8.2 Investment

Growth and Long-Term Poverty Reduction.  Evidence and economic argument suggest that, to get maximum benefit from their resources, states should use the revenue generated from the EI sector primarily to achieve sustained economic growth. Growth is seen as the main way in which incomes and consumption can be increased. It creates employment, bids up wages, and broadens the tax base for future public spending and service provision.  Investment in domestic assets is key to that growth.  Private sector investment, in the end, will be considerably more important to growth than public sector spending.[3]  Against this background, good practice would argue in favor of a disproportionate allocation of public sector resource revenues to domestic investment, with special attention to investments that will stimulate private sector investment.

 

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