NATIONAL DEVELOPMENT NATIONAL DEVELOPMENT STRATEGYSTRATEGY

Government of Mongolia Government of Mongolia –– External Partners External Partners Second Technical MeetingSecond Technical Meeting

N. Enkhbayar, Director, EPDN. Enkhbayar, Director, EPDMinistry of Finance of MongoliaMinistry of Finance of Mongolia

Ulaanbaatar Ulaanbaatar October October 99, 2006 , 2006

Need for National Development Need for National Development Strategy (NDS)Strategy (NDS)

•• Weak coordination of policies Weak coordination of policies •• Need to implement the countryNeed to implement the country’’s social policies s social policies

in a comprehensive approach in a comprehensive approach –– UnemploymentUnemployment–– Poverty Poverty –– EducationEducation–– Health Health –– Migration, etc.Migration, etc.

•• Based on achievements of the MDG there is a Based on achievements of the MDG there is a need to pursue long term policies/strategies need to pursue long term policies/strategies

Consequences of adoption of NDSConsequences of adoption of NDS

•• Decreased a number of policy papers Decreased a number of policy papers approved by the Parliamentapproved by the Parliament

•• Enhanced policy sustainability Enhanced policy sustainability •• Improved policy coordination among Improved policy coordination among

sectors sectors •• Shared vision and understanding on Shared vision and understanding on

MongoliaMongolia’’s future development s future development

NDS contentsNDS contents

I. Human developmentI. Human development-- EducationEducation-- HealthHealth-- Reduce unemploymentReduce unemployment-- Social welfareSocial welfare

III. EconomyIII. Economy-- Support private sectorSupport private sector-- Ensure economic growthEnsure economic growth-- Industrial policyIndustrial policy-- Investment policyInvestment policy-- Budget policyBudget policy

IV. EnvironmentIV. Environment-- Natural degradation, forestationNatural degradation, forestation-- Urban air pollutionUrban air pollution-- Biological speciesBiological species-- DeforestationDeforestation

II. GovernanceII. Governance-- TransparencyTransparency-- Participatory policyParticipatory policy--makingmaking-- Political stabilityPolitical stability-- Enhancing legal environmentEnhancing legal environment

Policy prioritiesPolicy priorities

•• Medium term objectives (2015)Medium term objectives (2015)–– to reach to reach MDGsMDGs and enhance development and and enhance development and

progress of Mongoliaprogress of Mongolia’’s peoples people

•• Long term objectives (2015 Long term objectives (2015 –– 2021)2021)–– Eliminate poverty, convert the country into the one of Eliminate poverty, convert the country into the one of

the leading country in the region in terms of human the leading country in the region in terms of human development, create knowledgedevelopment, create knowledge--based economybased economy

•• Vision (2021 Vision (2021 -- further)further)–– Contribute creatively to the global economy through Contribute creatively to the global economy through

technological advancement. Create a society based technological advancement. Create a society based on its human capacityon its human capacity

Population, millionPopulation, million

3.25

3.0

2.7

2.4

2

2.4

2.8

3.2

3.6

2005 2010 2015 2020

years

popu

latio

n, m

ln

Increase employmentIncrease employment

•• Increase private investment Increase private investment •• Support vocational training Support vocational training •• Enhance training contents, standardsEnhance training contents, standards•• Support Support SMEsSMEs

Expected outcomesExpected outcomes–– Employment participation Employment participation –– 75% (2015), 80% (2021)75% (2015), 80% (2021)–– Generate jobs for 40.0 Generate jobs for 40.0 thousthous (2007(2007--2015) per year2015) per year–– Generate jobs for 30.0 Generate jobs for 30.0 thousthous (2015(2015--2021) per year2021) per year–– Eliminate from poverty 60.0Eliminate from poverty 60.0--70.0 70.0 thousthous per yearper year

Policy to reduce unemploymentPolicy to reduce unemployment

SMEs

Infrastructure, big deposits

Private business,technology

Unemployed, thousand people

110

50

150

200

0

50

100

150

200

2005 2010 2015 2020

SMEs

year

Infrastructure,

big deposits

Private business,, technology

GDP per capita US$, decrease GDP per capita US$, decrease unemployed (unemployed (thousthous))

4692,0

2217,0

1327,0

680,050,0

100,0

150,0

200,0

0

2500

5000

2005 2010 2015 2020

GDP

per

cap

ita, U

S$

0

50

100

150

200

250

Une

mpl

oyed

pop

ulat

ion,

'000

Unemployed, '000 people

GDP per capita, US$

Reduce povertyReduce poverty

6,018,0

28,036,0

0

10

20

30

40

2005 2010 2015 2021

MDG target

Perc

ent

To achieve MDG target

Target growthTarget growth, , percentpercent

0.0

2000.0

4000.0

6000.0

8000.0

10000.012000.0

14000.0

16000.0

18000.0

20000.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20210.0

2.0

4.0

6.0

8.0

10.012.0

14.0

16.0

18.0

20.0GDP (billions tugriks)

Real GDP growth (%)

GDP per capita: 2200$

GDP per capita: 4700$

Economic growth strategyEconomic growth strategy

1.SMEs support (20051.SMEs support (2005--2010)2010)2. Industrial development (20102. Industrial development (2010--2015)2015)

–– Ensure energy supply by domestic producersEnsure energy supply by domestic producers–– Full supply by energy and export of excessFull supply by energy and export of excess–– Start oil processing Start oil processing –– Put into operation big mining enterprises and Put into operation big mining enterprises and

enhance processing stages enhance processing stages –– Establish industrial parksEstablish industrial parks

3. Knowledge3. Knowledge--based industry and service based industry and service expansion (2015expansion (2015--2021)2021)–– Introduce new technologyIntroduce new technology–– Prepare skilled workersPrepare skilled workers

Factors to reach economic Factors to reach economic growth targetgrowth target

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

•• Expected OutcomesExpected Outcomes–– Increased private investment growth at 9Increased private investment growth at 9--10% per 10% per

yearyear–– Generated job according to the investment growth Generated job according to the investment growth –– Enhanced investment opportunities Enhanced investment opportunities

Investment program policyInvestment program policy

•• Sources:Sources:DomesticDomestic•• public investment (public investment (88--1010%% of GDP)of GDP)•• private investment (16%)private investment (16%)

ODAODA•• LoansLoans (5(5--8%8% of GDP)of GDP)•• GrantsGrants

IssuesIssues•• Improved investment climateImproved investment climate•• Improved service delivery and its quality in education, healthImproved service delivery and its quality in education, health•• Expanded information, information channelsExpanded information, information channels

Priority sectors:Priority sectors:•• EducationEducation•• HealthHealth•• InfrastructureInfrastructure•• EnergyEnergy•• Information technologyInformation technology

Education sector policyEducation sector policy

1.1. 20052005––20102010•• Ensure facilities (schools, textEnsure facilities (schools, text--books, etc) supplybooks, etc) supply•• Specialists training program: US$ 10Specialists training program: US$ 10--15 15 mlnmln per per

annum annum

2.2. 20102010––201520151.1. Expand education basic standard on Expand education basic standard on

•• Health Health •• Ecological knowledgeEcological knowledge•• Technology advancement Technology advancement

Health sector policyHealth sector policy

Public health

Capacitybuilding

Technology, vaccination

Mortality reduction

Improved service delivery

Extended lifeExpectancy

NDS preparation planNDS preparation plan

Working GroupMDG-based NDS

(draft-2)

MDG-based NDS

(draft-2)

Open competition Open competition resultsresults

PresidentPresidentMDG-based NDS(draft-3)

MDG-based NDS(draft-3)

Open discussion Open discussion findingsfindings

MDG-based NDS(draft-4)

MDG-based NDS(draft-4)

ParliamentParliament MDG-based NDS

MDG-based NDS

MDG needs MDG needs assessment, costingassessment, costing

Academics,Academics,publicpublic

Public, Public, parties, parties, NGOsNGOs......

GovernGovern--mentment TTFsTTFs

Government Policy HarmonizationGovernment Policy Harmonization

Parliament Parliament

Line MinistriesLine Ministries

Ministry of FinanceMinistry of Finance Medium Term Fiscal Framework

Public Investment Program

Medium Term Aid Program

Sector Development

Strategy

Annual ODA Disbursement

Planning

Country Assistance

Strategy

ConsultativeMeeting

Socio-Economic Guidelines

National Development Strategy

Millennium DevelopmentGoals

Annual Budget

Annual SEGsaction plan

Main objectives of Main objectives of SEGsSEGs

•• Enhance business environment, promote foreign Enhance business environment, promote foreign and domestic investment, and sustain economic and domestic investment, and sustain economic growth growth

•• Resolve issues faced by health and education Resolve issues faced by health and education sector (20.8% of investment)sector (20.8% of investment)

•• Prepare and start use big mining depositsPrepare and start use big mining deposits•• Accelerate use of renewal energy Accelerate use of renewal energy •• Continue implement social programs included in Continue implement social programs included in

Government Action PlanGovernment Action Plan•• Cover 1Cover 1--4 grades by School Lunch program 4 grades by School Lunch program

Budget OutcomesBudget Outcomes

5,8

14,1

8,6

10,23,2

5,6

4,4-

4,0-

-10,0 -5,0 0,0 5,0 10,0 15,0 20,0 25,0

Plan 2007

Expected 2006

Plan 2006

Actual 2005

Overall balance Current balance

Budget policy prioritiesBudget policy priorities

•• Ensure economic growth Ensure economic growth •• Ensure fiscal sustainabilityEnsure fiscal sustainability•• Optimal allocation of domestic and Optimal allocation of domestic and

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

Linkage Linkage SEGsSEGs objectives and objectives and budgetbudget

•• Link is established (Link is established (SEGsSEGs Budget)Budget)•• Increase investment for Increase investment for sectoralsectoral programs programs

considered as priorities considered as priorities •• Provide financial support to industries with Provide financial support to industries with

advanced technologyadvanced technology•• Enhance investment into infrastructure Enhance investment into infrastructure

–– Roads Roads –– 15.3%15.3%–– Energy Energy –– 26.9 % 26.9 %

Thank you for your attention!Thank you for your attention!