4  BIS Review 13/2003  Several studies of the relationship between long-term economic growth and natural resources show that countries with an abundant suppy of natural resources have tendency to experience lower economic growth. Why? In principle, an abundance of natural resources is an advantage for a country's economy. One of the main findings of the studies on the relationship between long-term economic growth and the supply of natural resources is illustrated in the chart. The chart was made by Jeffrey Sachs and Andrew Warner, two of the most prominent researchers who have studied the phenomenon that has come to be known as the “resource curse”. They use the size of a country’s exports of natural resources in relation to GDP in 1970 to measure how rich the various countries are in terms of natural resources. There is a negative correlation between the supply of natural resources and economic growth in the period 1970-1989. The group of countries with the highest growth rates includes the Asian tigers, which have had a very limited supply of natural resources. Several of the oil-rich countries around the Persian Gulf fall into the group of countries with the lowest growth. This could suggest that it is not necessarily an advantage to have an abundance of natural resources. There are many factors that influence economic growth. Sachs and Warner only look at one of these factors in their chart. The relationship has proved to be relatively robust, however.
Jarle Bergo: Oil - economic policy challenges Address by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at the 2003 Southern Norway Conference, Kristiansand, 11 March 2003. The address is based on the assessments presented at Norges Bank's press conference following the Executive Board's monetary policy meeting on 5 March and on previous speeches. Please note that the text below may differ slightly from the actual presentation. *  *  *  Oil is a major component of the Norwegian economy - with all the advantages and disadvantages this entails. Oil gives us an economic base that is not available to many other countries. But it also presents us with considerable challenges. How should we use our petroleum wealth wisely? This question poses a number of economic policy challenges. In my discussion today, I will focus on three points: First, we must manage our petroleum resources recognising that they are part of our national wealth. When oil is extracted and sold, natural assets are transformed into financial wealth. This is not income in the ordinary sense. Norway’s national wealth belongs not only to our generation, but also to future generations. This means that our petroleum wealth must be equitably distributed between generations. The authorities must therefore be disciplined and apply long-term considerations in their spending. Moreover, the size of the cash flow from petroleum activities varies considerably.