Funding the Threat: Dr Liam Fox Speech

Shadow Defence Secretary, Dr Liam Fox's Speech on the link between oil and national security:

We are all too familiar with the fact that recent years have seen substantial rises in the price of crude. What is seldom discussed is the cumulative wealth shift that this represents, how it is being spent and the foreign and security policy implications that flow from it.

Let me begin with a few numbers. In the past five years Europe alone has pumped $49bn into the economy of Iran and an astonishing $232bn into the former Soviet Union, mainly Russia- and this for crude oil alone. This does not include the financial transfers resulting from gas or petroleum product sales. Of these two examples, at a national level, Germany has contributed $54bn to Russia while Italy handed $10.1bn to Iran. The global figures are, of course, much greater still.

In both Russia and Iran this windfall has been used to finance military buildup. In other words we in the West find ourselves in a security Catch-22. Our dependence on oil means that we cannot avoid paying whatever price is demanded of us. That in turn produces huge financial flows out of our economies into those oil producers, some of whom may be hostile to us. They in turn use this to finance a defence build up. In other words, our addiction to oil results in us funding the potential threat against us and our interests.

There is, in addition, the consequence that there is little incentive for a state like Iran to reduce international tension as greater uncertainty will inflate the oil price and keep revenues high.

You can read the whole article here.