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This just isn't true at all. Developed economies rely more on oil than less developed ones. Plus, more of that is driven by prices at source because in undeve

This just isn't true at all. Developed economies rely more on oil than less developed ones. Plus, more of that is driven by prices at source because in undeveloped countries delivery effort is a big price component. Here is some context on the volatility of oil: https://www.thebalance.com/oil-price-history-3306200 https://www.thebalance.com/oil-price-history-3306200 10y ago we were at almost twice the price and developing countries weren't "on strike full-retard" or seeing oil driven defaults. The closest to a country really being screwed recently by oil prices have been exporters, especially Russia which depends on higher prices to balance its budgets and had been harmed byow prices. That's not to say that oil prices "aren't important". It's just that every industry/economy/etc had been forced to learn to weather price volatility. That's. Why there is such a developed futures etc market.

barbasosi 7y ago
Depends on how you define "on strike full retard", at least where I live (Indonesia), it is spot on. Some context: Indonesian govt. subsidizes fuel to quite a large degree, up to ~50% of relative to petrol prices. Over the years, they've been trying to draw down, but it's a touchy subject. Last year, ~10% of state budget was spent on fuel subsidies (to give us a sense of scale). sources: indonesian Ministry of Finance state budget 2018 https://www.kemenkeu.go.id/apbn2018 https://www.kemenkeu.go.id/apbn2018 CNN indonesia post saying fuel subsidies was over the alloted budget: https://www.cnnindonesia.com/ekonomi/20190102172609-532-358006/subsidi-energi-di-apbn-2018-bengkak-jadi-rp1535-triliun https://www.cnnindonesia.com/ekonomi/20190102172609-532-3580... - sub) edit: some posterity
- simonh 7y ago
  Fuel subsidies in a lot of developing countries are politically weird. They mostly benefit wealthier people, but are most ardently supported by poorer people. It's difficult to disentangle.
  - esyir 7y ago
    People like free stuff, and after some time, it becomes expected. Moreover, think of it in the opposite direction. Imagine a getting hit with a 10% tax increase even if a richer guy gets 15%. Him being taxed more doesn't necessarily make that 10 feel much better.
- evrydayhustling 7y ago
  Thanks for cluing me into the interesting history of Indonesian subsidies. Here's a good analysis for English readers [1]. It looks like fuel subsidies were very high 5y ago, when oil was at 2x today, and have come off significantly since. I'd argue that this is exactly the sort of price stabilization mechanism that makes oil volatility less scary it sounds on its face. The government is centralizing (and, more controversially, socializing) the financial cost of creating internal price stability. This is actually pretty common, and I'm not sure 10% of budget (at peak) is as outsized as it sounds. In the USA, this takes the form of buying and releasing oil from the strategic reserve, but also in a mountain of foreign policy (read: military) spending on maintaining stable supply lines for energy trading. [1] https://worldview.stratfor.com/article/indonesia-energy-reform-takes-back-seat-pragmatism-jokowi-oil-gas-subsidies https://worldview.stratfor.com/article/indonesia-energy-refo...

barbasosi 7y ago

Depends on how you define "on strike full retard", at least where I live (Indonesia), it is spot on. Some context: Indonesian govt. subsidizes fuel to quite a large degree, up to ~50% of relative to petrol prices. Over the years, they've been trying to draw down, but it's a touchy subject. Last year, ~10% of state budget was spent on fuel subsidies (to give us a sense of scale). sources: indonesian Ministry of Finance state budget 2018 https://www.kemenkeu.go.id/apbn2018 https://www.kemenkeu.go.id/apbn2018 CNN indonesia post saying fuel subsidies was over the alloted budget: https://www.cnnindonesia.com/ekonomi/20190102172609-532-358006/subsidi-energi-di-apbn-2018-bengkak-jadi-rp1535-triliun https://www.cnnindonesia.com/ekonomi/20190102172609-532-3580... - sub) edit: some posterity

simonh 7y ago
Fuel subsidies in a lot of developing countries are politically weird. They mostly benefit wealthier people, but are most ardently supported by poorer people. It's difficult to disentangle.
- esyir 7y ago
  People like free stuff, and after some time, it becomes expected. Moreover, think of it in the opposite direction. Imagine a getting hit with a 10% tax increase even if a richer guy gets 15%. Him being taxed more doesn't necessarily make that 10 feel much better.
evrydayhustling 7y ago
Thanks for cluing me into the interesting history of Indonesian subsidies. Here's a good analysis for English readers [1]. It looks like fuel subsidies were very high 5y ago, when oil was at 2x today, and have come off significantly since. I'd argue that this is exactly the sort of price stabilization mechanism that makes oil volatility less scary it sounds on its face. The government is centralizing (and, more controversially, socializing) the financial cost of creating internal price stability. This is actually pretty common, and I'm not sure 10% of budget (at peak) is as outsized as it sounds. In the USA, this takes the form of buying and releasing oil from the strategic reserve, but also in a mountain of foreign policy (read: military) spending on maintaining stable supply lines for energy trading. [1] https://worldview.stratfor.com/article/indonesia-energy-reform-takes-back-seat-pragmatism-jokowi-oil-gas-subsidies https://worldview.stratfor.com/article/indonesia-energy-refo...