The proposed COVID-19 Pandemic Response Option (CPRO) will, in the short-term, help the government mitigate the negative economic impact and the significant decrease in trade and capital flows caused by the COVID-19 pandemic, alongside falling commodity price trends. The government's ongoing initiatives include a Coronavirus Pandemic Response Plan designed to contain the spread of the disease while strengthening the health system, and a significant increase in expenditure with an important rise in transfer payments that will ease the burden on vulnerable people.
|Project Name||COVID-19 Rapid Response Program|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
|Sector / Subsector||
Health / Health system development
Public sector management / Public expenditure and fiscal management - Social protection initiatives
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Description||The proposed COVID-19 Pandemic Response Option (CPRO) will, in the short-term, help the government mitigate the negative economic impact and the significant decrease in trade and capital flows caused by the COVID-19 pandemic, alongside falling commodity price trends. The government's ongoing initiatives include a Coronavirus Pandemic Response Plan designed to contain the spread of the disease while strengthening the health system, and a significant increase in expenditure with an important rise in transfer payments that will ease the burden on vulnerable people.|
|Project Rationale and Linkage to Country/Regional Strategy||
Since 2017, Mongolia has been recovering from a difficult economic period. Economic growth decelerated from a peak of 17.3% in 2011 to 1.2% in 2016, as net FDI inflows totally collapsed from $4.5 billion to negative $4.2 billion, coal exports decreased by 57.2%, terms of trade deteriorated significantly due to external shocks, and large mining projects were delayed. These factors pushed public debt to 109.1% of GDP in 2016, with a fiscal deficit of 15.3% in the same year. As a result, in May 2017, the International Monetary Fund (IMF) approved a 3-year Extended Fund Facility (EFF) of $5.5 billion, which was also supported by other development partners, including the World Bank and ADB. Economic performance over 2017-2019 was relatively robust, with growth recovering 5.3% in 2017, rising to 7.2% in 2018 and moderating at 5.1% in 2019.
Before the COVID-19 pandemic, this recovery was already moderating. The slowdown in economic activity became apparent in the second half of 2019 as fourth quarter growth dipped to 2.2%, making it the slowest quarter since the third quarter of 2016. This was driven by falling commodity prices directly impacting Mongolia's export prices, declining production in the mining sector and reduced economic activity in the PRC. The combined result was a downward adjustment in mining sector production and exports, and their transmission to non-mining sectors. As of February 2020, Mongolia's export price index decreased by 8.7% month on month and by 7.0% on year over year basis.
Mongolia will experience a severe economic slowdown due to the COVID-19 pandemic. The current turmoil in the global economy, capital markets and commodity markets due to COVID-19 pandemic, has weakened the global, regional and country-specific outlook. Consequently, GDP growth in Mongolia will be much lower in 2020 than envisioned ADB has revised the 2020 forecast down from 6.1% to 2.1%. A protracted global economic crisis due to the COVID-19 pandemic would further worsen this outlook considerably and may require support beyond the scope of this intervention.
|Impact||Adverse effects of the COVID-19 pandemic on the economy are mitigated and poverty is alleviated.|
|Description of Outcome||Negative health and economic effects of the COVID-19 crisis on vulnerable groups mitigated.|
|Progress Toward Outcome|
|Description of Project Outputs||
Measures and increased fund allocation for social protection programs for the most vulnerable groups implemented
Measures to safeguard productive sectors and MSMEs from the downturn implemented
Measures to strengthen infection prevention and control established
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Responsible ADB Officer||Van Rijn, Johannes Jacobus Frederik|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||Public Mgt, Financial Sector and Regional Coop Division, EARD|
Ministry of Finance (formerly Ministry of Finance and Economy)
S.Danzangiin Gudamj 5/1, Zasgiin Gazriin
II Bair, Ulaanbaatar 15160 Mongolia
|Fact Finding||02 Apr 2020 to 02 Apr 2020|
|MRM||16 Apr 2020|
|Approval||12 May 2020|
|Last Review Mission||-|
|Last PDS Update||13 May 2020|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||100.00||Cumulative Contract Awards|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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|Title||Document Type||Document Date|
|Loan Agreement (Ordinary Operations) for Loan 3922-MON: COVID-19 Rapid Response Program||Loan Agreement (Ordinary Resources)||May 2020|
|COVID-19 Rapid Response Program: Report and Recommendation of the President||Reports and Recommendations of the President||May 2020|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
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ADB Provides $100 Million to Support Mongolia's COVID-19 ResponseADB has approved a $100 million loan to the Government of Mongolia to mitigate the severe health and economic impacts of the novel coronavirus disease (COVID-19) pandemic.
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