Commentary

Toward Fiscal Stability and Sustainable

Development: The Role of Sovereign Funds

in Saudi Arabia

Nader AlKathiri

July 2020

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

The study, “Optimal Policies for Managing Oil Revenue Stabilization

Funds: An illustration using Saudi Arabia,” conducted by researchers

from KAPSARC, was recently published in the journal Resources Policy

(AlKathiri et al. 2020). It developed a model that optimizes the buildup and

drawdown of a stabilization fund. It offers key insights into managing a

stabilization fund to support scal stability over the short and medium term.

Its results indicate that the boundary between an oil-revenue stabilization

fund and a sovereign wealth fund is not a bright line. This commentary

extends the paper’s analysis by exploring the potential role of sovereign

funds, both short-term stabilization and long-term savings funds, in

achieving scal stability and sustainable development in Saudi Arabia.

The macroeconomic challenges of managing oil windfalls

Oil-dependent economies are exposed to various issues that can limit

their growth and development. There are three major problems associated

with a heavy reliance on oil revenues. First, oil provides uncertain revenue

streams due to oil price uctuations in the global market. Second, it is a

non-renewable resource that is constantly being depleted. Third, the oil

industry is capital-intensive and creates fewer jobs compared with other

industries.

Different tools can help to mitigate these issues, and each tool serves

different objectives, as depicted in Figure 1. Oil revenue stabilization

funds address the issue of oil revenue volatility by stabilizing government

expenditure in the face of oil price uctuations. Sovereign wealth funds

(SWFs) (savings funds) address the risk posed by the depletion of oil

by generating a sustainable source of income to replace the depleted

resource’s revenues. Other objectives of these funds include improving

intergenerational equity and isolating the economy from the adverse

macroeconomic effects associated with the dependence on oil revenues.

While these funds can be sufcient for developed oil-exporting countries

(e.g., Norway), they are insufcient for most developing countries with high

population growth because they do not directly generate jobs in the local

economy. Finally, economic diversication decouples the economy from

oil dependence in the long run and, therefore, reduces revenue volatility.

It helps to establish non-oil industries that can remain after resource

depletion and creates more jobs to absorb the growing working-age

population.

The boundary between

an oil-revenue

stabilization fund and

a sovereign wealth

fund is not a bright line

Figure 1. A simplistic illustration of how stabilization funds, SWFs, and economic diversication address the problems

associated with oil dependence.

Source: KAPSARC 2020.

Oil-dependent economy

Volatile revenues

Depletable resource

Creates few jobs Economic diversiﬁcation

Sovereign wealth funds

Oil revenue stabilization

funds

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

Oil-exporting

countries establish

oil revenue

stabilization funds as

a buffer against price

uctuations

The short-term view: Addressing the volatility of oil revenues

To mitigate the impact of volatile revenues on scal budgets, oil-exporting

countries establish oil revenue stabilization funds as a buffer against price

uctuations. Stabilization funds aim to smooth consumption over time

by making it less correlated with oil revenues and less disruptive to the

investment climate. Unlike SWFs (i.e., savings funds), where the focus

is on generating sustainable streams of income that can replace lost oil

revenues after resource depletion, stabilization funds provide only short-

term scal stabilization. Some countries use one fund for both stabilization

and savings purposes, while others have separate funds with their own

objectives and mandates.

The key question for managing a stabilization fund is how much to save

during oil boom cycles and how much to withdraw from it when prices

are low. These decisions imply a tradeoff between current and future

consumption and depend on several factors, including future oil revenue

expectations, the size of the fund, and the ability of the country to borrow

in downturns to nance its scal budget. Successfully stabilizing the

scal budget is not contingent on the existence of a stabilization fund.

In fact, many countries, such as Iran, and Venezuela, failed to achieve

macroeconomic stabilization despite their formal establishment of

stabilization funds (Bauer 2017). In contrast, Saudi Arabia and Chile use

their reserves or funds to stabilize expenditure by adopting countercyclical

scal policies. Figure 2 shows the co-movement of government expenditure

and revenue growth for four resource-rich countries.

Figure 2. Government expenditure and revenue growth for four resource-exporting countries.

-60%

-40%

-20%

20%

40%

60%

80%

2003 2004 2005 2006 2007

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2003 2004 2005 2006 2007

2008 2009 2010 2011 2012 2013

Saudi Arabia

Total government revenue growth Total government expenditures growth

2008 2009 2010 2011 2012 2013

Norway

Total government revenue growth Total government expenditures growth

2014 2015 2016 2017 2018

2003 2004 2005 2006 2007 2008

2009 2010 2011 2012 2013

Azerbaijan

2009 2010 2011 2012 2013 2014

Chile

2014 2015 2016 2017

2015 2016 2017 2018

-20%

20%

40%

60%

80%

100%

-20%

-10%

10%

20%

30%

40%

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

Although some people refer to the Saudi Arabian Monetary Authority’s

(SAMA’s) foreign reserves as an SWF, it is actually more a foreign

exchange reserve, the goal of which is to protect the stability of the

Saudi riyal’s currency peg to the United States dollar (US$). Reserves

accumulated as a result of measures taken to ensure the currency peg

are referred to as de-facto sovereign wealth funds, as explained in Wills

and van der Ploeg (2014). According to Venables and Wills (2016), the

difference between an SWF and a foreign exchange reserve is that the

former accumulates oil revenues as foreign assets before they enter

the domestic economy, while the latter accumulates foreign reserves

after oil revenues have been spent domestically. Part of SAMA’s foreign

reserves has not been spent and is considered pure oil revenue savings.

Specically, the deposits and reserves of the government (Table 2), which

represents 34% of SAMA’s foreign reserves, is under the direct control

of the government for budget nancing. The government saves budget

surpluses in this account, part of which can be allocated to the Public

Investment Fund (PIF), which is Saudi Arabia’s ofcial SWF, or other

development and pension funds.

The key question

for managing a

stabilization fund is

how much to save

during oil boom

cycles and how much

to withdraw from it

when prices are low

-60%

-40%

-20%

20%

40%

60%

80%

2003 2004 2005 2006 2007

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2003 2004 2005 2006 2007

2008 2009 2010 2011 2012 2013

Saudi Arabia

Total government revenue growth Total government expenditures growth

2008 2009 2010 2011 2012 2013

Norway

Total government revenue growth Total government expenditures growth

2014 2015 2016 2017 2018

2003 2004 2005 2006 2007 2008

2009 2010 2011 2012 2013

Azerbaijan

2009 2010 2011 2012 2013 2014

Chile

2014 2015 2016 2017

2015 2016 2017 2018

-20%

20%

40%

60%

80%

100%

-20%

-10%

10%

20%

30%

40%

Sources: SAMA; Statistics Norway; Banco Central De Chile; The State Committee of Republic of Azerbaijan.

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

As illustrated in Figure 2, Saudi Arabia was able to decouple government

spending from uctuating oil revenues by using the government’s reserves

held by SAMA as a buffer against oil price shocks. In AlKathiri et al. (2020),

we developed a model for managing oil revenue stabilization funds to

maximize the welfare of households by creating tradeoffs between current

and future consumption. The derived savings rule from the model matches

what we would expect: the larger the fund, the smaller the additions during

periods of high revenues and the bigger the withdrawals during periods of

low revenues. By applying the model to the observed revenues of Saudi

Arabia from 2003-2015, we estimate the optimal savings in each year

as a function of oil revenue and the size of the fund, and we compare

the outcome with what has been observed historically. We show that the

pattern of the buildup and drawdown of the government’s reserves closely

matches the optimal savings rule derived by the model until 2011, where

actual savings started to deviate from the optimal path as a result of the

rapid increase in government spending. Our ex-post analysis shows that

applying the optimal policy from 2003 until 2015 would have achieved the

same welfare outcome as what was actually achieved, but with a fund

size US$115 billion larger. This shows the importance of smoothing public

spending over time.

Saudi Arabia was

able to decouple

government spending

from uctuating oil

revenues by using

the government’s

reserves held by

SAMA as a buffer

against oil price

shocks

Table 1. SAMA assets.

Table 2. SAMA liabilities.

Source: SAMA (2017).

Foreign

currencies and

gold

Cash in vault Deposits with

banks abroad

Investments

in foreign

securities

Other assets Total

2017

(in billion US$) 61.12 6.88 100.79 331.91 6.94 5 0 7.6 4

Percentage 12% 1.4% 19.9% 65.4% 1.4% 100%

Currency

issued

Govt.

deposits

and

reserves

Govt.

institution

deposits

Regulatory

deposits

for

nancial

institutions

Foreign

institution

deposits

in local

currency

SAMA

bills and

repurchase

agreements

Other

liabilities

Total

2017

(in billion

US$)

61.12 171.03 23.56 26.01 4.93 37.01 183.99 5 0 7.6 4

Percentage 12% 33.7% 4.6% 5.1% 1% 7.3% 36.2% 100%

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

The investment strategy for stabilization funds and the role of debt

nancing

Stabilization funds’ assets have to be liquid enough and readily available

to meet their objectives of protecting their respective economies from

scal instability. The proper management of these funds is crucial for their

success in mitigating macroeconomic volatility, and they require integrating

with alternative sources of nancing scal decits. While budget decits

can be covered through debt-nancing, the availability of a stabilization

fund provides a strong balance sheet that can give negotiation power to

the government when it attempts to reduce the cost of its debt. Hence,

the decision as to whether to issue government bonds or withdraw from

the stabilization fund will be based on the opportunity cost of withdrawing

from the fund. Debt should not be issued if its cost exceeds the return on

the corresponding amount in the stabilization fund. Some poorly managed

funds have no clear goals and their operations do not make economic

sense. For example, some governments save resource revenues in funds

yielding low returns and issue debt at rates of interest that are higher than

the yields they receive (Venables and Wills 2016).

The assets of a stabilization fund can be divided into sequential tranches,

with each tranche tapped after the depletion of the preceding tranche. The

choice of investment for each tranche will differ based on the estimate of

the time it will take to start withdrawing from each tranche. Following the

work of AlKathiri et al. (2020), Figure 3 divides a stabilization fund of $450

billion into six tranches, with $75 billion in each, to illustrate how different

tranches could be managed. As the graph shows, the rst tranche will most

likely be needed to nance the budget shortfall immediately and, therefore,

should be kept in the form of cash or assets that are very easy to liquidate.

Stabilization funds’

assets have to be

liquid enough and

readily available to

meet their objectives

of protecting

their respective

economies from

scal instability

Figure 3. Probability distribution of the rst time each tranche is tapped.

Source: AlKathiri et al. (2020).

450

375

300

225

150

Billion US$

Probability

Tranche 1

Tranche 2

Tranche 3

Tranche 4

Tranche 5

Tranche 6

Short-term liquid

assets with low

returns

Long-term assets

with higher

returns

0.2

0.4

0.6

0.2

0.4

0.6

0.2

0.4

0.6

0.2

0.4

0.6

0.0

0.5

1.0

4 6 8 10 12 14

Years

16 18 20 22 24 26 28 30

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

Another major

issue confronting

oil-dependent

economies is the

exhaustibility of the

resource

Figure 4. The composition of wealth.

Source: World Bank (2018).

On the other hand, subsequent tranches have longer timeframes and can

be invested in longer-term bonds or assets with higher returns. The last

two tranches begin to resemble the kinds of assets appropriate for an SWF,

where the underlying assets should never be withdrawn and should be

invested in long-term investments with higher returns.

The long-term view: Transforming oil revenues into sustainable

sources of income

Another major issue confronting oil-dependent economies is the

exhaustibility of the resource. Specically, how should they prepare to

replace oil revenues as the resource depletes? Before addressing this

issue, it is important to understand what constitutes the wealth of a nation.

The World Bank (2018) provides estimates of “comprehensive wealth” for

141 countries and denes it as the sum of produced capital, natural capital,

human capital, and net foreign assets. Therefore, the wealth of a country is

its cumulative stock of assets. On the other hand, gross domestic product

(GDP) is a ow measure of income derived from the stock of wealth. A

country can boost its GDP by depleting its wealth (Hamilton and Hepburn

2014), thus nancing unsustainable consumption at the expense of future

generations. As Figure 4 illustrates, human capital is the most important

component of wealth, as it represents the largest share of wealth in all

income groups, except the low-income group, where natural capital

dominates. As countries transition from low- to medium- and high-income

countries, the share of natural capital declines, whereas the shares of both

produced and human capital increase (World Bank 2018).

-2%

-3%

-1%

14%

25%

22%

28%

27%

47%

27%

17%

30%

41%

51%

58%

42%

70%

64%

-5% 15% 35% 55% 75% 95%

Low income

Lower middle income

Upper middle income

High income: non-OECD

High income: OECD

World

Net foreign assets Produced capital Natural capital Human capital

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

How can oil wealth be efciently transformed into other types of wealth?

Hartwick’s rule (Hartwick 1977) suggests that resource rent should be

invested in other forms of productive capital to offset falling stocks of

non-renewable resources. If the revenue generated by the depletion of

non-renewable resources is used to nance extra consumption, wealth

will decline, and nancing this level of additional consumption is difcult to

sustain.

Traditional SWFs invest externally and therefore transform oil wealth

into foreign assets. The main objective of these funds is to protect the

economy from macroeconomic instability, such as revenue volatility

and real exchange rate appreciation, and to promote intergenerational

equity. The most successful fund of this kind cited in the literature is the

Norwegian Government Pension Fund Global (GPFG). Its functions include

both budget-stabilization and savings, with an implicit focus on protecting

the economy from the so-called ‘Dutch disease’ (Alsweilem and Rietveld

2017). Norway transfers all its resource revenues to the fund and limits

its structural non-oil decit to 4% of the fund, which can be nanced by

drawing down the fund. The disadvantages of these traditional SWFs are

their minimal contribution to the development of the domestic economy

and their inability to generate jobs for citizens. In fact, resource rents are

just being transformed into nancial rents without any improvement in the

productive base of the economy.

Other SWFs have domestic development objectives and invest in their local

economies, transforming oil wealth into produced capital and, potentially,

human capital. In contrast to foreign investments, an SWF’s domestic

investments support the development of non-oil sectors that generate jobs

for the local population. Creating jobs for the growing youth population

in Saudi Arabia is critical, since a large number of younger citizens are

expected to enter the labor force in the next few years. Figure 5 illustrates

the implications of using oil wealth to nance current consumption, invest

in foreign assets, or invest in the domestic economy for the size and

composition of future wealth.

How can oil wealth

be efciently

transformed into

other types of

wealth?

The disadvantages

of these traditional

SWFs are their

minimal contribution

to the development

of the domestic

economy and their

inability to generate

jobs for citizens

Figure 5. A simplistic illustration of the implication of using oil wealth to nance current consumption, invest in foreign

assets, or invest in the domestic economy on the size and composition of future wealth.

Source: KAPSARC 2020.

CURRENT FUTURE

TOTAL WEALTH

CURRENT

Natural capital Produced capital Human capital Net foreign assets

FUTURE

TOTAL WEALTH

CURRENT FUTURE

TOTAL WEALTH

Depleting oil wealth to ﬁnance

consumption

Transforming oil wealth

into foreign assets

Transforming oil wealth into produced

and human capital

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

The PIF’s strategy is

to invest domestically

and internationally

to enable economic

diversication

and growth in key

strategic sectors

An SWF should not

replicate the role of

the scal budget or

nancial institutions

and should seek

investments that

crowd-in rather than

crowd-out private

sector investments

Figure 6. The allocation of domestic investment among the government, private sector, and SWF.

The PIF’s strategy is to invest domestically and internationally to enable

economic diversication and growth in key strategic sectors. Its four

primary objectives include: 1) growing its assets to US$400 billion by 2020,

which it expects to generate an annual return of 4%-5%; 2) unlocking new

sectors in the economy; 3) building strategic partnerships; and 4) localizing

cutting-edge technology and knowledge. It also contributes indirectly to 28

Saudi Vision 2030 objectives beyond those with which it is tasked. PIF’s

domestic capital expenditure is not part of the government’s scal budget.

For example, budgeted government expenditure for 2018 is US$260.8

billion, of which US$54.7 billion is capital expenditure. On top of that, the

spending estimates of PIF and the National Development Fund (NDF) are

roughly US$22.1 and US$13.3 billion, respectively.

As pointed out by Gelb et al. (2014), an SWF should not replicate the role

of the scal budget or nancial institutions and should seek investments

that crowd-in rather than crowd-out private sector investments. Gelb et

al. (2014) also show that public investments can be assessed based on

their nancial, economic and social returns. Examples of investments that

produce high economic and social returns include infrastructure projects,

public schools, and public hospitals. In general, investments with high

economic and social returns but low nancial returns should be part of the

scal budget. This is because such investments may require future cost

commitments for operations and maintenance, which should be taken into

account when planning for the scal budget. In contrast, an SWF should

seek investments with high nancial, economic and social returns.

The Kingdom’s traditional economic structure incentivizes the private

sector to seek government projects in the non-tradeable sector, which

generates high prots at a lower risk than projects in non-oil tradable

sectors that are highly exposed to competition in the export markets (Callen

et al. 2014). This justies an SWF stepping in to ll the gap by investing in

protable strategic industries, which could attract private sector investment.

Investments that provide high nancial returns and low economic and

social returns should be left to the private sector. An SWF should engage in

such investments by acquiring foreign assets instead, which can alleviate

real exchange rate appreciation. Figure 6 shows a simplied graph for the

allocation of domestic investments among the government, the private

sector, and the SWF.

Private sector SWF

Private sector

Government

Economic and social returns

Financial return

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

Investing in the domestic economy and the risk of ‘Dutch disease’

The so-called ‘Dutch disease’ results from the appreciation of the real

exchange rate lowering the competitiveness of non-resource tradable

sectors (Corden and Neary 1982; Corden 1984). In a xed exchange rate

system, this begins with a large inux of foreign currencies from the exports

of natural resources that increases the national income. If the foreign

currencies are converted to the local currency and spent in the domestic

economy, it generates extra domestic demand for goods and services

from both non-tradable and tradable sectors. Without easy access to the

global labor market, higher domestic demand pushes up wages, which

leads to higher prices for domestically produced goods and services.

Hence, one unit of a foreign currency buys fewer goods and services in the

local economy. Price increases for domestic tradable goods and services

reduces foreign and domestic demand for them since imports become

less expensive. Consequently, the tradable sector shrinks in size. There

are no substitution effects in the non-tradable sector, so an increase in the

demand for its outputs signicantly raises the price level of the sector. This,

in turn, causes real exchange rates to appreciate.

On the other hand, access to an elastic supply of low-wage labor helps to

prevent real exchange rates from appreciating. Increasing the supply of

migrant low-wage labor offsets the rise in the domestic demand for non-

tradable goods and services. Saudi Arabia, for example, was able to mitigate

the appreciation of its real exchange rate through the reliance of its private

sector on cheap foreign labor and pegging its exchange rate to the US$.

However, such a reliance decreases labor productivity, disincentivizes

technological innovation, prevents nationals from being employed in the

private sector and increases their unemployment rate. The availability of

low-wage foreign workers also incentivizes the private sector to seek

government projects in the non-tradeable sector, which hinders the

development of other productive non-oil tradable sectors (Callen et al. 2014).

The ongoing structural changes in the labor market will likely increase

wages and could see a signicant portion of foreign workers replaced with

Saudi workers. Therefore, the leakage of oil rents outside the economy

(through workers’ remittances) could diminish. Furthermore, local

content initiatives are likely to contribute to lower outows of oil income.

Traditionally, large expenditure on imported goods, coupled with an elastic

supply of foreign labor, controlled domestic inationary pressures resulting

from the inows of oil income, and helped to expand the economy’s

absorptive capacity. Capital spending by PIF needs to take the absorptive

capacity of the economy into consideration to prevent macroeconomic

‘overheating’ that could damage the efciency of this spending. The

inexibility of the Saudi labor market presents a serious bottleneck that

could limit the ability of the economy to absorb more inows of oil income.

Therefore, government investment programs that enhance the productivity

of the labor force, in order to offset its inexibility, are essential.

Conclusion

As an oil-dependent economy, Saudi Arabia is vulnerable to volatile and

uncertain revenue streams that could induce pro-cyclical scal policies.

The instability of Saudi government spending has adverse effects on the

country’s investment climate because it discourages the private sector from

making long-term investments. The associated cost of revenue volatility for

the Saudi economy is signicant, as outlined in Pierru and Matar (2014).

The ongoing

structural changes

in the labor market

will likely increase

wages and could see

a signicant portion

of foreign workers

replaced with Saudi

workers

Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

The management of

a stabilization fund

should be integrated

with alternative

sources of nancing,

including domestic

and international

debt issuance, to

minimize the total

cost of borrowing

Unlike a stabilization

fund, the assets of

a sovereign wealth

fund should never be

withdrawn

A stabilization fund provides short-run protection against oil revenue

volatility by smoothing government expenditure through time, accumulating

reserves when oil revenues are high and allowing the government to draw

down from it when oil revenues are low. If this is coupled with clear and

transparent scal discipline, it can reduce scal uncertainty and create a

more predictable investment climate. The management of a stabilization

fund should be integrated with alternative sources of nancing, including

domestic and international debt issuance, to minimize the total cost of

borrowing.

Long-term issues associated with nite oil resources and the revenues they

generate can be tackled by establishing a sovereign wealth fund. Unlike a

stabilization fund, the assets of a sovereign wealth fund should never be

withdrawn. Instead, these assets should be treated as an endowment that

generates sustainable streams of income for current and future generations.

In fact, the aim of a sovereign wealth fund is to transform oil wealth

underground into other forms of wealth above the ground. By investing in

foreign assets, the fund transforms oil assets into foreign assets that yield

nancial rents rather than oil rents. To enable economic diversication, the

fund can invest domestically by unlocking strategic sectors of the economy

and creating more jobs for its growing population. The fund should seek

domestic investments with high nancial, economic and social returns.

These investments should crowd-in rather than crowd-out private sector

investment by creating an attractive entrepreneurship ecosystem in strategic

industries. However, the macroeconomic implications of a sovereign wealth

fund investing in its domestic economy must be taken into consideration.

Capital spending beyond the absorptive capacity of the economy can

push-up ination, leading to the appreciation of the economy’s real exchange

rate, and lowering the competitiveness of its non-oil tradable industries.

Investments that increase the efciency of doing businesses in the

non-tradable sector can expand the absorptive capacity of the economy and

alleviate the appreciation of its real exchange rate.

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Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia

About KAPSARC

About the project

The King Abdullah Petroleum Studies and Research Center (KAPSARC) is a

non-prot global institution dedicated to independent research into energy economics,

policy, technology and the environment across all types of energy. KAPSARC’s

mandate is to advance the understanding of energy challenges and opportunities

facing the world today and tomorrow, through unbiased, independent, and high-caliber

research for the benet of society. KAPSARC is located in Riyadh, Saudi Arabia.

Strategies can be developed to help mitigate the effects of oil price shocks on the

Kingdom’s economy. Oil stabilization funds provide short-run protection against oil

revenue uctuations. The Saudi government’s deposits and reserves held at the Saudi

Arabian Monetary Authority (SAMA) have historically served as a buffer to decouple

the government’s budget from oil revenue uctuations. Sovereign wealth funds create

income for future generations to replace revenue streams from depletable resources –

one of the purposes of Saudi Arabia’s Public Investment Fund. We have developed a

framework for optimizing policies for adding to and withdrawing from stabilization funds,

and applied it to Saudi Arabia as a case study. We will pursue this work by creating an

integrated framework for linking stabilization funds with sovereign wealth funds. Recent

data show the dependence of the country’s non-oil sector’s growth to oil prices, whereas

non-oil sector growth is key to achieving the Kingdom’s economic diversication

objectives. We will study this dependence through an in-depth analysis of the country’s

data, its national accounts and economic theory.

Legal Notice

This Document (and any information, data or materials contained therein) (the

“Document”) shall not be used without the proper attribution to KAPSARC. The

Document shall not be reproduced, in whole or in part, without the written permission

of KAPSARC. KAPSARC makes no warranty, representation or undertaking whether

expressed or implied, nor does it assume any legal liability, whether direct or indirect,

or responsibility for the accuracy, completeness, or usefulness of any information that

is contained in the Document. Nothing in the Document constitutes or shall be implied to

constitute advice, recommendation or option. The views and opinions expressed in this

publication are those of the authors and do not necessarily reect the ofcial views or

position of KAPSARC.