Designing a Fiscal Framework for a Prospective Commodity-producer: Options for Lebanon

Mariusz Jarmuzek, Mesa Puyo Diego () and Nakhle Najla ()
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Mesa Puyo Diego: International Monetary Fund, Washington, DC 20431-0001, USA
Nakhle Najla: International Monetary Fund, Washington, DC 20431-0001, USA

Review of Middle East Economics and Finance, 2016, vol. 12, issue 3, 257-278

Abstract: Lebanon is expected to have gas resources in its Mediterranean basin, and these could turn the country into a natural gas producer over the next decade. Lebanon’s economy and institutions will thus need to adapt to the challenges and opportunities that such change will bring. In this paper, we address how Lebanon’s fiscal framework will need to be reformulated to take into account potential resource revenue. Designing a fiscal regime appropriately is an absolute prerequisite to make sure that the government can receive a fair share of the resources while investors face appropriate incentives to invest and develop the sector. This step should be followed by setting macro-fiscal anchors and supporting institutions. The prospective framework should be focused on ensuring fiscal sustainability and intergenerational equity, given the estimated relatively short horizon of Lebanon’s gas resources. Strong institutional arrangements also need to underpin the prospective framework, to ensure that the pace of resource wealth’s use is set in line with Lebanon’s capacity constraints.

Keywords: fiscal policy; commodity producers; resource revenue management (search for similar items in EconPapers)
Date: 2016
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Working Paper: Designing a Fiscal Framework for a Prospective Commodity Producer: Options for Lebanon (2014)
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DOI: 10.1515/rmeef-2016-0032

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