Mongolia: EU increases aid to €14 million between 2007-10

Commissioner for External Relations and European Neighbourhood Policy Benita Ferrero-Waldner met today with the Mongolian Foreign Minister Nyamaa Enkhbold in the margins of the ongoing 8th ASEM Foreign Ministers meeting in Hamburg. They discussed EU-Mongolia relations and signed a Memorandum of Understanding (MoU) that endorses the new Mongolia Multiannual Indicative Programme for 2007-2010. Mongolia is the first Asian country to sign such a MoU. €14 million (up 17% from previous allocation) are earmarked primarily for rural development programmes.

Speaking after the meeting, Commissioner Ferrero-Waldner said, "I am satisfied to see Mongolia making a lot of progress: 7.5% economic growth in 2006, good prospects in the mining sector, a flourishing civil society and lively internal debates are signs for the considerable progress made in building a functioning democracy. Of course, big challenges remain, such as persistent poverty, the need for better and efficient governance and the continuing rural exodus. We will therefore continue assisting Mongolia, in particular through our new Indicative Programme and Country Strategy which increases aid to Mongolia by 17%. As a new partner in ASEM, Mongolia is also invited make its contribution to deepening political relations and dialogue with the EU."

EU-Mongolia relations have developed positively with the first ever EU-Troika visit (EU Presidency, Commission and Council Secretariat) to Mongolia in 2006 and the opening of an EC Technical Office in Ulaanbaatar. Mongolia considers the EU as one of its 'Third Neighbours'.

Since mid-2005 Mongolia has enjoyed duty-free access to the EU market for practically all of its products under the new General System of Preferences (GSP+). In March 2007, the new Country Strategy Paper 2007-2013 was finalised with a focus on rural development. The corresponding Indicative Programme 2007-2010 allocates €14 million to Mongolia, up 17% from the previous allocation of €3 million per year.

In co-operation with the World Bank and the Mongolian Government, most of the funds will be used to support sustainable livelihoods in the Mongolian countryside, for example through micro-credits, small grants to local communities and pastoral risk management.

Co-operation between Mongolia and the European Union was first established in a Trade and Co-operation Agreement in 1992 and since then bilateral assistance amounts to €70 million in grants. In addition to the bilateral support, Mongolia has also benefited since 2004 from regional Asia wide programmes as well as from thematic programmes such as support for NGO projects.

After 1990 Mongolia underwent a relatively successful transition to market economy and democracy. The country has been enjoying 5-10% economic growth over the last years, but remains dependent on world prices for its main export commodities (copper, gold, cashmere, and fluorspar). However, the poorest third of the population, notably in the countryside, does not benefit sufficiently from the current mining boom and continues to live on less than $1 per day. In addition, severe winters ('dzuds') and desertification threaten the livelihoods of nomadic herders in the countryside. Numerous international donors, including the EU and its Member States, are assisting Mongolia's development and reform efforts.

For more information:
http://ec.europa.eu/external_relations/mongolia/intro/index.htm

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