I have been busy with my professional blog for a few months and this explains my absence on this, my unprofessional, blog. Mongolia joined the World Bank in 1991 and our team set out to write a series of posts for each year. A few colleagues helped, and they are identified. You can find all of the posts here, or take a look at the teasers below and go straight to the year of interest.
Mongolia and the World Bank — 25 Years on the Path Toward Prosperity
It was 25 years ago, as the global order changed with the sweeping transitions from plans to markets, that Mongolia joined the World Bank. Within a decade, it was a member of all five institutions that make up the World Bank Group. Mongolia’s decision to join the international financial institutions came as old political blocs and economic alliances were crumbling, and a new epoch of globalization was just beginning. For Mongolia, the loss of Soviet aid and the imminent collapse of old trading arrangements led to economic and human hardship. Joining the World Bank meant expanding the range of partners and integrating with the rest of the world. Read more…
1991: Live-blogging Mongolia’s 25 year partnership with the World Bank, one year each day
The Articles of Agreement were signed on February 14, 1991 on the eve of the Mongolian lunar new year, Tsagaan Sar. Mongolia greeted the year of the female iron sheep as the 155th member of the World Bank. Mongolia’s first Country Economic Memorandum wrestled with the immediate macroeconomic challenges of runaway inflation and falling output. The official exchange rate was 40 MNT per US$. Price reform was among the most crucial elements of a reform program aimed at stabilizing the economy. While noting economic risks, the report also noted that “Mongolia’s medium-term development prospects include its well educated labor force, abundant agricultural and natural resources and the basic resilience of the rural economy.” By the end of the year, Mongolia’s first World Bank credits had been signed. Read more…
1992: On the magnitude of Mongolia’s challenges and the speed of reforms
The political and economic changes envisioned by early reformers became lasting institutions with the adoption of a new Constitution and elections to the new State Great Khural later that year. The reforms were well underway, but the economic difficulties deepened with GDP falling a further 9.3% during the year. Mongolia faced the challenge of reforming its institutions and dealing with a very sharp economic decline at the same time. The World Bank, for its part, sought to help keep things running and to contribute ideas on the way forward. Implementation proceeded on the projects approved the year before, delivering spare parts, needed supplies, equipment, technical assistance, and yet more spare parts. Read more…
1993: Attention turns to Mongolia’s nascent private sector
With GDP having fallen 20% since the transition began, and with an ambitious mass privatization scheme underway, Mongolia was ready for the economy to turn around. But the rebound would not come just yet. GDP fell another 3.2% in real terms, and consumer price inflation, which had only just become measurable in a robust way, checked in at 268% in 1993. A new Economic Transition Support Credit was passed to finance the critical imports of equipment, spare parts, and other essential inputs. Keeping machinery working was still a priority. While much of the earlier reform program focused on privatization of the state-dominated enterprise sector, by 1993 attention was beginning to shift to the nascent private sector. Read more about 1993, the year I first moved to Mongolia…
1994: Assessing the real costs of the economic contraction
At last the economic collapse of the early 1990s bottomed out and growth resumed. The economic hardship of the first years of transition, however, had taken its toll. A study on financing of education found that “Between 1990 and 1992, government expenditures and education expenditures were cut by 57.6 percent and 56.0 percent, respectively. The decline in public spending was more than three times as much as the decline in GDP. In 1993, the allocation to education was reduced to 15.2 percent of the state budget, and to 3.8 percent of GDP.” Read more…
1995: Helping implement Mongolia’s Poverty Alleviation Program
Growth picked up to 6.4% in 1995, but it was a short-lived acceleration—it would be another eight years before Mongolia reached that level of growth again. The World Bank/IDA’s first ever Country Assistance Strategy (CAS) for Mongolia noted that, as painful as the first half of the 1990s had been for Mongolia, it was not as bad as in the countries of the former Soviet Union. Only the Baltic countries had growth resume by 1994. Read more…
1996: Taking stock of the profile of the poor, and the state of state enterprises
In 1996, Mongolia’s GDP growth declined to 2.2% in real terms and consumer price inflation jumped back up to nearly 47%. The previous year had seen the launch of a project on Poverty Alleviation for Vulnerable Groups, a project which called for a deeper understanding of poverty in Mongolia. In 1996, Mongolia – Poverty Assessment in a Transition Economy was released. This was the first poverty assessment for Mongolia to be based primarily on the Living Standard Measurement Survey (LSMS). Read more…
1997: Stabilization at the heart of policy choices (By Badamchimeg Dondog)
Before digging into what the economic and social situation of the country looked like back then and what our Bank colleagues accomplished in Mongolia during the year, I want to quickly reflect on my own life back in the year. The year of 1997 happened to be a turning point in my life as it was the year when my family moved from the far western aimag of Khovd to the capital city Ulaanbaatar after having lived in the aimag center for well over a decade. The things I remember truly well from the time are, firstly, we did not have power in Khovd, so we had to study in candlelight and cook on gas stoves imported from China or using firewood inside our apartment. Read more about 1997 from the perspective of a Mongolian colleague…
1998: Mongolia’s financial, formal, and informal sectors
It was another year of modest growth, with agriculture and services making up for the continued decline of the industrial sector which had fallen from 43% of GDP in 1990 to only 25% by 1998. The financial sector was recovering from a crisis the previous year. For the year 1998, consumer price inflation stood at 9.4%. A detailed study of Mongolia’s financial system took stock of the institutional reforms of the early 1990s and the culmination in a banking crisis in 1996. Read more about 1998 the year I published the first study of Mongolia’s informal sector…
1999: Financing and investing in the world’s most sparsely populated country
Mongolia’s economy grew by just over 3%, and inflation checked in at the relatively modest rate of 7.6%. In 1991, under the old regime, the official exchange rate was 7 togrogs per US$. As the end of the decade approached, the exchange rate on the Mongolian togrog passed 1,000 per US$. Protests against globalization erupted in Seattle, while firms in Mongolia were looking for ways to enter the global markets. A new transport strategy focused squarely on Mongolia’s oft-cited geographical disadvantages. Read more…
2000: Restocking after the Dzud
The winter of 1999-2000 brought a terrible dzud—a Mongolian term for a particularly harsh winter causing major losses of livestock. According to a UNDP-GOM report, it was the worst dzud in 50 years for five of Mongolia’s aimags. The late snowfall affected over 70 percent of the total territory of Mongolia and when fully counted by June 1, 2000, nearly 2.4 million heads of livestock were lost. Partially as a result of this calamity, GDP growth fell to just 1.1% and agriculture’s share of GDP fell by 4 percentage points. Read more…
2001: Participatory learning about poverty
Following a devastating winter the year before, Mongolia would experience another dzud in the winter of 2001-2002, with further loss of animals and livelihoods for many. It was increasingly clear that restocking after the disasters, while needed, was not sufficient. The World Bank began preparation of a project focusing squarely on sustainable livelihoods for those in rural areas. The Sustainable Livelihoods Project would be approved the next year and remain a core part of the World Bank’s partnership with Mongolia to the present. Read more…
2002: Toward sustainable livelihoods
After back-to-back dzud’s (winter disasters), and to address the increasingly visible problem of rural poverty, the Sustainable Livelihoods Project (SLP) was approved in 2002. The rationale drew on a joint Government-donor evaluation of National Poverty Alleviation Program (NPAP) which concluded that “NPAP had provided valuable support to local governments for the rehabilitation of social and economic infrastructure, but the direct income-generation support to poor households was much smaller than ought to have been realized, and benefited perhaps not more than 20% of poor households. Achievements in reducing rural poverty were particularly limited.” With livelihoods on the steppe so fragile, what could be done? Read more…
2003: Understanding the environment, and strengthening public financial management
GDP grew 7.0% that year, the highest growth rate since the transition began. Nevertheless, agricultural production was still well below its historical levels: agriculture’s share of GDP had fallen from 35% in 1998-1999, prior to the dzud, to only 21% in 2003. After several years of difficult winters, the World Bank program had begun to focus more on rural livelihoods. Read more…
Today we examine 2004, the year Mongolia’s growth rate accelerated to 10.4%. After 15 years, real GDP per capita had finally passed the level of 1989. The country was in the midst of a mining boom, and that sector took center stage in 2004. Mongolia Mining Sector: Managing the Future assessed the “medium-term growth potential of Mongolia’s non-fuel minerals industry, and its potential contribution to economic growth, poverty reduction, and regional development.” Read more…
2005: Broadening support for the environment (and dinosaurs)
Growth remained a robust 7.3% and industry, which includes mining, continued to produce a larger proportion of Mongolia’s GDP. The need to strengthen the environment and natural resources agenda in Mongolia was becoming more visible, and help advancing this agenda came from a 2005 grant, managed by the World Bank, from the Netherlands to the Government of Mongolia. Read more…
The economy continued to grow, checking in at 8.6% for the year, as did industry’s share of GDP which peaked that year at 43%. The year 2006 was a banner year for the World Bank’s program in Mongolia, with several iconic projects approved that year, including one in rural education and another bringing ICT to rural areas. Read more…
2007: Sunshine works: Solar gers and transparency
In 2007, Mongolia’s economy grew at a double digit pace with modest inflation. The slump of the 1990s must have seemed a distant memory in the last full year before the elections in 2008. The Renewable Energy for Rural Access Project (REAP) brought a modern solution to a century old problem: how can the benefits of electricity be harnessed to benefit the quarter of Mongolia’s people who are nomadic herders living in gers? Read more…
2008: Defining common goals through deliberation (By Erdene-Ochir Badarch)
The year 2008 will be remembered by many Mongolians for events both high and low. The low point was the riot that followed parliamentary elections on 1st July, 2008. Five innocent lives were lost and Ulaanbaatar city was under a state emergency for two days and three nights. The high of 2008 occurred after this riot when Mr. Tuvshinbayr Naidan brought home Mongolia’s 1st ever gold medal from the Beijing summer Olympics. I will never forget the sight of people waving our national flag, gathering in the Central Square and cheering with exhilaration. Read more about 2008 from the perspective of a Mongolian colleague …
2009: Responding to the global financial crisis; estimating the costs of air pollution
The global financial crisis that began in the US the previous year hit Mongolia hard in late 2008 and through 2009, as commodity prices collapsed and economic growth turned negative for the first time since 1993. The World Bank switched from a quarterly to a monthly format for its economic updates to stay abreast of the rapidly deteriorating situation—the April 2009 edition illustrated how sharply the commodities markets had reversed in only one year. Read more…
2010: Continued support in the midst of snow and smoke (By Badamchimeg Dondog)
My very first thought of 2010 brings me back to sunny and hot Brisbane, Australia where I studied at the time for a graduate degree. In early January that year, after completing my first year of studies, I decided to come home for a quick visit just in time for the Lunar New Year celebrations. As I stood at the Brisbane International Airport, still in a light T-shirt, I did not realize how much I was underestimating the warnings my parents had given me, repeatedly, regarding the snow and smoke situation back home. Coming from the heat and humidity down under, when I landed in UB I experienced a 60 degree Celsius temperature difference as that winter was exceptionally cold with heavy snow and sharp temperature drops (below minus 40 degrees Celsius) in most parts of the country. Read more about 2010 from the perspective of a Mongolian colleague …
The year 2011 stands out as a year of recovery, and that is an understatement. By the beginning of 2011 the economy had stabilized and our economists returned to a quarterly format for publication of the economic updates. The January Economic Update noted the strengthening of the economy: For the year as a whole, real GDP grew 17.5 percent, the fastest rate for any country in the world. And while many mineral exporters were riding the wave of high commodity prices, few matched Mongolia’s investment boom, with FDI more than quadrupling in only a few years. By year’s end, exuberance about the rapid growth was joined by concerns. Read more about 2011 and watch an animation of Mongolia’s extraordinary FDI boom…
2012: Scaling up Mongolia (By Coralie Gevers)
This year stands out for several reasons. Starting with politics: 2012 was an electoral year that produced its fair share of surprises. The main issue at stake was for Mongolians to decide if and how they wanted to use the country’s mining wealth for its development. Politicians appealed to Mongolians’ love for their country, its nature, its grand history, and its fighting spirit. While Oyu Tolgoi and Tavan Tolgoi monopolized the headlines, the issue was much deeper: what does it mean to be Mongolian in today’s globalizing world? Read more about 2012 from the perspective of the World Bank’s Country Manager at the time …
2013: The challenge of public finance during a mining boom
Foreign direct investment (FDI) fell below 20% of GDP, down from the heights around 50% of GDP a few years earlier. Growth, however, was still in double-digit territory and inflation was in single digits. With the boom well underway, a report examined how to meet the challenge of scaling up infrastructure. Read more…
2014: Toward more efficient financing for healthcare, agriculture, and Ulaanbaatar city
Growth was 7.8 percent, but inflation was in double-digits and FDI continued to fall. The World Bank’s economic updates continued to warn of persistent macroeconomic imbalances, and sector studies focused on financing. The rapid growth rates of the previous years, combined with the bent for decentralization, led to a natural desire to explore new possibilities for subnational finance. Read more about 2014, the year I returned to Mongolia…
And finally,
2015: The 25th year of Mongolia’s partnership with the World Bank
This is the final entry in our series on the 25 years since Mongolia joined the World Bank. Befitting the 25th year of the partnership, the year 2015 was a year focused on knowledge, with studies on poverty, social welfare transfers, labor markets, and land management in Ulaanbaatar, among others.
This blog series sought to highlight some of the World Bank’s projects, studies, and events over those 25 years—we surely missed many things, but we hope the big picture captures the essence of the partnership. What is that big picture? After reviewing the 25 year partnership, what have we learned? Read more about 2015 and a summary of the 25 year series.
jimnosredna: jim anderson backwards, sort of. 