Life without Oil

Someone asked on the comment box as to whether I can write about life without oil. I supposed I could given the amount of information that I have acquired through my working career. Though I have to say that I am still bound by the OSA and have to word my words carefully.

I won't answer that question directly but probably point to some figures and pointers that probably can be used to start the ball rolling. And I would be relying on information available on open source such as the figures that I gave sometime last week about how much the government's income-expenses. From the income of roughly $8.7 billion in 2007 you can see the following:-

Tax Income from oil and gas is around $5.1 billion
Non-Tax Income from oil and gas is around $0.9 billion

in which case makes the figure around $6 billion. Income from the other non oil and gas is around $2.7 billion. Our expenses is around $5.8 billion. That means that take out the income from oil and gas, our other income barely covers half of our current expenditure.

There are two ways around this. One is to cut down our expenses and the other is to increase our income. Cutting down expenses would mean a much smaller government and the possibility of decreasing subsidies. Increase our income would mean to charge more for services and to find other sources of taxation. Both of which would hurt. Some would say that there is a third way. The government does have sufficient savings and investments and over the last few years, those savings would have grown as there have been a number of surpluses.

There is a lot of argument as to whether we should go, say the Dubai way, or not. Dubai has its successes and whether their methods are repeatable elsewhere depends very much on what one is willing to tolerate and the changes that has to be made. Our other way at the moment admitedly has not been as fast paced as most would have hoped for. But so far it has held steady and a little bit more push wouldn't hurt a bit. The 2007-2012 NDP is here to make sure that that will happen.

Life without oil would depend very much on what is our tolerance level and the level of savings that the government has. Compared to, say at the beginning of 2000 and now, personally I am more optimistic that life without oil would be something that we all can go through with.

Comments

eyeconomist said…
This comment has been removed by the author.
abid said…
creating self reliant is never an easy task...it can only create havoc and cumbersome process...but this is somewhat..everyone has to go through...either in life or business...people say look elsewhere outside this country..yes and no...yes if u hve d resources..no..if u are ready...u cannot run till u learn how to walk..my point is...brunei can be on its own...figuring out..we outrule..the wait and see what happens next and being not witfull about it...y not produce and grow our own rice? example? we hve labs to diagnose..we hve lands to field..d question is...are we ready to get our hands dirty?...u right...if we want to bcome next dubai...do u want indians to run ur country's economy?...

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