Over 70 percent of the Mongolian economy is now in private hands, a remarkable achievement for a country that, in the early 1990s, had a virtually nonexistent private sector. Until 2008, the gross domestic product (GDP) growth rate was consistently strong, due to political stability that attracted foreign investment and favorable world commodity prices. Falling copper prices in 2008, however, combined with declining international reserves, led to a deep fiscal, economic, and financial crisis.
Since the early 1990s, USAID has promoted economic growth by supporting policy reforms that encourage private investment and enterprise development. USAID has worked closely with all parts of the political spectrum to transform Mongolia’s tax structure and improve its investment climate. This has led to a lower tax burden on businesses, increased production, and new jobs. USAID has improved trade policy analysis and implementation, and it has helped broaden and deepen financial markets, improve corporate governance, and strengthen the banking sector. USAID has also helped develop a market-oriented regulatory environment to promote the competitive and efficient delivery of energy services.
Despite its impressive macroeconomic performance, Mongolia’s poverty rate remains high. For nearly 10 years, USAID has targeted disadvantaged Mongolians in the rural and peri-urban regions of the country by providing business development services. Since 2002, USAID has helped create or strengthen more than 7,000 small businesses, facilitated loans worth over $6.4 million, and increased the availability of business information to 500,000 people. Since 2009, this work has been funded by the U.S. Department of Agriculture’s Food for Progress program.
Going forward, USAID will concentrate its resources on strengthening the business enabling environment, with a special emphasis on implementation of the existing laws and regulations and advancing the financial sector.
GOVERNING JUSTLY AND DEMOCRATICALLY
From 2001 to 2009, USAID strengthened the judiciary by improving case management, access to information, and automation. All of Mongolia’s courtrooms are now automated, and public terminals in each court make case information available to the public. USAID has trained every Mongolian judge and prosecutor, helped the Ministry of Justice administer the first qualification exam for legal professionals, and developed a legal clinic and a trial skills course for law schools. USAID also helped create a special investigative unit that handles 600 cases per year, mostly related to judicial abuse of power, and produced popular media programs that inform the public of their legal rights. A new activity is working to strengthen the adjudication of commercial cases, to make judicial decisions in this area more transparent. Another focus of USAID's governance work is making domestic political processes more inclusive and responsive by building government capacity at the national and local levels to integrate citizen input and needs into decision- and policy-making processes.
Mongolia is making a concerted effort not to follow in the path of some other resource-rich countries, where corruption and a lack of transparency threaten political and economic stability. To this end, USAID helped Mongolia pass an Anti-Corruption Law in 2006. This law led to the creation of the Independent Authority Against Corruption (IAAC) that is leading prevention, investigation, public awareness, and other anti-corruption efforts. USAID also supported the creation of a public campaign to build public awareness of corruption; this includes an IAAC hotline, where hundreds of corruption complaints have been registered. National bench-marking surveys have revealed that petty corruption has fallen as the public’s tolerance for bribery and corruption has also declined. USAID also has helped introduce anti-corruption action planning workshops and plans for state-owned enterprises and government ministers. USAID has, in addition, supported development of an ethics and anti-corruption curriculum that was introduced at educational institutions.
Last updated: April 17, 2014