Economics Middle East & North Africa

GM’s Newest EV Signals a Successive Arab Spring

GM created an electric Hummer, the successor of the Humvee, a militaristic behemoth famous for traversing the sand dunes of Kuwait during the Gulf War.

The electric car revolution has arrived. No, I’m not referring to those ridiculously looking GM EV1s that resemble a 1960’s depiction of a spaceship, nor am I talking about the Smart Cars of the past that forced buyers to choose between practicality and efficiency. And no, I’m also not hinting at the highly popular Tesla Model line, which admittedly has given electric cars the sex appeal previous EV’s so desperately lacked. 

With over one billion gasoline cars in existence, how can I so confidently say that the revolution has begun? Because the unthinkable has happened. GM created an electric Hummer, the successor of the Humvee, a militaristic behemoth famous for traversing the sand dunes of Kuwait during the Gulf War. 

The intent behind creating the original Humvee (HV) was to build an all-terrain vehicle that was brawny, tough, and a spectacle of American might. It was not fast, it was not sleek, and it was certainly not efficient: the HV had a 25 gallon gas tank with a fuel economy of about 12 miles per gallon. But it got the job done. Operation Desert Storm was a success, and the war generated so much publicity around the HV that GM released a civilian version of the vehicle the following year. This new model, dubbed the H1, was no more environmentally friendly than its predecessor, getting an eyebrow-raising average of 10 miles per gallon. 

How has GM gone from producing a gas-guzzling civilian tank, driven mostly by athletes and members of the NRA, to now producing a space rover with a futuristic body design and an electric motor? Does GM suddenly care about the environment?

The answer is yes … and no. GM cares about the environment because frankly, car consumers have started to care about the environment. Caring about the environment has become a form of social capital— it’s “cool” nowadays. And nowhere is that trend better reflected than in the  car industry’s pivot from gasoline to electricity. With every automaker finally dipping their beaks into the electric market, this signals future political breakdown in the oil producing MENA States. 

Oil producing states have seen a steady decline in oil prices from 2013, at $120 USD a barrel, to dipping below $40 USD a barrel in 2016. (For reference, Saudi Arabia breaks even at $70 USD a barrel). Through 2020, the price level has fluctuated minimally, and this negative trend is likely to persist into the next decade. Particular states like Saudi Arabia, whose economy is based 90% on oil revenue, have struggled to adapt to the changing times. Since the commodity’s discovery in Iran in 1908, oil has been an expedient way for the Arab kingdoms to accumulate  vast amounts of wealth. Middle Eastern states, like Libya, Tunisia, Algeria, Iraq, and Qatar, based their entire economies over this one commodity, creating a system called rentierism.

Most of these states were both able to flourish and maintain their authoritarian rule by buying off their population’s loyalty at the expense of other states purchasing ‘rent’ in the form of oil. The state then operates like a corporation, as most industries are state owned and citizens are treated more like employees with little say in civil affairs. 

However, decreased demand for oil is signaling a bleak future for the Gulf States dominions’. Some states like Saudi Arabia, have started waking up to the alarm bells by taking proactive steps to diversify the economy. In 2016, the Saudi Crown Prince unveiled the ‘Vision 2030’ which aims to reduce dependence on oil and build up other sectors such as the state’s medical and technological industries. Other states have followed suit, as the UAE, Qatar, and Libya share similar visions of economic diversification and liberalization of the economy. However, officials are not oblivious  to the fact that liberalization of the economy is a step toward  privatization of industry, which would decrease reliance on the state  being the  main provider of employment. 

This initiative exposes the predicament the Saudis, and so many other rentier kingdoms, are in: privatization of their economy will weaken their political power. And it is certain the oppressed population would take the opportunity to rebel the moment disclosure of this vulnerability becomes known. While the Saudi Kingdom was already wildly unpopular by the first Arab Spring in 2011, their oil revenue was still substantial enough to ward off the uprising and regain control by inflicting even harsher governance.

But nine years later, in an increasingly dire situation, the government might not be so lucky. Ten years from 2021, political collapse is a given. According to Mohamed Mahjoub Haroon, professor of social science at the University of Khartoum, in Sudan, “… massive uncontrolled urbanization, pressure on the job markets are among other socioeconomic factors the leading causes behind greater expectations of the youth in the Arab societies. As long as these issues persist, so will fissures and attempts to shake up the established ruling orders in Arab societies.”

Regardless, anarchy is inevitable on either path the kingdom chooses. If the Gulf States stay on the trajectory they are on and fail to diversify their  economies, they will go bankrupt. The less wealth there is in a rentier state, the more likely poverty will rise. This leads to less political agency for the  government, who is then forced to use tactics of repression, which will ultimately collapse when the money runs out. And even if the Gulf does liberalize their economies, states like Saudi Arabia whose kingdom already uses tactics of repression, are sure to face the unrestrained wrath of the population. This theory is already manifesting itself, as a repeat of political turmoil has already begun sweeping across the Middle East in an ‘Arab Spring 2.0.’

And if neither economic liberalization nor bankruptcy cause a democratic rebellion in the Gulf States by 2030, the catastrophic climatic collision course the Middle East is headed on is yet another factor that could lead to destabilization and eventual collapse of the authoritarian institutions. The prolonged reliance on oil will cause an increase in expanding deserts, a process known as desertification, that is likely to permanently scar the region. The region of Qatar and the UAE for example, are likely to hit temperatures of 170°F if climate change is not corrected, rendering many cities uninhabitable.

Stemming from the climate crisis and desertification is a decreasing water supply and frequent droughts, which have already begun to devastate some parts of the region. In Afghanistan, for example, the 2018 drought resulted in an influx of climate refugees. Desertification has also led to a decreased supply of food and some countries like Yemen, who are also in a civil war, depend wholly on UN humanitarian aid programs to survive. The consequences of climate change pose greater strain on governments because as the populace migrates from rural areas to urban areas, already impoverished governments will be forced to reckon with the growing tensions of refugees in need of a job. These nations will become increasingly less self-sufficient . 

But this is not a negative thing. Authentic democratic change would likely bring about more competent governance who will respond to the needs of the population. If the current leaders of these authoritative nations had the foresight to change their policies and institute a democratic agenda that was focused on saving their citizens and not retaining power, this crisis would be averted. However, since the practice of current regimes has revolved around repression, their economic adaptations alone will not be enough to stabilize the political schisms. But grassroots democratic change, if it is even possible accomplished, will be a tough battle to fight.

A necessary solution would be for democratic superpowers in the West to promote state building and industry in the Middle East, similar to the work the Allies did in Japan following the end of WWII. Ironically, since these rentier regimes have been backed by Western democracies, it is unlikely the West will embrace democratization. It will take a massive restructuring of the government and economy to reverse the drastic effects oil has brought. While these nations have looted the Middle East of its golden resource for the past century, hopefully they extend an olive branch in the Middle East’s hour of need. In the meantime, if you want to do the world a favor, ride the bus. If you want to temporarily do the Saudi royal family a favor, buy a Humvee.

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By Matthew Rutzen

Matthew Rutzen is a junior at UCLA majoring in Political Science with a concentration in Middle Eastern Studies. At UCLA, he takes part in research for the Center for Middle Eastern Development. He hopes to continue his academic and professional endeavors to promote awareness of crucial current events in the Middle East through journalism, and later diplomacy.

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