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2012: Scaling up Mongolia

Coralie Gevers's picture
Also available in: Mongolian
In the 25 years since Mongolia joined the World Bank, 2012 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?
 
For an outside observer like me—I was in my second year as the World Bank’s Country Manager for Mongolia at the time—it was fantastic to see democracy at work: the spirit of 1990 that I had read about and seen in pictures at the National Museum was still alive! The more experienced observers were puzzled: many Mongolians told me that for the first time since 1990, they were unable to forecast the outcome of those elections. A few did predict the outcome, of course: the Democratic Party won the largest share of seats and opted to form a coalition with the MPRP and the Civil Will-Green Party.
 
At the World Bank, we also had a leadership change: Mr. Jim Yong Kim, until then President of Dartmouth College and co-founder of Partners in Health, replaced Mr. Robert Zoellick at the helm of the World Bank Group in July 2012.
 
The Mongolian Government showed bold ambitions for the country. They wanted to change the mining law so that more benefits would accrue to the population. They wanted to develop much-needed infrastructure across the country: power plants and power lines, roads and railways, industrial parks, and a large housing expansion for UB. They also knew how they were going to finance these mega projects: through an expansionary monetary policy, by creating the Development Bank of Mongolia, by setting up a Sovereign Wealth Fund, and by raising funds on the international markets through the issuance of the very first international bonds for Mongolia. The Chinggis Bonds were born!
 
While the experience of development banks around the world is rather mixed and depends strongly on the quality of the governance of those banks, we advised caution and funded consultants from the South African development bank to help set up some of the ground rules of this new Development Bank. We talked a lot with the Ministry of Economic Development to understand how they would determine the list of priority projects that would be funded out of the Chinggis Bonds. We worked with the Ministry of Mining and shared with them good practices in mining laws and sovereign wealth funds from around the world, hoping that it would inspire them to think of future generations. Every Economic Update we put out in 2012 and 2013 raised the alarm a bit more about the expansionary policies.
 
We were fortunate to develop a common understanding with several leaders and help them implement their visions. One field in which we really expanded our engagement was urban management and environment. It started with the UB Clean Air Project that was approved in 2012 and aimed to create a private sector-led market for clean stoves. Our engagement then expanded into municipal planning and management and disaster preparedness.
 
The other big stream of work that was initiated around that time was the one of e-government. Mongolians, once again, dared to think forward. After liberalizing their telecom sector, they realized that they could use their systems and data to deliver better services to citizens -- be it to register land parcels, deliver health services, or improve the accountability of public procurement. This openness, combined with the rise of civil society, gave way to a whole movement for greater accountability. Mongolia became a member of the Global Partnership for Social Accountability, and a few years later an NGO won a grant to develop new tools to monitor the performance of local schools.
 
Although Chinggis was very much featured in national politics, I always have had a preference for the Secret History of the Mongol Queens (thank you, Mr. Weatherford!). And starting in 2012, we started talking much more systematically about the role of gender when we issued our first World Development Report on Gender Equality and Development. We committed to think about gender aspects in each one of the new projects we would support in Mongolia.
 
One more area where major progress was accomplished in 2012-2013 is in the area of poverty statistics. Thanks to the strong partnership we had with the National Statistical Office, we were able for the first time to issue jointly new poverty data that were comparable over time.
 
In the midst of all these developments, we prepared the Country Partnership Strategy for the World Bank Group in Mongolia for FY2013-2017. It sought to: (1) enhance Mongolia's capacity to manage the mining economy sustainably and transparently; (2) build a sustained and diversified basis for economic growth and employment in urban and rural areas; and (3) address vulnerabilities through improved access to services and better service delivery, safety net provision, and improved disaster risk management.
 
I left Mongolia in early 2014, aware of the clouds gathering on the horizon. The commodity super cycle was running out of steam, FDI was dropping fast, the financing deal for the Phase Two of the Oyu Tolgoi development was still under discussion, the currency was depreciating, and GDP growth rate was slowing down.
 
What remains with me from my time in Mongolia is much more fundamental. Of course, one can never forget the big blue skies. There is no place where I have found the same sense of openness -- in terms of landscape but most importantly in terms of spirits. How could one not be impressed by the boldness of the Mongolians' ambitions? You are not afraid of dreaming of another future and working towards it; you are not afraid of failing and changing course; you can disagree and still consider each other friends. I know that those strengths will get Mongolia through the economic difficulties it is now facing. And I wish more developing countries would show the same determination and ambition.
 
Next in the series we look at 2013, and the public finance challenges of managing the mining economy.
 
(Please follow our 25 years in 25 days journey here and on twitter with the hashtag #WBG_Mongolia25th)

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