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Designing a Fiscal Framework for a Prospective Commodity Producer: Options for Lebanon
Author:
Mariusz Jarmuzek
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,
Diego Mesa Puyo
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Najla Nakhle
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Series:
IMF Working Papers
Volume/Issue:
Volume 2014: Issue 193
Language:
English
Publication Date:
23 Oct 2014
DOI:
https://doi.org/10.5089/9781484346143.001
ISBN:
9781484346143
ISSN:
1018-5941
Pages:
33
Keywords:
WP; natural resource; resource revenue; rate of return; risk tolerance; government company; government share; Lebanese authorities; regime option; fiscal policy; oil-producing countries; resource revenue management; accountability; government take option; government wealth; Fiscal stance; Fiscal governance; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Lebanon is expected to have gas resources in its Mediterranean basin, and these could turn the country into a natural gas producer over the next decade. Lebanon’s economy and institutions will thus need to adapt to the challenges and opportunities that such change will bring. In this paper, we address how Lebanon’s fiscal framework will need to be reformulated to take into account potential resource revenue. Designing a fiscal regime appropriately is an absolute prerequisite to make sure the government can receive a fair share of the resources while investors face appropriate incentives to invest and develop the sector. This step should be followed by setting macro-fiscal anchors and supporting institutions. The prospective framework should initially be focused on ensuring fiscal sustainability and intergenerational equity, given the estimated relatively short horizon of Lebanon’s gas resources. Strong institutional arrangements also need to underpin the prospective framework, to ensure that the pace of resource wealth’s use is set in line with Lebanon’s capacity constraints.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund