Good Management of Natural Resources: Lessons and Opportunities for Low Income Countries
Session Description: Many countries face challenges to realize the full potential of their exhaustible natural resources and avoid the pitfalls that have plagued resource-rich countries in the past. This is particularly the case for low-income countries, which have huge development needs but often weak institutions. Economic challenges include optimal resource taxation, fiscal policy design, exchange rate management, managing volatility, and promoting economic diversification. There are also significant political challenges, including establishing contracts that balance the country’s interests with those of companies, building strong domestic institutions, etc.
The seminar will discuss these challenges, drawing on lessons from successful countries and the opportunities that good management of natural resource can offer low-income countries.
- Economic policy. How to deal with the volatility and exhaustibility of resource revenue? How fast can spending be scaled up without compromising economic stability, economic diversification, and the efficiency of government spending? What role can sovereign wealth funds play in the management of resource revenues?
- Tax policy. What tax regime best balances the benefits from natural resources for the country and the interests of the extractive companies?
- Transparency. What is the role of transparency and good governance in ensuring that tax revenues are being properly collected and put to good use?
- Diversification. How to promote diversification of natural resource rich economies so to generate equitable growth and employment creation in the non resource sector?