Category: Natural Resources

Natural Resources, New social contract

Do resource rich economies have better or worse human development outcomes?

By Antonio Savoia, Senior Lecturer (Associate Professor) at the University of Manchester and a Non-Resident Senior Research Fellow at UNU-WIDER and Kunal Sen, Director of UNU-WIDER

Although increasingly challenged, we often hear that being resource rich can adversely affect growth prospects. Here we concentrate instead on a lesser-known aspect: how resource rich economies fare in terms of education, health, income inequality and poverty. The IMF classifies over 50 developing and emerging economies as resource rich. Many are in Africa, where a significant share of the world’s poor lives. With the increasing prices of many internationally traded commodities in the post-COVID recovery, resource revenues could provide a welcome boost to development spending for such governments.

Continue reading “Do resource rich economies have better or worse human development outcomes?”
Development Matters
Africa, Français, Natural Resources, New social contract

Victoire historique devant la Cour suprême en Zambie : des milliards de dollars US en recettes fiscales supplémentaires et un message par-delà les frontières

Par Ignatius Mvula, Directeur adjoint, Unité de vérification dans le secteur minier, Administration fiscale de la Zambie, Mary Baine, Directrice, Programmes fiscaux, Forum de l’administration fiscale africaine, et Ben Dickinson, Chef de la Division des Relations internationales et du développement, Centre de politique et d’administration fiscales, OCDE

Read this blog in Eglish

En mai 2020, l’administration fiscale de la Zambie (ZRA) a remporté une victoire fiscale historique devant la Cour suprême contre Mopani Mining Copper plc. Le Tribunal a condamné l’entreprise à payer 240 millions de kwacha (13 millions USD) d’impôts supplémentaires. La décision tenait au fait que la Zambie devait baser la partie technique de son dossier en apportant la preuve de l’évasion fiscale par des stratégies de l’érosion de la base d’imposition et du transfert de bénéfices, ou BEPS.

Continue reading “Victoire historique devant la Cour suprême en Zambie : des milliards de dollars US en recettes fiscales supplémentaires et un message par-delà les frontières”
Development Matters
Africa, Natural Resources, New social contract

Landmark Supreme Court victory in Zambia: collecting millions in tax revenues and sending a message across borders

By Ignatius Mvula, Assistant Director – Mining Audit Unit, Zambia Revenue Authority, Mary Baine, Director – Tax Programmes, African Tax Administration Forum, and  Ben Dickinson, Head of the Global Relations and Development Division, Centre for Tax Policy and Administration, OECD

Lire ce blog en français

In May 2020, the Zambian Revenue Authority (ZRA) won a landmark tax case against Mopani Copper Mining plc in the Supreme Court. The Court ordered the company to pay additional tax of 240 million Kwacha (USD 13 million). The judgement hinged on Zambia making a technical case showing evidence of tax avoidance through base erosion and profit shifting or BEPS strategies. In countries around the world multinational enterprises (MNEs) exploit gaps and mismatches between different countries’ tax systems, costing countries up to 100-240 billion USD in lost revenue annually, the equivalent to 4-10% of the global corporate income tax revenue. Moreover, developing countries’ higher reliance on corporate income tax means they suffer from tax base erosion and profit shifting disproportionately. Zambia and many African tax administrations report that the abuse of transfer pricing rules – the pricing of goods and services between related parties of a multinational enterprise – represents one of the highest BEPS risks to their tax bases.  

Continue reading “Landmark Supreme Court victory in Zambia: collecting millions in tax revenues and sending a message across borders”
Development Matters
Covid-19, Français, Natural Resources, New social contract

Une taxe climat européenne pourrait bénéficier aux pays exportateurs de pétrole

Par Håvard Halland, Economiste au Centre de développement de l’OCDE

Ce blog fait partie d’une série sur la lutte contre le COVID-19 dans les pays en voie de développement. Visitez la page dédiée de l’OCDE pour accéder aux données, analyses et recommandations de l’OCDE sur les impacts sanitaires, économiques, financiers et sociétaux de COVID-19 dans le monde.

Read this blog in English

Pour relancer nos économies d’une manière durable dans le sillage de la crise due au Covid-19, l’instauration d’une tarification effective du carbone à l’échelle mondiale reste plus importante que jamais. Cependant, tant que les Etats ne parviendront pas à s’entendre sur la gravité des risques induits par le changement climatique, la mise en place d’un système mondial de taxation des gaz à effet de serre restera une perspective lointaine.

Le mécanisme d’« ajustement carbone aux frontières » envisagé par l’Union européenne (UE) pourrait toutefois être un premier pas vers une réallocation des investissements internationaux dans le sens souhaité. Ambitieux, les nouveaux objectifs climatiques de l’UE exigeront des réductions des émissions non seulement dans le secteur de l’énergie, mais aussi dans les secteurs à forte intensité énergétique comme les industries lourdes, la métallurgie, la pétrochimie, le ciment, les engrais.

Continue reading “Une taxe climat européenne pourrait bénéficier aux pays exportateurs de pétrole”

Development Matters1 Comment
Covid-19, Green transition, Natural Resources, Social Protection

EU climate tax could benefit oil exporters

By Håvard Halland, Senior Economist at the OECD Development Centre

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Lire ce blog en français

In energy-intensive sectors, a carbon border tax could shift the geography of investment.

For a green coronavirus recovery, an effective global price on carbon remains as important as ever before. However, until governments can agree on the severity of the risk posed by climate change, a global tax on greenhouse gas emissions seems a remote prospect. Nonetheless, the “carbon border adjustment mechanism” that the EU is considering could have similar effects on capital allocation – albeit on a smaller scale.

The EU’s ambitious new climate goals will require emissions reductions not only in the energy sector, but also in energy-intensive sectors such as heavy industries, metals, petrochemicals, cement, and fertilizer. To ensure a level playing field between EU companies and foreign firms not subject to EU emissions targets, the EU may implement a border tax on carbon-intensive imports. The combination of high carbon taxes within the EU and a carbon border tax would present energy-intensive industries with a new set of locational choices.

Continue reading “EU climate tax could benefit oil exporters”

Development Matters2 Comments
Covid-19, Green transition, Natural Resources

How COVID-19 is changing the opportunities for oil and gas-led growth

Building-better-covid19-banner

By Glada Lahn and Siân Bradley, Senior Research Fellows, Energy, Environment and Resources Programme

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

shutterstock_680622253For oil and gas exporters, COVID-19 has caused a downturn like no other. From early 2020, lockdowns sent global energy demand plummeting by over a quarter. Combined with the Saudi-Russia price war, oil prices hit their lowest levels in over two decades, down to less than $20 a barrel in April. Without strategic reserve filling, the collapse would have been even steeper. As lockdowns eased and June’s OPEC-plus agreement to cut production boosted oil prices (around $40/b in June), producer countries could be forgiven for hoping that the worst is over. However, as the pandemic hit, the fossil fuel market was already facing a grim prognosis.

From boom and bust to… bust

Five years ago, Chatham House began exploring what decarbonisation might mean for extractives-led development. To achieve the Paris Agreement’s commitment to limiting global warming to well below 2°C and as close as possible to 1.5°C, all credible pathways will require a radical reduction in fossil fuel use. With 76 per cent of all greenhouse gas emissions (GHGs) and close to 90% of CO2 emissions coming from the burning of coal, oil and gas, the implications for these markets are profound. We are no longer talking about a cycle of boom and bust, but about structural decline. Continue reading “How COVID-19 is changing the opportunities for oil and gas-led growth”

Development Matters
Africa, Natural Resources

Negotiating a royalty pricing agreement: lessons from Liberia

By Stephen E. Shay, Lecturer at Harvard Law School; Iain Steel, independent economics consultant; Gabrielle Beran, Governance and Program Manager, International Senior Lawyers Project-UK (ISLP-UK); Olumide Abimbola, Business Development Lead, CONNEX Support Unit.

Liberia-mining-natural-resources
Mount Nimba, Liberia: an abandoned mining site and the highest point in West Africa

Countries often collect royalties on the sale of their natural resources, but how can they be sure that the price is right when a mining company sells iron ore to its own steel mills? This was the problem faced by Liberia with its largest iron ore mine – and a common problem around the world in mining and many other sectors.

Sales between “related parties”, where the companies share a common owner and are therefore not independent of each other, use a “transfer price[i]” that is supposed to reflect fair market value – the price two independent firms would have agreed transacting at arm’s length. In this article, we describe how governments can make use of pricing agreements with companies to determine transfer prices by reference to international benchmarks, and the importance of reviewing these agreements to ensure they remain fit for purpose over time. We also draw lessons for revenue authorities, host governments and donor partners from the recent renegotiation of a pricing agreement in Liberia. Continue reading “Negotiating a royalty pricing agreement: lessons from Liberia”

Development Matters
Africa, Covid-19, Green transition, Natural Resources, Trade

Middle East and North Africa: The challenge of a long-term strategy for oil exporting countries

Building-better-covid19-banner

By Rahmat Poudineh, Senior Research Fellow and Director of Research, the Oxford Institute for Energy Studies

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

oil-refinary-shutterstock_1076038007
Oil refinery plant in Qatar

There is no single successful strategy to shield oil-exporting countries of the Middle East and North Africa (MENA) from the long-term risks of an oil price crash, exposing them to serious long-term challenges.

Diversification for example, works only when it reduces risk by pooling uncorrelated income streams and sectors. If countries diversify only into sectors that rely on hydrocarbon infrastructure and where relationships (tangible and non-tangible) exist across fossil and non-fossil fuel businesses, they cannot build resilience. On the other hand, if they diversify into substantively different areas that have little in common with their current primary industry, which is the core of their comparative advantage, they run the risk of not being competitive. Moreover, the cost of reducing the long-term risks and increasing resilience of their core sector is to accept lower expected return on existing hydrocarbon assets, for instance, by investing in measures that align their hydrocarbon sector with low carbon scenarios. This lowers the overall return but reduces the risk of disruption in the long run. Continue reading “Middle East and North Africa: The challenge of a long-term strategy for oil exporting countries”

Development Matters
Covid-19, Green transition, Infrastructure, Natural Resources, Policy

How COVID-19 could help eliminate fossil fuel subsidies

Building-better-covid19-banner

By Mario Pezzini, former Director of the OECD Development Centre and special adviser to the OECD Secretary-General on development, and Håvard Halland, Senior Economist at the OECD Development Centre

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Oil pumpjacks in Tatarstan, Russia
Photo: Yegor Aleyev/Tass/PA Images

As oil-exporting countries struggle to respond to the crisis, there is a way to make critical fiscal resources available.

The Covid-19 pandemic has hit oil-exporting countries at the worst possible moment. Severely strained health systems, and the need for economic stimulus, call for unprecedented growth in public spending. At the same time, oil export revenues have plummeted, following the demand collapse caused by the pandemic and a breakdown of traditional price-setting mechanisms. As a result, many oil exporters in the low- and middle-income category will struggle to muster anything near the level of expenditure required for an efficient response to the virus. Continue reading “How COVID-19 could help eliminate fossil fuel subsidies”

Lia Beyeler4 Comments
Africa, Covid-19, Français, Natural Resources

Face au COVID-19, les leçons d’Ebola et du secteur minier en Guinée

Par Nava Touré, Conseiller principal auprès du Ministre des Mines et de la Géologie, République de Guinée, et Ruya Perincek, Analyste des politiques, Ressources naturelles pour le développement, Centre de développement de l’OCDE

Ce blog fait partie d’une série sur la lutte contre le COVID-19 dans les pays en voie de développement. Visitez la page dédiée de l’OCDE pour accéder aux données, analyses et recommandations de l’OCDE sur les impacts sanitaires, économiques, financiers et sociétaux de COVID-19 dans le monde.

Ebola-shutterstock_176475503
Photo : Shutterstock

Alors que les pays à travers le monde, connaissent des réponses diversifiées à la pandémie de COVID-19 et anticipent des conséquences économiques sévères, la Guinée s’appuie essentiellement sur l’organisation qui a fait ses preuves pendant l’épidémie d’Ébola de 2014-2015 : des structures institutionnelles pour répondre aux crises sanitaires, en collaboration avec les partenaires internationaux et le secteur minier qui joue un rôle important dans l’économie nationale.  Cette expérience dans la réponse aux crises sanitaires et les mécanismes établis dans les contrats et conventions minières pour le contrôle des revenus tirés par l’État pourraient mettre le pays dans une meilleure position par rapport à d’autres pays en développement pour la riposte au COVID-19 et à la crise économique.

Continue reading “Face au COVID-19, les leçons d’Ebola et du secteur minier en Guinée”

Development Matters1 Comment