OPEC MEMBER COUNTRIES:
A holistic analysis of their Individual Economies
This section focuses on
the 12 OPEC member nations. The focal point of attention on these countries
will be having an overview of the effects of their individual local oil prices
on the living standards prevalent in the countries. Secondly, the National
Economy Performance of these states will be examined. In arriving at this, two
tables would be created as thus; the equitableness of Oil Price on living standards
and the Efficiency of National Economy Tables which will respectively represent
the earlier two stated focal point.
These tables will be
the drive towards an all round profundity and logical precision in arriving at
the degree of responsiveness of the local price of the oil on the inhabitants
of a country further exploring the effects a well managed economy has on the
living standards of the people, the general economic viability and also the demerits
attracted by a sickly managed economy.
Also, having had an
overview of the correlation these variable factors have with one another as
regards the OPEC member nations, the Nigerian correlation would also be weighed
up. The purpose of this is to have a broader picture on the need for the
Nigerian government to learn from other governments that are getting it right
as put forward by this work, thereby driving her to an unprecedented level of
economic viability.
The reasons for
limiting the comparison to OPEC member countries is guided by Nigeria being a
member of the cartel, added to the fact that I opine that a country’s
membership of an International Organization of any sort is primarily to share,
enjoy and benefit advantageously from the bilateral or multilateral
relationship with other member countries of the International Organization
other than being a member of the International Organization with no purpose,
notably as a sleeping member. A country with this sort of membership is one
that in no time will deplete and drive towards doom rather than boom.
I believe that the
advantages benefited by a country from its membership of an International
Organization is directly correlated with the activities carried out by the
country, from the policies made and activities embarked upon to get the country
prosperous, having had a turnaround status, for example being a 3rd
world country to a 1st world country.
In arriving at this
turn around, such countries that are perhaps underdeveloped through the
bilateral and multilateral relationship at their disposal, courtesy the
International Organization to whom their members of will be able to import knowledge and learn from other countries in
the respective international organizations that were once in the depleted state
and through the pragmatic knowledge gained, forge towards correcting the depletion,
thereby importing productive ideas and projects prevalent in other countries
that have made such depletion history with the country being an epitome of one
having an economy that is buoyant for the betterment and benefit of the
generality of her citizenry, a perfect example in this regard is Qatar.
TABLE
1: EQUITABLENESS OF OIL PRICE ON LIVING STANDARDS
Table sources:
As illustrated in the
table above, 4 approaches are employed in adequately having an economic
analysis of the OPEC member nations from the equitableness of oil price on
living standards point of view. These approaches as illustrated in the table
are; the local oil price, minimum wage, percentage of population living below 2
US dollars a day in each of these countries and lastly, the national average
living age.
From the table 1, it is
observed that Venezuela has the cheapest oil price. At $ 0.023/litre (l) she is
no questioning the true epitome of a Father Christmas Government as against the
Nigerian government being wrongly addressed as one by her Central Bank of Nigeria (CBN) Governor. In
recapitulation to the prequel part to this subsidy saga series, the Governor of
the C.B.N. in his defense on the need for the Nigerian
government to remove the subsidy on petrol said; “the Federal Government is not and
cannot continue to be a Father Christmas.”
However, from the
table, it could be conclusively stated that the very low oil price in
Venezuela, added to the impressive minimum wage are the strengths to
Venezuelans having a high life expectancy of 73.7 years and also, a meager
percentage of 10.1% of her population living under $ 2/day.
Interestingly, as
regards the oil prices of these 12 countries, at $ 0.6164, that of Nigeria is
second to the highest and ironically, the minimum wage of Nigeria at
$112.062/month is what I perceive as being monetarily third to the lowest but economically
second to the lowest after Angola. The reason for the 2 variations in
analyses is due to the fact that with respect to singularly identifying the
OPEC member states with the lower minimum wage, Angola and Libya come before
Nigeria but when adding other added benefits by the individual government to
its workers in terms of subsidy and other government economic relief expenses,
Libya has her workers receiving more pay and benefits than the Nigerian public
worker thereby displacing Nigeria and having a shift in the radar, falling
behind Nigeria.
These said, the low
minimum wage in Nigeria, added to her high oil price is contributory to the
West African State having 83.9% of her people living below $2/day and 46.9years
being the average life expectancy. In addition, the free flowing corruption in
the public sector is also causative to the general poor living standards
experienced by most of Nigerians due to the fact that money which ought to have
been used in rendering qualitative governance to all Nigerians is wasted by the
fiends in government.
Though the figures with
respect to the minimum wage of Qatar and United Arab Emirates were not
available in the source as at the time of this work, having a look at the
prevailing average living age in both states at 75.6 and 78.7 respectively
brings to conclusion the fact that the minimum wage of both countries will be
equitably decent. This is because a well paid individual with the right living
standard would definitely live long due to him or her having a better proximity
to being able to take care of his or her primary needs, precisely health. Also,
the level of economic development of these countries and the low corruption
levels is one to be greatly commended.
Also, from the table,
at $799.963, the minimum wage of Saudi Arabia is
the highest while that of Kuwait at $781.248 comes second.
However both countries
have a well structured minimum wage that is grouped to cater for different
groups of individuals. With regards to Saudi Arabia, the $799.963 is for the
government sector employees while that of unofficial citizen workers in the
private sector is $399.9634. On the other hand, as revealed by wikipedia.org,
Kuwait has its minimum wage grouped into 3 categories. $781.248; $349.221 and
$144.009 are paid to the public sector, public sector non citizen and domestic
workers respectively. The overall average living age of Saudi Arabia is 72.8
and Kuwait, 77.6.
Venezuela with a
minimum wage of $326.3408 has her average living age as 73.7. On the other
hand, Iraq with her minimum wage at $ 9.009/< $ 4.505 per day for the
skilled worker and unskilled worker respectively has her overall life
expectancy at 59.5. Iran, its neighbour and also, another middle-east country
has its minimum wage at $ 179.23 and life expectancy at 71.
Libya has a life
expectancy of 74.0 with a well structured minimum wage as follows; $104.42;
$144.586 and $176.716 respectively for single person, married couple and family
of more than two. In addition to the minimum wage is government subsidized rent
and utilities. Motivationally, government workers receive additional $130 per
month for basic food staples.
Moreover, Ecuador with
a minimum wage of $ 240 + mandated bonuses has her average life expectancy at
75. In addition, her oil price at $ 0.44 is also low.
Algeria has its oil
price at $ 0.41, minimum wage at $196.88 and life expectancy at 72.3.
In the case of Angola,
the low minimum wage at $ 90.7425 added to its recently increased oil price of
$ 0.79 which makes her having the highest oil price is one that deserves no
questioning. This is due to the 27 years post independence civil war that
almost swallowed up the Southern African country between 1975 and 2002 and that
the present low economic state of the country would take a very long time for
her to fully recover. Though worrying, it is not surprising to see Angola
having 70.2% of its people living below $ 2 a day. The speediness of the
economic recovery of Angola is dependent on the nation being rightly governed
and corruption not allowed to breath, this the government of Angola is thriving
towards achieving.
Besides, it is evident
that the population living in abject poverty and average life span of citizens
and residents of any nation could be correlated with the living conditions with
regards to the National Minimum Wage and perhaps the oil price which has a
significant effect on the general price level. These said, a country with an
economically beneficial wage rate to her citizens has this as a merit that
would be contributory to them being salvaged from poverty, thereby having a
better life span.
Nonetheless, Nigeria is
widely perceived as one of the most richly blessed nations but in general, her
people are nothing to make obvious this richness that flourishes her.
These said Nigeria
indeed has a long way to go in its tall ambition of being among the top 20
developed economies of the world before the year 2020.
In this regard, I am
not a prophet of doom but I need no clairvoyant to tell me that no matter the
policies embarked on directed towards the achievement of Vision 20 2020,
Nigeria will best be a shadow of this group or perhaps best acclaimed to being
a wannabe come 2020. This is because asides the time not being available for
achieving this, the corruption stricken Nigerian economy added to the wastages
in the public sector are rooted deterrents to the materialization of this
dream. The rootedness of Nigeria in these economic advancement pitfalls, due to
these ills still being freely transpiring further makes the Vision 20 2020 a
joke that is to be frowned at.
I opine that in the
quest of a Nation achieving this developed nation status, it is
firstly paramount for the living standards of the people in the country to be
taken care of and made positive. One of the reasons for this notion of mine is
cemented on the believe that the higher the living standards of people in a
country due to the favourable minimum wage prevalent and positive individual
economy of the people, the more closer the nation will be driven towards its
attainment of the development status.
To this end, there is
no way a developing nation will have most of its people poor and get developed,
it just doesn’t and can never work that way.
This is primarily why with
83.9% of Nigerians being mudded in poverty, drastic actions need to be taken by
the government to ensure that Nigerian economy that has long been riddled with
the economic terrorist is timely appropriately addressed.
THE
EFFICIENCY OF NATIONAL ECONOMY
This table is primarily
employed to have a comparative illustration of the efficiency of the economy of
the 12 OPEC member nations. In arriving at this analysis, the Per
Capita Income, Unemployment Rate and Per
Capita Consumption of Electricity will be the bases of analysis.
Likewise, the Local Oil Price will be used in this table just as it was used
in table 1.
With regards to the
unemployment rate of the 12 countries in view two different sources are
referenced. These are figures provided by 2 somewhat comparable sources i.e. CIA
World Factbook and the trading economics. As at the time of carrying out this
research, Ecuador, Iran, Iraq, Kuwait and Libya had their unemployment rates
not available in the data as put forward in the Trading Economics website while
the CIA World Factbook Unemployment Analysis only had the status of Angola not
available.
Also as noted, the
figures of the unemployment rates as put forward by these 2 sources are
slightly different but are definitely pivotal towards having an all round
analysis of the unemployment rates prevalent in the OPEC member nations
TABLE
2 – THE EFFICIENCY OF NATIONAL ECONOMY
Table Sources:
A PIE CHART PERCENTAGE DEPICTION OF THE PER
CAPITA INCOME OF OPEC MEMBER NATIONS
Of all the bases of
economic analyses as indicated in table 2 above, the Per Capita Income (GDP Per
Capita) stands out at adequately examining the economy of a country. Simply
put, the per capita income is defined as the income per person in a given
country or population. It is generally accepted and viewed as the most
efficient means of calculating and knowing the average quality of life of
individuals in a country. The per capita income is calculated by dividing the
Gross Domestic Product of the retrospect country by her total population. The Gross Domestic Product is the value of all
goods and services produced in an economy in a given period such as a year.
These said, the higher
the per capita income, the higher would be the general living standard and
quality of life of the average individual in the country in view and vice
versa.
From the table above,
Qatar which is in 1st place in the Per Capita Income world rankings
has its Per Capita Income at $ 102,943 with a correlating unemployment level of
0.40%. In addition, of all the 12 countries in view, Qatar’s per capita income
has a 37% share as indicated in the pie chart. This brings to light the fact
that the economy of Qatar is one that is an epitome of efficiency in governance
with resource efficiency and management being one that is judiciously
assiduously executed by the government of Qatar.
In addition, the $
0.22/litre price of oil in Qatar further entails that she is a country that has
the government favourably working for its people in all ramifications of her,
primarily her economic activities. The 16, 327 kWh per capita power consumption
of Qatar is one of the strong points to her economy and notably per capita
income being on a flying note. Asides this, the level of private and foreign
investment in the country greatly contributes to her economic success, added to
the efficaciously managed oil industry that results in her oil price being low
and affordable by all.
The economies of fellow
Middle Eastern Asian Countries as thus; Kuwait, United Arab Emirates and Saudi
Arabia which all have their per capita income as $ 41,691 (15%); $ 48,158 (17%)
and $ 24,237 (9%) respectively seals the fact that these four oil rich
countries do not take their economies for granted and are devoid of exhibiting
nonchalance in leadership. Saudi Arabia’s 10.90% unemployment level seats her
at the 7th in the unemployment standings among the 12 OPEC member
states. Also, United Arab Emirates and Kuwait with the unemployment level of
2.40% and 2.20% respectively are seated in 3rd and 2nd place
behind Qatar, the country with the least unemployed people among the cartel of
OPEC member nations. In addition, of all these four countries, Saudi Arabia has
the lowest oil price at $ 0.13 which I perceive is instrumental at partly having
a downward shock effect and further pinning her unemployment level to 10.90%.
Additionally, the
14,417 kWh; 13,261 kWh and 5,653 kWh per capita electricity consumptions of
Kuwait, United Arab Emirates and Saudi Arabia have a significant effect towards
making their per capita incomes favourable. From this it could be concluded
that the level of power generation in a country is contributory towards making
her per capita income advantageous, added to the level of foreign and private
investment which further helps to encourage a drop in the unemployment level.
Also, Iran and Iraq
have their unemployment rates at 15% apiece even though the margin in their Per
Capita Income is huge with Iran being $ 13,053 (5%) and Iraq $ 3,886 (1%). From
these figures, I postulate that the reason for this similar unemployment level
in both countries is due to the advantage Iraq has over Iran with regards to
her lower oil price as thus, Iran being $ 0.655 and Iraq $ 0.38.
In addition Iraq’s more
encouraging private sector/foreign investment driven economy in contrast with
Iran which has the private sector and foreign investment having a little
contribution to her economy, it is anticipated that the unemployment in Iraq
would be better than Iran in the coming years. Though, an obstacle to this is
the security issues that have over the years been a worry to the government and
people of Iraq.
Venezuela, the country
with the cheapest oil price has her Per Capita Income at $ 12,568 and
unemployment level at 7.30%. More importantly, the 3,050 kWh per capita
electricity consumption of the country is of great help to keeping her per
capita income above $ 10, 000 and unemployment level below 10%. This analysis
further adds usefulness to my earlier postulation that the oil price in any
nation is contributory towards a positive per capita income and unemployment
level. This is due to the effect the price of oil (petrol) has on the general
price level of goods and services thereby playing a silent but pivotal role at
directly or indirectly encouraging or discouraging the engage in productive
services by members and residents of a country.
Of all the 12 countries
in view, Angola with her oil price at $ 0.79 is at the ceiling. Also, her per
capita income at $ 5,895 (2%) and per capita electricity consumption level at
243 kWh easily puts her ahead of Nigeria with respect to the quality life
enjoyed by citizens of both countries. The 25% unemployment level of Angola,
added to her high oil price could be significantly attributed the 27 years
civil war that ravaged the country. Remarkably, Angola is currently putting its
pieces together at a commendable pace.
In the case of Nigeria,
the economy is somewhat similar to that of Angola, though the richness of
Nigeria in natural resources is far more mouth watering than Angola but the
living standards of its people is shockingly the reverse and on a high
low. The per capita income of the self acclaimed giant of Africa at $
2,578 (1%), her unrepentantly shameful per capita electricity consumption at
126 kWh gets the economy of the West African country more deepening. It is
critical to state that with the erratic power supply level in Nigeria the potentials
of Nigeria and Nigerians has not been exposed and for as long as the power
sector in the country is not addressed the economy of the most populous black
country in the world will keep deepening.
Also, like I have
reiterated timelessly which I will still do, the benefits that would be “magnetted”
to the Nigerian economy if she can utterly get her refineries to meet all her
local needs, added to the export benefits will not go unnoticed.
The oil price at $
0.6164/litre only makes life more miserable for her citizens and I will not be
surprised if the unemployment level of Nigeria in no time rises above the
current 21.00%. I infer that a reason for this is due to the expected further
increase in the price of petrol.
Remarkably, Ecuador has
her unemployment level at 4.20 % and her per capita income, $ 8,492. It is no
doubt that her local oil price at $ 0.44/l plays a key role in amazingly
bringing down the unemployment level in the country even though the economy has
had its setback in recent years, notably 1999/2000. Suffice it to identify that with the low oil
price and per capita electricity consumption at 1,069 kWh, Ecuadorians are
encouraged to independently partake in the production process.
Libya with a per capita
income of $ 5,787 has its unemployment level at 30.00%, making her have the
worst unemployment level of all OPEC member states. But, as observed in the
source to this table, the current unemployment analysis is not available but
that of 2004. So for this reason, the analysis of Libya with respect to the
unemployment level should not be taken into much account. But the local oil
price of Libya at $ 0.17 added to her per capita electricity consumption at
3,431 kWh should be highly commendable.
Last but not the least
is Algeria. Algeria with her local oil price at $ 0.41/litre has her per capita
income at $ 7,333, unemployment level at 9.70% and per capita electricity
consumption at 819 kWh.
However in the quest of
any country driving towards economic development and the fastest growing status, the
venom that could get this ambition easily thwarted is what I have always
referred to as the economy terrorist (ET). It is one thing that a nation
carelessly brings upon herself, a thing that if let loose and carelessly
allowed to breath in government as a result of greed, wickedness, a somewhat
zero-supremacy of the law and a loss and misplacement of a once upon a time
ambitious government, will get the country economically doomed rather than
boomed up. This said the ET is corruption.
Fundamentally, the
following are the advantages a country will benefit from power supply being regular
and an efficiently managed oil industry;
With Respect to Power Supply,
the Country Will Benefit the Following;
1. The encouragement of
foreign investment will be more realistic. The level of industrialization of
any nation is largely dependent on the level of power supply prevalent in the
country. The reason for this is that most Multi National Companies or foreign
investors in general are aware of the dangers an inconsistent power supply
poses to their overhead cost and will as such avoid investing in countries with
a struggling power sector like the case of Nigeria. This is where Qatar stands
out and a perfect example for other countries to follow and take a cue from.
2. A regular power
supply in a country ensures an easier approach to the country easily securing
the lives and properties of its citizens and residents and as thus, a well
lighted country will have fighting crime easier than a country covered by
darkness.
For example, in
Nigeria, most times in the night, everywhere one goes, one sees darkness and
where one does not see darkness, one hears heavy disturbing noise that are
accompanied with the fumes of the power generating sets which are detrimental
to ones health. The widespread darkness and “earthquaking” noise from
the generators of lighted areas adds to the difficulty in crime fighting in the
night, a time that has crime on a high and vice versa.
3. It ensures proper
planning. With the high level of power failure in Nigeria, planning is
regularly disrupted due to the importance and many functions electric power
supply serves to man. From individual needs, to job and work needs. In
addition, the incessant power failure in Nigeria makes the power generating firm
in Nigeria; Power Holding Company of Nigeria (PHCN) plan for one rather than
one planning for oneself.
4. It ensures a drop in
unemployment level and a remarkable contribution to the per capita income.
Apart from the advantage to be benefitted from an increase in foreign
investment, a never-ending lighted up country has the advantage of having more
of its citizens being their own bosses and entrepreneurs which has the
multiplier effect of these entrepreneurs also being employers of labour. This
is due to the fact that not everyone can afford a generator and even those that
can afford it cannot regularly fuel it. In addition, an irregular power supply
in a country also increases the need for establishments, especially the small
scale ones to have a very limited workforce due to the unnecessary added cost
of generating power.
5. Beauty to the
environment. Though not having a direct economic significance to the economy, a
well lighted up country makes night movement encouraged due to the beauty that
is more manifested in the night. In addition, the availability of light at
every nook and cranny of the federation will get more people, business
establishments etc working at night.
With Regards To Efficiency
in its Oil Industry;
1. It would ensure that
the price of refined petroleum is on a low and very affordable.
2. It would ensure an
ease in the affordability of goods and services. This is due to the fact that
the general price level of goods and services is largely dependent on the price
of oil, a good that I will say is the most used and purchased goods after
water. To this end, everyone uses oil at one time or the other for production
activities.
2. It eases the
difficulty of an ease to daily living. This is dependent on the fact that
higher oil prices make living much more difficult for the average individual in
a country.
3. A low oil price is
directly related to the cost of electricity bills on the end user. This is with
respect to if natural gas and petroleum is majorly employed by the country in
generating power.
Having
discussed the economies of these countries it is advised that in a country’s
quest to economic development and viability, it is imperative for every
government to work towards having a high and favourable per capita income which
is achieved by the government taking advantage of the resources at its disposal
through ensuring its continued efficient management and the need to have a
limitless drive directed towards keeping the economy on a high, having its
citizens and not just the people in government as its most valuable assets.
References:
Begg, D., Fischer, S.
& Dornbusch, R. (2000) Economics sixth edition, McGraw- Hill Publishing
Company. Berkshire
Please leave your comments, opinions and views in the comment(s) box provided below.
Thank you!!!
To be continued...
