(DIYA) Bhumkar Chowk Call Girls Just Call 7001035870 [ Cash on Delivery ] Pun...
Managing commodity revenues in LAC
1. LAC Tax Policy Forum
Macroeconomic implications of the tax treatment of extractive
industries and relationships between levels of government
Mexico City – July 3-4, 2014
Managing fiscal revenues from commodities:
Why do they matter and what can be done?
Ángel Melguizo
Head, Americas Desk
OECD Development Centre
2. Managing fiscal revenues from commodities: why do they
matter and what can be done?
2
• Some key recent fiscal developments in Latin America
are commodity-related
• Commodities have also been very relevant for the macro
of the region
• (We suspect) Latin America is not saving (enough)
• Saving revenue windfalls: how? how much? what for?
3. Tax revenues convergence to OECD levels
3
Tax revenue over GDP
Source: OECD-ECLAC-CIAT (2014), Revenue Statistics in Latin America 1990-2012
Tax revenues over GDP in LAC have been converging to OECD
levels since 1990
0
5
10
15
20
25
30
35
40
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Difference (A-B) LAC (A) OECD(34) (B)
4. … related to the commodity-prices boom
4
Source: OECD-ECLAC-CIAT (2014), Revenue Statistics in Latin America 1990-2012
0 20 40 60 80 100
Bolivia (E.P.)
Peru
Chile
Ecuador
Argentina
Colombia
Venezuela (R.B.)
Brasil
México
7.7
12.2
3.3
3.1
14.7
2.8
4.4
9.8
2.2
%GDP
PEMEX
Fiscal revenues from non-renewable resources
(billion USD and %GDP)
5. Managing fiscal revenues from commodities: why do they
matter and what can be done?
5
• Some key recent fiscal developments in Latin America
are commodity-related
• Commodities have also been very relevant for the macro
of the region
• (We suspect) Latin America is not saving (enough)
• Saving revenue windfalls: how? how much? what for?
6. Resource windfalls related to commodities have historically
increased macro volatility
6
LAC Promedios lamda = 400 # bonanzas
Duración
(años)
Tamaño
promedio
(% PIB)
brecha
promedio
antes de la
bonanza
brecha
promedio
durante la
bonanza
brecha
promedio
despues de
la bonanza
Cambio en la
brecha
promedio
durante la
bonanza
Cambio en la
brecha
promedio
despues de
la bonanza
Cambio en la
brechaentre
antes y
despues de
la bonanza
Alimentos 41 4,4 5,9 -0,3 2,6 -0,7 3,4 -3,8 -0,4
Minerales 10 4,1 5,3 -0,8 1,1 -2,0 1,9 -3,4 -1,4
Combustibles 13 4,1 5,7 0,0 0,9 -1,6 0,9 -2,9 -1,9
Remesas 21 4,1 2,9 -1,7 -0,4 -1,3 1,6 -0,9 0,2
Flujos de capital de corto plazo* 14 2,9 6,8 0,7 4,4 -0,5 3,7 -4,9 -1,2
Inversión extranejra directa 24 3,3 5,1 1,3 4,0 -0,5 3,5 -3,2 0,6
Total recursos naturales 64 4,3 5,7 -0,3 2,0 -1,1 2,6 -3,5 -0,9
Total con flujos de capital 123 3,9 5,3 -0,1 2,3 -0,9 2,7 -3,2 -0,5
Suramérica Promedios
lamda = 400
# bonanzas
Duración
(años)
Tamaño
promedio
(% PIB)
brecha
promedio
antes de la
bonanza
brecha
promedio
durante la
bonanza
brecha
promedio
despues de
la bonanza
Cambio en la
brecha
promedio
durante la
bonanza
Cambio en la
brecha
promedio
despues de
la bonanza
Cambio en la
brechaentre
antes y
despues de
la bonanza
Alimentos 21 4,0 5,0 -1,3 2,8 -0,8 4,3 -3,9 0,3
Minerales 9 4,0 5,6 -1,5 1,6 -1,8 3,1 -3,8 -0,3
Combustibles 10 4,2 6,0 -0,5 0,1 -1,0 0,6 -1,4 -0,8
Remesas 5 3,8 2,8 0,3 -0,1 -2,3 -0,3 -2,2 -2,5
Flujos de capital de corto plazo 12 2,4 7,3 0,7 1,9 -0,9 1,2 -2,8 -1,6
Inversión extranejra directa 7 4,3 3,2 3,5 5,0 -1,5 4,8 -3,2 1,6
Total recursos naturales 40 4,1 5,4 -1,1 1,9 -1,1 3,1 -3,3 -0,1
Total con flujos de capital 64 3,8 5,3 -0,2 2,1 -1,2 2,7 -3,1 -0,4
Source: OECD-CAF-ECLAC (2014), Latin American Economic Outlook 2015. In progress.
Resource windfalls in LAC (mid 60s – 2013)
7. Managing fiscal revenues from commodities: why do they
matter and what can be done?
7
• Some key recent fiscal developments in Latin America
are commodity-related
• Commodities have also been very relevant for the macro
of the region
• (We suspect) Latin America is not saving (enough)
• Saving revenue windfalls: how? how much? what for?
8. Commodity-related public revenues explain a lot of recent
improvements in Argentina …
8
Source: Daude, C., A. Melguizo and A. Neut (2010), “Fiscal policy in Latin America: Countercyclical and sustainable at last?”, OECD
Development Centre Working Paper 291
Adjusted primary budget balance
(%GDP)
Uruguay Argentina
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
1992 1994 1996 1998 2000 2002 2004 2006 2008
Cyclical Observed Adjusted
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Cyclical Commodityrelated Observed Adjusted
9. … Chile, Peru…
9
Chile
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Cyclical Commodityrelated Observed Adjusted
Peru
-3.00
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Cyclical Commodityrelated Observed Adjusted
Source: Daude, C., A. Melguizo and A. Neut (2010), “Fiscal policy in Latin America: Countercyclical and sustainable at last?”, OECD
Development Centre Working Paper 291
Adjusted primary budget balance
(%GDP)
10. … and Mexico
10
Source: Daude, C., A. Melguizo and A. Neut (2010), “Fiscal policy in Latin America: Countercyclical and sustainable at last?”, OECD
Development Centre Working Paper 291
Adjusted primary budget balance
(%GDP)
Mexico
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Cyclical Commodityrelated Observed Adjusted
11. Managing fiscal revenues from commodities: why do they
matter and what can be done?
11
• Some key recent fiscal developments in Latin America
are commodity-related
• Commodities have also been very relevant for the macro
of the region
• (We suspect) Latin America is not saving (enough)
• Saving revenue windfalls: how? how much? what for?
12. Saving revenue windfalls: learning from peers from the
region and outside
12
• How?
- Fiscal framework (e.g. rule) with a stabilisation fund?
- Separated from the general budget?
• How much?
- Structural (long-term) prices and quantity
• What for?
- Fiscal sustainability and/or
- Stabilisation and/or
- Development (infrastructure, health, education) and/or
- Equity (inter-generational, territorial)
