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Namibia: Dangers of the 3rd Oil Crisis
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New Era (Windhoek)
OPINION
2 May 2008
Posted to the web 2 May 2008
Prof. Enos M.r. Kiremire
Windhoek
- The looming serious world-wide dangers of the creeping 3rd oil crisis - imminent global economic recession.
A few days ago, CNN announced that the price of petrol skyrocketed exponentially. The price of crude oil went up to US$120 per barrel, compared to US$20 per barrel in September 2001. This is an incredible price increase of 500% in about 7 years.
The impact of this is currently being felt worldwide. For instance, the price of fuel in Namibia was increased to N$8 per litre (Namibian 10th April, 2008) and electricity went up by 18% (Namibian 16th April, 2008).
According to the CNN, the food prices have, on average, also gone up by 45% world-wide. In Africa, there have been demonstrations against food price increase in Egypt, Cöte D'Ivoire and South Africa.
Clearly, these indicators and many more, are the effects of the 3rd OIL CRISIS that has set in.
An oil crisis brings with it a dramatic price increase in petrol, food items and other essential commodities and services.
Furthermore, it is also accompanied by immense hardships and suffering to the majority of the people. Let us briefly review the global oil crises experienced so far.
Brief review of earlier oil crises
An oil crisis can be regarded as a stress exerted on an equilibrium flow of oil to the world economy. Such a stress disrupts the smooth‚ flow of oil resulting in a relative sudden jump in the oil price. Such a crisis creates a shortage in the oil supply, giving rise to a high demand and an increase in the hoarding of oil by high consumers.
Before the first oil crisis
For almost a quarter of a century the price of oil hardly changed numerically. The following figures underpin this statement. In 1948, the oil price was US$2.50 per barrel.
Nine years later, 1957, the price was around US$3 per barrel. Fifteen years after that in 1972, the price was still around US$3 per barrel.
In this period of 1948-1972 when the oil price was miraculously stable, many countries derived immense economic, social and political benefits.
With the exception of United States, many colonialist super powers were recovering from the negative destructive effects of the Second World War.
Indeed, it was during this period that many colonized countries agitated for political independence and truly nearly 40 African countries attained their political independence, namely Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Democratic Republic of Congo, Côte D'Ivoire, Djibouti, Equatorial Guinea, Gabon, Gambia, Ghana, Kenya, Lesotho, Libya, Madagascar, Malawi, Mauritania, Mauritius, Morocco, Niger, Nigeria, Rwanda, Senegal, Somalia, Sudan, Swaziland, Tanzania, Togo, Tunisia, Uganda and Zambia.
The last African colonies Mozambique, Zimbabwe, Namibia and South Africa had to wage bloody protracted liberation wars before achieving their political freedoms. The main reason for this is that the colonial powers could no longer continue and sustain more wars overseas as they were just recuperating from the devastating effects of the Second World War.
In general, there was economic prosperity world-wide. The independent African countries began economic reconstruction in areas such as education, health and transport, just to mention a few.
Imperialist countries such as Britain, France, Italy, Spain, Germany, and Japan fully recovered from the war effects. The spin-offs of this recovery impacted on the creative arts such as music and the film industry.
The Hollywood industry mushroomed. Science and technology underwent tremendous revolution never experienced before in centuries by its heavy emphasis on research and development (R+D) efforts. The imperialist countries realized that supremacy in science and technology was directly linked to military supremacy and hence greater chances of leverage to control world strategic resources.
With the devastating effects of the two atomic bombs that were dropped onto Japan still fresh in their mind, the colonial powers intensified their military research with the heaviest possible funding. This resulted in modern submarines, tanks, military jet fighters, pilotless jetfighters, warships, satellite technology, computer technology, space exploration, star war machinery, etc. That period (1948-1972) laid the strong foundation for today's common scientific utilities such as colour TV, laptops and mobile phones.
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The First Oil Crisis, 1972 -1974: Oil price increase of 300%
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