Call of Duty: Industrial Policy for the Post-Oil Era

By Reda Cherif, Fuad Hasanov, Madi Sarsenbayev

March 29, 2024

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Reda Cherif, Fuad Hasanov, and Madi Sarsenbayev. Call of Duty: Industrial Policy for the Post-Oil Era, (USA: International Monetary Fund, 2024) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Oil-exporting economies face the risk of an acceleration in the energy transition. A risk-based approach calls for urgent preparation for the post-oil era by diversifying exports and transforming the prevailing growth model. We outline the principles of industrial policy to achieve this objective based on the experience of the Asian Miracles and propose a sketch of the strategy required to transform these principles into practice. The key component of the strategy is to select sectors along two dimensions—proximity to the current production structure or capabilities set and a timeframe for results to materialize. The three strategies—snail crawl, leapfrogging, and moonshots—determine how far from the current production structure the selected sectors are. These sectors need to show results both in the short run to jumpstart growth and ensure policy continuity—“quick wins”—and the long run to create a new growth model—“transformative gains.” We argue that the strategy should focus on supporting the exports of sophisticated sectors in both manufacturing and services while capitalizing on complex tasks and activities in existing industries but should leave non-sophisticated sectors such as tourism and non-tradable services to the private sector.

Subject: Exports, International trade, Oil exports, Oil prices, Prices

Keywords: B. sector selection analysis, Diversification, Energy Transition, Exports, Global, Growth recipe, IMF working paper 24/74, Industrial Policy, Oil exporter, Oil Exporters, Oil exports, Oil prices, Policy continuity, Sector selection strategy

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/074
Stock No:

WPIEA2024074
ISBN:

9798400270994
ISSN:

1018-5941

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