Research On The Development Of Oil And Gas Resources In Algeria From The Perspective Of Resource Curse

Algeria has a wealth of oil and gas resources,known as the "North African oil depot," is one of the African oil and gas production countries,and also OPEC's second largest producer of natural gas.The oil and gas industry,as a pillar industry of the national economy of Algeria,its output accounts for 30% of GDP,tax accounts for 60% of state revenue and export amount accounts for more than 97% of total national exports,So the economic development of Algeria is heavily dependent on the oil and gas resources industry.As oil price is affected by global oil prices and the international security situation,which will affect Algeria's oil exports Income and hinder the domestic economic growth,so the oil and gas industry in Algeria has changed from the "resources gospel" into "resource curse".This paper analyzes the causes and transmission mechanism of "resource curse" in the development of oil and gas resources in Algeria from the perspective of "resource curse",and gives relevant policies and suggestions.The main results of this paper are:Firstly,the theory and the transmission mechanism of "resource curse" are expounded.This paper analyzes the economic development of resource-rich areas at home and abroad,confirms that there are "resource curse" phenomena in many countries and provinces at home and abroad,and the key concepts are defined.By discussing in detail the impact of natural resources on the industrial structure,labor productivity and economic growth,it is believed that the rich natural resources itself will not restrict the economic growth,but by extruding the agricultural,manufacturing,scientific and technological innovation capacity,it influence the development of economy.The government rent-seeking and corruption phenomenon,the weakening of the system,the deterioration of the terms of trade,macroeconomic policy fluctuations,large price fluctuations and inequality in the resource development process in the resource-rich areas are the the root causes of "resource curse".Secondly,the status of oil and gas in Algeria is analyzed and reveal the possibility of the "resource curse".According to the statistics of oil and gas exports in Algeria,forming the foreign trade characteristics of the oil and gas industry as an absolute source of foreign exchange;According to the oil export earnings and currency exchange rate data,the dynamic characteristics of the impact of oil export earnings on the exchange rate of Algeria were analyzed by using the impulse response function of VAR model.The study shows that the oil export earnings are positive after the shock,the total export volume of Algeria increased rapidly,which results in the characteristic of Algeria's economic structure is still highly dependent on the oil and gas industry;Finally,by using Algeriaoil price fluctuations and economic growth statistics,shows that rich oil resources had a positive correlation with GDP,but the volatility of oil prices had a negative correlation with the growth in gross national product.,it will be the reasons of "resources gospel " into a "resource curse" for Algeria.Thirdly,the reason for the "resource curse" of Algeria: institutional quality is analyzed.It is proposed that the rich oil and gas resources industry in Algeria hinders the long-term development of the Algerian economy by delaying institutional reform,causing negative effects of rent-seeking and corruption and inequality in income and wealth distribution.Through the establishment of the system and the "resource curse" theoretical model,and by using the division of equilibrium and producer equilibrium analysis,it is found that resources in the rich area will become "resource gospel" or "resource curse" is dependent on the quality of the system.Based on the empirical model of Halvor Mehlum and the introduction of economic freedom to measure the quality of the system,this paper makes an empirical study on the relationship between natural resources,institutional quality and economic growth in Algeria.The study shows that the economic freedom index of Algeria is in the range of 49-61,which is lower than the threshold of institutional quality 83.The low quality of the system makes Algeria's abundant oil and gas resources not be able to promote economic growth effectively,but it will hinder economic development and make Algeria fall into the trap of "resource curse".Fourthly,the reason for the "resource curse" of Algeria: industrial structure is analyzed.It is proposed that the rich oil and gas resources industry in Algeria hinders the development of manufacturing and other industries by increasing labor costs,reducing the export competitiveness of manufacturing products,increasing import demand and cause the production factors of manufacturing,agriculture,human capital and industry structure outflow,this phenomenon is called "crowding out".By establishing the supply function and demand function of resource-rich area,the "crowding effect" model is established and choose the agricultural,manufacturing,human capital investment level,material capital investment level and natural resource abundance as the economic growth model variables.The study shows that 1% increase of the oil and gas industry in Algeria has brought about 0.182% decline in agricultural output value and 0.071% decline in the output value of manufacturing industry,and it will cause the proportion of teachers in the general university occupies the total population decline by 0.0068%,the proportion of total investment in fixed assets occupies the domestic production decline by 0.027%,and the per capita economic growth rate and natural resource abundance was significantly negatively correlated.As a result,Algeria's abundant oil and natural gas has a negative effect on the industrial restructuring and transformation,which will hinder its economic growth.Fifthly,the reason for the "resource curse" of Algeria: technological innovation capability is analyzed.It is proposed that the rich oil and gas resources industry in Algeria reduces the power of technological innovation activities,leading to technological progress level and technical performance decline,restricting economic development.Based on the theory of endogenous economic growth,two theoretical models of technological innovation ability and "resource curse" are established.The equilibrium analysis result shows that the growth rate of economy and technological innovation are negatively correlated with natural resource endowment coefficient,but is positively correlated with the proportion of resources produced in the manufacturing sector,that is,1% increase of Algeria's oil and gas industry output will result in the proportion of total investment in science occupies the total fiscal expenditure decline by 0.013%.In the economic growth function,the coefficient of oil and gas resources margin is negative,indicating that Algeria's oil and gas resources industry and economic growth was significantly negatively correlated.It can be seen that the rich natural resources of Algeria reduced the technical efficiency and technological innovation capability,leading to obstacles to its economic development.Sixthly,the countermeasures and suggestions to avoid "resource curse" are put forward.In order to improve the quality of the system,the policy suggestions are as follows: establishing clear natural resources property right and resource management system;carrying out reform of ownership system and encouraging economic pluralism;development of administrative system,simplification of government agencies;performance checks on government officials to combat bureaucratic corruption;improve people's quality of life.For Algeria's industrial structure optimization,the proposed policy recommendations are: change the mode of development of resource industries,enhance the advantages of resources;achieve diversified industrial structure development;vigorously develop strategic emerging industries.In order to improve the investment in human capital in Algeria,the policies and suggestions are as follows: pay attention to the investment and accumulation of human capital;increase the investment of education;formulate the preferential policies of talent,tap the potential of human resources;the process of human resources promotion should be based on the regional economic growth patterns and transfer the economic structure from simple capital and labor investment into high technology investment.For the construction of technological innovation system in Algeria,the policies and suggestions are as follows: cultivating innovative enterprise growth,accelerating technological transformation capability;increasing R?D investment,enhancing scientific and technological innovation ability;promoting infrastructure construction,creating technological innovation conditions;constructing technological innovation environment,and improve the region's technological innovation innovation capacity to achieve economic and social sustainable development.