August 19, 2009

If the net oil revenue that goes directly to government exceeds 5 percent of GDP, then oil is a curse

Sir Moisés Naím writes that “Oil can be a curse on poor nations” August 19 and of course he is right. That said I would hold that when net oil revenues amounting to more than 5 percent of GDP of a country goes directly to the government, making it independently wealthy, then simply put, the oil is a curse, on any nation, and any evidence to the contrary is just waiting for a disaster to happen.

You see when people hear about oil they think of richness and the citizens expect that richness to be distributed to them by the government, without really knowing how much they should get, and then all start jockeying for positions to be favoured by the mighty, and society breaks down.

I am the President of an NGO in Venezuela, Petropolitan, which starting in the last millennium has been working among other for oil revenue sharing. Notwithstanding more than 100 articles published on the subject our agenda has not move a lot forward and so lately we have been calling out for help to other countries trying to establish a global alliance of oil cursed citizens.

Do you know who represent some of our major obstacle? Strangely enough some of those well intentioned groups like Revenue Watch Institute and the Extractive Industry Transparency Initiative (EITI) and who, by somewhat naively pushing the illusions of good partial solutions, play right into the hands of our oil autocrats.