Asian Development Bank’s (ADB) 50th Annual Meeting of the ADB Board of Governors began on Thursday in Yokohama, Japan. This year’s meeting has drawn in over 5,000 delegates from governments, central banks, large businesses, stakeholders in the region and more.
With the theme “Building Together the Prosperity of Asia”, this year’s meeting will focus heavily on sustainable and inclusive growth and address the Asia-Pacific region’s need for better infrastructure.
Key discussions for this year’s annual meeting will be on addressing rising inequality, economic stability, financial inclusion and progress on the UN’s Sustainable Development Goals.
Mongolia and the ADB have been working together since 1991, and the bank has played a critical role in Mongolia’s transition to a middle-income and market-based economy. To date, ADB has invested 1.55 billion USD in sovereign loans, 96 million USD in non-sovereign loans, 229 million USD in grants, and 137 million USD for technical assistance projects in Mongolia.
ADB has pledged 900 million USD to Mongolia as part of the International Monetary Fund’s (IMF) 5.5 billion USD extended fund facility (EFF) program, making it one of the program’s biggest contributors. The Mongolian government has said it will use the EFF to balance its fiscal budget and pay off outstanding debts.
According to ADB’s East Asia Department Director General Ayumi Konishi, ADB stands ready to support Mongolia despite the IMF’s postponement of its review of Mongolia’s EFF enrollment in response to a fiscal budget amendment including tax increases and requiring foreign investors to use domestic banks to finance megaprojects. In response to the IMF’s decision, the Mongolian People’s Party has announced that it will make changes to the amendments.
Director General Konishi said he hopes that the issue will be resolved this month, as there are “a lot of expectations” for Mongolia’s future.
East Asia outlook
ADB projects 5.7 percent growth in 2017 and 2018 in the Asia-Pacific, with East Asia’s growth slowdown reflecting continued moderation in China.
According to ADB, “Subregional growth dipped by 0.1 percentage points to 6.0 percent in 2016. The People’s Republic of China slowed to 6.7 percent despite fiscal and monetary support as private investment weakened. Growth also dipped in Mongolia as construction faltered and in Hong Kong, China as tourist arrivals dropped. The rate is projected to moderate further in the PRC to 6.5 percent this year and 6.2 percent next as structural reform continues and the authorities emphasize financial stability. This will push the subregional average down to 5.8 percent in 2017 and 5.6 percent in 2018. Yet large government outlays will lift growth in Taipei, China and Hong Kong, China this year and the next. Mining investment will buoy growth in Mongolia, and the return of political stability in the Republic of Korea should pay a mild growth dividend in 2018. Inflation accelerated in East Asia last year but slowed in Mongolia on lower meat prices. It is expected to pick up modestly from 1.9 percent in 2016 to 2.3 percent in 2017 and 2.6 percent in 2018.”