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Managing manna from below: sovereign wealth funds and extractive industries in the Pacific

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  • Martin Gould

    (Treasury, Government of Australia)

Abstract

A key challenge for developing countries endowed with natural resources is to transform those resources into sustained improvements in living standards. A number of Pacific island countries have utilised sovereign wealth funds (SWFs) to manage government revenue from exhaustible natural resources with the aim of improving development outcomes. Experience in the region has been mixed — some SWFs have aided intergenerational equity and macroeconomic stability while others have struggled to bring about improvements in wellbeing. This paper examines the past and present SWFs of Kiribati, Nauru, Timor–Leste and Papua New Guinea. In doing so, it draws out some lessons for policymakers considering the use of SWFs in managing resource revenue in developing countries. Principles for successful SWFs are identified, including strong transparency, public support for the SWF, integration with the national budget and professional investment management.

Suggested Citation

  • Martin Gould, 2010. "Managing manna from below: sovereign wealth funds and extractive industries in the Pacific," Economic Roundup, The Treasury, Australian Government, issue 1, pages 63-86, April.
    • Handle: RePEc:tsy:journl:journl_tsy_er_2010_1_3
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    File URL: http://archive.treasury.gov.au/documents/1783/PDF/05_SWFs_in_the_Pacific.pdf
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    Cited by:

    1. Taguchi, Hiroyuki & Ganbayar, Javkhlan, 2022. "An econometric study on the classification and effectiveness of natural resource funds," MPRA Paper 114392, University Library of Munich, Germany.
    2. Mark Fabian, 2021. "DevSim: A PowerPoint-Based Choose-Your-Own-Adventure Game for Teaching Economic Development," Journal of Economics Teaching, Journal of Economics Teaching, vol. 6(2), pages 95-105, October.
    3. Hiroyuki Taguchi & Javkhlan Ganbayar, 2022. "Natural Resource Funds: Their Objectives and Effectiveness," Sustainability, MDPI, vol. 14(17), pages 1-20, September.

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    More about this item

    Keywords

    foreign direct investment; Pacific Area; sovereign wealth funds;
    All these keywords.

    JEL classification:

    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • O56 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Oceania

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