FMI - Too Much of a GOOD ThING? (Sept 2013)

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For natural resource riches to drive growth and reduce poverty, countries must balance spending now with investing in the future.

As countries like Uganda and Mozambique develop their new discoveries, they can learn from other countries’ chal- lenges managing the volatile revenues generated from abun- dant natural resources. Policymakers can spur growth and fight poverty by ramping up investment spending as long as they are mindful of their economy’s capacity to absorb such investment. And spending carefully combined with saving part of resource windfalls can avert future drastic spending cut and instability.