George Soros: Sharing Oil Wealth Could Quell Revolutions
To quell unrest, billionaire investor George Soros says oil-producing countries should share the wealth.
"What has caused the revolutions," Soros told BBC News this week, "is revulsion against the corruption that is fed by the misuse of natural resources." Libya, he noted, produces enormous wealth, much of which embattled leader Muammar Gaddafi treats as his own.
The price of crude oil rose to upwards of $116 a barrel on Friday, a direct result, some say, of Libyan security forces began a violent crackdown on protesters. That shows the power of Libya, producer of 1.6 million barrels of oil per day and Africa's largest oil supplier, to move markets.
Oil prices similarly rose during the Egyptian revolution, reaching their highest value since September 2008, when high oil prices helped drag the economy into recession.
Some investors have warned of a "nightmare scenario," in which rebellion could theoretically spread to other oil-producing countries, like Saudi Arabia.
In the BBC interview, Soros himself warned that more repressive oil-producing regimes would be tougher to topple. Iran, for example, could fall, he told BBC, but only after the "bloodiest of revolutions."
Analysts have suggested that Gaddafi's regime in Libya will likely be harder to topple than former President Hosni Mubarak's in Egypt because of the "resource curse," which sees citizens of developing countries rich in natural resources battling more corrupt and violent regimes.
Soros also warned that not backing revolutions in oil-producing countries could leave the U.S. out of the loop when new, more democratic regimes take over.
"It's very important that Europe and the U.S. should be in front of the revolution rather than behind it," Soros told the BBC. "The west has to regain the allegiance of the people in these countries."
Soros, who runs the giant hedge fund Quantum Endowment, is well-known for his daring trading, as well as for his philanthropic support of liberal causes, including a recent $100 million gift to Human Rights Watch.