An economy, which depends on extracting and mining of irreplaceable
natural raw materials, must save and invest in a Heritage Fund for the inevitable
end of revenue from such particular industries. Deposits into the fund should
be a fixed preset percentage of the previous year's collected revenues from
such industries, whether there was a surplus or deficit. This amount should have
been and still must be invested internationally in equivalent strong currencies
with a long-term focus. Withdrawals or legal assignments of the Heritage Fund's
principal or interest should be limited and linked only to clear reductions of independently
and professionally identified industry's product reserves, and used only for
other industry development, targeting export markets and earning hard
currencies.
An economy, which forecast to operate with deficit from time
to time due to price or production fluctuations, must save and invest in a
Stabilization Fund supplied from previous years of surpluses to offset and smoothen
out high revenue declines and essential expenditure increases. Depositing a high
portion of sums from years in which there was surpluses collected and investing
these sums internationally in hard currencies through a diverse portfolio with
short to medium objectives, should have been and is still the plan. Withdrawals
or consignments of the Stabilization Fund's principal or interest should be
legally limited and linked only to the approved debt ceiling in years of budget
deficits and used only to fund existing social programmes at prior levels hence,
reducing borrowing needs.
Having room under the approved debt ceiling and, of course,
the ability to service existing and new borrowings, in the related currency, is
key in successfully managing an economy, hence, using such new borrowings for
much needed economic activities; developing industries and strengthening social
support. It helps to understand, an economy is best describe by population ratios
of taxpaying employed individuals to social programme users, as opposed to Government
vs. Opposition policies, because there is very little that can be done without both
sides agreeing; one side promoting social investment in people and the other saying
infrastructure improvements are first needed.
Investing in infrastructure; developing foreign exchange
earning export industries, or investing in social services; security, healthcare,
education, shelter, will both always require sound economic projections based
in reality and financed through local or foreign borrowings. Such increases in
debt is justify and made much easier if, and would not it be nice to have; a
Heritage Fund with a minimum of 10% of the revenue collected over the past ten
years from the extractive industry, enough to fully back new industry needed
infrastructure projects and attract new private investment, and a Stabilization
Fund with an amount equal to the present budgetary current expenditure held in
reserve.
Read More:
Assessing Constantly Transformed Policies, Projects and Programmes.
To gauge and forecast long-term economic effects (Preservation and Growth).
The key roles of An Independent Office Of Budgets (OOB) is to inform the Public on the effects of Proposals & Decisions, to make State Enterprises Attractive to Investors, to dispose of Loss Makers, to predict Economic Growth and Declines and to track Sectors & Industries Advances.
Read More:
Assessing Constantly Transformed Policies, Projects and Programmes.
To gauge and forecast long-term economic effects (Preservation and Growth).
The key roles of An Independent Office Of Budgets (OOB) is to inform the Public on the effects of Proposals & Decisions, to make State Enterprises Attractive to Investors, to dispose of Loss Makers, to predict Economic Growth and Declines and to track Sectors & Industries Advances.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
