Assisting Mongolia on its Path to Economic Recovery | Asian Development Bank

Assisting Mongolia on its Path to Economic Recovery

Article | 21 November 2018

ADB’s assistance program to Mongolia is focusing on providing support for economic and social stability, connectivity and economic diversification, and tackling climate change, says Yolanda Fernandez Lommen, Country Director of the ADB Mongolia Resident Mission.

Ulaanbaatar, Mongolia - Following a slump in the price of minerals in the mid-2000s, Mongolia is now recovering from economic stagnation thanks to increasing commodity prices and higher foreign direct investment in mining.

Strengthening social protection and diversifying the economy are key to ensure sustainable and inclusive economic growth.

ADB’s assistance program to Mongolia is focusing on providing support for economic and social stability, connectivity and economic diversification, and tackling climate change, says Yolanda Fernandez Lommen, Country Director of the ADB Mongolia Resident Mission.

What is Mongolia's current economic outlook?

Mongolia’s economic outlook looks very promising. ADB is forecasting growth of about 6 per cent for next year and this year as well. This is remarkable because Mongolia was a in a deep economic crisis just a couple of years ago.

Mongolia’s economic outlook looks very promising. ADB is forecasting growth of about 6 per cent for next year and this year as well. This is remarkable because Mongolia was a in a deep economic crisis just a couple of years ago.

Thanks to very good macroeconomic policies implemented by the government and supported by the IMF-led program Mongolia has performed a spectacular recovery and the economy is doing very well.

Prospects are very good relying on peak mining developments. Mongolia has fantastic mines that are a source of growth in this country.

How is ADB assisting Mongolia's development? What are the guiding principles of ADB’s involvement with the country?

ADB a has a very long and standing relationship with the government of Mongolia, as we have been working together for more than 28 years. At present, ADB is the largest development partner of Mongolia.

We have increased our pipeline remarkably in the last 2-3 years. For instance, our current country partnership strategy envisages more than 1.2 billion in new operations, while the ongoing portfolio is 1.3 billion. We are very active: we have many resources and that allows us to be present in almost every sector in the country.

We align our support through three main pillars: the first one is to support economic and social stability in the country; the second one is connectivity and economic diversification; and the third one looks into climate change, which is new area where we are becoming now very active.

Are there cross-cutting themes in ADB’s assistance?

We have two cross-cutting themes that go across the three pillars I just described.

One is gender parity, which has become very prominent now in our country partnership strategy. And the second is public finance reform.

Is ADB supporting Mongolia’s private sector development?

We have also been interacting through the private sector arm. However, compared to sovereign lending, our activity in this area is much smaller. This is a challenge, as this is an area that we want to develop.

Traditionally, we have been active in trade facilitation and some lending to commercial banks to facilitate access to funding for small and medium enterprises.

We are currently looking at identifying new opportunities for ADB to become more present in support of the private sector.

How will ADB assistance to Mongolia evolve in the future?

In general, ADB is very well known for its spectacular client orientation and our work here in Mongolia is no different.

We adjust to the needs of the country. Mongolia is developing very fast, the transformation is quite substantial and so-far we have been flexible and agile adjusting to the new government priorities.

I am happy with some of the new areas that we are exploring now. For instance, gender, climate change impact, and resilience to natural shocks. I feel that, as we continue working together, we will be looking more into these new areas and sectors, and of course innovation is going to be also critical in our future support to the country.