Colombia hands key royalties proposal to Congress

[naaman fletcher]

BOGOTA, Aug 31 (Reuters) - Colombia's government presented Congress with proposed reforms to oil and mining royalties on Tuesday -- one of the key projects as the country seeks to regain investment grade lost during a 1990s fiscal crisis.

President Juan Manuel Santos plans to centralize how royalties are managed to more evenly distribute around $3 billion a year nationwide and stamp out inefficiency and corrupt abuses of regional commodity resources.

Santos, a U.S. and British-trained economist who took office this month, also wants to create a fund to put aside cash from boom times to help the economy weather slowdowns, following the example of countries like Chile and Norway.

"The royalties will cease to be resources for a few municipalities and pass to a common fund to be distributed among all the regions," Finance Minister Juan Carlos Echeverry said in a statement, noting that the proposal had been passed to parliament.

http://www.reuters.com/article/idUSN3124571720100831

Sounds like a good policy to me.