How To Avoid The Oil Curse

[Carafaat]

http://www.npr.org/blogs/money/2011/09/06/140110346/how-to-avoid-the-oil-curse

 

One of the biggest problems any new government in Libya will face is something that doesn't seem like a problem: The massive amount of oil wealth the country possesses

 

Economists call it the natural-resource curse. Resource-rich countries often end up being ruled by dictators and autocrats. And the massive amount of money that floods into a country after oil discovery often has the perverse effect of putting existing industries out of business.

 

It's a curse that just a couple of countries have managed to avoid. The country that's managed it best, most people say, is Norway — a feat due in large part to the work of an Iraqi geologist named Farouk Al-Kasim.

 

 

In the 1960's Al-Kasim and his wife, who is Norwegian, decided to move to Norway. Their son had cerebral palsy and needed medical care.

 

Job-wise, Norway seemed like the worst place in the world for an oil guy.

 

"The National Geological Survey had already said that there is no hope in heaven of ever finding oil or gas," Al-Kasim says. He figured, worst case scenario, he'd drive a taxi.

 

But even though Norway's geologists had said there wasn't oil, companies were still looking for it. And so the Norwegian government hired Al-Kasim to review the reports the companies were sending in of their explorations.

 

What he saw was surprising.

 

"Remember, the country was saying there is no way there's oil out there," Al-Kasim recalls. "And here I am looking at data that says that they've already found it, four times over."

 

The finds still weren't big enough to justify a big commercial investment. But a year later, the Ekofisk oil field was discovered.

 

It was a massive find. Norway was officially rich with oil — and at risk of falling victim to the natural-resource curse.

 

Al-Kasim and a colleague wrote a series of proposals that found their way into a government plan that most people credit with saving Norway from the oil curse.

 

One radical solution aimed at preventing the oil money from destroying Norway's existing industries: Limit the amount of money the country made from oil in the short term. Don't drill everything at once.

 

"It was received with skepticism by the industry, who wanted Norway to go full-speed ahead," Al-Kasim said.

 

Despite the industry pushback, Norway handed out just a couple drilling permits a year.

 

In an even more stunning act of self-restraint, the Norwegians decided not to spend most of the oil money. Instead, they put it in an oil trust fund that's now worth hundreds of billions of dollars. The government only spends the interest that the fund generates.

 

Perhaps most shocking: Norwegian politicians have largely agreed to leave the principal untouched.

 

"The Norwegian miracle is that ... all the parties in parliament agreed on a policy, and they agreed among themselves that they will never use oil policy as a subject during elections," Al-Kasim says.

 

So, that's Norway's secret: At every step of the way, do the opposite of basic human nature.

 

Tell powerful oil companies, you can't get the oil right away. Tell taxpayers, you won't get the money from the oil right away. And tell campaigning politicians, you know that half a trillion dollars we have just sitting there in our oil fund? You're not allowed to talk about it.

 

Al-Kasim says he worries that Libya, like most countries, will find it difficult to emulate Norway's success. His main piece of advice for them: "For God's sake, don't go very quickly."

[Somalia]

What existing industries do we have?

[Carafaat]

livestock, agriculture, fisheries.

[Mooge]

carefat the oil is good for lifting people out of poverty. support oil exploration. support your people. support horumar.

[Somalia]

Carafaat;807572 wrote:

livestock, agriculture, fisheries.

Hahahahahahaha, wallee waa cajiib. :rolleyes:

[Carafaat]

read the article and the example of Norway. How they have deal with their natural resources and made them the richest country in the world.

[Artan]

LOL! There's no oil, this is yet another attempt at those foolish companies like Range Resources, Red Emperor, etc... to get people to buy a whole lot of stocks, what an economic bubble they have created.

[nuune]

Carafaat;807633 wrote:

read the article and the example of

Norway.

How they have deal with their natural resources and made them the

richest country in the world

.

Rubbish, absolutely rubbish, you don't know any knowledge of Norway whatsoever, sxb, rich for what, the evarage Norwegian drives 1994 and 1995 cars, the average Norwegian lives in secluded houses similar to prison cells, and that is same for any place, Oslo, and other major towns and cities, in Oslo, I recently witnessed some strange things, a Somali friend was driving me through the city, yes, he was driving a nissan, that is of 1992, he told me he paid for it for 2,500 Euro, I said what is this all about, forget that, while we were driving, we saw a police vehicle which was a land cruiser, and it was in the year 2003, the Somali friend said to me, look the Norwgeian police, they are wasting money with new cars, I said, what new car, that is a 10 year old car, forget about that,they can't import new cars, everything is controlled by the government, no new cars, public transport dates back 1972, very old to that they make the loudest noises than an old 737-200 Boeing jet.

 

Their houses, again, Somalis in Oslo say a catch phrase, "qof Norwey joogo looma soo martiyo", that is, their houses are horrible, they will not have a place for a guest, not even in the kitchen have a space.

 

 

 

 

For your information, the oil revenue or money goes directly to the USA, if you are not aware of this, the USA signed a pact with Norway during the world wars, when the USA offered help for Norway, and they were spared.

 

That oil money which goes to the USA bank account stays there, Norway had no access to it whatsoever, a fact that everyone know.

 

 

 

So tell me, what are they rich for, when every Somali in norway si a cabbie driver, when the Norwegian citizens are living in a hellish life, can't build a house, can't buy a new car or import it, can't be rich, there is only one rich man in Norway, and he is controlled by the government, it is a fact.

 

 

 

 

I think a little history is needed when we talk about oil and money, or calling a country rich because the Western media does so to hide that their oil revenue goes To USA.

[Carafaat]

Nuune, the funds Norway earns on its natural resources is invested through national souvereign wealth funds rather then used as goverment expenditure. The funds from Norway is the biggest in Europe and belong to the biggest wealth funds in the world. This is what I mean with rich or wealth, they dont spend it. These funds invest in the US but so do all other funds in the world, even the chinese and arab´s buy US goverment bonds, stocks, etc. If you are saying the current financial system in the world, benefits America. then yes, you are right. but this goes for all the countries. not just for Norway.

[nuune]

Sxb, the country is not rich, nor its people, it is different from other countries, Gulf countries at least enjoy the money regardless of whether they put their money in USA or Europe, wey ka noolaadaan, as in Norway, wey ka bakhtinayaan their resources.

 

Lacag baan heestaa waana ka bakhtinayaa is not wax lagu faantamo, wax fahan sxb,

[Carafaat]

waan ku fahmay sxb. Laakinse adiguna faham lacag kusoo gasha wax ku iibso maha dhaqaale. Iminka bal Saudi eeg, dadka badankood wexe u shaqeeyaan dawlada, lacagtada si wanaagsan ayee u isticmaalaan. laakinse unemployment rate is still 25% and when the oil price goes down, the country will go in a crisis. this is hardly the case in Norway, where they are not oil depedent. http://www.globalsecurity.org/military/world/gulf/sa-labor.htm

 

People have to work their money, free handouts will not help on the long term but only make people lazy, less productive, less educated and create less added value. Now see the diffrence between Norway and Saudi Arabia.