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Diversified Development : Making the Most of Natural Resources in Eurasia

Author

Listed:
  • Indermit S. Gill
  • Ivailo Izvorski
  • Willem van Eeghen
  • Donato De Rosa

Abstract

This report is about the twelve countries of the former Soviet Union (Eurasia). About 85 percent of the region’s economic output is in six resource-rich economies. Today, 85 percent of Eurasia’s 280 million people are no longer poor. But academics who study resource-based economies debate whether these countries are cursed or blessed. And Eurasia’s policymakers long for the day when their economies are less extractive and more innovative. These observations prompt questions: Are resources a blessing or a curse? If it is one of these things, what would make it into the other? How much should Eurasia try to diversify their exports and economies away from natural resources? Are there ways to make Eurasian economies both extractive and innovative? The answers: a large majority of Eurasia’s people should consider themselves blessed. To make sure that this blessing does not become a curse, Eurasian economies have to become efficient—more productive, job-creating, and stable. But efficiency is not the same as diversification: there is little evidence that more concentrated economies have slower productivity growth, fewer jobs, or much more economic volatility. Governments need to worry less about the composition of exports and production and more about asset portfolios—natural resources, built capital, and economic institutions. They have much to do. Eurasia’s portfolios are heavy in tangibles like oil and gas and roads and railways and light in intangibles such as the institutions for managing resource earnings, providing social services, and regulating enterprise. But tangibles are not what distinguish success from failure—investments in intangibles, early in their development, have made some resource-rich countries both extractive and innovative.

Suggested Citation

  • Indermit S. Gill & Ivailo Izvorski & Willem van Eeghen & Donato De Rosa, 2014. "Diversified Development : Making the Most of Natural Resources in Eurasia," World Bank Publications, The World Bank, number 17193, July.
  • Handle: RePEc:wbk:wbpubs:17193
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    References listed on IDEAS

    as
    1. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 570-615, August.
    2. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    3. Raimundo Soto & Ilham Haouas, 2012. "Has the UAE Escaped the Oil Curse?," Working Papers 728, Economic Research Forum, revised 2012.
    4. Auty, Richard M., 2001. "The political state and the management of mineral rents in capital-surplus economies: Botswana and Saudi Arabia," Resources Policy, Elsevier, vol. 27(2), pages 77-86, June.
    5. World Bank, 2013. "World Development Indicators 2013," World Bank Publications, The World Bank, number 13191, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Raju Huidrom & M. Ayhan Kose & Franziska L. Ohnsorge, 2016. "Challenges of Fiscal Policy in Emerging and Developing Economies," Koç University-TUSIAD Economic Research Forum Working Papers 1604, Koc University-TUSIAD Economic Research Forum.
    2. Rentschler, Jun, 2016. "Incidence and impact: The regional variation of poverty effects due to fossil fuel subsidy reform," Energy Policy, Elsevier, vol. 96(C), pages 491-503.
    3. Popov, Vladimir & Chowdhury, Anis, 2015. "What Uzbekistan tells us about industrial policy that we did not know?," MPRA Paper 67013, University Library of Munich, Germany.
    4. John Baffes & M. Ayhan Kose & Franziska Ohnsorge & Marc Stocker, 2015. "The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses," Koç University-TUSIAD Economic Research Forum Working Papers 1504, Koc University-TUSIAD Economic Research Forum.
    5. Andrey Shelomentsev & Svetlana Doroshenko & Olga Kozlova, 2015. "The Resource Factor and Socio-Economic Development of the Post-Soviet Republics," Eurasian Journal of Social Sciences, Eurasian Publications, vol. 3(3), pages 79-85.
    6. World Bank Group, 2016. "Competitiveness of the Kyrgyz Economy in the Wake of Accession to the Eurasian Customs Union," World Bank Other Operational Studies 24252, The World Bank.
    7. Kojo, Naoko C., 2014. "Demystifying Dutch disease," Policy Research Working Paper Series 6981, The World Bank.
    8. repec:wsi:jicepx:v:06:y:2015:i:02:n:s1793993315500106 is not listed on IDEAS
    9. Rajag M. Nag & Johannes F. Linn & Harinder S. Kohli (ed.), 2016. "Central Asia 2050: Unleashing the Region's Potential," Books, Emerging Markets Forum, edition 1, number centasia2050, August.
    10. World Bank Group, 2014. "Third Ethiopia Economic Update : Strengthening Export Performance through Improved Competitiveness," World Bank Other Operational Studies 20026, The World Bank.
    11. World Bank Group, 2016. "Services and Manufacturing Linkages," World Bank Other Operational Studies 24040, The World Bank.
    12. Eromenko, Igor, 2016. "Do Remittances Cause Dutch Disease in Resource Poor Countries of Central Asia?," MPRA Paper 74965, University Library of Munich, Germany.
    13. World Bank Group, 2017. "Suriname Sector Competitiveness Analysis," World Bank Other Operational Studies 26205, The World Bank.
    14. World Bank Group, 2015. "Global Economic Prospects, January 2015 : Having Fiscal Space and Using It," World Bank Publications, The World Bank, number 20758, July.
    15. repec:wbk:wbpubs:28422 is not listed on IDEAS

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