Mongolia: Road Sector Development to 2016

Mongolia’s growth is set to accelerate in the next decade, as its vast mining resources start to be put into large-scale production. This has greatly improved its prospects for prosperity and poverty reduction. However, to realize its full potential, Mongolia will need to transform its society, economy, and administration. This report discusses how the context of road sector policy and road infrastructure investments will change, and the ways the sector can best prepare to fulfill its new role. Given the country’s road infrastructure needs, the road sector will be expected to implement massive highway investments in a short time and then to consistently maintain the new highways at a high standard. However, Mongolia’s current small-scale road sector will unlikely have the capacity to scale up and deliver upon such expectations without extensively modernizing its financing mechanisms, business processes, organization, and education systems. This report therefore argues that Mongolia’s government needs to implement a comprehensive capacity development program for the road sector for about 5 years. This study looks into the sector’s financial dimension, the techniques and processes followed for road maintenance and construction, and the role of human resources management and education. It tries to understand why sector performance improvement has been slow, even though many sector issues and apparent solutions have been considered in the past. Reflecting on lessons from international experience, it outlines a range of policy options for decision makers and proposes an agenda until 2016.