ADB provides $100 million to support Mongolia's COVID-19 response

The Asian Development Bank (ADB) has approved a $100 million loan to the Government of Mongolia to mitigate the severe health and economic impacts of the novel coronavirus disease (COVID-19) pandemic.

“I commend the government on its response to the COVID-19 outbreak, which has kept the number of COVID-19 cases low in Mongolia,” said ADB President Masatsugu Asakawa. “However, the crisis is putting a strain on the economy and the threat to public health remains serious. ADB’s assistance will help fund critical support to vulnerable people and businesses, and assist the government in managing the economic impact and responding to the health and social protection needs the pandemic has created.”

COVID-19 is triggering a severe economic slowdown in Mongolia. The current turmoil in the global economy and commodity markets has reduced revenues, increased balance of payment pressures, and accentuated financial sector risks. Women and small businesses are particularly vulnerable.

The economy, with its dependence on mining, which accounts for almost a quarter of gross domestic product and 90% of exports, remains vulnerable to swings in commodity prices. Mongolia is also heavily dependent on trade with its neighbor, the People’s Republic of China, where an economic slowdown has triggered a sharp fall in export prices in Mongolia and badly hit the transport, tourism, retail trade, and services sectors.

The program will support the government’s ongoing initiatives, including a National Emergency Response Plan to contain the spread of COVID-19 and strengthen the health system; and the CDEP, comprising cash transfer schemes and other social protection measures targeting poor and vulnerable groups, households, and businesses.

With ADB assistance, the CDEP will increase the allocation under the Child Money Program by 50% to reach 1.1 million children. Private sector workers will be exempt from personal income tax for 6 months starting from 1 April, aimed at employees at risk of losing their jobs. At least 45% of the beneficiaries are targeted to be women.

Support will also be provided to micro, small, and medium-sized enterprises, including those engaged in international trade, particularly the import of critical food and medical supplies, to protect jobs. Businesses whose operations have been impacted will be eligible for a 6-month exemption from the payment of social insurance, with at least 50% of the beneficiaries women.

Short-term assistance in supplying medical equipment and supplies will be complemented by a set of medium-term measures, including strengthening 35 hospitals to meet national infection prevention and control standards, and improving 210 hospitals to meet national standards to manage Severe Acute Respiratory Infection patients, and enhancing testing capacity.

Original source: ADB
Published on 12 May 2020