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Diversified Development : Making the Most of Natural Resources in Eurasia

Listed author(s):
  • Indermit S. Gill
  • Ivailo Izvorski
  • Willem van Eeghen
  • Donato De Rosa

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.

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This book is provided by The World Bank in its series World Bank Publications with number 17193 and published in 2014.
ISBN: 978-1-4648-0119-8
Handle: RePEc:wbk:wbpubs:17193
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  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, January.
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