Geopolitics-Oil=Risk for Democracies

PLANETARY GEOPOLITICS AND  ECONOMICS TODAY

 

IV: OIL: RISK FOR DEMOCRACIES 

Society for the Promotion of a European Human Rights Model

Association pour la Promotion d'un Modèle Européen des Droits de l'Homme

 

By  Didier BERTIN

July 20, 2012

  

Table of Contents

  

I-INTRODUCTION-page 7

 II - GDP - page 11

1-THE TWO WORLD LEADERS: UNITED STATES AND CHINA AND THE OTHER THIRTEEN  COUNTRIES HAVING A GDP HIGHER THAN ONE TRILLION USD -page 11

2-THE FIRST FOURTEEN COUNTRIES - INDIA EXCLUDED page 13

3-COUNTRIES HAVING A GDP INCLUDED BETWEEN ONE HUNDRED BILLION USD AND ONE TRILLION USD - page 13

4-THE OTHER HUNDRED THIRTY FOUR COUNTRIES OF THE WORLD INCLUDING INDIA-page 14

5-CASE OF THE FIRST THREE ECONOMIC LEADERS COMPARED TO THE FOURTH ONE- page 14

6-REAL WORLD AND MEDIA WORLD - PAGE 16

7-EXAMPLES OF DIFFERENCES BETWEEN REAL WORLD AND MEDIA WORLD-Page 18

8-THE LIMITS OF GDP AND THE DANGERS OF ITS GROWTH - Page 44

 

III-MILITARY DETERRENCE - page 49

1-THE TWO REAL GREAT POWERS-Page 49

2-THE THREE SECONDARY POWERS page 51

3-OTHER COUNTRIES WITH ANNUAL DEFENCE BUDGET  IN EXCESS OF FORTY BILLION - page 52

4 - ISRAEL -page 55

 

IV-OIL: RISK FOR THE DEMOCRACIES - page 57

1 - MAIN NET-OIL IMPORTERS -page 57

2-ORGANIZATION OF OIL PRODUCERS AND EXPORTERS - page 58

3-ECONOMIC SITUATION OF OIL PRODUCERS AND  EXPORTERS -    page 59

4-POLITY OF OIL PRODUCERS AND EXPORTERS  - page 62

5- THE CHOICES IN THE FIELD OF ENERGY - page 65

 

V-PUBLIC DEBT-page 66

1 - KEY DATA ON PUBLIC DEBT-page 66

2- THE RISK OF OVER-INDEBTEDNESS CONCERNS ESSENTIALLY THE RICHEST COUNTRIES -page 67

3-THE PUBLIC "OVER-INDEBTED" COUNTRIES ARE MAINLY IN THE RICHEST ONES, ACCOUNTING FOR ONLY  13.9% OF WORLD POPULATION -  page 68

4- EUROPEAN UNION, EURO AREA AND PUBLIC DEBT - page 71

5- JAPAN -page  73

6 - POLICY REGARDING  PUBLIC INDEBTEDNESS-page 74

 

VI -OTHER ECONOMIC OPTIONS - page 75

1 - THE RISK OF PROTECTIONISM - page 75

2 - ECONOMIC CHALLENGES- page 76 

 

VII - PLANETARY SOCIAL DISPARTIES - page 80

1-DEFINITION-page 80

2-CALCULATION- page-80

3-GINI INDEX APPLIED TO THE PLANET-page 81

4-ANALYSIS-page 86

 

VIII-THE REASONS WHY THE EUROPEAN UNION IS NOT A GREAT POWER - Page 93

1-EU AND NATO-page 93

2-CREATION AND TREATIES - EXPANSION AND INTEGRATION, Page 96

3-THE PROBLEM OF THE APPLICATION OF THE CHARTER OF FUNDAMENTAL RIGHTS-page 98

4-THE CONSTRAINTS OF DECISION MAKING-page 100

5 - INSTITUTIONS page 101

6-THE POLITICAL ORIENTATION OF THE EUROPEAN UNION-page 108

7-INTERNATIONAL POLITICS - page 112

8-THE CASE OF THE EUROPEAN PARLIAMENT ELECTIONS - page 113

9- THE DISPARITIES OF THE MEDIAN INCOME OF HOUSEHOLDS IN THE COUNTRIES OF THE EUROPEAN UNION - page 114

10-THE NEW MEMBERS OF THE EUROPEAN UNION -page 115

11-THE LIMITS OF THE EUROPEAN UNION page 116

12-A PARTICULAR EXAMPLE OF THE RIGHTIST ROOTING OF THE EUROPEAN UNION-page 119

A-The Prague Declaration of June 3, 2008 - page 120

B-The dangerous consequences of the Declaration  of Prague and of the related Declaration of the European Parliament-page 121

k-DECLARATION - page 135

 

IX - GENERAL CONCLUSION -page 138

 

APPENDICES

1-DATA OF THE FIRST 60 COUNTRIES WITH GDP HIGHER THAN 100 BILLIONS USD AND THE REST OF THE WORLD - Pages 145 and 146

 2-DATA ON THE INDEBTED COUNTRIES OF THE EUROPEAN UNION page 147

 3-DATA OF THE  EURO AREA COUNTRIES -page 148

 4-GENERAL DATA OF THE EUROPEAN UNION -page 149

 

 

IV: OIL: RISK FOR DEMOCRACIES

 

1 - MAIN NET-IMPORTERS

 

GDP/

Population

COUNTRIES

BBL/DAY NET

SUM bbl/day net

GDP

Billion USD

1

47 962

USA

  8 350 000

  8 350 000

 15 060

2

46 012

JAPAN

  4 027 000

12 377 000

   5 855

3

44 802

GERMANY

 2 201 000

14 578 000

   3 629

4

41 910

FRANCE

 1 733 000

16 311 000

   2 808

5

36 820

ITALY

  1 271 000

17 582 000

   2 246

6

32 702

SPAIN

  1 554 000

19 134 000

   1 537

7

23 755

SOUTH KOREA

  1 400 000

20 534 000

   1 164

 

 

TOTAL

 

 

  32 299

8

  8 406

CHINA

  4 574 000

25 108 000

  11 290

9

  1 529

INDIA

  2 234 000

27 342 000

   1 843

 

SOURCES: CIA FACTBOOK

MAIN OIL EXPORTS

39 267 000

GRAND TOTAL

WORLD PIB:74 460

  45 432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The major net oil importers are of course countries that have the most developed economies with the exception of India, as shown by their GDP per capita and are democracies with the exception of China.

Most producers being poor countries, relations between producers and consumers may be  stretched or insecure.

 

 

2-ORGANIZATION OF OIL PRODUCERS AND NET EXPORTERS

 

OIL EXPORTS BY   PRODUCING COUNTRY IN EXCESS OF THEIR CONSUMPTION

 

COUNTRY

BBL/DAY

Share %

EST. Date

OPEC

EXPORT OPEC

PNB/Popul. dollars

GINI%

1

SAUDIA    ARABIA

7 635 000

19,4

2009

1960

7 635 000

20 741

60

2

RUSSIA

5 010 000

12,7

2010

 

 

13 659

42

3

IRAN

2 523 000

6,4

2009

1960

2 523 000

6 076

45

4

UAE

2 395 000

6,1

2009

1967

2 395 000

71 600

60

5

NORWAY

2 184 000

5,6

2009

 

 

95 800

25

6

IRAQ

2 184 000

5,6

2011

1960

2 184 000

3 516

NA

7

KUWAIT

2 127 000

5,4

2009

1960

2 127 000

57 000

60

8

NIGERIA

2 012 000

5,1

2009

1971

2 012 000

1 453

44

9

CANADA

1 929 000

4,9

2009

 

 

51 735

32

10

VENEZUELA

1 871 000

4,8

2009

1960

1 871 000

11 071

39

11

ANGOLA

1 851 000

4,7

2009

2007

1 851 000

5 517

NA

12

ALGERIA

1 694 000

4,3

2009

1969

1 694 000

5 228

36

13

LIBYA

1 580 000

4

2010

1962

1 580 000

14 000

NA

14

MEXICO

1 511 000

3,9

2009

 

 

10 304

52

15

KAZAKHSTAN

1 390 000

3,5

2011

 

 

10 000

27

16

QATAR

1 038 000

2,7

2011

1961

1 038 000

86 500

41

17

ECUADOR

333 000

0,9

2007

2007

333 400

4 335

47

 

TOTAL

39 267 000

100

 

69,20%

27 243 400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In order to prevent that oil price decreases too much, Iran and Venezuela created OPEC in 1960. Today OPEC includes twelve countries exporting 69.2% of oil in the world.

This concentration of producer-exporter countries gives them a great power that allows them to be in a position to dramatically influence the oil prices and consequently  the health of major economies.

Oil price seems to result from a precarious balance between the breaking of the world's major economies and that of the few producer-exporter countries.

In addition  many OPEC countries are not real democracies and their room for maneuver is greater than those of importing countries.

Outside of OPEC, the largest producer-exporter of oil is Russia that provides 12.7% of world oil exports and which is not either a real democracy.

Seventeen countries are providing all the oil to about 170 countries (all countries of the world minus these 17 countries and self sufficient countries) and make the oil market, unbalanced and precarious.

 

3 - ECONOMIC SITUATION OF  OIL PRODUCERS AND EXPORTERS

 

A- GDP BIGGER THAN USD 40 000 PER CAPITA

 

GDP

PER CAPITA USD

%world of

oil exports

UNITED   ARAB EMIRATES

71   600

6.1

NORWAY

95   800

5.6

KUWAIT

57   000

5.4

QATAR

86   500

2.7

CANADA

51   735

4.9

Total

 

24.7

 

Among the producers-exporters, only five countries are rich and provide 24.7% of oil exports.

Apart from Norway and Canada, which have other resources that oil, only three countries, controlled by a few families, enjoy a high GDP per capita because of their small populations.

 

B- GDP PER CAPITA BETWEEN USD 30,000 AND USD 40,000

No producer-exporter country belong to this category.

 

C-GDP PER CAPITA BETWEEN 20 000  AND 30 000 USD

 

GDP

per capita  USD

% of world

oil exports

SAUDIA   ARABIA

20   741

19.4

 

Only one country belongs to this category.

 

D-GDP PER CAPITA BETWEEN 10 000 AND 20 000 USD

 

GDP per capita

 USD

% of

world oil exports

RUSSIA

13   659

12.7

VENEZUELA

11   071

  4.8

LIBYA

14   000

  4.0

MEXICO

10   304

   3.9

KAZAKHSTAN

10   000

   3.5

TOTAL

 

  28.9

 

This category includes five relatively poor countries and provides the highest percentage of oil exports. 

 

E-GDP PER CAPITA BETWEEN 0  AND  10 000 USD

 

GDP

per capita USD

% of

world exports

IRAN

6 076

6.4

IRAQ

3 516

5.6

NIGERIA

1 453

5.1

ANGOLA

5 517

4.7

ALGERIA

5 228

4.3

ECUADOR

4 335

0.9

TOTAL

 

27

  

Six particularly poor countries provide 27% of oil exports.  

Out of  the seventeen producer exporter countries, twelve have a GDP per capita below 13 659 USD and eleven have populations that are under severe inequality of income distribution. 

 

4 - POLITY OF OIL PRODUCERS AND EXPORTERS

OIL EXPORTS BY PRODUCING   COUNTRY IN EXCESS OF THEIR CONSUMPTION

 

COUNTRY

BBL/DAY

SHARE %

EST. DATE

OPEC

EXPORT OPEC

REGIME

GDP/

POPUL $

GINI%

1

SAUDIA 

ARABIA

7 635 000

19,4

2009

1960

7 635 000

ABSOLUTE   MONARCHY

20 741

60

2

RUSSIA

5 010 000

12,7

2010

 

 

AUTHORITARIAN REGIME

13 659

42

3

IRAN

2 523 000

6,4

2009

1960

2 523 000

ISLAMIST   FANATIC REGIME

6 076

45

4

UAE

2 395 000

6,1

2009

1967

2 395 000

ABSOLUTE   MONARCHY

71 600

60

5

NORWAY

2 184 000

5,6

2009

 

 

DEMOCRACY

95 800

25

6

IRAQ

2 184 000

5,6

2011

1960

2 184 000

US CONTROL

3 516

NA

7

KUWAIT

2 127 000

5,4

2009

1960

2 127 000

ABSOLUTE   MONARCHY

57 000

60

8

NIGERIA

2 012 000

5,1

2009

1971

2 012 000

INSTABLE

 TO VIOLENT RISK SITUATION

1 453

44

9

CANADA

1 929 000

4,9

2009

 

 

DEMOCRACY

51 735

32

10

VENEZUELA

1 871 000

4,8

2009

1960

1 871 000

CURRENT  

AUTHORITATIAN PRESIDENT

11 071

39

11

ANGOLA

1 851 000

4,7

2009

2007

1 851 000

Improved   situation-

presidential regime

5 517

NA

12

ALGERIA

1 694 000

4,3

2009

1969

1 694 000

MILITARY   REGIME DE FACTO

5 228

36

13

LIBYA

1 580 000

4.0

2010

1962

1 580 000

TRANSITIONAL   ISLAMIC REGIME

14 000

NA

14

MEXICO

1 511 000

3,9

2009

 

 

State authority

questioned by narcotics gangs

10 304

52

15

KAZAKHSTAN

1 390 000

3,6

2011

 

 

DICTATORSHIP

10 000

27

16

QATAR

1 038 000

2,7

2011

1961

1 038 000

ABSOLUTE   MONARCHY

86 500

41

17

ECUADOR

333 000

0.8

2007

2007

333 400

INSTABLE   DEMOCRACY

4 335

47

 

TOTAL

39 267 000

100

 

69,20%

27 243 400

 

 

 

 

 

Among the 17 oil producers and exporters in the world, only Norway and Canada are real democracies that together provide 10% of exports.

Ninety percent of oil exports are supplied to major Western countries by precarious countries. 

 

A-ABSOLUTE ISLAMIC MONARCHIES

 COUNTRIES

BBL/DAY   EXPORTS

%

SAUDIA ARABIA

 7 635 000

19.4

UAE

 2 395 000

6.1

KUWAIT

 2 127 000

5.4

QATAR

 1 038 000

2.7

TOTAL

13 195 000

33.6

 

B- EXTREMIST COUNTRIES AND DICTATORSHIPS

COUNTRIES

BBL/DAY   EXPORTS

%

IRAN

2 523 000

6.4

ALGERIA

1 694 000

4.3

KAZAKHSTAN

1 390 000

3.6

TOTAL

5 607 000

14.3

 

C- COUNTRIES WITH PRECARIOUS POLITY

COUNTRIES

BBL/DAY   EXPORTS

%

IRAQ

2 184 000

5.6

LYBIA

1 580 000

4.0

TOTAL

3 764 000

9.6

  

D- RUSSIA

COUNTRIES

BBL/DAY   EXPORTS

%

RUSSIE  

5   010 0000

12.7

 

Russia is not a total democracy because restricted  freedom of expression, the strength of few oligarchs  and the need for a strong leadership. The levy rate is very low  and the distribution of  income  is very unequal. Russia can use its exports of oil and gas to make pressure on its customers and it did it already.

 

E-COUNTRY SUBJECT TO AN INSTABILITY DUE TO INTERNAL EXISTING OR POTENTIAL VIOLENCE

COUNTRIES

BBL/DAY   EXPORTS

%

NIGERIA

2 012 000

5.1

VENEZUELA

1 871 000

4.8

ANGOLA

1 851 000

4.7

MEXICO

1 511 000

3.9

ECUADOR

   333 000

0.8

TOTAL

7 578 000

19.3

 

 

5- THE PRACTICAL CHOICES IN THE FIELD OF ENERGY

 

The dependence on oil should be reduced for the following reasons:

1. Oil is a highly polluting product regarding exploitation, transportation and consumption.

2. Apart from its use as an energy source, the petroleum-based products are also pollutants as the result of  their near-indestructibility.

3. Oil is a finite resource whose price should continue automatically grow in a long run  if it is utilized  .

4. The number of oil producing countries is small as compared to the consuming countries and the market is particularly unbalanced.

5. Fifteen of the seventeen producer and exporter countries are not real democracies and  each  may alone or in association and for a  various reasons, may influence the price of oil with heavy social and economic consequences for importing countries. These fifteen countries whose regimes are unstable and sometimes belligerent, could also pose a threat to one another that can influence the global oil price (example: Iran / Saudi Arabia).

The non-oil energy sources are the solution to get rid of this constant threat. Until we can use equivalent ecological resources, nuclear energy is a way with a limited pollution as compared to oil, to be  partially rid of the major risk that exists with a too large oil consumption. The Nuclear waste management should be improved  and of course countries with seismic risk cannot utilize nuclear energy.

France has a remarkable advance in this area and the EPR that is expected to produce more electricity (+10.34%) in using less uranium (-15%) appears to be an acceptable temporary solution.