The importance of oil to the economies of the organization of the petroleum exporting countries
The Gulf Cooperation Council (G.C.C.) was established by virtue of a protocol signed in 1981 by its member states, which at present consist of Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the United Arab Emirates (U.A.E.). Four of these states-Kuwait, Qatar, Saudi Arabia, and the U.A.E.-are also members of the Organization of the Petroleum Exporting Countries (OPEC)-which, until January 1993, counted a total of 13 members. Oil exports are the mainstay of many of the OPEC economies. In 1990 oil exports accounted for 40.8 percent of the gross national product (GNP) of the four G.C.C. countries and 11.1 percent of the non-G.C.C. OPEC countries. The ratios were highest for Nigeria (46.9 percent) and the U.A.E. (46.6 percent), and lowest for Iran (4.0 percent) and Indonesia (6.3 percent). In the G.C.C. and other OPEC members, the government budgets are financed by oil revenues to a large extent. The oil-generated revenues also contribute the foreign exchange needed to pay for imports, which accounted for close to 13 percent of the total OPEC gross national product in 1990. Traditionally, oil production has been confined to an enclave sector that is primarily export- and import-oriented, with limited linkages with the rest of the economy. In addition, before the large price increases of 1973, the oil export revenues were modest and insufficient to finance a large and sustained development effort. Steadily increasing oil revenues have made it possible, however, for the national governments to undertake ambitious industrial development programs since 1973. This paper presents estimates of externalities generated by the oil sector and captured by the rest of the economy in each of the OPEC countries. Productivity in these sectors was consistently higher than the rest of the economy. Also, the importance of oil exports to the domestic economies was assessed. Estimates suggest a significant weakening of the dependence on oil exports from 1981-1990. 3 refs., 2 tabs.
- OSTI ID:
- 7042305
- Journal Information:
- Journal of Energy and Development; (United States), Vol. 28:1; ISSN 0361-4476
- Country of Publication:
- United States
- Language:
- English
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