BRI Progress in Mongolia

1. BRI Progress in Mongolia Enkh-AmgalanByambajav,NationalConsultant of Mongolia,UNDESA Workshop on “Assessing the Potential Impact of the Belt and Road Initiative on Sustainable Development Goals in Asian Economies”Bangkok, Thailand 25-26 September 2019

2. CONTENT • Country profile: Mongolia • BRIinMongolia • Conclusion

3. Country profile: Mongolia

4. Mongolia is a lower-middle-income country with a GDP of 13 billion USD (2018) • In 2018, annual economic growth rate was 7.2 percent • Average GDP growth rate between 1990-1999 is -0.4% • Average GDP growth rate between 2000-2009 is 5.9% • Average GDP growth rate between 2010-2018 is 7.9% • The growth rate changes following the commodity prices in the world economy because of its dependency from the mining sector. • GDP per capita has increased 4.2 times between 2000-2009 from 450$ to 1882$ • GDP per capita has increased 1.6 times between 2010-2018 from 2488$ to 4009$

5. Foreign trade in 2018 • Mongolia exports 7.0 billion USD and imports 5.9 billion USD with the balance of 1.1 billion USD. • Mongolia exported goods to 74 countries and 96% of total exports went to China. • The main types of exports come from mining and minerals, and agricultural industry. • Furthermore, 78.1% of the total imports are from Russia and China. • Main import goods are food products, clothing, machinery, vehicles and fuel. • Mongolia imports approximately 99% of its petroleum needs from Russia.

6. The Belt and Road Initiative: Six Economic Corridors • Source: New Delhi Times

7. Background of BRIin Mongolia Figure1:MajorPoliticalEvents relatedtoBRI in Mongolia Signed the “Project Outline for Constructing the China-Mongolia-Russia Economic Corridor” Signed MOU on Formulating Guidelines for Constructing China-Mongolia-Russia Economic Corridor /32 projects/ Attended first BRI forum, Signed bilateral economic cooperation documents Focusoneconomiccooperation Meeting of Prime minister J.Erdenebat, Chinese President Xi Jinping and Prime minister Li Keqiang The third trilateral meeting of Mongolian President Ts.Elbegdorj, Chinese President Xi Jinping and Russian President Vladimir Putin The first trilateral meeting of Mongolian President Ts.Elbegdorj, Chinese President Xi Jinping and Russian President Vladimir Putin The second trilateral meeting of Mongolian President Ts.Elbegdorj, Chinese President Xi Jinping and Russian President Vladimir Putin 14-15 May,2017 Beijing September,2014 Dushanbe 23June, 2016 Tashkent 9July,2015 Ufa Source: Author’scompilingfromvarioussources

8. Background of BRIin Mongolia (continue) Figure1:MajorPoliticalEvents relatedtoBRI in Mongolia Proposed to accelerate the construction of a network of cross-border highways, facilitate customs clearance, strengthen energy cooperation, and discuss the construction of regional power grids. Attended second BRI forum, Signed of bilateral cooperation documents including a plan to align the BRI with the Development Road program. The center is responsible for conducting research on technology, economic estimation, research on coordinating regulations of the three countries and so on. Discussed to strengthening and enrichment of Mongolia-China-Russia comprehensive strategic partnership The fifth trilateral meeting of Mongolian President Kh.Battulga, Chinese President Xi Jinping and Russian President Vladimir Putin The fourth trilateral meeting of Mongolian President Kh.Battulga, Chinese President Xi Jinping and Russian President Vladimir Putin Meeting of Mongolian President Kh.BattulgaChinese President Xi Jinping Investment Research Center established under Ministry of Foreign Affairs 14June,2019 Bishkek 13 September,2017 Ulaanbaatar 24-28April, 2019 Beijing 9-10June,2018 Qingdao Source: Author’scompilingfromvarioussources

9. ProgramofMongolia-Russia-ChinaEconomicCorridor • Projects under trilateral economic corridor: • Transportation and infrastructure 13 • Railway 7 • Logistics 1 • Road 4 • Telecommunication 1 • Industrialsector 2 • Developmentofborder-crossing points 1 • Energy sector 1 • Facilitationoftradeandinspectionprocedures 4 • Environmentandecology 3 • Education,scienceandtechnologycooperation 3 • Humanitarian 3 • Agriculture 1 • Medical science 1 • Total 32

10. Railway transit corridor • Source: Ministry of Foreign Affairs

11. Road transit corridor • Source: Ministry of Foreign Affairs

12. Table 1: Economic Impact of Corridor (2030, against baseline, million USD) Simulated by IDE-GSM model Central Asia Regional Economic Cooperation (CAREC) Economic Corridor 4a • Source: Kumagai Satoru, GokanToshitaka, KeolaSouknilanh“Economic impacts of economic corridors in Mongolia : an application of IDE-GSM” IDE-JETRO 2018 Central Asia Regional Economic Cooperation (CAREC) Economic Corridor 4b Central Asia Regional Economic Cooperation (CAREC) Economic Corridor 4c

13. Gross External Debt of Mongolia (bln.usd, percent) Foreign Direct Investment Position of Mongolia (bln.usd percent) • Source: Bank of Mongolia

14. Chinese Foreign Direct Investment toMongolia by economic sector • Source: Ministry of Finance FDI inward flow from China reached 4.9 billion USD, which was 23.6% of total investment in 2018. (close to Lao PDR, 23%).

15. Cooperation Priorities of BRI in Mongolia

16. National Working Group to Implement Mongolia-Russia-China Economic corridor National Working group headed by Vice Minister for Ministry of Foreign Affairs was established by Prime Minister’s decree No133 of May 2017, which consists of 20 experts representing all ministries related the economic corridor. Since the establishment in 2017, National Working Group has held 5 meetings and discussed Mongolia’s policy and position towards the Central Railway Corridor and Central Road Corridor priority projects within the Economic Corridor Program, also exchanged views on determination of feasible trilateral projects on electrical gird renovation and measures to be taken until the trilateral meeting.

17. Supporting activities to BRI in Mongolia • Non-refundable aid of 2 billion yuan granted by the Chinese government, is going to be spent on ger area re-planning and rental apartment projects in between 2018-2020to reduce air pollution.

18. Supporting activities to BRI in Mongolia • The Mongolian and Chinese sides negotiated the general agreement on the soft loan amounting 1 billion USD, which has a payback period of 20 years. • Following projects will be implemented with the soft loan : • Constructing electric power transmission line and sub-station between Ulaanbaatar and Mandalgobi’ • Reconstruction of Erdenet thermal power plant • Construction of new wastewater treatment plant

19. Supporting activities to BRI in Mongolia • Construction of 20.9km road from Gachuurt intersection to Nalaikh-Choir intersection • Construction of meat-processing plant and quarantine facility • Project on developing area of Tuul and Selberivers • Project on setting surveillance cameras in streets of Ulaanbaatar city and aimagcenters • Project on building tunnel • Project on improving access, quality and control of communication sector

20. Linkages between policy and SDG in Mongolia GLOBAL SUSTAINABLE DEVELOPMENT GOALS 2030 OBJECTIVE 6 OBJECTIVE 5 OBJECTIVE 4 OBJECTIVE 3 OBJECTIVE 2 GREEN DEVELOPMENT POLICY OF MONGOLIA OBJECTIVE 1 6 OBJECTIVESOF ENVIRONMENTAL SUSTAINABILITY MONGOLIA SUSTAINABLE DEVELOPMENT VISION 2030 4 OBJECTIVES OF GOVERNANCE FOR SUSTAINABLE DEVELOPMENT 22 OBJECTIVES OF SUSTAINABLE ECONOMIC DEVELOPMENT 12 OBJECTIVES OF SUSTAINABLE SOCIAL DEVELOPMENT Source: ESCAP

21. Conclusion • Evaluating the Socio-Economic Impact of Investment related to BRI in Mongolia • Speed up BRIimplementation • Legal environment • Feasibility study • Need to study BRI activities to support SDGand Sustainable development vision of Mongolia

22. Thank you for attention