Continuing our series of blogs looking at the 25 year partnership between Mongolia and the World Bank, 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.” The study, based on field work undertaken in 2003, took a broad approach, examining potential constraints and investor perceptions, and then recommended options to improve industry management and the investment climate. Recommendations urged mining companies to support social programs that benefit the surrounding communities, and the government to establish and maintain adequate infrastructure to meet the mining sector’s growth. “The government should address the challenges associated with mining for growth, namely, preventing the development of unsustainable fiscal policy and mounting debt; avoiding rent-seeking behavior, and, overcoming absorptive capacity constraints and adverse impacts on non-mineral exports.”