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Libyan Writer Ghoma

Tuesday, 2 May, 2006

ISSUES OF DEVELOPMENT: Libya and Its Golden Goose!

By: Ghoma

        Development, in its broad sense, implies many things to many people. In its essence, it's synonymous with these three basic historical events: awakening, take-off, and acceptance of the idea of change and growth. The three aspects (phases) may demand different strategies but certainly require continuity. Once the political choices were made another set of questions will pop up, some of them ethical, others of philosophical nature. For instance, the question of sustainability: is it legitimate for one or two generations to use up most of the basic natural resources, or foul the environment, and how to apportion the rights and dues among the successive generations? How sacrifice is distributed among the social segments and who carries the brunt of the "side effects"? Et cetera, etc....

        Lucky those societies that kept rolling as time flowed and development "just happened". Today's world is different. Development has become a conscious effort that a society has to look for, face, enter to, and go along with. That's, development by choice and design: What society wants to be? How bad it needs it and how fast it's to reach it? What are the objectives and what path it chooses to reach them? Such questions are consecutive to taking stock of one's resources, talents, and marginal or strategic advantages and disadvantages.

        Libya and Arabstans in general have wasted, some half-century, others even more -when compared to Asian societies that started statehoods more or less in the same time, China, India, Korea, ... If there were any attempts at all to development the process exhausted itself in the phase of state formation! The process of " nation-building," for the Arab states, so far, has defied logic and commonsense in its disappointing results. What appeared to be a relatively easy and straightforward phase given the homogeneity of Arab societies and their lack of deep social tensions and fractures have turned out to be false assumptions. What took other countries a relatively short period of time proved for the Arab states to be a major hurdle and stumbling block. Half a century and longer and the state itself, not just its kind and make-up, are still in doubt, if not a mirage! Why? Because real development is a collective decision made by conscious people to start the change. The slumbering conditions in which Arabs have lived, are still mired in preventing them of making such a choice. For, had such questions been posed, some answers would have been looked for and found. Is it possible to develop physically and materially while remain attached to a backward culture and bygone civilization? Can a society change while it remains the same?

        Take, for instance, the exploitation of the most valuable -marketwise- natural resource, the oil. The avaricious and blind use of this resource,in the Arab fiefdoms, are without parallel. They're pumping it out as if there's no tomorrow, for no apparent reason, except the market can take it! No correlation whatsoever between their oil output and the needs for cash according to well thought about and accepted development plans. Oil at the whims of the consumers and the greediness of avaricious sheiks and their counterpart Military-cuops-plotters-turned-statesmen! True to the cliche of nouveau riche, these revenues are being wasted on frivolous projects and silly adventures. Take a country like Libya, for instance:

        Can you imagine a country's topographical map, instead of settlements and localities, is made out of a numbered gridded-sheets. Every grid is a square or BLOCK of so many square kilometers. And each block these days is on the auction stump. News keeps announcing new invitations for the multinationals to tender their bids for so many new blocks to prospect and explore. In a few months an overview from space to the Libyan desert will show it laced with rigs more than any other spot on earth. Why? Oil! More of it and the faster the better. The wretched sand dunes have become the milking cows to turn to whenever the country needs more cash to feed, clothe, and shelter the ever-increasing-rabbit-like huddled masses!

        The desert is the savior! Of course, Libya and the desert have always been synonymous. The desert had decided the fate of the land and the destiny of its inhabitants and more so since the discovery of oil. Since then the desert has become the Holy Cow to supplicate whenever life conditions worsened! Or better the desert has become its Golden Goose. The dumb greed and the shortsightedness were never an exclusive characteristic to tribes or their beduin surrogates nor are new discoveries to be added to human traits of our times. The Greeks had taken notice of such behaviors in humans long ago and had left us with a wise fable: The Golden Goose. Which goes that this: A yoke had discovered a goose who laid a golden egg each day; his greed got him thinking if he's to wait for the goose's one egg a day to get rich, he'll be waiting for a long time, if ever. So he killed the goose to harvest all the eggs at one time, only to discover there were no eggs left, and thus losing everything. Perhaps that's exactly what Libya and the other oil-pumping fiefdoms are doing to their oil: Resource Depletion!

        Libya, and indeed the rest of the Arab oil producing states, is gobbling its "Golden Eggs" at faster and faster speeds Even though other reasons may exist, as, for instance, a race with population increase, or market forces or God-knows-what-else to seize the chance and sell as much of the oil before it becomes less needed by those who invented its use? Both issues are there and in need of reflection on. A lot of thinking!. However, there's one fact which has to be kept in mind: no raw material and particularly of energy kind is going to lose its value in the foreseeable future. Prices may swing, wax and wane on the world market nevertheless oil will remain a source of power economically, geo-strategically, and politically to the end of time -just as wood, coal, plant oils, etc.

        Has then the manna from the desert been handled wisely, so far, or rather being squandered with the speed and voracity inherent of that old folk saw, "a hungry who's found grits?" The Libyan adage which describes the uncontrolled appetite with which a famished wolfs up whatever at hand. [Mind you the saying is about the drive of unmet need when the chance to satisfy it is encountered rather than the condescending uppity's smirching scorn of the nouveau riche behavior!] There's something to the fact that hunger and a long denial to meet its pangs leave no room for rational behavior. Just as overnight enrichment - a windfall inheritance or lottery win, etc.- drive their winners into excessive and erratic behaviors that lead often to bankruptcy, as a country, where an important commodity such as oil has been discovered in its territory, is doomed, it seems, to follow the same pattern of behaviors. Strange as it may sound that countries with 'all their collective wisdom' follow the same pattern of I-don't-believe-it-I-got-rich individuals!

        There's a disturbing trend in the continuos unhinged swinging and shifting of the world market, especially what concerns the energy sector. The major consumers have worked the prices up to levels congruent with the other sectors of the global economy and with their local energy production costs. The trend seems to point out the thrust of the matter: If the price of oil reaches levels compatible with oil production costs and profits in the developed world then there're no more compelling reasons for the industrialized nations to be using their own oil? Instead it makes more sense to buy one's needed energy from the international market and to keep what one has of oil, actually add to it, just as some countries have done with their coal reserves before, leaving it under the ground, since it's saver in there and isn't going to rot soon! Foresight and commonsense will suggest to consume what a country doesn't completely control first and then if and when the need arises it can still tap into its own stowed away reserves until a new alternative(s) is/are found. Sound farfetched? Not really. The strategy is already at work. The trick is to make the oil market more and more attractive and thus lure, induce, and whet the appetites of more and more producers to produce more and more and still more. That's, the trend to exhaust what's offered on the international oil market first is real. The oil producing countries are falling for the bait, the so-called windfall oil prices. But it's a catch-22 trap! The more they produce the more they've to buy from the consumers -to recycle the petro-dollars- and the more the need to produce more and more arises; since more revenues will only increase the consumption cycles of an ever increasing population loads. One may say that's well and dandy: Exchange between commodities and means to satisfy needs. The problem is aggravated by : 1- Some of these needs are not genuine needs but what are called induced needs! And thus are incompatible with the economic cycle, output, and stage of development of these importers -as for example, the use of the latest technological gadgets. 2- Most of oil producing countries have no other economic resources to speak of beside the oil. The faster they use it the faster they drive themselves to disaster. The case of Libya fits the point!

        It's reasonable at this point, almost a half-way/ half-life of oil abstraction in Libya, to imagine a scenario whereby in another 50 years or so some terrible disaster is going to strike, in the words of Jared Diamond, ecocide or environmental suicide! This disaster is totally predictable and almost within the range of certainty if no drastic measures are taken to curb the appetite for ever accelerating oil consumption and dependence. For the hunger of the producers is much worse that the always increasing appetites of the consumers. Why this is so in the case of Libya?

        In the last year or so and under the guidance of two "economics wiz-kids," the-what's-his-name, a surrogate-clown for a former PM and now the CEO of the only national oil company, and the jet-setting student-of-economics-turned-charity-mogul, and heir apparent, Seif, a solution to Libyan economic problems has been concocted: To open the country to oil multinationals to further explore the rest of the country, and, to repair and apply the latest techniques in wells' milking; so that the country can double its exporting quota, bingo! Therefore, solve the pressing problems of Libya's continuous impoverishment. It's that easy! Wouldn't that be equivalent to using one's savings for the rainy day to solve a structural problem? Ain't that what's usually called pipe's dream? In the best it's a temporary relief and in the worst it's a mere band-aid to, not a skin-deep wound, but to a real festering cancer. To pump more oil is only a make-believe of a quixotic dream taken for a real economic solution. It may give a respite to an embattled regime! For, the increasing of oil's production is, in the best scenario, a short term solution, more in the interests of those in power, than a long-term solution in the interests of the society at large. How's that so and why?

        Libya, so far, has few resources, beside the oil, are sun and sand - all made by nature! and there's also one more which is human made, population .The first set, the natural, are products of geology and dumb blind luck; and the second is product of ignorance. The second becomes more and more dependent on the first: it lives and prospers on the expense of the first. While a symmetry or balance needs to be found between these discordant factors, the correlation remains a historical one. It takes the live-span of one or more generations for the natural resources depleting consequences to begin biting. Thus the need for what's called sustainable development: a balance between natural resources and human use of them. For when the use of what eons of geological time had processed becomes intensive exploitation then its live span gets shorter and shorter. And when this "borrowing" is added to the speed of the desertification process, the population's exponential increase, etc. then demand grows exponentially for more and more borrowing. With the current production of 1.4 million/ bpd, and with the known reserves of 30 billion barrels, it'll last another 50 years. By doubling the production, even if doubling the reserves, the oil will only last that long if the population stays at current levels. So here we're; the country is inching faster and faster towards the depletion of the only resource that made it exist on the map of the modern world. If we add the pressing problem of the freshwater shortage then the country is truly in deep muck as they say!

        At the beginning of oil exportation, almost 5-decades ago, Libya had a population of a little over one million, mostly rural; today it has six times as many and most of them live in urban areas. Its oil export started somewhere around a million barrels per day and had reached 3.7 million/ bpd in the '70's and today it's somewhere around 1.5 million/ bpd. For the post-war generation, so far, it's been a roller-coaster trip. From dirt poor to "obscenely rich," to back again at the subsistence level. If you add to this the faster depletion of the stored geological freshwater reservoirs, the faster desertification, the soil erosions and fatigue, etc. then the picture will even gets bleaker. Some may say you've not accounted for the "human resource" and its creativity: Necessity is the mother of invention!

        Well, in Libya and the other oil exporting states what's known as human resources has turned out to be a "human burdens," hungry consumers eager for the latest gadgets they see the industrialist consumers/producers are using, without ever asking themselves: what's for? Furthermore, the technocrats assigned to the task to solve their problems are no different than the proverbial saying blind leading a blind. To be fair, it's not a problem of technocrats! By definition technocrats are no different than robotics, munchkins, or cogs in a huge machine. There're well-known for close to nigh initiatives or visions; they are tasks oriented; they always in need of someone else to set them on the course and light the blaze for them to follow. Bureaucracy tends to take the short cuts to get a job done, or to get out of the jam, such as, if the population has doubled then double oil export, and the problem if not solved at least alleviated. Or, another example, to 'diversify the economy: What have they chosen? Tourism! Now, tourism can be, and it's a viable source to a cash flowing, granted certain conditions are met. Among these, for example, most of what the sector needs is produced and the service is performed by the local labor force. But if the hotel is owned by a foreign company, the workers in it are from outside also, and the food and other trinkets are imported what's the gain and where's the diversification? It may only become a distraction?

        Libya, and the other petrol-station countries will not be the first cases in the world history that run themselves to total annihilation. Anyone who leafed through Jared Diamond's latest work [Collapse: How Societies Choose to Fail or Succeed] would have discovered that it was quite the fate of many other societies, who, in the same vain, led themselves, advertently or inadvertently, to extinction! The examples tell of the stories of societies who not only disregarded the critical balance between people and environment but also overused the resources their lands contained, by either using up the soil, freshwater, vegetation, or merely refused to learn how to cope with the environment in which they lived. Ain't this exactly what's taking place in the Middle Eastern region, where the humongous population growth is matched only by overuse of whatever natural resources they got, mainly freshwater and oil. As Vladimir said: What's to be done?

        Here are few suggestions to start a serious thinking about the issues. The most obvious of these would be:

        1- Population: What to do about it? Stop first population increase and then reverse it to negative population growth?

        2- Oil: Reduce dramatically, first the abstraction, and then the reliance on oil and other natural resources.

        3-Water: Diversify and curb freshwater usages and consumption.

        Each of these suggestions, if carried out, has tremendous implications that will ensue thereupon. Stopping population growth and reversing the trend, for instance, will require drastic measures that will bound only by not infringing on basic human rights. Attempts to implement such policies must start gradually with what's often termed soft approaches: Education campaigns on family planning, tax incentives and penalties, and fees on basic services, etc., one hope will do the job. In case that such measures fail then the experiences of the countries which lost population will be scrutinized for use.

        Oil and other natural resources should be used sparingly and only to build infrastructures and capital projects and to infuse the economy with some cash when it's badly in need. If oil is seen as a way for Libya to prepare itself to be plugged into the international market as a producer of some commodity or a service, then, it must be spent only for what's necessary to get the job done. Since almost all the production factors, except perhaps something related to the oil industry, are unfavorable to traditional manufacturing demands, the only sectors left will be the knowledge-based economy. Therefore, most of the oil revenue should be used to build a truly modern education system(s) geared towards critical thinking and problem solving; perhaps it's the only way out of the morass and to the modern world. Whatever is left should be invested inside the country in areas that are in need and will prop the future economy, such as research. Since the economy has to be built from scratch, so to speak, it's opportune to rethink of how to align the consumption to be on a level consonant with both the economic output and the stage of development.

        The freshwater issue is much more complicated than it may seem. Both economic change and growth demand the usage of perhaps more freshwater. Diversification is only one strategy; other approaches entail an economy and a way of life based on the minimum use of such a scarce commodity. A fact has to be faced and acknowledged which is: Agriculture has no place in the desert!

        In a nutshell, Libya is 99% desert. Its soil, resources, and ecology are very fragile. Historically no more than around one people scraped a miserable subsistence existence out of it. With oil and given the other constraints, perhaps, no more than a couple of millions or so can sustain a decent way of live in it. And even such a reduced population load will find it a tough struggle to make its existence sustainable with the land's ecology. Only human ingenuity and creativity will find a way to survive in such inhospitable environment.

        In these days when Oil-States have become the Banana Republics of yore, a mere chess pawns amenable to the moods of political strategists and to the whims of the oil companies. And when events in the Middle East coupled with the rise in energy demands in South and East Asia have sent shattering energy production and demand forecasts, the planners of the world order have reached out to their reserve standby countries, among them Libya in particular. No more stays in the cold for Libya, the dealers and wheelers have declared it the next frontier and the new Eldorado of energy supplies! Thus, if all goes according to plan in the next few years Libya will become one of the major suppliers of oil and gas at par with Iraq and Iran before the present crises -at least until both Iraq and Iran crises get settled down! One doesn't far to go to conclude that the doubling of production didn't originate in Tripoli but rather was suggested through the 'Vienna agent(s)" to adopt a good economic policy. To give such a flap a cover of legitimacy they hired academics to bless the plan! With all the respect due to Harvard and its economists, but when it come to 3rd World's economies they've very little credibility. Experience has shown that every time some of these self-proclaimed big gurus of business or economics got their noses in a country's affairs, it gets worse -Latin America in '80's and Eastern Europe in the '90's!

        Strategic choices! What are they? They must not be among what everybody knows, otherwise what kind of strategic are they. Oil is the only available resources in Libya at this point while tourism is still a potential to tap to. The real strategy is not to confirm what's in there but to tell the country what it doesn't know yet, that's, it is driving itself out of existence if it continues to use its limited natural resources with the intensity and speed is doing now. Telling Libya to double its oil production is like a doctor advising a patient with heart ailment to double smoking, eating, and drinking! What an irony the head of a state who goes around advising others on how to get out of their jams, and teaching humanity on the "only way" to solve their political, economic, and social problems; was in need of someone to tell him what he's under his nose for the last 37 years of his rule. Ain't this is typical of Third Worldism: to call upon 1st World to confirm and legitimize its only available choices, albeit misplaced choices? Why spend so much money on such puny and trivial recommendations!

        The other point is why bothering with such out-of-the-way topics when all the attention is geared toward more pressing issues of freedoms, democracy, and the rule of law. Well, perhaps, all these demands, as important as they're, fade when compared to the gravity of the issues at hand. All the ballyhoo about what kind of a state and how to manage it and who gets what from the pie are merely distractions, compared with the real dangers lurking in the corner. One tempted to say: The whole shenanigan is like arranging the chairs on [the sinking] Titanic!


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