The National Digital Edition - Business - 26 Oct 2010 - Middle East energy will help the West get

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Article rank 26 Oct 2010 Business Robin Mills Robin M Mills is an energy economist based in Dubai and the author of The Myth of the Oil Crisis

Middle East energy will help the West get back on

track
The West’s relationship with the Muslim world, though often subject to strains and conflict, has long been crucial for both sides. Cheap oil from the
MENA region fuelled post-war European reconstruction.

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Staton R Winter / Bloomberg

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US dominance of the Gulf protected its oil supplies from the Soviet Union during the Cold War, then from Iraq and Iran.
In return, western companies invested heavily in the Middle East, bringing physical infrastructure, technology and expertise.
ExxonMobil, BP, Shell and Total became some of the world’s largest and most influential companies through their stakes in oilfields from Algeria to
Saudi Arabia, Abu Dhabi and Iran.
The Middle East is now economically more important than at any time since the golden years of the Ottoman Empire half a millennium ago. It is
playing an increasingly important and constructive role in world affairs. The West is weighed down by indebted, uncompetitive economies. Europe’s
population is ageing; the US military is overstretched.
To deal with the immense challenge of competing and co-operating with a rising China, western countries need the energy resources of the MENA
region, as they have done for half a century. The new factor is that they also need the Muslim world’s money, people and ideas.
Yet the partnership is under threat from a growing tide of xenophobia and ignorance.
In the US, there are right-wing insinuations that President Barack Obama is a Muslim and there are campaigns against the construction of mosques
and some theoretical future application of Sharia law. Even the liberal commentator Thomas Friedman claims Middle East oil revenues fund terrorism.
In Europe, there have been votes against minarets in Switzerland and against Muslim women in France and Belgium wearing burqas, a garment worn
by an estimated 30 Belgian women out of half a million Muslims in the country.
Radical anti-immigration and neo-Fascist parties have entered the Dutch government and such parties have won parliamentary seats in Sweden. And
the usually moderate German chancellor Angela Merkel claimed recently that multicultural society in Germany was a failure.
The real problems for European Muslims, such as shockingly high unemployment, crime in urban ghettos and discrimination against French citizens of
Arab descent, attract little attention beyond rhetoric and blame.
This xenophobia extends to foreign affairs. France and Germany, with large populations of Turkish origin, are instrumental in blocking Turkey’s
progress towards EU accession despite its democratic reforms.
North African countries have been fobbed off with the French president Nicolas Sarkozy’s “Partnership for the Mediterranean”, an initiative to promote
peace and the environment. This is a far cry from the enthusiasm with which the EU welcomed Spain, Portugal and Greece as they emerged from
dictatorship and then Eastern Europe after the collapse of communism.
These actions are a betrayal of the West’s liberal, democratic values. It appears that traditions of tolerance, established so laboriously through the
Enlightenment, the battle against Nazism and the struggle for civil rights, do not run deep enough.
If the language of equality and justice is not enough to turn the growing tide of bigotry, perhaps we need to appeal to self-interest. Western leaders
and populations apparently do not understand just how important MENA energy is to them.
A third of Europe’s gas imports come from Algeria, while Qatar has emerged as a key exporter of liquefied natural gas. These supplies are a key part
of European energy security, given concerns over reliability of Russian supplies. And in the longer term, as the world moves towards lowcarbon energy
sources, North African solar power may supply Europe with electricity, as the ambitious Desertec partnership is intended to do.
The Nabucco pipeline, bringing Middle Eastern and Caspian gas to central Europe, would run through Turkey. Not surprisingly Ankara, rebuffed by
Paris and Berlin, has been giving Nabucco less than wholehearted support.
The accession of Turkey would give the EU borders with Iran, Iraq, Syria and the Caspian region, vaulting it above the US as the pre-eminent power in
the world’s energy hub.
Yet Europe has largely abdicated real involvement in the Caspian, leaving it to Russia, China and an increasingly overstretched US. The failure of
Europeans to grasp this gift of geography is baffling.
On the side of the US, rather than grandiose, futile and enormously costly plans for “energy independence” or attempting by force to remake the
Middle East in their own image, the country can achieve energy security in the same way as it has for the past half-century – through mutual respect and
interdependence with long-standing, reliable allies such as the UAE, Kuwait and Qatar.
Debt-laden western economies need to attract petrodollars from sovereign wealth funds such as the Abu Dhabi Investment Authority rather than whip

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up Islamophobia. US and European Muslims are a source of geopolitical strength, not weakness. They open up cultural understanding and business
opportunities. China, for all its growing power, is nowhere near matching this advantage. Chinese involvement in Middle Eastern energy is still minor.
For all Europe’s hostility to immigration, its social model cannot survive without rejuvenating its ageing population.
And in the battle of ideas, the West needs to build coalitions on key global issues, one of the most important being climate change – where the UAE is
playing an increasingly positive diplomatic and technological role.
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