Infrastructure
From Mongol Studies Online Reference
Though Mongolia exports construction materials and has huge mine industry capacity, its lack of infrastructure has presented challenges to industrial development. Legally, it takes 20 days to start a business, but it is often several months after the official opening of an industrial site before full capacity is reached, after which fluctuation is common. These common delays are mainly the result of poor infrastructure: Only 4% of Mongolia’s roads are paved [1], and rain can lead to heavy vehicle stalling. In addition, Mongolia’s harsh climate entails both high equipment technical standards and a short construction season, two obstacles that have inhibited infrastructure growth to date [2].
In spite of the obstacles, infrastructure continues to develop. The Asian Development Bank (ADB) is working on a USD multimillion project to connect local communities from Yarant (bordering China) to Ulaanbaishint (bordering the Russian Federation). Western Mongolia received USD 2 million from the Japan Fund for Poverty Reduction in July, 2008, which the ABD has put towards construction of 33.5 kilometers of access roads. The rural access roads will cut rural community access time to major roads by 35% by mid 1212 [3]. In addition, the South Korean government hopes to participate in developing Mongolia’s road and railway lines as such development pertains to their plans to tap Mongolia coal, copper, and uranium [4].
The Mongolian Government splits infrastructure into four groups: Urban Development and Water Supply, Energy (electricity and heat), Transport (roads, railways, and aviation), and Telecommunications. They have developed a strategy in 2006 around rapid urbanization, change in GDP composition, rapid integration into world markets, and rapid mining development (the strategy was formed three months after the passing of the Windfall Profit Tax) [See Windfall Profit Tax]. The government decided it needed investment of USD 4.7 billion from 2006-2020, wanted to diversify investment in railways to increase access to capital markets, and to respond to a financing gap they predicted will equal USD 245 million per year. The Mongolian Government created the following graph to compare the capital of each infrastructure sub-segment [5].
[edit] References
- ↑ WorldBank Mongolia Data Profile. The World Bank. Accessed July 2008.
- ↑ Economy and Trade as of End 2006 Embassy of Mongolia, Washington D.C
- ↑ "New roads seek to provide access to markets for rural communities is Western Mongolia". Mongolia Web. 14 July 2008. Accessed July 2008.
- ↑ "South Korea seeks Mongolian coal, other deposits". Mongolia Web. 14 May 2007. Accessed July 2008.
- ↑ "Infrastructure Strategy Review: Making Choices in Provision of Infrastructure Services". Government of Mongolia - External Partners Technical Meeting. October 10th, 2006.
