Last week saw the World Bank lowering its 2016 forecasts for 37 of 46 commodity prices, amid fears of further economic slowdown in many major emerging economies. Over the course of 2015, commodity prices fell 30.7 percent, with energy dropping 39.3 percent and non-fuel prices falling 19.1 percent, according to the IMF. This is grim news, especially for countries that are heavily dependent on natural resources. And yet despite the gloomy forecasts, some countries appear to be weathering the storm better than others.

Take Bolivia. With a GNI per capita of $2,220, the country heavily depends on natural resources. Gas and mining account for 74 percent of national exports, and 32 percent of fiscal revenues. And yet despite the declining prices and resultant loss in revenues, Bolivia’s economy held up well last year.

Kazakhstan, like Bolivia, was hit hard by the fall in oil prices, but has managed to waver the storm so far, thanks to its substantial foreign reserves. 

Mongolia and Zambia, on the other hand, suffered more significant slowdowns last year. Mongolia's growth in 2015 was at its lowest in over four years. The country continues to face challenges, weighed down by the fall in commodity prices and the slowdown in China, its main trading partner. In Zambia, economic growth in 2015 dropped to below 4 percent, the lowest since 1998 and the national currency collapsed following falling copper prices.

So what can resource-rich countries do to beat the resource-curse and better weather the cyclical nature of commodities markets? And how should development partners like the World Bank Group engage with their resource-rich country clients?

A recent IEG evaluation, World Bank Group Engagement in Resource-Rich Developing Countries: The Cases of Bolivia, Kazakhstan, Mongolia, and Zambia, looked at the experience of four countries with one common characteristic. All four have rich endowment with and dependence on non-renewable natural resources.

IEG's report identifies three inter-related areas that resource-rich developing countries consistently grapple with, namely the prudent management of revenues; economic diversification through finding growth and employment in the non-extractive sectors; and ensuring that the benefits of economic growth and revenues are widely shared within the society, contributing to human development, poverty reduction, and environmental sustainability.

Not surprisingly, management of revenues and economic diversification come up high on the list of findings. Resource-rich developing countries need to build up reserves during the upswing phase of commodity prices to counter the inevitable downward cycles. However, this calls for policy consensus across the political spectrum, something that can be difficult to achieve, especially when the commodity prices are high and so are the populist pressures to increase public expenditures, even when not economically justified.  At the same time, even at the upswing phase, extractive sectors may not generate much employment. Therefore, resource-rich countries also need to promote policies and create an environment conducive for development of  non-extractive sectors.

IEG's evaluation found, however, that the concept of economic diversification has been rather elusive for many governments as well as the Bank Group, particularly as far as precise definition and metrics are concerned. In fact, one of the most successful resource-rich countries, Chile, prefers to use the term "innovation" rather than "diversification" to describe its policies in this area. 

In all the four countries studied, the IEG report found that significant progress was registered in poverty reduction. However, all countries continued to grapple with inequality and a growing gap between urban and rural incomes.

The challenge for many of these countries is to design and implement the right human and social development investments. That means supporting better quality education and ensuring that social transfers are fiscally sustainable, for instance.

Some of the most important steps a government can take are focusing on the fundamentals: maintaining macroeconomic stability, investing in infrastructure, improving the business climate, and encouraging private investment.

Many of the report's findings and recommendations speak to the World Bank Group's role in working with resource-rich countries. The report notes that the main challenge for the Bank Group, especially when the prices are high, is how to stay relevant and competitive while maintaining honest and frank dialogue about challenges facing Resource-Rich countries,.

Overall, IEG's evaluation finds that the World Bank Group is well-positioned and technically equipped to effectively assist resource-rich countries particularly in implementing policies and strengthening institutions for prudent management of natural resources and revenues derived from their exploitation.

The report, however, recommends that the World Bank Group develops a consistent framework for engagement in resource-rich countries, one that is driven by the defining characteristics of these countries - their rich endowment with nonrenewable natural resources and dependence on revenues from their exploitation.

Read the full Report

Read the country case studies:

• The Plurinational State of Bolivia, Country Program Evaluation FY05-13

• Kazakhstan, Country Program Evaluation FY04-13

• Mongolia, Country Program Evaluation FY05-13

• Zambia, Country Program Evaluation FY04-13