Nations with vast oil wealth gaining clout
Some autocratic governments are challenging U.S. policies and silencing domestic dissent. But their increased spending raises the risk of inflation, which could erode popular support.
MOSCOW — The boom in world oil prices is bolstering autocratic governments in a handful of petroleum-rich countries, emboldening them to challenge U.S. objectives and weakening their own democratic movements.
The cost of a barrel of oil has climbed dizzyingly, from $80 in September to more than $147, before settling Wednesday at $134.60. Some analysts expect it to continue rising to $200. The effects are visible across the globe:
Iraq's warring factions are scrapping for a share of the massive oil wealth. The Sudanese government has more money to spend on military equipment and the campaign against rebels in Darfur. Saudi Arabia has grown more distant from its allies in Washington.
Russian official: An article in Thursday's Section A on how some oil-rich nations are feeling empowered to oppose U.S. policies misidentified Grigory Yavlinsky as head of Russia's opposition Yabloko party. Yavlinsky stepped down as party chairman June 21 and was replaced by Sergei Mitrokhin.
But some of the most obvious effects are in countries whose leaders are most hostile to the United States: Venezuela's populist President Hugo Chavez, Iran's stringent Islamic rulers and Russia's growing autocracy.
The governments of these three countries, among the top eight in proven reserves, are demanding a greater role in world affairs while spending on domestic social programs, raising salaries and building infrastructure -- measures that help blunt concerns over a slide into greater authoritarianism.
"You have no control from society or opposition or the state or anybody," said Grigory Yavlinsky, a Russian economist and leader of the opposition Yabloko party. "So it's easy to use this money to support your popularity."
But vast oil wealth comes with risks. All three countries are struggling with inflation, which might slowly erode popular support.
In Russia, public spending doubled from 2004 to 2007. Oil and gas revenues are expected to surpass $178 billion in 2008, nearly $33 billion more than originally projected. The International Monetary Fund, wary of inflation, has warned Russia against rampant spending.
Inflation in Iran has aggravated a devaluation of the currency.
Political changes wrought by the oil windfall also may backfire. Venezuela's output is declining in part because skilled engineers and foreign companies are fleeing. Analysts say sanctions, brain drain and dearth of foreign investment have badly hurt Iran's potential output because of a lack of modern techniques.
For now, however, all three are riding high on oil revenue.
