect oil-producing developing countries to exhaust their resources in large amounts in order to lower the prices for the time being, instead of guarding them as a natural right for generations to come?

A lot is being said about turning to clean and renewable energy sources, such as the wind, the sun, and underground heat. All of those are definitive future choices, and Arabs must prepare to be part of the development of these technologies immediately, instead of buying them at a later date as mere consumers.

Until sources of renewable energy become a “fait accompli”, the producing countries must be able to get a realistic price for their oil, which in turn reflects the economical need for it. This will allow oil countries to invest their current exporting revenues in projects to develop the new energy technologies, which will enable them in the future to continue to produce energy and export it, but this time it will be energy derived from the wind and the sun. The entire Arab region lies within the richest sun belt in the world, which presents a big advantage towards investing clean solar energy. Therefore, a wise management of oil resources now, and investing the revenues in advanced technologies, will ultimately result in the control of renewable energy resources in the future.

In the past, oil countries were led to believe that their interest lies in increasing production in order to overflow the market and keep the oil prices low, so as not to encourage other countries to develop alternative technologies that will eventually lead to dispensing with oil. However, this theory has been proven false, since it only resulted in depleting the producing country’s resources at cheap prices and stopped their technological advancement.

The only choice that will preserve the rights of future generations is to turn oil revenues into investments in manpower and the technology of the future.