ULAANBAATAR, Friday, June 12, 2009 - Mongolia may have been hit hard by the global financial crisis but World Bank Managing Director Dr Juan Jose Daboub believes that if the Government can maintain momentum on the ambitious reform agenda it has put in place, Mongolia can emerge with a stronger foundation for sustained economic growth and poverty reduction.
"Mongolia has managed the transition of its economy and politics since 1991 very well and should be proud about these achievements," said Dr. Daboub during a public speech today. "But Mongolia has not escaped the global economic crisis which has swept the world in recent months, and the impact on the country has revealed the need for continued reforms" he added. Mongolia's economic growth has slowed down significantly due to the copper price collapse and may barely reach 3% this year, down from the 9% average over the past four years.
Dr. Daboub is in the middle of a three-day visit to Mongolia during which time he is meeting Mongolian Government officials, parliamentarians, members of the business community, civil society, and other development partners, in addition to seeing first-hand how the crisis has hit the most vulnerable in Ulaanbaatar as well as in Mongolia's outlying rural communities.
In his meetings with President-Elect Elbegdorj and members of the cabinet and the parliament, Dr. Daboub praised the Government's initial response to the economic crisis. "The Government deserves credit for acting rapidly and resolutely as the impacts of the global crisis have become apparent. It will be important to keep the momentum of the medium-term reform agenda, while assuring that needed support is extended to the most vulnerable groups to weather the crisis," said Dr. Daboub. Since February, the Government has taken several tough decisions -- amending its budget, adjusting monetary policy, and initiating reforms to strengthen the fiscal framework -- that better position the country to withstand future commodity price swings.
Dr. Daboub also had an opportunity to discuss the efforts to improve the contributions of the mining sector to the economy. "From my conversations with the Speaker of Parliament and the members of Cabinet, it is clear to me that there is a common vision and a strong desire to develop the mining sector in a sustainable and transparent way in order to benefit present and future generations of Mongolians. WBG stands ready to continue to support the authorities in this endeavor," he added.
In his meetings with the representatives from civil society and private sector, Dr. Daboub highlighted the important role of the private sector as creator of sustainable jobs, growth and development. "With the global economy in recession and credit flows still tight, small countries like Mongolia more than ever need to ensure that they maintain transparent, efficient and competitive business environments to attract private investment. Our private sector arm IFC is present in Mongolia and actively pursuing investment opportunities.," said Dr. Daboub. Underlying the importance of good governance, he commented that stronger institutions and transparent mechanisms that enhance public awareness and oversight are the best allies in the fight against corruption.
During a visit of Ulaanbaatar's Ger districts to witness the World Bank-funded Ulaanbaatar Services Improvement Project which aims to reduce water loss and improve water quality for the city's vulnerable, the Managing Director emphasized the Bank's continued support for Mongolia to put in place necessary policy changes for social protection and safety nets so the nation is safeguarded against similar crises in the future "I have seen in the eyes and smiles of Mongolian children optimism and determination to take destiny into their own hands for a better future. We will support work with government to create the opportunities they need and deserve." he added.
World Bank has been a partner of Mongolia for 18 years and provided $422 million for 29 projects. Some $340 million of this amount is already disbursed for projects aimed at economic progress, mineral resource management, governance, infrastructure and human development. The Bank has recently discussed with authorities a new country strategy that will support government efforts to weather this economic storm and attend to the immediate needs of the most vulnerable, while keeping an eye on the longer term development agenda.
"There is potential in this great nation and I believe that once the dust settles from this economic storm Mongolia's march will continue. WBG stands ready to accompany the Mongolians in their path to prosperity," concluded the Managing Director.