Infrastructure Strategy Review Making Choices in Provision of Infrastructure Services

S. Rivera East Asia & Pacific The World Bank

Government of Mongolia: Working Group Technical Donors Meeting October, 2006. 1 Mongolia: Infrastructure Strategy

„ The Process and Outputs

„ Factors Shaping Infrastructure Strategy Demand

„ Key Choices to discuss this morning

2 Process and Outcome

ƒ The Process – An interactive process, bringing together international practices:

ƒ Meeting in , March 2005. Field work in the late 2005.

ƒ Preparation of about 12 background notes in sector and themes, discussed in Washington on June 2006.

ƒ Submission of final draft report in November, 2006

ƒ Launching of Infrastructure Strategy report in a two day meeting in early 2007.

ƒ Outcome A live document that can shape and form policy discussions on PIP, National Development Plan, and Regional Development Strategy….it has been difficult for the team to assess choices as well.

3 Factors Shaping the IS

• Urban led Size and Growth of and Selected Aimag (Pillar) Centers Size of the Circle=Total Population ('000) Infrastructure 6% 5% 869.9

Investments ) l 4% ua

nn 3% a Ulaanbaatar

(%, 2% h

t

w

o 1% r G

n 0% o i -10 0 10 20 30 40 50 60 70 80 at l -1% Kharkhorin

opu Ondorkhaan P -2% -3%

-4% Share of Total Urban Population (%)

4 Factors Shaping the IS: Connectivity, with the World and in Mongolia

Khankh

Khandgait

Ulaanbaishint Ereentsav Khatgal Altanbulag Nogoonnuur UVS KHUVSGUL Tsagaannuur ÒýñTes Öýíãýë Naranbulag Tsagaan - Uul MURUN ULGII 2 Ulgii Selenge DARKHAN Dayan Bayan - Uul Khutag- Undur BAYAN - ULGII SELENGE Havirga Tudevtei 5 ERDENET Sumber ZAVKHAN 3 BULGAN Jargalant KHENTII KHOVD ARKHANGAI ULIASTAI ULAANBAATAR Batnorov CHOIBALSAN Mandakh Tsahir Gachuurt Baganuur 1 Lun DORNOD Darvy Nalaikh

ZUUN MOD Munkhaan HOVD TUV UNDURKHAAN

Khar- Khorin Yarantai ALTAI Uench ÃÎÂÜѯÌÁÝÐ BARUUN - URT

BAYANKHONGOR SUKHBAATAR CHOIR Erdenetsagaan Bichigt MANDALGOVY GOVY - ALTAI Nariin Teel UVURKHANGAI 1 DUNDGOVY

Burgastai 4

Tsogt Ovoo DORNOGOVY

DALANZADGAD

UMNUGOVY Khanbogd

Gashuun Suhait

5 Factors Shaping the IS: Mining

• A strong role for coordination, but a priority for limited public investment?

• Mine development and related infrastructure should be financially viable

• Role for public investment only if evidence of significant additional economic returns

•Will there be significant economic returns to within- Mongolia rather than direct-to- mine rail infrastructure?

6 KEY CHOICES: Prioritizing our Spending

1. How do we improve efficiency and make subsidies and tariffs more equitable? – Prices and performance 2. How do we sustain our existing (extensive) infrastructure base? – O&M vs rehabilitation vs new construction

7 Prioritizing our Spending

3. How do we match Millennium goals and investment plans with resources? – Choosing within sectors and across them – Maximizing non-government financing – Targeting high returns 4. How do we gain from economic partnerships with the region? – Linking them together or linking our export centers to them?

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