Chapter 4 | Page 149
investment in health and education programmes.40 While the extractive
industries provide a significant source of government revenue in many
developing countries, in many cases the revenue thus generated is below the
potential.41
Some countries have managed natural resource revenue through special
arrangements for the allocation and use of resources, resource funds, and
special budgetary and treasury procedures for the use of natural resource
revenue, separate investment bodies, separate oversight bodies, and special
legal frameworks.42 For example, Timor Leste and São Tomé and Príncipe
use the maximum sustainable amount from oil savings in the fiscal year and
leave savings for an amount equal to the real value for later fiscal years.43
Such earmarking of revenue resources for investment purposes has proved
successful in countries such as Norway and Chile.44
Revenue from public sector enterprises45 is also an important source of
finance for many States. With increased privatisation of State enterprises,
revenue from such entities has declined substantially for some governments
although in many others, fully- or partially-owned State enterprises provide
significant revenue for the government.46 This is particularly the case in
economies where State enterprises are involved in substantial business
40
Ortiz, Chai and Cummins, above n 9.
41
See for example, Martin Stürmer, 'Let the good times roll? Raising tax revenues from the
extractive sector in sub-Saharan Africa during the commodity price boom' (Discussion
Paper, Deutsches Institut für Entwicklungspolitik), <http://www.u4.no/recommendedreading/let-the-good-times-roll-raising-tax-revenues-from-the-extractive-sector-in-subsaharan-africa-during-the-commodity-price-boom/downloadasset/692>.
42
Teresa Dabán and Jean-Luc Hélis, 'A Public Financial Management Framework for
Resource-Producing Countries' (IMF Working Paper WP/10/72, International Monetary
Fund, March 2010), <http://www.imf.org/external/pubs/ft/wp/2010/wp1072.pdf>.
43
Ibid., 16.
44
Ibid.
45
These entities are known as State Owned Enterprises (SOEs), Government Owned
Enterprises (GOEs), Government Business Enterprises (GBEs), Government Owned
Corporations (GOCs), and by many other names.
46
Isabel Ortiz, Matthew Cummins and Kalaivani Karunanethy, 'Fiscal Space for Social
Protection Options to Expand Social Investments in 187 Countries' (ESS Working Paper
No. 48, International Labour Organization), <http://www.social-protection.org/gimi/gess
/RessourcePDF.action?ressource.ressourceId=51537>.
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