The World Bank has prioritized efforts to work with governments, local communities, civil-society organizations, and other partners to ensure that our support benefits Mongolia's overall development. The following are some examples where assistance has resulted in a positive impact on the ground.
 Connecting the People
Internet and Communications Technologies: New Knowledge, New Growth
Supporting the Energy Sector
Stabilizing and Reforming the Financial Sector
Backing the Private Sector
Helping the Poor
Connecting the People
Given the dependence of the Mongolian economy on railways and roads, the World Bank recognized early on that the country would need emergency assistance for the transportation sector. One of the earliest Bank projects in Mongolia, the Transport Rehabilitation Project, was designed to complement activities of other donors in this area by providing physical investments in rail and bus fleets to smooth disruptions in service.
Despite the advances in construction and fleet capacity, two pressing issues remain in the transportation sector: maintenance of existing roads and construction of new ones. Budget constraints of the recent years have resulted in minimal investments in road maintenance, while the large territory and sparse population provide little incentive to develop new roads. As a result, only about 13 percent of all roads in Mongolia are paved. Another 30 percent of the roads are gravel or formed earth, and more than half of the country's roads are simply earth tracks.
Mongolia Road Composition 
Transportation on these roads is costly and is often impossible in winters, which is undermining regional growth and development. Thus, the World Bank recently approved another credit for Transport Development to help connect marginalized areas, improve roads, and reduce environmental degradation associated with poor road conditions.
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Internet and Communications Technologies: New Knowledge, New Growth
Internet and communication technologies will play a key role in advancing Mongolia's development goals to further connect its dispersed population, provide social services like education, and better manage the logistics and costs of international commerce. By the end of 2000 there were three public network providers, two telecom operators, two cellular phone service providers; six internet service providers, and more than ten cable TV operators. The digital divide between those with and those without access to communication technologies in Mongolia is striking. There are only about 30,000 internet users, most of them in the capital city. The Bank has recently initiated a new program to use new technologies to facilitate sharing knowledge and information for development. The focus of this new strategy includes: Supporting Mongolia's participation in the Global Development Learning Network (GDLN) and Development Gateway programs for building local capacity and sharing learning and knowledge for poverty reduction and generating growth. Supporting the deepening of telecommunications sector reform in Mongolia through assistance to strengthen the new regulatory oversight. Partnering with Korea and other countries to assist in developing Mongolia's knowledge-based strategy for both economic and social development and capacity in policy analysis and policy knowledge. Coordinating with other donors (especially the UN Development Programme, The Soros Foundation, and the Japanese government) on information technology services as new sources of growth. Identifying areas where the country needs support in implementing information technology goals, particularly in the area of increasing access to information infrastructure in the outlying areas. Using new technology to upgrade government operations, statistical and information databases, and the delivery of health and education services.
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Supporting the Energy Sector
Mongolia's energy needs are met mainly by domestic generation, as well as by some imports from Russia. Coal supplies about 80 percent of the country's energy. Additional energy is generated by diesel generators. The central energy system supplies Ulaanbaatar, three other cities and six aimags with electricity and heating, while in the rest of the aimags energy is supplied through coal-fired heat-and-power plants, diesel generators and heat-only coal-fired boilers.
The system experienced severe disruptions starting in 1990 and the resulting fall in supply was too large to be offset by the decrease in demand during economic decline. The Bank conducted a review of the energy sector which detailed current issues and future needsof the sector and incorporated measures for improving energy distribution. New energy legislation has laid out the framework for restructuring of the energy sector, and a recently approved World Bank loan will help reduce the significant losses in the country's energy system and help improve collections.
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Stabilizing and Reforming the Financial Sector
A few years into Mongolia's transition to a market economy, the banking sector was hard hit by rocketing interest rates, poor banking practices, an underdeveloped legal system, and defaulting borrowers. In 1996, the rate of non-performing loans in the banking system was about 47 percent and the structure of bank loans was such as to discourage productive businesses. Two of the four largest banks went insolvent, and the other two were on the edge of insolvency.
In response, the World Bank issued two loans -- the Banking and Enterprise Sector Adjustment Credit (BESAC) and the Bank, Enterprise and Legal Technical Assistance Credit (BELTAC) -- which contributed significantly to reforms carried out in the banking sector and to instituting better loan management practices. Nevertheless, external and internal problems continued to plague the banking sector, resulting in another severe crisis in 1999. Fielding a representative office in Mongolia, the World Bank began to closely follow developments in the banking sector and the overall macro situation. This time, the World Bank played a key role in coordinating government and donor efforts to restructure the ailing banking sector. A review of the financial sector carried out by the Bank helped the government to formulate new policies and strategies for restructuring and further development of the financial sector. In 1999, two large banks were liquidated and another one was placed in receivership . A highly fragmented banking sector was encouraged to consolidate. Non-bank financial institutions filled the gaps created by absence of banking services to some segments of population, namely, the middle- and low-income individuals, microenterprises and rural population.
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Backing the Private Sector
Almost all of the Bank's activities in Mongolia have been geared to building the private sector. Some measures include restructuring public enterprises, providing credits for private-sector intitiatives, developing an insolvency law, supporting micro-finance schemes, and promoting foreign investment. In conjunction with other donors to Mongolia, the World Bank has helped reduce the size of the public sector and increase the role of the private sector.
Today, Mongolia's private sector produces more than 70 percent of the country's total output. However, the private sector still needs stronger support of the government in form of a legal coherence and stability, land reform, and secure property rights. The Bank is engaging the government, the private sector, and civil society on the topic of business climate through roundtable discussions.
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Helping the Poor
More than one-third of Mongolia's population lives below the poverty line. The severity and depth of poverty has increased in past years, compounded by economic shocks. The World Bank has committed to reduce poverty and has undertaken several projects aimed at this goal.
The Urban Services Improvement Project aims to reduce the cost of living and improve the quality of life for residents living in the ger (yurt) areas around Ulaanbaatar. About 46 percent of these people are estimated to be living below the poverty line. Living near the capital, they face high prices for services, at the same time they are vulnerable to the hardships of rural life -- they lack nearby water sources (especially difficult during winters and in difficult weather conditions), and face risks from flooding, inadequate sewerage, and air pollution created by coal-fired heating. The Improved Stoves Project under the Global Environmental Facility is working to help provide the infrastructure for commercial development of more efficient wood- and coal-fired stoves in Ulaanbaatar. The new stoves will serve twin purposes: to reduce emission of greenhouse gases and to help economize on reduced input of wood or coal in these higher efficiency stoves.
Severe weather conditions (the Dzud) recurring in the past several winters killed about 3 million cattle and other livestock in the winter of 1999/2000, and killed more than 1 million in 2000/2001. The dzud has directly affected about a half of million rural inhabitants, or more than 20 percent of the total population. These affected herders manage over 40 percent of the livestock in Mongolia. The World Bank has joined other donors in providing assistance to the rural poor, helping them to purchase livestock through its Restocking Project. The recently approved Sustainable Livelihoods Project is working to help shift Mongolia's anti-poverty strategy away from welfare-style measures toward those that promote secure and sustainable livelihoods for all. The strategy aims to manage risk in pastoral livestock production, increase hay and fodder production, promote conservation techniques, improve livestock marketing, create early warning and emergency response systems, organize herd restocking and conflict management, institute rural micro-finance services, and set up a community investment fund for co-financing and execution of investments in basic infrastructure and social service provision.
More information:
 How the World Bank Measures Results
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