Strategy reaffirms support as Mongolia manages a booming resource economy
Washington DC, May 18, 2012— The World Bank Group’s Board of Executive Directors discussed yesterday the Country Partnership Strategy (CPS) for Mongolia. The strategy covers the Bank Group’s support for Mongolia for a 5 year period that will see the country experience record growth.
Over the past 20 years, Mongolia has become a dynamic multi-party democracy with a booming economy. The country is at the threshold of a major transformation driven by its vast mineral resources.
“This Country Partnership Strategy comes at a pivotal point in Mongolia’s development history. The economy is growing at one of the fastest rates in the world, and the huge copper, gold and coal deposits in the country can catapult it to the ranks of high middle-income countries in record time,” said Klaus Rohland, World Bank Country Director for Mongolia. “Yet there are also considerable risks on the development path ahead, and ensuring macroeconomic stability and strategic use of natural resource revenues is pivotal in this regard. Exploitation and prosperity today must be sustainable for future generations.”
The fast 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 39.2 percent in 2010 to 29.8 percent in 2011. Substantial progress has also been made in regard to several Millennium Development Goals (MDGs) – such as child mortality – at the national level, though significant regional disparities prevail.
The strategy noted that 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 and transparently between spending, investing, and saving; diversify its economy so as to generate job opportunities for all its citizens in urban and rural areas. It needs to do this in a manner which protects the environment and intergenerational equity.
“Mongolia has daunting developmental challenges and unique opportunity for further growth. At this important juncture, the International Finance Corporation will continue to support Mongolia through its investment and advisory services. IFC is committed to working with the Mongolian government, the private sector and development partners to achieve the sustainable and inclusive growth as laid out in this CPS," said Karen Finkelston, Vice President for Asia and Pacific, International Finance Corporation (IFC) – the Bank Group’s private sector arm.
The World Bank Group’s CPS is aligned with Mongolia’s Comprehensive National Development Strategy. It identifies three areas which the World Bank Group will support over the next five years (FY13-FY17): (i) Enhance Mongolia’s capacity to manage the mining economy sustainably and transparently, (ii) Build a sustained and diversified basis for economic growth and employment in urban and rural areas, and (iii) Address vulnerabilities through improved access to services and better service delivery, safety net provision, and improved disaster risk management.
During this CPS period, Mongolia will start accessing resources from IBRD – the Bank’s lending arm for middle-income countries. A pipeline of projects that could potentially be financed with this funding source is being developed and will reflect government’s priorities. The Bank Group will continue to establish platforms for engagement with Development Partners in areas of strategic relevance to its program and contribute to enhancing donor coordination.
“This strategy further strengthens the partnership between the World Bank Group and Mongolia. We look forward to supporting the efforts of the Mongolian Government to ensure that the country's mineral endowment helps reduce poverty and makes a positive difference in the lives of the Mongolian people,” said Coralie Gevers, World Bank Country Manager for Mongolia.