John At The Center

Mongolia’s leaders, some educated at Harvard and Cambridge, say they are determined to avoid this syndrome, known as “Dutch Disease” — a sudden surge in wealth that ultimately hampers expansion.

Working with the Washington-based World Bank, they are dispatching officials to nations such as Chile, which successfully harnessed its copper resources to help drive growth. They are also leveraging their democratic system to build support for policies including greater investment in transportation and a new budget law aimed at curbing the impact of volatile metals prices.

“If you go to most developing countries, they’ll tell you, ‘We’re saved; we’ve found uranium,’” said Hernando de Soto, a Peruvian free-market economist. Mongolia has “a president who says, ‘We are in grave danger because we have discovered we have a lot of natural resources.’” The fact that “they are forewarned gives you hope.”

via Mongolian Harvard Elites Aim for Wealth Without ‘Dutch Disease’ – BusinessWeek.