January 14, 2015
“If Only It Were So?”
By Richard L. Morningstar
Let’s look at these two disparate examples.
Oil prices have declined by more than 50 percent over the past several months. This is something very few analysts had predicted. The decline can be attributed to a drop in demand, increased production in the United States, and a largely market-based decision by Saudi Arabia and some other OPEC countries not to reduce production. This decision was based primarily on the economic interests of these countries and was heavily contested even within OPEC.
There are winners and losers as a result of the drop in oil prices.
Countries such as Russia and Iran have been hurt, which does not upset many in the West, but there is no certainty as to how these countries will ultimately react to the drop in prices. Hopefully they will become more cooperative, but the opposite is also a possibility.
Countries such as Iraq and Nigeria will face greater difficulties in dealing with their own internal threats as a result of decreased revenues. Mexico is seeing a sharp decrease in revenues. Reduced revenues are having a sharp impact on Venezuela. The ramifications of Venezuela’s increasingly difficult financial straits are unpredictable and could result in major instability.
Even in the United States there are winners and losers. Consumers clearly win by paying less at the pump, as do many businesses by paying less for energy. But producers of the oil that has contributed to the price decrease will suffer. Jobs will be lost and lower prices could slow down movement towards alternative energy solutions.
No doubt at some point prices will rebound, probably not to recent high levels. What is clear is that the price drop has had complex ramifications with unpredictable results. What is also clear is that the drop has taken place primarily because of market conditions. To say that the sharp drop in oil prices has been the result of a grand strategy cooked up in Washington is clearly far-fetched.
In a totally different area, conspiracy theorists blame the United States for protests in Kyiv and the political demise of Viktor Yanukovych, the Arab Spring, and attempts to create unrest and instability in disparate countries. Not only is the CIA often blamed, NGOs funded in part by the US government, particularly those working in the area of democracy and human rights, are cast as evil perpetrators seeking to destabilize or overthrow governments. Yes, NGOs work towards enhancing democratic values, but to think that with the relatively small amounts of funding received from the US NGOs can create color revolutions or major instability is far-fetched and only reflects the insecurity of governments espousing such views.
Some might say, “If only it were so; if only the United States could have such power.”
The United States does not and should not have that kind of control over such global issues, but the United States does have values and influence. By promoting democratic values in a non-hostile, constructive way, and by not talking past each other, the United States can have a strong influence and at the same time help create greater stability and better lives for people around the world.
Richard L. Morningstar is Founding Director of the Global Energy Center at the Atlantic Council. He served as the US Ambassador to the Republic of Azerbaijan and to the European Union.