ADB Approves USD 100 Million Loan to Strengthen Mongolia’s Fiscal, Financial, and Economic Resilience www.montsame.mn
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.
Published Date:2023-10-07