Mongolia’s Development Priorities: A Path to Sustainable Growth
Ulaanbaatar, Mongolia - The Mongolian government has identified five key priorities to accelerate development and overcome pressing challenges.
Governance: The Foundation of Progress
According to the World Bank, governance remains a cross-cutting issue that underpins all major challenges facing Mongolia. To address this, prudent macroeconomic management is crucial, along with improvements in the implementation of laws and regulations, and reducing clientelistic political competition.
Jobs and Private Sector Development: The Key to Growth
Mongolia’s high unemployment rates, particularly among youth, and low female labor participation are major concerns. To create more jobs and drive growth, the private sector must be empowered through fiscal reforms and an improved investment climate. Despite advances in Doing Business indicators, Mongolia remains perceived as a high-risk environment by investors.
Key Challenges:
- High unemployment rates, especially among youth
- Low female labor participation
- Perception of Mongolia as a high-risk environment for investors
Human Capital Accumulation and Protection: A Focus on Wellbeing
Remaining health challenges require an expansion of primary care services, better incentives for hospitals, and targeted social protection programs. The education system must also be overhauled to address the widening supply-demand gap, particularly in early childhood education. Upskilling and reskilling are essential to prepare the workforce for higher-value jobs.
Infrastructure: The Foundation for Diversification
As a landlocked country with limited natural resources, Mongolia’s infrastructure is critical to its development. The government must focus on public-private partnerships (PPPs) to ease fiscal pressures and provide better services to end-users.
Protection of Natural Resources: A Sustainable Future
Climate change, economic fluctuations, and population growth are depleting Mongolia’s natural resources. The government must enforce laws and regulations, invest in infrastructure, and engage in transparent discussions about the use of natural resources to ensure a sustainable future.
Addressing Gender Gaps
While Mongolia has made progress in closing gender gaps in health and education, significant disparities remain. The female labor force participation rate is 53%, compared to 68% for males. Women earn less than men, with a gender pay gap of 25%. Gender-based violence remains a widespread social problem.
Coping with COVID-19
The pandemic has exacerbated some of Mongolia’s fundamental challenges, including macroeconomic and fiscal management. Improving economic policies and enforcing fiscal discipline have become more challenging, highlighting the need for robust responses to mitigate the impact of the crisis.
Recommendations from the World Bank
- Implement countercyclical fiscal and monetary policies
- Undertake bold investment climate reforms
- Move away from product diversification towards expanding endowments
- Accelerate governance reforms
By addressing these five key priorities, Mongolia can create a foundation for sustainable growth, improve living standards, and ensure a brighter future for its citizens.