Chapter IC, Problem 3.5CDQ

Summary Introduction

Scenario: The given case deals with the growth of the economy of Country G. In the period between 2000 and 2013, the country had an annual growth rate of 7.5% in GDP which makes it as the fastest-growing economy in continent A. Being a major exporters of gold and cocoa, the country had also been the biggest exporter of oil.

After independence, the country struggled with political, corruption and inflation problems. In 1981, Person R became the president of the country who took vigorous actions towards corruption and changed the political perspective of country. He implemented policies which triggered democratic changes and economic liberalization. In 1992, prior to the election the ban on political parties was lifted and Person R won in that election and started to liberalize, privatize the state owned institute, market forums and opening the market to foreign investors.

After the discovery of oil in 2007, country G imposed strict rules against corruption but above all the preventive measures, the country continued to face the problem of corruption especially in the police force and as a result the country economic growth was slow. The countries status with respect to its infrastructure, power, water and road needs to be upgraded and many political problems has to be fixed.

To determine: The differences in the approach towards oil revenue followed by Country G and Country N and identify the best approach which favors the interest of the country in long-run.