Productive Linkages

The Importance of Productive Linkages

Resource nationalism is about advancing national ownership and control of natural resources for the benefit of citizens. One of the main mechanisms of increasing the benefit from oil, gas and mining is to encourage localization of productive linkages in the value chain. As discussed by Hirschman (1981), productive linkages include both backward linkages (supplying the goods and services required for oil, gas and mining activities) and forward linkages (processing, refining and beneficiation activities).

In recent years, there has been increased attention on local content policies (LCPs). According to Ovadia (2014), local content policies increase the utilisation of national human and material resources in the extractive sector and domicile in-country extractive industry-related economic activity that was previously located abroad. In Tanzania, Zambia and Zimbabwe, LCPs have been a key strategy for pursuing resource nationalism in the 21^st century.

In this Working Group, attention falls on the following four priority areas:

1. Baseline Surveys of Productive Linkages
2. The Politics of Local Content Regulations
3. Local Content, Gender and SME Development
4. Local Content and State Capacity