Record oil prices deepen rich-poor divide, say analysts

Record high oil prices, while having little effect on the world’s industrialised nations and benefiting oil-producing emerging economies, are taking a toll on poor countries that rely on imports, analysts say.
Industrialised countries are today much less dependant on oil than they were 30 years ago, said Manouchehr Takin from the Centre for Global Energy Studies.

They diversified their energy sources after the oil crises of the 1970s and 1980s, with some turning to nuclear power, and they also improved their energy efficiency.

Takin however said that if oil prices climb beyond 80 dollars the trend could have a pyschological effect and curb growth and accelerate inflation.

Oil-producing economies such as Algeria, Venezuela or Libya have profited handsomely from high prices,

But many analysts say that the price rises are a calamity for developing countries that rely on imports for their energy needs.

Their oil bills have ballooned, worsening their deficits and hampering their fight against poverty.

Claude Mandil, the head of the International Energy Agency watchdog, warned recently of a “catastrophe” for the world’s poorest countries that had forced the state to provide subsidisies for oil.

He said the cost of these subsidies was five times higher than the savings made when rich lender nations wrote off poor contries’ debts.

The Organisation for Economic Cooperation and Development said in its latest report on African economic perspectives that because of high oil prices, inflation had climbed beyond 10 percent in many of the continent’s countries that relied on oil imports.

France24