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In good news for Mongolia, the World Bank has recently finalized $120 million in aid designed to strengthen social safety nets, improve economic competitiveness, and promote better management of debt.
The financing program is intended to work together with policies which have been implemented by the Mongolian government to improve the broader economy. Mongolia has seen a substantial increase in government debt since the end of the economic boom in 2013.
Measures taken by the Mongolian government aim to reduce expenditures and boost revenues. The most significant change planned is a revision of the national income tax which will reduce taxes for lower incomes, while increasing sales taxes on alcohol and tobacco. The government will work to reform and improve funding for the food stamp program.
The World Bank financing package is closely linked with a similar package offered by the International Monetary Fund, with a focus on economic health and diversity. One goal of the program is to promote development of non-mining product sectors. The program also hopes to increase investment, which reforms designed to improve investor protections, and simplify permitting requirements. Promotion of agriculture will also be a priority.
The DPF operations endorse certain policy actions undertaken by the government and lay out a program of reforms for the next several years, while also providing low cost financing for the government’s budget. Policy reforms are expected to promote specific development outcomes that contribute to poverty reduction. The DPF complements the World Bank investment and technical assistance projects in areas such as development of non-mineral exports, employment support, energy, education, ICT development, and central and local governance.
In other news, renewable energy continues to grow in Mongolia with several projects being put into operation. Recently a new solar power project has begun operations in Ulaanbaatar. The unique project combines agriculture and solar power, with investments from Japan and Mongolia.