However, most of the oil exporters in the world are developing countries, which have to import most of their consumer goods from the countries they export oil to.
Therefore, if they earn a dollar in one hand, they then pay double with the other hand… What a paradox.
When oil prices reached US$78.77 a barrel last year, Oil & Gas Journal said rich countries could adapt themselves to the surge by linking oil prices to the value of the dollar, controlling main oil sources and exploiting oil at a low cost thanks to advanced technologies.
These countries also allocate huge sums of money to scientific research and experiments for the development and use of alternative energies.
Despite recent increases in oil prices, the International Monetary Fund (IMF) has raised its world economic growth forecast for 2007 and 2008 to 5.2 percent due to the success of some developing countries, including China.
The IMF also said high oil prices would pose a threat to the world economy, but it showed little concern over the matter.
The International Energy Agency (IEA), an organization aiming to protect the rights of energy consumers, described the situation as a disaster for the poorest countries in the world, where oil industries were subsidized by governments.
The IEA said the total subsidies were five times higher than the debt relief offered by G8 to these developing countries.
A recent economic prospect report by the IEA Organization for
Economic Cooperation and Development showed that the inflation rate in oil importing countries in Africa has exceeded 10 percent once again under the pressure of the oil price surge.
At a recent forum, the Organization of Petroleum Exporting Countries (OPEC) turned down a proposal by Washington to lower energy prices and support the sluggish US economy.
Most OPEC members said the surge in oil prices was not to blame for the economic slowdown that led to the credit crisis in the US Representatives at the forum also said Saudi Arabia was seeking a reduction of oil prices to $90 a barrel as well as an increase in OPEC production.
In the future, both rich and poor countries will be unable to survive the consequences of oil price surges unless they start changing now, especially when all the indicators prove that the surge is bad for the whole world.
Developing countries that export oil depend on crude oil as the main source of income while other sources necessary for development are still limited.
These countries should be aware that crude oil is a nonrenewable natural resource and that it will be exhausted someday.
Within the next five years, they should create strategies and plans to prepare for the transformation from mono-income economies into multi-income ones, in which crude oil is a reserved resource to be used only in need.
Moreover, we must turn to alternative energies such as natural gas and nuclear power to generate electricity.
Finally, we need good policy to support these moves.
We must persuade all people in all societies that this vital decision for future development will require them to make and finance strategic plans, carry out legal reforms, reorganize the industries, cut red tape and move forward.
Reported by Abdulaziz Al-Sharrah, Ph.D. (The Consulate General of Kuwait in Ho Chi Minh City) |
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