It may be a misfortune in that it provides a false sense of security and enables governments to delay the hard decisions concerning the implementation of reforms. Officials in Azerbaijan and Turkmenistan, for example, seem to feel that an abundance of oil and gas revenue can buy time, postponing change.
Higher prices transfer income from economies that import oil to oil exporters.
These receive a windfall which they can either save or spend on imports. Both countries are entering their first oil boom cycle. For the first time in years, industrial production is growing at double-digit rates. Although little is known about the precise sensitivity of these economies to oil prices, preliminary estimates suggest that budget revenues in Kazakhstan increase by 0.2 percent of GDP at a 10 percent increase in the oil price. There, oil and gas exports amount to roughly 50 percent of total exports, with mining accounting for a further 30 percent.