How oil funded terrorism
A tale of currency and compromise
The middle east is a peculiar geography, marked extensively by autocratic regimes employing varying levels of repression over populations loosely held by nationalist appeals. Religious rhetoric had propelled most of the current rulers to power, with the unintended consequence of vesting enormous power in the clergy.
Abdulaziz Ibn Saud, a staunch believer in Wahhabism, had prevailed over rival Arab tribes in the wake of a collapsing Ottoman empire to found modern-day Saudi Arabia. His conquest of Mecca and Medina granted him an outsized influence over the Islamic world, and a platform to outcast the Shias and the Sufis as heretics. Saudi was set to be a fundamentalist to the core until it slipped on oil.
03 March 1938 — Saudi Arabia found oil and fundamentalist beliefs went out the window. King Abdulaziz had discovered black gold, but he lacked the technology for drilling and the markets for selling. He needed Western support to get rich, and that meant making a deal with the devil. Did he do it? Of course, he did.
Subsequently, the Middle Eastern nation saw prosperity like few in history have. The Kingdom integrated itself into the modern capitalist economy, and members of the House of Saud attended Western universities to learn modern business. One small problem though: the hardline religious clergy that had legitimized the ruling family was not pleased with young princes dancing away in nightclubs.
Then came the Iranian revolution of 1979, and fears became real for the Saudi monarchy. Not only was Iran in the immediate neighborhood of Saudi Arabia, but its ruling monarch had been deposed in exactly the same fashion that the Saudis feared — through a movement triggered by the clergy.
A pre-emptive deal was reached between the rulers and the most hardline clerics. The deal was simple — the monarch would have control over the economy and the government, and the clergy could administer religious and social activities as they pleased. The prevailing images of Saudi justice, from floggings to amputations, are byproducts of the deal.
Furthermore, the Kingdom steered billions of dollars in oil money towards the religious establishment in attempts at appeasement. That same money was then funneled into an expanding apparatus that propagated Sunni fundamentalism, serving as a catalyst for religious radicalization throughout the world.
Minds are calmer when bellies are full. Unfortunately, vast regions in the Middle East and northern Africa suffer from exceptional unemployment rates and stalled economic growth. That, combined with concentrated fundamentalist propaganda, creates an atmosphere ripe for violence.
The results have compounded over the years, resulting in terrorist attacks and insurgencies across the modern world. Ironically, the Kingdom of Saudi Arabia enjoys rather cordial relations with the victims of the violence it has helped unleashed, courtesy of vast oil reserves, financial clout, and strategic geopolitical implications. Such are the ways of the world.
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If you liked this article, do read the one I’ve written on the economic importance of the middle class.
