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February 2016

1995: Helping implement Mongolia’s Poverty Alleviation Program

Jim Anderson's picture
Also available in: Mongolian
Photo courtesy of WB Group Archives
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.  The CAS attributed Mongolia’s turnaround to five factors: strong monetary, fiscal and exchange rate policies to achieve macroeconomic stabilization; an early privatization program which opened the door for a private sector supply response; prompt and continued assistance of the international community; political stability and progress on institutional reforms, including the adoption of several new laws to support the new market-oriented economy; and government commitment: “When controversial decisions need to be taken, reform-oriented views have prevailed within the Cabinet and Parliament. The Government, and society at large, are aware that a return to the past is impossible and emphasize that a market-oriented economy based on democratic principles is central to their development philosophy.”

1994: Assessing the real costs of the economic contraction

Jim Anderson's picture
Also available in: Mongolian
Today we look at 1994.  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.”

Enrolments fell generally, but herders' children who attended boarding schools were affected more severely than other children. “Enrollment of boarders in 1992 was only half of that in 1989. In sum, those who bear the brunt of structural adjustment are rural children.”  The challenge of educating herders’ children remains to this day a part of the World Bank program in Mongolia.

1993: Attention turns to Mongolia’s nascent private sector

Jim Anderson's picture
Also available in: Mongolian
Continuing with our reflections on the 25 year partnership between Mongolia and the World Bank, today we look at 1993.  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 needed for the coal and copper mines; essential imports for Mongolian Railways; and to provide resources for the import of lubricants and the replacement of old, inefficient gasoline pumps for the Mongolian Petroleum Import Concern. Keeping machinery working was still a priority.

1992: On the magnitude of Mongolia’s challenges and the speed of reforms

Jim Anderson's picture
Also available in: Mongolian
Continuing with our reflections on the 25 year partnership between Mongolia and the World Bank, today we look at 1992.  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.

1991: Live-blogging Mongolia’s 25 year partnership with the World Bank, one year each day

Jim Anderson's picture
Also available in: Mongolian
Photo courtesy of The World Bank Group Archives

As part of our series of 25 years in 25 days, we start with 1991, the year Mongolia joined the World Bank, IFC, and IDA.  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 was titled “Toward a Market Economy”, and it 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.”

How to scale up financial inclusion in ASEAN countries

José de Luna-Martínez's picture
MYR busy market

Globally, around 2 billion people do not use formal financial services. In Southeast Asia, there are 264 million adults who are still “unbanked”; many of them save their money under the mattress and borrow from so-called “loan sharks”, paying exorbitant interest rates on a daily or weekly basis. Recognizing the importance of financial inclusion for economic development, the leaders of the Association of South East Asian Nations (ASEAN) have made this one of their top priorities for the next five years.
Last week, the World Bank Group presented the latest data on financial inclusion in ASEAN to senior representatives of the ministries of finance and central banks of all 10 ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam). The session, held in Kuala Lumpur, is one of the joint activities the new World Bank Research and Knowledge Hub and Malaysia is undertaking to support financial inclusion around the world.

Malaysia’s long race to competitiveness

Laura Altinger's picture
Have you ever felt like you are in a race and each time you pass another competitor, more keep showing up ahead on the race track in an endless marathon? Well, countries striving to be competitive face a similar predicament. No matter how hard they try to improve their competitiveness, cut the red tape and reduce burdensome regulations, other countries are doing the same, but even quicker.

Malaysia is already a very competitive country. Today it ranks 18 out of 189 economies in the World Bank Group’s Doing Business Index. Yet, its ambition is to become more competitive. And it wants to overtake some countries on the way up. Malaysia has long recognized that a concerted cross-ministerial and public-private collaboration is needed to do just that.

Malaysia’s Special Task Force to Facilitate Business (PEMUDAH), was established in 2007 to improve the ease of doing business in Malaysia. Testament to its success was Malaysia’s surge to 6th position in the 2014 Doing Business, up from 12th place in 2013 and 18th in 2012, placing it in the same league as Singapore, Hong Kong, and the United States. But since then, Malaysia has been challenged to keep up with the rapid pace of business reforms across the globe.