{
  "title": "IMF Survey: Resource-rich Countries Can Learn from History, Says Collier",
  "publication": "IMF News, September 27, 2011",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/soint092711b",
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  "summary": "African countries endowed with mineral and other natural wealth could learn from the past and rise from their low-income status through better management of their natural resources, says economist Paul Collier, adding that resource revenues can help Africa finance its own development.",
  "publishDate": "2011-09-27",
  "sections": [
    {
      "heading": "Natural resource revenues — historical risks and opportunities",
      "content": "- Low-income countries rich in natural resources have historically performed worse economically than might have been expected, falling prey to conflict, corruption, or overdependency on a single resource.\n- History of resource extraction in Africa described as “a history of plunder”; societies can avoid repeating mistakes through “social learning.”\n- Commodity prices are high, and “over the next decade that will trigger a lot of natural resource discovery in Africa.” Capturing and harnessing those revenues could allow Africa “to finance its own development.”"
    },
    {
      "heading": "Policy instruments and fiscal management",
      "content": "- Recommendation to smooth spending to avoid booms followed by crashes:\n  - Save in good times and pull money into consumption in bad times.\n  - Create institutions that “ride the tiger of commodity prices.”\n- Proposed funds:\n  - “Sovereign resilience funds”: put money in when there is plenty; withdraw when there is not.\n  - “Sovereign development fund”: finances schools, ports, hospitals, roads, power stations to build a more productive future.\n- Emphasis on allocating substantial resources to building productive infrastructure; Africa has been “starved of economic infrastructure.”"
    },
    {
      "heading": "Diversification and investment strategies — country examples",
      "content": "- Botswana:\n  - Has done “a splendid job of riding the tiger.”\n  - Experienced “two episodes where its revenues from its only export—which are diamonds—fell pretty well to zero.”\n  - Because Botswana built up “a big financial cushion,” it could ride through shocks, even though “for several months there was no revenue.”\n  - Is attempting to diversify within the diamond value chain by “trying to break into the market for cutting and trading diamonds as well as just digging them out of the ground.”\n- Malaysia:\n  - Forty years ago Malaysia “looked just like Africa”: resource rich with social problems.\n  - Harnessed resource revenues to invest and diversify (example: investing in Penang to transform it into “a world-beating electronics center” by building physical and social infrastructure to attract skilled people and industry)."
    },
    {
      "heading": "Strategic guidance and practical considerations",
      "content": "- No single country to copy:\n  - Most rich countries were never natural resource rich; their development strategies differ.\n  - Canada and Australia are not good guides for Africa because they “save their money abroad” having already accumulated large capital stocks; Africa needs to “save its money at home” and invest within Africa.\n- Distinctive challenges require distinctive policies; guidance source mentioned:\n  - The Natural Resource Charter (naturalresourcecharter.org) is cited as independent guidance on the decision chain from discovery and taxation to investment and saving.\n  - The Charter’s board is described as “entirely southern” and headed by Ernesto Zedillo."
    },
    {
      "heading": "Key takeaways (bullet points Collier emphasized)",
      "content": "- Find a balance between present consumption needs and future investment.\n- Smooth public spending across commodity cycles through resilience and development funds.\n- Allocate substantial resource revenues to building productive infrastructure.\n- Use resource revenues to diversify the economy where feasible and context-appropriate.\n- Recognize country-specific constraints (e.g., landlocked status) when designing diversification strategies.\n\nIMF Survey online, September 27, 2011 — Interview with Paul Collier\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Survey Interview\n- Commodity price swings\n- Risks facing poorer countries\n- Ghana’s middle-income aim\n- Africa’s after-oil finances\n- Africa’s oil revenues surge\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/soint092711b"
    }
  ],
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    "[Markdown version](/en/news/articles/2015/09/28/04/53/soint092711b/index.md)",
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    "Published: September 27, 2011",
    "Low-income countries rich in natural resources have historically performed worse economically than might have been expected, falling prey to conflict, corruption, or overdependency on a single resource.",
    "History of resource extraction in Africa described as “a history of plunder”; societies can avoid repeating mistakes through “social learning.”",
    "Commodity prices are high, and “over the next decade that will trigger a lot of natural resource discovery in Africa.” Capturing and harnessing those revenues could allow Africa “to finance its own development.”",
    "Recommendation to smooth spending to avoid booms followed by crashes:",
    "Proposed funds:",
    "Emphasis on allocating substantial resources to building productive infrastructure; Africa has been “starved of economic infrastructure.”",
    "Botswana:",
    "Malaysia:",
    "No single country to copy:",
    "Distinctive challenges require distinctive policies; guidance source mentioned:",
    "Find a balance between present consumption needs and future investment.",
    "Smooth public spending across commodity cycles through resilience and development funds.",
    "Allocate substantial resource revenues to building productive infrastructure.",
    "Use resource revenues to diversify the economy where feasible and context-appropriate.",
    "Recognize country-specific constraints (e.g., landlocked status) when designing diversification strategies.",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Survey Interview](https://www.imf.org/en/news/search)",
    "[Commodity price swings](https://www.imf.org/external/pubs/ft/survey/so/2011/CAR092311A.htm)",
    "[Risks facing poorer countries](https://www.imf.org/external/pubs/ft/survey/so/2011/INT092111A.htm)",
    "[Ghana’s middle-income aim](https://www.imf.org/external/pubs/ft/survey/so/2010/INT021710A.htm)",
    "[Africa’s after-oil finances](https://www.imf.org/external/pubs/ft/survey/so/2007/CAR0829A.htm)",
    "[Africa’s oil revenues surge](https://www.imf.org/external/pubs/ft/survey/so/2007/CAR065A.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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