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Fiscal Sustainability in Heavily Indebted Countries Dependenton Nonrenewable Resources; The Case of Gabon

  • Joseph Ntamatungiro
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    This paper proposes a framework for assessing fiscal sustainability in heavily indebted countries dependent on exhaustible resources, with reference to Gabon. It finds that fiscal sustainability could be achieved by: (i) developing a fiscal rule for the non-oil primary fiscal balance compatible with an objective for reducing the debt-to-non-oil GDP ratio; (ii) introducing a constant oil-based income transfer per capita allowing intergenerational equity; and (iii) building up an oil savings fund. Long-term simulations show that Gabon's fiscal position is fragile and that a fiscal policy path consistent with the proposed framework could help achieve comfortable levels of net wealth.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/30.

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    Length: 38
    Date of creation: 01 Feb 2004
    Date of revision:
    Handle: RePEc:imf:imfwpa:04/30
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    1. Rodrigo O. Valdés & Eduardo Engel, 2000. "Optimal Fiscal Strategy for Oil Exporting Countries," IMF Working Papers 00/118, International Monetary Fund.
    2. Philip R. Gerson, 1998. "The Impact of Fiscal Policy Variableson Output Growth," IMF Working Papers 98/1, International Monetary Fund.
    3. Xavier Sala-i-Martín & Arvind Subramanian, 2003. "Addressing the natural resource curse: An illustration from Nigeria," Economics Working Papers 685, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, vol. 2(3).
    5. W.H. Buiter, 1997. "Aspects of Fiscal Performance in Some Transition Economies Under Fund-Supported Programs," CEP Discussion Papers dp0333, Centre for Economic Performance, LSE.
    6. Enzo Croce & V. Hugo Juan-Ramon, 2003. "Assessing Fiscal Sustainability; A Cross Country Comparison," IMF Working Papers 03/145, International Monetary Fund.
    7. Diep Nuven, 1994. "Linkages in Price Level and Inflation Rate Between Cfa Franc Zone Countries and France," IMF Working Papers 94/93, International Monetary Fund.
    8. Theodore M. Barnhill & George Kopits, 2003. "Assessing Fiscal Sustainability Under Uncertainity," IMF Working Papers 03/79, International Monetary Fund.
    9. Reinhart, Carmen & Rogoff, Kenneth & Savastano, Miguel, 2003. "Debt intolerance," MPRA Paper 13932, University Library of Munich, Germany.
    10. Qing Wang & Ugo Fasano-Filho, 2002. "Testing the Relationship Between Government Spending and Revenue; Evidence From GCC Countries," IMF Working Papers 02/201, International Monetary Fund.
    11. Nigel Andrew Chalk, 1998. "Fiscal Sustainability with Non-Renewable Resources," IMF Working Papers 98/26, International Monetary Fund.
    12. Kadima D. Kalonji & Boileau Loko & Raj Nallari & Montfort Mlachila, 2003. "The Impact of External Indebtednesson Poverty in Low-Income Countries," IMF Working Papers 03/61, International Monetary Fund.
    13. Thomas Baunsgaard, 2003. "Fiscal Policy in Nigeria; Any Role for Rules?," IMF Working Papers 03/155, International Monetary Fund.
    14. M. Alier & Martin David Kaufman, 1999. "Nonrenewable Resources; A Case for Persistent Fiscal Surpluses," IMF Working Papers 99/44, International Monetary Fund.
    15. M. O. Odedokun, 1997. "Dynamics of inflation in Sub-Saharan Africa: the role of foreign inflation, official and parallel market exchange rates, and monetary growth," Applied Financial Economics, Taylor & Francis Journals, vol. 7(4), pages 395-402.
    16. Axel Schimmelpfennig & Nouriel Roubini & Paolo Manasse, 2003. "Predicting Sovereign Debt Crises," IMF Working Papers 03/221, International Monetary Fund.
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