Oil-to-Cash: Fighting the Resource Curse through Cash Transfers

Oil-to-Cash Update

Independent research & practical ideas for global prosperity

Oil-to-Cash Update
Issue 2

October 17, 2012 Dear Colleague, The resource bonanza sweeping over Africa is not slowing down, with a raft of new oil and gas discoveries in East Africa and Ghana. Last month, the Economist reported that all but 5 countries in Africa are either producing or exploring for oil. CGD is continuing work on the Oil-to-Cash initiative and exploring new candidate countries that might benefit from directly distributing oil rents. Does the name Jay Hammond ring a bell? He was governor of Alaska from 1974-82 and is the architect of the Alaska Permanent Fund dividend. Just before he died in 2005, he started a book telling the inside story of the dividend (including his many mistakes!). I’m just putting the finishing touches on an edited volume that includes Hammond’s firsthand account plus more recent analysis of Alaska’s experiences and lessons for Iraq and other countries. Watch for The Governor’s Solution, out later this year. If you have any questions or suggestions, please contact us at oil2cash@cgdev.org. Best wishes, Todd Moss Vice President and Senior Fellow
New Oil-to-Cash study on Venezuela
In “Direct Distribution of Oil Revenues in Venezuela: A Viable Alternative,” Rodriguez, Morales and Monaldi argue that Venezuela could benefit significantly from distributing oil rents transparently and universally compared to the current discretionary use of oil rents by the Chavez government to buy support. They argue that the October 7th elections offered an unprecedented opportunity for the opposition to propose and move towards such a system—an opportunity the opposition missed. Chavez’ victory earlier this month could mean that the window has closed for now. Image: Globovisión/ cc
New Oil-to-Cash study on Sierra Leone
In “Evaluating the case for Cash Transfers of Resource Revenues in Sierra Leone,” Arvind Nair concludes that the implementation and political-economy challenges in distributing resource rents are substantial, but the very real risks of corruption and inefficient infrastructure spending suggest that the idea should at least be explored. Image: Flickr user imtfi/ cc
News: East African Eldorado?
A slew of new natural gas and oil discoveries in East Africa have raised hopes—and concerns—about the impact of the region’s new resource wealth. Tanzania’s known natural gas reserves, which tripled this year, are now valued at $430 billion, and while the government has announced plans to set up a sovereign wealth fund, details of how the wealth will be spent remain unclear. In March, Kenya struck commercially viable oil in the Turkana region in the North, but the potential revenue remains years away. Meanwhile, Uganda, which discovered oil years ago, continues to be mired in red tape and corruption allegations, which have stalled the construction of the refinery and the distribution of licenses. Image: Flickr user Stefan Gara/ cc