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Resource Mobilization and Structural Transformation

Resource Mobilization and Structural Transformation. Abdoulie Sireh-Jallow Lead Economist, IsDB. 2011 African Economic Conference Green Economy and Structural Transformation. Format of presentation. Structural Transformation Resource Mobilization - Fiscal Space Expansion

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Resource Mobilization and Structural Transformation

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  1. Resource Mobilization and Structural Transformation Abdoulie Sireh-Jallow Lead Economist, IsDB 2011 African Economic Conference Green Economy and Structural Transformation

  2. Format of presentation • Structural Transformation • Resource Mobilization - Fiscal Space Expansion • Traditional (the Usual) • Non-Traditional sources (Ethiopian Case) • Conclusion

  3. Definition • Structural Transformation Large scaletransferof resources from some sectors to others in a system, necessitated by fundamentalchanges in policiesor objectives. • Why Transfer? How about Creation? • Transitioning into a Green economy is a structural transformation • How can we fund this?

  4. Resource Mobilization • From where???? • Traditional Sources (the Usual Workhorses) • Tax and Non-Tax Revenue • ODA • Borrowing (External or internal) • Efficient management of what we already have And if these are NOT Enough? • Non-Traditional Sources of Development Finance to COMPLEMENT traditional ones • WHAT is Non-traditional?? • Lets look at the Tax Landscape in SSA

  5. Revenue sources as % of GDP - SSA Source: Raising Domestic Revenue for MDGs, Terry Mckinley, IPC, UNDP using IMF Statistics

  6. Estimated Tax Effort Source: Revenue Mobilization in Developing Countries, IMF (March 2011)

  7. Government Revenue as % of GDP in SSA Source: Regional Economic Outlook: Sub Saharan Africa, IMF (Apr, 2011)

  8. What are Non-Traditional Sources? • Very country-specific • What is N-T to country A may be Traditional in Country B • Examples • Carbon Sequestration and Trading • Diaspora Bonds • Trade in Services • Centers of Excellence – Trading Services in the Social Sectors • Tourism • You can only own your development when you FUND it yourself.

  9. The Case for Ethiopia Source: Min of Finance, Ethiopia, UNDP MP, IMF, Own computations

  10. ODA – Gleneagles Scenario Source: Min of Finance, Ethiopia, OECD, Own computation Food and Fuel Crisis FEC

  11. Carbon Trading Scenario Source: www.Mongabay.com and own computations

  12. Potential Fiscal Space (Select N-T Sources) Source: Prospects of Non-Traditional Sources of Development Finance in Ethiopia, UNDP Ethiopia (2010)(Unpublished)

  13. Solar Energy Potential Source: Millennium AG

  14. Fiscal space expansion helps in relaxing binding constraints induced growth Catch-22 cycle

  15. Conclusion • YES WE CAN! • YES AFRICA CAN! • Analytical Study in only ONE step, the next is a STRATEGIC ACTION PLAN to implement the study recommendations • Let us explore and exploit Non-Traditional Sources of Development Finance (Country-specific). • The more you can fund your development, the more you own your development.

  16. Thank You

  17. Reference documents Revenue Mobilization in Developing Countries, IMF (March 2011) Regional Economic Outlook: Sub Saharan Africa, IMF (Apr, 2011) Raising Domestic Revenue for MDGs. Why wait for 2015? Terry Mckinley, IPC, UNDP (2007) Prospects of Non-Traditional Sources of Development Finance in Ethiopia, UNDP Ethiopia and CDPR, SOAS (2010) Fiscal Space and Carbon Sequestration in Ethiopia: a potential non-traditional source of development finance to meet the MDGs, Abdoulie Sireh-Jallow (2010)

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