OPEC AND THE STRATEGY OF EXPORT SUBSTITUTION INDUSTRIALIZATION

Abstract

One of the most pressing policy objectives of oil producing countries is that of transforming a raw material producing! exporting economy to one that is capable of exporting semi‐processed, processed and manufactured goods. This policy objective was stressed by OPEC Secretary General Ali M. Jaidah when he addressed representatives of the international oil industry in October of last year in Vienna. On that occasion, the Secretary Generai spoke of the need for “the speedy transformation of the role of OPEC Member Countries from that of raw material exporters to manufacturers by carrying out certain downstream operations, especially with regard to refining and petrochemicals.” In this way, the Secretary General said, the national oil industries should become the central pivot in the process of industrialization. In the following article, Professor Alnasrawi outlines the main theoretical arguments for an industrialization strategy based on the concept of export substitution – i.e. placing the emphasis of development policy on non‐traditional, non‐primary exports; some of the difficulties which such a strategy is bound to encounter; and, finally, the applicability of that strategy to OPEC Member Countries.