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Resource Management

How to manage revenues from extractives? There’s a book for that!

Rolando Ossowski's picture
 
Offshore oil and rig platform. Photo: © curraheeshutter / Shutterstock.


Countries with large nonrenewable resources can benefit significantly from them, but reliance on revenues from these sources poses major challenges for policy makers. If you are a senior ministry of finance official in a resource-rich country, what are the challenges that you would face and how can you strengthen the fiscal management of your country’s oil and mineral revenues? Consider some of the issues that you would likely encounter:

For many resource abundant countries, large and unpredictable fluctuations in fiscal revenues are a fact of life. Resource revenues are highly volatile and subject to uncertainty. Fiscal policies will need to be framed to support macroeconomic stability and sustainable growth, while sensibly managing fiscal risks. Also, there is a question of how to decouple public spending (which should be relatively stable) from the short-run volatility of resource prices.

The “State-Sponsored” Public Sphere

Darshana Patel's picture

In India’s 2 million villages, public meetings at the village level called Gram Sabhas (GSs) have provided a structured, institutionalized space for dialogue between the local government and its citizens.  In a recently released paper on the topic, Vijayendra Rao and Paromita Sanyal have coined these GSs as “state-sponsored” public sphere.  In fact, these meetings are mandated by national legislation. 

In India, these public meetings not only offer a space to dialogue and feedback between citizens and local power holders, they also pair it with real decision-making on how to manage local resources for beneficiaries for public programs.  This is the most striking feature of the GSs.  While the government provides data on families living below the poverty line that could be eligible for local resources, the GSs are required to have these lists ratified by those attending the meeting.  Citizens can directly challenge the data in “a forum where public discourse shapes the meaning of poverty, discrimination and affirmative action.”