Klaus Roland
of the World Bank was in Ulaanbaatar to attend a meeting on June 9 between the
Government of Mongolia and the Bank on the progress of major economic reforms.
He answers questions from our reporter.

You are the World Bank’s new country
director for Mongolia. What are your plans for the country?

I visited
Mongolia many times in the 1990s. This time I come after 13 years to find much
has changed. With many new buildings, Ulaanbaatar looks better. It now has many
more people and I think the migration from the countryside will continue. This
means the city’s problems will also increase.

Big mining
projects are going to start. These offer Mongolia a great chance to develop.
Countries which depend largely on mining must have fiscal discipline because
commodity prices will never be stable. Increased revenue must not be
immediately spent.  Different countries
use different options to ensure this, but the basic principle is to save the
extra revenue from the “boom” days in a special fund and to use it when price
fall.

Does the World Bank share the IMF concern
that the budget deficit should no be more than 6 percent of the GDP?

The issue is
not one of 5.9 or 6.1 percent. There are many other considerations such as the total
amount of loans that have to be repaid, the nature of the expenses, etc. The economic
crisis has cautioned every country to control its fiscal deficit. The picture
here is not yet clear as Parliament is still discussing the proposed budget
revision. Our task is to offer advice. The World Bank works in over 100
countries, and each country has its own specific problems, and their solutions are
likewise different.