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OILCHANGE
1. Increasing oil production leads to increasing debt. There
is a strong and positive relationship between oil production
and debt burdens. The more oil a country produces,
regardless of oil’s share of the country’s total economy,
the more debt it tends to generate.
2. Increasing oil exports leads to increasing debt. There is
a strong and positive relationship between oil export
dependence and debt burdens. The more dependent on
oil exports a country is, the deeper in debt it tends to be.
3. Increasing oil exports improves the ability of developing
countries to service their debts. There is a strong and
positive relationship between oil exports and debt service.
The global oil economy improves the ability of countries
to make debt payments, while at the same time
increasing their total debt.
4. Increases in oil production predict increases in debt size.
Doubling a country’s annual production of crude oil is
predicted to increase the size of its total external debt as
a share of GDP by 43.2 per cent. Likewise, the same
change is predicted to increase a country’s debt service
burden by 31per cent. For example, the Nigerian government
currently plans to increase oil production by
160% by 2010. Past trends indicate that Nigeria’s debt
can thus be expected to increase by 69%, or $21 billion
over the next six years.
5. World Bank programs designed to increase Northern
private investment in Southern oil production have
instead drastically increased debt. Northern multilateral
and bilateral “aid” for oil exporting projects in the
South has exacerbated, rather than alleviated debt.
The industrialized North, which is home to only 20% of the world’s population, consumes 80% of the world’sresources. The concept of ecological debt refers to theongoing liability that wealthy nations of the North owe to
the South for centuries of environmental and human resource exploitation, dumping of waste, over-consumptionof collective resources (including the air), and profitsfrom ancestral and indigenous knowledge. Viewed from this perspective, many consider it fair to saythat the South does not owe the North anything – ratherit is the North that owes the South.
Read the document DrillingIntoDebt
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