Economic diversification is vital to resource rich countries' long-term economic growth. Vibrant and stable economies usually generate a large share of their income in the manufacturing and service sectors. The economies of many resource-rich countries, however, remain heavily reliant on revenues generated by mining or oil production, jeopardizing their chances for sustainable growth. Too often, resource-dependent countries lack clear policy guidelines on how to diversify their economies and export portfolios, and policymakers have limited understanding of why diversification is important.

To address this gap, Revenue Watch has been conducting a series of case studies and analyses on economic diversification in Algeria, Azerbaijan, Botswana, Chile, Indonesia, Kazakhstan and Malaysia. The initial findings suggest that a supportive policy environment can help countries successfully diversify their economies beyond the resource sector, though the experience of diversification can vary due to differences in policy design, implementation and political commitment. Firm commitments, sound macroeconomic policies, investments in infrastructure and sound institutions are critical to success. RWI's findings will be used to develop frameworks for monitoring diversification policies and training modules for civil society groups in Eurasia, Latin America and the MENA region.