Police officers try to disperse protesters in front of the Saudi Embassy in Tehran, Iran, Sunday, Jan. 3, 2016 AP
As expressed compellingly in your editorial (4 January) – “as long as the wells keep pumping and the Saudis keep buying our arms” – the West has been happy to ignore gross Saudi human rights abuses, and this has been an essential part of our economic life at least for the past 50 years.
From the early 1970s onwards, the Middle East became the world’s chief importer of weaponry, taking the lead position from South-east Asia. A significant amount of Saudi oil income (petrodollars) was invested in buying armaments and turned into weapon-dollars. Wars and tensions in the Middle East created the conditions for a type of dollar recycling based on arms trading.
Since the 1940s, the role of Saudi Arabia in the world economy had been intimately linked to oil exports, and from the 1970s onwards, this trade became the basis of the petrodollar system, which was then accompanied by another dimension – turning a good amount of this oil income into weapon-dollars. These two flows (oil going out, and weapons coming in) provided a powerful new lease of life for the US economy (and its close ally Britain’s economy).
The combination of these two flows was associated with the generation of substantial profits for the US-British arms manufacturing industry, and American-British giant oil companies. Thus, for example, in 1974, Saudi Arabia’s arms imports were worth $2.6bn, whereas after 1985 they increased ten times and reached $25.4bn.
Sharply intensified armed conflict and fast-rising tensions in the Gulf region mean much greater involvement of the US and Britain in the region militarily, and greater consolidation of the alliance between the US-British arms trade and energy interests.
This is the central story of our times, probably more than anything else, involving not only foreign policy but also national economies of key Western countries.
Professor of International Relations