Debt Sustainability, Public Investment, and Natural Resources in Developing Countries

Debt Sustainability, Public Investment, and Natural Resources in Developing Countries
Author: Mr.Giovanni Melina
Publisher: International Monetary Fund
Total Pages: 77
Release: 2014-04-01
Genre: Business & Economics
ISBN: 1475521073

Download Debt Sustainability, Public Investment, and Natural Resources in Developing Countries Book in PDF, Epub and Kindle

This paper presents the DIGNAR (Debt, Investment, Growth, and Natural Resources) model, which can be used to analyze the debt sustainability and macroeconomic effects of public investment plans in resource-abundant developing countries. DIGNAR is a dynamic, stochastic model of a small open economy. It has two types of households, including poor households with no access to financial markets, and features traded and nontraded sectors as well as a natural resource sector. Public capital enters production technologies, while public investment is subject to inefficiencies and absorptive capacity constraints. The government has access to different types of debt (concessional, domestic and external commercial) and a resource fund, which can be used to finance public investment plans. The resource fund can also serve as a buffer to absorb fiscal balances for given projections of resource revenues and public investment plans. When the fund is drawn down to its minimal value, a combination of external and domestic borrowing can be used to cover the fiscal gap in the short to medium run. Fiscal adjustments through tax rates and government non-capital expenditures—which may be constrained by ceilings and floors, respectively—are then triggered to maintain debt sustainability. The paper illustrates how the model can be particularly useful to assess debt sustainability in countries that borrow against future resource revenues to scale up public investment.


Debt Sustainability, Public Investment, and Natural Resources in Developing Countries
Language: en
Pages: 77
Authors: Mr.Giovanni Melina
Categories: Business & Economics
Type: BOOK - Published: 2014-04-01 - Publisher: International Monetary Fund

GET EBOOK

This paper presents the DIGNAR (Debt, Investment, Growth, and Natural Resources) model, which can be used to analyze the debt sustainability and macroeconomic e
Public Investment in a Developing Country Facing Resource Depletion
Language: en
Pages: 35
Authors: Adrian Alter
Categories: Business & Economics
Type: BOOK - Published: 2015-11-10 - Publisher: International Monetary Fund

GET EBOOK

This paper analyzes the tradeoffs between savings, debt and public investment in the Republic of Congo, a developing country with looming oil exhaustibility con
Natural Gas, Public Investment and Debt Sustainability in Mozambique
Language: en
Pages: 37
Authors: Mr.Giovanni Melina
Categories: Business & Economics
Type: BOOK - Published: 2013-12-23 - Publisher: International Monetary Fund

GET EBOOK

Mozambique has great potential in natural gas reserves and if liquefied/commercialized the sum of taxes and other fiscal revenue from natural gas will, at its p
From Natural Resource Boom to Sustainable Economic Growth
Language: en
Pages: 31
Authors: Pranav Gupta
Categories: Business & Economics
Type: BOOK - Published: 2015-04-30 - Publisher: International Monetary Fund

GET EBOOK

Some resource-rich developing countries are in the process of harnessing immense mining resources towards inclusive growth and prosperity. Nevertheless, tapping
Public Debt Sustainability in Developing Asia
Language: en
Pages: 227
Authors: Benno Ferrarini
Categories: Business & Economics
Type: BOOK - Published: 2012 - Publisher: Routledge

GET EBOOK

Addressing the global financial crisis has required fiscal intervention on a substantial scale by governments around the world. The consequent buildup of public