Countries and Regions

	Table of Contents
p. 16 of 20 BACK | NEXT I. Country Performance 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

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V. Donor Activities and Aid Coordination

101. Access to concessional external resources is essential for economic recovery and sustained growth in Mongolia. With a large fiscal deficit and the need to build up adequate foreign exchange reserves, substantial net capital inflows are required. While foreign direct investment (FDI) will meet some of these needs, the amount of FDI is expected to be modest and concentrated in a few sectors (e.g., minerals). The IMF, ADB and the World Bank have worked closely together to support the Government’s macroeconomic stabilization and reform program since 1991. Concessional assistance from the donor community will continue to be critical. At the Assistance Group Meeting in June 1999, about $320 million in external assistance was pledged for the next 18 months (July 1999 – December 2000) with Japan ($115 million), ADB ($76 million) and the World Bank ($52 million) as the three largest donors.

102. ADB has taken a lead role in several key sectors (education, health, finance, roads, telecommunications, power, air navigation, and housing). Among its activities, ADB has financed preparation of several sector master plans that provide frameworks within which to coordinate donor assistance. ADB has provided assistance to strengthen the Government’s capability to prioritize and coordinate projects proposed for external assistance. The World Bank has provided assistance to the transport, coal and mining sectors, poverty alleviation, privatization, and state-owned enterprise reform. Japan, the largest bilateral donor, has financed critical imports and provided assistance for the rehabilitation of the power plants, railways, urban transportation, and water supply sectors and has provided assistance for health equipment, human development, and environmental issues. The UNDP and other UN agencies are playing an important role in the areas of health and population, poverty alleviation, and human development and management capacities. UNDP is also active in facilitating local donor coordination.

103. Six meetings of the Mongolia Assistance Group (MAG) were held in Tokyo up to 1997. At the seventh meeting, held in Mongolia in June 1999, it was agreed that the meetings would be restructured as Consultative Group Meetings, with the World Bank as the Chair. The meetings are an important mechanism for aid coordination among donors. At the most recent MAG, it was agreed that thematic groups will be established to cover the key areas of governance, financial sector, and the social sectors, including poverty. The groups will include representatives from Government, civil society, the private sector and donors. Donors could participate in the groups on a voluntary basis. ADB is playing the lead facilitating role for the thematic group on governance.

104. Regular meetings are held in Ulaanbaatar to coordinate work the respect poverty reduction strategies of the ADB, World Bank and IMF. This has been particularly important during the development of the Partnership Agreement and the IMF/World Bank Poverty Reduction Strategy Paper.

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