While the middle east has once again come into the political spotlight due to the Arab spring, focus has mostly been around the levant* and in Palestine. However, not much understanding has progressed on Saudi Arabia and its role in the region and the world, and in particular what significance it holds in the matrix of US imperialism. But this understates the critical importance of Saudi and in general the gulf monarchies.
How the USA achieved its hegemony
Firstly, we must understand the role of US imperialism in the world today and how it has preserved its financial paramountcy, and why it attaches such importance to oil, and yet does not enjoy enough direct control over the resource. The strategic significance of the middle east has always existed but it changed from a purely geo-strategic one *( sitting between Southern Europe and South Asia ) to one with a material aspect namely Oil and Natural Gas. When oil was discovered around the 1930s America and Britain took the lead in exploration and exploitation of the resource enjoying direct control over it. However, all that changed in the mid 70s when Aramco was nationalized by the Saudi monarchy. The Same period saw heightening tensions between “OPEC” ( Organization of Petroleum Exporting countries ) and the USA over petrol prices and the embargo. This saw the application of game theory by the OPEC bloc and the US bloc, which essentially was a test of power between the consumer nation’s financial power *( USA and Western imperialism ) and the monopoly power over the production of and exportation of oil of OPEC.
The end result was the empowering of OPEC at the expense of US imperialism but without changing the position of US imperialism vis a vis OPEC. At the same time, we saw a more aggressive policy of the US towards the mid east post Nixon and the Vietnam war. This represents a shift of focus of the US away from East Asia to the middle east and a need to secure the position of the USA but by adapting to new realities in the aftermath of the embargo. This would be done by a combination of two ways, one by increasing a military presence so as to maintain the financial nation’s preponderance over the production centres *( Saudi, and the gulf nations ) and secondly, by ensuring the latter’s financial dependence on the dollar. The dollar was already freed from the Gold standard giving it the position of a reserve currency, thus its valuation would no longer be limited by that of Gold. However, this did not end its linkage to commodity, but simply shifted it to that of oil. the military preponderance of the USA in the mid east ensured political compliance of the gulf monarchies *( whose social base was so weak and so thoroughly incapable of capitalist development that they would leech on external military support anyways ) which in turn ensured the sale of petroleum from these countries be denominated in the dollar. What this did to the dollar was, to give it strength and ensure the world be always dependent on it, this being co-extensive with its dependency on petroleum as a source of energy.
The Special role of Saudi oil
Once it becomes clear what purpose Saudi holds for the USA , the whole complex of middle eastern politics and the role of imperialism reveals itself. The Iraq war is one episode in recent history which displayed the dynamics of the currency-commodity link in its deadliest form. Iraq for its part was relatively more autonomous than other mid-east nations and could threaten America with shifting away from the petro-dollar. Strategically, its autonomy was useful as a counter-weight to the Islamic Republic of Iran. But once it became clear that Iran would trade in the dollar no less, the whole point of Iraq’s acting as a counter-weight was put in question, as the threat posed by an independent Iran was now somewhat lessened. Eventually, Saddam’s aspirations at autonomy and regional power drove Iraq to confrontation with the USA in 1991, eventually, leading the USA to the second gulf war in 2003 to finish off what they had started in 1991. however, the aim at retaining military preponderance was achieved none the less, and the USA secured its primary objective of retaining the dollar as the main trading currency for oil exportation from the gulf.
The dollar is American imperialism’s corner stone and the entire economic edifice is based on the control over this one vital currency and pegging it to the most essential commodity in the world today. Much of the world is dependent on petroleum imports and importation of hydrocarbons. With this it ensures the paramountcy of American finances and uses Saudi as a battering ram with which to subdue other nations, ensuring its position as top dog in the ranks of imperialists, a position entrenched by its military dominance. But this is yet again pegged to its ability to control the top most petroleum producing countries namely, Saudi Arabia and the gulf nations which represent the bulk of petroleum production and exportation. Israel’s chief importance in this is to act as an imperialist gendarme in the Eastern mediterranean and ensure America’s politico-military supremacy and further ensure, that trade between Europe and the mid east remains undisturbed via the Suez. For this it is essential that Israel’s territorial ‘integrity’ remains intact, hence the ‘hard’ and indifferent approach towards Palestine’s recognition. The main target however, is not Palestine in itself which represents very little by way of economic or political gains, but the middle east as a whole and in particular the oil rich parts of it. Thus, when seen in the context of US aspirations over the gulf and the extended middle east and the petroleum industry, the true depth of its importance becomes clear.
The Levant is nothing more than an extended hinterland for Israel to project its military power, and ensure America’s lasting dominance in the region. For this of course the power of Syria and Iran as relatively autonomous centres of capital must be curbed. Iran thus far stands out like a sore thumb in America’s overall set up for the middle east as the only nation which has no political compulsions of any kind towards US imperialism and trading in the dollar, this gives it enough flexibility in maneuvering around US sanctions trading in either the Euro or the rupee or the ruble with its Asian and European trading partners. Being completely autonomous in the use of its military, Iran becomes further emboldened when dealing with the US. This gives Iran autonomy and power the likes of which no other middle eastern nation can boast of. Which is why it is so important to isolate Iran via sanctions and cripple its flexibility in economic dealings with other countries. yet again Saudi Arabia becomes the economic battering ram of the United States, via the import dependency on Asian economies on oil and energy products.
Consequences of Saudi Arabia’s special role
Among other things, this pivotal position of Saudi Arabia gives it considerable space of its own within the American global power framework to further its interests. Almost as a way to replicate the reactionary model of Saudi Arabia, it acts as a bastion of wahabbism† and uses its financial channels to spread the most reactionary Islamism as an anti-thesis to progressive forces world over, but most particularly in Islamic countries. Its capabilities as a centre of capital is weak, but as a carrier of US imperialist capital, its more than capable in exerting enough political pressure over countries via its preaching of wahabbism *( this is done through funding madrassa education among other things ) to either pacify and misdirect the masses of muslim majority nations, or to outright mould its foreign policy in line with its own which means by extension with that of the United States.
One country in which Saudi Arabia has huge influence is Pakistan, which under its influence has not only remained as an “Islamic republic” *( thus entitling it to subsidized oil purchases ) but also ensuring its position as a base of operations for the USA for expanding into Central Asia. Saudi was yet again instrumental in inducing Bangladesh towards adopting Islam as state religion on the same pretext , namely of promising subsidized rates for petroleum exports. However, this position as a de facto ‘controller’ of the Islamic world can only be ensured with the continued existence of Saudi Arabia as a monarchy. As long as the democratic aspirations of the people of Saudi remain stifled with just enough military prowess of its own to act as a local policeman *( note the intervention in Bahrain ) in the gulf, the political and economical structure of the USA in the mid east and the world remains undisturbed.
The Arab Spring threatens to overturn US imperialism precisely where it is most sensitive. However, the one force which is capable of the much needed revolutionary overthrow of the monarchies in the gulf nations is itself not indigenous but migrant, namely the migrant workers from the sub-continent. This poses unique challenges to organizing a revolutionary party and preparing a revolutionary programme for this party and links the revolutionary process in the gulf countries and the larger middle east, inextricably with the world Socialist revolution. For understanding this aspect further however, we’ll need to closely examine India’s role in the middle east which is expanding for obvious reasons, but has not yet been decided in finality. As such it is the only other significant external force in the region other than the USA which can have an impact on the affairs of the gulf region and the middle east. The invasion and toppling of the Saddam regime in Iraq was not only a blow for European aspirations but also was a strike at an old partner of India’s in the region, cutting down India’s global influence. India for its part has had a pivotal role to play in shaping the modern day middle east and in particular that of Iraq as it was a region conquered entirely by Indian forces during the first world war. It’s later administration was also organized by india. The gulf wars destroyed this 8 decade link India shared with Iraq. At present, India’s influence is highest in Oman *( whose Sultan is close to the Indian Congress Party leadership) , Dubai *( where the majority population is Indian ) , Qatar *( with which India has a security arrangement ) , and Iran *( Where India has a port and which is presently the largest import partner for oil in Asia ) .
For now it would suffice to conclude that Saudi Arabia and its oil exporting prowess is one of the chief weapons in the arsenal of US imperialism. A deadly nexus exists between keeping the monarchy in power through providing sufficient military security and its own military power, forcing it to continue trading in the dollar and thereafter using it to finance America’s own oil purchases by way of forcing Saudi to purchase US treasury bonds. America’s preponderance in military power globally as well as its preponderance regionally in the middle east ensures its financial supremacy allowing it to literally ‘Control the world’ without actually ‘controlling the world’ . Here the politics of US imperialism is more critical than the economics of it, especially so when US imposed control over oil becomes dependent on how politically independent they can be.
However, a change seems to be underway where the dollar is yet again veering away from pegging itself to a commodity, reflected in the disparity between rising dollar value and falling oil prices. This may yet save the Saudis their budgetary balance if the value of the dollar keeps rising, but would affect other countries more adversely killing their currencies and disturbing their economies. In the long run, the US might simply shift away from oil to a different commodity not affecting the dollar remarkably and depriving Saudi Arabia and the gulf countries of its relevance in the world.[hr]
*Levant is the region in the middle east comprising Syria, Jordan, Lebanon and Palestine. Basically the entire Eastern mediterranean littoral. The region was occupied by the Ottoman turks before coming under the control of Britain and France, who after 1946 partitioned the region creating the present day countries of Syria, Jordan, Lebanon, Palestine and the settlement of Israel.
† Wahabbism refers to a branch of Islam founded by Muhammad Abd Al Wahab in Arabia in the 18th century aiming at what he perceived as islamic revival by returning to primordial Islamic values. It preaches the unquestioned supremacy of the Quran and Hadeeth and the practice of consensus among believers known as Ijma.