ADB $420 million program to improve conditions and opportunities along IMAR border, PRC
SocietyUlaanbaatar/MONTSAME/. On October 21, the Asian Development
Bank (ADB) has approved up to $420 million for a multitranche financing
facility (MFF) to improve economic opportunities and living conditions among
communities along the border between the Inner Mongolia Autonomous Region
(IMAR) in the People’s Republic of China (PRC) and Mongolia.
“The IMAR-Mongolia border is one of the world’s longest and
the setting for a remote and often hostile environment for the communities at
border crossings,” said ADB Senior Financial Sector Specialist Seung Min Lee.
“The ADB program will upgrade and modernize facilities at five border
communities to ensure that the benefits of growing bilateral and regional trade
can be shared by both sides of the border. The program’s technical design,
environmental improvements, and robust economic and financial returns will
ensure its long-term sustainability and benefits.”
Although the border communities serve as the main
cross-border focal points for the rapidly expanding trade between the PRC and
Mongolia, they lack access to basic infrastructure and services, including
medical facilities, as well as job opportunities.
The poor infrastructure and inefficient processes at the
IMAR border crossings stifle the potential for development and international
trade on both sides of the border. Storage and quarantine facilities are
lacking, a deficiency compounded by outdated and inefficient management
systems, customs procedures, and standards. A one-stop customs process has not
been established, and goods clearance is not yet automated or integrated with
sanitary and phytosanitary measures.
Trade doubled between the PRC and Mongolia from $4 billion
in 2010 to $8 billion in 2018, and about $5 billion of this total was between
Mongolia and the IMAR alone. Greater efficiency at the IMAR border crossing
points could further accelerate this trade growth. Trade by the PRC and
Mongolia with third party countries, including those in Europe, would also
grow.
The program will enhance living conditions and
sustainability of target border regions by supporting the use of such advanced
technologies as smart drip irrigation with reclaimed water for forestation,
smart port management based on information and communication technology, and
smart waste collection and transfer.
Expanded financial and business support to small and
medium-sized enterprises (SMEs) will spur local income growth. International
best practices in gender equity will be applied through targeted support for
women-led SMEs, the gender-sensitive design of border town facilities, and
poverty alleviation program support for low-income households headed by women.
The program will also address the climate change and
adaptation challenges that confront both the IMAR and Mongolia. This will
include support for carbon pollution reduction by building protective forest
strips and the use of renewable and clean energy for heating supply. The
establishment of an agricultural value chain will enhance livelihoods on both
sides of the frontier.
Three tranches are envisaged for the MFF. The first of
$196.3 million will help finance the delivery of a smart port management system
in the Erenhot–Zamyn-Uud economic cooperation zone (ECZ), a service area and
customs supervision center at the Mandula port, and upgrade of equipment at the
international hospital in Erenhot. Ecological restoration will be carried out
in the ECZ, and a smart waste collection system established in Erenhot. SME
financing support, the construction of a quarantine station at the Mandula port,
and the establishment of a product tracing and management system and Poverty
Alleviation Program (PAP) will contribute to expanding income-generating
opportunities.
These first tranche activities will benefit 2.95 million
people in Erenhot and Baotou municipalities by providing greater livelihood
opportunities for the poor and the overall population. The program will have
strong regional spillover benefits for Mongolia, with expanded trade creating
about 3,300 direct and indirect jobs in Mongolia. Health and other services
will benefit disadvantaged communities on both sides of the border.
The project also closely complements other ADB projects in
Mongolia, including an Economic Cooperation Zone project at Zamyn-Uud free
zone approved in June 2020 that will create jobs and serve as a catalyst
for diversifying Mongolia’s economy and additional financing for Regional
Improvement of Border Services approved in 2019.
The total cost of the investment program is $888.35 million,
of which the government will provide $351.42 million, and $116.93 million will
come from other sources. The closing date for the third tranche is the end of
September 2031.
ADB is committed to achieving a prosperous, inclusive,
resilient, and sustainable Asia and the Pacific, while sustaining its efforts
to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49
from the region.
Source: ADB