Does ADB’s East Asia Department only cover Mongolia and China?
The East Asia Department has only two countries – Mongolia and China.
When you do economic analysis, do you not evaluate Hong Kong, South Korea, and Taipei?
The Economic Research Department when they do conduct research they cover the whole region and they also cover these areas, but for the East Asia Department, we do things related to China and Mongolia.
If North Korea applies to enter as a member of ADB. How will you respond?
I think our President Takehiko Nakao answered this question. I think ADB’s position is that we’re very encouraged with the development of North Korea, Italy, and other countries. To become a member of ADB, we need the consensus of our shareholders. Currently, ADB has 67 shareholders both from developed countries and developing countries.
As of now, we will continue to monitor the congress and the development and see how it goes. It’s still early to be talking about membership but since North Korea is indeed in East Asia, if things continue to improve, they can become a member of ADB.
What is ADB’s main focus in Mongolia?
The Country Business Operation Plan was approved last year and its main focus is to help Mongolia diversify economically. Last year was a crisis for Mongolia. During that time, funding partners were all reluctant to not only support the government but also the country program. We do have projects in energy, health, transport, and development of ger areas, which is a very big part of our plan.
We have three pillars. So, the three main areas we are supporting Mongolia are firstly, strengthening environmental sustainability. Just a month ago, Ulaanbaatar Air Improvement Program was signed. The second one is developing infrastructure for economic diversification, and the third is promoting economic and social stability. To support and achieve these targets, the projects just mentioned also cover roads, energy, cleaning the environment, and promoting development. Ger area is an area we’re very focused on. We’re also doing a number of projects in the health sector in Mongolia.
Can you tell me about ADB’s operations in Mongolia, specifically ADB’s current projects targeting promotion of sustainable development, resolving issues related to climate change and water scarcity, as well as future plans for Mongolia?
ADB’s current active portfolio in Mongolia includes 1.15 billion USD of loans and grants, covering 29 projects. Environmental sustainability is one of the three main pillars in ADB’s current CPS, 2017-2020 (the other two are Economic and Social Stability and Infrastructure to Support Economic Diversification). Between 2008 and 2016, ADB provided 26.5 million USD in grants and TAs for the environment sector and ADB plans to significantly increase this over the remainder of the CPS period.
In addition to the loan on air quality, ADB is providing a grant to reduce soil pollution in ger areas by improving sanitation and is providing technical assistance support to the government to conserve forest genetic resources.
Going forward, ADB aims to provide support to improve solid waste management and recycling (2018 –three million USD grant); managing solid waste in secondary cities (2019 – two million USD grant); improve the management of wastewater in aimags (provinces) and soums (Southeast Gobi Urban and Border Town Development Project – 2018 loan for 20 million USD); and strengthen disaster risk management (2020 – 25 million USD loan).
ADB recently loaned 130 million USD for air pollution reduction. I would like an update on this. What is the money being used for?
This stand-alone PBL (policy-based loan) was approved in March 2018. The first tranche, 100 million USD, will be disbursed in May, and the second tranche, 30 million USD, is expected to be disbursed in December 2018 upon the government’s fulfillment of the remaining policy commitments. The PBL is part of ADB’s contribution to the IMF “rescue package”.
The recommended policy actions tackle the air pollution problem from a holistic multi-sector perspective over short-term, medium-term and long-term horizons. And amid fiscal tightening and efforts to stabilize the economy imposed by IMF, the PBL expands public resources for air pollution control, also through efficiency and resulting fiscal savings and by leveraging private sector finance,
ADB’s policy dialogue has helped the government of Mongolia implement urgent measures to reduce air pollution and protect human health in Ulaanbaatar, such as the expansion of district heating and retiring highly inefficient and polluting small heat-only boilers, and the provision of cleaner heating fuel.
The PBL lays the foundation for the longer-term transition to cleaner energy systems and resilient and low-carbon urban development, in complementarity with ADB’s ongoing and planned portfolios, such as promoting a shift to cleaner transport fuel and the use of renewable energies for heating.
With the PBL, ADB leads the development coordination dialogue on air quality improvement and amplifies the impact of other donor interventions (JICA, KEXIM, WB, and others).
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I see us continuing our work in Mongolia for many years and hopefully, we’ll see it move to the upper middle-income country.
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I noticed that ADB’s investment to the Ulaanbaatar Urban Services and Ger Areas Development Investment Program will increase through 2020. Can you tell us specifically what kinds of projects will be implemented? Basically, this project will develop ger areas in terms of providing basic services. For example, water sanitation will be one of the key areas of our intervention. We approved the first tranche of the project in 2013 and the second in 2017. The first one was 130 million USD and the second 67 million USD. In conjunction with the ger area improvement, we will be processing green affordable housing. Not just housing but housing that uses low carbon technology. A lot of the project is related to the ecosystem, so like recycling. The ger area project is directed to heating, roads, and water supply. Do you have a specific target you want to meet through this project by 2020? It is not just one project. It’s a big program with a bunch of small programs. I think that the green affordable housing had a target of 10,000 houses. The project is still in process so it’s not definite yet. We hope that it will provide a more ecological approach to making the ger area more livable. What are the biggest challenges you face in implementing projects in Mongolia? It’s the short working season. Only six months can be used for construction. If we look at our projects, we can only make progress a season at a time, because of that constraint, unlike in other countries where we can work all year round. The harsh weather conditions impact our timetable for implementation in Mongolia. We missed the construction season a couple of times and had to wait for six months. Sometimes it happens when we go for a meeting with constructors because of some dispute or disagreement in negotiation and after it’s resolved, the construction season is over two months later. Like in most projects, if the implementing agency is working with ADB for the first time, we need to build their capacity because we have a lot of procedures, which is also a part of the reason why your government is borrowing from ADB – to build capacity and knowledge of officials in planning, managing, and implementing projects. In some cases, it could cost delays.______________________________________________________________________
...The harsh weather conditions impact our timetable for implementation in Mongolia...
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How cooperative is the Mongolian government? At project level, the Mongolian government is very cooperative. I remember a health project and a couple of social protection policy loans that we supported the government in ensuring. Because Mongolia is so dependent on mining, the economy sort of collapses when the price of metal resources goes down. Our support to that is very effective in my opinion. Overall, I would say the government’s cooperation is very consistent. As a large economic partner in Mongolia, we are working really closely with the government right now to implement. We have some policy-based loans that have been challenging but the government actually met the conditions last year. It’s challenging but we are working with the government to identify and resolve issues. ADB is discussing its Strategy 2030. What is the plan for Mongolia? The Strategy 2030 is guided ADB’s next 10-year focus -- the area we want to focus on. We want to work with our developing member countries to identify the issues we can join hands on. We identified seven issues, including inequalities and poverty reduction, climate change, disaster resilience, and environmental management. I think Mongolia will still require partnership in these areas. Then there’s gender equality. Mongolia actually has good gender equality. There’s also regional cooperation, rural development and agriculture, livable cities, and governance. These are the areas we want to focus but it’s more to do with getting results. For example, we will not be just building schools; we will see the impacts on students. How does ADB vision Mongolia in let’s say five years We hope that Mongolia will be clean, green, very livable, and have a diverse economy. We have been working in Mongolia for more than 30 years. We are committed to support and hopefully, together we can support Mongolia to continue its economic development. I think that other than the environmental aspect, we will diversify the economy. For Mongolia, this is crucial for stabilizing the economy. We will work at the macro level in these two areas and then the air pollution and infrastructure. I see us continuing our work in Mongolia for many years and hopefully, we’ll see it move to the upper middle-income country.
