The effects of natural resources on the economy of OPEC and some selected countries

Abstract

Countries with poor natural resources seem to have higher economic growth than those who are rich in natural resources. The purpose of this study is to test the hypothesis that the possession of natural resources leads to Dutch disease، negative terms of trade and rent seeking activities. Since the study has focused on OPEC members، we use the exports of natural energy as a proxy for the possession of natural resources. To investigate this hypothesis we implement the most recent growth models. Using panel data for eight OPEC members and 13 selected countries during the years 1969-2003، the estimated results suggest that energy exports revenue has a negative impact on GDP. In addition، the estimated results for individual countries prove that the exports of energy resources has a negative impact on the individual national income of countries such as; Iran، Indonesia، Libya، Nigeria، and Venezuela. In contrast to this finding، the effect has been positive in Saudi Arabia، and insignificant in Kuwait. In sum، the negative relationship between the energy exports revenue and national income in our country highlights the importance of curing the Dutch disease and its roots through a series of structural reforms in different sectors.

Keywords

• energy resources
• resource curse
• dutch disease
• economic growth
• panel data