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Mr. Luc Eyraud
,
William Gbohoui
, and
Mr. Paulo A Medas
This paper revisits the debate on the design of fiscal rules in resource-rich countries. Its main objective is to assess alternative systems of rules against their policy objectives, while taking into account country characteristics. One of the contributions of the paper is to propose fiscal frameworks that are centered around the principle of insurance against shocks and less reliant on estimating precisely resource wealth, which tends to be highly volatile.
Nathalie Pouokam
This paper discusses the main challenges faced by resource-rich nations in promoting equity; describes policy tools available for managing exhaustible natural resources; and analyzes the relationship between resource wealth and state fragility. It is argued that human capital accumulation, innovation, and technology diffusion can help escape the trap of low growth and resource dependence that plagues so many developing countries. But to make this possible, resource-rich nations must sustain strong citizen participation in the policy making to hold governments accountable and ensure the inclusive management of resource wealth.
International Monetary Fund. Fiscal Affairs Dept.

Abstract

Public sector balance sheets provide the most comprehensive picture of public wealth. They bring together all the accumulated assets and liabilities that the government controls, including public corporations, natural resources, and pension liabilities. They thus account for the entirety of what the state owns and owes, offering a broader fiscal picture beyond debt and deficits. Most governments do not provide such transparency, thereby avoiding the additional scrutiny it brings. Better balance sheet management enables countries to increase revenues, reduce risks, and improve fiscal policymaking. There is some empirical evidence that financial markets are increasingly paying attention to the entire government balance sheet and that strong balance sheets enhance economic resilience. This issue of the Fiscal Monitor presents a new database that shows comprehensive estimates of public sector assets and liabilities for a broad sample of 31 countries, covering 61 percent of the global economy, and provides tools to analyze and manage public wealth. Estimates of public wealth reveal the full scale of public assets and liabilities. Assets are worth US$101 trillion or 219 percent of GDP in the sample. This includes 120 percent of GDP in public corporation assets. Also included are natural resources that average 110 percent of GDP among the large natural-resource-producing countries. Recognizing these assets does not negate the vulnerabilities associated with the standard measure of general government public debt, comprising 94 percent of GDP for these countries. This is only half of total public sector liabilities of 198 percent of GDP, which also includes 46 percent of GDP in already accrued pension liabilities. Once governments understand the size and nature of public assets, they can start managing them more effectively. Potential gains from better asset management are considerable. Revenue gains from nonfinancial public corporations and government financial assets alone could be as high as 3 percent of GDP a year, equivalent to annual corporate tax collections across advanced economies. In addition, considerable gains could be realized from government nonfinancial assets. Public assets are a significant resource, and how governments use and report on them matters, not just for financial reasons, but also in terms of improving service delivery and preventing the misuse of resources that often results from a lack of transparency.

International Monetary Fund
The paper presents an update on the status of the standard template to collect data on government revenues from natural resources, originally presented to the Executive Board in January 2014. The paper discusses: (i) the field-testing of the standard template in six countries, which confirmed the feasibility of applying it more broadly; (ii) the final version of the template based on outcomes of consultation with the international community and the field-testing visits; and (iii) the adoption of the template by the Extractive Industries Transparency Initiative (EITI) International Secretariat as a mandatory reporting requirement for its member countries. The standard template serves as a companion to the Guide to Analyze Natural Resources in the National Accounts. The standard template was developed to support fiscal policy formulation and analysis in resource-rich economies, which constitute about one third of the Fund’s membership. The standard template is based on the revenue classification of the Government Finance Statistics Manual 2014, thereby facilitating the collection of resource revenue data in methodologically sound, analytically relevant, and cross-country comparable format.
Mr. Jack Calder

Abstract

L’administration des recettes fiscales tirées de ressources naturelles présente des difficultés particulières. Ce manuel est l’un des premiers ouvrages à s’intéresser de près à l’efficacité de l’administration des recettes issues des industries extractives. Il fournit aux décideurs politiques et aux agents des pays en développement et émergents des instructions pratiques pour mettre en place un cadre juridique, une organisation et des procédures solides pour gérer les recettes issues de ces industries. Il aborde le thème de la transparence et de sa promotion face une demande croissante des parties prenantes nationales et internationales pour plus de clarté et de responsabilité dans l’administration des recettes publiques tirées des ressources naturelles. Il approfondit également les solutions pour que les pays en développement parviennent à renforcer leurs capacités techniques et managériales pour mieux administrer ces recettes.

International Monetary Fund. Fiscal Affairs Dept.

Abstract

This issue of the Fiscal Monitor examines the conduct of fiscal policy under the uncertainty caused by dependence on natural resource revenues. It draws on extensive past research on the behavior of commodity prices and their implications for macroeconomic outcomes, as well as on extensive IMF technical assistance to resource-rich economies seeking to improve their management of natural resource wealth.

Mr. Jack Calder

Abstract

Los ingresos derivados de los recursos naturales suelen plantear desafíos singulares para la administración tributaria. Este Manual es uno de los primeros de su tipo que se enfoca en la administración eficaz de los ingresos provenientes de las industrias extractivas. Ofrece a las autoridades y los funcionarios en las economías en desarrollo y de mercados emergentes directrices prácticas para el establecimiento de un marco jurídico robusto, una organización y procedimientos para la gestión de los ingresos de estas industrias. Examina la transparencia y la manera de fomentarla ante las crecientes exigencias de claridad y rendición de cuentas en la administración de los ingresos públicos generados por las industrias extractivas, y analiza la forma en que los países en desarrollo pueden reforzar su capacidad gerencial y técnica para administrar estos ingresos.

Ms. Maria A Albino
,
Ms. Svetlana Cerovic
,
Mr. Francesco Grigoli
,
Mr. Juan C Flores
,
Mr. Javier Kapsoli
,
Mr. Haonan Qu
,
Mr. Yahia Said
,
Mr. Bahrom Shukurov
,
Mr. Martin Sommer
, and
Mr. SeokHyun Yoon
Over the past decade, rising oil prices have translated into high levels of public investment in most MENA and CCA oil exporters. This has prompted questions about the efficiency of public investment in generating growth and closing infrastructure gaps, as well as concerns about fiscal vulnerabilities. When public investment is inefficient, higher levels of spending may simply lead to larger budget deficits, without sufficiency increasing the quantity or quality of public infrastructure in support of economic growth. This paper examines the efficiency of public investment in the MENA and CCA oil exporters using several techniques, including a novel application of the efficiency frontier analysis, estimates of unit investment costs, and assessments of public investment processes. The analysis confirms that these oil exporters have substantial room to improve public investment efficiency. Reforms in the public financial and investment management systems are needed to achieve this objective.
Ms. Maria A Albino
,
Ms. Svetlana Cerovic
,
Mr. Francesco Grigoli
,
Mr. Juan C Flores
,
Mr. Javier Kapsoli
,
Mr. Haonan Qu
,
Mr. Yahia Said
,
Mr. Bahrom Shukurov
,
Mr. Martin Sommer
, and
Mr. SeokHyun Yoon
Over the past decade, rising oil prices have translated into high levels of public investment in most MENA and CCA oil exporters. This has prompted questions about the efficiency of public investment in generating growth and closing infrastructure gaps, as well as concerns about fiscal vulnerabilities. When public investment is inefficient, higher levels of spending may simply lead to larger budget deficits, without sufficiency increasing the quantity or quality of public infrastructure in support of economic growth. This paper examines the efficiency of public investment in the MENA and CCA oil exporters using several techniques, including a novel application of the efficiency frontier analysis, estimates of unit investment costs, and assessments of public investment processes. The analysis confirms that these oil exporters have substantial room to improve public investment efficiency. Reforms in the public financial and investment management systems are needed to achieve this objective.
International Monetary Fund
Ample natural resource revenues create both opportunities and challenges for a sovereign to transform its natural resources into well-managed financial assets. Hence, inter-temporal smoothing of revenue and consumption/investment moves to the center stage of macroeconomic policies. The questions arising from natural resource wealth accumulation are becoming more pressing for many countries, given the need to achieve intergenerational equity in a context where commodity prices may not continue their upward trajectory of the past decade. Addressing these questions requires a flexible sovereign asset-liability management (SALM) framework that integrates various macroeconomic and financial trade-offs with the aim of containing financial risk to the sovereign balance sheet. The framework and policy advice aims to guide policymakers across different institutions in weighing those trade-offs.