50THE BIG PAYBACKThe postnationalization era wound up modernizing the Gulf ’s econ-
omies while keeping intact the region’s peculiar form of sheikhly
governance.
The unusual combination brought about an unforeseen regime type,
one that would confound the world’s brightest political scholars for the
next fifteen years.
THE OPEC STRANGLEHOLDThe Arabs’ second golden age was the age of oil, and it had fully vested
once t hey took f u l l cont rol of t hat resource. The seizures in power broug ht
about a complete reversal of the terms of trade. Now, the industrialized
North found itself yoked in a dependent relationship with the primary-
product- exporting South.
If OPEC could control the prices of such a vital commodity, it could
influence the economic performance of importing countries. This rev-
elation came as another shock to the industrialized world. Political
threats to oil flows suddenly became a huge concern. “Energy security”
and Middle East “dependence” were buzzwords coined in that era that
remain with us today. Oil- importing countries from Japan to France to
the United States made frantic efforts to reduce their dependence on
imported energy, particularly from the Middle East. To Westerners who
had come of age amid the market stability of the Seven Sisters’ collusion,
the new state of affairs in oil was appalling— and dangerous.
“Never in recent history has there been a transfer of wealth and power
on the scale and at the velocity that is now being witnessed,” lamented
Arthur Ross in Washington Quarterly in 1980. “Millennia of cultural,
social and material developments supported by Western economic sys-
tems are threatened by this extraordinary development. Yet with few
exceptions, the recipients of this transfer of wealth and power are polit-
ical systems with little or no accountability to their own citizens, let alone
to the world community.”^20
Ross reckoned the Gulf countries, including Iran and Iraq, had pre-
sided over a price increase of nearly 500 percent between 1973 and 1980.