By A B Shahid
ARTICLE (September 15 2008): The price of Brent crude has fallen below $100 a barrel and that of light Arabian below $102 in spite of cyclones hitting the US. Till recently even predictions of such cyclones used to push up oil price by several dollars a barrel. Although storm Ike was expected to hit the US South Eastern coastline on September 12, until a day before that oil prices appeared virtually frozen.
Perhaps, we are in for a fresh dose of deceptive reasoning by the Western media about what does or doesn't alter 'market' trends.
Writing in these columns on August 18, I had only summed up the impact of developments in EU states before the last G-8 meeting in Hokkaido. In my view, these developments foretold a concerted effort by the EU and Japan to perk up the US Dollar and entice Opec members into lowering the oil price in Dollar terms, although the current state of the US economy and all the warnings contained in textbooks on macroeconomic indicators suggesting a sustained economic down turn, dictate the opposite.
Not surprisingly, soon after the G-8 meeting Opec president Chakib Khalil also predicted that a hike in US Dollar's exchange value to its 2006 level could push oil price below $80 a barrel. Accordingly, versus the Dollar, the British Pound, Euro and the Japanese Yen weakened rapidly and so did the oil price; it fell by nearly 30% although global growth hadn't fallen by a proportion that visibly warranted such adjustments.
But whenever Western interests are at stake 'divine' wisdom (in reality, expediency) accelerates market correction. By September 11, the Euro had depreciated against the Dollar by over 12% and the Pound by 16%. The Yen and the Swiss Franc too weakened substantially although the combined average of the fall in GDP growth rates in France, Germany, Italy, Spain and Japan was below 0.5%.
The $80 a barrel price, that the US finds realistic, is an expedient level because it will ensure that most non-oil producing developing states continue to subsidise oil imports and forego implementing any grandiose infrastructure improvement plans that could help the billions living below the poverty line, whose numbers went up significantly in the past 18 months, courtesy the ruthless oil price hike.
But the Opec is not as convinced about this price level being realistic, and has therefore planned supply cuts to push it up above $100 a barrel. The Opec president feels that "there's an oversupply [of oil].... and 'everybody' agrees that it is pushing the price down". Who exactly does he refer to when he attributes this view to 'everybody', is not hard to imagine: the greedy members of the Opec - which he gracefully heads, not the rest of humanity.
In spite of the apparent differences in perceptions about oil price, Opec is in league with the West in ensuring that the developing countries remain 'developing' countries, if possible, forever. In this context, our brotherly Middle Eastern oil producing states deserve special mention. Their apathy towards alleviating global poverty is more condemnable than that exhibited by capitalist Russia and socialist Venezuela.
The Middle Eastern oil producers are not only Muslim states but on their self-acclaimed 'right' path ie Sirat-e-Mustaqeem. Since when market exploitation became one of the covenants of Sirat-e-Mustaqeem, is known only to these friends of ours. They obviously can't see that besides several other Muslim non-oil producing countries Pakistan - the second largest - could fail (to a great extent) due to its inability to pay the sort of oil price demanded by these 'brotherly' countries.
Owing to the close relations Pakistan has had with them all along they know precisely where Pakistan stands right now. In spite thereof, and disregarding its many diplomatic gaffes, Pakistan appraised these countries of its extremely weak financial condition and requested them for help. Oddly, so far, the response to these requests can, at best, be described as little more than a casual nod.
Rumour is that the Saudis have indicated that their deferred payment facility for oil import will be for $1.2 billion, not $5.9 billion - a figure publicised not just by Pakistan but also by foreign press, and seconded by the IMF and the World Bank. Are we to believe that the steady deterioration in Pakistan's financial condition is persuading the Saudis to make it worse by withholding help when it is needed most?
There has been no clear indication from Kuwait, Qatar or the UAE about any help. As for Iran, its only concern is the mythical IPI. Nothing else seems to matter to the Iranians. Put all of them together and, of course, Afghanistan and good old India, and you can feel immensely proud of the neighbourhood you live in. Can any Pakistani help not being proud of its neighbours?
While Pakistan has no option but to admire its neighbours, they have a far better option - extending a helping hand - that none seems keen on exercising. With its business and industrial base operating below 50% of its capacity courtesy power shortages due to non-availability of fuel, Pakistan is well on its way to becoming a failed state and who else but its neighbours are the first hand, yet silent witnesses to this coming disaster.
References to the '2015' plan for dismantling Pakistan in the style of Yugoslavia are now more frequent in the Western press. There are unconfirmed reports about our Middle Eastern neighbours seeking a US nod before granting Pakistan a deferred payment facility for oil imports, which shows their true colours. It seems that after the assassination of Shah Faisal the Great they all coolly went back into the US fold.
The fact that it took blunt statements by French president Nicolas Sarkozy and German Defence Minister to force NATO into announcing categorically that it will not partake in US-led attacks inside Pakistan's borders, while our neighbours remained silent on the blatant violation of Pakistan's sovereignty by the US, should serve as and eye opener for the Pakistanis.
For Pakistan the message is loud and clear: to defend its sovereignty its people must give up the self- corruptive ways they got used to during the Shaukat Aziz era. It is time to put the economy ahead of everything. Business and industry must forget about making profit for the next two years. Their target should be selling at break-even prices to cut inflation and maximising self-sufficiency through fair sharing of deficit resources, particularly fuel and electricity.
Politicians and religious leaders, who are damaging the country more than its real enemy, must give up their ego-driven confrontation to free the defence forces to fight that enemy on the Western border. It is time to unite to allow for effective deployment of every individual in our defence forces; on their flexibility of action depends our future.
