OIL DEPENDENCY AND ECONOMIC DIVERSIFICATION: A LOOK AT NORWAY AND RUSSIA IN THE CONTEXT OF THE DUTCH DISEASE FROM 2002 TO 2022

This bachelor thesis examines the impacts of oil and natural gas extraction on the economy and explores ways to improve economic diversification and the management of natural resources. The work also analyzes the influence of the Dutch Disease, which can negatively affect economies dependent on revenues from these resources, with a specific focus on Norway and Russia. While Norway successfully minimizes the negative impacts of this disease through strong governmental policy and effective management, Russia faces serious economic and social problems caused by insufficient economic diversity. The analysis showed that countries that effectively manage their resources and develop various economic sectors are better able to face economic crises triggered by fluctuations in oil and gas prices. Norway demonstrates how strategic utilization of natural wealth can lead to economic stability and social prosperity. In contrast, Russia experiences greater economic instability. The results of the work suggest that countries that actively plan the use of their natural resources and the development of their economy can effectively mitigate the negative impacts of Dutch Disease. The example of Norway illustrates a successful resolution, while the situation in Russia highlights the need for reforms and improved administration. The thesis offers recommendations for improving policies and strategies that can help countries better face economic challenges and emphasizes the need for further research in this critical area.