Oil Money Research Articles

‘Recycling oil money': procurement politics and (un)productive entrepreneurship in South Sudan

Since its inception as a semi-autonomous state in 2005, the South Sudanese government procurement sector has been a booming business. Funded by oil income, the government procurement regimes have become instrumental institutional mechanisms for the allocation of rents within the political marketplace. This type of ‘rentier' politics is often considered to be anti-developmental in mainstream thinking about statebuilding in fragile states, while others argue that rentierism is not growth-retarding per se, but that its impact on development depends on how rents are utilized and reinvested. Taking the latter less-normative approach to rentierism as a starting point, this article begins by identifying patterns of rent allocation that characterized the government procurement sector during the 2005–2011 interim period. Following the political decision to shut down oil production in early 2012, the rent process that had sustained these clientelistic arrangements became suddenly unsustainable. In this context, another cadre of entrepreneurs comprised largely of diaspora returnees with higher technological capabilities and transnational linkages started to gain ground within the government procurement sector, signifying the emergence of a potentially ‘developmental' feature in the rent process. Notwithstanding, while the 2012–2013 austerity period arguably precipitated certain developmental features, it also uprooted the political settlement, which culminated in the December 2013 crisis, pushing the young country back to civil war.

Small and Far Between: Peacekeeping Economies in South Sudan

The massive expenditure on UN peacekeeping missions combined with a significant commitment of personnel and infrastructure creates ‘peacekeeping economies’ within host societies. We need to understand when and how peacekeeping economies are created and the kinds of factors that mitigate their occurrence, size and impact. Previous research indicates an overall tendency of UN missions to minimize involvement in host communities’ economies, and considerable variation in the level of economic impact. Especially in insecure environments, the modalities of UN peacekeeping limit the level of economic interaction with host societies. South Sudan is a case in point. Annually about 10,000 people are employed and $1 billion on average spent on peacekeeping in South Sudan. However, at both the macro and micro levels the economic impact of peacekeeping has been overshadowed by the concurrent influx of oil revenue. Oil money has created a boom in the larger towns that dwarfs the impact of peacekeeping activities. The lack of domestic markets and skilled labour reduces opportunities for the missions, and their foreign personnel, to engage in economic transactions with South Sudanese.

The Corporate Social Responsibility Projects of the Oil Companies in Angola: Anecdotal Fact or Significant New Trend in Public Health Development Intervention?

Angola is one of the most contradictory countries in the world. It has among the worst health and educational indicators, due to the war that tore it apart for more than 30 years. At the same time, it has one of the world's fastest rates of economic growth, thanks to the oil money that flows into the country. The country needs to (re)build its infrastructure – roads, schools, hospitals, and so on – and to develop its educational and health systems. Oil companies are deeply involved in this, through the process known as angolanização (Angolanisation). Through their corporate social responsibility (CSR) policies, they finance and implement social projects. They are thus replacing development NGOs, which never seized the market for the reconstruction of Angola. This article analyses the specificities of the oil companies' participation in the public health sector, looking at the changes their intervention is causing in the model of development. It concludes with an analysis of the consequences of these changes for the shape of the Angolan State.

Real estate and political power in 1970s Riyadh

The Saudi capital, Riyadh, underwent rapid urban growth in the decades that followed the discovery of oil in 1937. From a small town of 19,000 inhabitants in 1920, it was a city of more than 600,000 inhabitants in the late 1970s. This paper examines the mechanisms of this growth. It explores the housing decisions of everyday people, the investment strategies of the merchants and the bourgeoisie, and the city's planning policies. Its author—who worked on planning operations in 1970s Riyadh—shows that urban planning followed the dynamics of a real estate market fuelled by cheap state loans, public wages and rivalries between various branches of the royal family. In the 1970s, the Saudi elite invested oil money in real estate and literally turned oil into stone. As this paper suggests, they could have made other decisions: it is political choices, not oil determinism, that created the built environment of Riyadh.

공간정보 오픈플랫폼의 국가별 해외 수출 전략 연구 -캄보디아와 아부다비 에미리트를 중심으로-

Recently the environment in geospatial information has conversed into the plaform. The platform based geospatial information contributes to save time and cost as well as maintain the consistency and stability in spatial data infrastructure. The Republic of Korea is now constructing and operating the spatial open platform called as the V-World(Virtual World), and searching for the possibility of its abroad export. The purpose of this study is to elicit the abroad export strategy by country of spatial open platform by comparing the cases of developing country, the Kingdom of Cambodia and newly developed country, the Emirate of Abu Dhabi, The Kingdom of Cambodia depends on foreign aids to develop the spatial data infrastructure and the Emirate of Abu Dhabi is inducing an advanced technology and high human power from overseas based on abundant oil money. This study establishes the abroad export strategy based on two country models such as Cambodia and Abu Dhabi by considering the characteristics in geospatial information, and suggests the ways of abroad export and the methods on fund raising for spatial open platform.

Fortuitous coupling: A recollection of how Chris Jaffe brought together coupled rooms and Texas oil money to launch a graduate program and a career

Early in his career Chris Jaffe discovered that reverberation-starved Vaudeville theaters could be improved through use of light-weight demountable shells for the stage enclosures. These shells could be designed for frequency-dependent “selective transmission” of energy into the otherwise unused stage house, realizing a “fortuitous coupling” that improved acoustics for the audience and on-stage musicians. My experience with Chris at Rensselaer Polytechnic Institute (RPI) is also one of fortuitous coupling, as he orchestrated the launch a new graduate program in architectural acoustics. Chris had just overseen the completion of Bass Performance Hall in Fort Worth, Texas, which realized the culmination of his design philosophy for stage-house coupling in multipurpose theaters. Now, Bass Hall was to become a laboratory for studying the science underlying Chris's empirical findings. RPI, Chris's alma mater, was to be the institutional home for that research. And Ed Bass, scion of the Bass family and primary benefactor of the hall's construction, would provide the initial support. As a student, about to complete my Master's degree and ready leave physics for audio engineering, a chance elective course followed by a Medici-esque offer to study the physics of coupled rooms radically shifted the course of my professional life.

Has the Sovereign Wealth Fund of Azerbaijan (SOFAZ) Been Able to Promote Economic Diversification?

Oil-rich countries have oftentimes been confronted with the challenge of diversifying their economies away from oil dependence given the exhaustible nature of these fossil fuels. Investing in sovereign wealth funds has been one of the most ubiquitous ways of preparing for the post-oil period. Investing in sovereign wealth funds rather than directly injecting the oil revenues in the economy not only precludes the outbreak of the Dutch Disease (which is known for giving rise to an exchange rate appreciation, crowding out non-oil industries and keeping the economy reliant on oil), but it also saves for future generations. Yet, in the case of Azerbaijan, the Sovereign Wealth Fund of Azerbaijan (SOFAZ), founded in 1999, has only increased this reliance on oil. Using the rentier states theoretical framework, this paper will argue that the direct control over SOFAZ exercised by the president and the lack of consultation with the NGOs have made corruption easier, making the task of economic diversification more difficult. This has been possible because through corruption the president has often resorted to oil money to buy peace rather than invest it in economic diversification. As a result, since the foundation of SOFAZ, the country is more reliant, not less, on oil.
 
 Full text available at: https://doi.org/10.22215/rera.v8i1.223

Has the Sovereign Wealth Fund of Azerbaijan (SOFAZ) Been Able to Promote Economic Diversification?

Oil-rich countries have oftentimes been confronted with the challenge of diversifying their economies away from oil dependence given the exhaustible nature of these fossil fuels. Investing in sovereign wealth funds has been one of the most ubiquitous ways of preparing for the post-oil period. Investing in sovereign wealth funds rather than directly injecting the oil revenues in the economy not only precludes the outbreak of the Dutch Disease (which is known for giving rise to an exchange rate appreciation, crowding out non-oil industries and keeping the economy reliant on oil), but it also saves for future generations. Yet, in the case of Azerbaijan, the Sovereign Wealth Fund of Azerbaijan (SOFAZ), founded in 1999, has only increased this reliance on oil. Using the rentier states theoretical framework, this paper will argue that the direct control over SOFAZ exercised by the president and the lack of consultation with the NGOs have made corruption easier, making the task of economic diversification more difficult. This has been possible because through corruption the president has often resorted to oil money to buy peace rather than invest it in economic diversification. As a result, since the foundation of SOFAZ, the country is more reliant, not less, on oil.

Restoring The Gulf With Oil Money

First came the oil, and now comes the money. That’s a fact not likely to be lost on the residents of the Gulf of Mexico who want retribution for pain and suffering caused by the BP Deepwater Horizon oil disaster three years ago. Several funds have been established to distribute oil-spill penalties to the five Gulf Coast states. But the exact amount of money and the specific projects have yet to be solidified. So far, BP says, it has spent or committed to fork over at least $28.7 billion in spill-related spending. More than $14 billion of that, BP says, went to contain and stop the flow of oil and clean up pollution in the immediate aftermath of the U.S.’s largest-ever oil spill, which dumped more than 200 million gal of oil into the surrounding environment and killed 11 workers. But those billions are just a down payment. Eventually, BP ...

Oil money takes US academy into uncharted waters

Venerable government adviser will fund grants with half-billion-dollar windfall.

Critical Energy Infrastructure: Operators, NATO, and Facing Future Challenges

IntroductionCritical infrastructure enables modem society. It includes our communications and Internet, our banking systems, the means of safely delivering our supplies of food and water, health systems, defense installations, transportation networks, air traffic control systems, and logistics and port facilities. It also includes our energy and electricity supply. Power generation plants, electricity grids, and diesel, gasoline, oil, and natural gas distribution networks underpin our entire infrastructure. Critical energy infrastructure is the single most important part of the complex web of critical infrastructure. Without energy-particularly the regular supply of gasoline and diesel-no other element of our critical infrastructure can operate. This was clearly seen in the northeastern United States during Hurricane Sandy in 2012. That is why the priorities in the wake of the storm were first to reestablish power, and second to restore transit systems (buses and subways). Governments and relief organizations quickly realized that only then could other infrastructure, such as hospitals, become operational again.Threats to our energy infrastructure increasingly take different forms. They can arise from environmental hazards (as in the case of Hurricane Sandy, or the March 2011 earthquake and tsunami in Japan); industrial accidents; deliberate sabotage; and consequential sabotage. The latter two examples are closely connected, and will be explored further below.The Challenge of Energy SecurityThis article will highlight a threat to NATO's energy infrastructure that has been a concern for many decades. This threat is energy security. In 1912, the British Royal Navy converted its ships from coal to oil. Winston Churchill, then First Lord of the Admiralty, said Safety and certainty in oil lie in variety and variety alone. The United States and the U.K., with its oil fields in the Middle East, became the world's oil suppliers. That situation, however, was soon to change, a fact of which U.S. President Franklin Roosevelt was aware. In 1945, Roosevelt met with King Abdul-Aziz Ibn Saud, securing U.S. access to Saudi Arabia's oil output. Today the biggest potential challenge in terms of energy security is supply. There is a vast amount of oil, coal, and natural gas in the world. Each day, however, the world uses approximately 86 million barrels of oil. Daily world production is exactly that figure: 86 million barrels. So even a small 2 percent reduction in output caused by, for example, a crisis in Libya, has an enormous effect on the global price of oil. When such problems occur, only Saudi Arabia has the ability to quickly make up the deficit in the supply. The world economy is therefore enormously vulnerable to even a small drop in production.The security of the oil producing regions is vital to the NATO Alliance. In rural Iraq, it costs USD 15,000 for a family to connect to the electricity grid - an impossibly large amount. These communities, however, see vast oil wealth around them. It is vital that they are not tempted to work with those who want to damage the oil production infrastructure. It is particularly important-for our own security-that the international community help ensure that local communities in oil-rich countries benefit from their national energy resources. These benefits should include schools, hospitals, and infrastructure that oil revenues can bring, as well as help in fighting corruption. Once corruption starts, it is very hard to stop, as Nigeria's government has discovered. Corruption becomes ingrained in the whole system. Improving our energy infrastructure security means ensuring that communities in the Middle East and Africa do not have to turn to terrorist groups such as Boko Haram to feed their children. The Extractive Industries Transparency Initiative (EITI), established by BP's John Browne when he was the company's chief executive, is the ideal way to help ensure that oil money benefits the right people. …

Alternative Development Strategies for Azerbaijan Economy and Sectoral Analysis

The paper outlines aspects of economic growth after oil exports in Azerbaijan, and allocation of oil income to develop main sectors of economy: agriculture, tourism, power engineering, machine building industry, food industry and energy security. From oil contracts during 2008-2015 years the income is expected to be 35-42 billion USD. If one barrel of oil is 30 60 dollar till the last period of the project, exactly till 2029-2030 years, the total income amount taking from this area is expected to be in the amount of 120-140 billion USD. So there is great chance and obligation of developing non-oil sector. During this development main questions are how much of the oil income spend now and how much to keep for future generations; how and where to spend the oil income; how to control spending of oil money. Paper provides suggestions for those questions. In sectoral analysis, paper describes current situation in the above mentioned sectors of economy, lists problems in those sectors, and provide suggestions help making a decision about managing profits from oil industry to develop the other sectors and economy of the country as a whole.

The Enemy Within: Oil in the Niger Delta

The Enemy Within: Oil in the Niger Delta

Traditional vs modern Arabian morphologies

PurposeThe purpose of this paper is to describe the component attributes of an Arabian city, caught between tradition and modernization, with focus on their reactions to climate and religion.Design/methodology/approachA platform of comparison between Old Kuwait Town and Kuwait City is provided while showing the effects of oil money on the city's urban morphology. The paper's first section describes the emergence of the Islamic city in the Arabian (Persian) Gulf and identifies key concepts in city morphology. An Islamic School of Law, furthermore, is selected to explain who interprets religious text and how concepts in Islam, such as domestic privacy, are translated into design guidelines, which have influenced the Kuwaiti vernacular typology and street pattern. The transition is made to the second section, which compares Old Kuwait Town and Kuwait City based on knowledge gained in the preceding section. Finally, the third section of the paper recommends some architectural and planning specifications.FindingsIt is found that climate and religion have lost their authority at the expense of a paradigm shift in the 1950s.Research limitations/implicationsThe paper focuses on, and is limited to, one case study.Practical implicationsA few architectural and planning specifications are recommended for application in practice to improve contemporary design and to promote a unified morphological outcome in Kuwait City.Social implicationsThe message is to show readers that progress is about working with, and responding to, local determinants rather than applying Western thinking.Originality/valueThe author advocates a look at precedents, because learning from the past helps to design buildings and plan cities that are compatible with local environments and traditions.

Yemen: Descending into Despair

Yemen: Descending into Despair

Evaluation of on-shore oil spill remediation operations in Port Harcourt, Nigeria

Most oil producing regions in the world today are experiencing serious hydrocarbon spillages on land and water. The problem is more prevalent in developing countries where greater premium is always placed on the oil money than on the environment and the inhabitants of oil producing regions. The study is an attempt to unravel the effectiveness of clean-up exercises undertaken by oil companies each time oil spillage occurs. The results show that two years after the programme the efficiency level of the remediation exercise is very low as evidenced by the heavy presence of microbiological accumulation in the soil. Thus, there is need for more thoroughness in the clean-up exercise. Monitoring agencies should also be more efficient while respective oil companies need to be more responsive so as to avert the attendant violent protests from the affected communities.

Universities as Firms: The Case of U.S. Overseas Programs

We observe two waves of overseas programs offered by U.S. universities: A supply driven wave in the late 1980s to the mid 1990s, and a current wave beginning in the early 2000s, with distinctly different players. We compile a comprehensive dataset on overseas degree programs and host country characteristics. The data reveal that universities behave much like multinational corporations when they make investments overseas. Finance plays an important role. Real GDP per capita and tertiary school age population are two key determinants of the location choice. Asia and the Middle East are popular destinations for U.S. overseas programs, driven by market size and oil money, respectively. U.S. universities offer lower tuition discounts in countries with higher real GDP per capita. Undergraduate degree programs are discounted more than master degree programs because of greater local competition. When universities reduce costs through partnerships with local universities or through financial support from local governments, the savings are not passed on to local students in the form of lower tuition.

Current State of Azerbaijan's Economy: Myths and Realities

It is already 13 years since the contract of the century was signed with foreign companies for a term of 30 years to exploit the Caspian Sea resources of Azerbaijan. During this time, increased oil production and worldwide oil prices have led to a few developments happening in favor of Azerbaijan in terms of changes of production shares and meanwhile, enhanced country currency stock. Whereas, on the other hand, Azerbaijan does not yet enjoy the benefits of huge oil revenues and has to be preoccupied with the problems related with them. The national economy is now confronted with grave challenges, such as monopolistic barriers for expanded supply, shrinking diversification rate of the economy, loss of relative superiority in international merchandising, unbalance in the non-oil sector with regard to tradable and non-tradable goods, uncontrollable inflation rate. The situation gets even worse as it is further affected by the ineffective use of budget expenditures under the circumstances of non-transparency. The outstanding negative cases that emerged as a result of the afore-mentioned factors may include, for instance, control sharing and fight for rent by various state officials over various economic areas with a goal to making more profits. The so-called ‘‘light oil money’’ made state officials feel careless and diverted them from thinking about balanced and sustainable development to the fight for quick sharing of oil revenues as though they were in competition. That competition brought about tension among governmental groups reinforcing populist and irrational decision-making in the non-tradable sectors of the economy and ultimately making stronger the corrupt links between governmental and business entities. Therefore, the construction sector has been set as a priority among other budget expenditures as a conventional means of sharing revenues from oil revenues. While on the one hand, the emerging views due to the expensive projects in the construction sector are used as a promotion device for the government’s economic policy, on the other hand, they contributed negatively to the country’s shrinking corruption ranking, weaker international competitiveness, and one-sided development of the economy towards the non-tradable sector. Institutional change reforms that are so important in the light of annually growing revenues are left out of mind and pseudo-institutes are established instead under the name of reforms. Such being the case, political speculations were fueled by the economic assessments done based on macroeconomic indicators, which is basically in favor of state clerks. These speculations are more likely to increase on the eve of the upcoming next year presidential elections in Azerbaijan. Since the interpretation of Azerbaijan’s economy from different perspectives increases the importance of the actual assessment of the current state, this article independently evaluates the current situation and tries to demonstrate the objective view of the emergent situation.

The Two Faces of Saudi Arabia

The Saudi Arabian regime, aided by oil money and custodianship of Islam's holiest sites, has in recent years emerged as one of the most active and creative diplomatic players in the Middle East. Yet the regime's imaginative interventions in foreign affairs contrast starkly with its immobility in the face of deepening divisions at home. To minimise the perceived threat from Shi'ites in Iran, Iraq and Lebanon, the most sensible course is not to pursue a tacit anti-Shia alliance with the United States and Israel, but rather to improve social and political conditions for Shi'ites at home. This would require confronting the Wahhabi clerical establishment head on, which could fatally undermine one of the pillars of al-Saud rule. The regime appears fated to opt for continued immobility, engaging in largely symbolic regional diplomacy in the hope that this will some how buy it credit at home.

SHAPING THE SAUDI STATE: HUMAN AGENCY'S SHIFTING ROLE IN RENTIER-STATE FORMATION

The article offers a revisionist account of how the modern Saudi state emerged in the 1950s and 1960s. Differing with structuralist “rentier-state” accounts, I contend that individual agency has been very important in shaping the Saudi bureaucracy as oil money gave unique, although temporary, autonomy to princely elites to organize the state around their personal interests. Emerging institutions functioned as power tokens, leading to a fragmented administrative setup in which ministries serve as “fiefdoms” and bureaucratic capacities vary strongly from one institution to another. Through state growth and the “locking in” of distributional commitments, the autonomy of princely elites to redesign the state has strongly declined over time, meaning that many early institutional decisions have permanently impacted the shape and capacities of today's Saudi state. Vis-agrave;-vis rentier theory, I demonstrate that regime autonomy is not constant over time and that the quality of institutions is historically contingent and not determined by oil, which merely enlarges the menu of institutional choices available to rentier-state elites.