Discovering Wealth before Democratization
The relationship between oil and democracy is the
relationship between economy and politics and there is no doubt that there
is a close relationship between them.
Ali Akbar Moeinfar
Many people have
cursed oil. History of oil-rich countries has prompted many intellectuals to
complain that the powerful arms of colonialism and despotism were supported by
oil and oil revenues. They have noted that oil revenues made governments
needless of people and their taxes. Others have put more emphasis on
historical and cultural factors of a nationís failure to establish a civil
society instead of blaming everything on oil. They ask whether participation
of social institutions and classes in political affairs has existed before oil
discovery and domination of totalitarian government on oil resources. Wasnít
there any other factor but oil revenues to cause a nation fail to form a
modern government? Ali Akbar Moeinfar was employed by the National Iranian Oil
Company following the coup díťtat of August 19, 1953 and after the victory of
the Islamic Revolution in 1979 was chosen as the first minister of petroleum
of the Islamic government. He belongs to the second group. He considers oil a
national asset of the Iranian nation which cannot be left to legal or real
entities and has been trusted to the government which should preserve it for
future generations. Moeinfar notes that a nationís awareness when forming
governments determines the limits to which that government may take advantage
of natural resources. He maintains that attention to politics takes precedence
over economy and has noted that when oil was discovered there was no
supervision of people over the government. Since that time, although
democratization process has been progressing, but state monopoly over oil
revenue has been a major stumbling block on the way of that progress.
Do you actually
believe that there is any relationship between oil and democracy?
between oil and democracy is the relationship between economy and politics and
there is no doubt that there is a close relationship between them. In a
country, where democracy has not been realized, you cannot expect use of
public revenues to be optimal because people are not masters of their destiny
and will not have any control over consumption of public revenues. Thus, the
public wealth will serve the government alone.
You consider oil revenue as a public asset. However, some
argue that the government is earning that revenue and since its power does not
depend on people, it feels no need toward people. What is your opinion?
This argument as
always existed in Iran. They say if the Iranian oil was not monopolized by the
government, as is the case in the United States, the way would have been paved
for the realization of democracy. However, I think that a comparison between
Iran and the United States is a sheer mistake because oil wealth belongs to
the nation and it cannot be privatized like some plants and economic entities.
According to religious and common laws, underground resources belong to the
nation. In the United States, if you buy a land and discover underground
natural reserves in it, it would belong to you. I believe that if this was
practiced in our country, the situation would have been worse and like
privatization of many economic entities, it would have been monopolized by
certain social classes that are not even ready to pay taxes. Therefore, such
an approach cannot be positive in our national economy. Oil should belong to
the whole society with the government as manager. Therefore, there is no
reason why state control over oil resources should not be beneficial to the
nation. At the same time, some believe that governments which depend on such
revenues develop special behaviors and this theory is probably correct.
Anyway, the oil wealth has been forcefully bestowed upon our nation and it has
been handed down to the present generation. If the society can use it to good
effect, it would be the best tool for the realization of democracy. Otherwise,
if the society were not able to hold government accountable, oil would turn
into a factor for underdevelopment.
The proponents of oil privatization may ask why an economic
model, which has led to prosperity in another country, has failed to do the
same in Iran. In other words, what factor(s) differentiate Iran from the
Democracy is the
main issue in the United States followed by the way natural resources is used.
In Iran, utilization of resources takes precedence over the system of
government. That is, in the United States there is no argument over how oil
revenues are consumed because democracy and rule of law has been realized
there and the existing model has been sanctioned by law. In Iran, the opposite
is true. We have resources whose owners are known. The Iranian nation is the
owner. It should be noted that even in the United States, owners of oil
resources and major consultant and contractor companies are influential in the
government, but different political factions are so powerful that owners of
oil resources cannot seize the power. Anyway, without intending to introduce
the US government as an ideal system of governance, it should be accepted that
plurality of power sources has let the society to breathe. Therefore, I
emphasize that private exploitation of oil resources has nothing to do with
Although Iranian governments have always claimed to be
serving national interests of the country and despite the fact that they
control all revenues earned through oil sales, a civil society has never been
established in the country. Therefore, there is no powerful institution to
promote political participation of people. How citizens are supposed to resist
against totalitarianism of governments under such conditions and take another
step? To put is in a simpler way, how a rentier government can be harnessed?
The only way is
to gain more awareness and allow citizens to oversee details of every
development. There is no other way. Despite the fact that democracy has its
own flaws, nations are gradually realizing that it is the best formula for
management of democratic societies.
Didnít such awareness exist among constitutionalist
intellectuals and hasnít one hundred years passed since that time?
Both in the
constitutional revolution and in subsequent movements, we simply stressed on
what we did not want. During the constitutional revolution, people were fed up
with dictatorship and did not want the Qajar rule. But they had no idea what
was going to supplant it.
However, they established a parliament.
parliament was established, but even in that parliament, there was no
consensus on what the Iranian nation was looking for. If from the time that
the parliament was established, they had known what they were looking for,
there would have been no conflict between constitutionalism and religious
rule. The main problem is that since that time, Iranians have had no clear
idea about how they want to manage their society.
Since the history of Iran is full of dictatorial rules and,
as you say, even during the constitutional revolution, they had no clear idea
of how they intended to run their society, donít you think that if there was
no oil, their relationship with democracy would have been different today?
there would have been limited grounds for those who intended to misuse this
public wealth. However, I donít think that absence of oil would have led to
What impact can high oil prices have on economic relations
of oil-rich countries and the world of politics? Take 1970s Iran as an
example. Were high oil prices influential on governmentís behavior at that
There is no
doubt that high oil prices are followed by development. The public culture and
willingness to know the world also changes in parallel to development. Also,
other countries pay more attention to the country. The economic situation of
the Iranian people was better in 1970s, but some social classes became
aggressive and protested to human rights violations and ignorance of
democratic principles. High oil prices have also led to new economic problems.
When a government fails to use those revenues to activate the existing
potentials, the whole economy would be in disarray. This is what has happened
in Iran during the past few years. At present, disagreement is rising among
some social classes that avail of oil revenues. After being appointed as prime
minister, Mahmoud Sharif Emami ordered 7500 rials to be given as bonus to all
civil servants. He did this to satisfy them, but increased liquidity in the
society led to more protests.
At present, the world is witnessing high oil prices and the
governmentís revenues are likewise on the rise. If you were to be a cabinet
member once more, what measure would you have taken to prevent high revenues
from damaging the national economy and to prevent the government from becoming
too powerful in the face of the nation?
More than anything else, the government
is very willing to earn more petrodollars. I think this is not reasonable. We
must earn as much as our economic needs require. Experts may foresee that if
output is not increased when prices are high, oil prices may finally fall and
the opportunity is lost. Or we may need to increase revenues by selling oil
from those fields which are shared with neighboring countries. In that case,
production and exports would be reasonable.
Basically, earning revenue through oil
sales should follow a precise plan. Otherwise, we would not be able to use
petrodollars in the best manner and instead, we may be willing to produce more
and sell more. This is a mistake unless secret deals have been made with
Western countries. On the other hand, the use of oil revenues should be
regulated by such organizations as the former Management and Planning
Organization. We should have tried to eliminate that organizationís weaknesses
not to dissolve it altogether. The Management and Planning Organization was
economic brain of the country which could have found scientific methods for
optimal use of oil revenues. Investment in other countries was an option. Such
investments will provide the country with reliable revenue sources.
Like what Norway has done with its oil revenue?
There is no other way. The Oil Stabilization Fund was
established for this purpose. In the past regime they made investments outside
the country and regardless of where those investments were made, the decision
per se, was correct.