Financing for development in resource-rich countries

01 May 2015 by Degol Hailu, Senior Advisor for Sustainable Development

Photo: UNDP in Zimbabwe
In this blog series, our experts share their thoughts and lessons learned on key financing for development issues, in the run-up to the UN’s Financing for Development conference in July. For the past 10 years, prices of hydrocarbons, metals and minerals have been on the rise. Oil prices have risen from $50 per barrel in 2004 to $99 in 2007 and $115 in 2013. In the same period, the non-energy commodity-price-index increased by 112%. These price hikes were largely the result of rising global demand for natural resources. High commodity prices meant resource-rich countries could invest in social services. For instance, between 2002 and 2012, average per capita public expenditure on health of the 25 countries with highest shares of oil, gas and mineral exports increased by 65% from $112 to $219. Similarly from 2000 to 2010, average public expenditure on education increased by 11.86% compared to the decade before. However, the recent fall in commodity prices is threatening the availability of funds for development. Over the year ending in January 2015, The Economist’s commodity-price-index fell by 9.9% in dollar terms, with metal prices falling by 10.1%. Oil prices per barrel have fallen by 51.2%. The decline in commodity prices is … Read more

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