lization, as the state will need to rely on the people, during its diversification period, Bahrain built its economy to rely on business, tourism, and foreign labor, and not its people. Furthermore, the diversification and Westernization that occurred during the oil boom was economically successful, but the social changes, including Western ideologies that accompanied it were contrary to Islamic doctrine and isolated and angered the Shiite population. While there was a decline in oil production, it was other forces, such as the example of Iran’s 1979 Shiite-inspired Revolution and the extensive unemployment among Shiites caused by the importation of foreign labor that were pivotal to their demand for representation. In 1999, after the violence had subsided, the charismatic and progressive King Hamad came to power. He has since been the source of much praise for liberalizing Bahrain, and proves political leadership to be yet another major non-oil source of political liberalization.

It can be argued that oil indirectly caused the political change in Bahrain, as Bahrain’s drive for diversification caused by the fear of dwindling oil reserves led to Shiite dissent. But we can conclude that bigger forces, such as sectarian divide, social change, and political leadership were major sources of reform in Bahrain. Therefore, claiming Bahrain as an example for other Arab petrol states and as a support for the Rentier State Theory is a premature and spurious claim.

Dubai

“Yet the future that he is building in Dubai -- to the applause of billionaires and transnational corporations everywhere

“America is addicted to oil” – George W. Bush

In today’s corporate culture, the consumer’s voice resonates deeply. If a company engages in immoral or illegal behavior, the consumer can choose not to buy the company’s products, and stage a boycott as a show of protest. This is not a new phenomenon; it occurred in Colonial America after the British government monopolized tea, and it is currently being used against Coca-Cola for it’s immoral practices, including poisoning drinking water, murdering union members, and racial discrimination. Consumer responsibility entails the following: purchasing products from a company like Coca-Cola signifies condoning and indeed supporting their actions; boycotting a company’s products sends a message to them that their practices must stop and attempts to hurt their sales enough that change becomes necessary.

What is the difference between tea, Coca-Cola, and petroleum as consumer products? The difference is that the world economy is addicted to petroleum. In President Bush’s state-of-the-union speech, he proclaimed, “America is addicted to oil”. He further stated that he wants replace more than 75% of America’s Middle Eastern oil imports by the year 2025. Currently, the plausibility of such a goal seems doubtful. As of March 2006, the United States’ third-largest source of crude oil was Saudi Arabia. Our dependence on Saudi oil is deplorable; the credentials of the Saudi Arabian government are horrendous: it has a theocratic and despotic government, oppresses women and perpetrates human rights’ violations, and created terrorists and extremists. Doing business and maintaining a strong alliance with the Saudi Royal Family greatly hurts America’s reputation for pursuing justice and democracy, particularly in the Middle East. In this sense, America fails as a responsible consumer.

When examining consumer responsibility in dealing with oil, it is necessary to see what is done with the unbelievable profits these countries receive as a result of recent skyrocketing oil prices. Some of this money is used to economically develop these petrol states (as in Dubai). But in many cases, this money is used to fund terrorism (Iran), prop-up oppressive regimes (Saudi Arabia), and spread anti-American rhetoric (Venezuela). In this essay, three countries from the Persian Gulf will be examined: Bahrain, Dubai, and Saudi Arabia. Why the Persian Gulf? The Gulf is said to possess 2/3 of the world’s oil reserves, and an arguably great share of undemocratic and oppressive governments. I will examine the political and social atmosphere of these states and conclude that we must not support their policies by ending our dependence on oil in order to achieve American foreign policy goals of democracy and freedom.

The Rentier State Effect

“Look where the most creative innovation is happening in the Arab-Muslim world today. It is in the places with little or no oil.” – Thomas Friedman

Before examining each nation and the effects of its oil revenues, it is essential to understand the implications of oil on petrol states through the Rentier State Theory.

Why should we not buy oil from a tyrannical government? What effect does our purchase have upon a citizen’s wellbeing? According to the theory, a rentier state does not rely on taxation for running the state, but rather relies on a commodity, such as oil. This becomes problematic under the principal of “no taxation without representation,” for if a government does not tax its people, it does not need to represent its people, and will remain despotic. A rentier state is also able to use its wealth to provide social services to the people, thereby making the citizens dependent and thankful to the government. These social services also disallow the development of separate social groups that may demand political rights from the state and be a source of democratic reform.

According to this theory, buying oil from a tyrannical rentier state (such as Saudi Arabia), supports an unrepresentative and undemocratic regime that does not need to act in accordance with the rights and wishes of its people. Professor Michael Ross of UCLA tested this theory empirically and proved that given many other factors, including culture and history, resource richness was the greatest factor in determining whether a non-developed state would be democratic or authoritarian.

Bahrain

“…some degree of trauma us needed to bring about dramatic change”. –The Economist

A cited example of the decreased dependence on oil revenue and the Rentier Effect is Bahrain. According to Thomas Friedman, “Bahrain was the first Arab Gulf State to run out of oil…[and it] is the first to hold a free and fair election, in which women could both run and vote.” Unlike its neighbor Saudi Arabia, not only can Bahraini women drive and be unveiled, but they can also vote. According to Friedman’s hypothesis and the Rentier State Theory, Bahrain had to break its reliance on oil revenues, as its abundance began to grow thin, and that meant an increasing reliance on its population for its economic growth; this decrease in reliance has lead to the liberalization of politics on the small island.

But can the democraticization of Bahrain be solely attributed to the decrease in oil? Mr. Friedman claims that Bahrain’s decreased reliance on oil is the cause of the island nation’s liberalization; but the situation is a bit more complex. The movement can also be attributed to the recent turbulent history of Bahrain. The island state was wrought with violence in the 1990s as the Shiite majority resented the Sunni emirs who ruled Bahrain. The Shiites demanded more representation and reform to dilute the power of the Sunni ruling class who were repressing them. While Thomas Friedman states that it was the decrease in oil reserves that caused democratization in Bahrain, the reason that the Shiite majority protested when they did was because of a changing social structure and the large importation of foreign labor. It can be said that the change was not the result of a decrease in oil reserves and revenues, as the Shiites did not historically benefit from Bahrain’s oil boom, so a change in oil revenues had little impact on their wellbeing. But the oil boom led to a great deal of economic diversification and to the development of the island. While the Rentier State Theory suggests that decreases in oil will lead to political liberalization, as the state will need to rely on the people, during its diversification period, Bahrain built its economy to rely on business, tourism, and foreign labor, and not its people. Furthermore, the diversification and Westernization that occurred during the oil boom was economically successful, but the social changes, including Western ideologies that accompanied it were contrary to Islamic doctrine and isolated and angered the Shiite population. While there was a decline in oil production, it was other forces, such as the example of Iran’s 1979 Shiite-inspired Revolution and the extensive unemployment among Shiites caused by the importation of foreign labor that were pivotal to their demand for representation. In 1999, after the violence had subsided, the charismatic and progressive King Hamad came to power. He has since been the source of much praise for liberalizing Bahrain, and proves political leadership to be yet another major non-oil source of political liberalization.

It can be argued that oil indirectly caused the political change in Bahrain, as Bahrain’s drive for diversification caused by the fear of dwindling oil reserves led to Shiite dissent. But we can conclude that bigger forces, such as sectarian divide, social change, and political leadership were major sources of reform in Bahrain. Therefore, claiming Bahrain as an example for other Arab petrol states and as a support for the Rentier State Theory is a premature and spurious claim.

Dubai

“Yet the future that he is building in Dubai -- to the applause of billionaires and transnational corporations everywhere -

business and maintaining a strong alliance with the Saudi Royal Family greatly hurts America’s reputation for pursuing justice and democracy, particularly in the Middle East. In this sense, America fails as a responsible consumer.

When examining consumer responsibility in dealing with oil, it is necessary to see what is done with the unbelievable profits these countries receive as a result of recent skyrocketing oil prices. Some of this money is used to economically develop these petrol states (as in Dubai). But in many cases, this money is used to fund terrorism (Iran), prop-up oppressive regimes (Saudi Arabia), and spread anti-American rhetoric (Venezuela). In this essay, three countries from the Persian Gulf will be examined: Bahrain, Dubai, and Saudi Arabia. Why the Persian Gulf? The Gulf is said to possess 2/3 of the world’s oil reserves, and an arguably great share of undemocratic and oppressive governments. I will examine the political and social atmosphere of these states and conclude that we must not support their policies by ending our dependence on oil in order to achieve American foreign policy goals of democracy and freedom.

The Rentier State Effect

“Look where the most creative innovation is happening in the Arab-Muslim world today. It is in the places with little or no oil.” – Thomas Friedman

Before examining each nation and the effects of its oil revenues, it is essential to understand the implications of oil on petrol states through the Rentier State Theory.

Why should we not buy oil from a tyrannical government? What effect does our purchase have upon a citizen’s wellbeing? According to the theory, a rentier state does not rely on taxation for running the state, but rather relies on a commodity, such as oil. This becomes problematic under the principal of “no taxation without representation,” for if a government does not tax its people, it does not need to represent its people, and will remain despotic. A rentier state is also able to use its wealth to provide social services to the people, thereby making the citizens dependent and thankful to the government. These social services also disallow the development of separate social groups that may demand political rights from the state and be a source of democratic reform.

According to this theory, buying oil from a tyrannical rentier state (such as Saudi Arabia), supports an unrepresentative and undemocratic regime that does not need to act in accordance with the rights and wishes of its people. Professor Michael Ross of UCLA tested this theory empirically and proved that given many other factors, including culture and history, resource richness was the greatest factor in determining whether a non-developed state would be democratic or authoritarian.

Bahrain

“…some degree of trauma us needed to bring about dramatic change”. –The Economist

A cited example of the decreased dependence on oil revenue and the Rentier Effect is Bahrain. According to Thomas Friedman, “Bahrain was the first Arab Gulf State to run out of oil…[and it] is the first to hold a free and fair election, in which women could both run and vote.” Unlike its neighbor Saudi Arabia, not only can Bahraini women drive and be unveiled, but they can also vote. According to Friedman’s hypothesis and the Rentier State Theory, Bahrain had to break its reliance on oil revenues, as its abundance began to grow thin, and that meant an increasing reliance on its population for its economic growth; this decrease in reliance has lead to the liberalization of politics on the small island.

But can the democraticization of Bahrain be solely attributed to the decrease in oil? Mr. Friedman claims that Bahrain’s decreased reliance on oil is the cause of the island nation’s liberalization; but the situation is a bit more complex. The movement can also be attributed to the recent turbulent history of Bahrain. The island state was wrought with violence in the 1990s as the Shiite majority resented the Sunni emirs who ruled Bahrain. The Shiites demanded more representation and reform to dilute the power of the Sunni ruling class who were repressing them. While Thomas Friedman states that it was the decrease in oil reserves that caused democratization in Bahrain, the reason that the Shiite majority protested when they did was because of a changing social structure and the large importation of foreign labor. It can be said that the change was not the result of a decrease in oil reserves and revenues, as the Shiites did not historically benefit from Bahrain’s oil boom, so a change in oil revenues had little impact on their wellbeing. But the oil boom led to a great deal of economic diversification and to the development of the island. While the Rentier State Theory suggests that decreases in oil will lead to political liberalization, as the state will need to rely on the people, during its diversification period, Bahrain built its economy to rely on business, tourism, and foreign labor, and not its people. Furthermore, the diversification and Westernization that occurred during the oil boom was economically successful, but the social changes, including Western ideologies that accompanied it were contrary to Islamic doctrine and isolated and angered the Shiite population. While there was a decline in oil production, it was other forces, such as the example of Iran’s 1979 Shiite-inspired Revolution and the extensive unemployment among Shiites caused by the importation of foreign labor that were pivotal to their demand for representation. In 1999, after the violence had subsided, the charismatic and progressive King Hamad came to power. He has since been the source of much praise for liberalizing Bahrain, and proves political leadership to be yet another major non-oil source of political liberalization.

It can be argued that oil indirectly caused the political change in Bahrain, as Bahrain’s drive for diversification caused by the fear of dwindling oil reserves led to Shiite dissent. But we can conclude that bigger forces, such as sectarian divide, social change, and political leadership were major sources of reform in Bahrain. Therefore, claiming Bahrain as an example for other Arab petrol states and as a support for the Rentier State Theory is a premature and spurious claim.

Dubai

“Yet the future that he is building in Dubai -- to the applause of billionaires and transnational corporations everywhere

a citizen’s wellbeing? According to the theory, a rentier state does not rely on taxation for running the state, but rather relies on a commodity, such as oil. This becomes problematic under the principal of “no taxation without representation,” for if a government does not tax its people, it does not need to represent its people, and will remain despotic. A rentier state is also able to use its wealth to provide social services to the people, thereby making the citizens dependent and thankful to the government. These social services also disallow the development of separate social groups that may demand political rights from the state and be a source of democratic reform.

According to this theory, buying oil from a tyrannical rentier state (such as Saudi Arabia), supports an unrepresentative and undemocratic regime that does not need to act in accordance with the rights and wishes of its people. Professor Michael Ross of UCLA tested this theory empirically and proved that given many other factors, including culture and history, resource richness was the greatest factor in determining whether a non-developed state would be democratic or authoritarian.

Bahrain

“…some degree of trauma us needed to bring about dramatic change”. –The Economist

A cited example of the decreased dependence on oil revenue and the Rentier Effect is Bahrain. According to Thomas Friedman, “Bahrain was the first Arab Gulf State to run out of oil…[and it] is the first to hold a free and fair election, in which women could both run and vote.” Unlike its neighbor Saudi Arabia, not only can Bahraini women drive and be unveiled, but they can also vote. According to Friedman’s hypothesis and the Rentier State Theory, Bahrain had to break its reliance on oil revenues, as its abundance began to grow thin, and that meant an increasing reliance on its population for its economic growth; this decrease in reliance has lead to the liberalization of politics on the small island.

But can the democraticization of Bahrain be solely attributed to the decrease in oil? Mr. Friedman claims that Bahrain’s decreased reliance on oil is the cause of the island nation’s liberalization; but the situation is a bit more complex. The movement can also be attributed to the recent turbulent history of Bahrain. The island state was wrought with violence in the 1990s as the Shiite majority resented the Sunni emirs who ruled Bahrain. The Shiites demanded more representation and reform to dilute the power of the Sunni ruling class who were repressing them. While Thomas Friedman states that it was the decrease in oil reserves that caused democratization in Bahrain, the reason that the Shiite majority protested when they did was because of a changing social structure and the large importation of foreign labor. It can be said that the change was not the result of a decrease in oil reserves and revenues, as the Shiites did not historically benefit from Bahrain’s oil boom, so a change in oil revenues had little impact on their wellbeing. But the oil boom led to a great deal of economic diversification and to the development of the island. While the Rentier State Theory suggests that decreases in oil will lead to political liberalization, as the state will need to rely on the people, during its diversification period, Bahrain built its economy to rely on business, tourism, and foreign labor, and not its people. Furthermore, the diversification and Westernization that occurred during the oil boom was economically successful, but the social changes, including Western ideologies that accompanied it were contrary to Islamic doctrine and isolated and angered the Shiite population. While there was a decline in oil production, it was other forces, such as the example of Iran’s 1979 Shiite-inspired Revolution and the extensive unemployment among Shiites caused by the importation of foreign labor that were pivotal to their demand for representation. In 1999, after the violence had subsided, the charismatic and progressive King Hamad came to power. He has since been the source of much praise for liberalizing Bahrain, and proves political leadership to be yet another major non-oil source of political liberalization.

It can be argued that oil indirectly caused the political change in Bahrain, as Bahrain’s drive for diversification caused by the fear of dwindling oil reserves led to Shiite dissent. But we can conclude that bigger forces, such as sectarian divide, social change, and political leadership were major sources of reform in Bahrain. Therefore, claiming Bahrain as an example for other Arab petrol states and as a support for the Rentier State Theory is a premature and spurious claim.

Dubai

“Yet the future that he is building in Dubai -- to the applause of billionaires and transnational corporations everywhere

n drive and be unveiled, but they can also vote. According to Friedman’s hypothesis and the Rentier State Theory, Bahrain had to break its reliance on oil revenues, as its abundance began to grow thin, and that meant an increasing reliance on its population for its economic growth; this decrease in reliance has lead to the liberalization of politics on the small island.

But can the democraticization of Bahrain be solely attributed to the decrease in oil? Mr. Friedman claims that Bahrain’s decreased reliance on oil is the cause of the island nation’s liberalization; but the situation is a bit more complex. The movement can also be attributed to the recent turbulent history of Bahrain. The island state was wrought with violence in the 1990s as the Shiite majority resented the Sunni emirs who ruled Bahrain. The Shiites demanded more representation and reform to dilute the power of the Sunni ruling class who were repressing them. While Thomas Friedman states that it was the decrease in oil reserves that caused democratization in Bahrain, the reason that the Shiite majority protested when they did was because of a changing social structure and the large importation of foreign labor. It can be said that the change was not the result of a decrease in oil reserves and revenues, as the Shiites did not historically benefit from Bahrain’s oil boom, so a change in oil revenues had little impact on their wellbeing. But the oil boom led to a great deal of economic diversification and to the development of the island. While the Rentier State Theory suggests that decreases in oil will lead to political liberalization, as the state will need to rely on the people, during its diversification period, Bahrain built its economy to rely on business, tourism, and foreign labor, and not its people. Furthermore, the diversification and Westernization that occurred during the oil boom was economically successful, but the social changes, including Western ideologies that accompanied it were contrary to Islamic doctrine and isolated and angered the Shiite population. While there was a decline in oil production, it was other forces, such as the example of Iran’s 1979 Shiite-inspired Revolution and the extensive unemployment among Shiites caused by the importation of foreign labor that were pivotal to their demand for representation. In 1999, after the violence had subsided, the charismatic and progressive King Hamad came to power. He has since been the source of much praise for liberalizing Bahrain, and proves political leadership to be yet another major non-oil source of political liberalization.

It can be argued that oil indirectly caused the political change in Bahrain, as Bahrain’s drive for diversification caused by the fear of dwindling oil reserves led to Shiite dissent. But we can conclude that bigger forces, such as sectarian divide, social change, and political leadership were major sources of reform in Bahrain. Therefore, claiming Bahrain as an example for other Arab petrol states and as a support for the Rentier State Theory is a premature and spurious claim.

Dubai

“Yet the future that he is building in Dubai -- to the applause of billionaires and transnational corporations everywhere

lization, as the state will need to rely on the people, during its diversification period, Bahrain built its economy to rely on business, tourism, and foreign labor, and not its people. Furthermore, the diversification and Westernization that occurred during the oil boom was economically successful, but the social changes, including Western ideologies that accompanied it were contrary to Islamic doctrine and isolated and angered the Shiite population. While there was a decline in oil production, it was other forces, such as the example of Iran’s 1979 Shiite-inspired Revolution and the extensive unemployment among Shiites caused by the importation of foreign labor that were pivotal to their demand for representation. In 1999, after the violence had subsided, the charismatic and progressive King Hamad came to power. He has since been the source of much praise for liberalizing Bahrain, and proves political leadership to be yet another major non-oil source of political liberalization.

It can be argued that oil indirectly caused the political change in Bahrain, as Bahrain’s drive for diversification caused by the fear of dwindling oil reserves led to Shiite dissent. But we can conclude that bigger forces, such as sectarian divide, social change, and political leadership were major sources of reform in Bahrain. Therefore, claiming Bahrain as an example for other Arab petrol states and as a support for the Rentier State Theory is a premature and spurious claim.

Dubai

“Yet the future that he is building in Dubai -- to the applause of billionaires and transnational corporations everywhere -- looks like nothing so much as a nightmare of the past: Walt Disney meets Albert Speer on the shores of Araby.” – Mother Jones

Dubai, one of the seven states of the United Arab Emirates, has recently become the Gulf’s economic success story. It has been using staggering oil profits to become the Middle East’s (and possibly the world’s) financial hub, even though oil only accounts for 7% of its GDP. This multiethnic and dynamic state has also become a tourist hot spot, a transportation center, a booming real estate market, and a destination for corporations to establish a foothold in the Middle East or to build a bridge between Europe and East Asia. Here will be a brief examination of what oil money has done for the economic, political, and social climate of Dubai.

Economically, Dubai is proving that it is the dominant financial and tourist hub of the Persian Gulf, and even the Middle East. Yet, Dubai is much less reliant than other Gulf States on oil. As stated previously, only 7% of its GDP is from oil, whereas oil accounts for 45% of Saudi Arabia’s GDP. Dubai’s economy is diversifying as the city-state is trying to establish itself in the world economy. A great deal of Dubai’s breakneck growth is caused by the construction that is demanded from its burgeoning real estate market and its desire to become a corporate capital. While the World Bank estimates that it will cost $53 billion to rebuild Iraq, Dubai is spending $100 billion on its current construction projects. Reportedly, one-fifth of the world’s cranes are in Dubai, and 250,000 men are at work building this fantasyland. In this sprawling city, an artificial island in the shape of a palm tree has been made as a housing development, the first of many projects. It doesn’t stop there: the world’s tallest building, the biggest shopping mall, an underwater hotel, and an indoor ski resort are all in the works. Even before the completion of these impressive projects, Dubai receives 5 million tourists each year, a number that is suggested to double shortly.

Where does all this money come from? According to The Economist, most of the funding for the stunning projects in Dubai comes from the government (namely the wealthy al-Maktoum family). Although only 7% of Dubai’s GDP is derived from oil, with oil prices increasing, Dubai is a sufficiently wealthy oil exporter. Much like Bahrain, Dubai’s oil is said to deplete soon, with estimates given at reserves ending in 2010. Dubai, also like Bahrain, is trying to become economically self-sufficient by relying on business, tourism, and expatriate labor (which will be later examined) for its economic survival after the depletion of petroleum reserves. Yet, Dubai’s most promising future source of income and investment is from abroad. Dubai’s leaders have worked hard to make it the city-state an attractive investment opportunity and a financial hub. The Jebel Ali Free Zone provides a site outside Dubai City, but within the state of Dubai, that has zero taxation and allows for 100% foreign ownership. Furthermore, after the 9/11 attacks, much of the money that Arab oil states had previously invested in America, as well as future investments, began being moved to Dubai, upon worries of an anti-Arab backlash in the US. In 2004 alone, the Saudis are said to have invested $7 billion in Dubai. While Dubai’s own oil supplies may not seem impressive, the great deal of oil money from abroad that is being invested there shows that oil is still a necessity for the growth of the burgeoning city, particularly after the city-state’s reserves run out.

Politically, Dubai is not democratic. On the Economist’s 1-10 scale of democracy, with 1 being a dismal democracy, and 10 being a perfect democracy, the United Arab Emirates (the federation Dubai is a part of) was given a rating of 1. While it had the highest ranking of economic openness in the Arab world, its political freedom was given a 1, and its press freedom a 3. One of the suspected reasons for this lack of political freedom is the lack of taxation (following the principle of no taxation without representation). As one Saudi once said, “I would love to pay tax, if only so I wouldn’t have to pretend to be grateful all the time.” But the status of taxation is not likely to change, as Dubai seems poised to be able to rely on investments, tourism, and expatriate labor to fuel its economy in the future.

Socially, religiously, and culturally Dubai is fairly open. A writer from The Guardian notes that “[Dubai] is not a Saudi Arabia. Brokeback Mountain is soon to open in Dubai cinemas, which it never could in Saudi Arabia”. But the biggest and most common problem with Dubai’s social structure is the treatment of its expatriate labor force. Human Rights Watch stated that Dubai is sustaining its growth on “forced labor”. When workers come from abroad, mainly from India and Pakistan, their visas and passports are confiscated to ensure against escape. These workers are then crowded into rooms with up to twelve people, work in unsafe environments that have led to unnecessary deaths, and are not always paid on time or even at all, in many cases. And there is nothing that these laborers can do: labor unions are strictly outlawed in Dubai. Treatment of construction workers aside, prostitution and child slavery are also posing problems for the city-state. HBO Real Sports reported that Dubai’s jockeys, "some as young as three -- are kidnapped or sold into slavery, starved, beaten and raped".

As an economic model, Dubai holds little competition, and is arguably the most economically developed Gulf state. It serves as an example of how oil wealth should be used. Although Dubai has made leaps-and-bounds over other Gulf States economically, its lack of democracy, as well as its practices for achieving its economic growth and prestige are shameful and must not be condoned.

Saudi Arabia

“I would love to pay tax, if only so I wouldn’t have to pretend to be grateful all the time.” –A would-be Saudi democrat

Saudi Arabia has the largest oil reserves and the highest production of oil in the world. It is also the third largest source of crude oil imports to the United States. Saudi oil is pivotal to the world market; if its production slows, world oil prices will rise, even affecting the price of domestic oil; if its production increases, oil prices fall and the world economy breathes a collective sigh of relie