Garavini: 50th Anniversary Congress in Havana.


Speech by Giuliano Garavini, professor of International History at the Roma Tre University and writer at the Il Fatto Quotidiano, on the 50th Anniversary Congress on the New International Economic Order in Havana.

OPEC was the first institutional organization of the the Global South. It was created in 1960, before the formalisation of the Non Aligned Movement in 1961, and before the creation of UNCTAD in 1964. It was born, not by chance, at the same time that oil become the world’s most important primary energy source.

I will not go into the key role that OPEC, and specifically the Algerian Presidente Houari Boumédiène, played for launching of the NIEO. It has to do with nationalisations, with unilateral price increases (the “oil shock”), with defeating the Seven Sisters, the most powerful multinationals on the Planet at the time, and also with the support by Arab oil exporters to the Palestinian cause during the so-called “embargo”.

The alliance between OPEC and Third World countries generated hopes but also fears. It was soon labelled as the “unholy alliance” by Henri Kissinger and the Social Democratic German Chancellor Helmut Schmidt.

A number of institutions have been created (the IEA in 1974, the G6/7 in 1975) precisely to overcome the challenges of this “unholy alliance” and its calls for sovereignty over natural resources. The defeat of the “unholy alliance” inaugurated a long period of “globalization”, or “neoliberal globalization”, from the early 1980s.

Today the era of globalization seems to be giving way to a new era of “geo-economic fragmentation” and struggle to secure supply chains, including of “critical minerals”. Raw materials exporters from the Global South, once again, have the potential opportunity to rise their voices and contribute to a new order.

But in the era of the climate crisis natural resource extraction for economic development and natural resource conservation can (and should) go hand in hand.

I will mention two great thinkers that point to the importance of natural resource conservation, and to the possibility of combining it with economic development.

First of all let me quote a crucial passage of the of the old Karl Marx that clearly states why natural resource conservation is a vital issue for countries and peoples both North and South:

“From the standpoint of a higher socioeconomic formation, the private property of particular individuals in the earth will appear just as absurd as the private property of one man in other men. Even an entire society, a nation, or all simultaneously existing societies taken together, are not the owners of the earth. They are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations”.

But this principle conservation can be compatible with development.

We do not start from zero. It is thus worth mentioning a second thinker, Juan Pablo Pérez Alfonzo, the founder of OPEC and minister of Petroleum of Venezuela, with his “The Oil Pentagon. A Nationalist Policy for Defence and Conservation” that was published in 1967. According to him these were the 5 key policies for natural resource exporters:

  1. Reasonable participation: Local Governments should be able to capture all the natural resource rent. Even the US has just increased royalties on Federal lands for the first time in a Century to 16,67%. Royalties, taxes and and mechanisms to guarantee a participation in the extraordinary profits of the operators, should be geared to ensuring reasonable participation;
  2. Creation of a Coordination Commission for the Conservation and Trade of Hydrocarbons: Natural resource exporters need production planning and a detailed knowledge of their geology. Conservation and the hope of creating of a “global pro-rationing agency” was one of the strong motives behind the creation of OPEC;
  3. Venezuela Petroleum Corporation: Natural resource exporters need a public instrument for direct intervention to create jobs and to generate an ecosystem technological innovation also by a wise use of procurement policies;
  4. No more concessions: Concessions are residue of colonial time, they should be substituted by “service contracts”;
  5. Organisation of the Petroleum Exporting Countries: Resource nationalism in one country cannot work because capitalists organize globally. There is need for global or regional cooperation on quotas, on taxation, and so on.

It is not impossible to agree on a set of principles on which Global South natural resource exporting countries aggregate, be that regionally or globally. The good news is that BRICS now hosts under the same roof the largest consumers and producers of energy resources and could be a good venue to engage in dialogue between countries that aim at maximising rents and countries that are interested in stable supplies.

Major economic actors and key consumers such as China or India will not openly antagonise producers by talking of an “unholy alliance” while promoting international organizations to undermine them.

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Giuliano Garavini
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