Description:
Oil and mineral revenues raise national
savings and hence facilitate investment, capital
accumulation, and sustained growth; thus, there are benefits
of owning large natural resources. There can be a
significant spillover effect from the oil sector to the
non-oil sector particularly if governments are committed to
bridge the infrastructure gap and promote the non-oil
economy and foremost the non-oil tradable sector.
Consequently, the capacity for coordinated policy
formulation and execution is fundamental as well as sound
windfall management mechanisms and institutions. This
conceptual framework uses the case of Indonesia and the
example of Norway to argue that the resource paradox is
avoidable. Abundance should not be a curse, but rather a
blessing for Sub-Saharan Africa's oil and mineral
exporting countries. The country context and political
economy matter a great deal but should not be the main
driving forces behind windfall management, to avoid
excessive rent-seeking activities, inefficiency, and
wasteful spending. The EITI++ implementation can contribute
to make a difference, mostly through capacity building,
implementation assistance, and coordination support.