The World Bank - Mongolia

Context

Over the past 20 years, Mongolia has transformed itself from a socialist country to a vibrant multiparty democracy with a booming economy. Mongolia is at the threshold of a major transformation driven by the exploitation of its vast mineral resources and the share of mining in GDP today stands at 20 percent, twice the ratio of a decade ago. The economic growth rate is estimated at 12.5 percent in 2013, compared to 6.4 percent GDP growth in 2010. GDP is expected to grow at a double digit rate over the period from 2013 to 2017.

This economic growth has translated into some benefits for the people of Mongolia. Poverty has been on a downward trend over the past decade. Most recently, it decreased from 38.7 percent in 2010 to 27.4 percent in 2012. Substantial progress has also been made in regard to several Millennium Development Goals (MDGs) at the national level, though significant regional disparities prevail.

To ensure sustainable and inclusive growth, Mongolia will need to strengthen institutional capacity to manage public revenues efficiently and limit the effects of Dutch Disease; allocate its resources effectively among spending, investing, and saving; reduce poverty; and offer equal opportunities to all its citizens in urban and rural areas. It needs to do this in a manner which protects the environment and intergenerational equity.

Strategy

Mongolia became a member of the World Bank Group in February 1991. Since then, the World Bank has provided US$701.7 million to Mongolia.

As of April 1, 2014, the Bank's portfolio in Mongolia has total commitments of $ 160.39 million, composed of 7 operations financed by IDA credits totalling $95.05 million and 14 trust funds totalling $65.34 million spread over 12 operations.

The majority of the projects support infrastructure development, economic governance and institutional strengthening of the mining sector.

In addition to the lending and grant operations, the Bank also provides analytical and advisory work to Mongolia to support its medium and long term development objectives and capacity building for government’s reform strategy in key strategic directions.

In 2008, Parliament of Mongolia approved the Comprehensive National Development Strategy. The document sets a 14-year development path: the first phase (2007-2015) will focus on achieving the Millennium Development Goals and actively developing the country’s economy; the second phase (2016-2021) will be dedicated to transitioning to a knowledge-based economy.

The World Bank Group’s Country Partnership Strategy (CPS) for Mongolia is aligned with this Strategy and thus identifies three areas which the World Bank Group will support over the next five years (FY13-FY17):

• Enhance Mongolia’s capacity to manage the mining economy sustainably and transparently.
• support the country in developing a regulatory environment, institutional capacity, and infrastructure for world-class mining;
• support the Government in designing and implementing policies and systems for a more robust, equitable, and transparent management of public revenues and expenditures.

• Build a sustained and diversified basis for economic growth and employment in urban and rural areas.
• enhance the investment climate and financial intermediation;
• create more opportunities in the rural economy for enhanced livelihoods.

• Address vulnerabilities through improved access to services and better service delivery, safety net provision, and improved disaster risk management.
• work with the Government on the design, adaptation, and implementation of a comprehensive social protection system that supports the poor;
• support better delivery of basic services (education, health, justice, and infrastructure);
• reduce vulnerability of households exposed to natural hazards and pollution.