Mongolia’s Investment Priorities for National Development

Place: Mongolia • Dates: 2013 • Partner: ADB

Project Summary

Mongolia is an economy remarkably rich in natural resources, at the outset of an ambitious national agenda for sustained development. By committing to an extensive series of large scale development projects and investment partnerships, the Government of Mongolia plans to leverage its abundant resource base for long term transition from a predominately rural, subsistence society to a modern, diversified, higher income country. The extent to which the country’s considerable potential can be realized will depend not only on successful extraction and marketing of resources, but the extent to which these targeted activities and revenues general net-positive spillovers for the rest of the economy, enhancing the basis for market oriented entrepreneurship, higher labor productivity, and sustainable increases in living standards for the majority of Mongolians.

To assess these opportunities, and particularly the interactions and linkages needed to facilitate balanced and sustained growth, we developed and new dynamic economic forecasting model for Mongolia. Calibrated to a new, 2008 Social Accounting Matrix for the country, this economywide decision support tool was used to assess 26 of the country’s highest priority development projects. Our results suggest that each of these can make an important contribution to the national development agenda, but they differ in important ways in both the scope and timing of their impacts. Because of their scale, these projects are very pervasive in their effects across the economy, and many different stakeholders will be implicated by them and have their livelihoods and opportunities affected directly and indirectly. By using scenario analysis such as that undertaken in this study, it is hoped the Government of Mongolia can more clearly identify both beneficiaries and those who will face adjustment challenges.

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