Will Higher Oil Revenue Always Guarantee a Higher Quality of Life?
Will Higher Oil Revenue Always Guarantee a Higher Quality of Life?
(A study of governance in Oman, Saudi Arabia and Nigeria)
Department of Economics
Trent University
Peterborough
CANADA.
I. Introduction
The demand for oil has been increasing exponentially. In 1965, the world oil consumption was 31,095 thousand barrels of oil and in 2009 the world oil consumption was 84,077 thousand barrels of oil (Simon 2010). The demand for oil has been followed by large revenues for countries that can supply the oil. This paper will analyze the effect of higher oil revenue in Nigeria, Oman, and Saudi Arabia and the correlation it has to the quality of life in those countries. Higher quality of life has a positive correlation with developed countries. Developed countries have a higher human develop index (measures life expectancy, education and standard of living) and a higher GDP, gross domestic product, per capita. In order for developing countries to become developed they require economic development. Economic wealth can allow for the means of the country to give back to the citizens investing in healthcare, infrastructure, education, and farther economic development. Oil revenues make up a large portion of the wealth for rentier states like Nigeria, Oman, and Saudi Arabia. The oil revenue has increased the respective countries’ GDP. Despite, certain countries having an increase in wealth, what is done with the money determines the effect it has on the quality of life. An increase in GDP does not necessarily mean an increase in the quality of life. Oil revenues are divided between corporations and the countries which the oil is being extracted from. The governments of these oil rich countries are responsible for distributing the wealth to the general public. Although, many developed countries have a democracy Oman and Saudi Arabia are two countries which have an absolute monarchy. The two countries have increased
(A study of governance in Oman, Saudi Arabia and Nigeria)
Department of Economics
Trent University
Peterborough
CANADA.
I. Introduction
The demand for oil has been increasing exponentially. In 1965, the world oil consumption was 31,095 thousand barrels of oil and in 2009 the world oil consumption was 84,077 thousand barrels of oil (Simon 2010). The demand for oil has been followed by large revenues for countries that can supply the oil. This paper will analyze the effect of higher oil revenue in Nigeria, Oman, and Saudi Arabia and the correlation it has to the quality of life in those countries. Higher quality of life has a positive correlation with developed countries. Developed countries have a higher human develop index (measures life expectancy, education and standard of living) and a higher GDP, gross domestic product, per capita. In order for developing countries to become developed they require economic development. Economic wealth can allow for the means of the country to give back to the citizens investing in healthcare, infrastructure, education, and farther economic development. Oil revenues make up a large portion of the wealth for rentier states like Nigeria, Oman, and Saudi Arabia. The oil revenue has increased the respective countries’ GDP. Despite, certain countries having an increase in wealth, what is done with the money determines the effect it has on the quality of life. An increase in GDP does not necessarily mean an increase in the quality of life. Oil revenues are divided between corporations and the countries which the oil is being extracted from. The governments of these oil rich countries are responsible for distributing the wealth to the general public. Although, many developed countries have a democracy Oman and Saudi Arabia are two countries which have an absolute monarchy. The two countries have increased
References: Rogers, S. (2010, June 9). BP energy statistics: the world in oil consumption, reserves and energy production. Intheguardian. Retrieved March 23, 2013, from http://www.guardian.co.uk/news/datablog/2010/jun/09/bp-energy-statistics-consumption-reserves-energy#_ http://data.worldbank.org/country/oman#cp_wdi -stats on gni, life expectancy, water souce, GDP per capita Al Harthi, F. (2010, November 6). Oman: A success story in achieving high human development. In Oman Observer. Retrieved March 26, 2013, from http://omanobserver.om/node/29063 (Al Harthi 2010)