Mongolia Business Plus Initiative Quarterly Performance Report January – March 2012

The initiative was funded by the United States Agency for International Development (USAID) and implemented by Chemonics International Inc. The BPI aimed to strengthen private sector capacity and competitiveness, improve the financial sector capacity and enabling environment, and implement business enabling policies. In the first quarter of 2012, the BPI continued its exhaustive search for a new Chief of Party, with interim Chief of Party Fernando Bertoli fielded in mid-February. In response to USAID's concerns that the project was not gaining traction in the Business Enabling Environment component, Mr. Bertoli initiated a process to revise the annual work plan for Year 1 and upcoming Year 2. This effort focused on identifying areas of activities that could gain traction within the government and project counterparts, identifying champions for reform, refocusing the grants program, and removing activities that no longer demonstrated a return on investment or expected to produce impact in the short term. Within component 1, the BPI placed an added focus on reforms that could be achieved with the customs agency on simplifying import and export processes. The World Bank's Doing Business indicator "trading across borders" was identified as an area that could have potential "quick wins," and Chemonics committed to bringing in an accomplished expert to establish a plan for improving Mongolia's standing from a ranking of 159. Additionally, there was express demand from the customs agency to assist with Risk Management and an identified need to assist with the establishment of a custom brokers' association and develop a draft law. In component 2, the quality assurance program achieved significant milestones with the continued training of over 150 private sector champions for quality assurance in Health and Food Safety. This included the collection of service fees to provide a foundation for the eventual launch of the Quality Management Center of Excellence (QMCE), a clear indicator of sustainability based on private sector demand for quality assurance systems. Within component 2, the first grant was issued for a web-based solution to assist start-ups in Mongolia. In the financial sector component, the project continued to support the Ministry of Justice and its bankruptcy law working group to advance the draft bankruptcy law, participated at the Corporate Governance National Council activities, and advised on National CG national policy implementation. The project also assisted the Financial Regulatory Commission (FRC) insurance department to develop a strong regulatory function, establish guidance on determining benefits, and strengthen the insurance sector capacity. In the next quarter, the BPI plans to conduct the following activities: continue support to the custom brokers association and develop a draft law and kick-off public and private dialogue on the draft legislation; initiate the establishment of customs brokers association; assess the plan to reduce the number of days for import clearance and reduce the burden of compliance with tax procedures; continue Economic Journalism Club activities; continue training activities affiliated with the quality assurance program and seek financial and leadership support for the envisioned QMCE; offer institutional capacity building initiatives across association landscape; assist the Financial Regulatory Commission in developing regulations for the law on compulsory drivers' insurance combined with public education activities; and seek opportunities to provide assistance to the Credit Information Bureau.