[LINK] "The Iraqi who saved Norway from oil"

[rfmcdonald]

The Financial Times' Martin Sandbu has come up with a long article that explores the idea that Farouk al-Kasim, an expatriate Iraqi engineering now living in Norway, helped save his adopted country from being ruined by oil wealth, eventually leading Norway in its creation of its highly successful preparation for this boom.

Poor countries dream of finding oil like poor people fantasise about winning the lottery. But the dream often turns into a nightmare as new oil exporters realise that their treasure brings more trouble than help. Juan Pablo Pérez Alfonso, one time Venezuelan oil minister, likened oil to “the devil’s excrement”. Sheikh Ahmed Yamani, his Saudi Arabian counterpart, reportedly said: “I wish we had found water.”

Such resignation reflects bitter experience of the way that dependency on natural resources can poison a country’s economic and political system. Inflows of hard currency push up prices, squeezing the competitiveness of non-oil businesses and starving them of capital. As a result, productivity growth withers (a phenomenon known as “Dutch disease” after the negative effects of North Sea gas production on the Netherlands). Meanwhile, the state institutions in charge of oil often become corrupt and evade democratic control. And oil-rich states almost invariably waste the income it brings, many ending their oil booms deeper in debt than when they started.

This is better understood today than it was 40 years ago. When al-Kasim arrived in Oslo, no one was worrying about how oil might challenge Norway – in part because they didn’t think any would be found. The Geological Survey of Norway had dismissed the possibility just 10 years earlier.

The politicians and senior bureaucrats had not caught oil fever. A serious mining accident had recently brought down a government, and most did not want to touch oil matters with a bargepole. “Everything I said was met with, ‘Oh, you think so? Mmm. Maybe. Let’s wait and see’,” al-Kasim recalls. “This characteristic saved Norway from the curse of oil: the fact that they are completely incapable of getting carried away by the oil dream. They were very sceptical – plain horse sense basically. They didn’t want to move until it was absolutely proven that it was the right time to act.”

His was a lonely, contrarian voice. After examining exploration results, he wrote a report that warned Norway was sleeping, that even though no one had found oil yet, it was only a question of time. And time was short: the country’s leaders needed to prepare Norway to become an oil nation, but they were doing nothing. “I was a constant reminder that they were doing everything wrong,” al-Kasim says pointedly. Only his closest colleagues would listen.