Economics and Business, Society and Culture

Upper-Middle-Income-Ish

For anyone doing research on Mongolia, especially on the economic side of things, I’m sure that the World Bank database (data.worldbank.org) is a familiar friend. For those of you who didn’t know that fun fact, go there immediately to revel in the amount of data that the World Bank has collected and compiled into a (mostly) usable format.

The Mongolia page is http://data.worldbank.org/country/mongolia#cp_wdi

The first thing you’ll notice is that Mongolia is categorized as an “Upper Middle Income” country. This is part of the the World Bank’s Country Classifications, which are revised every year on July 1st. These classifications are based on Gross National Income (GNI) per capita of each country, and end up being rather important because they end up determining a country’s eligibility to loan money from the World Bank.

According to the World Bank, this year, low-income economies are those that had a GNI of $1,045 or less in 2014; lower-middle-income economies had a GNI per capita between $1,045 and $4,125; upper-middle-income economies had a GNI per capita between $4,125 and $12,736; and high-income economies had a GNI of $12,736 or more.

Mongolia just wedged into the upper middle income level with a GNI per capita of $4,320 in 2014. It’s a little odd to think of Mongolia as an upper middle income country, as your usual “Upper-Middle-Income” country had an average GNI per capita of $7,893, and the averages for East Asia & Pacific (developing only) and Europe & Central Asia (developing only) was $6,122 and $6,864, respectively. But I guess somebody has to round out the ends. Yay, us!

GNI per capita

By moving from lower-middle-income to upper-middle-income, Mongolia has graduated to the World’s Bank’s threshold for 17-year International Bank for Reconstruction and Development (IBRD) loans, which sounds…nice?

A little background: The IBRD, set up during the Bretton Woods Conference at the end of World War II, is the oldest World Bank institution. The IBRD and the International Development Association (IDA) (the concessional lending arm of the World Bank) make up the World Bank. The purpose of the World Bank is to make loans to developing countries. With three other international organizations, these make up the World Bank Group, which broadly makes leveraged loans to developing countries (there are some differences – the IBRD and IDA focus on lending to countries, whereas the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) focus on lending to the private sector).

Anyways, in 2014, $93.7 million and 4 projects were approved by IBRD and the IDA for operations and projects in Mongolia. It will be interesting to see by how much this number changes in 2015. Stay tuned.

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