Regions and Countries

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p. 6 of 20 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Poverty Assessment C. Assessment of Socio-Environmental Performance D. Governance: Sound Development Management E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Subregional Economic Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Mongolia : I. Country Performance Assessment

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E. Implementation Assessment

1. The Portfolio

30. Since Mongolia joined ADB in 1991, ADB operations have grown steadily in terms of volume and the number of sectors covered in accordance with the operational strategy. ADB is Mongolia’s second largest source of donor assistance after Japan. By 31 December 1999, ADB had approved 21 loans, amounting to $427.5 million. Lending operations have been dominated by program loans (28.6 percent by number and 32 percent by amount), which have supported policy reforms and infrastructure rehabilitation projects. All public sector loans are from ADB’s concessional facility, the Asian Development Fund (ADF). For the year 1999, contract awards reached $26.6 million or 65.6 percent of annual projection. The disbursement ratio increased from 20.3 percent to 35.7 percent during the year, compared with the ADB average of 22.2 percent.

32. The transportation and communications sector accounted for 31.5 percent of the total lending to Mongolia, followed by the finance and industry sector with 23 percent, the energy sector with 22 percent, the agriculture sector with 9 percent, and the social sectors with 9 percent.

33. By 31 December 1999, ADB had provided 89 technical assistance (TA) grants totaling $45.3 million. TAs have helped to improve governance, build institutional capacity, support policy and institutional reforms, and develop the legal and regulatory framework and human resources and to prepare investment projects in a wide range of sectors.

34. ADB’s development impact is evident in many sectors in Mongolia, particularly in policy leverage shown in sector reforms, capacity building, institutional strengthening, and support of good governance. In key infrastructure sectors such as energy, and transport and communications, ADB’s policy dialogue assisted the Government in:

1. separating policy and regulatory functions from operations;
2. commercializing management and operations; and
3. improving tariff adjustments and cost recovery.

In industry and agriculture sectors, ADB’s program loans assisted the Government in implementing difficult policy and reform agendas covering liberalization of prices, deregulation of the trade regime, and development of a legal and regulatory framework. In the social sectors, ADB is helping the Government to rationalize structures and facilities, promote cost recovery, and privatize provision of social services wherever possible.

35. Despite the economic uncertainty, fiscal constraints, and institutional weaknesses in all sectors, ADB’s portfolio in Mongolia is, in general, performing satisfactorily and implementation is proceeding on schedule. A high proportion of ADB lending has been through program loans. Release of the second tranches of program loans in the industry, agriculture, and education sectors demonstrates the Government’s commitment to and capability for implementing difficult policy and sector reforms. A six-month delay in release of the second tranche of the Financial Sector Program Loan has been caused by the intensity of the problems facing the sector; mitigating steps were agreed to during the review for the release of the second tranche. One project (Special Assistance Loan in 1991) has been postevaluated and rated generally successful. Because of the generally good portfolio performance, it has not been necessary to undertake any “spring cleaning”. Technical assistance completion reports demonstrate that the ADB-funded TAs achieved their objectives and have significantly contributed to supporting policy and sector reforms, strengthening institutions and capacity building, and developing the legal and regulatory framework and human resources in a wide range of sectors. Detailed portfolio performance indicators are given in Appendix 2.

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