Mongolia Economic Retrospective: 2008-2010

8/7/2019 Mongolia Economic Retrospective: 2008-2010

1/64

Lofkoeia C`ofoli`

Xctrospc`tivc=8>>2-8>1>

A [ O X E D H A F J P T S D Y


2/64


3/64

[ O X E D H A F J P T S D Y

Lofkoeia C`ofoli`

Xctrospc`tivc= 8>>2-8>1>


4/64

@opyrikbt 8>1>

Tbc Iftcrfatiofae Hafj gor Xcòfstru`tiof afd Dcvceoplcft/Tbc [ored Hafj

1212 B Ptrcct, F.[.

[asbifktof, D.@. 8>400, S.P.A.

Aee rikbts rcscrvcd

1 8 0 4 10 18 11 1>

[ored Hafj Ptudics arc puheisbcd to òllufiàtc tbc rcsuets og tbc Hafjs worj to tbc dcvceoplcft

òllufity witb tbc ecast possihec dceay. Tbc lafus`ript og tbis papcr tbcrcgorc bas fot hccf prcparcd

if a`òrdaf`c witb tbc pro`cdurcs appropriatc to gorlaeey-cditcd tcxts. Polc sour`cs ìtcd if tbis

papcr lay hc ifgorlae doùlcfts tbat arc fot rcadiey avaieahec. Tbis voeulc is a produ`t og tbc stagg og

tbc Iftcrfatiofae Hafj gor Xcòfstru`tiof afd Dcvceoplcft/Tbc [ored Hafj. Tbc gifdifks,

iftcrprctatiofs, afd òfèusiofs cxprcsscd if tbis voeulc do fot fc`cssariey rcgec`t tbc vicws og tbc

Cxcùtivc Dirc`tors og Tbc [ored Hafj or tbc kovcrflcfts tbcy rcprcscft.Tbc [ored Hafj docs fot kuaraftcc tbc a`ùra`y og tbc data ifèudcd if tbis worj. Tbc

houfdarics, òeors, dcfolifatiofs, afd otbcr ifgorlatiof sbowf of afy lap if tbis worj do fot ilpey

afy mudklcft of tbc part og Tbc [ored Hafj òf`crfifk tbc eckae status og afy tcrritory or tbc

cfdorsclcft or a``cptaf`c og su`b houfdarics.

Xikbts afd ^crlissiofs

Tbc latcriae if tbis puheiàtiof is òpyrikbtcd. @opyifk afd/or trafslittifk portiofs or aee og tbis worj

witbout pcrlissiof lay hc a vioeatiof og appeiàhec eaw. Tbc Iftcrfatiofae Hafj gor Xcòfstru`tiof

afd Dcvceoplcft/Tbc [ored Hafj cfòurakcs dissclifatiof og its worj afd wiee forlaeey kraft

pcrlissiof to rcprodu`c portiofs og tbc worj prolptey.

Gor pcrlissiof to pbotoòpy or rcprift afy part og tbis worj, pecasc scfd a rcqucst witb òlpectc

ifgorlatiof to tbc @opyrikbt @ecaraf`c @cftcr If`., 888 Xoscwood Drivc, Dafvcrs, LA >1980, SPA:tcecpbofc= 9;2-;3>-24>>: gax= 9;2-;3>-44;>: Iftcrfct= www.òpyrikbt.òl.

Aee otbcr qucrics of rikbts afd ei`cfscs, ifèudifk suhsidiary rikbts, sboued hc addrcsscd to tbc

Oggi`c og tbc ûheisbcr, Tbc [ored Hafj, 1212 B Ptrcct F[, [asbifktof, D@ 8>400, SPA: gax= 8>8-388-

8488: c-laie= puhrikbtsNworedhafj.ork.

IPHF= 9;2->-2810-234>-1

cIPHF= 9;2->-2810-2342-;

DOI= 1>.1397/9;2->-2810-234>-1

Eihrary og @ofkrcss @ataeokifk-if-ûheiàtiof Data

Lofkoeia còfoli` rctrospc`tivc.p. `l.

IPHF 9;2->-2810-234>-1 -- IPHF 9;2->-2810-2342-; (cec`trofi`)

1. Lofkoeia--Còfoli` ofditiofs--81st cftury. 8. Lofkoeia--Còfoli` poei`y--81st `cftury.

0. Lifcs afd lifcrae rcsour`cs--Lofkoeia. I. [ored Hafj.

B@40>.83.L704 8>1>

00>.931;'0--d`88

8>1>>088;>


5/64

iii

@oftcfts

A`jfowecdklcfts ...................................................................................................................vi

A`rofyls afd Ahhrcviatiofs .............................................................................................. vii

Cxcùtivc Pullary ............................................................................................................... viii

1. Tbc Cxtcrfae Pbo`j afd Its ^roxilatc Ilpa`t ................................................................. 1

Cxtcrfae Pbo`j if 8>>2->9 .................................................................................................. 1

Pbarp Dctcrioratiof if Gisàe Haeaf`cs ............................................................................. 8

@urrcft A`òuft, Purpeus to Dcgiìt ................................................................................. 0

Puhstaftiae Xcscrvc Eosscs ................................................................................................ 0Hafjifk Pc`tor [cajfcsscs ............................................................................................... 3

8. Lofkoeias Cxpcricf`c @olparcd to Otbcr @oppcr ^rodu`crs .................................. ;

0. Tbc ôei`y Xcspofsc ...........................................................................................................11

Tbc Kovcrflcfts Ptrofk ôei`y A`tiofs ...................................................................... 11

Pupport hy Iftcrfatiofae afd Hieatcrae Dofors............................................................. 18

Lififk Pc`tor Xcgorls ..................................................................................................... 10

4. Bow Did tbc Còfoly Xcspofd? ..................................................................................... 12

Xcae A`tivity Xcòvcrs ..................................................................................................... 12

Xcòvcry, Krowtb, afd Xisifk @ofsulcr ^ri`cs.......................................................... 12

ûhei` Gifaf`cs Ilprovcd Puhstaftiaeey if tbc Eattcr Baeg og 8>>9 ........................... 19

Tbc @urrcft A`òuft Dcgiìt Farrowcd ........................................................................ 81

Tbc Cx`bafkc Xatc Ptahieizcd ......................................................................................... 88

Hut Hafjifk Pc`tor ^rohecls Eifkcrcd ......................................................................... 80

Ifgorlae Pc`tor [orjcrs Bardcst Bit hy tbc @risis ..................................................... 83

3. ^rolotifk Xcòvcry afd Krowtb Koifk Gorward ......................................................0>

7. Eoojifk Gorward .................................................................................................................41

Tahecs

Tahec 0.1. Pullary og ôei`y A`tiofs Tajcf ovcr 8>>9..................................................... 11

Tahec 4.1. Daiey [akcs og Sfsjieecd [orjcrs if Pcec`tcd Ifgorlae Eahor Larjcts

if SH ..................................................................................................................................87

Hox Tahec 3.3a. @ofditiof og tbc Fatiofae âvcd Xoad Fctworj ..................................... 09

Tahec 7.1. Lcdiul-tcrl Hasceifc ^romc`tiof ....................................................................... 48

Tahec 7.8. Haeaf`c og âylcfts Outeooj .............................................................................. 48

Hox Tahec 7.1a. @apitae Geows to Clcrkifk Còfoli`s Gcee Pbarpey if Lay,

ârtiùearey Clcrkifk Larjct Hofd Issuaf`c ............................................................. 47

Tahec 7.0. Lofkoeia= Jcy Ifdiàtors......................................................................................4;


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@oftcfts v

Gikurc 3.1. Cxpcfditurcs of @apitae Xcpairs Bavc Dcèifcd Xceativc to Fcw

Ifvcstlcfts .......................................................................................................................08

Gikurc 3.8. Trcfds if Cxpeoratiof afd Lififk Ei`cfsifk A`tivity Sfdcrlifcd hy

ôei`y Ifstahieity ..............................................................................................................08Hox Gikurc 3.1a. Bow Dut`b Discasc if tbc 19;>s @auscd tbc Fctbcreafds Xcae

Cx`bafkc Xatc to Apprcìatc afd Output to @oftra`t ............................................... 00

Hox Gikurc 3.0a. @ollodity ^ri`cs if Xc`cft Ycars Puhmc`t to Earkc Pwifks ............... 07

Hox Gikurc 3.0h. Earkc Crrors if Gorcàstifk @oppcr ^ri`cs ............................................. 07

Hox Gikurc 3.4a. Lofkoeias I@OX ratios Arc Lu`b Bikbcr tbaf if Otbcr

Dcvceopifk @ouftrics, Ifdiàtifk Ifcggiìcft Ifvcstlcft Ppcfdifk ........................ 0;

Hox Gikurc 3.4h. Xcturfs to Akkrckatc (ûhei` afd ^rivatc) Ifvcstlcft Bavc

Xclaifcd Ptcady if Xc`cft Ycars ............................................................................. 02

Hox Gikurc 3.4`. Hut Xcturfs to ûhei` Ifvcstlcft Bavc Gaeecf Pbarpey sif`c

8>>3 ....................................................................................................................................02

Hox Gikurc 7.1a. Xisc if @rcdit Dcgauet Pwaps if tbc Curo Arca ...................................... 43

Hox Gikurc 7.1h. Clcrkifk Larjct Hofd Yiceds Bavc Xiscf, hut Fot to tbc Bcikbts

og Eatc 8>>2 afd Carey 8>>9 ..............................................................................................43

Hox Gikurc 7.1`. Clcrkifk Larjct Hofd Issuaf`c, SP$ hieeiof ........................................ 47

Hoxcs

Hox 8.1. @biecs Gisàe Xckilc ..................................................................................................9

Hox 0.1. [ored Hafj Hudkct Pupport Approvcd ................................................................ 14

Hox 0.8. Tbc Oyu Toekoi Ifvcstlcft Akrcclcft ................................................................ 14

Hox 4.1. Bouscboed-Ecvce Ilpa`ts og tbc Còfoli` @risis if Lofkoeia= Gifdifks

grol Tbrcc Xoufds og Quaeitativc Xcscar`b ................................................................ 87

Hox 4.8. Tbc Ilpa`t og tbc Dc`clhcr 8>>9 Dzud of Eivcsto`j Lortaeity afd

Xurae Eivceiboods .............................................................................................................8;

Hox 3.1. Dut`b Discasc ............................................................................................................08

Hox 3.8. Gisàe Ptahieity Eaw= Plcetifk @oppcr ifto ^rospcrity ........................................ 04

Hox 3.0. Gorcàstifk @oppcr ^ri`cs ....................................................................................... 03

Hox 3.4. Tbc Xcturfs to Ilprovcd Ifvcstlcft Ppcfdifk if Lofkoeia ............................ 0;

Hox 3.3. Xoad Pc`tor ^rohecls if Lofkoeia ........................................................................ 09

Hox 3.7. ûhei`-^rivatc ârtfcrsbips= Fo Laki` Hueect ...................................................... 4>Hox 7.1. Povcrcikf Hofd Pprcads if 8>>9 .............................................................................43


8/64

A`jfo

bis Còfo

tbc [ored

afd soìae dcv

worj if Lofk

[ored Hafjs

tbc Cast Asia a

Tcblifa Jba

Tayeor. Waeua

Kraclc Bafò

og tbc Lo

bttp=//www.w

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ecdk

i` Xctrospc`ti

Hafjs ofkoei

ceoplcfts afd

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ôvcrty Xcdu`

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fkoeia òuft

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grol lid-8>

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f`y: tbc tcal i

, Aetaftsctsck

d hy @bris

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opics àf

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cs outeifc rc`c

of ofkoifk

icr vaf dcf Hri

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fèudcs Xaepb

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if`b, Afdrcw

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ored Hafj

j grol tbc

tor Sfit if

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fd Asbecy

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cd grol


9/64

vii

A`rofyls afd Ahhrcviatiofs

ADH Asiaf Dcvceoplcft Hafj

hf Hieeiof

HoL Hafj og Lofkoeia

@Î @ofsulcr ^ri`c Ifdcx

GR Gorcikf ùrrcf`y

KD^ Kross Dolcsti` ^rodu`t

E@ Eoàe ùrrcf`y

EBP Ecgt bafd sidc

LGA Lofkoeiaf Gifafìae Assoìatiof

lf Lieeiof

LFT Lofkoeiaf tokrok

LoG Lifistry og Gifaf`c

lol loftb-of-loftb

lt lctri` tof

FÊ Fofpcrgorlifk eoaf

FPO Fatiofae Ptatisti`s Oggi`c

XBP Xikbt bafd sidc

ozt troy ouf`c

[^T [ifdgaee ^rogit Tax

yoy ycar-of-ycar

ytd ycar-to-datc


10/64

viii

Cxcùtivc Pullary

ofkoeia was ofc og tbc Cast Asiaf còfolics bardcst bit hy tbc keohae dowfturf,

as òppcr pri`cs òeeapscd afd cxtcrfae dclafd gcee. [itb tbc rcòvcry if

còfoli` a`tivity ùrrcftey wcee ufdcrway, hut tbc poei`y `baeecfkcs bikbeikbtcd hy

tbc `risis yct to hc gueey addrcsscd, tbis Còfoli` Xctrospc`tivc cxalifcs tbc jcy

còfoli`, gifafìae, afd poei`y dcvceoplcfts grol lid 8>>2 to Aprie 8>1>.

@oeeapsifk lifcrae pri`cs afd a stccp drop if cxtcrfae dclafd duc to tbc keohae

dowfturf og 8>>2 afd 8>>9 wcrc tbc cxtcrfae sbo`js wbi`b wcrc trafslittcd to

Lofkoeias còfoly. Tbis sbo`j cxposcd ufdcreyifk wcajfcsscs if tbc còfoli`

stru`turc afd poei`y cfviroflcft. Gor cxalpec, cftcrifk tbc `risis, tbc òuftrys gisàe

positiof was bikbey rceiaft of lifcrae rcvcfucs. ôei`y did fot aeeow gor adcquatc

savifks durifk tbc hool, wbi`b saw earkc if`rcascs if ufsustaifahec, ifcggiìcft, afd

popueist cxpcfditurcs. Tbc hafjifk sc`tor was aeso ovcrbcatifk as eoaf krowtb

hoolcd, outpaìfk dcposits. Hafjs wcrc bikbey cxposcd to sc`tors su`b as

òfstru`tiof, wbi`b suggcrcd hadey durifk tbc dowfturf, afd to advcrsc sbo`js to

sifkec `rcditors duc to a òf`cftratcd eoaf hooj.

Tbc proxilatc ilpa`t og tbc cxtcrfae sbo`j was a sbarp widcfifk og tbc gisàe afd

ùrrcft a`òuft dcgiìts. Dclafd gor eoàe ùrrcf`y droppcd afd rcscrvc eosscs wcrc

ifùrrcd if support og tbc dc ga`to cx`bafkc ratc, wbi`b dcprcìatcd sbarpey tbroukb

carey 8>>9. @ofgidcf`c if tbc hafjifk sc`tor gcee, wbcf a lamor hafj gaiecd if eatc 8>>2

afd eoàe ùrrcf`y dcposit outgeows louftcd.

If rcspofsc to tbc `risis, if tbc scòfd quartcr og 8>>9, tbc kovcrflcft ufdcrtooj

strofk a`tiofs of gisàe, lofctary, cx`bafkc ratc, afd gifafìae poeiìcs. Tbcy wcrc

ladc possihec hy strofk poeitiàe ecadcrsbip afd af cggc`tivc hipartisaf òfscfsus.

Tbcsc a`tiofs wcrc aeso supportcd hy a rapid rcspofsc grol dcvceoplcft partfcrs if

tbc gorl og hudkct afd haeaf`c og paylcfts support, afd tc`bfiàe assistaf`c.

Pikfigiàft prokrcss if lififk sc`tor rcgorl afd dcvceoplcft was aeso ladc durifk

8>>9 witb tbc sikfifk og tbc eofk-awaitcd Oyu Toekoi (OT) Ifvcstlcft Akrcclcft.

Ecadifk up to tbc sikfifk og tbis akrcclcft, a fulhcr og poei`y issucs wcrc èarigicd

afd solc og tbc jcy disif`cftivcs to lififk ifvcstlcft wcrc rclovcd.Tbc poei`y rcspofsc og autboritics, bcepcd hy ilprovcd cxtcrfae òfditiofs, as

òllodity pri`cs afd @bifcsc ilport krowtb rcòvcrcd, ecd to a rapid stahieizatiof if

tbc còfoli` situatiof grol lid-8>>9. Fofctbcecss, rcae KD^ if 8>>9 gcee hy 1.7

pcr`cft agtcr stcady krowtb og 2.9 pcr`cft if 8>>2. Tbc soìae ilpa`t og tbc `risis was

cvidcft tbroukb a sbarp dcèifc if rcae wakcs, partiùearey if tbc ifgorlae sc`tor.

Xc`cft eivcsto`j eosscs duc to tbc dzud bavc aeso pea`cd gurtbcr prcssurc of tbc

eivceiboods og tbc rurae poor.

Eoojifk gorward, Lofkoeias lcdiul afd eofk-tcrl krowtb outeooj is gavorahec,

drivcf hy tbc lififk sc`tor. Bowcvcr, tbcrc rclaif sizcahec poei`y `baeecfkcs koifk

gorward. If partiùear, òftifucd gisàe prudcf`c is fc`cssary to su``cssgueey hridkc tbcfcxt gcw ycars prior to tbc risc if gisàe afd cxport rcvcfucs grol tbc OT promc`t.

Xcvcfucs wiee suggcr grol tbc cxpiratiof og tbc [ifdgaee ^rogit Tax if 8>11 afd dofor

gifafìfk is sct to dcèifc. Otbcr fcar-tcrl `baeecfkcs arc to rcsoevc tbc ofkoifk

L


11/64

Cxcùtivc Pullary ix

soevcf`y prohecls if tbc hafjifk sc`tor if a dcìsivc afd trafsparcft laffcr if ordcr

to prcparc tbc sc`tor gor tbc upturf if còfoli` a`tivity, ifvcstlcft, afd àpitae

ifgeows if tbc ycars abcad. Tbc lofctary afd gisàe poei`y staf`cs lust aeso rcspofd

appropriatcey to risifk ifgeatiofary prcssurcs if ordcr to avoid a rcpcat og tbc hoolafd hust `yèc og rc`cft ycars.

Lorc kcfcraeey, fow is tbc tilc to put if pea`c a strofk poei`y gralcworj to

lafakc tbc upòlifk lififk hool afd avoid tbc listajcs og tbc past. Tbc eoolifk

lififk hool hrifks tbc risjs og Dut`b discasc cggc`ts afd a rcturf to tbc progeikatc

popueisl og tbc past. Lcasurcs to addrcss tbcsc risjs ifèudc tbc rc`cftey adoptcd

gisàe stahieity eaw tbat wiee bcep tbc òuftry lovc away grol tbc gisàe hool afd hust

`yècs og tbc past: ilprovclcfts to tbc hudkct pro`css afd tbc peaffifk afd

lafakclcft og puhei` ifvcstlcfts if ordcr to lorc cggiìcftey ahsorh tbc earkc

promc`tcd if`rcascs if rcvcfucs: afd appropriatc poei`y gralcworjs to support guturc

ifgrastru`turc ifvcstlcft. Ilpeclcftifk a tarkctcd povcrty hcfcgit sboued aeso cfsurc

tbc poor arc protc`tcd grol lififk hool-afd-husts if a gisàeey sustaifahec laffcr.

Gifaeey, òftifucd rcgorls if tbc lififk sc`tor wiee cfbaf`c if`cftivcs gor fcw

cxpeoratiof afd cfviroflcftaeey afd soìaeey sustaifahec dcvceoplcft.


12/64


13/64

1

@ B A ^ T C X 1

Tbc Cxtcrfae Pbo`j afd

Its ^roxilatc Ilpa`t

Cxtcrfae Pbo`j if 8>>2->9

Lofkoeia was bit hy a sikfigiàft cxtcrfae sbo`j if eatc 8>>2 afd carey 8>>9 as lifcrae

pri`cs òeeapscd afd cxport dclafd gcee witb tbc keohae còfoli` dowfturf. Tbc pri`c

og òppcr, tbc òuftrys laif cxport, gcee hy as lu`b as 73 pcr`cft grol SP$2,;>> pcr

tof if Aprie 8>>2 to SP$0,>>> pcr tof if Lar`b 8>>9. ^ri`cs og otbcr jcy cxport

òlloditicsòae, zif`, àsblcrc, afd `rudc oieaeso gcee sikfigiàftey. Ofey tbc

pri`c og koed bced up, hcàusc og its roec as a sagc-bavcf ifvcstlcft (Gikurc 1.1).

Tbis cxtcrfae pri`c sbo`j was òlhifcd witb af cxtcrfae dclafd sbo`j rcsuetifk

grol tbc dowfturf if còfoli` a`tivity og Lofkoeias lamor tradifk partfcrs. Gor

cxalpec, @bifas ifdustriae produ`tiof krowtb, wbi`b ahsorhs ahout ;> pcr`cft og

Lofkoeias cxports, seowcd grol ahout 17 pcr`cft ycar-of-ycar if lid-8>>2 to 3pcr`cft if tbc girst quartcr og 8>>9. @bifcsc ilport dclafd gor òppcr afd Lofkoeiaf

koods kcfcraeey gcee sbarpey, rca`bifk aroufd 3> pcr`cft ycar-of-ycar (yoy) if tbc girst

baeg og 8>>9 (Gikurc 1.8).

Gikurc 1.1. @ollodity ^ri`cs@oeeapscd if tbc Pcòfd Baeg og 8>>2

Gikurc 1.8. Afd Dclafd if @bifa,Lofkoeias Earkcst Tradifk ârtfcr,Droppcd

Ifdcx> if Mafuary 8>>4 % ycar-of-ycar bafkc og 0-loftb lovifk avcrakc

Pour`c= ELC, [ored Hafj. Pour`c= Bavcr Afaeyti`s, [ored Hafj.

>

3>

1>>

13>

8>>

83>

0>>

03>

4>>

Apr->; O`t->; Apr->2 O`t->2 Apr->9 O`t->9 Apr-1>

@oppcr

@oae

Koed

@rudc oie

-1>

-3

>

3

1>

13

8>

83

0>

-1>>

-3>

>

3>

1>>

13>

8>>

83>

0>>

Dc`->; Mue->2 Gch->9 Pcp->9 Apr-1>

@bifa Ifdustriae rodu`tiof(sa), XBPTotae Ilports hy @bifa, EBP

@bifa's Ilports og @oppcrOrc afd @of`cftratcs, EBPIlports hy @bifa grolLofkoeia, EBP


14/64

8 [ored Hafj [orjifk âpcr

Tbc gaee if tbc òppcr pri`c afd suddcf còfoli` dowfturf cxposcd stru`turae

afd còfoli` poei`y wcajfcsscs if Lofkoeia. As a rcsuet, as òppcr pri`cs gcee, tbc

gisàe afd ùrrcft a`òuft dcgiìts widcfcd. Dclafd gor eoàe ùrrcf`y droppcd afd

rcscrvc eosscs wcrc ifùrrcd if support og tbc dolcsti` ùrrcf`y, wbi`b dcprcìatcdsbarpey tbroukb carey 8>>9. @ofgidcf`c if tbc ovcrbcatifk hafjifk sc`tor gcee, witb a

lamor hafj gaieifk if eatc 8>>2, afd dcposits gaeeifk rapidey.

Pbarp Dctcrioratiof if Gisàe Haeaf`cs

Tbc òppcr pri`c òeeapsc rcsuetcd if a sbarp dctcrioratiof if tbc gisàe haeaf`c duc to

tbc bikb rceiaf`c of lifcrae rcvcfucs afd tbc gaieurc to savc durifk tbc hool. Tbc

kovcrflcft bad ruf ofey lodcst gisàe surpeuscs durifk tbc hool ycars (8>>3->;),

wbi`b wcrc ifsuggiìcft to ahsorh tbc gisàe sbo`j àuscd hy tbc òeeapsc og tbc lifcrae

pri`cs. If additiof, durifk tbc hool pcriod, tbc kovcrflcft bad sbigtcd tbc gisàehurdcf away grol tbc fof-lififk sc`tor, ecavifk tbc hudkct if`rcasifkey dcpcfdcft

of lififk rcvcfucs. At its pcaj if 8>>; lififk-rceatcd rcvcfuc òftrihutcd fcarey 4>

pcr`cft to totae rcvcfuc or 13 pcr`cft og KD^. If additiof, tbc `cftrae hafj pursucd a dc

ga`to pck og tbc eoàe ùrrcf`y to tbc doeear, wbi`b rcsuetcd if dirc`t trafslissiof og tbc

gaeeifk iftcrfatiofae òppcr pri`c to tax rcvcfucs. Tbc fof-lififk gisàe dcgiìt if`rcascd

dralatiàeey grol ;.0 pcr`cft og KD^ if 8>>7 to a 13.0 pcr`cft dcgiìt if 8>>2 (Gikurc 1.0).

Xisifk rcvcfucs durifk tbc hool pcriod bad guceecd ufsustaifahec afd ifcggiìcft

cxpcfditurc trcfds wbi`b gurtbcr iftcfsigicd tbc gisàe prcssurcs duc to tbc `risis.

Poìae trafsgcrs proeigcratcd, hcòlifk ufivcrsaeizcd durifk hool ycars. Tbc lost

ilportaft soìae trafsgcr prokral was tbc @bied Lofcy ^rokral (@L^), wbi`bdishurscd ahout LFT 14> hieeiof pcr ycar (3.7 pcr`cft og gisàe spcfdifk if 8>>2). [itb

voeatiec lififk rcvcfucs a`òuftifk gor roukbey tbrcc quartcrs og @L^s gifafìfk: tbc

laif soìae sagcty fct gor tbc poor was dcpcfdcft of geu`tuatifk iftcrfatiofae òppcr

pri`c. Gurtbcrlorc tbc @L^ was fot wcee-tarkctcd, witb cxtcfsivc ecajakc og hcfcgits

to fofpoor bouscboeds. Ppcfdifk of wakcs, saearics, àpitae cxpcfditurcs, afd

suhsidics as a sbarc og KD^ aeso if`rcascd sbarpey if 8>>2 (Gikurc 1.4). Bowcvcr, as

disùsscd if @baptcr 3, lafy og tbc ifvcstlcft promc`ts gufdcd durifk tbc hool

grcqucftey ea`jcd cvcf hasi` gcasihieity studics. Ycars og cxtrclcey poor puhei`

ifvcstlcft peaffifk bad aeso rcsuetcd if poor opcratiofae cggiìcf`y og fcw

ifvcstlcfts. Lcafwbiec, kross ufdcrspcfdifk of àpitae laiftcfaf`c bad ecd todisrcpair if tbc cfcrky afd roads sc`tors.


15/64

Lofkoeia Còfoli` Xctrospc`tivc= 8>>2-8>1> 0

Gikurc 1.0. Tbc Gisàe Haeaf`c Lovcdifto Dcgiìt if 8>>2 witb tbc Fof-LififkDcgiìt Xisifk if tbc Hool

Gikurc 1.4. Xisifk Pbarc ogCxpcfditurcs of Puhsidics afdTrafsgcrs Goeeowcd hy Hool if

Ifvcstlcft

% og KD^ % og totae cxpcfditurc

Pour`c= Lifistry og Gifaf`c, [ored Hafj.

Fotc= @cftrae/statc afd eoàe hudkct, LDG, afd

soìae scùrity gufd. * @orporatc ifòlc tax afd

dividcfds grol lififk òlpafics, tbc [^T, afd

royaetics.

Pour`c= Lifistry og Gifaf`c afd [ored Hafj.

Fotc= * Laiftcfaf`c dcgifcd as @apitae Xcpairs

(if hudkct): prohahey ufdcrcstilatcs a`tuae

àpitae rcpairs, as part is ifèudcd if otbcr

itcls. ** Fcw ifvcstlcft dcgifcd as Dolcsti`

Ifvcstlcft ofey.

@urrcft A`òuft, Purpeus to Dcgiìt

Tbc ùrrcft a`òuft haeaf`c swufk grol surpeus to dcgiìt. Duc to tbc gaee if

òllodity pri`cs afd cxport vaeucs, tbc tradc haeaf`c dctcrioratcd larjcdey tbroukb

eatc 8>>2 afd carey 8>>9 (Gikurc 1.3). Tbc vaeuc og cxports gcee witb iftcrfatiofae

òllodity pri`cs, lorc tbaf outstrippifk lodcratiof if tbc ratc og krowtb og ilports.

As a rcsuet tbc ùrrcft a`òuft haeaf`c lovcd grol a surpeus og 7.; pcr`cft og KD^ if

8>>; to a dcgiìt og 14 pcr`cft if 8>>2 èilhifk to ovcr 13 pcr`cft if tbc girst two

quartcrs og 8>>9 (Gikurc 1.7).

Puhstaftiae Xcscrvc Eosscs

[itb dclafd gor eoàe ùrrcf`y gaeeifk if eatc 8>>2 afd carey 8>>9, suhstaftiae rcscrvc

eosscs wcrc ifùrrcd if support og tbc ùrrcf`y. @urrcf`y geikbt durifk tbc `risis

pcriod was gurtbcr akkravatcd hy tbc Hafj og Lofkoeias (HoL) attclpt to boed of to

its dc ga`to ùrrcf`y pck to tbc S.P. doeear. Tbis was if òftrast to otbcr lamor

òllodity cxportcrs tbat ect tbcir ùrrcfìcs grccey dcprcìatc as a girst dcgcfsc

lc`bafisl akaifst gaeeifk iftcrfatiofae òllodity pri`cs. If tbc pro`css, tbc HoL eost

SP$3>> lieeiof og iftcrfatiofae rcscrvcs hctwccf Muey 8>>2 afd Gchruary 8>>9. Tbc

ùrrcf`y dcprcìatcd afyway, hy ahout 02 pcr`cft hctwccf tbc cfd og O`tohcr afd tbc

liddec og Lar`b 8>>9 (Gikurcs 1.; afd 1.2).

-8>

-13

-1>

-3

>

3

1>

13

8> Lififk-rceatcd rcvcfuc*

Hudkct haeaf`c

Fof-lififk haeaf`c*

>

8>

4>

7>

2>

1>>

8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9

Laiftcfaf`c*

Fcw Ifvcstlcft**

Puhsidics &Trafsgcrs

[akcs & Paearics


16/64


17/64


Hafjifk Pc`tor [cajfcsscs

[cajfcsscs if tbc hafjifk sc`tor cxposcd hy tbc cxtcrfae sbo`j rcsuetcd if a `risis og

òfgidcf`c if eatc 8>>2 afd dcposit geikbt. Tbc keohae dowfturf cxposcd prohecls ifLofkoeias gifafìae sc`tor, wbi`b bad hccf ovcrbcatifk durifk tbc hool ycars. Wcry

bikb dolcsti` ifgeatiof00.; pcr`cft yoy if Aukust 8>>2, tbc bikbcst if Cast Asia if

8>>2afd eoosc lofctary poei`y ecd to a `rcdit hool (Gikurc 1.9), wbi`b bid tbc

krowtb if fofpcrgorlifk eoafs (FÊs) afd wcajfcsscs if `rcdit quaeity. Ecfdifk

portgoeios cftcrcd tbc `risis bcaviey òf`cftratcd of sc`tors su`b as òfstru`tiof afd

rcae cstatc. Cxposurcs to ifdividuae lamor horrowcrs wcrc bikb, if`rcasifk tbc

vuefcrahieity og a hafjs eoaf portgoeio to sbo`js bittifk ifdividuae `rcditors. Gor

cxalpec, grol lid-8>>2 ofwards, eoafs a`òuftcd gor hy tbc top 3> horrowcrs hy eoaf

sizc if`rcascd grol aroufd 8> pcr`cft to 0> pcr`cft (Gikurc 1.1>). Tbcsc gikurcs arc of

af akkrckatc hasis afd ifdividuae hafjs lay wcee bavc bikbcr cxposurcs.

Tbc bikb ecvce og ifgeatiof rcsuetcd if fckativc rcae iftcrcst ratcs of eoàe ùrrcf`y

dcposits, òftrihutifk to tbc lovclcft og eoàe ùrrcf`y (LFT) savifks ifto GR

dcposits grol lid-8>>2 (Gikurc 1.11). [bcf Afod Hafj, tbc gourtb earkcst hafj, was

tajcf ufdcr òfscrvatorsbip hy tbc HoL, at tbc cfd og 8>>2, tbc puhei` startcd to eosc

òfgidcf`c if tbc hafjifk sc`tor. Lamor sbortakcs og gorcikf ùrrcf`y clcrkcd afd tbc

HoL ratiofcd GR ecadifk to a suhstaftiae dcviatiof hctwccf tbc oggiìae HoL cx`bafkc

ratc afd tbc paraeece larjct ratc (rcgcr ha`j to Gikurc 1.;). Tbis ecd to a kcfcraeizcd

geikbt out og hotb LFT afd GR dcposits. To rcstorc puhei` trust, tbc kovcrflcft issucd

a heafjct dcposit kuaraftcc if Fovclhcr 8>>2, hut it ecgt lafy ùstolcrs if

uf`crtaifty ahout wbi`b dcposits wcrc ifèudcd, wbiec rcae iftcrcst ratcs ofLFT dcposits wcrc fckativc.

Gikurc 1.9. A @rcdit Hool Pct tbc Ptakcgor Trouhec if tbc Gifafìae Pc`tor

Gikurc 1.1>. @of`cftratcd EcfdifkIf`rcascd Cxposurc to tbc 3> EarkcstHorrowcrs

@rcdit krowtb pcr`cft yoy LFT hf %

Pour`c= [ored Hafj. Pour`c= Hafj og Lofkoeia, [ored Hafj.

> 1> 8> 0> 4> 3> 7>

Lofkoeia

^bieippifcs

Jorca

Tbaieafd

Pifkaporc

Laeaysia

Ifdofcsia

Wictfal

@bifa

Auk'>9 % y-y

Dc`'>2 % y-y

13%

8>%

83%

0>%

03%

>

83>

3>>

;3>

1,>>>

Dc`->; Dc`->2 Dc`->9

LFT hieeiof

Pbarc og totae eoafs outstafdifk


18/64


19/64

;

@ B A ^ T C X 8

Lofkoeias Cxpcricf`c

@olparcd to Otbcr

@oppcr ^rodu`crs

ee tbc lamor òppcr produ`crs if tbc wored wcrc aggc`tcd hy tbc òeeapsc if òppcr

pri`cs. Bowcvcr, Lofkoeias cxpcricf`c was pcrbaps tbc lost scvcrc hcàusc og

its partiùearey wcaj còfoli` afd poei`y cfviroflcft. Tbc earkcst òppcr cxportcrs

if tbc wored, if tcrls og sbarc og òppcr to totae cxports, arc ]alhia, @biec, Lofkoeia

(LFK), âpua Fcw Kuifca (^FK),

afd ^cru (Gikurc 8.1).

Cvcf tboukb tbcsc òuftrics wcrc

aee cxposcd to tbc salc keohae òppcrpri`c òeeapsc, tbc ilpa`t of tbcir

còfolics was diggcrcft. Aee givc

òuftrics ga`cd KD^ krowtb dcèifcs

if 8>>9, hut ^cru afd Lofkoeia

suggcrcd tbc earkcst dcèifcs (Gikurc

8.8). Aee òuftrics gisàe haeaf`cs

lovcd ifto dcgiìt if 8>>9. @biec afd

âpua Fcw Kuifca bad ruf earkc

gisàe surpeuscs durifk tbc hool up to

8>>2, wbcrcas Lofkoeia afd ]alhia

wcrc aercady if dcgiìt if 8>>2 (Gikurc

8.0). Lofkoeias fof-lififk gisàe

dcgiìt was tbc earkcst og aee.

A

Gikurc 8.1. Lofkoeias Cxport@of`cftratiof @olparcd to Otbcr @oppcr

^rodu`crs

Cxport òf`cftratiof ifdcx*(rikbt axis, har), òppcr sbarcif cxports if 8>>; (ecgt axis, eifc)

Pour`c= SF @oltradc, [ored Hafj.

Fotc= * Bcrgifdabe ifdcx= sul og squarcs og % cxport

sbarcs a`ross aee olloditics (rafkc= >1>>).

;;%

3;%

44%

0>% 8;%

>

1>

8>

0>

4>

3>

7>

>.>

>.1

>.8

>.0

>.4

>.3

>.7

>.;

>.2

>.9

1.>

]alhia @biec Lofkoeia ^FK ^cru


20/64


Gikurc 8.8. Lofkoeias Krowtb afdFof-lififk Gisàe Haeaf`c [orstAggc`tcd alofk @oppcr ^rodu`crs

Gikurc 8.0. Gisàe Haeaf`cs Dctcrioratcdgor Aee @oppcr ^rodu`crs

^cr`cftakc poift `bafkc (KD^ krowtb)/^cr`cft og KD^(gisàe haeaf`c)

^cr`cft og KD^

Pour`c= ILG [ored Còfoli` Outeooj datahasc,

ILG Artièc IW rcports, [ored Hafj

Pour`c= ILG [ored Còfoli` Outeooj Datahasc.

Fotc= Kovcrflcft haeaf`c cxèudifk krafts.

Tbc ùrrcft a`òufts og aee òuftrics wcrc aeso strofkey ilpa`tcd hy tbc òppcr

pri`c òeeapsc. Bowcvcr, Lofkoeia saw a partiùearey earkc dctcrioratiof if 8>>2

(Gikurc 8.4), witb ]alhia aeso rcqucstifk cxtcrfae assistaf`c.1

Tbc risc if avcrakc @Îifgeatiof durifk tbc òllodity pri`c ruf-up was aeso krcatcst if Lofkoeia, cvidcf`c

og tbc earkcst dolcsti` hool, òlparcd to tbc otbcr gour òuftrics (Gikurc 8.3).

Gikurc 8.4. Hut tbc @urrcft A`òuftXcvcrsae gor Lofkoeia [as ârtiùeareyLarjcd

Gikurc 8.3. As [as tbc Xisc afd Gaee if@Î Ifgeatiof

^cr`cft og KD^ ^cr`cft ycar-of-ycar

Pour`c= ILG [ored Còfoli` Outeooj

Datahasc.

Pour`c= ILG [ored Còfoli` Outeooj Datahasc.

Fotc= Ifgeatiof og avcrakc ofsulcr pri`cs.

-8>

-13

-1>

-3

>

3

@biec LFK ^FK ^cru ]alhia

@bafkc if KD^ krowtb8>>9 to 8>>2Fof-lififk gisàe haeaf`c8>>2

fa

-13

-1>

-3

>

3

1>

8>>8 8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9

Lofkoeia

@biec

âpua Fcw Kuifca

^cru

]alhia

-8>

-13

-1>

-3

>

3

1>

13

8>>8 8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9

Lofkoeia

@biec

âpua Fcw Kuifca

^cru

]alhia

>

3

1>

13

8>

83

0>

8>>8 8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9

Lofkoeia

@biec

âpua Fcw Kuifca

^cru

]alhia


21/64


@oppcr cxport dcpcfdcf`c, or a bikb cxport òf`cftratiof, aeofc docs fot cxpeaif

tbc diggcrcf`cs if pcrgorlaf`c durifk tbc `risis. Gor cxalpec, ]alhia afd @biec arc tbc

lost dcpcfdcft of òppcr cxports, hut tbcir cxpc`tcd drop if KD^ is ecss tbaf tbat og

Lofkoeia afd ^cru. ]alhia opcfcd a lamor fcw òppcr lifc if eatc 8>>2 (tbc ofeyòuftry to do so).

Tbc if`rcasc if òppcr output litikatcd tbc dowfturf. ]alhia aeso rclovcd tbc

wifdgaee tax of lififk to òftifuc to attra`t fcw lififk ifvcstlcfts afd prcvcft

cxistifk opcratiofs grol hcifk sàecd dowf prclaturcey. ]alhia aeso hcfcgitcd grol

dcht rceicg as a rcsuet og kood còfoli` pcrgorlaf`c. ^cru bad a`ùlueatcd sizcahec

gisàe surpeuscs gor tbc prcvious tbrcc ycars, afd uscd tbc lifcrae wifdgaee earkcey hy

if`rcasifk savifks afd rcduìfk puhei` dcht.

@biec goufd itsceg if a kood positiof to wcatbcr tbc storl= it hcfcgitcd grol a gisàe

ruec tbat eilitcd cxpcfditurc durifk hool tilcs, ifgeatiof tarkctifk, a gecxihec cx`bafkc

ratc, a òppcr stahieizatiof gufd to bcep cfsurc tbat tbc geu`tuatiofs if òppcr pri`cs do fot

spieeovcr ifto tbc rcst og tbc còfoly, afd adcquatc a``css to gorcikf gifafìfk.

Ifdccd, tbc òftrast og Lofkoeias cxpcricf`c witb tbat og @biec is partiùearey

strijifk= @biecs cx`bafkc ratc was gecxihec (so it ahsorhcd part og tbc sbo`j) afd it was

ahec to sceg-gifaf`c a earkc stilueus pa`jakc to support its còfoly. Tbis was a`bicvcd

drawifk of earkc gisàe savifks ladc grol hool ycars ufdcr its stru`turae haeaf`c ruec

(scc Hox 8.1). @biecs hafjifk sc`tor was aeso ufaggc`tcd duc to prudcft ecfdifk

poeiìcs durifk tbc hool pcriod, ufeijc Lofkoeia.

Hox 8.1. @biecs Gisàe Xckilc

Hox Gikurc 8.1. Bow @biecs Ptru`turae Haeaf`cXuec Ptahieizcd tbc Hudkct Durifk tbc @oppcr^ri`c Hool afd Hust

Pour`c= [ored Hafj, ILG, @cftrae Hafj og @biec afd Lofkoeia.

^rior to tbc iftrodu`tiof og its gisàe rckilc, @biec bad suggcrcd grol a scclifkey cfdecsssu``cssiof og lififk hools afd husts. If 8>>1, tbc @biecaf Lifistry og Gifaf`c adoptcd astru`turae haeaf`c ruec (Hox Gikurc 8.1) wbi`b eilitcd tbc cggc`ts og `yèiàeity of gisàelafakclcft (lififk rcvcfucs arc if tbc ordcr og 13 pcr`cft og totae rcvcfucs) afd ilprovcd

wcaj puhei` gifaf`cs sccf if tbceatc 199>s. Tbcsc wcajfcsscsifèudcd a scrics og gisàe dcgiìts,tbc fckativc fct wortb og tbc@cftrae Hafj (ufdcrlifcd hy aearkc haieout og ifsoevcft hafjs iftbc 192>s afd GR opcratiofs iftbc 199>s), gorcikf dchtvuefcrahieitics, afd tbc earkcòftifkcft eiahieitics assoìatcdwitb pcfsiofs afd ifgrastru`turcòf`cssiofs. A fcw gisàe rckilcwas fccdcd to fcutraeizc tbcgeu`tuatiofs. If ordcr to providclaxilul èarity of tbc gisàesituatiof afd avoid lafipueatioftbc rckilc bad to hc silpec,ècarey dcgifcd, afd trafsparcft.

Tbc sour`c og tbc geu`tuatiofs of

gisàe rcvcfucs was tbrccgoed.Girst, wbcfcvcr òppcr (afdloeyhdcful) pri`cs wcft up,lififk tax rcvcfucs goeeowcd.

(Hox òftifucs of fcxt pakc)

1>>>

0>>>

3>>>

;>>>

9>>>

-13

-1>

-3

>

3

1>

199;

1992

1999

8>>>

8>>1

8>>8

8>>0

8>>4

8>>3

8>>7

8>>;

8>>2

@biec's gisàe haeaf`c (% og KD^)

@biec's stru`turae haeaf`c (% og KD^)

Lofkoeia's gisàe haeaf`c (% og KD^)

@oppcr pri`c (rikbt axis) if $ pcr lctri` tof


22/64

1> [ored Ha

Hox 8.1 (òfti

To fcutraeizc geupri`c. Tbis dctcreofk-tcrl pri`cgeu`tuatcd, fof-was cstilatcd,slootbifk lc`b

If ca`b ycar, tbsu`b a way tbattbcrcgorc aeecdsurpeus). Durifkpea`c. @biecs aèilitcd to 1 pcrìt was aeso rcvis@urrcftey, @biec i

@biecs gisàe rckcfcratcd hy tbGufd (CPPG) wceoàe gifafìae astbc rcàpitaeizatiafd gifafìae as

purposcs ofey= gòfscrvativc afkovcrflcft hofpcr`cft og KD^hieeiof if savifkstbc gifafìfk og t

Tbc stru`turae hsustaifahec hudkog its KD^. @biectbc dowfturf. Tbog 1 pcr`cft ogifvcstlcfts. Tb

òftrovcrsiae, isPour`c= [ored Hafj

Fotc

1If rcspofsc to t

povcrty rcdu`tio

its quota, wbcrc

83-loftb ILG Pt

witb eow a``css t

j [orjifk âpcr

ucd)

`tuatiofs, a eofifcd tbc stru`t

promc`tiof, tbcififk tax rcvcf

afd a stru`turaeafisl was adopt

c stru`turae (foa spcìgi` gisàe hstru`turae haeaftbc lififk hoouae gisàe surpeuft. Tbc stru`turad dowfward sc

s ufdcr a stru`tu

spofsihieity eawruec. Tbc ^cfsi

rc `rcatcd afdsct larjcts grolf og tbc @cftraect lafakclcft.

ifafìfk tbc gis`d lifdgue og tbds og tbc Sfitcdcvcry ycar, witbhcgorc tbc keohaebc gisàe dcgiìt `

aeaf`c ruec cggccts. @biec wcatbis fow ifmc`tifkc @biecaf gisàeD^ tax ùts, 1poei`y og ruffif

ow gueey vifdiàtstagg: Heoolhcrk: Hu

bc `risis, ]alhi

f prokral, aetbo

s Lofkoeia rc`c

afd-Hy Arrafkc

o ILG rcsour`cs.

-tcrl òppcr prirae lififk rcvccaeizcd rcvcfuccs geu`tuatcd. Tfof-lififk taxcd to òftroe geu`t

t a`tuae) rcvcfuaeaf`c woued hc`c. @biec hckaf

ycars og tbccs woued krow toe haeaf`c tarkct icrae tilcs to hct

rae gisàe dcgiìt ru

òlpeclcfts tbof Xcscrvc Gufdboeey ifvcstcd agisàe portgoeio kHafj ovcr givc yTbc savifks sct

ae dcgiìt afd rcp rcquirclcft toPtatcs, scvcrae

a geoor og >.8 pcre `risis. Today, tbuscd hy tbc stil

tivcey cfdcd tbcrcd tbc storl hcufds ifto tbc c`tilueus pa`jakccr`cft if`rcascearkc gisàe surp

d afd eckitilizcdkcts Hurcau, Lifist

rc`civcd a suhst

ukb its a``css to

ivcd 0>> pcr`cft

cft grol Mafua

`c promc`tiof waucs. Ig tbc a`tua

s woued hc savfcutraeizc tbis,cvcfuc strcaluatiofs og tbc ko

s woued sct a eia`bicvcd. Tbc hitb a stru`turae hid-8>>>s, tbc s

2 or 9 pcr`cft orcvicwcd cvcry

tcr rcspofd to tbec og >.3 pcr`cft.

is rckilc hy l(^XG) afd Poìroad if ordcr toowtb. Tbc gisàears afd if`rcascasidc if tbc stah

ayifk puhei` dch hc eiquid: ifvcCS statcs, afd`cft. Tbc stahieisavifks arc do

ueus pa`jakc.

hool afd hustttcr tbaf otbcrsfoly, ifèudifkis cftircey dolcùrrcft cxpcfd

euscs durifk tbc

hy poeitiàe poeery og Gifaf`c og @bie

aftiae if`rcasc i

LG gifafìfk is

ufdcr its PHA.

y 8>>;, hut tbis

s uscd ifstcade lififk pri`c wccd. Pcòfd, wba eofk-tcrl KDwas `rcatcd. Tbcrflcfts gifaf

lit of a`tuae cxdkct haeaf`c tb

aeaf`c og 1 pcr`tru`turae haeaf`cg KD^, hut cxpcycar, afd if tbcc clcrkifk cò

afakifk tbc gifae afd Còfoli`sbiced tbc cx`barcspofsihieity eaws trafsparcf`y oieizatiof gufd arc

t. Tbc ifvcstlcstcd lostey (;>apaf. Tbc ^XGatiof gufd bcedf to SP$; hieeio

`yècs, witb prcitb savifks og ah

gufds to protc`t tstiàeey gifaf`cd,iturcs, afd >.2 plififk hool, wb

.c.

gifafìfk og its

tiee ofey aroufd

or òlpectcfcss

as òfsidcrcd p

og tbc a`tuaeft ahovc tbccfcvcr KD^

krowtb ratcird, a silieariae asscts.

cfditurcs ifs tarkctcd isft og KD^ (aruec was if

diturcs wcrcàsc og @biecoli` trcfds.

fìae assctsPtahieizatiof

fkc ratc afdaeso pcrlitsg gisàe poei`yuscd gor two

t stratcky ispcr`cft) if

rc`civcs >.3hout SP$83, hcàusc og

di`tahec afdout ofc tbirdbc poor grolafd òfsistscr`cft puheiì`b bad hccf

fkoifk ILG

3> pcr`cft og

, ^cru bad a

rcàutiofary


23/64

11

@ B A ^ T C X 0

Tbc ôei`y Xcspofsc

Tbc Kovcrflcfts Ptrofk ôei`y A`tiofs

Ptrofk poei`y a`tiofs wcrc tajcf hy tbc kovcrflcft if carey 8>>9 to addrcss tbc `risis.

Ga`cd witb tbc rcaeity og tbc scvcrc dowfturf, tbc kovcrflcft ifitiaeey òfsidcrcd a

varicty og possihec rcspofscs. Tbcsc ifèudcd sikfifk eofk-tcrl lifcrae cxportòftra`ts if cx`bafkc gor earkc up-groft paylcfts afd ilpeclcftifk a widc-rafkifk

stilueus pa`jakc to hc gufdcd hy a SP$1.8 hieeiof sovcrcikf hofd. As còfoli`

òfditiofs worscfcd, afd a``css to iftcrfatiofae àpitae larjcts of rcasofahec tcrls

scclcd vcry diggiùet, a hipartisaf òfscfsus hckaf to clcrkc aroufd a lorc

òlprcbcfsivc poei`y rcspofsc, a rcspofsc tbat òued hc supportcd hy tbc ILG afd

otbcr dcvceoplcft partfcrs.

Tbcsc poei`y `bafkcs ifèudcd strofk a`tiofs of gisàe, lofctary, cx`bafkc ratc,

afd gifafìae poeiìcs (Tahec 0.1). Gor cxalpec, to prcvcft af ovcrsbootifk og tbc

cx`bafkc ratc tbc `cftrae hafj sbarpey raiscd iftcrcst ratcs if Lar`b 8>>9 to 14 pcr`cft

grol 9.;3 pcr`cft. Tbc HoL aeso ahafdofcd its dc ga`to pck afd iftrodu`cd a

trafsparcft hi-wccjey gorcikf cx`bafkc au`tiofifk lc`bafisl to rcstorc òfgidcf`c if

tbc eoàe ùrrcf`y. Of tbc gisàe sidc, witbout additiofae lcasurcs, it was gorcàst if

carey 8>>9 tbat tbc 8>>9 hudkct dcgiìt was bcadifk gor 18 pcr`cft og KD^.

Tahec 0.1. Pullary og ôei`y A`tiofs Tajcf ovcr 8>>9

Pc`tors ôei`y a`tiofs=

Gisàe poei`y Dcgiìt òftaifcd to 3.4 pcr`cft og KD^, hceow tbc 3.2 pcr`cft tarkct if tbc Mufc 8>>9 hudkct

ûhei` ifvcstlcft ùt

Cxpcfditurc ùt of wakcs afd saearics og puhei` scrvafts: birifk grcczc ilposcd.Fof-òf`cssiofae gorcikf horrowifk eilitcd if 8>>9

Cx`bafkc ratc afdlofctary poei`y

HoL raiscd tbc poei`y ratc to 14% afd iftrodu`cd GR au`tiof

Hafjifk sc`tor Two gaiecd hafjs put ufdcr rc`civcrsbip. Audit hy iftcrfatiofae rcputahec auditor gor ofc hafjòlpectcd afd hafj hcifk eiquidatcd.

Xc`civcr appoiftcd gor scòfd hafj afd audit ufdcrway. Ptatc hafj `rcatcd to bousc tbc koodasscts.

HoL if`rcascd àpitae adcqua`y rcquirclcfts.

HoL rcviscd afd èarigicd dcposit kuaraftcc eaw.

Lififk sc`tor Pikfifk og OT akrcclcft afd assoìatcd poei`y lcasurcs (c.k. àf`ceeatiof og [^T)

^rokrcss of CITI

Pour`c= [ored Hafj stagg.


24/64


To jccp tbc gisàe dcgiìt witbif gifaf`cahec eilits, tbc kovcrflcft òued ùt spcfdifk

or raisc rcvcfucs, or hotb. Pif`c raisifk rcvcfucs is ifbcrcftey diggiùet durifk af

còfoli` dowfturf, tbc kovcrflcft bad eittec `boi`c hut to ùt spcfdifk drastiàeey if

its 8>>9 hudkct, witb tbc hudkct alcfdcd if Lar`b afd Mufc 8>>9. Tbc Mufcalcfdlcft tarkctcd a 3.2 pcr`cft og KD^ dcgiìt (LFT 074 hieeiof) wbi`b òlparcs

witb tbc guee ycar outturf og 3.4 pcr`cft og KD^ (LFT 082 hieeiof).

Pupport hy Iftcrfatiofae afd Hieatcrae Dofors

Tbc kovcrflcft prcscftcd its a`tiof peaf to tbc dcvceoplcft partfcrs of Lar`b 14,

8>>9. Of Aprie 1, 8>>9, tbc ILG Hoard approvcd af 12-loftb Ptafd-Hy Arrafkclcft

(PHA)1og SP$889 lieeiof if haeaf`c og paylcfts support to bcep Lofkoeia admust hy

stahieizifk tbc la`rocòfoli` situatiof.

Tbc jcy ohmc`tivcs og tbc ILG-supportcd prokral arc= to rcstorc la`rocòfoli`stahieity tbroukb gisàe, lofctary, afd gifafìae sc`tor poeiìcs: afd protc`t tbc poor

grol tbc hurdcf og tbc fccdcd admustlcft. Tbc prokral aeso ails to outeifc a soeid

la`rocòfoli` gralcworj tbat providcs tbc hasis gor tbc autboritics to approa`b tbc

hroadcr iftcrfatiofae òllufity gor gifafìae support.

Bowcvcr, tbc `cftcr pic`c was a suhstaftiae gisàe admustlcft to dcae witb tbc gaee

if lifcrae rcvcfucs og 1> pcr`cft og KD^. Gisàe dcgiìts og 7 afd 4 pcr`cft og KD^ if

8>>9 afd 8>1>, rcspc`tivcey, wcrc huiet ifto tbc prokral, witb a totae gisàe gifafìfk

kap at tbc tilc cstilatcd at SP$8>3 lieeiof if 8>>9 afd 8>1>. Tbc gisàe admustlcft is

`cftcrcd prilariey aroufd cxpcfditurc rcstraift. Tbc hikkcst savifks wiee òlc grol

postpofclcft og dolcstiàeey gifaf`cd àpitae cxpcfditurc peafs. Additiofae savifkswiee hc kcfcratcd grol a wakc afd birifk grcczc, ùts if solc uftarkctcd soìae

aeeowaf`cs, afd rcdu`tiofs if otbcr pur`bascs afd koods afd scrvi`cs. To prcvcft tbc

guturc hool-hust gisàe `yèc, a strofkcr ifstitutiofae gralcworj wiee hc pea`cd to

cfsurc a krcatcr proportiof og wifdgaee òppcr rcvcfucs is savcd.

Additiofae rcgorls goùs of lofctary afd cx`bafkc ratc poeiìcs, rchuiedifk

òfgidcf`c if tbc hafjifk systcl, afd protc`tifk tbc lost vuefcrahec grol tbc

dowfturf afd tbc admustlcfts. Tbc prokral cfvisakcs strcfktbcfifk tbc òuftrys

iftcrfatiofae rcscrvc positiof afd àeihratifk lofctary poei`y to prcvcft afy ufduc

ovcrsbootifk og tbc cx`bafkc ratc afd to jccp ifgeatiof of a dowfward patb. A fcw

systcl og gorcikf ùrrcf`y au`tiof bas hccf iftrodu`cd to bavc a fofdis`rilifatoryafd trafsparcft lc`bafisl to scee gorcikf cx`bafkc tbat aeeows gor larjct

dctcrlifatiof og tbc cx`bafkc ratc. To huied òfgidcf`c if tbc eoàe hafjifk systcl,

tbc prokral ifèudcs lcasurcs to gurtbcr strcfktbcf tbc hafjifk systcl hy ilprovifk

tbc ùrrcft gralcworj gor dcposit kuaraftccs afd cfbafìfk hafj supcrvisiof.

Gifaeey, witb ofc tbird og tbc popueatiof eivifk hceow tbc povcrty eifc, ilprovifk tbc

soìae sagcty fct is a jcy ceclcft og tbc prokral. Tbis is to cfsurc tbc poorcst scklcfts

og soìcty arc protc`tcd adcquatcey. If òeeahoratiof witb tbc Asiaf Dcvceoplcft Hafj

(ADH) afd tbc [ored Hafj, tbc autboritics wiee dcsikf a òlprcbcfsivc ovcrbaue og

tbc cxistifk uftarkctcd systcl og soìae trafsgcr prokrals. Tbc koae wiee hc to hcttcr

tarkct tbcsc prokrals towards tbc vcry poor afd if`rcasc tbc support tbat poorbouscboeds rc`civc.

Adbcrcf`c to tbc ILG prokral bas hccf strofk. If Lar`b 8>1>, tbc ILG Hoard

approvcd tbc òlpectiof og tbc gourtb rcvicw, wbi`b cfahecd tbc illcdiatc


25/64


dishursclcft og af alouft cquivaecft to PDX 13.00 lieeiof (ahout SP$80.4 lieeiof).

Tbis hroukbt totae dishursclcfts ufdcr tbc arrafkclcft to af alouft cquivaecft to

PDX 188.74 lieeiof (ahout SP$12;.4 lieeiof). Tbc Hoard aeso approvcd tbc rcqucst gor

tbc lodigiàtiof og pcrgorlaf`c `ritcria to rcgec`t tbc rcviscd la`rocòfoli` data afdgralcworj. Tbc Hoards prcss rcecasc fotcd tbc suhstaftiae ilprovclcft og

Lofkoeias la`rocòfoli` outeooj afd tbc kovcrflcfts prokrcss if strcfktbcfifk

puhei` gifaf`cs. Tbc fccd gor òftifucd gisàe admustlcft afd disìpeifc was

clpbasizcd, if partiùear tbroukb tbc carey passakc og tbc òlprcbcfsivc soìae

trafsgcr afd gisàe stahieity eaws tbat wcrc suhlittcd to pareialcft. Tbc ilportaf`c og

strcfktbcfifk tbc hafjifk systcl was aeso bikbeikbtcd, witb pareialcftary adoptiof

og a òlprcbcfsivc hafj rcstru`turifk peaf vicwcd as a jcy lcasurc.

To giee tbc gisàe gifafìfk kap, tbc [ored Hafj pecdkcd SP$7> lieeiof. Tbis àlc

if tbc gorl og two sifkec-traf`bc dcvceoplcft poei`y `rcdits (D^@s, SP$4> lieeiof gor

8>>9 afd SP$8> lieeiof gor 8>1>) supportifk rcgorls if tbc poei`y arcas lost aggc`tcd

hy tbc dowfturf. Tbc girst D^@, dishurscd if Muey 8>>9 (Hox 0.1), goùscd of tbc

goeeowifk poei`y arcas (i) gisàe poei`y afd lafakclcft, kivcf tbc hudkcts strofk

dcpcfdcf`c of lififk rcvcfucs: (ii) soìae protc`tiof, kivcf tbc ilpa`t og tbc

còfoli` dowfturf of tbc poor: (iii) tbc gifafìae sc`tor, wbi`b was ovcrbcatifk wbcf

tbc keohae `risis bit, afd wbi`b cxpcricf`cd a lamor hafj gaieurc if eatc 8>>2: afd (iv)

tbc lififk sc`tor, kivcf tbc sc`tors ilportaf`c if drivifk tbc rcòvcry.8^rcparatiof

og tbc scòfd D^@ is ofkoifk witb gufds bavifk hccf if`rcascd to SP$0> lieeiof.

Tbc kovcrflcft ohtaifcd cquaeey strofk support grol tbc ADH (SP$7> lieeiof) afd

Mapaf (SP$3> lieeiof), afd aeso rc`civcd hudkct support grol Austraeia (SP$0.3 lieeiof),afd a girl pecdkc grol tbc Sfitcd Ptatcs. As a rcsuet, tbc promc`tcd haeaf`c og paylcfts

afd gisàe kaps wcrc gieecd. Tbc [ored Hafj, Mapaf, tbc ADH, afd Austraeia dishurscd tbcir

pecdkcd aloufts gor hudkct support if 8>>9 (SP$100.3 lieeiof if totae) if Muey 8>>9. Tbc

ILG, lcafwbiec, dishurscd ahout SP$179 lieeiof if 8>>9 ufdcr tbc PHA if haeaf`c og

paylcfts support gor tbc `cftrae hafj.

Lififk Pc`tor Xcgorls

Ilportaft lififk sc`tor rcgorls wcrc aeso ufdcrtajcf witb tbc sikfifk og tbc OT

Ifvcstlcft Akrcclcft. Pikfigiàft prokrcss if lififk sc`tor rcgorl afd dcvceoplcft

was aeso ladc durifk 8>>9 witb tbc sikfifk og a earkc, wored-èass lififk promc`takrcclcft= tbc OT Ifvcstlcft Akrcclcft witb Ivafboc Lifcs afd Xio Tifto (Hox 0.8).

If tbc pro`css ecadifk up to tbc sikfifk og tbis akrcclcft of O`tohcr 7, a fulhcr og

poei`y issucs wcrc èarigicd afd solc jcy disif`cftivcs to ifvcstlcft wcrc rclovcd.

If partiùear, tbc [ifdgaee ^rogits Tax0 was rcpcaecd witb cggc`t grol Mafuary 8>11.

Otbcr positivc `bafkcs ifèudcd pcrlittifk privatc sc`tor òfstru`tiof afd

lafakclcft og roads afd watcr suppey gaìeitics, eihcraeizifk tbc poei`y cfviroflcft

afd `bafkifk tbc ifòlc tax rckilc to cxtcfd eoss àrry gorward provisiofs. If

additiof, tbc OT akrcclcft àf hc uscd as tbc dragt stafdard akrcclcft upof wbi`b

guturc promc`ts wiee hc fckotiatcd.

Fcvcrtbcecss, otbcr lcasurcs wcrc iftrodu`cd tbat providcd strofk disif`cftivcs

to fcw cxpeoratiof afd dcvceoplcft. Must as tbc OT fckotiatiofs wcrc hcifk

òlpectcd, af alcfdlcft to tbc WAT Eaw was iftrodu`cd. Tbis alcfdlcft cxèudcd


26/64


cxports og lifcrae produ`ts grol èailifk rcgufds gor tbc WAT paid of tbc ifputs

uscd gor tbcsc lifcrae produ`ts. Tbis òfstitutcs a sikfigiàft if`rcasc if opcratifk

òsts to lifcrs afd rcdu`cs progitahieity. If additiof, gorward lovclcft of ilportaft

rckueatory dcvceoplcfts, if rceatiof to lifcrae ei`cfsifk, bas hccf seow.

Hox 0.1. [ored Hafj Hudkct Pupport Approvcd

Of Mufc 83, tbc Hoard approvcd SP$4> lieeiof if hudkct support gor Lofkoeia. It was ratigicd hypareialcft of Muey 8. Tbc support àlc as part og a òf`crtcd cggort hy Lofkoeias dcvceoplcftpartfcrs, ifèudifk tbc ILG, tbc ADH, Mapaf, afd Austraeia, to bcep lafakc tbc dowfturf. Tbc[ored Hafjs hudkct support to Lofkoeia àlc if tbc gorl og a D^@ to Lofkoeia og SP$4>lieeiof of IDA tcrls.a

Tbc D^@ is tbc girst og two `rcditsa D^@8 is peaffcd gor 8>1>dcsikfcd to assist tbckovcrflcft lafakc tbc ùrrcft dowfturf, wbi`b was trikkcrcd hy tbc òeeapsc og tbc òppcr

pri`c, afd support tbc còfoli` rcòvcry. Tbc D^@8 supports rcgorls if gisàe poei`y afdlafakclcft, soìae protc`tiof, tbc gifafìae sc`tor, afd tbc lififk sc`tor, kivcf tbc sc`torsilportaf`c if drivifk tbc rcòvcry.

Xckardifk gisàe poei`y afd lafakclcft, tbc D^@s support ilprovclcft if àpitae hudkctpeaffifk, ifèudifk tbc protc`tiof og laiftcfaf`c og hasi` ifgrastru`turc. To support tbcscrcgorls, tbc Hafj wiee providc tc`bfiàe assistaf`c to dcvceop rohust `ritcria gor promc`tprioritizatiof afd scec`tiof, afd tbc gifafìfk og promc`t laiftcfaf`c ovcr tbc eigcspaf og tbcifgrastru`turc. If tbc arca og soìae protc`tiof, tokctbcr witb tbc ADH, tbc Hafj supports soìaewcegarc rcgorls hy bcepifk to `rcatc a systcl tbat wiee aeeow tbc Lifistry og Poìae [cegarc tohcttcr tarkct its soìae assistaf`c to tbc poor. If tbc gifafìae sc`tor, tbc ail is to ilprovcòfgidcf`c if tbc gifafìae sc`tor afd strcfktbcf hafjifk supcrvisiof. Tbis is ilportaft hcàuscaddrcssifk tbc prohecls og tbc gifafìae sc`tor if a dcìsivc afd trafsparcft laffcr wiee bcep

pavc tbc way gor a lu`b strofkcr hafjifk sc`tor if tbc ycars abcad afd aeso bcep prcparc it gortbc upòlifk còfoli` upturf wbcf tbc Oyu Toekoi lifc hcòlcs opcratiofae.

Tbc gifae arca is tbc lififk sc`tor, wbi`b wiee hc a jcy drivcr og krowtb if tbc lcdiul to eofk tcrl.Ssifk ùrrcft fckotiatiofs og lamor lififk promc`ts, tbc kovcrflcft is worjifk witb pareialcft toèarigy afd ilprovc its lififk poei`y gralcworj. Tbis ifèudcs ifsistifk of rcspofsihec lififkpra`ti`cs, òfsistcft witb iftcrfatiofae stafdards (falcey, tbc Cquator ^rifìpecs), afd hcòlifkvaeidatcd ufdcr tbc Cxtra`tivc Ifdustrics Trafsparcf`y Ifitiativc (CITI) prokral.

Pour`c= Tbc guee D^@ doùlcft is avaieahec at tbc [ored Hafjs Doùlcfts afd Xcports [chsitc=bttp=//ko.woredhafj.ork/XOT3TQEW@>.a. It is a òf`cssiofae eoaf, wbi`b wiee fccd to hc paid ha`j if 4> ycars, witb fo paylcfts duc gor tbc girst 1> ycars.Tbcrc is a scrvi`c `barkc og >.;3 pcr`cft pcr ycar.

Hox 0.8. Tbc Oyu Toekoi Ifvcstlcft Akrcclcft

OT is tbc woreds earkcst ufdcvceopcd òppcr-koed promc`t afd is eoàtcd if tbc Poutbcrf Kohirckiof, must fortb og tbc @bifcsc hordcr. Af ifvcstlcft akrcclcft to dcvceop tbc OT lififkdcposit was su``cssgueey òfèudcd if O`tohcr 8>>9 hctwccf tbc Kovcrflcft og Lofkoeia afdXio Tifto Iftcrfatiofae (a Hritisb-Austraeiaf lififk òlpafy), Ivafboc Lifcs Eilitcd (@afadiaf),afd Ivafboc Lifcs Lofkoeia If`. EE@ (ILLI) afd tooj guee afd hifdifk cggc`t of Lar`b 01, 8>1>.A jcy aspc`t og tbc akrcclcft is tbat tbc kovcrflcft wiee boed a 04 pcr`cft cquity sbarc if ILLI,wbi`b is tbc ei`cfsc boedcr og tbc OT promc`t.

Lifc òfstru`tiof òsts arc promc`tcd at roukbey SP$4 hieeiof. Tbc moift Ivafboc-Xio Tiftoòfditiofae hudkct approvcd gor 8>1> to hckif tbc guee-sàec òfstru`tiof og tbc lifc is SP$;32lieeiof, afd siliearey earkc aloufts arc cxpc`tcd to hc spcft if tbc fcxt gcw ycars witb sikfigiàft

jfo`j-of cggc`ts cxpc`tcd gor tbc còfoly.



27/64


Hox 0.8 (òftifucd)

^rodu`tiof is cxpc`tcd to òllcf`c if 8>10 afd to produ`c 3>>,>>> tofs og òppcr afd3>>,>>> ouf`cs og koed pcr ycar gor at ecast 03 ycars. Tbc eigc og tbc lifc is cstilatcd to hcahout 7> ycars. Xcvcfucsòrporatc ifòlc tax, royaetics afd WAT afd dividcfdsgrol OTarc cxpc`tcd to geow ifto tbc hudkct grol 8>10 ofwards. Grol 8>17 tbcrc wiee hc fct rcvcfucs,agtcr tbc alortizatiof og prcpaylcft afd cquity sbarc eoafs (scc hceow) cftcr tbc hudkct. Tbcjcy tcrls og tbc akrcclcft arc as goeeows=

Owfcrsbip afd gifafìfk arrafkclcfts= If a`òrdaf`c witb Lofkoeias Lifcraes Eaw tbckovcrflcft wiee owf, tbroukb tbc statc-owfcd Crdcfcs LKE, a 04 pcr`cft cquity/ifvcstlcftsbarc if Ivafboc Lifcs Lofkoeia If` (ILLI) EE@ wbi`b is tbc ei`cfsc boedcr og tbc OT promc`t.Ivafboc wiee rctaif a òftroeeifk 77 pcr`cft cquity sbarc if OT (witb Xio Tifto owfifk a 88 pcr`cftsbarc if Ivafboc). Ivafboc wiee arrafkc gifafìfk gor tbc òfstru`tiof og OT witbif two ycars ogtbc Ifvcstlcft Akrcclcft tajifk cggc`t. ^rodu`tiof lust hckif witbif givc ycars og gifafìfkhcifk scùrcd.

Ivafboc wiee aeso gufd tbc kovcrflcfts 04 pcr`cft sbarc og ifitiae àpitae òsts. Tbis wiee hca`bicvcd tbroukb a dolcsti` hut SP$-dcfolifatcd eoaf cstilatcd at approxilatcey SP$2;>lieeiof eoaf. Tbis is cxpc`tcd to hc rcpaid startifk aroufd 8>14 ofwards of rcdclptiof og tbccquity, dividcfds, afd iftcrcst at a ratc og 9.9 pcr`cft, admustcd to tbc S.P. @Î. Tbc kovcrflcftbas tbc optiof to pur`basc af additiofae cquity iftcrcst og 17 pcr`cft og ILLI. Tbis àf hc dofcofc ycar agtcr tbc cxpiry og tbc ifitiae 0>-ycar tcrl og tbc akrcclcft afd goeeowifk tbc start og tbcpcrlittcd 8>-ycar cxtcfsiof. Bowcvcr, Ivafboc wiee òftifuc to boed lafakclcft rikbts ovcr tbcpromc`t afd boed a dcìdifk votc at hoard afd sbarcboedcr lcctifks.

Ivafboc bas aeso akrccd to lajc advaf`c paylcfts og SP$83> lieeiof to tbc kovcrflcft iftbrcc traf`bcs gor hudkctary support. Tbcsc wiee hc scùrcd hy kovcrflcft hofds tbat wieelaturc agtcr givc ycars afd pay affuae iftcrcst og 0.2 pcr`cft. Og tbis SP$83>lf, af ifitiaeSP$1>> lieeiof was trafsgcrrcd to tbc kovcrflcft if 8>>9. [itbif 14 days og tbc OT Ifvcstlcft

Akrcclcft tajifk guee cggc`t, wbi`b bappcfcd at tbc cfd og Lar`b 8>1>, a gurtbcr SP$3> lieeiofwiee hc trafsgcrrcd. Tbc gifae SP$1>> lieeiof wiee hc trafsgcrrcd witbif 14 days og tbc su``cssgueraisifk og gufds rcquircd to huied tbc opcf-pit lifc afd òlpectc sbagt afd tuffce a``css to tbcifitiae ufdcrkroufd dcposit at tbc sitc (cxpc`tcd if 8>11).

Taxatiof= Otbcr ilportaft tcrls ifèudc a stahec opcratiofae afd tax cfviroflcft. Ivafboc wieerc`civc a 1> pcr`cft ifvcstlcft tax `rcdit of aee àpitae cxpcfditurcs afd ifvcstlcfts ladctbroukbout tbc OT òfstru`tiof pcriod. Afy guturc taxcs iftrodu`cd wiee fot hc ilposcd of tbcpromc`t ufecss tbc eckiseatiof is lorc gavorahec. Ig Lofkoeia cftcrs a trcaty tbat providcs krcatcrhcfcgits to afotbcr ifvcstor, Ivafboc lay rcqucst tbc hcfcgit og tbis to bcep cfsurc tbat a stahectaxatiof cfviroflcft is laiftaifcd.

Clpeoylcft= Tbc akrcclcft aeso ifèudcs spcìgi` òllitlcfts rckardifk tbc birifk ogLofkoeiaf worjcrs afd òftra`torsaafd s`boearsbips.hA òlprcbcfsivc, givc-ycar OT Traififk

Ptratcky afd êaf wiee hc suhlittcd to tbc kovcrflcft gor tbc traififk og Lofkoeiafs. Tbckovcrflcft wiee aeso support tbc iftrodu`tiof og iftcrfatiofae lififk cduàtiof afd traififkòurscs witbif 9> days afd six loftbs rcspc`tivcey og tbc akrcclcft tajifk cggc`t. Ivafboc wieecfsurc paylcft og gair wakcs afd cquae rclufcratiof gor worj og cquae vaeuc.

Husifcss dcvceoplcft= If rcspofsc to tbc kovcrflcfts iftcrcst if addifk vaeuc to Lofkoeiafòf`cftratc, Ivafboc lust prcparc witbif givc ycars a rcport of tbc còfoli` viahieity og huiedifka òppcr slcetcr if Lofkoeia. Afy slcetcr, ig huiet, lust hc eoàtcd witbif Lofkoeia afd tbckovcrflcft lay rcqucst prcgcrcftiae a``css, of akrccd tcrls, to Xio Tiftos proprictary geasb-slcetifk tc`bfoeoky gor usc at tbc slcetcr. OT òf`cftratc woued hc suppeicd to su`b a slcetcr,if wbi`b tbc kovcrflcft lay bavc af iftcrcst, of òllcrìae tcrls afd at iftcrfatiofae priìfk.



28/64


Hox 0.8 (òftifucd)

Ivafboc afd Xio Tifto bavc aeso akrccd to kivc priority, wbcrc possihec, to huyifk afd usifkscrvi`cs providcd hy Lofkoeiafs. Cquiplcft afd latcriaes ladc if Lofkoeia afd eoàehusifcsscs wiee hc aeso kivcf girst priority. ^riority wiee hc kivcf to rcsidcfts og eoàe òllufiticsgor traififk assistaf`c afd mohs. Pupport wiee hc kivcf to bcep dcvceop eoàe husifcsscs àpahec ogsuppeyifk OT afd aeso to bcep husifcsscs divcrsigy. Foladi` bcrdcr galieics ilpa`tcd hy tbc OT^romc`t wiee oftifuc to rc`civc olpcfsatiof.

Ivafboc wiee support afd partiìpatc if tbc Poutbcrf Kohi Xckiofae Dcvceoplcft @oufìe, to hccstaheisbcd hy tbc kovcrflcft, wbi`b wiee gorlueatc a dcvceoplcft stratcky gor tbc rckiof. Tbisòfsuetativc òufìe wiee òfsidcr issucs rceatifk to kovcrfaf`c, if-likratiof, urhaf peaffifk afddcvceoplcft, afd cduàtiofae afd voàtiofae traififk alofk otbcrs.

Hcst-pra`ti`c cfviroflcftae lafakclcft afd watcr rcsour`c usc= Ivafboc wiee appeylodcrf cxtra`tiof afd pro`cssifk tc`bfoeoky, wbi`b lccts Lofkoeiaf afd iftcrfatiofaecfviroflcftae òdcs afd stafdards, if af cggiìcft laffcr tbat lifilizcs cfviroflcftae ilpa`ts

to af còfoliàeey gcasihec cxtcft. Af ifdcpcfdcft rcport of tbc prokrcss og tbc promc`tscfviroflcftae protc`tiof peaf afd lofitorifk prokral wiee hc suhlittcd cvcry tbrcc ycars afdladc puhei`. Tbc òst og ceilifatifk latcriae, advcrsc ilpa`ts of air, watcr, soie, afilaes, afdpeafts wiee hc horfc hy tbc promc`t.

OT bas tbc rikbt to usc watcr rcsour`cs tbat Ivafboc bas disòvcrcd gor afy purposcs òffc`tcdwitb tbc promc`t, durifk tbc eigc og tbc promc`t. Purpeus watcr lay hc ladc avaieahec to otbcrcòfoli` cftitics providcd Ivafboc is òlpcfsatcd gor its cxpeoratiof òsts. [atcr disòvcrcd hyIvafboc wiee hc ladc avaieahec to bcrdcrs afd eoàe òllufitics gor bouscboed purposcs afd goreivcsto`j. [atcr surpeus to bouscboed rcquirclcfts wiee hc ladc avaieahec gor eoàe, fof-òllcrìae akriùeturae uscs.

Lodcrf tc`bfoeoky afd pro`cdurcs wiee hc appeicd to lifilizc watcr usakc afd watcr wiee hcrc`yècd wbcrc pra`tiàhec. Arcas èoscd to gurtbcr lififk wiee rc`civc cfviroflcftae

rcbahieitatiof afd potcftiae bazards wiee hc addrcsscd to protc`t tbc puhei`. A lifc-èosurc peafwiee hc gifaf`cd tbroukb gufds aeeoàtcd to af cs`row a`òuft hckiffifk scvcf ycars hcgorca`tuae eosurc.

Cfcrky afd trafsport ifgrastru`turc= [itb tbc suppey og rceiahec cec`triìty `ritiàe to tbc promc`t,Ivafboc bas tbc rikbt to ohtaif powcr grol ifsidc or outsidc Lofkoeia, ifèudifk arrafkifk tbcòfstru`tiof og a bikb-voetakc eifc grol OT to tbc Lofkoeia-@bifa hordcr to òffc`t witb @bifcscsuppey. It aeso bas tbc rikbt to huied or suhòftra`t òfstru`tiof og a òae-guceecd powcr peaft at afappropriatc sitc to suppey tbc promc`t, wbi`b òued hc suppeclcftcd hy rcfcwahec wifd or soearpowcr. Bowcvcr, witbif gour ycars og tbc start og lifc produ`tiof, aee powcr rcquirclcfts lust hcsour`cd grol witbif Lofkoeia, citbcr grol a òae-guceecd peaft or grol tbc fatiofae distrihutiofkrid.

Ivafboc lay huied af iftcrfatiofae road grol OT to tbc Kasbuuf Pujbait `rossifk of tbcLofkoeia-@bifa hordcr, witb òsts to hc dcdu`tcd grol affuae taxahec ifòlc, witb kovcrflcftrcspofsihec gor road laiftcfaf`c afd uscr gccs òeec`tiof. Tbc kovcrflcft lay òfstru`t, orpcrlit a tbird party to òfstru`t, a raieway if tbc viìfity og OT to tbc Lofkoeia-@bifa hordcr, to hcladc avaieahec to OT of òlpctitivc ollcrìae tcrls witb Ivafboc ofsuetcd of tbc routc.

Pour`c= Xio Tifto, Kovcrflcft og Lofkoeia, [ored Hafj stagg.a. At ecast 9> pcr`cft og tbc promc`ts clpeoyccs wiee hc Lofkoeiaf ìtizcfs. Durifk òfstru`tiof afd afy cxpafsiofpcriods, at ecast 7> pcr`cft og tbc òftra`tors clpeoyccs wiee hc Lofkoeiaf ìtizcfs: afd gor lififk afd lififk-rceatcdworj, at ecast ;3 pcr`cft og òftra`tors clpeoyccs wiee hc Lofkoeiaf ìtizcfs. [itbif givc ycars, at ecast 3> pcr`cft ogcfkifccrs wiee hc Lofkoeiaf ìtizcfs, if`rcasifk to at ecast ;> pcr`cft witbif 1> ycars.h. A totae og 18> s`boearsbips wiee hc kivcf ovcr six ycars to Lofkoeiaf studcfts studyifk if Lofkoeia afd 0> to studyat iftcrfatiofae ufivcrsitics


29/64

Lofkoeia Còfoli` Xctrospc`tivc= 8>>2-8>1> 1;

Fotcs

1Tbc PHA is a fofòf`cssiofae eoaf to hc rcpaid if gour ycars (witb two ycars kra`c), hut kivcs

Lofkoeia cx`cptiofae a``css to ILG rcsour`cs. Tbis akrcclcft, approvcd hy tbc ILG at its Aprie 1

Hoard lcctifk, rcòkfizcs tbc cxtraordifary cxtcrfae sbo`j òlifk grol tbc òeeapsc og òppcr

pri`cs. Tbc totae alouft og tbc ILG rcsour`cs ladc avaieahec ufdcr tbc arrafkclcft cquaes 0>>

pcr`cft og tbc òuftrys quota. Lofkoeia, wbi`b moifcd tbc Gufd of Gchruary 14, 1991, bas a

quota og PDX 31.1 lieeiof (ahout SP$;7.4 lieeiof).8 [ored Hafj (8>>9), ^rokral Doùlcft gor a ^roposcd Dcvceoplcft ôei`y @rcdit, Mufc ([ored

Hafjs Doùlcfts afd Xcports wchsitc= bttp=//ko.woredhafj.ork/XOT3TQEW@>).0Tbc [^T is a 72 pcr`cft tax appeics to òppcr afd koed rcvcfucs ig pri`cs cx`ccd SP$87>>/tof

afd SP$23>/ouf`c rcspc`tivcey. Tbc [^T rcvcfucs arc dcpositcd if tbc Lofkoeiaf Dcvceoplcft

Gufd (LDG) to gifaf`c savifks, soìae prokrals, afd ifgrastru`turc ifvcstlcfts. If pra`ti`c,

hctwccf 8>>7 afd cfd-8>>2, ahout 0> pcr`cft og [^T rcvcfuc was savcd, alouftifk to 4.9

pcr`cft og KD^, afd ;> pcr`cft og rcvcfuc was aeeoàtcd to soìae trafsgcrs afd ifvcstlcft.


30/64

12

@ B A ^ T C X 4

Bow Did tbc Còfoly Xcspofd?

bc còfoly bas rcòvcrcd suhstaftiaeey sif`c tbc liddec og 8>>9 supportcd hy tbc

òlprcbcfsivc afd strofk la`rocòfoli` poeiìcs og tbc kovcrflcft as wcee as

iftcrfatiofae afd hieatcrae hudkct afd haeaf`c og paylcfts support, afd tc`bfiàe

assistaf`c. As lcftiofcd, tbc sikfifk og OT Ifvcstlcft Akrcclcft was aeso afcxtrclcey sikfigiàft dcvceoplcft, wbi`b bcepcd to rcturf positivc scftilcft to tbc

lififk sc`tor afd trafsgorlcd tbc ovcraee còfoli` outeooj.

Xcae A`tivity Xcòvcrs

Agtcr seowifk sbarpey if carey 8>>9, rcae a`tivity bas rcòvcrcd strofkey. Lofkoeias

còfoli` dowfturf was partiùearey scvcrc. [biec tbc ifitiae sbo`j àlc grol

òllodity sc`tor pri`cs afd lififk sc`tor wcajfcsscs, hafjifk sc`tor ifstahieity ecd

to a sbarp òftra`tiof if `rcdit wbi`b gurtbcr addcd to tbc drak of còfoli` a`tivity.

Tbc còfoly òftra`tcd hy 1.7 pcr`cft if 8>>9 goeeowifk krowtb og 2.9 pcr`cft tbc

prcvious ycar. Tbc sc`tor lost aggc`tcd was òfstru`tiof, wbi`b òftra`tcd seikbtey

lorc tbaf 3> pcr`cft ovcr tbc ycar, goeeowcd hy wboecsaec afd rctaie tradc afd

lafuga`turifk. Tbcsc sc`tors cxpcricf`cd affuae dcèifcs og 89 afd 18 pcr`cft

rcspc`tivcey if 8>>9 (Gikurc 4.1).

Bowcvcr, krowtb startcd pi`jifk up if tbc east quartcr og 8>>9 afd rca`bcd ;.7

pcr`cft (yoy) if girst quartcr og 8>1> (Gikurc 4.1). Tbc rcòvcry if tbc lififk afd rctaie

sc`tors, aeofk witb trafsport afd òllufiàtiof sc`tor, ecd tbc way. KD^ krowtb gor

8>1> is promc`tcd to risc to ovcr ; pcr`cft og KD^ of tbc ha`j og a bukc if`rcasc if OT-

rceatcd ifgrastru`turc spcfdifk.

Xcòvcry, Krowtb, afd Xisifk @ofsulcr ^ri`cs

Tbc còfoli` rcòvcry afd tbc prospc`ts og òftifucd strofk krowtb if 8>1> bavc

òftrihutcd to rc`cft riscs if òfsulcr pri`cs. As còfoli` a`tivity dcèifcd if carey

8>>9, tbc bcadeifc @Î ifgeatiof ratc gcee sbarpey, hricgey turfifk fckativc grol Aukust

to Fovclhcr. Tbis aeso rcgec`tcd tbc ufwifdifk og tbc keohae good afd cfcrky pri`c

sbo`j og 8>>2 as wcee tbc wcajfcsscs if tbc ufdcreyifk còfoly (Gikurc 4.8).

T


31/64


Gikurc 4.1. Agtcr Gaeeifk if 8>>9 XcaeKD^ Krowtb î`jcd up Ptrofkey

Gikurc 4.8.Ifgeatiof Gcee Pbarpey

% ycar-of-ycar ^cr`cftakc poift òftrihutiof to @Î ifgeatiof if Seaafhaatar

Pour`c= Fatiofae Ptatistiàe Oggi`c, [ored Hafj. Pour`c= Fatiofae Ptatistiàe Oggi`c, [ored Hafj.

Fotc= Sfecss statcd otbcrwisc, tbc `bart sbows

@Î data gor Seaafhaatar.

Ifgeatiof turfcd positivc at tbc cfd og 8>>9, afd bas avcrakcd ovcr 2 pcr`cft sif`c

Gchruary 8>1> (Gikurc 4.8). Tbis was laifey drivcf hy a risc if good pri`cs wbi`b

(fotahey lcat rcgec`tifk earkc eivcsto`j eosscs duc to tbc rc`cft dzud) afd aeso a pi`j-

up if tbc ratc og òrc ifgeatiof as tbc rcòvcry tooj boed. Ifdccd, if tbc gourtb quartcrog 8>>9 afd carey 8>1> tbc scasofaeey-admustcd òrc afd ovcraee Seaafhaatar òfsulcr

pri`c ifdi`cs sbowcd loftbey krowtb if tbc rafkc og 8 to 0 pcr`cft. Tbc `baeecfkc

koifk gorward is to cfsurc tbat ifgeatiof docs fot a``cecratc gurtbcr as durifk tbc

prcvious hool pcriod wbcf it rca`bcd as bikb as 00.; pcr`cft (if Aukust 8>>2).

ûhei` Gifaf`cs Ilprovcd Puhstaftiaeey if tbc Eattcr Baeg og 8>>9

Cxpcfditurc rcstraift afd a rcòvcry if rcvcfucs bavc bcepcd ilprovc gisàe haeaf`cs

if rc`cft loftbs hut òftifucd gisàe òfsoeidatiof rclaifs a priority. If tbc gifae

quartcr og 8>>9, tbc gisàe dcgiìt ilprovcd as tbc dcèifc if rcvcfucs stahieizcd afd

spcfdifk was ùrtaiecd (Gikurc 4.0). Ovcraee, tbc gisàe haeaf`c if 8>>9 àlc if at

LFT 082 hieeiof (aroufd 3.4 pcr`cft og KD^) òlparcd witb a guee-ycar hudkct tarkct

og LFT 074 hieeiof (aroufd 3.2 pcr`cft og promc`tcd KD^).

Tbc rcvcfuc iftajc if 8>>9 was solc ;.3 pcr`cft eowcr tbaf if 8>>2 if folifae

tcrls laifey rcgec`tifk tbc gaee if lififk rcvcfucs duc to tbc gaee if òppcr pri`cs.

Bowcvcr, tbc rcòvcry if òppcr pri`cs if rc`cft loftbs bcepcd to stauf`b tbc dcèifc.

Ovcraee, rcvcfucs afd krafts if`rcascd hy 77 pcr`cft ycar-of-ycar if tbc girst quartcr

og 8>1>, aetboukb positivc hasc cggc`ts (arisifk grol tbc sbarp drop if totae rc`cipts if

Lar`b 8>>9) bavc aeso bcepcd to strcfktbcf tbcsc fulhcrs.

[itb tbc kovcrflcft ùttifk ha`j of spcfdifk if ordcr to laiftaif gisàe

sustaifahieity afd lcct tbc gisàe dcgiìt tarkcts, totae spcfdifk was solc 3.; pcr`cft

eowcr if folifae tcrls tbaf if 8>>2. Tbc earkcst ùts wcrc ladc to àpitae cxpcfditurc

afd suhsidics. Oggscttifk tbcsc was af if`rcasc if wakcs afd saearics, ufcxpc`tcd

-7

-4

-8

>

8

4

7

2

1>

Q0->2 Q4->2 Q1->9 Q8->9 Q0->9 Q4->9 Q1-1>

Akr

Lififk

Lafug.

Cec`., ofst. & scrvi`cs

KD^

-3>

3

1>

13

8>

83

0>

03

4>

Apr->; O`t->; Apr->2 O`t->2 Apr->9 O`t->9 Apr-1>

Cfcrky afd guces

Lcat, liej afd`bccsc@orc ifgeatiof

@Î ifgeatiof


32/64

8> [ored Hafj [orjifk âpcr

rcpair cxpcfditurcs duc to geood dalakc afd spcfdifk of òftaififk tbc sprcad og

swifc geu afd dzud rceicg cggorts. Tbcrc wcrc aeso suhstaftiae gisàe òsts assoìatcd

witb tbc heafjct kuaraftcc eaw afd gaieurcs if tbc hafjifk sc`tor. Ovcraee, LFT 2.7

hieeiof was dishurscd1out og tbc kovcrflcft rcscrvc gufd afd LFT 2 hieeiof out ogGifaf`c Lifistcrs portgoeio.

If tbc girst quartcr og 8>1>, tbc trcfd ilprovclcft if tbc gisàe dcgiìt staeecd

solcwbat as tbc positivc ilpa`t of tbc dcgiìt og ilprovifk rcvcfucs was oggsct hy

cxpafdifk cxpcfditurcs (Gikurc 4.4). If Aprie, tbc 18-loftb roeeifk dcgiìt dctcrioratcd

seikbtey to 3.2 pcr`cft og KD^, dcspitc ilprovcd rcvcfuc kcfcratiof. Tbcrc arc

krowifk òf`crfs tbat ratbcr tbaf af a`ùlueatiof og gisàe savifks if a pro`css og

sustaifcd òfsoeidatiof, cxpcfditurcs wiee òftifuc to risc if stcp witb rcvcfucs,

risjifk a rcturf to tbc hool-afd-hust `yèc og tbc prc-`risis ycars. @oftifucd

cxpcfditurc rcstraift is fc`cssary kivcf tbc diggiùet gifafìfk òfditiofs promc`tcd gor

tbc fcxt gcw ycars. If partiùear, 8>11 wiee hc a diggiùet ycar gor tbc hudkct duc to tbc

ahoeisbcd [ifdgaee ^rogits Tax afd tbc dwifdecd dofor gufdifk gor hudkct support.

Gikurc 4.0. Tbc 18 Loftb Xoeeifk GisàeDcgiìt Ilprovcd if Eatc 8>>9 If Eifcwitb Xcvcfucs

Gikurc 4.4. Hut KovcrflcftPpcfdifk Xosc Ptrofkey if Carey 8>1>

% og KD^ % og KD^*% ùlueativc cxpcfditurc (ycar to datc) òlparcd tosalc pcriod east ycar if rcae tcrls


Fotc= *KD^ iftcrpoeatcd usifk a`tuae 8>>2 afd

8>>9 KD^ data afd KD^ promc`tiofs gor 8>1>.

**Admustcd gisàe haeaf`c cxèudcs fct ecfdifk

grol cxpcfditurc, ecavifk urrcft afd apitae

cxpcfditurc ofey.


Fotc= Fulhcr if hox is tbc if`rcasc if fct

ecfdifk if rcae pcr`cftakc tcrls gor Aprie, 8>1>

òlparcd to Aprie 8>>9.

-8>

-13

-1>

-3

>

3

0>

0804

07

02

4>

48

44

47

42

3>

Apr->2 Pcp->2 Gch->9 Mue->9 Dc`->9

Xcvcfuc & krafts

Totae cxpcfditurc afd fct ecfdifk

Totae cxpcfditurc

Gisàe haeaf`c (rikbt axis)

399.>

-4>

-8>

>

8>

4>

7>

2>

Totaecxpcfditurcafdfctecfdifk

@urrcftcxpcfditurc

[akcsafdsa

earics

ûr`bascsogkoodsafdscrvi`cs

Puhsidicsafd

trafsgcrs

@apitaecxpcfditurc

Fctecfdifk

Apr->9 Apr-1>


33/64


Tbc @urrcft A`òuft Dcgiìt Farrowcd

Ilprovclcfts if cxtcrfae dclafd afd rcòvcry if òllodity pri`cs bavc òftrihutcd

to tbc strofk ùrrcft a`òuft admustlcft if tbc scòfd baeg og 8>>9. @bifas strofkcòfoli` a`tivity bas bad a positivc ilpa`t of Lofkoeias cxtcrfae haeaf`cs (Gikurc

4.3). Ptilueus poei`y lcasurcs strcfktbcfcd ifdustriae produ`tiof, afd if turf, tbc

affuae krowtb og @bifcsc ilports ifèudifk tbosc grol Lofkoeia. Tbcsc ga`tors bavc

òftrihutcd to tbc rcvivae if Lofkoeias òppcr afd òae cxports ovcr tbc east quartcr.

Tbc cxtcrfae positiof bas aeso

hccf bcepcd hy risifk òllodity

pri`cs. @oppcr pri`cs hy lid-Lar`b

wcrc ofey ahout 1; pcr`cft hceow

tbcir bistori` pcaj if Muey 8>>2. Koed

pri`cs bavc rclaifcd witbif tbcSP$1,>>>-1,8>> pcr troy ouf`c (ozt)

rafkc sif`c Dc`clhcr, wcee ahovc tbc

roukbey SP$2>>/ozt pri`c sccf at tbc

cfd og 8>>2 as tbcy bavc hccf

supportcd hy sagc-bavcf huyifk afd

`cftrae hafj pur`bascs. Tbc doeear

vaeuc og Lofkoeias koed cxports,

bowcvcr, bas òftifucd to dcèifc

(Gikurc 4.7). Tbc voeulc og cxports

aelost baevcd if 8>>9 òlparcd to8>>2 if spitc og tbc provisiof og

kovcrflcft-gifaf`cd `rcdit to

support koed produ`crs. Ga`tors

ifgeucfìfk tbc rcdu`tiof if koed

cxports8 ifèudc tbc [^T ([ifdgaee ^rogit Tax) afd dc`rcascd koed produ`tiof hy a

lamor koed cxportifk òlpafy if Lofkoeia.

Duc to hotb cxpcfditurc-swit`bifk grol tbc risc if tbc pri`c og ilports goeeowifk

tbc dcprcìatiof afd cxpcfditurc òlprcssiof witb tbc gaee if còfoli` a`tivity,

ilports gcee hy up to 3> pcr`cft if tbc girst baeg og 8>>9. [itb tbc rcòvcry og tbc

dolcsti` còfoly, tbc dcèifc if ilports lodcratcd. Mafuary 8>1> saw tbc girstaffuae if`rcasc if totae ilports sif`c Dc`clhcr 8>>2 (Gikurc 4.;). Pif`c tbcf ilports

bavc aeso strofkey rchoufdcd drivcf laifey hy a surkc if sbiplcfts grol Xussia afd

@bifa (hotb douhecd of tbc ycar). Bowcvcr, if eikbt og tbc cxtrclc wcajfcss if tbc

girst baeg og 8>>9, wbcf ilports peufkcd sbarpey, tbcsc affuae fulhcrs lay ovcrstatc

tbc ùrrcft strcfktb og ilport dclafd.

Gikurc 4.3. Xisifk @bifcsc DclafdPupportcd tbc Xcòvcry if Cxports

% yoy òftrihutiofs to cxport krowtb hy dcstifatiof

Pour`c= Hafj og Lofkoeia, loftbey hueectif, [ored

Hafj.

-2>%

-4>%

>%

4>%

2>%

18>%

17>%

Lar->9 Muf->9 Pcp->9 Dc`->9 Lar-1>

Xussia

@bifa

Otbcr

Totae


34/64


Gikurc 4.7. Ovcraee Cxport KrowtbIlprovcd if tbc Pcòfd Baeg og 8>>9

Gikurc 4.;. [itb Ilport Dclafd AesoXcòvcrifk

^cr cftakc poift oftrihutiofs to ycar-of-ycar krowtb ^cr cftakc poift oftrihutiofs to ycar-of-ycar krowtb

Pour`c= Fatiofae Ptatistiàe Oggi`c, [ored Hafj. Pour`c= Fatiofae Ptatisti`s Oggi`c, [ored Hafj.

As a rcsuet og tbc ilprovcd koods dcgiìt, tbc ùrrcft a`òuft dcgiìt farrowcd to 4

pcr`cft og KD^ if tbc gifae quartcr og 8>>9, agtcr pcajifk at 10 pcr`cft if Q1 (rcgcr ha`j

to Gikurc 1.7). Tbc dcgiìt if scrvi`cs tradc bas aeso ilprovcd hut rclaifs rceativcey

bikb at 0 pcr`cft og KD^ (òlparcd witb a bikb og aroufd 4 pcr`cft if Q1) as

trafsport afd tourisl rc`cipts rclaif dcprcsscd.Gor 8>>9 as a wboec, tbc ùrrcft a`òuft haeaf`c farrowcd hy SP$04> lieeiof to a

dcgiìt og SP$028 lieeiof (or approxilatcey 9 pcr`cft og KD^). It was prilariey

gifaf`cd hy fct àpitae ifgeows if tbc gifafìae a`òuft,0 wbi`b alouftcd to SP$23>

lieeiof (8> pcr`cft og KD^) if 8>>9. Gorcikf dirc`t ifvcstlcft (GDI) , laifey if tbc

lififk sc`tor, if`rcascd suhstaftiaeey ovcr tbc òursc og tbc ycar, hut stiee rclaifs

ahout 1> pcr`cft eowcr tbaf 8>>2. Fct horrowifk grol ahroad hy hotb kovcrflcft

afd tbc privatc sc`tor mulpcd if 8>>9, duc to tbc dofor dishursclcft afd eoafs to tbc

òllcrìae hafjs.

Tbc Cx`bafkc Xatc Ptahieizcd

Goeeowifk its dcprcìatiof if carey 8>>9 tbc folifae cx`bafkc ratc bas rclaifcd stahec

sif`c Aprie 8>>9. Tbc poei`y a`tiofs of tbc cx`bafkc ratc, ifèudifk ahafdofifk tbc

cx`bafkc ratc pck afd raisifk folifae iftcrcst ratcs, òlhifcd witb tbc farrowifk og

tbc tradc dcgiìt, rcsuetcd if a stahieizatiof og tbc folifae cx`bafkc ratc sif`c Aprie

8>>9. It aeso cfahecd tbc HoL to rchuied iftcrfatiofae rcscrvcs. Xcscrvcs bavc aeso hccf

hoostcd hy tbc dishursclcft og tbc ILG PHA traf`bcs, tbc OT prcpaylcft eoaf,

promc`t gufdifk grol tbc Iftcrfatiofae Gufd gor Akriùeturae Dcvceoplcft (IGAD), af

PLC Dcvceoplcft ^romc`t grol Mapaf, afd dcposits grol òllcrìae hafjs. Xcscrvcs

rca`bcd rcòrd ecvces og SP$1,143 lieeiof if Dc`clhcr 8>>9. Lcafwbiec, tbc sprcadhctwccf tbc asj afd hid ratcs if paraeece afd òllcrìae hafj gorcikf cx`bafkc

larjcts bas rclaifcd eow (rcgcr ha`j to Gikurc 1.;).

-2>%

-0>%

8>%

;>%

18>%

Maf->9 Apr->9 Mue->9 O`t->9 Maf-1> Apr-1>

@oppcr of`cftratc

Koed

@oae

Krcasy asblcrc

Otbcr

Totae cxports

-7>%

-4>%

-8>%

>%

8>%

4>%

7>%

2>%

1>>%

18>%

Lifcrae produ`ts

Tr. cquip., la`b. & cquiplcft

Otbcr

Totae ilports


35/64


Hut Hafjifk Pc`tor ^rohecls Eifkcrcd

Goeeowifk tbc stahieizatiof og dcpositor òfgidcf`c tbc goùs og òf`crf sbigtcd to tbc

bcaetb og hafj haeaf`c sbccts. ôei`y lcasurcs ufdcrtajcf hy tbc HoL to stahieizc tbccx`bafkc ratc afd rcstorc òfgidcf`c if tbc eoàe ùrrcf`y òftrihutcd to a rcòvcry if

dcposits if tbc scòfd baeg og 8>>9. Tbc `cftrae hafj if`rcascd tbc @HH ratc to as bikb

as 14 pcr`cft if Lar`b 8>>9. Of`c gorcikf cx`bafkc larjct òfditiofs stahieizcd afd

ifgeatiof gcee, it kraduaeey rcdu`cd tbc ratc to 1> pcr`cft if Pcptclhcr 8>>9. It aeso

if`rcascd tbc àpitae adcqua`y ratio og hafjs, rcdu`cd `rcdit risj gufd ratcs afd

iftrodu`cd a gorcikf cx`bafkc au`tiof/tradifk systcl.

Dcspitc tbc HoL bavifk ùt its oggiìae poei`y ratc tbrcc tilcs sif`c Lay, grol 14

pcr`cft to 1> pcr`cft if Pcptclhcr, folifae iftcrcst ratcs of hotb eoàe ùrrcf`y

dcposits afd eoafs harcey gcee if 8>>9, aidifk dcposit rctcftiof. Of tbc dcposit sidc, tbc

scar`b gor gufds hy hafjs gaìfk eiquidity diggiùetics lay bavc hccf af ilportaftdrivcr og tbc bikb ratcs wbiec tbc ecfdifk ratcs eijcey rcgec`tcd òf`crfs ovcr `rcdit

quaeity, afd bikb gufdifk òsts.

Gikurc 4.2. Xcae Dcposit afd EcfdifkXatcs If`rcascd tbroukb 8>>9 hut BavcPif`c Gaeecf as Ifgeatiof Xosc

Gikurc 4.9. Ecfdifk Peowey Xcòvcrcd

^cr`cft (affuae ratc) % LFT hf

Pour`c= Hafj og Lofkoeia, Fatiofae PtatistiàeOggi`c, [ored Hafj.

Pour`c= Hafj og Lofkoeia @ofsoeidatcd EoafXcport, [ored Hafj.

@olhifcd witb tbc sbarp dcèifc if tbc @Î ifgeatiof ratc ovcr 8>>9, tbc trcfd if

folifae ratcs rcsuetcd if risifk rcae còfoly-widc horrowifk òsts. Tbis was

lcasurcd hy tbc cx post rcae iftcrcst ratc (Gikurc 4.2), wbi`b poscd a òfstraift to tbc

rcòvcry if privatc sc`tor a`tivity. Bowcvcr, tbc rc`cft upward trcfd if ifgeatiof bas

rcsuetcd if gaeeifk cx post rcae ratcs, aetboukb ratcs gor tbcsc eoafs rclaif bikb at aroufd 10

pcr`cft. [itb strofk krowtb prospc`ts gor 8>1> eijcey ecadifk to bikbcr ifgeatiof

cxpc`tatiofs if rc`cft loftbs, cx aftc horrowifk òsts arc eijcey gaeeifk rapidey.

Tbc avaieahieity og `rcdit aeso dcèifcd durifk tbc `risis pcriod as cvidcf`cd hyhafjs `boosifk to usc gufds to pur`basc `cftrae hafj hiees. Tbc ovcraee sto`j og

outstafdifk eoafs bas rclaifcd hroadey geat if folifae tcrls sif`c lid-8>>2, up ofey

0 pcr`cft grol 8>>9 Q8 tbroukb to tbc cfd og 8>>9 Q4. Tbc ecvce og fcw eoaf issuaf`c

-8>

-1>

>

1>

8>

0>

4>

Apr->2 Auk->2 Dc`->2 Apr->9 Auk->9 Dc`->9 Apr-1>

@Î ifgeatiof

Xcae laxilul iftcrcst ratc of E@ tilc dcposits

Xcae avcrakc iftcrcst ratc of E@ tilc dcpositsXcae iftcrcst ratc of hafj E@ eoafs

>

3>>

1,>>>

1,3>>

8,>>>

8,3>>

0,>>>

>

1>

8>

0>

4>

3>

7>

8>>;Q4 8>>2Q8 8>>2Q4 8>>9Q8 8>>9Q4

Xatio og fcw issuaf`c to eoaf sto`j at cfd ogprcvious quartcr (EBP)Eoaf sto`j at cfd quartcr (XBP)

Fcw issuaf`c if quartcr (XBP)


36/64


gcee larjcdey if eatc 8>>2 afd carey 8>>9 hotb if folifae tcrls, dowf 3; pcr`cft ycar-

of-ycar gor cxalpec if 8>>9 Q1, afd rceativc to tbc outstafdifk sto`j og eoafs. Tbcrc

bas hccf solc rcòvcry if fcw issuaf`c ecvces if rc`cft quartcrs, bowcvcr, if

partiùear if tbc lififk sc`tor (Gikurc 4.9).As tbc illcdiatc tbrcat og a eiquidity `risis rc`cdcd, wcajfcsscs if tbc quaeity og

hafjifk sc`tor haeaf`c sbccts hcàlc if`rcasifkey apparcft tbroukbout 8>>9. Eoaf

quaeity, if partiùear to tbc privatc sc`tor, dctcrioratcd larjcdey witb fofpcrgorlifk

eoafs (FÊs) afd eoafs witb tbcir prifìpae if arrcars4 as a pcr`cftakc og totae

outstafdifk eoafs risifk to 83 pcr`cft if Fovclhcr 8>>9, a givc-goed if`rcasc grol tbc

prcvious ycar (Gikurc 4.1>).

Gikurc 4.1>. Hut Hafj Assct QuaeityDctcrioratcd

Gikurc 4.11. Assct Quaeity if @ofstru`tiofafd Akriùeturc Xclaifs ôor

LFT hieeiof

Pour`c= Hafj og Lofkoeia, Fatiofae Ptatistiàe

Oggi`c, [ored Hafj.

Fotc= Tbc fulhcrs if hoxcs arc tbc suls og

FÊs to rcsidcfts afd fof-rcsidcfts afd eoafs

witb prifìpae if arrcars as a pcr`cft og totae

eoafs outstafdifk.

Pour`c= Hafj og Lofkoeia.

Fotc= Otbcr sc`tors laifey òlprisc ecfdifk to

òfsulcrs c.k. lortkakcs, pcfsiof afd saeary

advaf`cs.

If tbc hafjifk sc`tor, totae FÊs afd eoafs witb prifìpaes if arrcars dcèifcd to

aroufd 81 pcr`cft og totae outstafdifk eoafs at tbc cfd og tbc girst quartcr og 8>1>3

(agtcr pcajifk at 83 pcr`cft if Fovclhcr 8>>9), laifey hccf duc to a stahieizatiof if

FÊs. Eoafs witb prifìpaes if arrcars bowcvcr òftifuc to louft, rca`bifk LFT 109

hieeiof if Aprie, up 80 pcr`cft sif`c Dc`clhcr. Tbc FÊ ratios diggcr a`ross sc`tors,

rcgec`tifk tbc diggcrcftiae ilpa`t og tbc `risis afd ufdcreyifk `rcdit quaeity. Gor

cxalpec, tbc òfstru`tiof sc`tor if Q4 8>>9 a`òuftcd gor aroufd 14 pcr`cft og tbc

outstafdifk òfsoeidatcd eoaf sto`j hut aroufd 02 pcr`cft og FÊs afd eoafs if

arrcars, i.c. af ovcraee FÊ ratio og ovcr 03 pcr`cft (Gikurc 4.11). Ovcraee tboukb tbcrc

arc tcftativc sikfs tbat tbc hafjifk sc`tor is startifk to stahieizc, witb òllcrìae

hafjs carfifk a progit og LFT 1>.4 hieeiof if Aprie òlparcd witb a eoss og LFT 140.4

hieeiof gor 8>>9 as a wboec.7

3.0

18.>

1;.0

84.7

8>.2

>

1>>

8>>0>>

4>>

3>>

7>>

;>>

2>>

9>>

1,>>>

1>/>2 >1/>9 >4/>9 >;/>9 1>/>9 >1/1> >4/1>

Eoafs witb prifìpae if arrcars

FÊs to fof-rcsidcfts

FÊs to rcsidcfts

FÊs og gaiecd hafjs87.;%

88.>%

84.>%

0;.9%

8>.>%

14.0%

>% 1>% 8>% 0>% 4>%

Akriùeturc

Lififk afd quarryifk

Lafuga`turifk

@ofstru`tiof

[boecsaec afd rctaie

Otbcr sc`tors

Pbarc og outstafdifk eoafsPbarc og FÊs afd eoafs if arrcars

(Eahce ifdiàtcs FÊ ratio)


37/64


Ifgorlae Pc`tor [orjcrs Bardcst Bit hy tbc @risis

Xckistcrcd ufclpeoylcft rosc afd gcee durifk tbc `risis afd rcòvcry, aetboukb tbc

fulhcrs ufdcrcstilatc tbc ilpa`t og tbc `risis of eahor larjcts. Tbc oggiìaeufclpeoylcft ratc, wbi`b ifèudcs ofey tbosc wbo arc rckistcrcd witb tbc Eahor afd

Poìae [cegarc Pcrvi`c @cftcr, rosc grol 8.; pcr`cft if Fovclhcr 8>>2 to 0.; pcr`cft if

Muey 8>>9 Gikurc 4.18). Pif`c tbcf ufclpeoylcft bas kraduaeey gaeecf ha`j to aroufd

0.8 pcr`cft if tbc girst quartcr og tbis

ycar. Bowcvcr, it is eijcey tbat tbcsc

fulhcrs krossey ufdcrcstilatc tbc

ilpa`t og tbc còfoli` dowfturf of

ufclpeoylcft afd rcae wakcs.

A`òrdifk to tbc 4Q Eahor Gor`c

Purvcy, wbi`b aeso tajcs ifto a`òufttbosc wbo arc fot oggiìaeey rckistcrcd,

tbc ufclpeoylcft ratc stood at 18.2

pcr`cft. Tbis is up grol 1>.3 pcr`cft if

Pcptclhcr 8>>9, witb solc 148,>>>

pcopec ufclpeoycd grol tbc totae

eahor gor`c og 1,18>,>>>.

Tbc advcrsc soìae ilpa`t og tbc

`risis was visihec if tbc dcèififk rcae

wakcs if ifgorlae eahor larjcts. Tbc

[ored Hafj òllissiofcd quartcreysurvcys to cvaeuatc tbc `bafkcs if rcae

ifòlc if tbc ifgorlae eahor larjcts

if Seaafhaatar. Tbc survcys goufd

tbat tbc cggc`ts og tbc còfoli`

seowdowf wcrc widcsprcad (Tahec

4.1). Gor cxalpec, tbc Aprie 8>>9 survcy ifdiàtcd rcae cggc`tivc ifòlcs bad gaeecf hy

ahout 7> pcr`cft if solc ifgorlae urhaf eahor larjcts as ifgeatiof crodcd folifae

wakcs afd as moh eosscs louftcd.;Clpeoylcft òfditiofs aeso hcàlc ecss gavorahec

Documents

Mongolia Economic Retrospective: 2008-2010