 Oil shock in the Caspian Basin: Diversification policy and subsidized economiesVugar Bayramov and Gulnara Abbas Resources Policy, 2017, vol. 54, issue C, 149-156 Abstract: The recent oil price shocks of 2014 resulted in a substantial economic slowdown in the oil-exporting countries of the Caspian Basin, namely Russia, Kazakhstan and Azerbaijan. These resource-reliant countries have encountered a contraction not only in the commodity sector, but also in the non-oil sector due to poor diversification of the economy, and cuts in budget expenditure amid plunging oil prices. By analyzing the underlying causes of the current crisis, this paper concludes that, the economies of these countries are “subsidized economies”, or based on government spending financed by resource windfalls. The non-resource sectors in these oil-exporting countries were poorly developed prior to the crisis and failed to act as an avenue for diversification, lacking the potential to be export-oriented and sustainable. Russia, Kazakhstan, and Azerbaijan need to implement various reforms to support the diversification of the economy, including liberal measures such as eliminating barriers to market entry and promoting competition. Keywords: Russia; Kazakhstan; Azerbaijan; Caspian Basin; Diversification; Oil shock; Subsidized economy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:54:y:2017:i:c:p:149-156 DOI: 10.1016/j.resourpol.2017.10.006 Access Statistics for this article Resources Policy is currently edited by R. G. Eggert More articles in Resources Policy from Elsevier |
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