Happy hump day! We’re halfway through the month of April and the sensationalized panic about the oil price has subsided into a quieter, somber acceptance of a new reality (somewhat). I haven’t been as diligent with my morning newspaper routine; I used to flip through the papers first thing at work with a hot drink in hand but werk got bizzier and news got boringer, especially after LegCo.
Since LegCo already announced the official 2016/2017 government budget and forecasted revenue (and expected spending deficit), I need to eventually update the chart I drew up in the Q&A here to include that… Clearly my assumptions were on the optimistic side, huh? I’ll eventually do a proper check on the numbers but we’re expecting a deficit of roughly 4 billion (how much spending exceeds income) based on a government budget (planned spending) of 5.6 billion and an expected revenue (income) of a depressfest 1.5ish billion, if I recall correctly. My “conservative prediction” for the deficit was a billion dollars less, at 3 billion. Guess we’re in for a pretty rough ride.
Anyhoot – In the last couple of weeks, BBC has published a few news articles regarding a number of other major oil producing countries so I’ve curated a batch for your reading pleasure. They’re not explicitly linked into a series on BBC or anything, but these articles all – in some way or another – describe the various ways the plunge in oil price has affected the economies and governments of oil-dependent states:
Petroleum and LNG are the cornerstones of Qatar’s economy and account for more than 70% of total government revenue, more than 60% of gross domestic product, and roughly 85% of export earnings.
- Is Qatar’s economy feeling the pinch? (12 April 2016)
Very good, comprehensive read that looks at the issue from different angles
Kuwait has the sixth largest oil reserves in the world are accustomed to lavish benefits, such as interest-free housing loans, free education and healthcare, and food and fuel subsidies. (Sound familiar?)
- Kuwaitis face cuts in lavish benefits as oil prices drop (24 March 2016)
Eerily similar to what’s happening (and what high level government representatives are saying) in Brunei. Budget cuts, continuing to spend would be “economic suicide”, call for privatisation of things like the airport, etc.
Angola’s economy is heavily dependent on oil. It accounts for more than 95% of export earnings and more than two-thirds of government revenue.
- Angola seeks IMF help in the wake of oil price falls (6 April 2016)
Big trouble, need a loan or “financial assistance”
Venezuela has the world’s biggest known oil reserves (even larger than Saudi Arabia). Oil exports account for as much as 95% of Venezuela’s revenue.
- Venezuela economy: Nicolas Madura declares emergency (15 Jan 2016)
Economy is crazy bad, serious crisis
- Venezuela declares every Friday a holiday to save electricity (7 April 2016)
Drought means less water for hydro-generation, severe energy shortage
- The surreal world of Venezuela’s queues (20 April 2015)
Shortage of basic goods like milk, sugar, cooking oil, toilet paper (NEEDS!) means people have to queue all day
- How long does it take to buy basic goods in Venezuela? [VIDEO] (23 Mar 2015)
If you don’t feel like reading the feature above, this is an easy, interesting video about the same thing. People sometimes take the day off to buy stuff and it’s estimated people spend 8 hours a week queuing for basic goods
The petroleum industry in Nigeria is the largest on the African continent.
(As of 2014, Nigeria’s petroleum industry contributes about 14% to its economy. Therefore, though the petroleum sector is important, it remains in fact a small part of the country’s overall diversified economy.)
- Nigeria’s fuel crisis: Why is Africa’s largest oil producer short of petrol?
Spoiler alert, three reasons: huge debt, currency crisis, fuel subsidy
Have a good read!