Natural Resources, Finance and Development: Confronting Old and New Challenges
November 4-5, 2010
Organized by the IMF Institute in collaboration with The Bank of Algeria on November 4—5, 2010
"… in resource-rich countries, the blessing of riches can turn rapidly into the curse of conflict." Dominique Strauss-Kahn, Kenya International Conference Center, Nairobi March 8, 2010.
The seminar took place in Algiers on November 4-5, 2010 and was aimed chiefly at policymakers in sub-Saharan Africa. It brought together 17 cabinet ministers and central bank governors, 23 other senior policy makers, and a number of well known academics from around the world.
Countries with an abundance of natural resources, many of which are in sub-Saharan Africa, often show a record of relatively poor economic performance compared with non-resource rich countries. The consensus in both academic and policy circles is that the presence of natural resources could pose various challenges: (i) a loss of competitiveness in potentially dynamic, non-natural resource sectors, (ii) a consequent narrowing of the production base, (iii) excessive reliance on commodities for both government revenues and export earnings, (iv) high vulnerability to commodity price fluctuations, (v) macroeconomic and financial volatility, and (vi) rent-seeking behavior that can undermine governance and exacerbate the difficulty of building robust, growth-enabling institutions. The seminar focused on how to manage these challenges so as to reap the benefits of resource wealth while avoiding the pitfalls.
Starting from a diagnosis of the wide range of challenges to macroeconomic management and financial policies in resource-rich countries, the seminar sought to propose context specific solutions, drawn from experiences in the most successful cases and implementable in Africa. As such, the seminar discussed fiscal, monetary and exchange rate policies; savings policies; institutional arrangements to safeguard the economy against volatility; economic diversification; and institution building.
P R O G R A M 
| THURSDAY, NOVEMBER 4, 2010 | ||
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| 8:00 a.m. | Welcome by Mohammed Laksaci, Governor, Bank of Algeria | |
| Opening Remarks: Dominique Strauss Kahn, Managing Director, IMF: Speech Ahmed Ouyahia, Prime Minister, Algeria |
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| Overview of Questions and Themes Leslie Lipschitz, Director, IMF Institute |
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| 9:30 a.m. – 11:00 a.m. | SESSION I. COMMODITY MARKETS AND THE MACROECONOMY | |
| Chair: Masood Ahmed, Director, Middle East and Central Asia Department, IMF | ||
| Speaker: Thorvaldur Gylfason, University of Iceland. “Natural Resource Endowment: A Mixed Blessing?” Presentation | Paper (pdf) |
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| Speaker: Marian Radetzki, Luleå University of Technology. “Primary Commodities: Historical Perspectives and Prospects”. Presentation | Paper (pdf) | ||
| General Discussion | ||
| 11:00 a.m. – 11:20 a.m. | Coffee Break | |
| 11:20 a.m. – 12:40 p.m. | SESSION II. ECONOMIC DIVERSIFICATION | |
| Chair: Lamido Sanusi, Governor, Central Bank of Nigeria | ||
| Speaker: Alan Gelb, Center for Global Development; “Economic Diversification: Theory and Practice” Presentation | Paper (pdf) |
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| Speaker: Asim Khwaja, Harvard University. “Finance and Diversification in Resource Rich Countries” Presentation (pdf) |
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| Speaker: Thorsten Beck, Tilburg University. “Finance and Oil: Is there a Natural Resource Curse in Financial Development?” Presentation | Paper (pdf) |
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| General Discussion | ||
| 12:40 p.m. – 2:00 p.m. | Lunch Keynote Address by Jeffrey Frankel, Harvard University. “How Can Commodity Producers Make Fiscal & Monetary Policy Less Procyclical?” Presentation | Paper (pdf) |
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| 2:00 p.m. – 3:20 p.m. | SESSION III. FISCAL POLICY | |
| Chair: Gilbert Ondongo, Minister, Ministry of Economy, Finance and Budget, Republic of Congo | ||
| Speaker: Kirk Hamilton, World Bank “Sustainable fiscal policy in mineral-dependent economies” Presentation (pdf) |
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| Speaker: Kaddour Hadri, Queens University Management School “What can we learn from primary commodity prices series which is useful to policymakers?” Presentation (pdf) |
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| Speaker: Rabah Arezki, IMF Institute
“Fiscal Policy in Commodity Exporting Countries: Stability and Growth” Presentation (pdf) |
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| General Discussion | ||
| 3:20 p.m. – 3:40 p.m. | Coffee Break | |
| 3:40 p.m. – 5:00 p.m. | SESSION IV. EXCHANGE RATE AND FINANCIAL STABILITY | |
| Chair: Aasim Husain, Senior Advisor, Strategy, Policy, & Review Department , IMF | ||
| Speaker: José De Gregorio, Governor, Central Bank of Chile. “Copper and Macroeconomic Fluctuations in Chile”
Discussant: Jeffrey Frankel, Harvard University |
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| Speaker: Mohammed Laksaci, Governor, Bank of Algeria “Natural Resource Management and Financial Stability in Algeria” Paper (pdf) | ||
| Speaker: Linah Mohohlo, Governor, Bank of Botswana “The Management of Commodity Revenues: The Case of Botswana” Presentation (pdf) | ||
| General Discussion | ||
| 5:20 p.m. – 6:30 p.m. | Panel Discussion Chair: Karim Djoudi, Minister of Finance, Algeria Panelists: Ali Badjo Gamatie, Vice Governor, BCEAO Fifi Kwetey, Deputy Minister, Ministry of Finance and Economic Planning, Ghana Jean-Claude Masangu Mulongo, Governor, Bank of Democratic Republic of Congo Mark Plant, Deputy Director, African Department, IMF Emmanuel Tumusiime-Mutebile, Governor, Bank of Uganda |
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| 7:30p.m. | Dinner | |
| FRIDAY, NOVEMBER 5, 2010 | ||
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| 9:00 a.m. – 10:20 a.m. | SESSION V. MANAGING VOLATILITY AND ASSET ALLOCATION | |
| Chair: Mohammed Laksaci, Governor, Bank of Algeria | ||
| Speaker: Javier Duclaud, Central Bank of Mexico.
“Mexico´s Oil Price Hedging Program” Discussant: Aasim Husain, Senior Advisor, Strategy, Policy, & Review Department , IMF |
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| Speaker: Thomas Ekeli, Ministry of Finance, Norway;
“Optimal Level of Reserve and Financial Asset Allocation” Presentation (pdf) Discussant: Amadou Sy, IMF Institute. |
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| General Discussion | ||
| 10:20 a.m. – 10:40 a.m. | Coffee Break | |
| 10:40 a.m. – 12:00 p.m. | SESSION VI. INSTITUTIONAL ASPECTS | |
| Chair: Situmbeko Musokotwane, Minister of Finance and National Planning, Zambia | ||
| Speaker: Ragnar Torvik, Norwegian University of Science & Technology
“The Political Economy of Reform in Resource Rich Countries” Presentation | Paper (pdf) Discussant: Antoine Heuty, Revenue Watch Institute Presentation (pdf) |
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| Speaker: Augustin Fosu, UNU-WIDER.
“Terms of Trade and Growth of Resource Economies: A Tale of Two Countries” Presentation | Paper (pdf) Discussant: Thorvaldur Gylfason, University of Iceland |
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| General Discussion | ||
| 12:30 p.m. – 2:00 p.m. | Lunch. | |
| 2:00 p.m. – 3:30 p.m. | SESSION VII. PANEL DISCUSSION | |
| Chair: Leslie Lipschitz, Director, IMF Institute | ||
| Panelists: José De Gregorio, Governor, Central Bank of Chile Jeffrey Frankel, Harvard University Alan Gelb, Center for Global Development Mustapha Nabli, Economic Research Forum Christof Rühl, BP |
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| General Discussion | ||
| 3:30 p.m. – 4:45 p.m. | Closing Remarks | |