Opening Remarks at the workshop on "Boosting economic dynamics and job growth: the potential of industrial policies"

Presented by Mr José Manuel Salazar-Xirinachs, Assistant Director General for Policy, ILO

Presentation | 15 March 2013
Governments and institutions need to secure access to finance in order to invest in productive capacities and to foster socio-economic transformation. Mobilizing revenues, and in particular, domestic resources, is critical if governments aim at transforming their economies and meeting the needs of their citizens. Fiscal challenges have become more pressing in an international context that is characterized by austerity policies, sluggish growth performance in advanced countries and uncertainties with regard to access to external aid and credit. Countries that are rich in natural resources or minerals have the option to mobilize revenues from production and export of primary products. While natural resources are often viewed as a curse, they can – under certain conditions - provide the financial base for developmental policies and structural transformation. Fiscal space can also be expanded by reforming tax systems or by contracting external debt or development aid, although the developmental and redistributive effects of each option have to be considered carefully.
The presentation addresses the following guiding questions:
• What are effective policies and institutions to mobilize domestic resources from mineral production and commodity exports and to translate them into productive and social transformation leading to more diversified, equitable and sustainable growth patterns?
• How can tax reforms expand fiscal space and contribute to productive as well as distributive goals? What can we learn from the political economy of tax reforms and the linkages with expenditure policies?
• How can governments achieve a reasonable balance between economic and social expenditures?
• What role does aid and external credit play for financing productive and social development?
• What are the linkages between the politics of domestic resource mobilization and fostering of domestic capabilities?