THE WORLD CRISIS AND THE RAW-MATERIAL ORIENTED TRANSITION ECONOMIES
Lola SULTANOVA, Albina GAYSINA
Lola Sultanova, Ph.D. (Econ.), lecturer at the Tashkent State Institute of Oriental Studies (Tashkent, Uzbekistan)
Albina Gaysina, Master of Economics, independent researcher (Tashkent, Uzbekistan)
The world crisis, which naturally aggravated many problems, increased the raw-material dependence of the transition economies of at least some of the CIS countries.
A comparative analysis of the economic progress achieved in the last decades revealed that natural riches slow down economic growth. This phenomenon, known as the resource curse, was accepted as a fact and became a subject of economic studies, especially after J.D. Sachs and A.M. Warner published their articles dealing with the negative statistical dependence between natural riches and economic growth rates.
The authors, who looked at the “natural resources curse” as a factor of investments, corruption, the country’s openness, and trade conditions, agreed that natural riches should be described as a negative factor.
There are numerous examples confirming the above: between 1965 and 1988 the per capita GNP of the resource-dependent countries dwindled by approximately 1.3 percent every year, while in the countries with low and average incomes it grew annually by 2.2 percent.
Nigeria, the oil-related income of which increased between 1965 and 2000 from $33 to $245 per capita in comparable prices while the GDP remained the same ($325 in comparable prices), is one of the most striking examples among the OPEC countries.
Between 1970 and 2000, the share of the poor (with incomes below $1 per day) in the country’s population increased from 36 to 70 percent.
Many countries have been able to disentangle themselves from the natural resource curse and are demonstrating adequate development rates. Such are the United States and Botswana, among others.
The opinions about the fairly contradictory empirical regularities of the “natural resource curse” differ.
Theoreticians rely on an analysis of all sorts of economic and institutional aspects of what is known as Dutch disease (economic restructuring) caused by a country obtaining additional profits.
In fact, Dutch disease (Dutch syndrome) is a wider concept than the “natural resource curse” since the money might not only come from the raw-materials sector or market fluctuations but also in the form of foreign aid.
Much has been written about Dutch disease. Most authors explain it by the contracting production of finished industrial goods responsible for external benefits. Others attach special importance to rent, economic policy mechanisms, and exchange rate fluctuations.
V. Matveenko, who has relied on the one-sector model to analyze the correlation between raw-material dependence and economic growth rates, and K. Kuralbaeva and O. Eysmont, who studied the dependence between the GDP growth rates of a resource exporter and the share of the resource sector in the economy using the two- and three-sector model, stand apart among the CIS authors.
The majority prefers simpler explanations: world oil and……………..