April 15, 2003
Statistics on Oil Reserves by Income

See exciting commentary below.

















Approx

Country

Group

Avg.

Income


2000

Oil Reserves

(Barrels)


Per

Person


Total Pop

This group


Top 10%


26,632


123,000,000,000


191


647,420,314


Sec 10%


13,857


343,500,000,000


607


 565,538,466


Third 10%


5,440


160,400,000,000


197


 816,148,126


 


 


 


 


 


Top Third


14,548


627,000,000,000


309


 2,029,106,906


Sec Third


3,237


127,700,000,000


62


2,048,667,859


Bott Third


1,439


35,700,000,000


18


 1,989,002,291


So here are the numbers on oil reserves, as promised. I have grouped countries by their GDP/capita (income). Because the world income distribution is highly skewed, I have grouped countries in the following way: approximately top 10%, second 10%, third 10%; these are combined into a group called the "top third" -- which contains about 1/3 of the world's population. I also look at the second third and the third third.

Which countries are in these groups? The top (approximately) 10% of countries include the US, many countries and Europe, and also Kuwait. The second 10% contains most of OPEC, which is why oil reserves are so high for that group, but also countains other parts of Europe, Taiwan, and some of Latin America. The richest country in the third 10% is Poland, and the poorest is Paraguay. The Middle group is dominated by China, but also includes some sub-saharan African countries. At the bottom are India, Vietnam and other countries.

As you can see, countries with a lot of oil reserves tend to be richer. This is no big surprise, of course, except to strange economists with wacky theories! See my previous blog, but to recap: These wacky economists and their "I ate a brain tumor for breakfast" friends at the Boston Globe argue, I suppose, that the OPEC countries in the second 10% would be in the top 10% if they just didn't have the easy money from oil. Does anybody out there believe this?? I find it hard to believe. I suspect without the oil, the middle east might look a lot more like sub-saharan africa than America or Japan. Besides, if these economists are right, then the obvious policy implication for the middle east is that we should destroy all their oil wells, which would make everybody better off, right? Saddam's were doing the right thing by buring the oil wells! And the EVIL US tried to stop him.

Data Compiled from:
Oil Reserves: U.S. Geological Survey and Oil and Gas Journal estimates
Population Data: Census Bureau
Income Data: www.geographic.org

Also, thanks to my brother Caru Grasshopper (TM) for finding the oil reserves numbers.

Posted by ethan at April 15, 2003 12:48 PM
Comments

You're an animal. I have a question. I wonder if the Japan, Korea and other low resource economic wonders were able to jump start by FDI? FDI being the main culprit instead of low resources.

My guess, and this is a pure guess, is that countries with high resource based income tend to have social sclerosis, very unequal income distributions and very little social mobility because there's a small but powerful interest in keeping things the same. While countries with low resources and FDI are able to channel the FDI to productive uses and raise the standard of living. These governments usually are able to concentrate the FDI in developing native industries because the FDI isn't controlled by an elite and there's less political interest in keeping things the same.

So, I guess, if you have the time, can you run the same analysis holding FDI/capita constant? We should then see how FDI affects growth and GDP/capita, and see if there's any correlation with oil reserves. Of course FDI is related to other things like openness of economies and human capital, etc. It's all a mess when you try to figure stuff like this out, but I think you definitely put the oil reserve vs income question to rest.

Posted by: teddy on April 16, 2003 12:37 PM

Oh my gosh Ethan, this is too much for my small brain!

Posted by: Helen on June 2, 2003 11:41 PM

I don't disagree with your point.

But keep in mind that competence causes proven reserves.

A country like Zaire could have large amounts of oil in the ground yet have few proven reserves becuase its level of technical skill makes finding oil very difficult.

My guess is the correlation between amount of oil in the ground and income would be much less than the correlation between proven reserves and income.

Posted by: aa on November 9, 2003 5:49 PM
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