There is no doubt that Nigeria, as a member country of the Organisation of Petroleum Exporting Countries, has not developed as it should, despite the huge earnings accrued from the proceeds of oil.
The oil sector accounts for 20 per cent of the country’s Gross Domestic Product; 95 per cent of its foreign exchange earnings and about 65 per cent of its budgetary revenue.
Other OPEC countries have become economically influential countries in the international system by utilising the revenue obtained from past booms in the demand for oil and its products.
But in the case of Nigeria, it is not so because of the misuse of resources among other issues affecting the economy, which the Federal Government has not adequately addressed.
There are also underlying indices such as ecological degradation, oil spillage, gas flaring, social disequilibrium, ineffective application of environmental regulations and others too numerous to mention.
Analysts say that the changing nature of the international market and the situation of Nigeria’s domestic oil industry have a great bearing on whether the country is ready for development or not.
Due to contributing factors, chiefly corruption, Nigeria cannot be listed among the oil-producing countries that have used oil as an instrument of coercion in foreign policy.
In other words, the country, as a result of an unstable economy, cannot bargain with world powers on the basis of its oil to get what it wants in terms of development.
Added to this is the disruption of the oil business, which, for example, has led in the past to the shutting down of multinationals such as Shell, Chevron and AGIP. Most notable of such disruptions was in May 2009 when there was a confrontation between the Nigerian military forces and the Niger Delta militants leading to oil production loss.
The hope is that Nigeria will be able to bargain with oil if government takes a few steps.
One, the government must embark on projects to build well-designed and efficient refineries with adequate maintenance. The government should be able to account for funds put into any oil project, and also make sure such funds are put to good use.
Two, the government should fight corruption in the sector by monitoring the activities of its agencies such as the Nigerian National Petroleum Corporation. The government should embark on projects to build factories to process oil into finished products for exportation as well.
This will increase Nigeria’s economic influence in the international system.
In the area of using oil to its advantage in the world system, Nigeria can learn from examples.
When in 1973, the United States of America re-supplied Israel with weapons during the Yom Kippur War, Arab oil-producing countries cut back their exports of oil to the United States and other Western countries.
The discovery of oil has increased the revenue of several nations, e.g. the discoveries of oil in the Arabian Peninsula, the North Sea and the Gulf of Mexico. It is also important because countries that possess oil and other forms of energy resources have considerable importance in international affairs due to the possession of oil.
Nigeria can use its oil resources as subtle coercion to have its way in the international economic system.
Coercion, can be seen as the use of threats to influence another’s behavior (usually a target state but occasionally a non-state actor) by making it choose to comply rather than directly forcing it to comply i.e. by brute force).
Coercion can involve the use of deterrence, made to cause a target state to not take a particular action or compelling a target state to stop a current action or to undertake another. Clearly, deterrence and compelling are two types of coercion. Both depend on risk, threats and choice. In both deterrence and compelling, the target chooses to comply. Coercion depends on two factors, credibility and manipulating sanctions.
Oil as an instrument of coercion in foreign policy involves the use of oil as a tool for power by a supplier country or countries that make a concerted effort to utilise the embargoing of oil to affect the foreign policy of the target country or countries. As such, using oil as an instrument of coercion of foreign policy can be considered a form of economic sanction. Oil as an instrument of coercion in foreign policy is effective if it results in a substantial alteration in the target’s policy consistent with the initially stated goals.
The field of International Relations has only recently begun to examine oil and its role in inter-state relations, focusing mainly on its use as a foreign policy tool. One commonly used technique is the manipulation of resources. Whenever one party controls materials or funds essential for the survival or well-being of another, threats of withholding them may be used as a weapon. In 1960, five of the world’s largest oil-producing nations established OPEC; since then, the OPEC nations have exacted numerous concessions from various industrial nations by manipulating both the supply and price of crude oil and even sometimes trade embargo. Oil is also used as an instrument of coercion in foreign policy by the use of embargoes and import restrictions for political reasons or to protect or promote their interests. The US has historically imposed a greater number of oil embargoes than any other nation, including oil embargoes on Japan before World War II, on the Soviet Union in the 1960s, and on South Africa, Burma, Serbia, Haiti, Libya, Iraq, Iran, and Sudan in the last two decades. A number of Arab oil-producing states, mostly the US allies, used oil as an instrument of coercion against Western countries in 1956, 1967, and 1973. Their objective, especially in 1967 and 1973, was to force countries that supported Israel to change their foreign policies and put pressure on Israel to withdraw from territories it occupied during the 1967 war.
Oil embargoes are not confined to the past. Calls for oil embargoes have been on the rise in recent years. Iraq and Iran called on Islamic states to halt oil exports to pressure Western countries to force Israel to pull out of Palestinian areas after the violent incursion into the Jenin refugee camp in March 2002. Even more recently, some Muslim leaders have called for the use of oil as an instrument of coercion for the same purpose. Despite the official stand of current Arab governments that they would not use oil as an instrument of coercion, the anti-American sentiment in the Middle East today supports the imposition of an oil embargo on the US and even a halt in oil production. Any radical change in the Arab world may change the current official stand and pull the trigger of using oil as an instrument of coercion.