Oil-producing countries have benefited from rising oil prices in recent years. The increase in oil exports and oil revenues has had major implications for these countries. These developments have revealed how governments manage their fiscal policies in light of changing oil-market conditions and the role of special fiscal institutions (SFIs). In this Occasional Paper, IMF experts examine the fiscal response of oil-producing countries to the recent oil boom and the role of SFIs in fiscal management, they review the experiences of selected countries, and they draw general lessons. In doing so, they link findings on best practice in the design of SFIs with broader fiscal management advice.
This paper examines the fiscal responses of oil-producing countries (OPCs) to the oil boom through 2005 and the role of special fiscal institutions (SFIs)—oil funds, fiscal rules and fiscal responsibility legislation (FRL), and budgetary oil prices—in fiscal management in OPCs, and draws some general lessons.
This paper examines the fiscal responses of oil-producing countries (OPCs) to the oil boom through 2005 and the role of special fiscal institutions (SFIs)-oil funds, fiscal rules and fiscal responsibility legislation (FRL), and budgetary oil prices-in fiscal management in OPCs, and draws some general lessons.
The new African oil boomcentered on the oil-rich Atlantic waters of the Gulf of Guinea, from Nigeria to Angolais a moment of great opportunity and great peril for countries beset by wide-scale poverty.
Charting OPEC's rise, decline and virtual disappearance as a commercial force in the world, this text strives to unravel the puzzle of why so many countries all followed the same path to economic development and with such wretched consequences.
Based on country experiences, the paper assesses policy options to assign oil revenues to subnational governments (SNGs). The literature recommends that oil revenues be centralized. Given political economy considerations, this paper suggests that a possible alternative is to assign stable oil-tax bases to oil-producing SNGs, supplementing these with predictable transfers from the center. Although commonly used, oil revenue-sharing arrangements are the least preferable solution, as they complicate macroeconomic management and do not provide stable financing. Revenue sharing also does not diffuse separatist tendencies, since oil-producing SNGs would still be better off by keeping their oil revenues in full.
The petroleum-rich former Soviet republics around the Caspian Sea face the dual challenge of managing the transition to a market economy and a booming resource sector. This paper examines this challenge with particular reference to Azerbaijan. The standard “Dutch disease” model is modified to capture the special conditions of transition economies, with specific attention to the pattern of real exchange rate movement. “Transition factors” are found to add to the speed of real appreciation. Non-oil sectors may suffer, but less through the real appreciation than through transition-specific structural problems. The paper describes a medium-term policy strategy for Azerbaijan, relating its prospects to the experience in the 1970s of Ecuador, Indonesia, and Nigeria. The adverse effects of the Dutch disease may be avoided if Azerbaijan pursues policies to promote savings and open trade, and strengthens the supply side through structural policies.
This report - the first phase of a programmatic Iraq country economic memorandum (CEM) is structured around the themes of revenue management and economic diversification. These themes accord with the economic challenges faced by Iraq in the medium term but contrast with the short-termism of current Iraqi decision making, which is pushing for a rapid ramp-up of oil production - reducing diversification to finance a large up-front spending program which is detached from a vision of how to diversify the economy. Iraq's oil revenue boom will not be able to meet the expectations placed upon it without a range of supporting policies. Iraq should aim towards adapting its economy to strong weight of oil, as opposed to complete insulation of the non-oil economy from it or dependence on it. To address the myriad links between Iraq's economic challenges, the report takes a sequential approach to the analysis. Chapter one presents an overview of the fiscal aspects of prospective developments in the energy sector, and an outline of major obstacles to growth in the non-oil economy. Chapter two, a relatively high-level and abstract economic model is developed to study the impact of various options for spending the oil revenue windfall on the non-oil economy. Chapter three, the opportunities for the development of the non-oil economy are set out in more detail along with recommended next steps in the World Bank support to the government of Iraq.
Multidisciplinary perspectives to governance of oil in African countries Large quantities of oil were discovered in the Albertine Rift Valley in Western Uganda in 2006. The sound management of these oil resources and revenues is undoubtedly one of the key public policy challenges for Uganda as it is for other African countries with large oil and/or gas endowments. With oil expected to start flowing in 2021, the current book analyses how this East African country is preparing for the challenge of effectively, efficiently, and transparently managing its oil sector and resources. Adopting a multidisciplinary, comprehensive, and comparative approach, the book identifies a broad scope of issues that need to be addressed in order for Uganda to realise the full potential of its oil wealth for national economic transformation. Predominantly grounded in local scholarship and including chapters drawing on the experiences of Nigeria, Ghana, and Kenya, the book blazes a trail on governance of African oil in an era of emerging producers. Oil Wealth and Development in Uganda and Beyond will be of great interest to social scientists and economic and social policy makers in oil-producing countries. It is suitable for course adoption across such disciplines as International/Global Affairs, Political Economy, Geography, Environmental Studies, Economics, Energy Studies, Development, Politics, Peace, Security and African Studies. Contributors: Badru Bukenya (Makerere University), Moses Isabirye (Busitema University), Wilson Bahati Kazi (Uganda Revenue Authority), Corti Paul Lakuma (Economic Policy Research Centre), Joseph Mawejje (Economic Policy Research Centre), Pamela Mbabazi (Uganda National Planning Authority), Martin Muhangi (independent researcher), Roberts Muriisa (Mbarara University of Science and Technology), Chris Byaruhanga Musiime (independent researcher), Germano Mwabu (University of Nairobi), Jackson A. Mwakali (Makerere University), Tom Owang (Mbarara University of Science and Technology), Joseph Oloka-Onyango (Makerere University), Peter Quartey (University of Ghana), Peter Wandera (Transparency International Uganda), Kathleen Brophy (Transparency International Uganda), Jaqueline Nakaiza (independent researcher), Babra Beyeza (independent researcher), Jackson Byaruhanga (Bank of Uganda), Emmanuel Abbey (University of Ghana).
Seminar paper from the year 2012 in the subject Economics - Finance, grade: 1,3, Frankfurt School of Finance & Management, course: Public Finance - Finanzwissenschaften, language: English, abstract: The objective of this paper is to examine how public expenditures, revenue and debt in resource-rich economies changed in the past, how politicians and bureaucrats respond(ed) to resource abundance, and how an optimal budget rule for resource-rich economies should be designed. The paper follows a non-technical approach and comes to the conclusion that the successful management of resource revenues highly depends on the political situation in an economy as this determines how well it sticks to any budget rule. The budget rule presented in section IV approaches the different parameters which are at play and shows challenges regarding the rule’s practical feasibility.
