|Oil Exploration - promise of electoral riches?|
According to local media reports, Foreign Minister Tonio Borg has made a proposal to Libya and Italy as a possible solution to the continental shelf issue, which has been pending for years, An agreement is needed so that oil exploration can take place.
This really sends a shiver down my spine!
Unless oil is found in mega Norwegian style quantities sufficient to guarantee our well being for the long term on a totally oil-dependant economy ( with risks of obsolesecnce in case of green technology advancements) I fear that oil expoloration could be an economic displacement rather than additonal value added. As an example I doubt if tourism can co-exist with an oil economy.
Take Britain! When they explored the North Sea oil their manufacturing base was wiped out. When oil exploration waned Britain's economy developed in an unbalanced manner with over-concentration on financial services. The result is that when the financial crisis came, Britain has hit harder than other countries like Germany where the manufacturing base was protected.
I tend to get over-suspicious when the oil carrot starts being dangled in the final year of the legislature. We have come a long way without exploiting any natural resources. Our best resource is the human capital which could lose the incentive to develop if we think we can strike it rich through oil exploration. We should be careful what we wish for!