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Texas's economy suffered and so did parts of the American economy with High
inflation and high debt which caused the economy to suffer. Increased regulation
and diversification of a country's resources can stop this from being the case.
Countries representing OPEC all live and die by the constant production of oil.
While this factor is used to stimulate their countries economic growth, it
should be used to stimulate the building of a country's infrastructure. Oil-rich
countries should use the positive affect oil has had on their countries to build
strong governments and consumer demand for other goods. This powerful
infrastructure that could be built will give the economy stability and allow for
a country's GNP to grow in a slow, steady, and positive way.
The building of a
strong middle-class will allow for country's to prosper for many years to come.
Instead what has happened is that economies of these countries are in a state of
flux. What I mean by this is that their economies are very unpredictable and
unstable and their reliance on oil has made the disparity between the rich and
the poor a gap that becomes too large to overcome. One prime example of this is
Brazil, Brazil has large reserves of oil in a very large country. Brazil is a
developing nation and is very unstable when it comes to central governments. In
the 70's and 80's Brazil made large amounts of oil from its reserves. Instead of
investing the money made (from exporting oil) into their countries future, the
leaders of that country used the money to make themselves rich and left the
country in political and economic disarray.
The middle class of Brazil became
almost non-existent and their seem to be but two classes in that country. Those
classes were the extremely rich and the extremely poor. The lack of
infrastructure and consumer confidence in the economy due to the mishandling of
oil profits lead to many political assassinations and increased crime rates
throughout the country. It has taken and will continue to take Brazil years and
years to recover from these economic crisis's , which all could have been
avoided had Brazil's government invested in its future. It is definitely true
that an economy of a country can be vastly affected by the demand, consumption,
and supply of oil. The affect that good supplies of oil has on a country's
economy is one that can only be measured in the sense that it is inevitable that
they will be affected. As long as we drive cars that are fueled by gas and we
use heat in the winter time, oil will always be a strong factor in determining
the growth of a countries economy. In the United States, we have the strong
infrastructure to adapt to problems that the instability of both the supply and
demand of oil will cause. Countries need to look within themselves for managed
growth in order to steady their economies if oil is what sparks their economy.
A
strong central bank and government will allow for funds to be invested in
supporting the economy, the oil business, and consumerism. Once the
infrastructure is set the shear reliance on oil will not be a factor, because
the country's economy will be able to handle the affect. When the day comes that
oil wells ran dry and substitutes are needed the countries that will survive
will be the ones that have braced themselves for the effect that this will have
on their economy. Then these countries will adapt and overcome. Oil and gas
should be used as helper of a country's economy and not the passion by which it
is run. The production of great income for a country and a higher GNP that oil
production is something that should be able to benefit them for many years to
come. If you look at the United States as a model you will see a country that
handles oil with precision.
When the oil industry is in a downturn, the
government can step in and regulate taxes and stimulate investment by having the
central bank pump in funds that would not otherwise be used. When the oil
industry is doing fine, the government can sit back and reap the prosperity of
increases in employment and a rise in demand for oil. The prices will be lower
for gas and oil, which means consumption will be up and the economy will be up
too. Countries around the world can learn how to handle oil to the extent that
it creates an agenda that the benefits far outweigh the costs. We know that oil
and gas affects the economy and that it easily regulated by strong central
government and bank. The infrastructure must be built up to manage growth. The
leaders of the country should be committed to the development of the oil
industry. Finally the consumers should be aware of how their role in the
consumption of oil will affect the economy as a whole. When all parties are
aware and committed to the prosperity of their country and to the industry then
the consumption, supply, demand, profits, losses, and investment towards oil
will be a mutually beneficial one for the country and it's people.
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