POLITICAL ECONOMY OF OIL AND FORMATION OF AN OIL STATE IN - - PowerPoint PPT Presentation

POLITICAL ECONOMY OF OIL AND FORMATION OF AN OIL STATE IN AZERBAIJAN

PhD PROJECT Hafiz Aliyev

“OIL STATE”

♦ Economically – RENTIER ♦ Politically –

AUTHORITARIAN OR SEMI-AUTHORITARIAN

“OIL STATE”

♦RENTIER: Economic gains from

export of a natural resource (in our case, oil) constitute the most substantial part of the revenues of the state.

♦AUTHORITARIAN: Lack of

participatory democracy and political pluralism, & exercise of coercive power of the state on other political and social forces.

THE LINK BETWEEN AUTHORITARIAN POLITICAL STRUCTURE AND RENTIER ECONOMY

Why are we concerned about it? => =>Empirical evidences:

• Kuwait, S.Arabia, UAE, Bahrain, etc.;
• Nigeria, Iraq, Algeria, etc.

Why does it happen in the case of OIL, not other resources?

Characteristics of oil as a commodity:

• Non-price elastic product;
• Different from other sources of wealth (for

example, diamonds, gold, narcotics, etc…).

• Strategic product, i.e:
• Not only economic gain;
• But also political influence.

So, IS AZERBAIJAN A FORTHCOMING OIL STATE?

• Primary Analysis: economic and

political trends since independence (1991).

• Secondary Analysis: Importance of
• il in pre-Soviet independence (2

years) and Soviet periods – in order to find whether there are historical roots of this phenomenon in Aze.

ELEMENTS/FACTORS TO WATCH IN THE FIELD OF ECONOMY: ♦Economic significance of oil

revenues (percentage of GDP);

♦Legal and practical control over oil

revenues => Oil Fund?

♦Liberal economic structure; ♦Existence/lack of independent

business elite.

ELEMENTS/FACTORS TO WATCH IN THE FIELD OF POLITICS:

♦Political structure (clan, kinship, &

regional affiliation, separation of powers, etc);

♦Democracy & political pluralism; ♦Existence/lack of strong pol.

• pposition;

♦Degree of social consent and political

coercion;

♦Civil control over pol. & econ. issues.

Link between rentier economy and political authoritarianism

♦ Link between power relationships and

production/economic relationships

♦ Link between political and economic

factors:

• political effects of economic variables;
• economic effects of political variables.

PRELIMINARY FINDINGS

♦Some evidences in the field of

politics and economy;

♦Expected rise in oil revenues from

the export of major oil:

• - Norway or Nigeria?
• - Kuwait/S.Arabia or Iraq/Algeria?

POLICY RECOMMENDATIONS

♦What to do?

• Political sphere
• Economic sphere
• External factors

Thank you for your attention!