Escaping the Resource Curse:
Managing Natural-Resource Revenues in Low-Income Countries
Hosted by
Center on Globalization and Sustainable Development
The Earth Institute at Columbia University
Sponsored by
The Open Society Institute
February 26, 2004
9:00 am – 5:30 pm
at the Faculty House, Columbia University
Workshop Goals
This workshop is aimed at eliciting lessons learned from recent efforts to improve the management of natural-resource revenues in developing countries. In all too many cases, the discovery of oil or other resources has been associated with devastating political conflict and economic setbacks. Only a few countries have managed resource revenues in a way that promotes sustainable economic growth and poverty alleviation. This one-day event is aimed at surveying a wide range of approaches, in preparation for a larger international conference to be held in the Fall of 2004, where formal papers would be presented for publication in book form.
Workshop Agenda (Draft)
Substantively, we will lay out a step-by-step approach to escaping the resource curse, covering both the management of the natural resources and the management of the revenues that flow from them. Given that there is now a considerable body of work analyzing the causes of the problems, we will focus on solutions that work, measures that are practical and doable even in the hard cases. The following outlines some of what we believe to be key steps needed to escape the resource curse:
1. Managing Natural Resources
1.1 Contracting Mechanisms. Auctioning of concessions, etc.
1.2 Governance of production sharing. PSA terms, equity participation.
1.3 Taxation and Fiscal Regimes. Lump-sum payments and risk-sharing.
1.4 Role of public vs. private sector, legal status of state-owned companies.
2. Managing Revenues: Guidelines for financial management
2.1 Integrate or segregate in budget. Special funds. Experiences of Chile, Norway, Singapore, Kazakhstan.
2.2 Saving vs. spending. How to decide when to do one or the other. The use of project appraisal rules as in Botswana.
3. Managing Revenues: Innovative uses
3.1 Micro-finance, housing guarantees, domestic debt retirement, citizen stipends, etc.
3.2 Direct distribution to citizens: pros and cons, mechanisms.
3.3 Tying revenue to social targets, e.g. the Millennium Development Goals, education and health.
3.4 Implication of resource revenue for general taxation policies (corporate, income commodity).
4. Managing Revenues: Ensuring accountability
4.1 Keeping the books. Proper accounting. Publish what you pay. Publish what you receive. Publish what you spend.
4.2 Legislative, other oversight mechanisms.
4.3 Relations of producing vs. non-producing parts of a country. Regional vs. national. Counteracting secessionist tendencies, civil conflict.
4.4 Corporate Social Responsibility. Role of producing companies.
4.5 Ensuring effective public accountability. Mechanisms. Capacity building, media, civil society. Chad experience. International partnerships to strengthen parliaments, civil society. Caspian Revenue Watch (OSI, International Peace Academy, McArthur Foundation). Other political management. UN Global Compact.
5. Managing the Economic Impact: Short-run Planning
5.1 Managing the rise in revenues, from zero to peak production.
5.2 Coping with oil price shocks. Avoiding boom-bust cycles.
5.3 Exchange rate management.
5.4 Coordination with foreign-aid inflows.
6. Managing the Economic Impact: Strategic issues
6.1 Typology of resource inflows in overall economy over time.
6.2 How to estimate the expected impact of oil revenues on different sectors?
6.3 Is there a case for intervention in non-resource sectors to promote employment, agriculture, manufacturing? Experiences.
Workshop Timetable and Presentations
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