Optimal policies for managing oil revenue stabilization funds: An illustration using Saudi Arabia

AlKathiri, Nader; Atalla, Tarek; Murphy, Frederic H.; Pierru, Axel

doi:10.1016/j.resourpol.2020.101686

Cited by 8 publications

(2 citation statements)

References 33 publications

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“…These are uncommonly specific regarding both investment and saving behavior, and the trade balance. On investment and savings, the use of the sovereign Saudi fund as a buffer against fluctuations of oil export revenues (AlKathiri et al, 2020) requires departing from the CGE standard of fixed savings driving investment. Variations of the sovereign fund amount to variations of national savings meant to smooth out the investment path of the Kingdom.…”

Section: Salient Featuresmentioning

confidence: 99%

Structural Transformation Options of the Saudi Economy Under Constraint of Depressed World Oil Prices

Soummane¹,

Ghersi²,

Lecocq³

2022

The Energy Journal

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We implement the hybrid (energy-economy) recursive-dynamic multisector IMACLIM model with important adaptations to Saudi macroeconomics. We design two scenarios reflecting both the Saudi Vision 2030 economic development program and Nationally Determined Contribution (NDC) to greenhouse gas mitigation: Continuity of previous plans to expand energy-intensive activities under maintained energy-pricing policies, versus Transformation by economic diversification away from hydrocarbon-related activities and fiscal and energypricing reforms. We show that, compared to Continuity, Transformation improves activity, employment and public budget outlooks, while considerably abating the energy intensity of GDP and total CO2 emissions. Our results thus point at the relevance of economic diversification as both a hedging strategy against international climate change mitigation depressing oil markets and a national climate mitigation strategy for Saudi Arabia.However, the successful advancement of the reforms necessary for diversification remains conditional to setting a suitable institutional framework for a competitive economy.

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Section: Salient Featuresmentioning

confidence: 99%

Structural Transformation Options of the Saudi Economy Under Constraint of Depressed World Oil Prices

Soummane¹,

Ghersi²,

Lecocq³

2022

The Energy Journal

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“…For example, in 2020, Brazil and the Russian Federation increased their PGEB dramatically despite the plunge in oil rent, while their tax revenue was almost unchanged. Studies reported that many oil-exporting countries increased their budget value to fight the crisis, thus expecting to cover up the budget gap with high oil rents after the spike in oil market demand (AlKathiri et al, 2020;Jin & Xiong, 2021). This study explored the oil rent dynamics in PGEB formulation in Malaysia and other selected oil exporters.…”

Section: Graph 8: Effect Of Oil Rents On Primary Government Expenditu...mentioning

confidence: 99%

Landscape Discussion of Oil Rents and Primary Government Expenditure Budget

Zakaria¹,

Musa²,

Mohamed³

et al. 2022

ipnj

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Purpose: This study compares Malaysia’s oil rent dynamics and primary government approved budget (PGEB) with other major oil-exporting countries. This study reviews the annual time series data from 2005 to 2020 of oil rents and PGEB. Methodology: The outcomes derived from meta-analysis approach are presented in graphical comparisons of oil rents and PGEB of Malaysia with other oil exporters. A horizontal comparison was also carried out. Kuwait, Saudi Arabia, Nigeria, Kazakhstan, Brazil, and the Russian Federation were selected as relevant oil exporters. Findings: Referring to the historical graphical presentation, the oil market fluctuations were linearly aligned to the budget figure among oil exporters. The study results portray historical connections between oil rents and PGEB in the context of Malaysia and other oil exporters, which may be beneficial to policymakers and practitioners in their decision-making process. Practical Implications: The findings that display the historical connections of Malaysian oil rents and PGEB with other oil exporters serve as a guideline to policymakers and practitioners. Originality/Value: In addition to the Malaysian setting, the scenario of other oil exporters amplifies the dynamics of oil rents on PGEB formulation. Keywords: Oil rents, primary government, approved budget, crude oil, Malaysian economy.

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