Mongolia - Taming the tyrannies of distance and isolation : a transport strategy for Mongolia
Cunningham, Wendy V. | Maloney, William F.
Mongolia's transport sector is underdeveloped and is unable to fulfill its objectives of stimulating economic growth and national integration. The greatest obstacles are physical distance from international markets and isolation among its regions. The greatest constraint to overcoming these obstacles is financial. Innovative approaches are needed to generate as much private funding as possible, leveraging public funding to maximize the amount of private investment. Development of at least two trade corridors should be encouraged, so that the transport and logistics costs of exports and essential imports can be minimized. To overcome the internal isolation of vast regions, a combination of low-cost, all-weather roads and basic regional airports will provide the infrastructure over which effective transport services can operate. Finding ways to maximize competition without incurring excessive additional costs presents a greater problem for Mongolia than most countries. A combination of competitive services within markets where demand is sufficient to sustain them, and concessioned services that compete for the market elsewhere, will be the most cost-effective way of implementing a policy of transport competition. This policy will require a strong regulatory system so that its potential abuses can be controlled. The transport strategy proposed here comprises a policy framework based on these principles, and an application of that framework to the principal sector issues.
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