Policies for Managing Natural Resources in Low Income Countries

The specific example of the South Sudan is used in this paper in order to examine the conditions in poor developing countries such as political instability, limited financial and physical infrastructure, low human resources and failing institutions. It discusses how these conditions limit policy options. The policy problem for these countries is particularly serious because in addition to the usual problem of dealing with growth and development issues typical of all developing countries, they have to deal with compounded issues caused by natural resource dependence. Due to the fact that the resources available from natural resources are dwarfed by competing development needs, priorities have to be determined and trade-offs made. As expected, the additional list of problems arising from natural resources is overwhelming, far beyond the capacity of any omnipotent government, let alone that of the least developed countries.