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Dynamic Ulaanbaatar—photographs from 1990s and the present

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Also available in: Mongolian
One regret from my time in Mongolia in the 1990s is that I did not take more pictures. I wasn’t alone in this respect—people generally didn’t carry cameras, and whenever I pulled out my 35mm Nikon I got a lot of stares.  I had to buy and develop film in Beijing and, well, I just didn’t take nearly as many photos as I should have.  Happily, I did take some.

In the spring of 1997 I conducted the research for a study of Mongolia’s informal sector. It was the first such study in the country and there was a blank slate in terms of information.  I was fascinated by how rapidly it had grown, by questions about the size of the sector, by how people working in the informal sector see and organized themselves, by informal entrepreneurship and the spontaneity of markets.

I had as much fun as I have had in my career before or since, poring through statistics, interviewing taxi drivers and shoe shine boys. I interviewed officials on how they decide to provide permission for kiosks to set up shop and how they collaborate with informal (i.e., private, independent) buses. I worked with the NSO and the Ulaanbaatar city statistics department to do a survey to put some numbers with the stories.

End poverty now more than ever, Mongolia

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Also available in: Mongolian

October 17 is End Poverty Day. Every day is a day to end poverty, but it helps to designate one day per year to reflect on this goal and how we can work to achieve it.

In Mongolia, poverty declined from 2010 to 2012, and again from 2012 to 2014. Since poverty rates very closely track overall economic growth, this is not surprising. Growth in labor incomes over the period helped reduce poverty, and this growth, in turn, was generated by increases in real wages in the non-agricultural sector and non-wage income in the  agricultural sector.  Mongolia’s fondness for universal social transfers also contributed: poverty rates fell from 38.8 percent in 2010 to 21.6 percent in 2014, based on the national poverty lines.

That was then, this is now.

Although the 2016 poverty level is not yet available, we can be sure that the economic downturn has not helped. Overall growth of GDP is projected to be only 0.1 percent for 2016, with production in the non-mining sector declining. And Mongolia’s pro-cyclical policies that funded social programs in the boom years now face opposite pressures. Social welfare  programs that are categorically targeted and pro-cyclically funded are more difficult to scale up when times become difficult.

With a large and unsustainable budget deficit (projected to reach 18 percent of GDP for 2016), and with growing levels of debt, Mongolia has little choice but to focus on fiscal  consolidation. Can they do so without hurting the most vulnerable people in society?

What’s in a category?

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Also available in: Mongolian



One year ago, Mongolia was designated an Upper Middle Income Country (UMIC) when the country’s GNI per capita crossed the threshold between lower and upper middle income countries.  Some Mongolians celebrated, seeing the designation as a reflection of how far the country had come since recovering from a prolonged slump in the 1990s.  Others wondered what it means for the availability of concessional financing in the future.  And others just wondered if it was accurate.  While Mongolia’s progress is unmistakable, we also know that 22% of the population lives below the national poverty line of roughly $2.70 per day—what does it mean to be an “upper middle income country” in the face of such a statistic?

Last week, Mongolia was re-designated a Lower Middle Income Country (LMIC).  How is this possible and what does it mean?

2015: The 25th year of Mongolia’s partnership with the World Bank

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Also available in: Mongolian
This is the final entry in our series on the 25 years since Mongolia joined the World Bank. (To read the series from the beginning, click here for the 1991 post.) Befitting the 25th year of the partnership, the year 2015 was a year focused on knowledge.

The latest estimates of poverty in Mongolia showed both progress and reason for concern. The National Statistical Office (NSO) and the World Bank have worked together on the methodology for estimating poverty since at least 2002. The estimates showed that the poverty rate declined from 27.4 percent in 2012 to 21.6 percent in 2014, continuing the trend of 2010-2012. The estimates also showed, however, that many people are near the poverty line and remain vulnerable as the economy softens. 

2014: Toward more efficient financing for healthcare, agriculture, and Ulaanbaatar city

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Also available in: Mongolian
Continuing our series on the 25 years since Mongolia joined the World Bank, today we look at 2014. 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. To this end, a pair of studies in 2014 aimed at preparing a debt management approach for Ulaanbaatar and a financial self-assessment for the city. The former stressed “the need to first build local institutional capacity for an effective and transparent debt management system before any borrowing is considered. … UB should use this time to put in place a debt management system so that it is prepared for borrowing once it is ready and the macroeconomic conditions improve.” The latter study examined what it would take for Ulaanbaatar to improve its credit quality and thereby prepare for an official rating from a credit rating agency. The recommendations centered on improving the city’s financial reporting system, strengthening its capital investment planning process, improving its capital asset registry, strengthening the oversight of municipal-owned enterprises and their debts, and identifying Ulaanbaatar’s contingent liabilities, both explicit and implicit.

2013: The challenge of public finance during a mining boom

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Also available in: Mongolian
Continuing our series celebrating the 25 years that Mongolia has been a member of the World Bank, today we look at 2013.  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.  In a blog summarizing the study, one co-author was blunt:  “Financed by the mining boom, government spending on new infrastructure in Mongolia has increased 35-fold in the past 10 years. But you would not know this from driving the pot holed streets of Ulaanbaatar or inhaling the smog filled air of the city, particularly in the ger areas. … [The study] examines why this increased spending is not resulting in equivalent benefits for the citizens of Mongolia in terms of better roads, efficient and clean heating, and improved water and sanitation services.” The study pointed to poor project planning and implementation, and suggested ways to improve.

2011: Galloping

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Also available in: Mongolian
In our review of the 25 years since Mongolia joined the World Bank, 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.  A 45 second animation showing FDI and GDP for extractives exporting countries makes clear how remarkable Mongolia’s second, synchronous, wave of FDI really was.
 
FDI and GDP growth over time
FDI and GDP growth for six extractives exporting countries from 1990 to 2013 as animated by the World Bank’s Macrostats app.

2009: Responding to the global financial crisis; estimating the costs of air pollution

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Also available in: Mongolian

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.
 

2007: Sunshine works: Solar gers and transparency

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Also available in: Mongolian

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.) 

2006: Bringing libraries to every classroom, and mobile telephones and internet to every town, in rural Mongolia

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Also available in: Mongolian

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.

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