The ratings on the Republic of Botswana reflect the sovereign's strong external net asset position, a well-managed minerals-based economy, and political and macroeconomic stability, offset by the narrow economic base and the challenges posed by the HIV/AIDS pandemic. The public sector net external asset position, projected at 95% of current account receipts (CARs) in 2006, is among the highest recorded by any rated sovereign, bolstering the government's capacity to absorb potential shocks. The general government balance achieved a surplus of 2.7% of GDP in fiscal year 2005/2006 (ended March 31, 2006) and is forecast to record surpluses of about 1% of GDP in the medium term. The sharply improve fiscal performance in 2005/2006, compared with a surplus of 0.5% of
