Mutsumi SATO: "Private sectors will play major role in development of Mongolia"

Editor L.Byambadorj

2016-06-07 19:13 GMT+8

GoGo Mongolia had an opportunity to with Mr. Sato Mutsumi, Chief Representative of JICA Mongolia Office, about JICA's operation in Mongolian and other important development, economic and social issues.

- PART I: INTRODUCTION -

Q: First of all, good afternoon. Thank you for having us. Please introduce yourself?

My name is Mutsumi Sato, I’m Chief Representative of JICA Mongolian office. I came here in March 4, 2015. Actually, in my previous position I was in charge of all operations in Mongolia at JICA headquarter office in Tokyo. So I had several business trips here before and familiar with Mongolia. It’s very nice country, favorable to Japanese people.

Q: What is your background and past experiences before JICA?

I graduated from the Hokkaido university. Hokkaido is the north island of Japan. I studied law. After graduation, I started working at Panasonic company. And in 1997, I joined the Japanese Overseas Cooperation Volunteers program, conducted by JICA, and stayed in China for 2 years. After that I joined JICA in 2000.

Q: You have been in Mongolia for over a year now, what’s your favorite Mongolian food?

I am familiar with the food. I like mutton and lamb. Usually, Japanese people don’t really eat mutton but Hokkaido is famous for eating mutton and I’m very used to it. And my favorite dishes are Tsuivan and Khorkhog. But Mongolian language is very difficult.

- PART II: WE HAVE 3 MAIN AREAS OF FOCUS -

Q: Can you briefly tell us about JICA’s history in Mongolia?

JICA is the implementation agency of Japan’s Official Development Assistance (ODA). And JICA has more than 60 overseas offices and more than 10 offices in Japan. As for Mongolia, the office was established in 1992. But at that time, it was only for volunteers’ operations. Not technical cooperation, not grant aid, and not soft loan. The office status was upgraded in March 1997. After that, it became official overseas office which conducts various activities.

Q: How do JICA select countries as part of their focus of development assistance?

First of all, it’s not only for JICA’s matter. Diplomatic relations come here first, where Japanese Government and recipient country talk about necessity of assistance. Therefore, we don’t have direct involvement in decision making because we are implementing agency.

Q: How many employees work at JICA Mongolian office?

At the moment, we have 10 Japanese officers and some 20 Mongolian staffs. It’s medium sized operation.

In 2014, we have invested $20 million for technical cooperation, $10 million for grant aid, $80 million for soft loan, 50 training programs and 16 grassroots projects.

Q: How many JICA volunteers work in Mongolia?

As of the end of 2015, about 60 volunteers have worked in Mongolia. They worked in various fields such as education, sports and health working as elementary school teacher, basketball coach, nurses and of course Japanese language teacher.

Q: Mongolia-Japan bilateral relations have boosted greatly in the past few decades. What are the areas of focus for JICA in Mongolia?

At first, I would like to touch on the first stage of JICA’s cooperation for Mongolia. We started full scale operations in 1990, just after democracy and transition into market oriented economy here. At that time, Mongolia was in serious condition. We conducted lots of projects. Japanese government hosted ‘Mongolia Assistance Group’ meeting with World Bank in Tokyo in 1991. We held series of six meetings through 1990s. These meetings played crucial role in the cooperation for Mongolia. These series of meeting produced very good result. We conducted commodity loan which provided fund for Mongolia to import necessities from foreign countries. And also we conducted grant aid for thermal power plant number four project, and another grant aid for food and increased food production. All of them were part of necessity emergency. That is the first stage of cooperation for Mongolia. Coming back to recent years, we have 3 pillars, strategic areas for cooperation. First one is enhancement of governance. Second, assisting inclusive growth – job creation through small and medium enterprises development; basic social services including education, health and social welfare. And last pillar is enhancement of capacity and function of Ulaanbaatar city as capital.

Q: Can you give us rough estimate of all financial assistance provided by JICA for Mongolia?

I have the figure for 2014. $20 million for technical operation, $10 million for grant aid, $80 million for soft loan. Additionally, we conducted about 50 programs for training course in Japan targeted for Mongolian government officials. Another 16 projects for grassroots technical cooperation, based on proposals from Japanese ministries and universities etc. Its size is little bit small but we are promoting the relations between Japanese – Mongolian ministries. Lastly, we have about 60 volunteers in Mongolia.

Q: What is the biggest project ever implemented by JICA? Can you please tell us more about previous and current projects? What were the impacts?

As for the amount of scale, the biggest project is the construction of new international airport at Khoshig valley. It’s being implemented by ODA soft loan providing 65 billion Japanese yen, that is approximately $650 million. Also Mongolian government partly bears the expense. Japanese company commissioned the project and construction is going well.

As for the amount of scale, our biggest project is the construction of new international airport at Khoshig valley.

Q: Can you please tell us more about technical assistance and its progress in Mongolia?

I would like to pick up 2 projects related to your question. TA project aims at human resource development and institutional building with specific outcome. First one is TA projects under the first pillar, enhancement of governance, where we have conducted and completed a lot of projects including capacity building for internal auditing with Ministry of Finance; “Strengthening Mediation System” project with Ministry of Justice. Also “Public Private Partnership (PPP) scheme” together with Invest Mongolia Agency (IMA). Our latest project is capacity building for Authority for Fair Competition and Consumer Protection. “Internal Audit Law” will be submitted to parliament in the next autumn session. It is contributed by our project. The new PPP draft law will be submitted to next parliament session. So these are the outcomes of our project.

Second project is the Mongolia-Japan Center for Human Resource Development which is under second pillar-- inclusive growth. It’s located next to National University of Mongolia. It was constructed in 2002 by grant aid (440 million Japanese yen) from Japanese government. Since then it has been providing Mongolian business people with latest management training courses such as business strategies, finance, human resource management and marketing etc. under the TA project from JICA. Also it implements Japanese language classes for Mongolian citizens while providing useful information about Japan.

So far about 14,000 business people have participated in these activities from 2002 to 2016. About 22,000 thousand people took Japanese language classes. And the number of people who came to Mongolia-Japan Center reached two million as of April 2016. Mongolia-Japan Center certainly became a window for Mongolian people interested in Japan. That is our biggest success in scope of TA project.

Q: Please elaborate more about the second pillar, inclusive growth.

Inclusive growth includes job creation, education, medical and social welfare areas. I would like to pick up two step lending project. It is a soft loan project. Two step lending project aims to provide Mongolian SMEs with fund for their business. It has low interest rate and long repayment period. In Mongolia, borrowing money from bank is the opposite. This project contributes SMEs to expand their business and operations. Two step lending project was implemented between 2006-2009 (2.5 billion Japanese yen) for phase 1 and phase 2 (5 billion Japanese yen) in 2011-2014. More than 600 hundred companies received fund from our loan, and 95 percent of them increased their sales. So far over 2000 jobs are created by making use of the loan. 70 percent of them are making use of the loan for import substitution and 7 percent of them are using the fund to export their products. This is very good outcome which helps SMEs to develop and accelerate diversification of industries.

Q: Mongolia-Japan made EPA to boost bilateral economic trade between the two countries. How can Mongolia benefit from this? What do you think?

This EPA is very good, because it’s mutually beneficial. But it’s not very easy to be part of this because if Mongolian businesses wants to export products to Japan, they need to produce high quality products to meet the requirement.

Ordinary citizen’s credibility, trust for the government should be improved. Transparency, accountability and responsibility of government is quite important for the development of country.

- PART III: POLITICAL STABILITY, CHANGES AND SOLUTIONS -

Q: In Mongolia, what issues need solutions urgently?

Personally, political stability is one. I think election will affect Mongolia’s agencies or ministries. JICA’s counterpart is ministries or UB city office. I have experienced such kind of experience in the last election in 2012 when I was in Tokyo. The minister, secretary, director and officers changed. When the new government came, we had to talk and explain everything from the beginning. It’s very difficult because it took a lot of time & energy. Another one would be industrial diversification is key for sustainable development. Mining is of course very important. It’s driving force to lead rapid economic growth for couple of years. But the industry is very fluctuant. It’s very vulnerable because its closely related commodity market price. I think diversification of industry, especially agriculture, stock breeding and tourism is needed. Also air pollution is very serious issues.

Besides these bad issues and experiences, I had a wonderful experience last summer. I was at the State department store shopping when a Mongolian person approached and asked me in Japanese: “Are you Mr. Mutsumi Sato san of JICA?”. I turned around and said “Yes, I am Mutsumi Sato of JICA Mongolian office”. But I didn’t remember her so I asked “I’m very sorry, where have we met before?” and she replied: “We have not met before but I would like to thank JICA’s assistance for Mongolia, especially during 1990s when Mongolia was in bad situation.” This was very surprising and wonderful experience. I realized our operation was well received and appreciated by Mongolian people. Then told myself again, I have to work hard from now on also.

Q: In your opinion, what sectors in Mongolia needs to be looked at and developed?

I would like pick up governance, SMEs, and UB city infrastructure as important sectors to cover. Technical assistance (TA) aims at institutional building and human resource development. It’s not like building facilities, providing equipment and fund. Traditionally, JICA is favor of TA. But of course we conducted grant aids to build hospitable or schools and we also have ODA loan projects for new international airport project.

Q: If you have the power, what would you change and improve in Mongolia?

Frankly speaking, I wouldn’t like to comment on political issues but ordinary citizen’s credibility, trust for the government should be improved. Transparency, accountability and responsibility of government is quite important for the development of country. As for the development side, I would like to support Mongolia’s effort to make grand design for mid or long term sustainable development. Such kind of grand design is very important. “Long-term Sustainable Vision 2016-2030” was approved by parliament this February supported by UNDP. So JICA would like to support Mongolian effort for development.

- PART IV: FUTURE -

Q: What is next for JICA Mongolian office?

Well, situation of Mongolia is changing. For example, Mongolia’s GNI per capita was about $2000 in 2010, but it reached $4000 last year. It classified Mongolia as upper-middle income country by regulation of World Bank. According to regulations, upper-middle income countries cannot receive grant aid from JICA or another donor. This is a big change for our operation. We also have to consider the increasing amount of fund from private sectors. So public donors such as JICA, ADB, and World Bank might not be a major player in the future for the development of Mongolia. Private sectors will be majority, in scale of fund. JICA has just started revising our policy for Mongolia. So I cannot say anything on how the new policy will be.

Q: I will leave the last moment to you. Would you like to add anything?

In the short period, I strongly hope election will go smoothly without any conflict or trouble. As world commodity price is dropping and China’s economy is also slowing down, Mongolia should take this chance to rise and restructure. Government of Mongolia should seriously discuss about future development issues with international organizations and donors such as JICA, UNDP, ADB, and World Bank.

Thank you for your time and good luck. 

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