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Oil: Fueling Another Debt Crisis?

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  • can-petroleum-aid-development

    Can Petroleum Aid development?

    2 members,25 bookmarks

    Neoclassical economists approach petroleum as a "resource curse", alleviated only through appropriate institutional incentives promoting lagging comparative advantages (e.g. export crops). However, broader study of petroleum corporations, authoritarian governments, international supporters, and oppr

  • eco2020

    Eco20/20

    44 members,492 bookmarks

    Come and discuss/learn/share what you know about energy. We also have a website, please check it out, sign up and pass it along.

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Saved by 1 people (0 private), first by anonymouse user on 2008-04-22


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it is clear that soaring oil prices are undermining the benefits of debt cancellation in some countries, especially poor oil-importing nations.

Highlighted by pickinjava

In Escaping the Resource Curse, Columbia University professors Macartan Humphreys, Jeffrey Sachs and Joseph Stiglitz identify a vast array of contributing causes to the resource curse. Corruption is among the most severe, they conclude. “The short run availability of large financial assets increases the opportunity for the theft of such assets by political leaders. Those who control these assets can use that wealth to maintain themselves in power, either through legal means (e.g., spending in political campaigns) or coercive ones (e.g., funding militias).” Local corruption, they note, is often aided and abetted by international companies. “International mining and oil companies that seek to maximize profits find that they can lower the costs of obtaining resources more easily by obtaining the resources at below market value — by bribing government officials — than by figuring out how to extract the resources more efficiently.”

Highlighted by pickinjava

High oil prices have a clear economic effect. But for highly indebted, impoverished countries, climate change, fueled significantly by CO2 emissions from cars and other gas-guzzling vehicles in the North, will have serious ecological, social and economic impacts as well.

Highlighted by pickinjava

Says Saul, “A key way to transition away from dependence on oil is through debt cancellation. Countries need fiscal space in order to invest in the post-fossil fuel economy — but the debt trap keeps countries from meeting a wide variety of social needs.”

Highlighted by pickinjava

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