Investor Presentaiton
A different approach to managing resource revenues
In order to overcome domestic structural constraints (such as low technological sophistication, limited
areas of competitive advantage While mitigating economic risks associated with domestic
investments of resource revenues (such as public investment inefficiency, absorptive capacity constraints,
and Dutch disease), the approach in Chang and Lebdioui (2020) is based on the following two features:
The gradual
scaling-up of
domestic
investments in
real assets
The targeting of
productivity
enhancing assets
for tradable
sectors
ଓ
This approach is dynamic
over time because it
enables the gradual shift
between short-term fiscal
stabilisation and long-term
accumulation of productive
capabilities.
TIIT
how certain
It takes account
patterns of resource-revenue
investment can better contribute to
increasing the institutional capacity to
invest over time.
It has several benefits, such as:
•Reducing the cost of misjudging the
duration of a commodity boom
Taking into account the diminishing
marginal utility of public spending and the
issue of absorptive capacity
•Explicitly considering the opportunity costs
associated with over-insurance through
overseas financial investment of resource
revenues.View entire presentation