ADB to support Economic Cooperation Zone for Mongolia
EconomyUlaanbaatar /MONTSAME/ The Asian Development Bank (ADB) has approved a $30 million loan to develop and operationalize Mongolia’s Zamyn-Uud free zone, which is part of a proposed economic cooperation zone between the country and the People’s Republic of China (PRC).
The Zamyn-Uud free zone is situated near the busiest international border port between Mongolia and the PRC in a district where the local economy and population rely heavily on border traffic and trade activities.
“The
project will serve as a catalyst for diversifying Mongolia’s economy,
integrating it into regional and global value chains, and increasing job
opportunities for the country’s people,” said ADB Regional Cooperation
Specialist Dorothea Lazaro. “By addressing infrastructure gaps within the zone
and improving connectivity, ADB will also help Mongolia reduce trade costs.”
Exports
account for 62% of Mongolia’s gross domestic product but are constrained by
border delays, poor infrastructure, and a weak regulatory environment that
drive up trade costs. The economic impact of the coronavirus disease (COVID-19)
outbreak has heightened Mongolia’s need to facilitate international trade,
which will be crucial to its post-pandemic economic recovery.
The
project is part of a wider network of ADB trade-related projects in Mongolia
along the Central Asia Regional Economic Cooperation (CAREC) program’s corridor
4b. CAREC corridors link Central Asia’s key economic hubs and connect
landlocked CAREC countries such as Mongolia with markets in Asia, Europe, and
the rest of the world. The government recognizes that transcending the
country’s geographical constraints requires concerted efforts to facilitate
trade, improve physical connectivity, and strengthen regional cooperation and
integration. It is working to enhance Mongolia’s role and economic return as an
overland transit and trade node between Northeast Asia and Europe.
The
project will support the construction and sustainable operations of new
infrastructure and facilities in the free zone, as well as effective zone
management. This will provide the foundation and environment needed for the
private sector to build production capacity and help Mongolia expand trade
activities and adapt to the rapidly evolving global economic landscape. The
port-of-entry system to be established under the project will promote the
integration of various border agency systems and enable data-sharing both
within the country and across the border with the PRC. This interoperability of
operations and systems will make it easier to monitor, trace, and manage risks
in the cross-border movement of goods and people and make it safer and more
efficient.
The
project is expected to be completed by December 2025. It will cost $35.76
million, of which the Government of Mongolia will contribute $5.76 million.
Asian Development Bank