Ulaanbaatar
ADB Approves USD 100 Million Loan to Strengthen Mongolia’s Fiscal, Financial, and Economic Resilience
Economy
Ulaanbaatar, October 6, 2023 /MONTSAME/. The Asian Development Bank (ADB) has approved a USD100 million loan to strengthen Mongolia’s fiscal, financial, and economic resilience.
“Mongolia is vulnerable to volatility in commodity markets
and other exogenous shocks because of its dependence on mining revenues,” said
ADB Principal Public Management Specialist Hans van Rijn. “To shore up against
the impact of this volatility, the Strengthening
Fiscal, Financial, and Economic Resilience Subprogram
1 supports reforms to strengthen tax revenue mobilization, debt management,
banking sector stability, and the role of the private sector in economic
development.”
Mongolia’s economy experiences repeated boom-and-bust
cycles. The current growth trajectory is the third major expansionary economic
cycle since 2008, underpinning the importance of implementing and accelerating
structural reforms to build resilience.
The program supports tax revenue growth through structural
improvements in domestic tax administration and increased alignment with
international tax treaties around profit shifting and the automatic exchange of
information.
Mongolia’s debt sustainability would be enhanced through
the introduction of a risk-based approach to debt management, the strengthening
of local capital markets, and increased fiscal transparency.
The program would also improve finance sector stability and
resilience by boosting banking sector supervision and regulation, enhancing
nonperforming loan resolution, and promoting financial consumer
protection.
Finally, reforms would strengthen the upstream environment
for private sector development through relevant legal reforms, support for
public–private partnerships, and enhance the performance of the Development
Bank of Mongolia.
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