## Macroeconomic Policy Frameworks for Resource-Rich Developing Countries

_Policy Papers, August 24, 2012_

## Source details

**Canonical URL:** [Macroeconomic Policy Frameworks for Resource-Rich Developing Countries](https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/macroeconomic-policy-frameworks-for-resource-rich-developing-countries-pp4698)

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## Bibliographic details
- Published: August 24, 2012
- Series: Policy Papers

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### Summary and Objective
- This paper aims to widen the prism through which Fund policy analysis is conducted for resource-rich developing countries (RRDCs).
- Objective: develop new macro-fiscal frameworks and policy analysis tools for RRDCs that could enhance Fund policy advice.
- Publication date: August 24, 2012.

### Key challenges for RRDCs
- Resource revenue exhaustibility gives rise to inter-temporal decisions on how much of the resource wealth to consume and how much to save.
- Revenue volatility calls for appropriate fiscal rules and precautionary savings.
- RRDCs face additional challenges relative to other resource-rich economies, including:
  - lack of access to international capital markets
  - domestic capital scarcity

### Optimal savings and investment considerations
- Under certain conditions, it would be optimal for a significant share of a RRDC’s savings to be in domestic real assets (e.g., investment in domestic infrastructure).
- Domestic investment considerations must account for absorptive capacity constraints to promote efficient spending.
- Short-run policies are needed to preserve macroeconomic stability while expanding domestic real asset investment.

### Policy implications and recommendations
- Design fiscal rules that address revenue volatility and support precautionary savings.
- Prioritize policies that expand and improve absorptive capacity to ensure efficient use of domestic real asset investments.
- Balance inter-temporal allocation of resource wealth between current consumption and savings to reflect exhaustibility.
- Provide tailored macro-fiscal frameworks and policy analysis tools that reflect RRDCs’ limited access to external capital and domestic capital scarcity.

### Thematic coverage
- Developing countries
- Exchange rate policy
- Fiscal policy
- Investment
- Monetary policy
- Natural resources
- Savings
- Technical assistance

*Macroeconomic Policy Frameworks for Resource-Rich Developing Countries, August 24, 2012 — International Monetary Fund*

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- **082412**
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_Source: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/macroeconomic-policy-frameworks-for-resource-rich-developing-countries-pp4698_