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- Forward Linkages (Supplying Extractives’ Downstream Sectors)
- Policy Options
- Identifying Obstacles to Downstream Integration
Identifying Obstacles to Downstream Integration
At a Glance
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Consultation processes allow potential investors to be better understand the government's position and the resources it is prepared to commit to downstream production.
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Consultations help to facilitate mutual understanding, and policies based on such understanding are far more likely to achieve defined objectives in supporting downstream production.
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In most cases, governments wanting to enhance downstream production will have to offer incentives or penalties.
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Consultation alone may be sufficient to induce investment downstream in cases where a natural resource is unique or rare.
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Governments may achieve more of their policy aims by focusing on parts of the value chain other than downstream processing, such as local procurement.
Case Studies
- Botswana Diamond Workers Bleed (Roman Grynberg)
- Export Restrictions on Raw Materials: Experience with Alternative Policies in Botswana (Jane Korinek)
- Region Fails to Cut It in Diamonds (Roman Grynberg)
- Zimbabwe's Beneficiation Policy Part 1: Understanding the Drivers and Objectives (Claude Baissac, Ferdinand Maubrey, JP van der Merwe, Jessica van Onselen)
Key Resources
- One Thing Leads to Another: Promoting Industrialisation by Making the Most of the Commodity Boom in Sub-Saharan Africa (David Kaplan, Raphael Kaplinsky, Mike Morris)
- Linkages to the Resource Sector: The Role of Companies, Government, and International Development Cooperation (Columbia Center for Sustainable Investment, Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ))
Topic Briefing
Governments contemplating supporting downstream production would do well to consult with potential downstream investors to identify any obstacles to investment. This will help clarify which government incentives are likely to be most effective in attracting investors.