Question

1. How has the oil curse affected the socioeconomic structure of RRLP countries?

2. Explain some socio-economic and political effects of the Arab Uprising. Show where it has succeeded and where it has failed.

3. Compare and Contrast the strategies of ISI and Export-Led Growth in the MENA Region

Answer 1

1) Oil curse effect on socioeconomic structure of RRLP Countries:-  Richard Auty defines the oil curse as “An extreme manifestation of a broader rent curse that is rooted in policy failure and reflects the unusual capital intensity of hydrocarbon production." Oil exports are actually a liquidation of assets rather than a source of income; nonetheless, oil reliant countries treat revenues generated from oil sales as income. Without converting such revenues into some form of lasting capital, the net result is a reduction of national wealth.

The countries with high oil endowments or low indigenous citizen populations are part of the resource rich labor poor (RRLP) group. Countries with high dependence and large populations such as Algeria and Iran fall in lower-middle income groups, despite their valuable natural resource endowments and are classified as RRLP group. It is worth noting that Libya defies easy classification .On the one hand its per captia GDP is lower than all other RRLP countries. and its long time ruler, Muammar al- Qaddhafi, distributed oil rents unevenly among citizens than most other RRLP Countries. Remaining middle income resource poor labor abundant (RRLA) countries export a relatively low volume of hydrocarbons or not at all. other factors effecting the Oil curse RRLP countries are

1- Oil price volatility- International oil market is probably the most unstable in the world and politicians have difficulty managing sudden price fluctuations and the economic expansion that follow. The price volatility has a significant negative effect on budgetary discipline control of public finances, as well as public planning efforts.

2- : the "Dutch disease"/or Failure to compete:- Oil-dependent countries often suffer from what is called the "Dutch disease", a phenomenon in which the oil industry causes a rise in the exchange rate of the local currency, which automatically makes other exports very uncompetitive

3- the lack of skills and performance quality

4- the problem of taxes, fiscal insecurity, and management of revenues