Geopolitics-Oil=Risk for Democracies

PLANETARY GEOPOLITICS AND ECONOMICS TODAY

IV: OIL: RISK FOR DEMOCRACIES

Society for the Promotion of a European Human Rights Model

Association pour la Promotion d'un Modèle Européen des Droits de l'Homme

By Didier BERTIN

July 20, 2012

Table of Contents

I-INTRODUCTION-page 7

II - GDP - page 11

1-THE TWO WORLD LEADERS: UNITED STATES AND CHINA AND THE OTHER THIRTEEN COUNTRIES HAVING A GDP HIGHER THAN ONE TRILLION USD -page 11

2-THE FIRST FOURTEEN COUNTRIES - INDIA EXCLUDED page 13

3-COUNTRIES HAVING A GDP INCLUDED BETWEEN ONE HUNDRED BILLION USD AND ONE TRILLION USD - page 13

4-THE OTHER HUNDRED THIRTY FOUR COUNTRIES OF THE WORLD INCLUDING INDIA-page 14

5-CASE OF THE FIRST THREE ECONOMIC LEADERS COMPARED TO THE FOURTH ONE- page 14

6-REAL WORLD AND MEDIA WORLD - PAGE 16

7-EXAMPLES OF DIFFERENCES BETWEEN REAL WORLD AND MEDIA WORLD-Page 18

8-THE LIMITS OF GDP AND THE DANGERS OF ITS GROWTH - Page 44

III-MILITARY DETERRENCE - page 49

1-THE TWO REAL GREAT POWERS-Page 49

2-THE THREE SECONDARY POWERS page 51

3-OTHER COUNTRIES WITH ANNUAL DEFENCE BUDGET IN EXCESS OF FORTY BILLION - page 52

4 - ISRAEL -page 55

IV-OIL: RISK FOR THE DEMOCRACIES - page 57

1 - MAIN NET-OIL IMPORTERS -page 57

2-ORGANIZATION OF OIL PRODUCERS AND EXPORTERS - page 58

3-ECONOMIC SITUATION OF OIL PRODUCERS AND EXPORTERS - page 59

4-POLITY OF OIL PRODUCERS AND EXPORTERS - page 62

5- THE CHOICES IN THE FIELD OF ENERGY - page 65

V-PUBLIC DEBT-page 66

1 - KEY DATA ON PUBLIC DEBT-page 66

2- THE RISK OF OVER-INDEBTEDNESS CONCERNS ESSENTIALLY THE RICHEST COUNTRIES -page 67

3-THE PUBLIC "OVER-INDEBTED" COUNTRIES ARE MAINLY IN THE RICHEST ONES, ACCOUNTING FOR ONLY 13.9% OF WORLD POPULATION - page 68

4- EUROPEAN UNION, EURO AREA AND PUBLIC DEBT - page 71

5- JAPAN -page 73

6 - POLICY REGARDING PUBLIC INDEBTEDNESS-page 74

VI -OTHER ECONOMIC OPTIONS - page 75

1 - THE RISK OF PROTECTIONISM - page 75

2 - ECONOMIC CHALLENGES- page 76

VII - PLANETARY SOCIAL DISPARTIES - page 80

1-DEFINITION-page 80

2-CALCULATION- page-80

3-GINI INDEX APPLIED TO THE PLANET-page 81

4-ANALYSIS-page 86

VIII-THE REASONS WHY THE EUROPEAN UNION IS NOT A GREAT POWER - Page 93

1-EU AND NATO-page 93

2-CREATION AND TREATIES - EXPANSION AND INTEGRATION, Page 96

3-THE PROBLEM OF THE APPLICATION OF THE CHARTER OF FUNDAMENTAL RIGHTS-page 98

4-THE CONSTRAINTS OF DECISION MAKING-page 100

5 - INSTITUTIONS page 101

6-THE POLITICAL ORIENTATION OF THE EUROPEAN UNION-page 108

7-INTERNATIONAL POLITICS - page 112

8-THE CASE OF THE EUROPEAN PARLIAMENT ELECTIONS - page 113

9- THE DISPARITIES OF THE MEDIAN INCOME OF HOUSEHOLDS IN THE COUNTRIES OF THE EUROPEAN UNION - page 114

10-THE NEW MEMBERS OF THE EUROPEAN UNION -page 115

11-THE LIMITS OF THE EUROPEAN UNION page 116

12-A PARTICULAR EXAMPLE OF THE RIGHTIST ROOTING OF THE EUROPEAN UNION-page 119

A-The Prague Declaration of June 3, 2008 - page 120

B-The dangerous consequences of the Declaration of Prague and of the related Declaration of the European Parliament-page 121

k-DECLARATION - page 135

IX - GENERAL CONCLUSION -page 138

APPENDICES

1-DATA OF THE FIRST 60 COUNTRIES WITH GDP HIGHER THAN 100 BILLIONS USD AND THE REST OF THE WORLD - Pages 145 and 146

2-DATA ON THE INDEBTED COUNTRIES OF THE EUROPEAN UNION page 147

3-DATA OF THE EURO AREA COUNTRIES -page 148

4-GENERAL DATA OF THE EUROPEAN UNION -page 149

IV: OIL: RISK FOR DEMOCRACIES

1 - MAIN NET-IMPORTERS

	GDP/ Population	COUNTRIES	BBL/DAY NET	SUM bbl/day net	GDP Billion USD
1	47 962	USA	8 350 000	8 350 000	15 060
2	46 012	JAPAN	4 027 000	12 377 000	5 855
3	44 802	GERMANY	2 201 000	14 578 000	3 629
4	41 910	FRANCE	1 733 000	16 311 000	2 808
5	36 820	ITALY	1 271 000	17 582 000	2 246
6	32 702	SPAIN	1 554 000	19 134 000	1 537
7	23 755	SOUTH KOREA	1 400 000	20 534 000	1 164
		TOTAL			32 299
8	8 406	CHINA	4 574 000	25 108 000	11 290
9	1 529	INDIA	2 234 000	27 342 000	1 843
	SOURCES: CIA FACTBOOK	MAIN OIL EXPORTS	39 267 000	GRAND TOTAL WORLD PIB:74 460	45 432

The major net oil importers are of course countries that have the most developed economies with the exception of India, as shown by their GDP per capita and are democracies with the exception of China.

Most producers being poor countries, relations between producers and consumers may be stretched or insecure.

2-ORGANIZATION OF OIL PRODUCERS AND NET EXPORTERS

OIL EXPORTS BY PRODUCING COUNTRY IN EXCESS OF THEIR CONSUMPTION
	COUNTRY	BBL/DAY	Share %	EST. Date	OPEC	EXPORT OPEC	PNB/Popul. dollars	GINI%
1	SAUDIA ARABIA	7 635 000	19,4	2009	1960	7 635 000	20 741	60
2	RUSSIA	5 010 000	12,7	2010			13 659	42
3	IRAN	2 523 000	6,4	2009	1960	2 523 000	6 076	45
4	UAE	2 395 000	6,1	2009	1967	2 395 000	71 600	60
5	NORWAY	2 184 000	5,6	2009			95 800	25
6	IRAQ	2 184 000	5,6	2011	1960	2 184 000	3 516	NA
7	KUWAIT	2 127 000	5,4	2009	1960	2 127 000	57 000	60
8	NIGERIA	2 012 000	5,1	2009	1971	2 012 000	1 453	44
9	CANADA	1 929 000	4,9	2009			51 735	32
10	VENEZUELA	1 871 000	4,8	2009	1960	1 871 000	11 071	39
11	ANGOLA	1 851 000	4,7	2009	2007	1 851 000	5 517	NA
12	ALGERIA	1 694 000	4,3	2009	1969	1 694 000	5 228	36
13	LIBYA	1 580 000	4	2010	1962	1 580 000	14 000	NA
14	MEXICO	1 511 000	3,9	2009			10 304	52
15	KAZAKHSTAN	1 390 000	3,5	2011			10 000	27
16	QATAR	1 038 000	2,7	2011	1961	1 038 000	86 500	41
17	ECUADOR	333 000	0,9	2007	2007	333 400	4 335	47
	TOTAL	39 267 000	100		69,20%	27 243 400

In order to prevent that oil price decreases too much, Iran and Venezuela created OPEC in 1960. Today OPEC includes twelve countries exporting 69.2% of oil in the world.

This concentration of producer-exporter countries gives them a great power that allows them to be in a position to dramatically influence the oil prices and consequently the health of major economies.

Oil price seems to result from a precarious balance between the breaking of the world's major economies and that of the few producer-exporter countries.

In addition many OPEC countries are not real democracies and their room for maneuver is greater than those of importing countries.

Outside of OPEC, the largest producer-exporter of oil is Russia that provides 12.7% of world oil exports and which is not either a real democracy.

Seventeen countries are providing all the oil to about 170 countries (all countries of the world minus these 17 countries and self sufficient countries) and make the oil market, unbalanced and precarious.

3 - ECONOMIC SITUATION OF OIL PRODUCERS AND EXPORTERS

A- GDP BIGGER THAN USD 40 000 PER CAPITA

	GDP PER CAPITA USD	%world of oil exports
UNITED ARAB EMIRATES	71 600	6.1
NORWAY	95 800	5.6
KUWAIT	57 000	5.4
QATAR	86 500	2.7
CANADA	51 735	4.9
Total		24.7

Among the producers-exporters, only five countries are rich and provide 24.7% of oil exports.

Apart from Norway and Canada, which have other resources that oil, only three countries, controlled by a few families, enjoy a high GDP per capita because of their small populations.

B- GDP PER CAPITA BETWEEN USD 30,000 AND USD 40,000

No producer-exporter country belong to this category.

C-GDP PER CAPITA BETWEEN 20 000 AND 30 000 USD

GDP

per capita USD

% of world

oil exports

SAUDIA ARABIA

20 741

19.4

Only one country belongs to this category.

D-GDP PER CAPITA BETWEEN 10 000 AND 20 000 USD

	GDP per capita USD	% of world oil exports
RUSSIA	13 659	12.7
VENEZUELA	11 071	4.8
LIBYA	14 000	4.0
MEXICO	10 304	3.9
KAZAKHSTAN	10 000	3.5
TOTAL		28.9

This category includes five relatively poor countries and provides the highest percentage of oil exports.

E-GDP PER CAPITA BETWEEN 0 AND 10 000 USD

	GDP per capita USD	% of world exports
IRAN	6 076	6.4
IRAQ	3 516	5.6
NIGERIA	1 453	5.1
ANGOLA	5 517	4.7
ALGERIA	5 228	4.3
ECUADOR	4 335	0.9
TOTAL		27

Six particularly poor countries provide 27% of oil exports.

Out of the seventeen producer exporter countries, twelve have a GDP per capita below 13 659 USD and eleven have populations that are under severe inequality of income distribution.

4 - POLITY OF OIL PRODUCERS AND EXPORTERS

OIL EXPORTS BY PRODUCING COUNTRY IN EXCESS OF THEIR CONSUMPTION
	COUNTRY	BBL/DAY	SHARE %	EST. DATE	OPEC	EXPORT OPEC	REGIME	GDP/ POPUL $	GINI%
1	SAUDIA ARABIA	7 635 000	19,4	2009	1960	7 635 000	ABSOLUTE MONARCHY	20 741	60
2	RUSSIA	5 010 000	12,7	2010			AUTHORITARIAN REGIME	13 659	42
3	IRAN	2 523 000	6,4	2009	1960	2 523 000	ISLAMIST FANATIC REGIME	6 076	45
4	UAE	2 395 000	6,1	2009	1967	2 395 000	ABSOLUTE MONARCHY	71 600	60
5	NORWAY	2 184 000	5,6	2009			DEMOCRACY	95 800	25
6	IRAQ	2 184 000	5,6	2011	1960	2 184 000	US CONTROL	3 516	NA
7	KUWAIT	2 127 000	5,4	2009	1960	2 127 000	ABSOLUTE MONARCHY	57 000	60
8	NIGERIA	2 012 000	5,1	2009	1971	2 012 000	INSTABLE TO VIOLENT RISK SITUATION	1 453	44
9	CANADA	1 929 000	4,9	2009			DEMOCRACY	51 735	32
10	VENEZUELA	1 871 000	4,8	2009	1960	1 871 000	CURRENT AUTHORITATIAN PRESIDENT	11 071	39
11	ANGOLA	1 851 000	4,7	2009	2007	1 851 000	Improved situation- presidential regime	5 517	NA
12	ALGERIA	1 694 000	4,3	2009	1969	1 694 000	MILITARY REGIME DE FACTO	5 228	36
13	LIBYA	1 580 000	4.0	2010	1962	1 580 000	TRANSITIONAL ISLAMIC REGIME	14 000	NA
14	MEXICO	1 511 000	3,9	2009			State authority questioned by narcotics gangs	10 304	52
15	KAZAKHSTAN	1 390 000	3,6	2011			DICTATORSHIP	10 000	27
16	QATAR	1 038 000	2,7	2011	1961	1 038 000	ABSOLUTE MONARCHY	86 500	41
17	ECUADOR	333 000	0.8	2007	2007	333 400	INSTABLE DEMOCRACY	4 335	47
	TOTAL	39 267 000	100		69,20%	27 243 400

Among the 17 oil producers and exporters in the world, only Norway and Canada are real democracies that together provide 10% of exports.

Ninety percent of oil exports are supplied to major Western countries by precarious countries.

A-ABSOLUTE ISLAMIC MONARCHIES

COUNTRIES	BBL/DAY EXPORTS	%
SAUDIA ARABIA	7 635 000	19.4
UAE	2 395 000	6.1
KUWAIT	2 127 000	5.4
QATAR	1 038 000	2.7
TOTAL	13 195 000	33.6

B- EXTREMIST COUNTRIES AND DICTATORSHIPS

COUNTRIES	BBL/DAY EXPORTS	%
IRAN	2 523 000	6.4
ALGERIA	1 694 000	4.3
KAZAKHSTAN	1 390 000	3.6
TOTAL	5 607 000	14.3

C- COUNTRIES WITH PRECARIOUS POLITY

COUNTRIES	BBL/DAY EXPORTS	%
IRAQ	2 184 000	5.6
LYBIA	1 580 000	4.0
TOTAL	3 764 000	9.6

D- RUSSIA

COUNTRIES	BBL/DAY EXPORTS	%
RUSSIE	5 010 0000	12.7

Russia is not a total democracy because restricted freedom of expression, the strength of few oligarchs and the need for a strong leadership. The levy rate is very low and the distribution of income is very unequal. Russia can use its exports of oil and gas to make pressure on its customers and it did it already.

E-COUNTRY SUBJECT TO AN INSTABILITY DUE TO INTERNAL EXISTING OR POTENTIAL VIOLENCE

COUNTRIES	BBL/DAY EXPORTS	%
NIGERIA	2 012 000	5.1
VENEZUELA	1 871 000	4.8
ANGOLA	1 851 000	4.7
MEXICO	1 511 000	3.9
ECUADOR	333 000	0.8
TOTAL	7 578 000	19.3

5- THE PRACTICAL CHOICES IN THE FIELD OF ENERGY

The dependence on oil should be reduced for the following reasons:

1. Oil is a highly polluting product regarding exploitation, transportation and consumption.

2. Apart from its use as an energy source, the petroleum-based products are also pollutants as the result of their near-indestructibility.

3. Oil is a finite resource whose price should continue automatically grow in a long run if it is utilized .

4. The number of oil producing countries is small as compared to the consuming countries and the market is particularly unbalanced.

5. Fifteen of the seventeen producer and exporter countries are not real democracies and each may alone or in association and for a various reasons, may influence the price of oil with heavy social and economic consequences for importing countries. These fifteen countries whose regimes are unstable and sometimes belligerent, could also pose a threat to one another that can influence the global oil price (example: Iran / Saudi Arabia).

The non-oil energy sources are the solution to get rid of this constant threat. Until we can use equivalent ecological resources, nuclear energy is a way with a limited pollution as compared to oil, to be partially rid of the major risk that exists with a too large oil consumption. The Nuclear waste management should be improved and of course countries with seismic risk cannot utilize nuclear energy.

France has a remarkable advance in this area and the EPR that is expected to produce more electricity (+10.34%) in using less uranium (-15%) appears to be an acceptable temporary solution.