Dependence on Oil and Gas Revenues

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Political scientist Michael Ross describes oil dependence as 'the ratio of oil, gas and coal exports to GDP'. By this definition, the most highly oil dependent state in 1995 was Angola (68.5%), followed by Kuwait (49.1%). The most highly mineral-dependent states were Botswana (35.1%) and Sierra Leone (28.9%).

High levels of dependence can make states more susceptible to symptoms of the so-called Resource Curse, such as a higher propensity for violent conflict, weak institutions and stunted economic development.[1] A UN paper investigating patterns of resource dependency between 1960-1990 found a correlation between countries exhibiting high levels of fuel and mineral dependency and negative per capita annual growth rates over that period.[2]

However as can be seen in the figure below. there are two different measures of oil revenue dependence, the first being the ratio of oil revenues to fiscal revenues,or the total income of the government and the second is the ratio of oil revenues to total exports. The IMF estimated in 2003 that, of the Gulf producers, the United Arab Emirates shows the least oil dependence, with oil accounting for just over half of government income, and just under half of exports.[3]

GCC.jpg


Qatar, by contrast, showed a ratio of 70% of government revenues, and 80% of total exports. The International Monetary Fund identified at least 30 countries where revenues from oil and gas accounted for at least 25% of government income during the period 2005-8 and where sufficient information was available for meaningful analysis:

Algeria, Angola, Azerbaijan, Bahrain, Bolivia, Brunei, Cameroon, Chad, Congo, Ecuador, Equatorial Guinea, Gabon, Indonesia, Iran, Kazakhstan, Kuwait, Libya, Mexico, Nigeria, Norway, Oman, Qatar, Russia, Saudi Arabia, Sudan, Timor-Leste, Trinidad and Tobago, UAE, Venezuela, Vietnam, and Yemen.[4]

It is important to note that oil revenue dependence is not related to the quantity of oil produced or exported. Yemen, which exported around 448,000 barrels of oil a day (bpd) in 2003, displayed a higher degrees of dependence on oil revenues than Saudi Arabia, which exported around 10.2 million bpd over the same period, or over twenty times more.[5]


Dependence on Extractives Revenues by Country

Azerbaijan

Main article: Dependence on extractives revenues in Azerbaijan

Colombia

Main article: Dependence on extractives revenues in Colombia

Ghana

Main article: Dependence on extractives revenues in Ghana

Iran

Main article: Dependence on extractives revenues in Iran

Iraq

Main article: Dependence on extractives revenues in Iraq

Libya

Main article: Dependence on extractives revenues in Libya

Niger

Main article: Dependence on extractives revenues in Niger

Kenya

Main article: Dependence on Oil and Gas Revenues in Kenya

Egypt

Main article: Dependence on extractives revenues in Egypt

References

  1. Natural Resources and Violent Conflict”. World Bank, 2003.
  2. Meeting the Challenge Of the ‘Resource Curse’”. UNDP, 2006.
  3. GCC Countries: From Oil Dependence to Diversification”. International Monetary Fund, 2003.
  4. Fiscal Policy in Oil Producing Countries During the Recent Oil Price Cycle”. International Monetary Fund, February 2010.
  5. BP Statistical Review of World Energy June 2011”. BP, June 2011.