Regions and Countries

	Table of Contents
p. 14 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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F. Private Sector Operations

98. With equivalent of 60 percent of GDP now in the private sector and a basic market oriented legal and regulatory framework in place, it is appropriate to examine opportunities for private sector operations. The development impact of a number of ADB’s public sector operations is to improve the incentive framework for greater private sector participation in economic activity by enhancing the policy, legal, regulatory, and institutional framework, as well as by redefining the role of Government. Although there have been no private sector operations to date in Mongolia, ADB and the Government are exploring possibilities, and ADB’s Private Sector Group participated in the 1999 country programming mission. It was agreed that ADB's private sector strategy in Mongolia should be to provide assistance to:

1. financial and capital market institutions;
2. infrastructure projects; and
3. industrial, agro-business and other projects including small and medium enterprises and tourism projects.

Subsequent missions have identified project proposals in the financial sector, microfinance, and rural telecoms.

99. The main prospect for ADB’s first private sector operation in Mongolia is to assist with the privatization of the Trade and Development Bank to a strategic partner. This is a key element of the ADB-World Bank policy matrix for the forthcoming Financial Sector Program Loan II. The World Bank has included a floating tranche of $8 million in its credit, which will be released only if the bank is privatized. The next step is for Parliament to remove TDB from the list of “most valuable” companies which may not be privatized.

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