Oil rents (% of GDP)
Definition: Oil rents are the difference between the value of crude oil production at world prices and total costs of production.
Description: The map below shows how Oil rents (% of GDP) varies by country. The shade of the country corresponds to the magnitude of the indicator. The darker the shade, the higher the value. The country with the highest value in the world is Iraq, with a value of 37.78. The country with the lowest value in the world is Eritrea, with a value of 0.00.
Source: Estimates based on sources and methods described in "The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium" (World Bank, 2011).
Development Relevance: Accounting for the contribution of natural resources to economic output is important in building an analytical framework for sustainable development. In some countries earnings from natural resources, especially from fossil fuels and minerals, account for a sizable share of GDP, and much of these earnings come in the form of economic rents - revenues above the cost of extracting the resources. Natural resources give rise to economic rents because they are not produced. For produced goods and services competitive forces expand supply until economic profits are driven to zero, but natural resources in fixed supply often command returns well in excess of their cost of production. Rents from nonrenewable resources - fossil fuels and minerals - as well as rents from overharvesting of forests indicate the liquidation of a country's capital stock. When countries use such rents to support current consumption rather than to invest in new capital to replace what is being used up, they are, in effect, borrowing against their future.
Limitations and Exceptions: This definition of economic rent differs from that used in the System of National Accounts, where rents are a form of property income, consisting of payments to landowners by a tenant for the use of the land or payments to the owners of subsoil assets by institutional units permitting them to extract subsoil deposits.
Statistical Concept and Methodology: The estimates of natural resources rents are calculated as the difference between the price of a commodity and the average cost of producing it. This is done by estimating the world price of units of specific commodities and subtracting estimates of average unit costs of extraction or harvesting costs (including a normal return on capital). These unit rents are then multiplied by the physical quantities countries extract or harvest to determine the rents for each commodity as a share of gross domestic product (GDP).
Aggregation method: Weighted average