News and Events

News Release

Email this   printer friendly format

ADB, Mongolia Sign Poverty Partnership Agreement

The Asian Development Bank and the Government of Mongolia today signed a Partnership Agreement with the aim of reducing by at least half the proportion of the country's poor by 2005. Prime Minister Rinchinnyamiin Amarjargal signed the Agreement on behalf of the Government of Mongolia, while Mr. Geert van der Linden, Director, Programs Department (East), signed for ADB.

The Partnership agreement follows the adoption in November last year by ADB of its Poverty Reduction Strategy, which makes the fight against poverty ADB's overarching objective.

Thirty six percent of Mongolia's 2.5 million people live below the poverty line. Poverty is the result of the shocks of 1991 following the break-up of the former Soviet Union in 1991. These include the loss of capital inflows and trading arrangements; transition to a market economy; economic contraction and hyperinflation (1990-1993); the loss of financing for social services and the weakening of the social safety net.

The situation has now stabilized. The Government has also managed to maintain very good standards of health and education for the Mongolian population. Nevertheless, growth in the economy has not reduced the level of poverty, which is mainly the result of lack of employment and income opportunities. It was against this background that ADB, in close cooperation with the Government, developed a new Country Operational Strategy for Mongolia, which places poverty reduction at the center of ADB's operations. Under the strategy, ADB will support areas that have the potential to contribute the most to poverty reduction. The Government, on its part, will seek to focus donor-assisted and domestic investment projects on poverty reduction.

ADB President Tadao Chino says: "The Asian Development Bank considers poverty to be an unacceptable human condition. I am pleased to see that the Government of Mongolia and the ADB share the strong commitment to fight poverty. We will work together to achieve this objective. It is our sincere hope that, together, we will make a sharp difference in the quality of life of the poor in Mongolia."

The Country Operational Strategy was developed through a process of extensive consultation among key stakeholders including the Mongolian Parliament, civil society, the private sector, and other donors. The Strategy has been endorsed by the Mongolian Cabinet and ADB's Board of Directors. The strategy identifies five core sectors for ADB assistance—finance, agriculture, the public sector, the social sector and urban development. They were chosen in the strategy because of their potential to reduce poverty:

Financial Sector, which has the potential to remove the single most important barrier to private sector investment and savings—the fragile and thin banking system—and to develop microfinance.

Agriculture Sector, which has the potential to generate employment and income.

Public Sector, which has the potential to reorient the Government to become more supportive of private-sector-led growth and to improve service delivery by delegating responsibilities to lower levels of the Government.

Social Sector: Education, health, and social protection have the potential to empower the labor force, maintain standards of health and education, and make health and education services more widely available.

Urban Development Sector, which has the potential to support health improvement and enhance living conditions.

The Partnership Agreement sets targets for poverty reduction and establishes mechanisms to monitor the progress made. In addition to halving the proportion of people living below the poverty, the Agreement aims at achieving universal primary education and halving the mortality rates for infants and children under five years, all by 2005. Universal access to family planning services is targeted for achievement by 2015.

ADB plans to help the Government achieve these targets with resources from its concessionary lending window, the Asian Development Fund. Lending is expected to be about $40 million per year. In addition, ADB will provide technical assistance grants of about $4 million per year to prepare projects, and assist in capacity building and policy development. Continued monitoring and analysis of the poverty situation will be a key component of the ADB's assistance.

Natural disasters are often a cause of families falling into poverty. The ADB has monitored the reports of the very severe winter conditions in Mongolia this year, and has held discussions with the Government on possible assistance.

The Government of Mongolia has shown decisive action in beginning a comprehensive fight against poverty, and ADB wishes to remain as a dedicated partner for the Government in this fight. Other multilateral and bilateral assistance agencies have also joined in this fight against poverty.

Contacts