Resource-rich Countries Research Articles

Future availability of natural gas: Can it support sustainable energy transition?

Mitigating the adverse effects of global climate change and limiting global warming to 1.5 °C requires a complete transition from fossil fuels to renewable energy sources. Despite ongoing global efforts, particularly since the Paris Agreement in 2015, renewables are expected to not fully meet global energy demand by 2050. In this context, natural gas is expected to be a complementary fuel to support renewables throughout the transition. This paper assesses whether the future availability of global resources would enable natural gas to support sustainable energy transition. To this end, we first employ R/P ratio and Hubbert curve analyses and then compare our results with the recent natural gas supply/demand forecasts in the literature. Our findings suggest that global natural gas resources, both conventional and unconventional, are enough to meet forecasted global natural gas demand. This requires substantial investment in the natural gas industry, which would further increase greenhouse gas emissions. Therefore, natural gas resource-rich countries and the natural gas industry must adapt their operations to the new global paradigm framed by Paris Agreement and United Nations Sustainable Development Goals.

Sustaining Taxation in Rentier Economies: Evidence from Nigeria

The rentier state thesis was proposed to explain the unique political and economic nature of governance in resource-rich countries starting in the 1970s. The wealth in a rentier state is usually accrued through extraction and selling of valuable natural resources under the full control of the government which is mainly directed by a ruling elite group. Nigeria is described as a ‘rentier state’ as a result of its mono-economy in which oil rents play a dominant part. The paper examines the rentier state syndrome in Nigeria and how it affects tax revenues, which are largely based on non-oil sector development. The Rentier State Theory was adopted as the theoretical framework of the study. A documentary research design was used for the study. Data collection was done using secondary sources while data analysis involved the use of descriptive statistics and content analysis. Findings of the study revealed that oil revenue has over the years surpassed tax revenue and remains the mainstay of the Nigerian economy. It also showed that the imbalance between tax revenues and resource rents in Nigeria is due to quick profits from oil; opportunistic rent seeking and rent grabbing; weak private sector; and the desire by political elites to undermine transparency and accountability that comes with a functional tax system. The study recommends economic diversification, deregulation, digitalization and tax transparency as mechanisms for sustaining tax revenues in Nigeria’s rentier economy.

Emerging pathways to sustainable economic development: An interdisciplinary exploration of resource efficiency, technological innovation, and ecosystem resilience in resource-rich regions

Innovation has always been a key factor in economic growth. But with the increasing pressure on natural resources, it has become even more crucial to understand the relationship between innovation, resources, and economic development. Technology has also played a significant role in helping to achieve sustainability. By utilizing the right strategies and investing in innovative technologies, businesses and governments can promote sustainable economic progress while decreasing their influence on the environment. This work explores the nexus among resource consumption, technological innovations, sustainability, and economic development and how this relationship has evolved from a traditional resource-poor region to a more resource-rich one. A correlation heat map showed the highest association between GDP growth (GDPG) and research and development expenditure (RDE) (−0.47). Support vector Regression with radial basis function (SVR-RBF) was applied to see the impact of contributing parameters that influence GDPG. For GDPG, the model generated R = 0.88 and R2 = 0.78 (RMSE = 1.16). The results of the SVR showed that the strongest coefficient in the SVR model is self-employed, total (SE), followed by electricity production from the nuclear resource (EPNR). This study could have several contributions. Firstly, the study’s focus on sustainable economic development provides insights into how resource-rich regions can balance economic growth with environmental conservation. This information could be valuable to policymakers, businesses, and other stakeholders interested in creating sustainable economic growth strategies. Secondly, the study’s interdisciplinary approach could help bridge the gap between different fields of study, leading to more holistic and effective solutions to environmental and economic challenges. This interdisciplinary approach could also help build stronger partnerships between academia, industry, and government. Finally, the study’s exploration of resource efficiency, technological innovation, and ecosystem resilience could provide useful information for China, a resource-rich country undergoing rapid economic growth. China faces numerous environmental and economic challenges, and the study’s findings could help inform policies and strategies to address these challenges.

Does foreign aid procurement in resource-rich countries depend on these countries’ financial development and institutional quality? Evidence from PVECM and quantile-on-quantile regression

The underlying structure of the global economy has undergone major structural changes over the last two decades. These transformations have been powered by globalisation, technological development and multilateral trade agreements. The more open global economy has benefitted the global community, but many resource-rich developing countries are struggling to keep pace with more developed countries. As these resource-rich countries attempt to catch up with more developed economies, many rely on foreign aid to develop their institutions of governance and financial sector for a more knowledge-intensive economy. This study analyses the long- and short-run associations between foreign development aid procurement, financial development, and institutional quality in resource-rich countries from 2005 to 2020, employing the panel vector error-correction (PVECM) model and Quantile-on-Quantile Regression (QQR). Our analysis shows that, in the short run, there is a strong endogenous nexus between foreign aid procurement, quality of institutions and financial development. Furthermore, the results reveal that financial development and higher institutional development assist resource-rich countries in procuring foreign developmental aid in the long run. These findings suggest that a financial system which functions well, and favourable institutional governance are critical for these countries to secure foreign aid to put them on a path to sustainable development.

Validating resources curse hypothesis in US: Exploring the relevancy of financial market risk and technology innovation

Countries that have a higher reserve of resources tend to have less developed financial systems. The financial sector plays a vital role in facilitating the conversion of personal savings into business investment and the efficient allocation of limited resources, both of which contribute to economic expansion. Moreover, due to its size, and location, the United States of America possesses a variety of natural resources, including water, oil, gas, coal, farmland, land, coastlines, etc. However, theoretical forecasts for financial growth are conflicting for natural resource-rich countries. Hence this research is conducted to identify the role of Natural Resources (NTR), Technology Innovation (TIN), and Financial Market Risk (FMR) in light of the natural resource curse hypothesis for the USA. Through the application of Bootstrapped ARDL, the findings validate the existence of the resource curse, where TIN is also found to enhance the FD; however, the role of FMR is found to enhance the FD, which might be because of the geographical context of the US where people are assumed to be not risk averse and keep on their investing despite of prevailing market uncertainties. Besides, the identification of the nexus between the aforementioned variables in the presence of the resource curse hypothesis would help corporations and policymakers in developing strategies that can promote sustainable financial development.

Spillovers effect of gas price on macroeconomic indicators: A GVAR approach

The demand for natural gas as a transitional fuel has been increasing steadily due to global energy transitions. However, the high concentration of natural gas sources among a few producers and the dependence of many consuming economies raises questions about the macroeconomic impact of gas price shocks. Therefore, this study utilizes the global vector autoregressive (GVAR) approach to estimate the spillover effects of natural gas price shocks on key macroeconomic indicators. To enhance the GVAR data vintage, we have incorporated Iran and Russia in 24 countries and updated data till 2020. Our empirical analysis reveals that inflation responds positively to gas price hikes in major gas-consuming countries. Moreover, real GDP responds positively to increased gas prices in resource-rich countries such as Iran and Russia but negatively in other countries. Additionally, an augmentation of resource rents fosters GDP for Iran and Russia. Our findings highlight several policy implications that account for gas price shocks. Therefore, policymakers should consider the spillover effects of gas price shocks and their impact on inflation and real GDP. Moreover, resource-rich countries like Iran and Russia should optimize resource rents to foster economic growth.

The impact of financial development on the manufacturing industry in resource-rich countries: Empirical evidence from Azerbaijan

The study is devoted to assessing the causal relationship between financial development and economic growth in the manufacturing sector of Azerbaijan, a country rich in oil and gas resources. The study covers quarterly data from 2005-2021. The Johansen co-integration test and the Toda-Yamamota test are used to analyze temporal and causal characteristics between indicators. The results showed that there is no co-integration between financial development and growth in the long run. Along with this, no evidence was found indicating the presence of a causal relationship between variables in the short run. The results show that increased credit availability does not necessarily positively impact productivity and capital growth in the manufacturing sector. At the same time, the growth of loans contributes more to the growth of imports than to the growth of domestic production. The hypothesis about the negative impact of the "resource curse" on financial development is confirmed by financial market development in Azerbaijan, which makes it difficult to assess the securities market's impact on manufacturing sector growth. Research on the institutional aspects of financial regulation and finding ways to increase the relative attractiveness of the manufacturing sectors could provide more detailed recommendations to improve the effectiveness of financial instruments.

Relationship between economic and political factors of the country’s economic development (on the example of the Democratic Republic of the Congo)

The economic growth and economic development of the country is determined by many factors, including geographic, climatic, demographic, political, as well as its natural resource potential and historical path of development. Between all these factors there is both interrelation and interdependence, and contradictions. The historical path of the country’s development, the current sectoral and territorial structure of the economy, the institutional environment, political processes, the values of economic activity and established business practices have an impact both in the short and long term. The result of these factors can be a variety of institutional traps that give rise to the effect of hysteresis and determine the choice of strategic development priorities or even their absence. In addition to internal factors, the country’s economy is influenced by external economic and political factors, as well as the interests of global economic actors: foreign companies, states and institutions. The identification of the relationship between all of the above factors in the historical context is of high scientific importance for predicting the further development of the country’s economy. The authors of the article studied the influence of economic and political factors on the economic development of the Democratic Republic of the Congo in the late 20th and early 21st centuries and revealed the existence of institutional traps that caused the hysteresis effect as the main cause of poverty in one of the most resource-rich countries on the African continent.

Tax competition with asymmetric endowments in fossil resources

This paper contributes to the theoretical understanding of strategic interactions of governments on global markets for fossil resources and for capital. We analyze carbon taxes and subsidies and their impact on national welfare in a two country model with markets for capital and fossil resources, and asymmetric resource endowments. Resource poor countries have an incentive to tax the use of fossil fuels to appropriate the resource rent. Resource rich countries subsidize fossil fuel use to attract production factors in order to increase national income. We have two main results. First, we demonstrate that capital mobility has a taming effect on the incentives to tax and to subsidize resources. When taxing resources not only affects the international resource market, but also the international capital market, taxation is more distortionary and is thus more costly to governments. Second, while early studies of asymmetric tax competition found that small countries in terms of population are winners of tax competition, we show that with asymmetric resource endowments but a symmetric population size, there are no winners. Then, the Nash equilibrium of carbon tax competition is the least desirable outcome in terms of social welfare. A game structure similar to a Prisoner’s Dilemma emerges and cooperation makes Pareto improvements over the Nash equilibrium possible.

Can energy efficiency and natural resources foster economic growth? Evidence from BRICS countries

The availability of natural resources has a significant impact on economic growth. Nevertheless, the ineffective utilization of these resources can lead to economic instability and conflict, in addition to poor economic performance. Despite abundant natural resources, several resource-rich countries, such as Brazil, Africa, and India, have not realized the benefits of their natural capital and have not reaped the benefits of their abundant natural resource reserves. This study examines the role of natural resource rent in effecting economic development is evaluated for Brazil, Russia, India, China and South Africa nations between the years 1990 and 2020 in the context of energy efficiency, financial risk, and technological innovation. To estimate the parameters, advanced econometric methods are utilized. According to the findings, natural resources have an effect that is counterproductive to the advancement of the economy. As a direct consequence, the resource curse argument can be validated for the sample nations. In addition, we found that improvements in technological innovation and energy efficiency both contributed positively to the expansion of the economy. On the other hand, the likelihood of financial loss is inversely proportional to economic development.

Why is Ghana losing the war against illegal gold mining (Galamsey)? An artificial neural network-based investigations.

Ghana, like most resource-rich countries, is saddled and inundated with resource curse challenges. Key among them is the problem of illegal small-scale gold mining activities (ISSGMAs), which is mercilessly robbing the nation of its ecological integrity, despite attempts by successive governments to remedy the situation. In the midst of this challenge, Ghana, year in and year out, performs abysmally on environmental governance score (EGC) variables. Against this framework, this study intends to uniquely establish the drivers behind Ghana's failure to overcome ISSGMAs. To achieve this, a total of 350 respondents were sampled through a structured questionnaire, with a mixed method approach from selected host communities, believed to be the epicenters of ISSGMAs in Ghana. The questionnaires were administered from March to August, 2023. AMOS Graphics and IBM SPSS vs 23 were used to analyze the data. In particular, the novel hybrid artificial neural network (ANN) and linear regression techniques were adopted to establish the relational linkages among the constructs of the study and their respective contribution to ISSGMAs in Ghana. The study displays intriguing results that explain why Ghana has failed to be victorious over ISSGMAs. In particular, the findings of the study demonstrate that the three key drivers of ISSGMAs in Ghana, in a sequential and consecutive order are as follows: bureaucratic licensing regime/weak legal framework, political/traditional leadership failures, and corrupt institutional officials. Moreover, socioeconomic factors and proliferation of foreign miners/mining equipment were also observed to contribute significantly to ISSGMAs. While the study contributes to the ongoing debate on ISSGMAs, it also proffers valuable and practical solutions to the menace as well as theoretical implications.

The role of sovereign wealth funds in natural resource-rich countries: A systematic meta-narrative review

The role of sovereign wealth funds in natural resource-rich countries: A systematic meta-narrative review

Investigations on Entrepreneurship Needs, Challenges, and Models for Countries in Transition to Sustainable Development from Resource-Based Economy—Qatar as a Case

This paper presents a comprehensive and comparative investigation into the needs, challenges, and potential roles for entrepreneurship in transforming resource-rich countries into sustainable economies. It explores the role of entrepreneurship to help transition from a resource-based economy, mainly through increasing the number of entrepreneurs and enhancing private-enterprise-led and small and medium enterprises to achieve economic diversification. This study focuses on the case of Qatar, considering its current policies, mechanisms, and institutes, and how they are working together to help diversify the economy and ultimately transition from its current resource-based economy. It begins with a comprehensive review of the literature, including a discussion of the significance of economic diversification globally and examining the role of government and other actors in developing entrepreneurship and the private sector. The methodology and conditions are set out, followed by the findings of the qualitative interview study with key and representative stakeholders within the existing entrepreneurship arena, such as entrepreneurs (successful or failed), those wanting to be entrepreneurs, policymakers, investors, and supporting agencies. The interviews are thematically analyzed to identify apparent challenges, their root causes, and initial recommendations. Three barriers in the entrepreneurship ecosystem in Qatar are identified: (1) lack of a conducive and transparent legal, regulatory, and governance environment, (2) lack of access to risk-based financing for entrepreneurs, and (3) lack of locally relevant entrepreneurial mentorship and guidance. Finally, the authors used the literature review and interview results to develop a progressive, locally tailored, dynamic preliminary framework for Qatar, and similar countries, to increase the number of entrepreneurs and small businesses to achieve economic growth and diversification.

Giant oil discoveries and conflicts

This study investigates the effects of oil discoveries on conflict. We propose that the effects from oil discoveries may differ depending on types of conflicts, mainly interstate versus intrastate. Using a measure for oil discoveries for a global panel of countries between 1970 and 2012, we find a positive association between oil discoveries and both conflict types, controlling for other conflict determinants and unobserved heterogeneity. However, we observe that the effects on intrastate conflicts are evident within a year of discovering the oil, while the effects on interstate conflicts only become evident after five years of the discovery. We also find that within intrastate conflicts, the results are mainly driven by the effects on ethnic conflicts. The findings imply that there may be different mechanisms at play for interstate versus intrastate conflicts related to resource discoveries. For example, resource-induced inequality can aggravate already existing tensions between groups in society, which can result in internal conflict soon after discovering the resource. On the other hand, the feasibility of engaging in conflict with a neighbouring resource-rich country depends on fighting capacity and mobilising resources, which can delay interstate conflicts. Overall, we believe the results from this study will provide some further understanding to the dynamics involving natural resources and types of conflict.

WEO Newsletter.

WEO Newsletter.

Role of economic policies, renewable energy consumption, and natural resources to limit carbon emissions in top five polluted economies

Top carbon-emitting countries are rich in natural resources (NRR). NRR are found to be indifferent to the economic development of many resource-rich countries. Economic policies are important to handle NRR. Uncertain economic policies and natural resource rents may affect the environment of an economy. Estimating the empirical impact of NRR and uncertain economic policies (EPU) on carbon emissions in the top five polluted economies could be an interesting setting. Therefore, this article is an effort to examine the impact of NRR, EPU, and renewable energy consumption (REC) on total and consumption-based carbon emissions (CBE). With the latest data available, “cross-sectionally augmented autoregressive distributed lag and augmented mean group” estimations are used to quantify results. The findings show that EPU harm the environment. Though, RE and NRR are substantially reducing the total and CBE in the top five polluted economies. The findings have effective policy implications for the sustainable environment.

FDI, exports, imports, and consumption-based CO2 emissions in the MENA region: spatial analysis

MENA region is full of natural resources and has a huge mineral sector in their economies. CO2 emissions are increasing global warming and foreign trade and investments can play their roles in determining CO2 emissions in the resource-rich MENA countries. Moreover, spatial linkages are expected in the emissions and trade relationship, which could catch less attention in the environmental literature of the MENA region. Thus, the present research is motivated to capture the contributions of exports, imports, and Foreign Direct Investments (FDI) in consumption-based CO2 (CBC) emissions in twelve MENA economies from 1995 to 2020 by applying Spatial Autoregressive (SAR) Model. Our results exhibit the existence of the Environmental Kuznets Curve (EKC). Moreover, the impact of exports is found negative in direct and total estimates. Thus, exports of the MENA region are reducing CBC emissions in the MENA region and transferring emissions to their importing partners. Moreover, the spillovers of exports are found positive and exports of one MENA country are also responsible for the transfer of CBC emissions to other MENA neighboring countries, which corroborates the trade linkages of the MENA region. Imports have a positive effect on CBC emissions in direct and total effects. This result confirms the fact of energy-intensive imports of the MENA region, which have environmental consequences in the domestic economies and the whole MENA region. FDI increases CBC emissions in direct and total estimates. This result substantiates the pollution Haven hypothesis in the MENA region and is in line with the fact that FDI is mostly coming in the mineral, construction, and chemical sectors. The study suggests that MENA countries should promote exports to reduce CBC emissions and to reduce energy-intensive imports in the region to save the environment from CBC emissions. Moreover, FDI should be attracted to the clean production process and environmental standards should be raised to avoid the environmental problems of FDI in the MENA region.

Distributional Dynamics Amidst Resource Abundance: The Implications of Structural and Institutional Transformations

A critical evaluation of prior studies indicates that the roles of structural and institutional transformations in moderating natural resource-inequality dynamics is understudied. Moreover, very little is known about such dynamics in resource-rich sub-Saharan African (SSA) countries. To cover the literature gaps, this study harnesses annual panel datasets comprising natural resource rent, structural transformation, institutional quality and technology for the top 10 resource-rich SSA countries over 2000–2018 for empirical evaluations. After ascertaining long-run coevolution among the series, the estimates of the panel quantile regression depict that natural resource abundance is the leading cause of income disparities in these countries; hence, it promotes inequality significantly across all quantiles of the distributions. Furthermore, at the 5th quantile, both structural and institutional transformations deaccelerate inequality insignificantly, but at the 10th quantile, institutional reforms engender equitable income distributions. Notably, beyond the 10th and 50th quantiles, institutional and structural reforms significantly promote income disparities. Additionally, at the 10th quantile, technology marginally promotes equitable income distributions, but at the 60th, 70th and 80th quantiles, technology significantly promotes inequality. Implicatively, a blend of structural reforms and technological improvements within the thresholds around 10th and 50th quantiles could ensure equitable prosperities in the region. Among other policy options highlighted herein, pro-equity redistributive policies that ensure no one is left behind are expedient to eliminate income disparities in these countries.

Urethral strictures. Diagnosis and treatment

Urethral strictures represent the intrinsic and permanent narrowing of the urethral lumen with urodynamic effects and genitourinary complications resulting from obstruction in the path of urine and seminal fluid elimination. In men, urethral stricture refers to a narrowed segment of the anterior urethra caused by a process of fibrosis and scarring of the urethral mucosa and surrounding spongiosum tissue ("spongiofibrosis"). In the male posterior urethra, there is no spongiosum tissue, and the term stenosis is preferred in this location. The definition of meatal stenosis is accepted as a distal narrowing at the level of the meatus, without involving the navicular fossa. There is no universal definition of female urethral stricture. Female urethral stricture is defined by most authors as "a fixed anatomical narrowing" that leads to a reduction in urethral caliber. This reduced urethral caliber is defined as being between <10 Fr and <20 Fr, with most studies defining it as <14 Fr, compared to the normal urethral caliber of 18-30 Fr. In transgender patients, the term stricture is used to define narrowing of the reconstructed urethra despite the absence of spongiosum tissue around it.[1] In men, a marked increase in incidence is observed after the age of 55, with a median age of 45.1 years. The estimated incidence is generally 229-627 cases per 100,000 men [2]. The anterior urethra is most commonly affected (92.2%), especially the bulbar urethra (46.9%) [3]. In women, 2-29% of patients with refractory lower urinary tract symptoms have obstructive flow at the level of the bladder, of which 4-20% will have urethral strictures [4]. There is a significantly increased incidence in women over 64 years of age. In children, most strictures are traumatic: iatrogenic causes account for 27.8-48% and external trauma for 34-72% of cases [1]. Congenital (13%), inflammatory (4%), or postinfectious (1%) strictures are less commonly observed. The bulbar urethra is the most frequently affected part of the urethra [1]. After hypospadias repair, meatal stenosis and urethral strictures are reported in 1.3-20% of cases, depending on the severity of hypospadias and the technique used [5]. There is a significantly higher incidence of this type of stricture in resource-rich countries due to a higher rate of surgical interventions. It has been reported that up to 18% of urethral strictures involving the meatus or navicular fossa are caused by surgical repair of hypospadias, lichen sclerosus, instrumental/traumatic causes, or idiopathic causes. Post-circumcision meatal stenosis has been reported in less than 0.2% of infants undergoing circumcision. In transgender patients ("trans men"), approximately 51% will suffer from a urethral stricture, while in "trans women" (male to female), the incidence is 14.4% [6].

An Analytical Study of Foreign Direct Investment in the Gulf Cooperation Council (GCC)

The aim of this paper is to identify the critical determinants in the Gulf Cooperation Council (which will be referred to as GCC) for Foreign Direct Investment (FDI) inflows. Using the understanding of financial econometrics, the study discusses a significant positive association between FDI in Non-oil industries, while on the contrary, the negative association with the Oil industries. Natural resources are a path for some countries to attract FDI. Still, it does not achieve the main benefits of FDI, which are the introduction of new technology and the offering of job opportunities. Existing literature argues the suggestion that resource-rich countries attract less FDI because of resource (oil) price volatility. Statistical Models in Economics are used to analyze the data to achieve a conclusion. This study examines that natural resources discourage FDI in GCC countries, and helps identify policy reform priorities to support diversification and growth in the GCC through foreign investment.