FACTBOX-How countries have coped with the oil "curse"

Nov 22 (Reuters) - Iraq is poised to strike deals with international oil companies that could vault it into third place in the table of oil producing nations.

Emerging from years of sectarian slaughter and war triggered by the 2003 U.S. invasion, it desperately needs the billions of dollars in development and reconstruction funds that a large increase in oil exports will bring. [ID:GEE5AL043]

But oil riches often cause more economic damage than benefit, a phenomenon known as the oil or resource "curse."

Following are descriptions of how other countries have dealt with their oil wealth.

NORWAY

Norway's management of its oil revenues since its major discoveries in the 1970s is often held up as a model for other oil-rich countries to follow. It was helped by already being a wealthy, democratic and stable country.

The government laid down ethical principles for earmarking revenues and the requirement that they be used for future generations. The Petroleum Fund, set up in 1990, effectively isolates oil revenues from the economy by investing abroad and returning its above-inflation gains of about 4 percent. The $400 billion fund, managed by the independent central bank, owns about 1.0 percent of global listed equities.

Despite some calls for the government to spend more of the revenues, there is a broad political consensus on the rules.