Surging oil prices are draining our foreign exchange revenues.

A decline in oil revenues could be devastating to the fledgling Iraqi government. Current oil revenues are barely enough to cover state expenses, let alone pay for reconstruction, debt, and war reparations.

Unfortunately, Chad, under the agreements linking it to the oil consortium, benefits from only a small proportion of the revenues resulting from its oil.

Those Governments experiencing increasing oil revenues, both from production and taxation, should invest sufficient portions of those revenues into research and development regarding sustainable and renewable energy.

While the sharp rise in oil prices during 2004 led to windfall revenues for oil exporting countries, its impact on the global economy was limited.

Before we used to just budget on whatever oil we bring in, because oil is the biggest, most revenue earning sector in the economy 70 percent of our revenues come from oil.

As oil prices rise, these countries dependence on the oil sector increases, despite all efforts to diversify their economies. To combat the impact of such dependence, they spend oil revenues on other sectors, leaving the oil sector with little investment.

Nevertheless, rehabilitation efforts require substantial financial and technical input, which cannot currently be met by oil revenues and donors combined.

It was equally unclear why UNITAR should single out oil as the only commodity that generated important revenues for central governments.

As the world s fourth largest oil exporter, Iran has profited mightily from the tripling of global oil prices over the last four years. Its economic stability is dependent on oil revenues, so it is here that Iran s rulers are vulnerable.

Others include deep rooted social issues pertaining to the administration of the national capital and the determination and allocation of oil revenues.

This resulted partly from various efforts by Governments in the region to consolidate their fiscal deficits and partly from improved oil revenues.

Revenues from Timor Sea oil and gas resources have started to flow in to make up for declining budgetary support from development partners.

High oil prices have created huge export revenues for Middle Eastern governments, which still want to park their earnings in American assets. The same is true of Russia, whose oligarchs, as well as the huge state investment fund that finance minister Alexi Kudrin has created, also want to invest their oil revenues in the US.

They did not benefit from oil revenues from their ancestral land, and lacked basic services such as electricity, telephones, schools, hospitals and health clinics.

The frequency of attacks on Iraq's infrastructure, such as electricity generation and oil facilities, has decreased since the election, but they continue to have an adverse impact on the availability of electricity and on oil revenues.

Government revenues depend on the value of domestic output, not only consumption. Though lower oil prices depress consumer prices, they should boost production and overall GDP.

However, for that to occur, oil revenues should be directed towards more productive investments, while economic policies should promote intraregional employment generation and flow of funds.

Missing revenues

State Revenues Act.

Municipal Revenues Act.

Given the surge in oil revenues throughout 2004 and the currently prevalent upward price trend, significant budget surpluses are expected, leading to a further strengthening of their financial positions.

Given that most of Sudan s oil wealth is concentrated in the South, the management of the oil industry and its revenues after secession is an existential problem for Bashir s regime and its capacity to control his vast and ethnically diverse country. It is in the oil rich border areas that a new war might erupt.

Revenues obtained from the illegal charcoal exports and port revenues in Kismaayo are considerable.

Oil and gas export revenues were being paid into a national fund, to assure sustainable social and economic development and cushion the country against the impact of unfavourable external factors.

But the Iranian government is under economic and political pressure to supply increasing amounts of electricity to its growing population and fragile economy. Using oil or natural gas for domestic electricity threatens oil and gas exports, which are the principle source of government revenues.

Indeed, the Soviet Union had a similar experience 40 years ago, when a protracted period of rising oil revenues fueled an increasingly assertive foreign policy, which culminated in the 1979 invasion of Afghanistan. Oil prices quadrupled following the first oil embargo in 1973, and the discovery of large reserves in the 1970s underpinned a massive increase in Soviet output.

Trading of Government revenues

Misappropriation of Government revenues

Misappropriation of Government revenues

Revenues have been enhanced.

(c) They accord foreign countries the right to control Iraq apos s national resources, and they make it permissible for them to have free disposal of its assets and oil revenues.

The rule of law is absent, and much more effort is spent on extortion and rent collection than production. Consequently, economic progress has not kept pace with the accumulation of oil revenues.

As potential revenues from oil and gas exploitation remain uncertain, the country will continue to depend on external assistance to finance its economic, social and human development and to reduce overall poverty.

That's seven percent of revenues.

Revenues and expenditure, 1995 1997a

While Saudi leaders have managed to buy middle class support by allocating a significant proportion of oil revenues to targeted welfare and credit support programs, widespread poverty and massive income inequality persist. Shia Muslims in the oil rich Eastern Province have repeatedly defied the ban on anti regime demonstrations.

Notwithstanding booming oil and gas revenues, its infrastructure remains underdeveloped, and successful economic modernization is a long way off. Likewise, its political and legal system is authoritarian, and its numerous minority problems remain unsolved.

Palestine refugees' properties and their revenues

But the Iranian budget is now running a 15 of GDP deficit, and foreign reserves are shrinking, despite the oil boom. Instead of distributing oil revenues through a program of low cost loans, as promised, the government has been forced to ration gasoline, as economic promise has given way to crisis.

A petroleum fund, aimed at managing and avoiding corruption and the mismanagement of revenues from oil and gas, has been established, following wide consultation with civil society and the most important institutions of the country.

In 2004, overall real growth in the Gulf Cooperation Council countries, which in 2003 had been 6.6 per cent, was only 4.7 per cent, largely because of high oil and natural gas production and revenues.

At the same time, many oil exporters are being forced to scale back expenditure plans in the face of sharply falling revenues. Even Saudi Arabia, despite its vast oil and financial reserves, has come under strain, owing to a rapidly rising population and higher military spending associated with conflicts in the Middle East.

However, what happens in the interface between external shocks and economic activities or why the quantity of effective or nationally retained savings falls when oil revenues rise cannot be explained by the lack of political stability.

1. The cloud of financial uncertainty under which this Commission has been operating all of these years has finally been dispelled with the resumption of Iraqi oil sales and the firm prospect of incoming revenues shortly.