Mongolia and Japan's cooperation comes to new level
In the past, Japan was one of the biggest aid provider to Mongolia. Japan’s non-refundable aid to Mongolia totals around 116 billion Japanese Yen in the past 40 years.
Mongolia and Japan's cooperation comes to new level. In the past, Japan was one of the biggest aid provider to Mongolia. Japan’s non-refundable aid to Mongolia totals around 116 billion Japanese Yen in the past 40 years. However, in recent years Mongolia received less aid from Japan due to the increase of GDP per capita of Mongolia. While a total of more or less 8.5 billion Japanese Yen worth of aid have been provided in 2015, it was only around 70 million Japanese Yen in 2016. The Government of Japan follows the standards of International Development Association (IDA) of the World Bank Group when providing non-refundable aids, which states the required GDP per capita of the country of assistance. Thus, Mongolia`s GDP per capita exceeded International Development Association`s standard, causing Japan’s aid to shrink. However, Mongolia and Japan`s cooperation is further increased in the long-term low interest rate soft loans. For example, new international airport construction project in Khushig Valley has been successfully continuing under the Japan`s soft loan of more than 500 million USD with a maturity of 40 years and 0.1 percent interest rate. Additionally, Thermal Power Plant 4 in Ulaanbaatar capital city is implementing an expansion project under the Japan`s soft loan. It is believed by many that Japan is seeking mutually beneficial cooperation options, rather than aid and support. Therefore, the sides are signifying the mutual partnership agreement, which was established in 2016.
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