East Asia and Pacific
Continuing our series celebrating the 25 years since Mongolia became a member of the World Bank, today we look at 2009. 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.
Did you know that low-income Mongolians are better at managing daily finances than higher income earners, although those with better incomes are more likely to make provisions for the future?
These were the findings of a comprehensive demand-side assessment on financial capability in Mongolia which the World Bank Group carried out in 2013.
These findings make sense. Poor people – those with low and irregular incomes – devote a lot of time to thinking about how to stretch their money to put food on the table while being able to cover other daily spending needs. They tend to have surprisingly sophisticated financial lives despite having limited income, the Portfolios of the Poor found.
Continuing with our series looking at the 25 year partnership between Mongolia and the World Bank, today we look at 2008, a year that 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. While Mongolia is rightfully praised for its peaceful transition from one regime to another in 1990, this incident of 2008 will be remembered as the darkest time in the 25 years of democracy.
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. The World Bank’s Country Director, David Dollar, also celebrated this historic occasion, noting that “The event was important enough to get rival political parties to shake hands and share the pride.”
Last week, I had the opportunity to attend the Singapore Urban Week along with other colleagues from the World Bank Beijing office, as well as delegates from China’s national government and participating cities. For all of us, this trip to Singapore was an eye-opening experience that highlighted the essential role of integrated urban planning in building sustainable cities, and provided practical solutions that can be readily adapted to help achieve each city’s own development vision. A couple of key lessons learned:
Putting people at the center of development strategies
This is only possible when planners always keep in mind people’s daily experience of urban space and invite them as part of decision-making process through citizen engagement.
For instance, in many cities, public transit has been perceived as a low-end, unattractive option of travel, causing ridership to stagnate despite severe traffic congestion. But in Singapore, public transit accounts for 2/3 of the total travel modal share in 2014. Moving around the city by metro is comfortable and efficient because transfers between different modes and lines are easy, with clear signage of directions, air-conditioned connecting corridors, and considerate spatial designs and facilities for the elderly and physically-challenged users. In addition, metro stations are co-located with major retail and commercial activities and other urban amenities, significantly reducing last-mile connectivity issues.
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 previous year saw several iconic projects approved, and 2007, the next year in our 25 years in 25 days reflection, did likewise. The Renewable Energy for Rural Access Project (REAP) became effective in 2007 and was ultimately expanded. The project 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? Connecting them to the grid was not a solution both because distances are vast and because nomadic people move around. The modern solution was to give the herders access to solar power through a program launched by the Mongolian Government supported by the World Bank and the Government of the Netherlands. “Thanks to the National 100,000 Solar Ger Electrification Program, over half a million men, women and children, covering half the rural population of Mongolia and 70 percent of herders, now have access to modern electricity.” For these 100,000 herder families, the off-grid solar home systems generate enough power for lights, televisions, radios, mobile phone charging and small appliances. (Video here.)
In post decentralization Indonesia, the responsibility to deliver services falls largely at the hands of the local government. So, too, does the management of public money. Local governments currently manage about half of Indonesia’s public finances. Transfers to the regions increased by more than threefold in real terms since the onset of decentralization.
However, with few improvements in health and education indicators, the results of these increased transfers are not encouraging.
Today we look at 2006, the 16th year of the 25 year partnership between Mongolia and the World Bank. 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, starting with one in rural education.
An institutional and governance review of budget expenditure for education found that the pupil-per-teacher ratio is higher in urban schools. Among other findings, the Public Expenditure Tracking Survey (PETS), on which the report was based, illustrated that students in rural schools obtained significantly lower test scores than those from urban schools, consistent with “a pattern where the more disadvantaged — and therefore lower-performing students — systematically fail to advance their schooling and drop out at a younger age in the rural areas.” The need to provide rural children better education opportunities, which had been a theme for years, had further evidence.
Unify our response, build the ‘New Deal,’ inform wider policy
Like never before, a powerful global consensus is emerging that
This recognition is the foundation for our collective work on fragility and for our collective hopes for Goal 16 of the new Global Goals, in which UN member states pledged to focus on creating peaceful, inclusive societies with access to justice and accountable institutions at every level.
Together, we see that fragility—in which governance is weak or ineffective, or is seen by local citizens as illegitimate—is a key driver of the crises that strain our current international systems. In particular, we see that an arc of fragile states and regions, stretching across much of northern and sub-Saharan Africa, the Middle East and into Asia, has ignited civil wars, fueled virulent new forms of violent extremism and triggered historic levels of human displacement due to conflict.
Our common understanding is why the U.S. Institute of Peace (USIP) was an enthusiastic partner with the World Bank at the just-concluded Global Fragility Forum 2016. , in terms of humanitarian suffering, reversal of development and global security concerns. The World Bank mission to reduce global poverty and the United States Institute of Peace mission to end violent conflict have never been more intertwined.
My great hope is that this year’s Fragility Forum marks a true sea change in three fundamental ways for policy makers, academics and practitioners.
In our one-year-at-a-time celebration of the 25 year partnership between Mongolia and the World Bank, today we look at 2005. Growth remained a robust 7.3% and industry, which includes mining, continued to produce a larger proportion of Mongolia’s GDP.