أثر انخفاض أسعار النفط في حقبة الثمانينات على الإنفاق العام في الدول العربية النفطية

الملخص EN

This paper aims to investigate the outcome of the decline in oil prices on public expenditure in the Arab Oil States and its influences on those economies, in an attempt to predict the future.

This is achieved through the study of: 1-The fiscal policy in those states.

2-The size of pulic expenditure and its rate of growth .

3-The structure of public expenditure.

4-The possibilities of the future in the context of the oil market predictions.

I.

Fiscal Policy in the Arab Oil States Whatever the explanation given to the behaviour of those states, and whether this explanation is based on the concept of the "rentier state" or the concept of the "allocative state" .

there are common features characterizing fiscal policies in those states, some of which are that: 1-Most of the oil revenues accrue directly to the government, a matter which gives the latter a leading role in the economy.

2-The clear influence of oil is that it frees the government from the need to draw income internally.

3-The basic role of the government became the destribution of advantages and benefits to its citizens.

4-The generation of the oil revenues became easier than spending them.

5-The experience of the period 1973 - 1980 in the Arab oil states proved that _fiscal policies had a greet role in those countries .

* Associate Professor - Faculty of Economics and Political Sciences Cairo, Universty .

(BULLETIN OF ARAB RESEARCH AND STUDIES, VOL.

19,1991.

pp.

25-28) 6-The Eighties were characterized by a growing trend in those countries for adopting adjustment fiscal policies.

II.The Size of Public Expenditure and its Rote of Growth The oil boom was characterized by a public expenditure spur which was accompanied by some prolems like inflation, bottelnecks, distortoins, social tensions and the generation of an environmnet encouraging for illegal operations.

With the fall in oil revenues, public expenditures also fell.

However, it was only natural that the decrease in public expenditures was less then the decrease in public revenues, since the latter are influenced by external factors out of control of these states, while public expenditures are linked to internal factors, economic and social development programs, and inflationary pressures in the economy .This led to the appearance of fiscal deficits in this group of states budgets sincel982 (with some disparities among those countries).

III.

The Structure of Public Expenditure Public current expenditure (which reflects public or government expenditure) is very high in this group of countries.

There are also some remarks concerning current expenditures: 1-Current expenditures could have a great developmental effect which is the case of expenditure on education, training, health etc.

In fact, most of Arab oil states built a developed welfare state.

However, this system had some negative points, the most important were that: a) It was characterized by extreme extravagance in most of the times.

b) It led to a situation of extreme dependency on the governments which entails economic and social effects especially the Future generations.

2-Current expenditures contributed to the increase in private consumption through increasing private incomes.

3-Expenditure on defense and armement constituted a very high share of total current expenditure (about 20 % in 1979 and average of 25.15 % in the period of 1980 -1985).

4-Wages and salaries represented also a high share of total current expenditure (23 % in 1979 and an average of 22,7 % in 1980 -1985) .

5-Financing current expenditure is through oil revenues which means a depletion a capital asset, oil, and a misallocation of resources.

It is evident from the study of the current expenditure strucure that it did not change after the decline in oil revenues in the eighties and that investment or development expenditures were the ones which fell, which means negative consequences on economic development in those countries.

IV.

An Outlook for the future.

It is very difficult to draw a picture for the future or for the possible changes in this future, in order to predict the probable fiscal policy or the public expenditure paths in the Arab Oil states .

However different studies pointed to the continuity of the oil glut at least until the end of the decade.

Therefore it might be said that oil revenues would not regain their seventies levels for at least fifteen years to come .

This might lead to the continiuty of budsget deficits in most of the Arab oil states.

The above situation impose two choices upon those countries: 1-Imposing taxes and dveloping other resources in order to finance public expenditures.

2-Or depleting more oil to finance this high level of public expenditures .

Both choices are difficult although not impossible .

However, it is clear that the reform requires a basic and strategic change : a change in mentality and the way of thinking as well as a change in attitudes and policies.

As far as public expen¬diture is concerned, what matters is not closing the deficit gap, as much as it is a chang in the fiscal policy and its objectives, a change which includes both public expenditures and public revenues items, which means a overall revision of priori¬ties.