A mineral deposit is finite and so are the taxes governments derive from a project. This infographic takes a look at the choices a government needs to make.
Being well endowed with resources may be beneficial for a developing country, but an abundance of resources with finite lifespans can make it difficult for governments to decide how to best spend or invest their wealth.
There are a series of choices policy makers need to make, each with own pros and cons:
Should countries invest abroad or domestically?
Should revenues be consumed with public or private spending?
Should revenues go towards real assets or financial assets?
Should citizens receive payment directly or should it be spent on public infrastructure?
What happens after the resource is depleted?
The infographic below uses the research of Amir Lebdioui to walk through the consequences of government decisions over resource revenue.
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