(EnergyAsia, October 12 2011, Wednesday) — Mongolia has a bright future but needs to continue economic reform and ensure that the fruits of development are extended to all its people, said Haruhiko Kuroda, President of the Asian Development Bank (ADB).
He made the call at this week’s ADB-Mongolia Partnership Forum – A Roadmap for a Happy, Healthy and Harmonious Mongolia – in Ulaanbaatar to mark 20 years of ADB-Mongolia partnership and the 10th anniversary of the establishment of ADB’s office in the country.
The landlocked country between Russia and China is at “the threshold of prosperity”, he said, noting that the Mongolian economy has grown by an average 7% a year since 2003.
The country’s per capita gross domestic product has more than tripled to US$2,200 in 2010 from US$638 in 2004 and foreign direct investment has soared. Its prospects have been further boosted by the recent US$4 billion Oyu Tolgoi mining agreement.
“While high economic growth is desirable, further efforts must be made to make economic growth more inclusive. This means ensuring that the benefits from high economic growth are distributed more broadly, and that people have equal access to opportunities and basic social services,” Mr Kuroda said.
Yet, Mongolia remains a poor country. As of 2008, an estimated 35% of the population was still living below the official poverty line. Inequality remains high both within cities and between those living in urban areas and those in the countryside.
The ADB said Mongolia’s longer-term future depends on how well it manages its mineral revenues. The government must promote policy and institutional reform anchored in good governance, and pursue closer integration with the global economy.
“This integration will help generate the private sector-led economic growth needed to sustain development,” Mr Kuroda said on the 20th anniversary of Mongolia joining the ADB.
Since then, the bank said it has extended 45 loans totalling US$794.7 million to Mongolia, as well as 12 Asian Development Fund grants of just over US$170 million. ADB also provided technical assistance support amounting to US$86 million and grants under the Japan Fund for Poverty Reduction of US$31.5 million.