Mongolia

In 2012, Mongolia's economy continued to experience a high growth rate of 12.3 percent. This growth rate was however lower than anticipated as Mongolia saw its coal... Show More + exports drop significantly due to China's economic slowdown. Most noticeably, Mongolia had to finance a large fiscal deficit of 8.4 percent of gross domestic product (GDP), a record in the last 13 years. It is concerning that similar fiscal trends might continue in 2013 with the economy growing at a double-digit rate but also accumulating another large fiscal deficit. As Mongolia embarks on its largest infrastructure investments ever which can be in part financed through a first successful sovereign Chinggis bonds issuance- greater attention has to be paid: (i) to preparing those investments rigorously to ensure maximum socioeconomic return and avoid potential wastage of public resources; and (ii) to reflecting their financing transparently in the national budget. Show Less -

The objective of this report is to analyze in depth the current public investment management system and to assess whether or not it is able to meet this challenge of... Show More + delivering good quality projects in the priority areas in a macro-economically sustainable manner; and to recommend what needs to be done to improve the system so that it is able to effectively transform natural resource revenues into sustainable capital assets. In making its recommendations, this report focuses on some of the details that need to be laid out in implementing regulations in order to make the Fiscal Stability Law (FSL), Budget Law of Mongolia (IBL), and Public Procurement Law of Mongolia (PPLM) work. The report also suggests amendments to some of the existing laws that pose a risk to meeting the four objectives. In proposing policy options, the report is conscious of the political economy of reform and, wherever possible, analyzes the compatibility of the technical solutions with the political interests of policy-makers. Show Less -

As Mongolia has begun to develop its abundant mineral resources over the past decade, the share of mining in gross domestic product (GDP) has more than tripled to around... Show More + 20 percent currently. The sector has also contributed up to a third of total government receipts in recent years and more than 80 percent of exports in 2010. Evidence suggests that women tend to miss out on the potential benefits associated with a booming mining sector. In addition, large scale mines typically tend to be the dominant employers in remote locations. The policy note starts by gauging potential growth and employment effects associated with the expansion of the mining sector on other sectors, using a computable general equilibrium model specially calibrated for the Mongolian economy. It then considers experience and lessons from other countries that are trying to integrate and ensure the participation of women in large-scale mining and the practical policy recommendations to do so. The key findings are that there is a high degree of occupational segmentation in the mining sector, with women mostly located in service support roles, although this is by no means unique to Mongolia. However in Mongolia's case, this segmentation also likely reflects Mongolian labor regulations that existed until 2008 and which limited women’s participation in the sector. Evidence from around the world indicates that gender equal laws are a necessary and crucial first step towards guaranteeing gender equality and equity, but by themselves are not sufficient. Companies may also consider revising recruitment or hiring strategies with the objective of raising the share of female employment across all professional categories in the mining sector. Show Less -

This tenth edition of Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying... Show More + with relevant regulations. It measures and tracks changes in regulations affecting eleven areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and employing workers. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 185 economies, from Afghanistan to Zimbabwe, over time. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. This economy profile presents the Doing Business indicators for Mongolia. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator. The data in this report are current as of June 1, 2012 (except for the paying taxes indicators, which cover the period January - December 2011). Show Less -

Mongolia's mineral-rich economy was hit extremely hard by the global downturn during 2008-9, when copper prices plunged, external demand fell, and growth collapsed.... Show More + The shock exposed serious underlying weaknesses in the management of the country's natural resource wealth, particularly the lack of policies to insulate the economy from commodity cycles and real exchange rate appreciation pressures, an inadequate safety net, and poor public investment planning. These issues gained further urgency with the signing of a major copper mining deal in 2009 that further increased the country's mineral dependence. As part of its reform efforts and with the assistance of the World Bank and the International Monetary Fund (IMF), the government began an intensive south-south exchange, notably with Chile, another major copper producer, on strengthening the policy environment. The dialogue proved critical in the passage of several landmark laws within the space of a few years, including a fiscal stability law modeled after Chile, and the accompanying integrated budget and procurement and social welfare laws. These reforms will be crucial in managing the boom-bust cycle of mineral prices and mitigating Dutch disease effects by anchoring a prudent countercyclical fiscal policy, strengthening public financial management, increasing savings, and providing a fiscally sustainable social safety net targeted to the poor. Show Less -

Dzud is the Mongolian term for a winter weather disaster in which deep snow, severe cold, or other conditions render forage unavailable or inaccessible and lead to high... Show More + livestock mortality. Dzud is a regular occurrence in Mongolia, and plays an important role in regulating livestock populations. However, dzud, especially when combined with other environmental or socio-economic stresses and changes, can have a significant impact on household well-being as well as local and national economies. This study aims to fill this gap in knowledge by conducting in-depth case studies of four communities responses to the 2009-2010 dzud to document both household-and community-level impacts and responses. The case studies use a mixed-methods approach employing qualitative and quantitative data collection and analysis techniques including interviews, focus groups, household questionnaires, photovoice and document review, and were carried out in two soums (districts) located in the forest-steppe zone of Arkhangai Aimag (province), Ikhtamir and Undur Ulaan, and two soums in the Gobi desert-steppe zone of Bayankhongor Aimag, Jinst and Bayantsagaan. The specific objectives of this study are to assess herder household and community vulnerability, adaptive capacity, and medium-term recovery and resilience from the dzud of 2010. Show Less -

The health equity and financial protection reports are short country-specific volumes that provide a picture of equity and financial protection in the health sectors... Show More + of low- and middle-income countries. Topics covered include: inequalities in health outcomes, health behavior and health care utilization; benefit incidence analysis; financial protection; and the progressivity of health care financing. This report analyses equity and financial protection in the health sector of Mongolia. In particular, it examines inequalities in health outcomes and health care utilization; benefit incidence analysis; financial protection; and the progressivity of health care financing. Data are drawn from the 2005 Mongolia multiple indicator cluster survey and the 2007-08 Mongolia household socio-economic survey. Show Less -

This technical note summarizes findings and recommendations on measures for the strengthening of the capital markets in Mongolia. The authorities have taken bold steps... Show More + in the last two years to modernize the Mongolian Stock Exchange (MSE) and put in place modern legal, regulatory and market infrastructure for the capital market. Improving the institutional, regulatory and supervisory framework is a key priority, and the enactment of a new securities market law should lay a sound foundation for the regulation and supervision of the securities markets. However, its current draft has several gaps that should be addressed. Nonetheless, development of the domestic securities market in Mongolia should take into account the inherent problems for small markets, because a central feature of the securities market is economies of scale. Currently, the local capital market is not representative of the full universe of Mongolian enterprises that are operating in the country at present. As a result, it may be difficult to attract foreign investors interest if the country's most attractive firms are not listed domestically. One of the most important elements for a strong domestic capital market is a diversified institutional investor base, and the regulatory agencies involved should pursue a concerted strategy toward developing the investor base. Mongolia needs to provide an enabling environment to attract a diverse range of institutional investors participation, including investors from abroad. Show Less -

The World Bank's Mongolia quarterly economic update assesses recent economic and social developments and policies in Mongolia. It also presents findings of ongoing World... Show More + Bank activities in Mongolia. The Mongolian economy is continuing to grow at a very rapid pace, expanding by 16.7 percent year-on-year (yoy) in first quarter (Q1). This high growth however, is also fuelling inflation which touched 16 percent in April, well above the Bank of Mongolia's (BoM) inflation target of 10 percent. Increasing government spending on wages and salaries, large cash handouts to the general population, and burgeoning capital expenditures are adding to the demand pressures. Meanwhile, the worsening global economic outlook, in particular a faster than expected slowdown in China, Mongolia's largest trading partner, has negatively impacted export growth, resulting in deterioration in external balances. Under these circumstances, the advice to Mongolian policy-makers is to 'hold your horses' and adopt a more cautious macro-economic stance, tightening both monetary and fiscal policy to prevent further over-heating of the economy. The global economic outlook has deteriorated considerably in recent months. Financial conditions in high-income Europe, higher oil prices, and, most importantly, the slowing Chinese economy pose risks for Mongolia. The channels through which these operate include financial and trade linkages namely volatility in commodity prices and through demand from China for its mineral exports. Indeed, signs of these are already visible as demonstrated by the decline in exports in April. Other financial market linkages should also not be discounted: Mongolia's banking system, which has shown signs of overheating over the past year, is highly dollarized, with about a third of deposits denominated in dollars and easy convertibility out of the Mongolia Togrog. A sharp economic slowdown and/or an increased macroeconomic instability could expose the liquidity and asset quality vulnerabilities in individual banks and system overall. Show Less -

Owing primarily to extensive investment in new mining projects, Mongolia's economy is on a path of very rapid long-term growth. While financial intermediation in Mongolia... Show More + has been growing fast, access to finance remains a critical constraint for enterprises, and especially for Small and Medium Enterprises (SMEs). Improving access to financial services will require strengthening the legal and regulatory framework and financial infrastructure, including the secured transactions framework, creditor rights and insolvency regime, credit information sharing system, platform for technology-based banking products, regulation and supervision of nonbank financial institutions, and consumer protection in financial services. To realize fully its economic potential, Mongolia needs to build a diversified, efficient and stable financial system, capable of intermediating both on a large scale and in specific market segments. Due to its focus on the development agenda, and specifically on access to finance for the SME sector, capital markets development, and housing finance market development, this report does not address financial sector stability issues. Financial intermediation in Mongolia has grown significantly in recent years; credit and deposit penetration are on par with the average in the East Asia and the Pacific (EAP) region. Access to finance is particularly constrained for SMEs, which are also more sensitive to an unstable macroeconomic environment, characterized by high inflation and exchange rate fluctuations. Show Less -