A delegation of Mongolian MPs, all of them members of the
Standing Committee on the Budget, recently visited Botswana to learn how the
country has successfully managed revenues from minerals. The MPs have decided
to study practices in Botswana, Norway and Chile before formulating a national
minerals as well as fiscal policy.

The Minister of Finance and Development Planning, Kenneth
Matambo, told them that Botswana, rated 
one of the 25 poorest countries in the world when it became independent
in 1966, saw an opportunity for economic development  when diamonds were discovered in the 1970s. It
channeled revenues into developing infrastructure, and water, health care,
primary education and roads network were identified as priority sectors.

Rapid economic development was achieved by saving part of
the revenue surpluses for the future. At the end of April, 2010, the
accumulation was enough to cover 19 months of the country’s import needs. Part
of the reserves was also used to finance part of the huge budgetary deficits
that followed the recent economic and financial crisis.

Matambo advised the Mongolian MPs not to get excited over
the sudden influx of mineral revenues and urged them not to spend these on
increased and unproductive consumption. Instead, they should be invested in
areas that ensured sustainable development.