Week 8: May 20. PEAKING OUT IN THE MIDDLE EAST

The limits of Saudi munificence and the cost of Iraq and Iran oil

Chinese in Africa

(Continued from last week)

• Chinese have reversed their approach to international relations from Mao years and have rationalized their policy – they “Signaled left but turned right”
• Chinese don’t come to Africa with colonial baggage
• They play up the 15th Century chinese Muslim explorer that visited Africa
• Also “General Chinese Gordon” was killed in Sudan so they play on this too suggesting that Chinese always had “love in the hearts” for Africa
• Sudanese oil dominated by China, since 90s
• Sudan is a nasty government and have been excommunicated by Western powers because of unpopular measures taken by the government against rebellion groups.
• Nigeria and Angola top 2 producers in Africa
• Chinese have been making inroads in Nigeria for 15 years and have some offshore blocks but aren’t as technologically advanced at offshore drilling although they are catching up quickly
• Also getting into Angola
• China can be successful in these oppressive regimes because they don’t have prohibitions against it and don’t allow opposing dialog
• Even Western powers struggle where moral issues collide with economic concerns
• Chinese are also active with smaller African producers like: Chad, Equatorial Guinea,
• Chad and Sudan are enemies so China has problems supporting both
• World Bank built a pipeline from Chad goes through Cameroon to Atlantic. Profits from oil supposed to go to a development fund, but most was diverted to regime
• US doesn’t have the money or interest to spend a lot of effort in Africa, so doesn’t have a big problem with China going in
• Chinese doing some good in Africa by building roads, factories and other infrastructure
• But Chinese like to bring in their own workers for these projects which angers the Africans, but Chinese workers are cheaper and help solve unemployment issues in China and get the job done faster
• Chinese do suffer by getting rolled up with the corruption of the regimes they are doing business with
• Nigeria resistance movement against government, oil companies and also now Chinese
• Conga has huge copper and cobalt mines that haven’t been worked in ages. The Chinese are coming in and working them again, there are 50 or 60,000 Chinese in Congo
• Zimbabwe has chromium, nickel, gold and China has been trading weapons for these resources
• China has vetoed a very significant and necessary UN measure to censure Zimbabwe, but this costs Chinese in soft power
• South Africa has gold, diamonds, titanium, platinum. Chinese are all over South Africa including tourism and relocating their
• Niger has Uranium which the Chinese are acquiring

Persian Gulf

• Has 61% of proven oil reserves, US and Europe 12%, Africa 10%,
• Iranian revolution undermined everything we were trying to do in the Middle East
• US has become the hegemony power in the Middle East. This resulted from the Carter doctrine that we would do anything that needed to be done to secure the waterways and commerce that was necessary for the sustenance of our economy
• The US through Chevron and Socal were the first oil companies to acquire concessions in Saudi Arabia
• Private US oil companies doing well managing, servicing and repairing oil wells in Middle East rather than owning them
• “BBL” stands for Blue Barrel of Oil which is 42 gallons versus 40 gallons for standard barrel
• Persian Gulf oil countries are: Saudi Arabia, Iraq, Iran, Kuwait, UAE
• Israel is an issue that these countries promote to gain legitimacy with the younger people, but is not really the major issue
• During Vietnam, US didn’t pay a lot of attention to the Middle East, which was during the Israel 6 Day War and Yom Kippur war. There was no Western presence in the ME. So Nixon came up with the idea of having a regional hegemony and chose Iran. Nixon sent the Shah a lot of weapons. Then the Iranian revolution in 1979 and hostage taking killed this vision. This led to the Carter Doctrine and creation of the Central Command (CentCom).
• Reagan and Bush Senior coddled Saddam and allowed him to win over the mullahs.
• SA overcame reluctance and allowed US troops after Saddam lobbed some missiles towards Riyadh
• Bush II wanted to have a petro-secure and military presence in the ME

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