Lower Oil Revenues Research Articles

The resource curse and income inequality in Iran

This paper has investigated the relationship between oil revenues and inequality in Iran from 1969 to 2012. For this purpose, a threshold regression model has been used for capturing the non-linearity impact of the share of oil revenues in GDP on inequality. Two indicators have been applied for inequality: “Gini coefficient” and “the share of the richest decile of household expenditures which were relative to the poorest decile”. Estimation results of both inequality models suggested that there is a non-linear relationship as a u-shape between “oil revenues/GDP” and inequality in two regimes of oil revenues including high and low oil revenues regimes. The threshold level of oil revenues divided by GDP was about 10% for both inequality models. Before this threshold value, in low oil revenues regime, an increase of oil revenues would decrease income inequality, but after the threshold level and staying in high oil revenues regime, a rise in oil revenues would increase income inequality in Iran.

FOCUS: Saudis try to stick with ambitious oil and gas plans despite low oil revenues

Oil and Energy TrendsVolume 40, Issue 11 p. 4-7 FOCUS FOCUS: Saudis try to stick with ambitious oil and gas plans despite low oil revenues First published: 25 November 2015 https://doi.org/10.1111/oet.12328Citations: 1Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume40, Issue11November 2015Pages 4-7 RelatedInformation

The Financial Crisis of 2008 and Saudi Arabia

The current economic and financial crisis was driven by the reversal of the three positive ‘shocks’ that developing countries experienced during the recent boom period: exceptional financing, high commodity prices and , for a significant number of countries, large flows of remittances. No country in the world will be spared from the effects of the financial crisis and ensuing global recession. The paper focuses Saudi Arabia; it has completely shifted the focus of economic policy from controlling inflation to restoring confidence in the financial sector. We see the following key implication for the Saudi economy. Finance for local and foreign companies doing business in Kingdom will be less easily available and more expensive .Lower oil revenues will mean the end to the huge budget and current account surpluses in coming years .If the crisis encourage Arab government to restructure their economies, they will be better placed when the international economy picks up Saudi Arabia and some other Gulf States are taking these challenges much more seriously than in the past. They are investing large sums in upstream hydrocarbon projects to get more value from their oil, and are trying to diversify their economies away from petroleum products.

The relationship between oil revenues and economic growth, using threshold methods (the case of Iran)

In this paper, we study the non-linear relationship between oil revenues and real output growth of the Iranian economy during 1959–2007 using a threshold error correction model. The estimation results show that the response of economic growth to oil revenue growth in low regimes of oil revenues is greater than in high regimes of oil revenues. The threshold of oil revenues in Iran is about 37 per cent, in a way that increasing the oil revenues over this threshold results in aborting its positive impact on the gross domestic product and its significant effect. In addition, the impact of capital stock on economic growth in low oil revenues is also much more than that in high oil revenues. These results confirm the resource curse, higher rent-seeking activities and lower productivity hypothesis, especially during boom periods for oil revenues.

Oil and the Politics of Fear

Washington politics is no longer about issues. It is about fear. To succeed, a politician has to play on the public’s fears, most of all fear of terrorism and fear of global warming. Republicans capitalized on fear of terrorism in 2002 and 2004 to win national elections. Democrats chose fear of global warming, and they have experienced political success with it. Strangely enough, both groups, riding a platform of fear, come to the same conclusion: Oil is the enemy. For Republicans, oil finances terrorism. For Democrats, oil causes global warming. For both, dependence on oil is a disaster in the making. A third group, mostly but not exclusively Democrats with neoconservative attitudes-let’s call them Republocrats-has also called for eliminating dependence on oil to foster democracy in the Middle East. They believe that eliminating dependence on oil will lower prices and decrease the flow of money to Middle Eastern governments’ coffers. According to this view, lower oil revenues will force governments to be more democratic. The three groups that dominate American politics now have a single enemy: oil. For all of them, if you eliminate dependence on oil, you solve the world’s most pressing problems: terrorism, global warming, and dictatorship. I wish it were that easy. Fear of terrorism, global warming, dictators, and consequently of oil has allowed politicians to spend billions of dollars to promote substitutes for oil. This spending has in turn created new and powerful industries that thrive as long as their oil-bashing supporters are in power. Amazingly, even the private sector has launched a war against oil.

The Changing Role of Labor Migration in Arab Economic Integration

During the oil boom of the 1970s and early 1980s, labor migration became an effective instrument for addressing labor market needs at the national level while simultaneously serving the goals of Arab economic integration. The 1990s, however, witnessed a rapid deceleration in the net inflows of Arab workers to the oil-exporting countries. The negative effects of lower oil revenues were reinforced during and after the 1991 Gulf War by the replacement of workers from the region with migrants from Asia as well as ongoing efforts in the oil-exporting countries to nationalize their labor forces. Current unemployment rates, together with the projected rapid expansion in the national supply of the receiving countries, provide further incentives to restrict migration inflows especially from the Arab world. As a result, the future contribution of labor migration to Arab economic integration will decline.

Evaluation of Taxes and Revenues From the Energy Sector in the Baltics, Russia, and Other Former Soviet Union Countries

This paper examines the level and structure of fiscal revenues from the Baltics, Russia, and other former Soviet Union countries’ (BRO) energy sector and suggests reforms in energy tax policy. Revenues from the oil and gas sectors are about half the level that might be expected from international comparisons. Low oil revenues result from infrastructure constraints on oil exports, weak tax administration, and inappropriate tax structures. Low gas revenues are due to low statutory tax rates, a tax structure that does not capture monopoly or resource rents, and weak tax administration. Taxation of oil products could be increased.

Evaluation of Taxes and Revenues from the Energy Sector in the Baltics, Russia, and Other Former Soviet Union Countries

This paper examines the level and structure of fiscal revenues from the Baltics, Russia, and other former Soviet Union countries` (BRO) energy sector and suggests reforms in energy tax policy. Revenues from the oil and gas sectors are about half the level that might be expected from international comparisons. Low oil revenues result from infrastructure constraints on oil exports, weak tax administration, and inappropriate tax structures. Low gas revenues are due to low statutory tax rates, a tax structure that does not capture monopoly or resource rents, and weak tax administration. Taxation of oil products could be increased.

The London Business School with Gower Publishing

Collapsing oil prices and a falling dollar set the background to a Budget in which the Chancellor, hamstrung by lower oil revenues, was seen as having little room for manoeuvre. In fact the sharp fall in the sterling price of oil has provided him with the perfect excuse for not making significant cuts in personal income tax that were largely irrelevant to the needs of the economy. Instead of a boost to household demand we have had, thanks to OPEC, a transfer to companies in the form of a reduction in costs. This should enable them to expand output against a background of falling inflation. Our post‐Budget assessment of macroeconomic prospects (Section I), made on the Treasury's assumption of a $15 oil price, shows output growing by 2 1/2 per cent this year and inflation falling below 3 per cent in 1987. We are thus less optimistic than the Treasury about output but more optimistic about inflation.How was the Chancellor able, within the confines of the Medium‐Term Financial Strategy, to give anything away having lost so much oil revenue? A detailed analysis of the PSBR forecast (Section II) reveals good reasons why non‐oil tax revenues should be some £3 1/2n higher than forecast this time last year. But, because we still expect public spending to be above the official figures, our PSBR forecast is £1bn higher than the Treasury's.Although the macroeconomic impact of the Budget was small (especially in relation to that of the fall in oil prices which preceded it), it continued the process of tax reform. We focus, in Section III, on the new proposals to deal with the problem of the pension fund surpluses to which we drew attention in the November issue of Financial Outlook. We conclude that the proposed measures could have a larger effect on tax revenues in the longer term than is indicated by the Treasury's Budget estimates.

Libya Accommodates to Lower Oil Revenues: Economic and Political Adjustments

Libya enjoyed steadily rising oil revenues after 1960 and became a significant member of the world's trading community. By 1980, oil revenues were over US $20 bn and these enabled development spending to approach US $10 bn per year as well as permitting large allocations to consumption, defence, and international ventures. The sums involved in the three sectors cannot be defined precisely as defence spending, and the cost of such military campaigns as the 1981 intervention in Chad are not available. Whether such data were precisely known or not, the spending options were limited to these three sectors, and trade-offs had to be made between them when financial resources became constrained. The first two sectors, development and consumption, were of great interest to the population in general, while defence and international ventures were of interest to the leadership as well as having appeal to that special constituency which populated the military establishment of the country.