FAISAL AND OIL Driving Toward a New World Order

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$23,000 in Abu Dhabi. But those figures did not reflect living standards because the quick cash has not had time to filter down to the people. Bureaucracies strained to figure out ways to spend at home. Kuwait expanded one of the world's most all-encompassing welfare states. To hold down food prices, most of the big oil producers subsidized imports of staples. Office buildings, low-rent apartments and supermarkets rose almost everywhere. Some planners worried about keeping a work ethic going. Said a Saudi government minister: "We will have to be very careful not to spoil our citizens. Our people will have to deserve what they earn. We will furnish them with basic requirements, but nobody should live on charity."

The Europeans and the Japanese, umbilically dependent on the Middle East for respectively 70% and 80% of their oil, not only pressed their most modern technology on the Arab states but also granted them strong diplomatic support. Some European political leaders called for a new Euro-Middle East alliance, perhaps to replace the Atlantic Alliance. The French, responding to what they call the "New Reality" of oil-based Arab power, were especially obsequious in their attentions. The Dutch, long outspoken defenders of Israel, fell silent in fear of Arab wrath.

The Aim: A Redistribution of Wealth

Indeed, the Arabs' ultimate weapon, oil, did much to change the entire balance of their conflict with Israel. Within the United Nations, a bloc of Arab, African, Latin American and Communist countries banded into a new majority, pushing through resolutions that isolated Israel and antagonized the U.S. Only the Dominican Republic and Bolivia voted with the U.S. and Israel when the General Assembly, by a margin of 105 to 4, invited the P.L.O.—with its long record of terrorism—to join in the debate over the Palestine issue. The U.N. welcomed P.L.O. Leader Yasser Arafat as a conquering hero and gave his organization permanent observer status.

Next to Faisal, the ruler who gained most from oil last year was not an Arab but the "Light of the Aryans," the Shah of Iran. His country, the world's second largest oil exporter, quadrupled its petroleum earnings, to $20.9 billion. Impatient to industrialize and militarize, the Shah pressed the construction of automobile and petrochemical factories, dams and hospitals, and ordered 70 F-4 Phantom jets and 800 British Chieftain tanks to bolster a mighty armed force. This swelling strength raised apprehensions among some Arab governments in the region and evoked new hostility—but also won new respect in Washington, where Iran is valued as an anti-Communist bulwark. Though much poverty and illiteracy hang on in Iran, the middle class is rapidly spreading and the gross national product is expanding at an astounding rate of 50% a year. The Shah, who aims to turn Iran into "the Japan of West Asia," argued for price increases long before Faisal did, and he has been even more vocal than the Saudi King in urging that prices stay up.

Several other countries rose on petropower. Oil made Nigeria not only black Africa's wealthiest nation ($9.2 billion in earnings) but unquestionably its strongest political force. Indonesia, though still abysmally poor, is showing the first glimmerings of its potential as Southeast Asia's economic leader, thanks to oil exports.