Download The Impact of Natural Resources on Economic Growth: A Case Study of Norway and OPEC and more Slides Banking and Finance in PDF only on Docsity! Structural Adjustment, Export Specialization, and Growth in Diversified Resource Based Economies: The Case of Norway Docsity.com Outline of presentation 1. Norway and the Dutch disease 2. The macroeconomics of oil 3. A brief digression on OPEC 4. Empirical cross-country evidence on natural resources and growth 5. But, Norway is different Docsity.com Exports of goods and services 1960-2000 (% of GDP) What does experience show? Norway’s exports have hovered around 40% of GDP since 1960, with only a weak tendency to rise over time 0 10 20 30 40 50 60 70 80 19 60 19 64 19 68 19 72 19 76 19 80 19 84 19 88 19 92 19 96 20 00 Netherlands Norway Docsity.com Foreign direct investment 1967-2000 (gross, % of GDP) Since 1970s, Norway has attracted less gross FDI than the Netherlands 0 5 10 15 20 25 30 35 40 19 67 19 70 19 73 19 76 19 79 19 82 19 85 19 88 19 91 19 94 19 97 20 00 Netherlands Norway Docsity.com Manufacturing exports 1962- 2001 (% of total exports) In Norway, oil exports have crowded out other exports krone for krone relative to GDP since the mid-1970s 0 10 20 30 40 50 60 70 80 19 62 19 66 19 70 19 74 19 78 19 82 19 86 19 90 19 94 19 98 Netherlands Norway Docsity.com Government consumption 1960-2000 (% GDP) In Norway, general government consumption has increased, but not to extravagant levels, at least not yet 0 5 10 15 20 25 30 19 60 19 64 19 68 19 72 19 76 19 80 19 84 19 88 19 92 19 96 20 00 Netherlands Norway Docsity.com GNP per capita 1962-2001 (current USD, Atlas method Since mid- 1970s, Norway has grown faster than the Netherlands 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 19 62 19 66 19 70 19 74 19 78 19 82 19 86 19 90 19 94 19 98 Netherlands Norway Docsity.com Macroeconomics of oil and other resources Natural resources Economic growth x 2 Docsity.com Crowding out Hence, natural capital may crowd out Foreign capital Social capital Human capital Real capital Matter of taste whether these mechanisms are viewed as additional symptoms of the Dutch disease or as separate channels of transmission Docsity.com Natural resource abundance and economic structure Resource poor, resource dependent (Chad, Mali) Resource rich, resource dependent (OPEC) Resource rich, resource free (Canada, USA) Resource poor, resource free (Jordan, Panama) Re so ur ce d ep en de nc e, b Resource abundance, N Dependence hurts growth, even if abundance may help Docsity.com A quick look at OPEC Nigeria has been stagnant since independence in 1960: No growth Per capita growth 1965-1998 Iran and Venezuela: -1% per year Libya: -2% Iraq and Kuwait: -3% Qatar: -6% Why? 3 Docsity.com Increasing awareness that oil brings risks If ... oil revenue is managed well, it can educate, heal and provide jobs for ... the people. But oil brings risks as well as benefits. Rarely have developing countries used oil money to improve the lives of the majority of citizens or bring steady economic growth. More often, oil revenues have caused crippling economic distortions and been spent on showy projects, weapons and Paris shopping trips for government officials. Docsity.com Is OPEC an exception? No, this seems to be a general pattern. Of 65 natural resource abundant countries 1970-1998, only four had Investment of more than 25% of GDP Per capita GNP growth of more than 4% per year They are: Botswana, Indonesia, Malaysia, Thailand Docsity.com
