Uganda discovered 3.5 billion barrels of oil in the past few years. And Mozambique recently confirmed huge amounts of coal and natural gas reserves, with further discoveries expected in the near future. Will these countries be able to reap the benefits from their newfound natural resource wealth? Or are they bound to fall prey to the same failed policies that have too often plagued other resource-rich developing countries? Those failures underscore a hard reality: without good policy frameworks, especially for taxing and spending, resource-rich countries can easily squander their natural riches. Many developing countries are endowed with exhaustible natural resources—such as oil, gas, minerals, and precious gems—that, if properly managed, could help them reduce poverty and sustain growth.
See full Article: http://www.imf.org/external/pubs/ft/fandd/2013/09/Geiregat.htm
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