NATIONAL DEVELOPMENT STRATEGY

Government of Mongolia External Partners Second Technical Meeting

N. Enkhbayar, Director, EPD Ministry of Finance of Mongolia Ulaanbaatar October 9, 2006

Need for National Development Strategy (NDS)

Weak coordination of policies Need to implement the countrys social policies
in a comprehensive approach
Unemployment Poverty Education Health Migration, etc.

Based on achievements of the MDG there is a

need to pursue long term policies/strategies

Consequences of adoption of NDS

Decreased a number of policy papers
approved by the Parliament Enhanced policy sustainability Improved policy coordination among sectors Shared vision and understanding on Mongolias future development

NDS contents
I. Human development - Education - Health - Reduce unemployment - Social welfare III. Economy - Support private sector - Ensure economic growth - Industrial policy - Investment policy - Budget policy II. Governance - Transparency - Participatory policy-making - Political stability - Enhancing legal environment IV. Environment - Natural degradation, forestation - Urban air pollution - Biological species - Deforestation

Policy priorities
Medium term objectives (2015) Long term objectives (2015 2021)
to reach MDGs and enhance development and progress of Mongolias people Eliminate poverty, convert the country into the one of the leading country in the region in terms of human development, create knowledge-based economy Contribute creatively to the global economy through technological advancement. Create a society based on its human capacity

Vision (2021 - further)

Population, million
3.6 3.25
population, m ln

3.2 2.8 2.4 2.4 2 2005 2010 years 2.7

3.0

2015

2020

Increase employment
Increase private investment Support vocational training Enhance training contents, standards Support SMEs
Expected outcomes
Employment participation 75% (2015), 80% (2021) Generate jobs for 40.0 thous (2007-2015) per year Generate jobs for 30.0 thous (2015-2021) per year Eliminate from poverty 60.0-70.0 thous per year

Policy to reduce unemployment

Unemployed, thousand people
200 200

150 150 110 100 SMEs

Private business, , technology Private

business, technology

SMEs
50
Infrastructure, big deposits

50

0 2005

Infrastructure, big deposits

2010 year 2015 2020

GDP per capita US$, decrease unemployed (thous)

GDP per capita, US$ 5000 Unemployed, '000 people 200,0 GDP per capita, US$ 200 150,0 150 2500 1327,0 680,0 50,0 0 2005 2010 2015 2020 0 2217,0 100 100,0 50 4692,0 250 Unemployed population, '000

Reduce poverty
40 Percent 30 20 10 0 2005 18,0 2010 2015 6,0 36,0 28,0

MDG target

To achieve MDG target

2021

Target growth, percent

20000.0 18000.0 16000.0 14000.0 12000.0 10000.0 8000.0 6000.0 4000.0 2000.0 0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

GDP (billions tugriks) Real GDP growth (%)

GDP per capita: 4700$

20.0 18.0 16.0

GDP per capita: 2200$

14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0

Economic growth strategy

1.SMEs support (2005-2010) 2. Industrial development (2010-2015)

3. Knowledge-based industry and service expansion (2015-2021)

Introduce new technology Prepare skilled workers

Ensure energy supply by domestic producers Full supply by energy and export of excess Start oil processing Put into operation big mining enterprises and enhance processing stages Establish industrial parks

Factors to reach economic growth target

To reach stable and higher economic growth
Develop infrastructure Presence of favorable investment environment Reduce transportation cost Keep public investment at 8-10 % of GDP Keep price level increase (at 3-5 %)

Expected Outcomes

Increased private investment growth at 9-10% per year Generated job according to the investment growth Enhanced investment opportunities

Investment program policy

Sources:
Domestic public investment (8-10% of GDP) private investment (16%) ODA Loans (5-8% of GDP) Grants Priority sectors: Education Health Infrastructure Energy Information technology

Issues Improved investment climate Improved service delivery and its quality in education, health Expanded information, information channels

Education sector policy

1. 20052010 2. 20102015
1. Expand education basic standard on Health Ecological knowledge Technology advancement
annum

Ensure facilities (schools, text-books, etc) supply Specialists training program: US$ 10-15 mln per

Health sector policy

Public health

Capacity building

Technology, vaccination

Mortality reduction

Improved service delivery

Extended life Expectancy

NDS preparation plan

Working Group
MDGMDGbased based NDS NDS (draft-2) (draft-2)
Open competition results Open discussion findings MDG needs assessment, costing
Academics, public

Public, parties, NGOs... Government TTFs

MDGMDGbased NDS based NDS (draft-3) (draft-3)

President

MDGMDGbased NDS based NDS (draft-4) (draft-4)

Parliament

MDGMDGbased NDS based NDS

Government Policy Harmonization

Parliament Line Ministries
National Development Strategy Sector Development Strategy Socio-Economic Guidelines Millennium Development Goals

Ministry of Finance

Medium Term Fiscal Framework Public Investment Program

Medium Term Aid Program

Country Assistance Strategy

Annual Budget

Annual SEGs action plan

Annual ODA Disbursement Planning

Consultative Meeting

Main objectives of SEGs

Enhance business environment, promote foreign
and domestic investment, and sustain economic growth Resolve issues faced by health and education sector (20.8% of investment) Prepare and start use big mining deposits Accelerate use of renewal energy Continue implement social programs included in Government Action Plan Cover 1-4 grades by School Lunch program

Budget Outcomes
3,2 Actual 2005 4,4Plan 2006 5,6 Expected 2006 4,0Plan 2007 5,8 14,1 8,6 10,2

-10,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

Overall balance

Current balance

Budget policy priorities

Ensure economic growth Ensure fiscal sustainability Optimal allocation of domestic and

external resources Increase real income of population Expand access to public services Support real sector

Linkage SEGs objectives and budget

Link is established (SEGs Budget) Increase investment for sectoral programs
considered as priorities Provide financial support to industries with advanced technology Enhance investment into infrastructure
Roads 15.3% Energy 26.9 %

Thank you for your attention!