Land Question and Ethnicity in Darjeeling Hills Essay

ABSTRACT Although economic factors are often considered as essential for augmenting ethnic movements, the analytic relationship between economic issues and ethnicity is far from being clear cut. In an attempt to address the problem of ethnicity in a non-Marxist theoretical plane, most of the studies on ethnic problems inadvertently indulge such logical inconsistencies. Such a critical reading led us to conceptualize ethnicity as a lived-in category – much like the concepts of class or caste – where both the material and cultural domain of routine life congregates. With the help of a case study of the Gorkhaland movement in the Darjeeling Hills (India) and the input of a particular field of material predisposition – namely, the issues related with land and agrarian social formation, this paper attempts to argue that ethnic movements are a dynamic podium wherein the encoded meanings of material and/or economic issues/grievances are decoded in cultural idioms. Even if the discussions on ethnicity have an inbuilt tendency to develop a theoretical plane that criticizes Marxian class analysis and demands an autonomous conceptual frame duly encouraged by post-Marxist and poststructuralist/postmodernist theoretical renditions, literatures on ethnicity for the most part have stressed economic factors, in some way or the other. Hence, finding available studies, which have made considerable advances in understanding the problem of Gorkha ethnicity, that have concentrated their focus on economic factors as the root cause of ethnic antagonism and conflict in the Darjeeling Hills (West Bengal, India) is common. ‘Economic stagnation’ (Dasgupta 1988), ‘uneven implementation of development policies’ (Chakrabarty 1988), ‘economic deprivation and negligence’ (Bura Magar 1994; Lama 1988; McHenry Jr. 2007; Nanda 1987), ‘petty-bourgeoisie aggrandisements against the dominance of monopoly capitalists of the Centre and the State’ (Sarkar 1988), ‘economic negligence, exploitation, and unavailability of white-collar jobs’ (Chadha 2005), ‘growing unemployment and step motherly attitude of the state regarding the overall development of the hill areas’ (Timsina 1992), ‘uneven development’ (Dasgupta 1999; Datta 1991), ‘endemic poverty, underdevelopment, and the perception of being â€Å"malgoverned†Ã¢â‚¬â„¢ (Ganguly 2005), are some such factors many scholars put as the root cause of the Gorkhaland movement in the Darjeeling Hills. However, none of these studies have made it abundantly clear how economic conditions – the domain of the material – are linked to the desires of ethnic separatism, which conceptually remained under the rubric of culture – the non-material. Again, if the economic factors remarkably remained so significant, as the studies show, then why ultimately the cultural warpath (i.e., 81 ethnic conflict) and not an economic one (i.e., class conflict) appeared as a suitable remedial strategy? One obvious question arises thus: how the ‘material’ is transposed into ‘cultural’? The present paper is an attempt to answer such questions by analyzing the case of the Gorkha ethnicity and movement as it emerged out of the people’s grievances experienced through their quotidian life processes cloaked in their relative positions within the structural inequality. In fact, ethnic identity much like the issues of class or caste is a lived-in category that emerges out of the perception of reality and receives constant reformulation, since the reality is itself dynamic. In our treatment ethnic identification – much like all other identifications – is overall rooted in the larger canvas of social experience, which determines the processes of framing contending relationships between and among groups based on their varying capacity of possessing the valued and scarce resources available in the society. Instead of pinpointing the causes of the movement, our analysis attempts to show that the assertion of Gorkha ethnic identity has had payoffs with respect to resource access and utilization and that the protracted struggle of the Gorkhas for separate statehood is that trajectory wherein both the cultural and material aspects of routine life coalesce. Sometimes this happens even without an immediate ethnic ‘other’. This is particularly the case, as the study shows, with the hill agrarian sector. It thus becomes imperative that the problem should be studied in a historical plane putting utmost emphasis on the social formation of the Darjeeling Hills, which would help us focus the pattern of resource distribution on an ethnic plane vis-à  -vis the question of structural inequality. The importance of treating the issue of Gorkhaland movement as a historical phenomenon can hardly be ignored, especially when one finds that the Darjeeling Hills has experienced a century long historicity of protest – sometimes accommodative, sometimes violent – to achieve a separate politico-administrative arrangement for self rule. Moreover, the historical perspective is needed to show the fundamental changes that have taken place within the social formation of the region since the colonial days and had corresponding effects for furthering the cause of the movement in the post-colonial period. Therefore, a proper historical analysis of ethnicity can help us understand how the grievances of the masses were articulated and were translated into the courses of violent action, how new equations came up because of state intervention and how the overall dynamics of the movement kept on rolling, putting ethnicity at the center stage. SOCIAL FORMATION AND SOCIAL MOVEMENTS Indeed, there can never be a single cause of an ethnic movement that stretched over a century.1 However, our concern regarding the causes of Gorkhaland movement is not about degree but of kind, by which we mean that Gorkha ethnicity, or for that matter the Gorkhaland movement, is embedded in the social formation of the Darjeeling Hills. It is neither entirely the product of primordial sentiments nor even the result of elite manipulation, but had been the outcome of a dynamic social formation that reproduced its productive forces, relations of production, as well as the relations of subjugation and exploitation meted out by its incumbents. The onus of social formation in augmenting the cause of social movement has been stressed by most of the major theoretical paradigms in some form or the other. For example, functionalism, though lately emerging from its erstwhile position of bracketing social movements as pathological social behavior, became increasingly concerned with the analysis of social movement as a variety of (normal) collective action and showed the necessity of framing a general hypothesis on the social system while analyzing social movements as a collective phenomenon of some sort. Likewise, symbolic interactionism and resource mobilization theory, in their attempts to analyze social movement, put stress on the relational structures and on the complex processes of interaction mediated by certain networks of belonging, respectively. The Marxist tradition, perhaps, has given utmost emphasis on the necessity to view social movements in relation to structural arrangements available in the social formation. Each social formation is rooted in a particular structure of relationship and movement is not the cause but the outcome of the differentially arranged social order in which privileges and rewards are more in possession of some minority groups compared with the majority others. Even the post-Marxist or for that matter the New Social Movement (NSM) perspective in their zeal to study the identity-based movements as manifestations of post-material claims hardly denied the importance of social formation while understanding the so-called post-material claims of the NSMs. In outlining the principles for the analysis of collective action, Melucci (1996:24) – a prominent figure of NSM school – points out that the analytical field of the NSMs depends on the systems of relationships within which such action takes place and toward which it is directed. The recorded history of the Gorkhaland movement suggests that the first spurt of the movement can be marked out in the year 1907 when the hill people submitted a memorandum – for the first time – to the colonial government urging separation from the then Bengal and the need to formulate a separate administrative arrangement for the Darjeeling Hills. ALTHUSSER, SOCIAL FORMATION, AND THE DYNAMICS OF RURAL DARJEELING Taking a cue from the centrality of social formation in the study of social movement as analyzed above, an attempt has been made to focus on the social formation of the Darjeeling Hills2 and its contribution to the development of a protracted ethnic movement in the region. Our treatment of the concept of social formation is Althusserian in inspiration and is viewed as a complex whole composed of concrete economic, political and ideological relations that provide the pretext upon which the consolidation of selfhood of the individual or the group within a given social space becomes feasible. It is worth mentioning here instead of using such terms like ‘social system’, ‘social order’ or for that matter ‘society,’ Althusser (1997) preferred the use of ‘social formation’. Since he believed while terms like ‘social system’ and ‘social order’ presupposes a structure that reduces the form of all its emanations, ‘society’ as a concept is loaded with pre-Marxist humanist conception that treats social life as ultimately the product of individual human beings. Althusser has used the concept of social formation with some broader theoretical appeal. He problematized the so-called base-superstructure module by bringing together the notions of social system, order, and society closer to his postMarxist formulation of social formation. Social formation, for Althusser, is constituted of a complex of concrete economic, political, and ideological relations, bound together and given their particular character as capitalist, feudal or whatever by the fact that economic relations, is the ‘determinant in the last instance.’ Conceived in this manner the concept of social formation presupposes that under this model social reality is neither determined, nor to be explained by a single causal variable but always by the whole structure (a notion that he labels as ‘overdetermination’), which remains amenable to the economic determinant only in the last instance. The uniqueness in Althusser’s concept of social formation lies in the fact that it problematizes the ‘base-superstructure’ relationship (that remains central, almost invariably, to the whole realm of post-Marxist scholarship) to that extreme of Darjeeling has been one of the prominent hill stations developed by the British i n colonial India.

This essay seeks to compare and contrast the approaches taken by Keith B. Richburg and Karl Maier in discussing Africa.The title is Woes of Africa

This essay seeks to compare and contrast the approaches taken by Keith B. Richburg and Karl Maier in discussing Africa.The title is Woes of Africa Over the past years, many writers have made bold attempts to address issues confronting Africa. The views expressed by these writers in their books are influenced by the major happenings on the continent within the time period the book is to be written. But one thing that leaves much to be desired about the approaches taken by some of these authors is the generalizations they make about the whole African continent, using the woes of just a few countries as a marker for the others. This paper seeks to compare and contrast the approaches taken by Keith B. Richburg and Karl Maier in discussing Africa.Richburg's confrontation of Africa in his book, Out of America, discusses his traumatic experiences in Africa. His approach reveals to the reader that the present-day Africa is just a replica of the Dark Continent described by early explorers. Richburg describes Africa as a "senseless continent" (153), "violent" (227), and a "strange and forbidding place" (237) where fighting and other nefa rious activities is the order of the day.Richburg, New YorkHe states that:"It's one of those apocryphal stories you always hear coming out of Africa, meant to demonstrate the savagery of "the natives." Babies being pulled off their mothers' backs and tossed onto spears. Pregnant women being disemboweled. Bodies being tossed into the river and flowing downstream. You heard them all, but never really believed" (xiii).Richburg thus imposes on the reader the "vicious" nature of Africans. He tries to justify this image he puts forth to his readers by his unrealistic and over-exaggerated descriptions of his encounters and experiences at the hands of civilians, the military, and guerilla fighters.Richburg does not have any positive thoughts about Africa during his travels from the time he "smells" (1) the continent till his departure. In Richburg's eyes,

Can Give Rise To Psychological Issues

Explain Can Give Rise To Psychological Issues? Withholding of the truth about Amy can give rise to psychological issues and have an impact on her quality of life. Her physical inabilities as difficulty to find words and repetition during a conversation and lack of concentration are contributing to her psychological distress, as she is unable to understand the reason of her sudden change in behaviour and memory. Withholding the information can have a negative impact on the patient’s attitude. It would reduce her coping ability, cause mood disturbances and anxiety and reduces her ability to prepare for the future(Kelley & Morrison, 2015). The withholding of life limiting illness about Amy also has serious negative impact on her family. Her mother is in her 80’s and witnessing such a change in behaviour and mood in Amy can have psychological impact and extremely painful. Her son Erik finds it difficult to conceal the truth of her life limiting illness from Amy and that might affect her end-of-life care and her compliance with the treatment and medication. This puts her family members in a hard situation and her family members face ethical dilemma whether to inform her or not. This situation raises ethical dilemma for me. Although, Amy and her family members wants to withhold her life limiting illness as posed by the family, the primary concern is to disclose the illness to her in culturally sensitive manner. This ethical dilemma can affect her end-of-life care and response to treatment. As she has limited English speaking ability, it is important to convey through family members or interpreters. The considerations include using of plain language, addressing of one piece of information at a time and ask about Amy’s worries, thoughts and understandings after illness disclosure through culture centred communication (Katz & Johnson, 2013). The care provided to Amy should include her cultural practices and spiritual needs and directed towards culture-centred care. It is important for the staffs to learn about her beliefs, cultural attitudes meanings of illness, health and symptoms. As she is diagnosed with life-limiting illness, it is important to recognize the unique cultural aspects of the care provision at the end-of-life (Wittenberg, et al., 2015). Knowing about cultural values of Amy would help the staffs to understand, grapple and navigate through the limiting illness. Integration of Amy’s cultural needs would help staffs in delivering her end-of-life care. Staffs need to understand that cultural factors and their integration into healthcare would influence her healthcare seeking behaviour, medical and clinical decision-making and finally health outcomes. Therefore, culture-centred end-of-life care act as driving factor in delivering culturally competent healthcare to Amy. By providing culture-centred, care to Amy would help her and family to respond to the end-of-life care and have a positive impact on their psychological well-being. The cultural consideration and specific spiritual needs of Amy would be fulfilled in her terminal diagnosis, as the staffs would provide culturally appropriate care that improves her and family situation. As a graduate health professional, I would like to spend time to develop an understanding of her feelings and specific needs to address anxiety and point of disagreement in providing end-of-life care. I will try to develop an empathetic relationship with Amy and her family in providing culture-centred care. For this culture-centred communication, principles are important through interpreters to understand Amy’s true preferences for receiving illness information. As she has limited English speaking ability, it is important to be cognizant about how her cultural factors and beliefs might affect her end-of-life care. This sensitivity to Amy’s individual and cultural preferences would help to avoid stereotyping and in making incorrect assessments in providing her end-of-life care (Moir, Roberts, Martz, Perry, & Tivis, 2015).   Katz, R. S., & Johnson, T. G. (2013). When professionals weep: Emotional and countertransference responses in end-of-life care. Routledge. Kelley, A. S., & Morrison, R. S. (2015). Palliative care for the seriously ill . New England Journal of Medicine,  373(8), , 747-755. Moir, C., Roberts, R., Martz, K., Perry, J., & Tivis, L. J. (2015). Communicating with Patients and their Families about Palliative and End of Life: Comfort and Educational Needs of Staff RNs. International journal of palliative nursing,  21(3), , 109. Wittenberg, E., Ferrell, B., Goldsmith, J., Smith, T., Glajchen, M., Handzo, G., & Ragan, S. L. (2015). Textbook of Palliative Care Communicaiton. Oxford University Press.

Careers in Mathematics Essay Example | Topics and Well Written Essays - 1500 words

Careers in Mathematics - Essay Example In recent trends, students are able to have several opportunities to develop their career in mathematics. Mathematics provides wide range career opportunities for the students in several departments such as science department and engineering department among others. This subject provides statics as well as calculation knowledge to the students (LaLonde, Leedy and Runk 285-292). The paper intends to explain about the rewards of selecting a career in math along with the contribution of teachers to the American child to overcome their difficulties in learning mathematics. It also deals with the procedure based on which teachers can help the students to develop a competitive career and they become the next genius in mathematics. Mathematics is one the major subjects through which students can develop their career in several sectors and fulfill their aims in their professional life. Mathematics is majorly associated with science as well as engineering department. The students who have a greater knowledge about mathematics are able to enhance their talent and can easily have an understanding about statistical knowledge, which is presented in demand in the job market. It is a subject, which is required in every step of study and by selecting the subject for building a career; students can develop their career in different fields that include engineering, doctor and scientist among others. By choosing a career in mathematics, students are able to have excellent job opportunities in their professional life (Byrnes and Miller 599-629). In recent trends, it can be observed that most of the students want to grow their career in mathematics based on the job competition in the market. Science, Technology, Engineering and Mathematics (STEM) graduate students are essential for the American economy to maintain superiority in the STEM field. Mathematics has own field of career opportunity for the students. However, the students

Art Essay Example | Topics and Well Written Essays - 1250 words - 4

Art - Essay Example e Head of Saint John the Baptist is one example of the artist’s works with Biblical subject and embodies the style of the Baroque period, which is characterized mainly of dynamic movements and emotional intensity. In Caravaggio’s painting depicting the Biblical character Herodias with the beheaded John the Baptist, dynamic movement is evident in the oblique lines visible in the artwork particularly the leaning position of the main subject while as the emotional intensity is visible in the colors used by the painter. The colors used were dominantly dark shades of red, blue, brown and green as if signifying the somber mood of the painting as it mainly depicts the death of John the Baptist and the triumph of the wicked. The colors also insinuate the bloodshed that transpired and the lifeless head of John the Baptist that is of a greenish-blue pallor. The volume element of the painting shows depth of each form in the painting and contributes to the dramatic appeal of the artwork as it creates an impression that the person in the painting holding a severed head is real and is just in front of the viewer. The emotional intensity in this painting perfectly exemplifies the attributes of the Baroque period and serving the propaganda of the Catholic Re-reformation during that period. Pilgrimage to Cythera (Embarkation for Cythera) done in 1717 by French artist Jean-Antoine Watteau is oil on canvas work created during the Rococo period and is 1.29 m x 1.94 m. in size currently housed in the Louvre. Watteau’s artwork was created during the Age of Enlightenment in Europe wherein philosophical reasoning had flourished and artworks commonly had to be confined to have a rationale behind them. (Pomarede) Appropriately representing the Rococo style is the artist’s Pilgrimage to Cythera (Embarkation for Cythera) in terms of lines, subject and form since it depicts a group of men and women in a scene that looks as though they were preparing to travel to Cythera—an island

Compounding Pharmacy Essay Example | Topics and Well Written Essays - 250 words

Compounding Pharmacy - Essay Example In order to answer this question, it is important first do define compounding pharmacy. Compounding pharmacy, as defined by the NABP, is actually â€Å"†¦the preparation, mixing, assembling, packaging, or Labeling of a Drug or Device (i) as the result of a Practitioner’s Prescription Drug Order or initiative based on the Practitioner/patient/Pharmacist relationship in the course of professional practice, or (ii) for the purpose of, or as an incident to, research, teaching, or chemical analysis and not for sale or Dispensing.† (Walkup n. p.) In this case, it is important to note that in compounding pharmacy, ensuring quality must always be top priority (Walkup n. p.). Ensuring quality, which includes obtaining Certificates of Good Manufacturing Practices and Certificate of Analysis (in which a third party testing is used to extend BUD beyond USP standards) will ensure that one can do almost anything, even tailor-made for the patient, ensuring trust with consumers an d profitability. Works Cited Walkup, Kenny. An Introduction to Independent Community Pharmacy Ownership. Specialty Medicine Compounding Pharmacy, n. d. PowerPoint file.

Economics Essays Petroleum Price Oil Economy

Economics Essays Petroleum Price Oil Economy Petroleum Price Oil and the Economy Summary The vulnerability of oil-importing countries to higher oil prices varies markedly depending on the degree to which they are net importers and the oil intensity of their economies. According to the results of a quantitative exercise carried out by the IEA in collaboration with the OECD Economics Department and with the assistance of the International Monetary Fund Research Department. Euro-zone countries, which are highly dependent on oil imports, suffered the most in the short term, their GDP dropping by 0.5% and inflation rising by 0.5% in 2007. The United States suffered the least, with GDP falling by 0.3%, largely because indigenous production meets a bigger share of its oil needs. Japan’s GDP fell 0.4%, with its relatively low oil intensity compensating to some extent for its almost total dependence on imported oil. In all OECD regions, these losses should start to diminish in the following three years as global trade in non-oil goods and services recovers. This analysis assumes constant exchange rates. Oil prices impact the health of the world economy. Higher oil prices since 1999 – partly the result of OPEC supply-management policies – contributed to the global economic downturn in 2000-2001 and are dampening the current cyclical upturn. World GDP growth may have been at least half a percentage point higher in the last two or three years had prices remained at mid-2001 levels. Current fears of OPEC supply cuts, political tensions in Venezuela and tight stock prices have driven up international crude oil and product prices even further. The adverse economic impact of higher oil prices on oil-importing developing countries is generally even more severe than OECD countries. This is because their economies are more dependent on imported oil are more energy-intensive, and energy is used less efficiently. On average, oil-importing developing countries use more than twice the amount of oil to produce a unit of economic output as do OECD countries. Developing countries are also less able to weather the financial turmoil wrought by higher oil-import costs. India spent $15 billion, equivalent to 3% of its GDP, on oil imports in 2003. This is 16% higher than its 2001 oil-import bill. It is estimated that the loss of GDP averages 0.8% in Asia and 1.6% in very poor highly indebted countries in the year following. The loss of GDP in the Sub-Saharan African countries would be more than 3%. The impact of higher oil prices on economic growth in OPEC countries would depend on a variety of factors, particularly how the windfall revenues are spent. In the long term, however, OPEC oil revenues and GDP are likely to be lower, as higher prices would not fully compensate for lower production. In the IEA’s recent World Energy Investment Outlook, cumulative OPEC revenues are $400 billion lower over the period 2001-2030 under a Restricted Middle East Investment Scenario, in which policies to limit the growth in production in that region lead to on average 20% higher prices, compared to the Reference Scenario. Introduction This paper reviews how oil prices affect the macro-economy and assesses quantitatively the extent to which the economies of OECD and developing countries remain vulnerable to a sustained period of higher oil prices. It summarizes the findings of a quantitative exercise carried out by the IEA in collaboration with the OECD Economics Department and with the assistance of the International Monetary Fund (IMF) Research Department. That work, which made use of the large-scale economic models of all three organizations, constitutes the most up-to-date analysis of the impact of higher oil prices on the global economy. Oil prices have been creeping higher in recent months: the prices of Brent and WTI – the leading benchmark physical crude oils. These price increases and the possibility of further increases in the future have drawn attention again to the threat they pose to the global economy. The next section describes the general mechanism by which higher oil prices affect the global economy. This is followed by a quantitative assessment of the impact of a sustained rise in the oil price on, first, the OECD countries and then on the developing countries and transition economies. Finally the net effect on the global economy is summarized. Oil Price and the Global Economy Oil prices remain an important determinant of global economic performance. Overall, an oil-price increase leads to a transfer of income from importing to exporting countries through a shift in the terms of trade. The magnitude of the direct effect of a given price increase depends on the share of the cost of oil in national income, the degree of dependence on imported oil and the ability of end-users to reduce their consumption and switch away from oil. It also depends on the extent to which gas prices rise in response to an oil-price increase, the gas-intensity of the economy and the impact of higher prices on other forms of energy that compete with or, in the case of electricity, are generated from oil and gas. Naturally, the bigger the oil-price increase and the longer higher prices are sustained, the bigger the macroeconomic impact. For net oil-exporting countries, a price increase directly increases real national income through higher export earnings, though part of this gain would be later offset by losses from lower demand for exports generally due to the economic recession suffered by trading partners. Adjustment effects, which result from real wage, price and structural rigidities in the economy, add to the direct income effect. Higher oil prices lead to inflation increased input costs, reduced non-oil demand and lower investment in net oil importing countries. Tax revenues fall and the budget deficit increases, due to rigidities in government expenditure, which drives interest rates up. Because of resistance to real declines in wages, an oil price increase typically leads to upward pressure on nominal wage levels. Wage pressures together with reduced demand tend to lead to higher short term unemployment. These effects are greater the more abrupt and the more pronounced the price increase and are magnified by the impact of higher prices on consumer and business confidence. An oil-price increase also changes the balance of trade between countries and exchange rates. Net oil-importing countries normally experience deterioration in their balance of payments and putting downward pressure on exchange rates. As a result, imports become more expensive and exports less valuable, leading to a drop in real national income. Without a change in central bank and government monetary policies, the dollar may tend to rise as oil-producing countries’ demand for dollar-denominated international reserve assets grow. The economic and energy-policy response to a combination of higher inflation, higher unemployment, lower exchange rates and lower real output also affects the overall impact on the economy over the longer term. Government policy cannot eliminate the adverse impacts described above but it can minimize them. Similarly, inappropriate policies can worsen them. Overly contractionary monetary and fiscal policies to contain inflationary pressures could exacerbate the recessionary income and unemployment effects. On the other hand, expansionary monetary and fiscal policies may simply delay the fall in real income necessitated by the increase in oil prices, stoke up inflationary pressures and worsen the impact of higher prices in the long run. Impact on OECD Countries OECD countries remain vulnerable to oil-price increases, despite a drop in the region’s net oil imports and an even more marked decline in oil intensity since the first oil shock. Net imports fell by 14% while the amount of oil the OECD used to produce one dollar of real GDP halved between 1973 and 2006. Nonetheless, the region remains heavily dependent on imports to meet its oil needs, amounting to 56% in 2006. Only Canada, Denmark, Mexico, Norway and the United Kingdom are currently net exporting countries. Oil imports are estimated to have cost the region as a whole over $360 billion in 2006 – equivalent to around 1% of GDP. The annual import bill has increased by about 30 % since 2005. Higher oil prices have a significant adverse impact on OECD economic performance in the short term in this case, though their impact in the longer term is more limited (Table 1). The impact on the rate of GDP growth is felt mostly in the first two years as the deterioration in the terms of trade drives down income, which immediately undermines domestic consumption and investment. OECD GDP is 0.4% lower in 2005 and 2006 compared to the base case. In all OECD regions, these losses start to diminish in the following years as global trade in non-oil goods and services recovers. Throughout the whole five-year projection period, GDP is 0.3% lower on average. The impact of higher oil prices on the rate of inflation is more marked. The consumer price index is on average 0.5% higher than in the base case over the five year projection period. The impact on the rate of inflation was felt mostly in 2006 – the second year of higher prices. Recent trends show a clear correlation between oil price movements and short-term changes in the inflation rate. The economic impact of higher oil prices varies considerably across OECD countries, largely according to the degree to which they are net importers of oil. Euro-zone countries, which are highly dependent on oil imports, suffer most in the short term. GDP losses in both Europe and Japan would also exacerbate budget deficits, which are already large (close to 3% on average in the euro-zone and 7% in Japan). The United States suffers the least, largely because indigenous production still meets over 40% of its oil needs. The Impact on Developing Countries The adverse economic impact of higher oil prices on oil-importing developing countries is generally more pronounced than for OECD countries. The economic impact on the poorest and most indebted countries is most severe. On the basis of IMF estimates, the reduction in GDP would amount to more than 1.5% after one year in those countries. The Sub-Saharan African countries within this grouping, with more oil intensive and fragile economies, would suffer an even bigger loss of GDP, of more than 3%. As with OECD countries, dollar exchange rates are assumed to be the same as in the base case. Asia as a whole, which imports the bulk of its oil, would experience a 0.8% fall in economic output and a one percentage point deterioration in its current account balance (expressed as a share of GDP) one year after the price increase. Some countries would suffer much more: the Philippines would lose 1.6% of its GDP in the year following the price increase, and India 1%. China’s GDP would drop 0.8% and its current account surplus, which amounted to around $45 billion in 2006, would decline by $6 billion in the first year. Other Asian countries would see deterioration in their aggregate current account balance of more than $8 billion. Asia would also experience the largest increase in inflation in the first year, on the assumption that the increase in international oil price would be quickly passed through into domestic prices. The inflation rate in China and Thailand would increase by almost one percentage point in 2007. Latin America in general would suffer less from the increase in oil prices than Asia because net oil imports into the region are much smaller. Economic growth in Latin America would be reduced by only 0.2 percentage points. The GDP of transition economies and Africa in aggregate would increase by 0.2 percentage points, as they are net oil-exporting countries. The economies of oil-importing developing countries in Asia and Africa would suffer most from higher oil prices because their economies are more dependent on imported oil. In addition, energy-intensive manufacturing generally accounts for a larger share of their GDP and energy is used less efficiently. On average, oil importing developing countries use more than twice the oil to produce one unit of economic output as do developed countries. The IMF estimates suggest that, in the sustained oil-price increase case, the net trade balance of OPEC countries would improve initially by about $120 billion or around 13% of GDP, taking account of lower global economic growth. Venezuela would gain the least and Iraq and Nigeria the most, reflecting the relative importance of oil in the economy. The impact of higher oil prices on economic growth in OPEC countries would depend on a variety of factors, particularly how the windfall revenues are spent. In the long term, however, OPEC oil revenues and GDP are likely to be lower, as higher prices would not compensate fully for lower production. Higher oil prices in the last four years are in part the result of OPEC’s success in implementing its policy of collectively constraining production. This policy has led to a decline in OPEC’s share of world oil production from 40% in 1999 to 38% in 2003. There is a risk that this policy may be continued in the future, which would limit the extent to which OPEC producers, notably those in the Middle East, contribute to meeting rising world oil demand. According to the IEA’s latest World Energy Outlook, OPEC’s market share is projected to rebound to 40% in 2010 and 54% in 2030. In the IEA’s recent World Energy Investment Outlook, cumulative OPEC revenues are $400 billion lower over the period 2001-2030 under a Restricted Middle East Investment Scenario, in which policies to limit the growth in production in that region lead to on average 20% higher prices, compared to the Reference Scenario. Impact on the Global Economy The results of the sustained higher oil price simulation for both the OECD and non- OECD countries suggest that, as has always been the case in the past, the net effect on the global economy would be negative. That is, the economic stimulus provided by higher oil and gas export earnings in OPEC and other exporting countries would be outweighed by the depressive effect of higher prices on economic activity in the importing countries, at least in the first year or two following the price rise. Combining the results of all world regions yields a net fall of around 0.5% in global GDP – equivalent to $ 255 billion in the first year of higher prices. The loss of GDP would diminish somewhat by 2008 as increased demand from oil-exporting countries boosts the exports and GDP of oil-importing countries. The main determinant of the size of the initial net loss of global GDP is how OPEC and other oil-exporting countries spend their windfall oil revenues. The greater the marginal propensity of oil-producing countries to save those revenues, the greater the initial loss of GDP. Both the IMF and OECD simulations assume that oil exporters would spend around 75% of their additional revenues on imported goods and services within three years, which is in line with historical averages. However, this assumption may be too high, given the current state of fiscal balances and external reserves in many oil-exporting countries. In practice, those countries might take advantage of a sharp price increase now to rebuild reserves and reduce foreign and domestic debt. In this case, the adverse impact of higher prices on global economic growth would be more severe. Higher oil prices, by affecting economic activity, corporate earnings and inflation, would also have major implications for financial markets – notably equity values, exchange rates and government financing – even, as assumed here, if there are no changes in monetary policies: International capital market valuations of equity and debt in oil-importing countries would be revised downwards and those in oil-exporting countries upwards. To the extent that the creditworthiness of some importing countries that are already running large current account deficits is called into question, there would be upward pressure on interest rates. Tighter monetary policies to contain inflation would add to this pressure. Currencies would adjust to changes in trade balances. Higher oil prices would lead to a rise in the value of the US dollar, to the extent that oil exporters invest part of their windfall earnings in US dollar dominated assets and that transactions demand for dollars, in which oil is priced, increases. A stronger dollar would raise the cost of servicing the external debt of oil-importing developing countries, as that debt is usually denominated in dollars, exacerbating the economic damage caused by higher oil prices. It would also amplify the impact of higher oil prices in pushing up the oil-import bill at least in the short-term, given the relatively low price-elasticity of oil demand. Past oil shocks provoked debt-management crisis in many developing countries. Fiscal imbalances in oil-importing countries caused by lower income would be exacerbated in those developing countries, like India and Indonesia that continue to provide direct subsidies on oil products to protect poor households and domestic industry. The burden of subsidies tends to grow as international prices rise, adding to the pressure on government budgets and increasing political and social tensions. It is important to bear in mind the limitations of the simulations reported on above. In particular, the results do not take into account the secondary effects of higher oil prices on consumer and business confidence or possible changes in fiscal and monetary policies. The loss of business and consumer confidence resulting from an oil shock could lead to significant shifts in levels and patterns of investment, savings and spending. A loss of confidence and inappropriate policy responses, especially in the oil-importing countries, could amplify the economic effects in the medium term. In addition, neither the OECD’s estimates for member countries nor the IMF’s estimates for the developing countries and transition economies take explicit account of the direct impact of higher oil prices on natural gas prices and the secondary impact on electricity prices, other than through the general rate of inflation. Higher oil prices would undoubtedly drive up the prices of other fuels, magnifying the overall macroeconomic impact. Rising gas use worldwide will increase this impact. Nor does this analysis take into account the macroeconomic damage caused by more volatile oil prices. Short-term price volatility, which has worsened in recent years, complicates economic management and reduces the efficiency of capital allocation. Despite these factors, the results of the analysis presented here give an order-of-magnitude indication of the likely minimum economic repercussions of a sustained period of higher oil prices. Conclusion Oil prices remain a significant macroeconomic variable. Higher prices can still inflict substantial damage on the economies of oil-importing countries and on the global economy as a whole. The surge in prices in 1999-2000 contributed to the slowdown in global economic activity, international trade and investment in 2000- 2001. The disappointing pace of recovery since then is at least partly due to rising oil prices: according to the modeling results, global GDP growth may have been at least half a percentage point higher in the last two or three years had prices remained at mid-2001 levels. The results of the simulations presented in this paper suggest that further increases in oil prices sustained over the medium term would undermine significantly the prospects for continued global economic recovery. Oil importing developing countries would generally suffer the most as their economies are more oil-intensive and less able to weather the financial turmoil wrought by higher oil-import costs. The general economic background to the current run-up in prices is significantly different to previous oil-price shocks, all of which coincided with an economic boom when economies were already overheating. Prices are now rising in a situation of tentative economic revival, excess capacity and low inflation. Firms are less able to pass through higher energy-input costs in higher prices of goods and services because of strong competition in wholesale and retail markets. As a result, higher oil prices have so far eroded profits more than they have pushed up inflation. The consumer price index growth has fallen in almost every OECD country in the past year, from 2.3% to 2.0% in the Euro zone and 2.4% to 1.9% in the United States in the 12 months to December 2003. Deflation in Japan has worsened from -0.3% to 0.4% over the same period. A weaker dollar since 2002 has also offset partly the impact of higher oil prices in many countries, especially in the euro-zone and Japan. The squeeze on profits delayed the recovery in business investment and employment, which began in earnest in 2003 in many parts of the world. In contrast to previous oil shocks, the financial authorities in many countries have so far been able to hold down interest rates without risking an inflationary spiral. Yet the economic threats posed by higher oil prices remain real. Fears of OPEC supply cuts, political tensions in Venezuela and tight stocks have recently driven up international crude oil and product prices even further. Current market conditions are more unstable than normal, in part because of geopolitical uncertainties and because tight product markets – notably for gasoline in the United States – are reinforcing upward pressures on crude prices. The hike of futures prices during the past several months implies that recent oil price rises could be sustained. If that is the case, the macroeconomic consequences for importing countries could be painful, especially in view of the severe budget-deficit problems being experienced in all OECD regions and stubbornly high levels of unemployment in many countries. Fiscal imbalances would worsen, pressure to raise interest rates would grow and the current revival in business and consumer confidence would be cut short, threatening the durability of the current cyclical economic upturn. References Eichengreen, B., Y. Rhee and H. Tong (2004), â€Å"The Impact of China on the Exports of Other Asian Countries,† NBER Working Paper no.10768 (September). 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