The main reason for this heightened arms race among many of the OPEC countries is a deep-seated, historic animosity, which their professed financial unity does not change. Iran wars with Iraq at regular intervals. Kuwait is suspicious that Iraq intends to grab that tiny land. Saudi Arabia is afraid that radicals will foment crisis in that sparse land. The UAE is busy in quelling its several guerrilla groups in the hills. Above all, the shadow of the Soviet Union, which is so close geographically, and especially with its foothold in South Yemen, falls on the whole Middle East.
There are also the invisible costs of an arms race, which, in fact, depletes industrial competence and stifles innovation in nonmilitary fields. The glamor and encomiums attract the bright young men to the military services, depriving the industrial sector of its vital management pool. Since the main shortage in OPEC nations is human capital, particularly trained personnel, the arms race may produce a lot of specialized maintenance technicians and an excess of automechanics without creating gainful employment for its people. Finally, a country gains little by upgrading its work force for military work and, in the meanwhile, wasting its capital to the point of having to scrap or curtail its civilian development plans.
But the energy crisis and the Middle Eastern oil reserves changed the whole balance of power in the world. This region has become so important geopolitically that great nationalist leaders such as the late Prime Minister Mossadegh of Iran or Nasser of Egypt could never have dreamt of in the heyday of their power. Now all the big powers of the world are currying favor with these oil-rich, strategically located OPEC countries, as do the oil-poor Third World countries, who need real help from the OPEC nations. As a matter of fact, the Third World countries can no longer be characterized as having few industrial plants, low income, and substandard conditions compared to the developed nations, particularly when Abu Dhabi could boast of the highest per capita income in the world--around $50,000 in 1977--about five times higher than the highest European nation. Thus, the oil-rich developing countries have truly become the Third World, while the oil-poor and resource-less underdeveloped countries have become the Fourth World.