I think it is mostly the correctness of investment policies in place to guide the investing of natural resource revenues rather than their abundance determines the correctness of investment decisions.  Such investment policies would require the investing of non renewable natural resource revenues to serve as complements rather than main enablers of wealth creation endevours, serve maximum benefit to all generations they belong to, and founded on complete and correct consideration of investment of investment options in the Colombian Local governments.

Dear Antipas,

Thanks for sharing your thoughts on the topic. I would like to know, from your experience, what kind of governments are more eager/able to design and implement "good" policies for the management of resource revenues. I have read about cases of governments that wanted to invest properly their revenues but were not able due to their lack of technical capacity. But I have also read about governments that were simply not interested in making investments with high returns. These governments were guided by other interests, such as ensuring reelection through patronage. To put it in a broader way: what are the political economy conditions that enable or hinder good governance of resource revenues investments?

Dear Juan , Thank you for the good questions. My experience in an African developing economy showed that a government which is able and would often design and implement ‘’good’’ policies for the management of resource revenues would often be the effective in terms of the correctness of national development vision it is equipped with on how the non –renewable national resource revenues would be spent in view of maximizing benefit to all generations they belong to. Such a government would often be the democratic, composed of effective institutions and all political and nonpolitical groups, and headed with a common national development vision with regard the need to invest the non-renewable national resource revenues in a manner which means they would always be available as seed capital inputs in the national development endevours throughout generations the non-renewable national resource revenues belong to. The democratic Governments made of all main political and nonpolitical groups would always come up with good policies in the management of the non-renewable national resource revenues they would implement most effectively. The diversity of views the best from all political and nonpolitical groups these governments are composed of would enable the generation of good policies which are overall common interests. The presence of all political and nonpolitical groups in these governments would also eliminate the mismanagement of the national resource revenues arising from the role of political corruption in service of ruling political party group interests against the common national interests in the management of the revenues under the ruling political parties dominated governments. The investing of the non-renewable national resource revenues throughout generations they belong to means they could only be available as loans throughout the generations they belong to for the Government investing in the development of national infrastructures like in power supply and transport to stimulate increased investing in the economy, plus in the most important in the global economy R&D led national and multinational companies like in energy and manufacturing. Such Government investing of the non-renewable national resource revenues ensures effect on the economy is sustainable throughout generations it would serve in the form of soft loans and investments for increased tax revenues, loan interests and shares of investment profits. Yes, my experience too in a developing country also showed that lack of correct technical capacity input contributed the mismanagement of its national resource revenues mainly because it is who knows who and/or political affiliation rather technical competence determines who is employed and/or not employed in the governments of developing countries headed by all politicians from the so called ruling political parties. Such governments would often avoid the high-long term return investments which take long before they start delivering goods which are felt throughout voters in favour of the low short-term return investments which deliver quick results which would be felt throughout targeted voters in coming elections. Overdependence on the inputs of foreign stakeholders in the formulation of policies regarding the utilization of their non renewable resource revenues also contributed a lot of the unsustainable direct consumption of such revenues most of these governments are on because such consumption is also felt throughout the population throughout the period exploitation is going on for the benefit of the foreign miners and the ruling parties who would look good in front of the populations and voters directly fed the non renewable resource revenues as they come in. To generalize, I would say that the ruling political party group rather than all political and nonpolitical groups dominated political leadership of economies development plus absence of correct common national development vision regarding the investing of no renewable resource revenues plus overdependence on the inputs of foreign stakeholders in the formulation of policies regarding the investing of their nonrenewable resource revenues contributed a lot of the bad policies regarding the investing of resource revenues governments in developing economies operate on.

Dear Antipas, once again thank you for answering my queries. I have one follow-up question. You gave a very careful depiction of the types of governments that would be able to harness their wealth and others that would not. Would you be able to point which countries in Africa would fall into your taxonomies? The opposite examples that come into my mind are Botswana and Nigeria, but maybe you have others in mind. Best wishes, Juan

Dear Juan, thank you for the additional information and good question you asked here. Like mine are for full-grown multiparty democracies and nonexistent on the African Continent South of the Sahara where such democracies are still on development phase and dominate in most countries. But, I think my ideas on how Governments could achieve optimal utilization/investing of their mineral revenues are also considerable and applicable in the countries where Governments are built on democracies other than the multiparty. The Botswana you mentioned is a good example others could emulate to maximize Government revenues they would receive on sustainable basis from giving their mineral prospects for shares of the international Mining Companies exploiting them and the same throughout the world sustainably. I also know that Angola invests some of its oil revenues in the experienced foreign capital reproducing companies from which it would be receiving shares of [profit sustainably. Counties like Tanzania, Uganda and Kenya which have discovered huge reserves of oil and/or natural gas are establishing oil and/or natural gas Sovereign Funds for future generation. But, it not yet known how much of their oil and/or natural gas revenues would be deposited in the Funds, and how the Funds and revenues not deposited in them would be utilized/invested in ensuring they serve maximum benefit to all in the generations they belong to. It is only Norway I know operates on model of mineral revenues management and investing similar to the one I propose for mineral rich developing countries.