COMPARATIVE ANALYSIS OF OIL AND GAS ECONOMY WITH INDUSTRIALLY DIVERSIFIED ECONOMY
CHAPTER ONE
INTRODUCTION
1.1 BAGROUND OF THE STUDY
Diversification which is all about the exploitation and development of various sectors of an economy if not all sectors, has been a major route through which many developed countries of the world passed. The discovery of certain primary materials or resources however, often change the mentality of such nations into the problem of non-diversification. The blockage to diversification comes as a result of sudden rise in revenue of such affected nations whose riches from natural resources or otherwise it’s abundance, take them several years backward by killing their economies. In place of diversification, leaders are rather induced into corruption and wasteful spending, thereby, creating a declining economic activities, weak investments, nonchalant attitude towards reinvesting the excess income from their booming single sector.
In the case of Nigeria for instance, Obasanjo(1992) explain that while Indonesia had oil in part to finance its investment in agricultural development, Malaysia was not blessed with the same gift of nature. Yet the story has been told so often of how Malaysia came in the sixties to collect palm oil seedlings from Nigeria. The irony of it is that while Malaysia is currently an exporter of palm oil, Nigeria is now an importer of palm oil and importing from Malaysia.
This explains the story of declining agriculture in Nigeria as a result of concentration on a single sector (oil) for everything. The situation became more and more difficult, when rising bills from imported food and industrial machines that made Nigeria became more and more dependent on oil. The danger of depending on a single sector began to manifest glaringly when Nigeria began to produce less than 1 million barrels of petrol daily and sold it for about $30 per barrel as against an earlier 2.5 million barrels per day in 1979 and at a tagged price of $40 per barrel(FGN1983). Many countries of the world has suffered from similar situation due to dependence on single growing sectors‟.
        This propelled scholars to begin to ask questions on the type of economy- driving (oil and gas or industrially diversified) that is most preferred comparatively. And in order to ensure an inclusive study that will sustain a proper deduction, we will be considering the comparative analyses of oil and gas economy with industrially diversified economy using the Dutch disease syndrome.
More also, the remaining parts of this chapter include, the background of the study, followed by statement of research problems, research questions, research objectives, research hypothesis, significance of the study and scope as well as the limitation of the study.
1.2 STATEMENT OF RESEARCH PROBLEM
The Dutch disease is related to the great discovery and the negative impact of   economic rent generated by the abundance of natural resources such as gold, oil and gas. Excessive currency appreciation arising from income generated by new findings implied a contraction for the Dutch manufacturing industry which ultimately brought down the unemployment rate and growth rate. After the host country discovered, the economic situation worsened with the "Dutch illness" problem, or the paradox known as curse of resources.
In extreme cases, Dutch diseases can lead to "Imissage growth" syndrome - the situation where increased production of goods exported by the country worsen the welfare of the country (Bhagwati, 1958). This occurs when the impact of export-led growth on the country's trade conditions is strong enough that it offset the direct benefit of growth. It is an extreme case of self-sacrifice growth. In countries such as Venezuela, Brazil, Nigeria, Malaysia, few countries have similar experiences in the past 30 years, but they were not developed for oil exporters, but export Despite a significant increase in income, it applies to many oil exporters in the sense that it suffered a major decline in general welfare mainly due to management failure of oil income. Therefore, the Dutch disease syndrome confirms the claim that Spanish writers of the 16th century "satisfaction of wealth is neither owned nor extravagant expenditure but a wise application". The main expression of Dutch disease syndrome in oil exporting countries is the decrease or depression of non-petroleum export sector, but the rise in real exchange rate at the time of onset, the increase in corruption, external increase poverty and the neglect of increase in environmental problems.
 However, the discovery of natural resources such as petroleum and natural gas should not be a but a blessing therein for the country when well utilized, Utumi(2003).  Furthermore, not all of the oil exporters suffering from this disease are simultaneously marking "collateral". The experience of the country varies greatly depending on the political economy. The industrially diversified economy has a potential good political will to further develop the country by making good use of the huge lease born from this natural resource. Thus it is important to empirically look into the comparative analyses of oil and gas economy with industrially diversified economy with a view to unravel the relationship between resources abundance and poor welfare of citizens.
1.3 RESEARCH QUESTIONS
In line with the knowledge gap created above, we will be able to ask and provide answers to some pertinent questions as follows;
Do economic indices of oil and gas dominated economy comparatively better in relation to industrially diversified economy?
1.4 OBJECTIVE OF THE STUDY
The broad objective of this work is to conduct comparative analyses of oil and gas economy with industrially diversified economy.
The specific objective include to
Determine if economic indices of oil and gas dominated economy is comparatively better than industrially diversified economy.
1.5 RESEARCH HYPOTHESIS
 The hypothesis that would be tested in the course of this research work is stated as follows
Economic indices of oil and gas dominated economy is not comparatively better than industrially diversified economy.
1.6 SCOPE OF THE STUDY
For the sake of this work, we will be considering some major countries that sustain majorly with natural resource such as oil and gas and those that have diversified their economy industrially in order to permit a logical deduction that can influence policy decision. The materials utilized for this work are based on World Bank, trading economy data and that of other relevant international agencies.
1.7   SIGNIFICANT   OF THE STUDY
This research will serve as a basis for other scholars and researchers interested in carrying out further research in this field subsequently. If applied will go to an extent to provide new explanation to the topic. Owing to the fact that the researcher has aimed at undergoing the comparative analyses of oil and gas economy with industrially diversified economy. The findings of this research work will be of helpful to most countries who my wish to expand the frontiers of development of its economy.
Due to the fact that the secondary information and data are utilized for this research work is enough limitations since the researcher have to rely on the information and data available.