that has directly resulted in a positive growth of the GNP and negates any fallout of reduced Construction Projects?
The attached article, is a telling example of the incredibly flexible and efficient US Economy and Technology, that was able to weather the price drop, but nevertheless be able to reduce the industry costs by more than 50% from the cost of production of a Barrel of Shale.
So when the Middle Eastern Countries who hoped that the price drops of over 50% would decimate the Shale business, they were sadly mistaken as the US was able to more than match it by cost reduction out of efficiency and technological improvements.
The consequence of this for long term price stability at lower prices, and its devastating effect on Middle Eastern Economies in the longer term, cannot at the moment be understood by many policy makers. This has consequences for the stability of the Middle East as they will not have sufficient surpluses to subsidize their ever thirsty, fast growing populations.
If not foreseen, the possibilities of major implosions is more than certain, which will affect the political balance in the Middle East. Those economies that have been able to wean themselves out of oil dependency will most certainly benefit, but others like Nigeria and Venezuela will face an uncertain future as they are dependent on oil to run their economies.
Even Saudi Arabia with an increasing population will face pressure to abolish the monarchy or at least significant part of the largesse paid to the huge Royal Family of more than 4000.
We presume that by this time, Sri Lanka would have changed its human export structurally to essential and skilled jobs in these countries, that the local populations will not have the skills to replace, and thereby be cushioned from the impact.
The flip side for Sri Lanka’s energy security will be the cost of extraction of Oil and Gas from our own offshore fields, which will not become a priority in the future, and we should turn more to cleaning up the environment, and the use of renewable energy, and making our energy use more efficient, and reducing energy wastage both by more fuel efficient vehicles and our industrial and home energy consumption patterns.
The renaissance of the US economy will be at hand as the world’s largest producer and consumer of cheap energy, and it should be consequent upon Sri Lanka being ready to cash in on those opportunities presented without leaning to the China orbit for help and trade.
The Chinese economy will face greater pressures on cleaning up the mess they have created in their environment and the aging population, and health consequences of industrialization and non-communicable diseases spiraling out of control. If we predict we will benefit! That should be the slogan. We must look into what if scenarios and be prepared for all outcomes.