Mongolia: COVID-19 Rapid Response Program

approved

This program is proposed to be supported under AIIB's COVID-19 Crisis Recovery Facility and co-financed with the Asian Development Bank (ADB) as a policy-based loan under its Countercyclical Support Facility COVID-19 Pandemic Response Option (CPRO). The program will provide critically needed support to assist the Government of Mongolia in mitigating the severe adverse health, social, and economic impacts caused by the COVID-19 pandemic. Mongolia has taken proactive and decisive actions in response to the COVID pandemic and kept the number of COVID-19 cases low. However, its vulnerability to the pandemic remains, as the Government has identified that about 20% of its population, especially the poor and other vulnerable groups, are at high risk due to the strained healthcare system. Meanwhile, the pandemic triggered severe economic slowdown in the country. Mongolia's economy has limited diversification and is highly dependent on the mining sector, which accounts for 24% of its gross domestic product (GDP) and almost 90% of its exports. Its high dependency on trade makes the country particularly vulnerable to exogenous shocks, such as the COVID-19 pandemic. The government of Mongolia has put together a comprehensive set of response measures to mitigate the COVID-19 impact. The measures include the Countercyclical Development Expenditure Program (CDEP), which consists of three packages: (1) support to public health protection; (2) social protection to support citizens and businesses; and (3) support to vulnerable businesses and fiscal stimulus measures. The proposed Mongolia COVID-19 Rapid Response Program (the Program) will assist the government's response to COVID-19 pandemic, support the implementation of its CDEP to mitigate the adverse impacts of the pandemic on the economy, and support poverty alleviation. The Program will support the three packages of the CDEP: public health protection, social protection, and fiscal stimulus measures.