Boosting the benefits from extractive industries through local content policies

Extractive industries are important in most Latin American economies. Because of this, decision makers have focused efforts both on increasing revenues from the extractive sector and on transferring these benefits to other sectors of the economy. Local content (LC) policies have become a viable strategy for governments to achieve these goals. Local Content strategies may vary between countries but generally include interventions aimed at: job creation in the areas of influence of the extractive projects, capacity building and technology transfer, and the participation of national industries throughout the extractive industry’s value chain. The regional research paper “Local Content Frameworks in Latin American Oil and Gas Sector: Lessons from Ecuador and Colombia” authored by Grupo FARO, analyses and compares the Local Content policies and practices of six oil and gas producing countries, as well as the development results that these policies have achieved. The research identifies those strategies that have led to the best results, and the underlying conditions that have led to success. The study presents different scenarios and considerations for decision makers interested in including Local Content measures to boost the extractive sectors in their countries.