Category Aid

Government Revenues – the only real benefit from the extractive sector?

Advocates of natural resource extraction in developing countries commonly list five benefits: economic growth, employment, infrastructure, community investments, and government revenue.

Our conclusion is unambiguous: the overwhelming benefit is government revenues. Here’s a roundup of why…

Natural resources – a curse, a blessing, or a “preventable disease”

According to conventional wisdom, a rich endowment of natural resources represents a curse, not a blessing, as resources are said to do more harm than good. Findings show that the resource curse may be overstated in the case of Mozambique.

Firstly, natural resource dependence has been linked to increased incidence of civil war in places like Angola, Sierra Leone and the Democratic Republic of Congo.

In the case of Mozambique, natural resources were not a factor in the civil war. A distinction can be drawn between resources that are “lootable” – those that can be exploited with out sophisticated technology – and those that require industrialized production. While there is artisanal production in Mozambique, the majority of the mineral wealth can only be exploited with industrial technology.

World Bank’s Vice President for Africa, Diop: “Too often local populations suffer …the development neglect of extraction…

PARIS, October 5, 2012 - With new discoveries of oil, gas, and other minerals generating a wave of significant mineral wealth in African countries, the World Bank today launched a new fund to help countries on the continent level the playing field and ensure equitable deals in their natural resource contracts with international companies.

With Africa holding 15% of the world’s oil reserves, 40% of its gold, and about 80% of the platinum group of metals, natural resources represent important development opportunities for the continent. For example, oil production has been growing steadily in Africa, and is expected to continue to rise at an average rate of six percent per year for the foreseeable future.

Welcome to The Chapa!

Grab a seat and hold on, this is going to be an exciting ride. With international human rights standards as our roadmap, our destination is the future of Mozambique where all children’s rights are fulfilled.  The journey will be long and bumpy, with unexpected diversions a certainty.  The trip will also be expensive and staying the course may require tough choices along the way.

An ever present factor along our social policy journey is the debate over identifying fiscal space in the budget for social and economic development.   But what is fiscal space?  It depends who you ask, i.e. it means different things to different people in the development, financial and aid communities.   Experts have defined it as space to spend a government’s budget without jeopardizing the stability of the economy.   The same experts debate how certain resources in the budget can be labeled or calculated.  And yes, yet another group of experts, including the UN, define it in relation to how government’s mobilize resources to combat poverty and achieve the Millennium Development Goals (MDGs).

All aboard the Social Policy blog

In Lewis Carroll’s, Alice in Wonderland, Alice asks the Cheshire cat to tell her the way to go. “That depends a good deal on where you want to get to,” answers the cat. “I don’t much care where,” Alice replies, “as long as I get somewhere.” The cat responds, “Oh, you’re sure to do that, if only you walk long enough.”

Alice in Wonderland

Social policy is about achieving social outcomes in cost-effective ways. It’s the final destination of the long path of sustainable development. But choosing the ‘right’ route (the means) to achieve those goals is as important as the final destination. And understanding the bumps and detours along the way makes all the difference…

The Chapa will take us down that road, asking questions at each stop and collecting innovative ideas along the way. <

Join the ride.