Learning Objectives

Strength through funds, policies and frameworks

After studying this unit, you should be able to:

• Be able to explain the extractive industries governance framework;
• Be able to recognize the stages of the resource chain;
• Be able to articulate the relationship between the economic, legal and social framework, the stages of the resource chain and transparency and accountability;
• Recognize the necessity of having a strategic plan for the extractive industries sector;
• Be able to explain the elements of a good strategic plan;
• Know how to get information and stay up to date on the policies and pieces of legislation regarding the extractive industries sector;
• Know how to use the budget process to influence the allocation of revenues in ways that alleviate poverty and promote social and economic development;
• Know which policy measures will diminish the negative effects of the resource curse
• Know what a Stabilization Fund is.

Introduction and Overview

How can extractive industries contribute to long-term national debt? How can they help reduce poverty? How much should they be taxed? This unit outlines the requirements of the strategic framework for the extractive industries sector, as well as the macro-economic and legal framework. In this unit, parliamentarians will be provided with practical information on budgeting, consumption and investment choices, spreading out expenditures over time (expenditure smoothing), ways to counter the Dutch Disease, and rules for fiscal discipline. Practical tools to influence and monitor these policies are provided as well.