At the end of the first day, I had the opportunity to interview Paul Collier, Professor of Economics, Director of the Centre for the Study of African Economies at the University of Oxford. The following issues were addressed:
- Given that oil is a non-renewable resource, what will happen to the region when the oil is gone?
- How well do you believe the region is successfully trying to manage its oil wealth?
- What would you advise policymakers to do to intelligently manage their oil funds?
Collier stressed on the need to build up other assets than oil revenues, which could include capital, human skills, investment in the country and assets abroad. He also highlighted the diversity of the region; different countries having different degrees of success and different opportunities. According to him, Dubai presents a good example of a country who managed successfully to diversify away from oil by turning itself into a service economy. Following this example and given its good location, North Africa should diversify in manufacturers and services for the European market.
As for the risk of facing an oil curse, Collier considers it being very low given the amount of oil discoveries in other places (i.e. North America). According to him, the danger remains in the market becoming over-supplied to the extent that prices calm down, as well as the possible adoption of a regulatory regime that reduces the use of oil to save the planet; which makes the diversification of the economy even more urgent.
Finally, Collier pointed out the need for a decision-making structure to allow the use of oil funds for domestic investment and foreign asset accumulation.
Watch the full interview: