An interesting look by The New York Times at how the approach of triple-digit oil prices has redrawn the economic and political map of the world, causing oil-rich nations to enjoy historic gains and opportunities, while major importers — including China and India — confront rising economic and social costs.
“…Managing this new order is fast becoming a central problem of global politics. Countries that need oil are clawing at each other to lock up scarce supplies, and are willing to deal with any government, no matter how unsavory, to do it.
In many poor nations with oil, the proceeds are being lost to corruption, depriving these countries of their best hope for development. And oil is fueling gargantuan investment funds run by foreign governments, which some in the West see as a new threat.
…For developing countries, oil can be a tool of national transformation — whether the goal is a middle-class standard of living or a utopian society.In Venezuela, President Hugo Chávez is pouring oil proceeds into a socialist revolution, creating free health care, free education and cheap food; enabling heavy public spending that has helped fuel four years of economic growth.
…Oil-rich Angola is taking in two and a half times the cash it did three years ago. Hotels in the capital, Luanda, are booked months in advance, largely by foreign oil companies. Sales of luxury cars are booming, and the International Monetary Fund projects the economy will grow 24 percent this year, one of the world’s fastest rates. Yet analysts for the Catholic University of Angola’s research center say two in three Angolans live on $2 or less a day, the same ratio as in 2002, when the country’s decades-long civil war ended.The government is eager to show that oil wealth is benefiting ordinary citizens. It has rebuilt 2,400 miles of roads, refurbished 4 airports, and laid 430 miles of new railroad track.
But many Angolans take it as a given that oil has enriched public officials most of all. In 2003, a newspaper in Luanda identified the 20 richest people in Angola: 12 were government officials; 5 were former officials. Angola’s growing muscle — it is now the biggest oil supplier to China and the sixth biggest to the United States — is leading it to rethink its global position. It recently joined the Organization of the Petroleum Exporting Countries and is limiting its cooperation with the I.M.F.
In perhaps the most far-reaching change, China has become Angola’s financier, lending Luanda as much as $12 billion for the country’s reconstruction, in return for guaranteed oil supplies.
…China, a one-time oil exporter that now must import half its oil to lubricate its booming economy, is facing politically troublesome shortages of fuel from Shenzhen to Beijing, as Chinese refining companies refuse to supply diesel at unprofitable state-regulated prices. To head off a crisis, China raised retail prices for fuel nearly 10 percent on Nov. 1.
India is potentially even more vulnerable than China, some analysts say. Although it consumes a third as much oil as China, it imports 70 percent of its oil. It also has no strategic reserves, and demand is growing faster than in any other economy except China’s. Like China, India subsidizes fuel, particularly the kerosene used by lower- and middle-class families for cooking — a policy that costs it some $12 billion a year. If oil reaches $100 a barrel and stays there, analysts say, India will be forced to roll back those subsidies.
…Without an increase in retail prices, officials at the Ministry of Petroleum and Natural Gas warned recently, they might no longer be able to buy adequate supplies of crude for India’s refineries. “Unless consumers are paying for what they consume,†said M. S. Srinivasan, the petroleum secretary, the ministry “is going to be left with a big hole in its pocket.â€