October 18, 2017 – PEP researchers in Mongolia organized a workshop in Ulaanbaatar, Mongolia, to introduce the PEP-institutionalization project and the policy issues being analyzed.
The research team from Mongolia’s Economic Research Institute (ERI) are the first beneficiaries of PEP’s new institutionalization project grant, created as part of the PAGE II initiative. The ERI team’s first research project aims to identify the effect of Mongolia’s recent mining boom and bust on the country’s economy.
They organized a workshop to introduce the project, its methodology, and the expertise being developed to key policy stakeholders. Participants included representatives of the Ministry of Finance (Macroeconomic Policy Division), the National Development Agency (Development Policy and Planning Division), the Research Department of Parliament, and the Bank of Mongolia (the Monetary Policy and Research and Statistics departments), as well as researchers and academics.
During the workshop, the team presented the computable general equilibrium (CGE) modelling techniques they are using as well as the application, possibilities and advantages of using CGE models for policy analysis in other areas. Linked to this, the team presented the Mongolian Social Accounting Matrix they built using data for 2014 as the baseline for the CGE model.
The Head of Development Policy and Planning Division of the National Development Agency (NDA), Mrs. Doljinsuren, expressed particular interest in the model. She explained that the NDA needs a tool and expertise to analyze the impact of major investment projects the government plans to undertake in the near future.
The team then presented three simulations exploring the effects of specific policies or shocks on the Mongolian economy:
- The economic impact of the expansion of the coal sector (an increase in the coal production and the world prices of coal)
- The economic impact of a reduction in the government current expenditure on the economy
- The effects of a shift in the Tavan Tolgoi’s transportation (i.e. an expansion in the railway sector)
The workshop participants offered helpful comments and advice for each simulation. The team leader, Ragchaasuren Galindev said: "Following the workshop, we better understand what we need to improve to in terms of our CGE model and simulations to provide the kind of evidence the stakeholders want." The experts and policymakers expressed their willingness to support the team’s future activities involving CGE modelling and simulations. In particular, the Head of the Macroeconomic Policy Division of the Ministry of Finance recommended that the team discuss the assumptions they will use for simulations in upcoming meetings to make sure the simulation results are useful and relevant to key policy questions.
The policymakers present highlighted the importance of investigating government actions. Representatives of the NDA and the Research Department of Parliament stated their belief that CGE modelling is essential for policy simulations and expressed their willingness to collaborate with the team in the future. Furthermore, representatives of the NDA and the Development Bank of Mongolia said they would be interested in engaging the team for analysis of large investment projects such as the railway and copper smelter.