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dc.contributor.authorKyle, Stevenen_US
dc.description.abstractThis paper discusses the policy issues facing São Tomé e Príncipe, given the discovery and imminentexploitation of large reserves of oil in its territorial waters. A common reaction to news of a large oil discovery is tothink that all economic problems can be solved by the flow of oil revenues. However, the experience of numerousoil countries shows that it is necessary to temper this attitude somewhat since there are numerous pitfalls which canoffset the positive aspects of oil riches. An appropriate policy for macro balance and for disposal of oil revenueswill be essential if São Tomé e Príncipe is to avoid the problems which have plagued countries such as Nigeria orAngola. The two main lessons of macroeconomics in such a situation is first not to generate revenue faster than itcan be productively used and second to invest in such a manner that the country's underlying comparativeadvantages are preserved. In the case of São Tomé e Príncipe, history and recent analyses confirm that there is astrong comparative advantage in agriculture, implying that investments which enhance productivity and efficiency inthis sector would be appropriate for expenditure of oil revenues. In addition, such a strategy would have beneficialeffects in terms of poverty alleviation and equitable distribution of benefits from the coming windfall.en_US
dc.publisher|aCornell University, Department of Applied Economics and Management |cIthaca, NY-
dc.relation.ispartofseries|aStaff Paper, Cornell University, Department of Applied Economics and Management |x2003-02en_US
dc.subject.stwSao Tome und Principeen_US
dc.titleWe're rich!! Or are we? Oil and development in São Tomé e Príncipeen_US
dc.typeWorking Paperen_US

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