IDEAS home Printed from https://ideas.repec.org/a/tsy/journl/journl_tsy_er_2010_1_3.html
   My bibliography  Save this article

Managing manna from below: sovereign wealth funds and extractive industries in the Pacific

Author

Listed:
  • Martin Gould

    (Treasury, Government of Australia)

Abstract

A key challenge for developing countries endowed with natural resources is to transform those resources into sustained improvements in living standards. A number of Pacific island countries have utilised sovereign wealth funds (SWFs) to manage government revenue from exhaustible natural resources with the aim of improving development outcomes. Experience in the region has been mixed — some SWFs have aided intergenerational equity and macroeconomic stability while others have struggled to bring about improvements in wellbeing. This paper examines the past and present SWFs of Kiribati, Nauru, Timor–Leste and Papua New Guinea. In doing so, it draws out some lessons for policymakers considering the use of SWFs in managing resource revenue in developing countries. Principles for successful SWFs are identified, including strong transparency, public support for the SWF, integration with the national budget and professional investment management.

Suggested Citation

  • Martin Gould, 2010. "Managing manna from below: sovereign wealth funds and extractive industries in the Pacific," Economic Roundup, The Treasury, Australian Government, issue 1, pages 63-86, April.
  • Handle: RePEc:tsy:journl:journl_tsy_er_2010_1_3
    as

    Download full text from publisher

    File URL: http://archive.treasury.gov.au/documents/1783/PDF/05_SWFs_in_the_Pacific.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thorvaldur Gylfason & Gylfi Zoega, 2006. "Natural Resources and Economic Growth: The Role of Investment," The World Economy, Wiley Blackwell, vol. 29(8), pages 1091-1115, August.
    2. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
    3. International Monetary Fund, 2006. "Iceland: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/296, International Monetary Fund.
    4. International Monetary Fund, 2006. "Australia: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/374, International Monetary Fund.
    5. Mr. Rolando Ossowski & Mr. Steven A Barnett & Mr. James Daniel & Mr. Jeffrey M. Davis, 2001. "Stabilization and Savings Funds for Nonrenewable Resources," IMF Occasional Papers 2001/004, International Monetary Fund.
    6. Paul Collier & Anthony Venables & Rick Van der Ploeg & Michael Spence, 2009. "Managing Resource Revenues in Developing," OxCarre Working Papers 015, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    7. R.G. Gregory, 1976. "Some Implications Of The Growth Of The Mineral Sector," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 20(2), pages 71-91, August.
    8. Hodler, Roland, 2006. "The curse of natural resources in fractionalized countries," European Economic Review, Elsevier, vol. 50(6), pages 1367-1386, August.
    9. Will Devlin & Bill Brummitt, 2007. "A few sovereigns more: the rise of sovereign wealth funds," Economic Roundup, The Treasury, Australian Government, issue 4, pages 119-136, December.
    10. International Monetary Fund, 2006. "Papua new Guinea: Selected Issues and Statistical Appendix," IMF Staff Country Reports 2006/105, International Monetary Fund.
    11. International Monetary Fund, 2006. "Romania: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/168, International Monetary Fund.
    12. International Monetary Fund, 2006. "Luxembourg: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/164, International Monetary Fund.
    13. International Monetary Fund, 2006. "Republic of Estonia; Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 06/418, International Monetary Fund.
    14. International Monetary Fund, 2006. "Ireland: Staff Report for the 2006 Article IV Consultation," IMF Staff Country Reports 2006/293, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Taguchi, Hiroyuki & Ganbayar, Javkhlan, 2022. "An econometric study on the classification and effectiveness of natural resource funds," MPRA Paper 114392, University Library of Munich, Germany.
    2. Hiroyuki Taguchi & Javkhlan Ganbayar, 2022. "Natural Resource Funds: Their Objectives and Effectiveness," Sustainability, MDPI, vol. 14(17), pages 1-20, September.
    3. Mark Fabian, 2021. "DevSim: A PowerPoint-Based Choose-Your-Own-Adventure Game for Teaching Economic Development," Journal of Economics Teaching, Journal of Economics Teaching, vol. 6(2), pages 95-105, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert M. Stern, 2011. "Trade in Financial Services—Has the IMF been Involved Constructively?," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 5(1), pages 65-92, February.
    2. Mr. Manmohan S. Kumar & Mr. Dennis P Botman, 2007. "Global Aging Pressures: Impact of Fiscal Adjustment, Policy Cooperation, and Structural Reforms," IMF Working Papers 2007/196, International Monetary Fund.
    3. Al-Mashat Rania & Billmeier Andreas, 2008. "The Monetary Transmission Mechanism in Egypt," Review of Middle East Economics and Finance, De Gruyter, vol. 4(3), pages 32-82, September.
    4. Rochelle Belkar & Lynne Cockerell & Christopher Kent, 2008. "Current Account Deficits: Tha Australian Debate," Central Banking, Analysis, and Economic Policies Book Series, in: Kevin Cowan & Sebastián Edwards & Rodrigo O. Valdés & Norman Loayza (Series Editor) & Klaus Schmidt- (ed.),Current Account and External Financing, edition 1, volume 12, chapter 13, pages 491-535, Central Bank of Chile.
    5. Lisandro Abrego & Pär Österholm, 2010. "External Linkages and Economic Growth in Colombia: Insights from a Bayesian VAR Model," The World Economy, Wiley Blackwell, vol. 33(12), pages 1788-1810, December.
    6. Luke McInerney & Chris Nadarajah & Frances Perkins, 2007. "Australia’s infrastructure policy and the COAG National Reform Agenda," Economic Roundup, The Treasury, Australian Government, issue 1, pages 17-49, February.
    7. Nikola Kojucharov, 2007. "Poverty, Petroleum & Policy Intervention: Lessons from the Chad-Cameroon Pipeline," Review of African Political Economy, Taylor & Francis Journals, vol. 34(113), pages 477-496, September.
    8. International Monetary Fund, 2007. "Russian Federation: Selected Issues," IMF Staff Country Reports 2007/352, International Monetary Fund.
    9. Nguyen Tra Ngoc Vy, 2016. "Does Profitability affect Debt Ratio? Evidence from Vietnam Listed Firms," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(2), pages 87-100, October.
    10. Tommaso Nannicini & Andreas Billmeier, 2011. "Economies in Transition: How Important Is Trade Openness for Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(3), pages 287-314, June.
    11. Mr. Ananthakrishnan Prasad & Mr. Adarsh Kishore, 2007. "Indian Subnational Finances: Recent Performance," IMF Working Papers 2007/205, International Monetary Fund.
    12. Kenneth Patrick Vincent O'Sullivan & Stephen Kinsella, 2013. "Financial and regulatory failure: The case of Ireland," Journal of Banking Regulation, Palgrave Macmillan, vol. 14(1), pages 1-15, January.
    13. Honohan, Patrick & Donovan, Donal & Gorecki, Paul & Mottiar, Rafique, 2010. "The Irish Banking Crisis: Regulatory and Financial Stability Policy," MPRA Paper 24896, University Library of Munich, Germany.
    14. Mr. Mark J Flanagan, 2008. "Resolving a Large Contingent Fiscal Liability: Eastern European Experiences," IMF Working Papers 2008/159, International Monetary Fund.
    15. Robert M Stern, 2009. "Trade in Financial Services--Has the IMF Been Involved Constructively?," Working Papers 587, Research Seminar in International Economics, University of Michigan.
    16. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth: Economic and institutional development in countries with a high share of income from the sale of natural resources. Analysis and recommendations based on internatio," EconStor Research Reports 121950, ZBW - Leibniz Information Centre for Economics.
    17. Marinheiro, Carlos Fonseca, 2008. "Ricardian equivalence, twin deficits, and the Feldstein-Horioka puzzle in Egypt," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1041-1056.
    18. Ernst Baltensperger & Philipp Hildebrand & Thomas Jordan, 2007. "The Swiss National Bank's monetary policy concept - an example of a 'principles-based' policy framework," Economic Studies 2007-03, Swiss National Bank.
    19. World Bank, 2010. "Baltic States and Poland Trade Logistics Review," World Bank Publications - Reports 22292, The World Bank Group.
    20. Calmfors, Lars, 2011. "The Swedish Fiscal Policy Council," Seminar Papers 769, Stockholm University, Institute for International Economic Studies.

    More about this item

    Keywords

    foreign direct investment; Pacific Area; sovereign wealth funds;
    All these keywords.

    JEL classification:

    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • O56 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Oceania

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tsy:journl:journl_tsy_er_2010_1_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Treasury (Commonwealth of Australia) (email available below). General contact details of provider: https://edirc.repec.org/data/trgovau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.