Publication: The Impact of Higher Oil Prices on Low Income Countries and the Poor : Impacts and Policies
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Date
2006-08
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2006-08
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This note is designed to provide a brief of how the current oil price increases are expected to impact low income countries and poorer households. By tracing the transmission mechanisms of the shocks it points to areas where mitigating policies for the present and for the future can be focused.
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“Bacon, Robert. 2006. The Impact of Higher Oil Prices on Low Income Countries and the Poor : Impacts and Policies. Knowledge Exchange series;no. 1. © http://hdl.handle.net/10986/17963 License: CC BY 3.0 IGO.”
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Publication Implications of Higher Global Food Prices for Poverty in Low-Income Countries(World Bank, Washington, DC, 2008-04)In many poor countries, the recent increases in prices of staple foods raise the real incomes of those selling food, many of whom are relatively poor, while hurting net food consumers, many of whom are also relatively poor. The impacts on poverty will certainly be very diverse, but the average impact on poverty depends upon the balance between these two effects, and can only be determined by looking at real-world data. Results using household data for ten observations on nine low-income countries show that the short-run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but, that poverty increases are much more frequent, and larger, than poverty reductions. The recent large increases in food prices appear likely to raise overall poverty in low income countries substantially.Publication How are Developing Countries Coping with Higher Oil Prices?(World Bank, Washington, DC, 2006-07)This note is based on a forthcoming report by ESMAP. The report covers policy alternatives adopted by developing country governments in response to the increases in world oil prices since the end of 2003. The report analyzes what factors have affected the responses and what policy prices have been used by governments to mitigate the effects of higher oil prices on consumers, the government budget, and the total demand for oil.Publication The Impact of Higher Oil Prices on Low Income Countries and on the Poor(Washington, DC, 2005-03)The rapid and large oil price rise experienced during 2004 has created widespread concern about its impact on low income countries and on poor households in many countries. To appreciate the magnitude of this impact and to formulate policies to ameliorate these effects, a number of questions need to be answered. What are the routes by which countries are impacted? Which countries are most vulnerable to oil shocks? What determines the degree of vulnerability to such shocks? How much are the poor in various countries impacted by the effects of higher oil prices? What policies can reduce the vulnerability of countries to oil shocks, both immediately and in the medium to long run? Three levels of analysis are used to discuss these issues: the macroeconomic, that looks at the direct impact of the balance of payments and the necessary adjustment of GDP to restore equilibrium; the mesoeconomic, that looks at factors which determine a country's propensity to be a net oil importers, including oil self-sufficiency, oil dependence and energy intensity; and the microeconomic that looks at the direct impact and indirect impacts on households of an increase in oil prices.Publication Potential Impact of Higher Food Prices on Poverty : Summary Estimates for a Dozen West and Central African Countries(World Bank, Washington, DC, 2008-10)Concerns have been raised about the impact of rising food prices worldwide on the poor. To assess the impact of rising food prices in any particular country it is necessary to look at both the impact on food producers who are poor or near-poor and could benefit from an increase in prices and food consumers who are poor or near-poor and would loose out when the price increases. In most West and Central African countries, the sign (positive or negative) of the impact is not ambiguous because a substantial share of food consumption is imported, so that the negative impact for consumers is larger than the positive impact for net sellers of locally produced foods. Yet even if the sign of the impact is clear, its magnitude is not. Using a set of recent and comprehensive household surveys, this paper summarizes findings from an assessment of the potential impact of higher food prices on the poor in a dozen countries. Rising food prices for rice, wheat, maize, and other cereals as well as for milk, sugar and vegetable oils could lead to a substantial increase in poverty in many of the countries. At the same time, the data suggest that the magnitude of the increase in poverty between different countries is likely to be different. Finally, the data suggest that a large share of the increase in poverty will consist of deeper levels of poverty among households who are already poor, even if there will also be a larger number of poor households in the various countries.Publication Are Low Food Prices Pro-Poor? Net Food Buyers and Sellers in Low-Income Countries(World Bank, Washington, DC, 2008-06)There is a general consensus that most of the poor in developing countries are net food buyers and food price increases are bad for the poor. This could be expected of urban poor, but it is also often attributed to the rural poor. Recent food price increases have increased the importance of this issue, and the possible policy responses to these price increases. This paper examines the characteristics of net food sellers and buyers in nine low-income countries. Although the largest share of poor households are found to be net food buyers, almost 50 percent of net food buyers are marginal net food buyers who would not be significantly affected by food price increases. Only three of the nine countries examined exhibited a substantial proportion of vulnerable households. The average incomes (as measured by expenditure) of net food buyers were found to be higher than net food sellers in eight of the nine countries examined. Thus, food price increases, ceteris paribus, would transfer income from generally higher income net food buyers to poorer net food sellers. The analysis also finds that the occupations and income sources of net sellers and buyers in rural areas are significantly different. In rural areas where food production is the main activity and where there are limited non-food activities, the incomes of net buyers might depend on the incomes and farming activities of net food sellers. These results suggest the need for reevaluation of the consensus on the impact of food prices on food needs. Further work on the regional differences, and more important, on the second order effects, are necessary to answer these questions more precisely. Only on the basis of further analysis can we start generating better policy responses.
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