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

Author/Editor:

Joseph Ntamatungiro

Publication Date:

February 1, 2004

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2004/030

Subject:

Commodities Fiscal policy Fiscal stance Fiscal sustainability Oil Oil, gas and mining taxes Public debt Taxes

English

Publication Date:

February 1, 2004

ISBN/ISSN:

9781451844948/1018-5941

Stock No:

WPIEA0302004

Pages:

38

Please address any questions about this title to publications@imf.org