Skip to Main Navigation

Absorptive capacity, the demand for revenue, and the supply of petroleum (English)

With growing attention focused on the issue of absorptive capacity, there is a need to examine the production policies of the petroleum-exporting countries from their own perspective. The prevailing view consists of a set of misconceptions: petroleum is plentiful and is being artificially monopolized; production is being maintained below capacity to produce; the price charged for petroleum is higher than its marginal cost of production; and petroleum exporters are undeservedly rich countries that should do more to solve the problems they have created. This paper debates these misconceptions by stressing the need to foster interdependence between sellers and buyers and the promotion of oil-producer cooperation for the benefit of world prosperity. Moreover, there are special problems of this petroleum-exporter group of developing countries that are liquidating a nonrenewable resource and attempting to build up alternative sources of income under difficult conditions. Financial intermediation should aid these countries in expanding their absorptive capacity and raising investment returns to levels that are comparable to those offered by investment abroad.




Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.


El Serafy,Salah

Absorptive capacity, the demand for revenue, and the supply of petroleum (English). World Bank reprint series ; no. REP Washington, D.C. : World Bank Group.