Archive for the ‘Energy & Environment’ Category


By Robert Mason

Utilising the high oil price regime since 2003, as well as renewing century’s old trade links with China and India, Saudi Arabia is now in a position to manage a gradual transition towards a diversified economy that includes development across all sectors. The education and health sectors are both experiencing rapid expansion and reform, and privatisation is leading Saudi Arabia more rapidly into industries such as energy, petroleum, infrastructure, services and large scale projects such as its economic cities. However, there are challenges which could significantly alter the timescale and nature of a future diversified Saudi economy. These can be divided into the following issues:

  • The ‘Arab Spring’
  • A re-evaluation of the strategic plan for the economic cities
  • The dialogue between the government and private sector (including the priorities of business versus internal security concerns)
  • Youth unemployment and the Saudi work ethic
  • Domestic constraints and pressures to slow the pace of reform

Like an oasis in the Empty Quarter, Saudi Arabia is managing to flourish despite being surrounded by a harsh Arab Spring in the North (Egypt), South (Yemen), East (Bahrain) and West (Libya). Saudi Arabia is in good shape financially, having injected $36 billion in social and welfare programs and boosted public-sector pay by 15%1. Arab unrest, the resignation of President Mubarak, and attacks on Libyan oil fields, has contributed to a $100 per barrel oil price. Therefore, Saudi Arabia is in a prime position to benefit within the production constraints of OPEC. It is only the misconception of some businesses which may look at the region with one lens that requires Saudi Arabia to maintain vigilance in the way it continues to promote itself as an attractive investment opportunity.

However, the immediate concern of the Saudi Arabian General Investment Authority (SAGIA) must be its economic cities since they have only attracted high net worth Saudi businessmen and received very little foreign investment. There remain questions as to how they will connect with the industrial cities and how the state should finance them. SAGIA is therefore reappraising its strategic plan and looking at an increased role for the private sector in terms of financing and risk. This dialogue will inevitably slow down the timescales and lead them to take a different form from that originally envisaged. Read more…

Robert Mason is a PhD candidate in the Institute of Arab and Islamic Studies, University of Exeter, UK. His thesis is on the economic drivers of foreign policy of Middle East states with reference to oil and gas exporters.


By Haizam AmirahFernández, Associate Professor at the IE School of Arts and Humanities and Senior Analyst for Mediterranean and Arab World at Real Instituto Elcano

 The world we know today would not be the same without the eight countries that border the Persian Gulf. The development model based on hydrocarbons would be inconceivable without the resources extracted over almost a century in a region that includes Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). This model could not have survived without the region’s oil and natural gas deposits. With known oil reserves approaching 750,000 million barrels (accounting for more than 60% of the world total) and over 40% of the world’s natural gas reserves, these eight countries are the world’s main source of energy. Approximately 40% of the world’s seaborne oil shipments and 25% of the world’s daily oil consumption pass through the only sea passage out of the Gulf, the Strait of Hormuz.

These countries have undergone huge transformations in recent years due to the rapid growth of their economies and infrastructures and to the social and cultural changes that have come about as a result of globalisation and the use of new technologies, all of which has had an influence on their international relations. Apart from hydrocarbons, the Gulf’s importance has increased due to the appearance of large international business and finance centres, as well as to its capacity for investment and the growing presence of emerging powers (China and India). To this should be added the rise in Iran’s regional power following the toppling of Saddam Hussein and the tensions caused by its regional ambitions, especially with the US and Israel.

The heavy dependence of the international system on the Gulf states’ energy resources has conditioned their international relations, making them highly complex and subject to the establishment of alliances to defend or challenge the status quo and to security dilemmas which often lead to paradoxes and contradictions.

Security-focused Relations
The Gulf’s international relations are, among other things, focused on security. It is because of internal reasons, such as the authoritarian nature of their political systems and the rentier nature of their economies, as well as regional rivalries and tension, that the international –and domestic– policies of the Gulf regimes have traditionally been focused on considerations conditioned to a large extent by security. Since the early days of the British Empire, the international powers have attached a great strategic importance to the region, first as a route to the British colonies in India and afterwards, following the discovery of oil at the beginning of the 20th century, as a source for increasingly essential hydrocarbons.

One element that all of the leaders in the Gulf have in common, which is vital for explaining their behaviour and decisions, is their desire to hold on to power internally. This means that when making alliances their political calculations depend, above all, on their perception of how regional events and the moves of their rivals could endanger their own safety and perpetuation in power. Many decisions that affect individual and collective freedoms and the distribution of resources are taken in the name of ‘national security’, when they are really for the ‘security of the regime’ and its representatives. Read more…

As published by the Real Instituto Elcano on March 15, 2011.


But there’s much more we can do to reduce the odds of a catastrophe.

By James M. Acton

Until March 11, with the 25th anniversary of the Chernobyl accident approaching — and memories of that disaster receding — safety concerns no longer appeared to be the killer argument against nuclear power they once were. Instead, another fear, of climate change, looked like it might be driving a “nuclear renaissance” as states sought carbon-free energy sources. But the ongoing crisis at Japan’s Fukushima Daiichi Nuclear Power Station will return safety to the forefront of the nuclear power debate. Even the most ardent industry advocates now recognize that the unfolding crisis inside two reactors there — shown on live television and beamed around the world — has left the future of their industry in doubt.

Nevertheless, the case for nuclear power remains strong. All forms of energy generation carry risks. Fossil fuels, which (for the time being at least) are nuclear energy’s principal rival, carry the risk of catastrophic climate change. And as we’re seeing in Japan, we haven’t eliminated all the dangers associated with nuclear power, even though accidents are few and far between.

Good public policy involves balancing these risks. Persuading the public to accept the risks of nuclear energy will, however, not be easy. To do so, the nuclear industry will have to resist a strong temptation to argue that the accident in Japan was simply an extraordinarily improbable confluence of events and that everything is just fine. Instead, it must recognize and correct the deficiencies of its current approach to safety.

When it comes to safety, the nuclear industry emphasizes the concept of “defense in depth.” Reactors are designed with layers of redundant safety systems. There’s the main cooling system, a backup to it, a backup to the backup, a backup to the backup to the backup, and so on. A major accident can only occur if all these systems fail simultaneously. By adding extra layers of redundancy, the probability of such a catastrophic failure can — in theory at least — be made too small to worry about.

Defense in depth is a good idea. But it suffers from one fundamental flaw: the possibility that a disaster might knock out all of the backup systems. A reactor can have as many layers of defense as you like, but if they can all be disabled by a single event, then redundancy adds much less to safety than might first meet the eye.

This kind of failure occurred at Fukushima Daiichi on March 11. As soon as the earthquake struck, the reactors scrammed: The control rods, used to modulate the speed of the nuclear reaction, were inserted into the reactor cores, shutting off the nuclear reactions. So far so good. Nevertheless, the cores were still hot and needed to be cooled. This in turn required electricity in order to power the pumps, which bring in water to cool the fuel. Read more…

James M. Acton is an associate in the Nuclear Policy Program at the Carnegie Endowment for International Peace.

As published in on March 14, 2011.

MULTILATERALISMO Y DESORDEN GLOBAL: El orden multipolar al que se dirige el mundo podría alejarse aún más del multilateralismo. ¿Cómo evitarlo?
Por Borja Lasheras y Antonio Ortiz

El presidente francés, Nicolás Sarkozy, y el primer ministro británico, David Cameron, firmando un acuerdo bilateral de defensa, noviembre de 2010


Para los aficionados a la pintura, el mundo actual se asemejaría a un cuadro impresionista, con figuras borrosas, o incluso a una obra surrealista que rechaza criterios racionales y donde predominan sorpresa y desorden. No sería una obra clásica, de formas nítidas, como desearon Wilson o Roosevelt para remediar el caos posterior a las dos guerras mundiales. 

Pero no hay mucho arte en el sistema internacional contemporáneo. Ni mucha estrategia. Más que el Gran Juego decimonónico, la política internacional es un juego de póquer donde se utilizan cartas como la política monetaria o la energía, y se guardan otras a la espera de la siguiente mano. Pocos socios, menos aliados y muchos rivales. Los sofisticados esquemas académicos y designios estratégicos ideados en los laboratorios políticos casan mal con la enrevesada realidad de las relaciones internacionales modernas.

Lo cierto es que, más allá de que asistimos a cambios geopolíticos de envergadura, no sabemos mucho del futuro orden internacional. Sí podemos aventurar que será un mundo multipolar o no polar, donde coexistirán, aún de forma desordenada, varios poderes de influencia dispar, muy vulnerables ante factores no estatales (desde emergencias civiles, shocks financieros hasta acciones de grupos terroristas). Un mundo donde lo doméstico se entremezcla de forma confusa con lo internacional; fenómenos aparentemente locales, como nacionalismos y xenofobia, tienen serias implicaciones geopolíticas. Imprevisibilidad e incertidumbre son palabras que reflejan nuestra perplejidad ante el orden internacional que se avecina.

Seguir leyendo en: Foreign Policy (edición española), Octubre-Noviembre 2010



by Gaudenz Assenza (Professor at IE School of Arts and Humanities)

After rising from the ashes of the Second World War, industrialized countries experienced an epoch of unprecedented growth and stability, but instead of preparing for the future, the predominant mode was to live as if there was no tomorrow. Individuals, firms and nations borrowed with abandon, not realizing how overconsumption and lack of ecological stewardship destabilized the very fundament of prosperity. Small fissures in the economic, social and ecological fabric widened to cracks; cracks broadened to crevices; and the crevices expanded to tectonic faults, causing friction and unleashing forces comparable to earthquakes and eruptions of volcanoes.

The idea that the 21st century will be smooth sailing lacks historical awareness. Just like the 20th century experienced great tragedies, the 21st century will experience its share of calamities. Many predictions of the future conducted by agencies like the CIA and the National Intelligence Council are implausible, because they are based on the same assumptions and worldviews that triggered the personal and institutional failures, which we experience today. Predictions assuming an extrapolation of the status quo are improbable, because the status quo cannot be maintained:

  • The much touted rise of China is unlikely to persist in the absence of sweeping changes in policy. As we witnessed during the Olympics, ecological strains have begun to choke China’s economic miracle and social tensions could erupt anytime;
  • Russia is unlikely to become a hegemonic power, not because Putin and Medvedev are ready to relinquish this goal, but because the government is short of resources to pay for a military buildup;
  • America is unlikely to experience a “Golden Age” in the second half of the century, as predicted by George Friedman, because the country lost decades in development by failing to invest sufficiently in human development and the protection of natural resources.

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