I am happy to see the efforts made by the OECD and other international agencies to bring forth suggestions to streamline the global oil shocks (No. 245, November 2004 and various editions). We at The Indian Institute of Finance (IIF) have been working extensively to provide possible solutions to economies and international agencies since 1987. Some of our suggestions and research forecasts have been very apt and have helped nations to build shields against oil shocks.
A recent forecast made by my colleague, Prof. J. D. Agarwal, indicated that oil prices were expected to shoot up, hence economies and international agencies needed to initiate effective steps to offset the shocks. Suggestions to this effect were also considered in his paper, which appeared in Finance India, March 2004. This piece was written in December 2003, when no market indication of such a scenario was visible.
Also our suggestion to create an Oil Pool Account in 1990-91, which was duly initiated by India and some other countries, has helped India live with the shock which the world has seen in the last two years.
Fortunately, the development of derivative markets and products on oil and their use by markets globally have also helped to bring discipline to the oil market and a reduction of pure dependence on OPEC or a select few nations.
© OECD Observer, No. 250, July 2005
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