Regions and Countries

	Table of Contents
p. 12 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Operations 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 : III. Sector Strategies

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D. Governance Dimensions of ADB Operations

90. ADB has played an active part in improving governance through policy reforms and capacity building in several key sectors such as banking, agriculture, telecommunications, civil aviation, transport, power, housing, education, and health. It has provided substantial technical assistance to develop accounting and financial management systems in key infrastructure sectors and to improve the legal and regulatory frameworks. Among the laws that were drafted with ADB assistance are the Telecommunications Law, Energy Law, Education Law, Environment Law and Regulations, Housing Policy Law, Housing Privatization Law, Condominium Law, Audit Law, Procurement Law, Civil Aviation Regulations, Law on Private Land Ownership, Land Settlement Act, Land Registration Act, and Cadastral Survey Regulations. Technical assistance has also been provided to strengthen taxation, improve accounting and audit systems, develop local procurement capacities, strengthen local governments and support decentralization efforts, enhance the state statistical system, and retrain legal professionals. To assist the Government in implementing far-reaching public administration reforms, substantial policy advice and technical assistance have been provided in the civil service reforms and in drafting the comprehensive Public Sector Management and Finance Act.

91. ADB’s support for improved governance will emphasize public sector reform activities at three interrelated levels:

1. central Government;
2. local government; and
3. enterprise or unit.

In parallel with the administrative reforms, output-oriented budgetary reforms will be introduced at both the central and local government levels. An outcomes-based public expenditure management system will be established within the Ministry of Finance and, through the administrative reforms, agency or local government budgeting will be linked systematically with this system. In addition to the strong efficiency improvement impact, the governance reforms will also be substantially in line with the Government’s strengthened anti-corruption agenda.

92. The strategy implies, among others:

1. strengthening the fiscal discipline and strategic budgetary planning by putting in place a combined system of top-down budgeting process and a micro-based budgeting framework in which budgetary provisions also take performance-based budgeting into account;
2. performance-based management at the central and local levels;
3. transparent and efficient fiscal and administrative relations between local and central governments as formulated in the implementation strategy developed during the first phase; and
4. continued corporatization or privatization of state-owned enterprises.

93. The Government is implementing a program of governance reforms supported by a program loan, which was approved in December 1999. The Government is firmly committed to enhancing governance and currently is in the process of adopting resource and performance-based accounting systems and implementing comprehensive public administration reforms largely patterned on the New Zealand model. The program covers the key reform areas of:

1. civil service reforms;
2. privatization;
3. local government reforms; and
4. legal reforms.

94. Further ADB assistance is contemplated in 2003 to enhance governance in the public sector and to adopt a comprehensive public administration reforms program largely patterned on models of best international practice. In the housing sector, technical assistance is proposed to enhance the transparency of restructuring housing finance institutions through support for the creation of a housing development fund. Further technical assistance has been programmed to prepare additional audit legislation and strengthen auditing capacity, and to assist in establishing a central procurement agency.

95. ADB participated in a recent Government/donors meeting to review the World Bank-supported Legal Needs Assessment. Among the conclusions of the Assessment is that legal training requires considerable strengthening. ADB has supported the establishment of a Legal Retraining Center (LRC) and will consider providing follow up technical assistance. The focus of the training offered at the LRC is on Mongolian commercial law and regulations.

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