Overview

Over the past 20 years, Mongolia has transformed into 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 Mongolian economy is facing challenges from persistent economic imbalances. In 2014, economic growth slowed as it began to adjust to unsustainable economic imbalances. Real GDP growth softened to 7 percent in the first 9 months, from 12.8 percent in the previous year. 

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 (the most recent update by the National Statistics Office). 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.

 

 

Last Updated: Mar 25, 2015

Mongolia became a member of the World Bank Group in February 1991. Since then, the World Bank has provided US$808.17 million to Mongolia.

As of March 25, 2015, the Bank's portfolio in Mongolia has total commitments of $207.92 million, composed of 9 operations financed by IDA credits totalling $172.75 million and 14 trust funds totalling $35.17 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.
    1. support the country in developing a regulatory environment, institutional capacity, and infrastructure for world-class mining;
    2. 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.
    1. enhance the investment climate and financial intermediation; 
    2. 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.
    1. work with the Government on the design, adaptation, and implementation of a comprehensive social protection system that supports the poor;
    2. support better delivery of basic services (education, health, justice, and infrastructure);
    3. reduce vulnerability of households exposed to natural hazards and pollution.

 

Last Updated: Mar 25, 2015

Since 1991, IDA has supported rural development, education, improving the livability of Ulaanbaatar, ensuring sound management within the mining sector, sustainable infrastructure development in southern Mongolia, environmental protection, policy development and air pollution abatement measures.

The overall goal of the rural program has been to reduce the vulnerability of herders to pastoral risk as well as to protect and extend gains made to provide relief in cases of climate emergencies, micro-finance, telecommunications and social services to rural residents. 

Between 2007 and 2013, the Rural Education and Development (READ) Project made learning materials available in rural Mongolia by establishing 3,560 classroom libraries in all 383 rural primary schools. Each school received over 160 books, benefiting a total of 130,000 students. 4,144 rural primary teachers and 383 school directors were trained. A local professional development network has been set up consisting of 95 core schools and 178 mentor teachers.

The Renewable Energy and Rural Electricity Access Project (REAP) helped the Government of Mongolia complete its National 100,000 Solar Ger Electrification Program, which provided over half a million nomadic herders with access to electricity through portable solar home systems. The project also helped fund improvements in soum (district) electrification, including rehabilitating mini-grids and installing renewable energy technology hybrid systems to power them.

In 2006, the Index-Based Livestock Insurance Project was launched initially in four aimags (provinces). In 2010, when another dzud hit Mongolia, it was expanded to cover all 21 aimags. This was the first time such a system was implemented in the world.

The project introduced a new insurance scheme where payments are based on the total number of livestock lost by species and soum (district) rather than on households’ actual, individual losses.

Since the program started, insurance policies have become more and more popular among herders. Every year there is an increase in the number of policies bought.

About 19,500 herders purchased the insurance during the 2013-2014 cycle, an increase of 21% over the past cycle. All herders eligible for compensation got indemnity payments.

From 2005 to 2013, thanks to the Information Communications Infrastructure Development Project (ICIDP) Project:

·         All 360 soum centers (villages) in Mongolia have access to modern phone and Internet services.

·         34 soum centers have access to high speed Internet.

·         Telephony minutes originated in soum centers increased from 1.2 million per year in 2006 to 56.5 million in 2013.

·         Telephony minutes originated in rural areas outside of soum centers increased from almost zero in 2006 to 530,000 a year in 2013.  

·         The number of Internet users in soum centers increased from 300 in 2006 to 12,000 in 2013.

·         The government improved the policy and regulatory environment and promoted investments in ICT in rural areas, which ensured the continued additional annual investment in the ICT sector of the country – annual investment increased from $37.6 million in 2005 to $395 million in 2013.  

·         A mechanism has been established to collect resources into a fund to finance universal access to telecommunication and Internet services.

The Avian and Human Influenza Control, Preparedness and Response Project strengthened the capacity of Mongolia’s emergency agencies, hospitals and veterinary services to detect and respond to potential outbreaks of infectious diseases, such as an avian and human pandemic influenza (AHI). The project helped set up 22 joint response teams, integrating these organizations across the country. For the first time, the concept of “One Health” --an initiative to forge collaboration between physicians, veterinarians and other scientific and health-related disciplines-- was put into practice in the country.

 

Last Updated: Mar 25, 2015


LENDING

Mongolia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments