The Oil Curse

Michael Ross, a political scientist, has done extensive research on countries who  possess  vast amount of petroleum to see  “why petroleum resources have such strange effects on a country’s political and economic health.” In his book The Oil Curse, Ross addresses such questions as “why oil wealth typically creates less economic growth than it should, why it produces jobs for men but not for women,  and why oil riches create more problems in poor states than in rich ones.”   He argues that “ the political and economic problems of the oil states can be traced to the unusual properties of petroleum revenues.  How governments use their oil revenues to benefit the few is certainly a problem.  But whether governments spend these funds wisely or foolishly.”

The debate about “oil curse” has also entered Iran with some experts calling it Nekbat’e Manabeh (resource curse).  In an interview, the Minister of Finance Mr. Ali Taebnia  was asked to explain why Iranians have not seen tangible economic benefits from large oil earnings,  and instead of improvement in their daily conditions,  the country has witnessed higher inflation and negative economic growth. Taebnia responded that this can be called “oil curse,”  but reminded the interviewer that this curse is not an Act of God,  rather, it is caused by mismanagement and government’s abuse of its national asset.

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