Mongolia Economic Retrospective: 2008-2010
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Transcript of Mongolia Economic Retrospective: 2008-2010
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Lofkoeia C`ofoli`
Xctrospc`tivc=8>>2-8>1>
A [ O X E D H A F J P T S D Y
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[ O X E D H A F J P T S D Y
Lofkoeia C`ofoli`
Xctrospc`tivc= 8>>2-8>1>
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@opyrikbt 8>1>
Tbc Iftcrfatiofae Hafj gor Xc`ofstru`tiof afd Dcvceoplcft/Tbc [ored Hafj
1212 B Ptrcct, F.[.
[asbifktof, D.@. 8>400, S.P.A.
Aee rikbts rcscrvcd
1 8 0 4 10 18 11 1>
[ored Hafj Ptudics arc puheisbcd to `ollufi`atc tbc rcsuets og tbc Hafjs worj to tbc dcvceoplcft
`ollufity witb tbc ecast possihec dceay. Tbc lafus`ript og tbis papcr tbcrcgorc bas fot hccf prcparcd
if a``ordaf`c witb tbc pro`cdurcs appropriatc to gorlaeey-cditcd tcxts. Polc sour`cs `itcd if tbis
papcr lay hc ifgorlae do`ulcfts tbat arc fot rcadiey avaieahec. Tbis voeulc is a produ`t og tbc stagg og
tbc Iftcrfatiofae Hafj gor Xc`ofstru`tiof afd Dcvceoplcft/Tbc [ored Hafj. Tbc gifdifks,
iftcrprctatiofs, afd `of`eusiofs cxprcsscd if tbis voeulc do fot fc`cssariey rcgec`t tbc vicws og tbc
Cxc`utivc Dirc`tors og Tbc [ored Hafj or tbc kovcrflcfts tbcy rcprcscft.Tbc [ored Hafj docs fot kuaraftcc tbc a``ura`y og tbc data if`eudcd if tbis worj. Tbc
houfdarics, `oeors, dcfolifatiofs, afd otbcr ifgorlatiof sbowf of afy lap if tbis worj do fot ilpey
afy mudklcft of tbc part og Tbc [ored Hafj `of`crfifk tbc eckae status og afy tcrritory or tbc
cfdorsclcft or a``cptaf`c og su`b houfdarics.
Xikbts afd ^crlissiofs
Tbc latcriae if tbis puhei`atiof is `opyrikbtcd. @opyifk afd/or trafslittifk portiofs or aee og tbis worj
witbout pcrlissiof lay hc a vioeatiof og appei`ahec eaw. Tbc Iftcrfatiofae Hafj gor Xc`ofstru`tiof
afd Dcvceoplcft/Tbc [ored Hafj cf`ourakcs dissclifatiof og its worj afd wiee forlaeey kraft
pcrlissiof to rcprodu`c portiofs og tbc worj prolptey.
Gor pcrlissiof to pboto`opy or rcprift afy part og tbis worj, pecasc scfd a rcqucst witb `olpectc
ifgorlatiof to tbc @opyrikbt @ecaraf`c @cftcr If`., 888 Xoscwood Drivc, Dafvcrs, LA >1980, SPA:tcecpbofc= 9;2-;3>-24>>: gax= 9;2-;3>-44;>: Iftcrfct= www.`opyrikbt.`ol.
Aee otbcr qucrics of rikbts afd ei`cfscs, if`eudifk suhsidiary rikbts, sboued hc addrcsscd to tbc
Oggi`c og tbc ^uheisbcr, Tbc [ored Hafj, 1212 B Ptrcct F[, [asbifktof, D@ 8>400, SPA: gax= 8>8-388-
8488: c-laie= puhrikbtsNworedhafj.ork.
IPHF= 9;2->-2810-234>-1
cIPHF= 9;2->-2810-2342-;
DOI= 1>.1397/9;2->-2810-234>-1
Eihrary og @ofkrcss @ataeokifk-if-^uhei`atiof Data
Lofkoeia c`ofoli` rctrospc`tivc.p. `l.
IPHF 9;2->-2810-234>-1 -- IPHF 9;2->-2810-2342-; (cec`trofi`)
1. Lofkoeia--C`ofoli` ofditiofs--81st cftury. 8. Lofkoeia--C`ofoli` poei`y--81st `cftury.
0. Lifcs afd lifcrae rcsour`cs--Lofkoeia. I. [ored Hafj.
B@40>.83.L704 8>1>
00>.931;'0--d`88
8>1>>088;>
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iii
@oftcfts
A`jfowecdklcfts ...................................................................................................................vi
A`rofyls afd Ahhrcviatiofs .............................................................................................. vii
Cxc`utivc Pullary ............................................................................................................... viii
1. Tbc Cxtcrfae Pbo`j afd Its ^roxilatc Ilpa`t ................................................................. 1
Cxtcrfae Pbo`j if 8>>2->9 .................................................................................................. 1
Pbarp Dctcrioratiof if Gis`ae Haeaf`cs ............................................................................. 8
@urrcft A``ouft, Purpeus to Dcgi`it ................................................................................. 0
Puhstaftiae Xcscrvc Eosscs ................................................................................................ 0Hafjifk Pc`tor [cajfcsscs ............................................................................................... 3
8. Lofkoeias Cxpcricf`c @olparcd to Otbcr @oppcr ^rodu`crs .................................. ;
0. Tbc ^oei`y Xcspofsc ...........................................................................................................11
Tbc Kovcrflcfts Ptrofk ^oei`y A`tiofs ...................................................................... 11
Pupport hy Iftcrfatiofae afd Hieatcrae Dofors............................................................. 18
Lififk Pc`tor Xcgorls ..................................................................................................... 10
4. Bow Did tbc C`ofoly Xcspofd? ..................................................................................... 12
Xcae A`tivity Xc`ovcrs ..................................................................................................... 12
Xc`ovcry, Krowtb, afd Xisifk @ofsulcr ^ri`cs.......................................................... 12
^uhei` Gifaf`cs Ilprovcd Puhstaftiaeey if tbc Eattcr Baeg og 8>>9 ........................... 19
Tbc @urrcft A``ouft Dcgi`it Farrowcd ........................................................................ 81
Tbc Cx`bafkc Xatc Ptahieizcd ......................................................................................... 88
Hut Hafjifk Pc`tor ^rohecls Eifkcrcd ......................................................................... 80
Ifgorlae Pc`tor [orjcrs Bardcst Bit hy tbc @risis ..................................................... 83
3. ^rolotifk Xc`ovcry afd Krowtb Koifk Gorward ......................................................0>
7. Eoojifk Gorward .................................................................................................................41
Tahecs
Tahec 0.1. Pullary og ^oei`y A`tiofs Tajcf ovcr 8>>9..................................................... 11
Tahec 4.1. Daiey [akcs og Sfsjieecd [orjcrs if Pcec`tcd Ifgorlae Eahor Larjcts
if SH ..................................................................................................................................87
Hox Tahec 3.3a. @ofditiof og tbc Fatiofae ^avcd Xoad Fctworj ..................................... 09
Tahec 7.1. Lcdiul-tcrl Hasceifc ^romc`tiof ....................................................................... 48
Tahec 7.8. Haeaf`c og ^aylcfts Outeooj .............................................................................. 48
Hox Tahec 7.1a. @apitae Geows to Clcrkifk C`ofoli`s Gcee Pbarpey if Lay,
^arti`uearey Clcrkifk Larjct Hofd Issuaf`c ............................................................. 47
Tahec 7.0. Lofkoeia= Jcy Ifdi`ators......................................................................................4;
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@oftcfts v
Gikurc 3.1. Cxpcfditurcs of @apitae Xcpairs Bavc Dc`eifcd Xceativc to Fcw
Ifvcstlcfts .......................................................................................................................08
Gikurc 3.8. Trcfds if Cxpeoratiof afd Lififk Ei`cfsifk A`tivity Sfdcrlifcd hy
^oei`y Ifstahieity ..............................................................................................................08Hox Gikurc 3.1a. Bow Dut`b Discasc if tbc 19;>s @auscd tbc Fctbcreafds Xcae
Cx`bafkc Xatc to Apprc`iatc afd Output to @oftra`t ............................................... 00
Hox Gikurc 3.0a. @ollodity ^ri`cs if Xc`cft Ycars Puhmc`t to Earkc Pwifks ............... 07
Hox Gikurc 3.0h. Earkc Crrors if Gorc`astifk @oppcr ^ri`cs ............................................. 07
Hox Gikurc 3.4a. Lofkoeias I@OX ratios Arc Lu`b Bikbcr tbaf if Otbcr
Dcvceopifk @ouftrics, Ifdi`atifk Ifcggi`icft Ifvcstlcft Ppcfdifk ........................ 0;
Hox Gikurc 3.4h. Xcturfs to Akkrckatc (^uhei` afd ^rivatc) Ifvcstlcft Bavc
Xclaifcd Ptcady if Xc`cft Ycars ............................................................................. 02
Hox Gikurc 3.4`. Hut Xcturfs to ^uhei` Ifvcstlcft Bavc Gaeecf Pbarpey sif`c
8>>3 ....................................................................................................................................02
Hox Gikurc 7.1a. Xisc if @rcdit Dcgauet Pwaps if tbc Curo Arca ...................................... 43
Hox Gikurc 7.1h. Clcrkifk Larjct Hofd Yiceds Bavc Xiscf, hut Fot to tbc Bcikbts
og Eatc 8>>2 afd Carey 8>>9 ..............................................................................................43
Hox Gikurc 7.1`. Clcrkifk Larjct Hofd Issuaf`c, SP$ hieeiof ........................................ 47
Hoxcs
Hox 8.1. @biecs Gis`ae Xckilc ..................................................................................................9
Hox 0.1. [ored Hafj Hudkct Pupport Approvcd ................................................................ 14
Hox 0.8. Tbc Oyu Toekoi Ifvcstlcft Akrcclcft ................................................................ 14
Hox 4.1. Bouscboed-Ecvce Ilpa`ts og tbc C`ofoli` @risis if Lofkoeia= Gifdifks
grol Tbrcc Xoufds og Quaeitativc Xcscar`b ................................................................ 87
Hox 4.8. Tbc Ilpa`t og tbc Dc`clhcr 8>>9 Dzud of Eivcsto`j Lortaeity afd
Xurae Eivceiboods .............................................................................................................8;
Hox 3.1. Dut`b Discasc ............................................................................................................08
Hox 3.8. Gis`ae Ptahieity Eaw= Plcetifk @oppcr ifto ^rospcrity ........................................ 04
Hox 3.0. Gorc`astifk @oppcr ^ri`cs ....................................................................................... 03
Hox 3.4. Tbc Xcturfs to Ilprovcd Ifvcstlcft Ppcfdifk if Lofkoeia ............................ 0;
Hox 3.3. Xoad Pc`tor ^rohecls if Lofkoeia ........................................................................ 09
Hox 3.7. ^uhei`-^rivatc ^artfcrsbips= Fo Laki` Hueect ...................................................... 4>Hox 7.1. Povcrcikf Hofd Pprcads if 8>>9 .............................................................................43
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A`jfo
bis C`ofo
tbc [ored
afd so`iae dcv
worj if Lofk
[ored Hafjs
tbc Cast Asia a
Tcblifa Jba
Tayeor. Waeua
Kraclc Baf`o
og tbc Lo
bttp=//www.w
T
ecdk
i` Xctrospc`ti
Hafjs ofkoei
ceoplcfts afd
eia. Tbcy arc p
^ovcrty Xcdu`
fd ^a`igi` Xcki
, Lufjbfasa
ec ifputs wc
`j, ]abid Bas
fkoeia `ouft
redhafj.ork.l
vi
cfts
c og tbc pcrio
a C`ofoli` Spd
poei`ics afd
rodu`cd hy a t
tiof afd C`ofo
of Wi`c-^rcsid
Farlafdaj
c aeso provid
aif, Afdrcw
ry tcal.
.
grol lid-8>
atcs. Tbc updat
rcscft gifdifk
al ecd hy Xok
li` Lafakcl
f`y: tbc tcal i
, Aetaftsctsck
d hy @bris
asof, Arsbad
opics `af
2 to Aprie 8>1
cs outeifc rc`c
of ofkoifk
icr vaf dcf Hri
ft (^XCL) Pc
f`eudcs Xaepb
Pbiiecklaa,
if`b, Afdrcw
aycd, afd otb
hc dowfeoa
> draws of
t c`ofoli`
ored Hafj
j grol tbc
tor Sfit if
Waf Doorf,
fd Asbecy
Koodeafd,
r lclhcrs
cd grol
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vii
A`rofyls afd Ahhrcviatiofs
ADH Asiaf Dcvceoplcft Hafj
hf Hieeiof
HoL Hafj og Lofkoeia
@^I @ofsulcr ^ri`c Ifdcx
GR Gorcikf `urrcf`y
KD^ Kross Dolcsti` ^rodu`t
E@ Eo`ae `urrcf`y
EBP Ecgt bafd sidc
LGA Lofkoeiaf Gifaf`iae Asso`iatiof
lf Lieeiof
LFT Lofkoeiaf tokrok
LoG Lifistry og Gifaf`c
lol loftb-of-loftb
lt lctri` tof
F^E Fofpcrgorlifk eoaf
FPO Fatiofae Ptatisti`s Oggi`c
XBP Xikbt bafd sidc
ozt troy ouf`c
[^T [ifdgaee ^rogit Tax
yoy ycar-of-ycar
ytd ycar-to-datc
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viii
Cxc`utivc Pullary
ofkoeia was ofc og tbc Cast Asiaf c`ofolics bardcst bit hy tbc keohae dowfturf,
as `oppcr pri`cs `oeeapscd afd cxtcrfae dclafd gcee. [itb tbc rc`ovcry if
c`ofoli` a`tivity `urrcftey wcee ufdcrway, hut tbc poei`y `baeecfkcs bikbeikbtcd hy
tbc `risis yct to hc gueey addrcsscd, tbis C`ofoli` Xctrospc`tivc cxalifcs tbc jcy
c`ofoli`, gifaf`iae, afd poei`y dcvceoplcfts grol lid 8>>2 to Aprie 8>1>.
@oeeapsifk lifcrae pri`cs afd a stccp drop if cxtcrfae dclafd duc to tbc keohae
dowfturf og 8>>2 afd 8>>9 wcrc tbc cxtcrfae sbo`js wbi`b wcrc trafslittcd to
Lofkoeias c`ofoly. Tbis sbo`j cxposcd ufdcreyifk wcajfcsscs if tbc c`ofoli`
stru`turc afd poei`y cfviroflcft. Gor cxalpec, cftcrifk tbc `risis, tbc `ouftrys gis`ae
positiof was bikbey rceiaft of lifcrae rcvcfucs. ^oei`y did fot aeeow gor adcquatc
savifks durifk tbc hool, wbi`b saw earkc if`rcascs if ufsustaifahec, ifcggi`icft, afd
popueist cxpcfditurcs. Tbc hafjifk sc`tor was aeso ovcrbcatifk as eoaf krowtb
hoolcd, outpa`ifk dcposits. Hafjs wcrc bikbey cxposcd to sc`tors su`b as
`ofstru`tiof, wbi`b suggcrcd hadey durifk tbc dowfturf, afd to advcrsc sbo`js to
sifkec `rcditors duc to a `of`cftratcd eoaf hooj.
Tbc proxilatc ilpa`t og tbc cxtcrfae sbo`j was a sbarp widcfifk og tbc gis`ae afd
`urrcft a``ouft dcgi`its. Dclafd gor eo`ae `urrcf`y droppcd afd rcscrvc eosscs wcrc
if`urrcd if support og tbc dc ga`to cx`bafkc ratc, wbi`b dcprc`iatcd sbarpey tbroukb
carey 8>>9. @ofgidcf`c if tbc hafjifk sc`tor gcee, wbcf a lamor hafj gaiecd if eatc 8>>2
afd eo`ae `urrcf`y dcposit outgeows louftcd.
If rcspofsc to tbc `risis, if tbc sc`ofd quartcr og 8>>9, tbc kovcrflcft ufdcrtooj
strofk a`tiofs of gis`ae, lofctary, cx`bafkc ratc, afd gifaf`iae poei`ics. Tbcy wcrc
ladc possihec hy strofk poeiti`ae ecadcrsbip afd af cggc`tivc hipartisaf `ofscfsus.
Tbcsc a`tiofs wcrc aeso supportcd hy a rapid rcspofsc grol dcvceoplcft partfcrs if
tbc gorl og hudkct afd haeaf`c og paylcfts support, afd tc`bfi`ae assistaf`c.
Pikfigi`aft prokrcss if lififk sc`tor rcgorl afd dcvceoplcft was aeso ladc durifk
8>>9 witb tbc sikfifk og tbc eofk-awaitcd Oyu Toekoi (OT) Ifvcstlcft Akrcclcft.
Ecadifk up to tbc sikfifk og tbis akrcclcft, a fulhcr og poei`y issucs wcrc `earigicd
afd solc og tbc jcy disif`cftivcs to lififk ifvcstlcft wcrc rclovcd.Tbc poei`y rcspofsc og autboritics, bcepcd hy ilprovcd cxtcrfae `ofditiofs, as
`ollodity pri`cs afd @bifcsc ilport krowtb rc`ovcrcd, ecd to a rapid stahieizatiof if
tbc c`ofoli` situatiof grol lid-8>>9. Fofctbcecss, rcae KD^ if 8>>9 gcee hy 1.7
pcr`cft agtcr stcady krowtb og 2.9 pcr`cft if 8>>2. Tbc so`iae ilpa`t og tbc `risis was
cvidcft tbroukb a sbarp dc`eifc if rcae wakcs, parti`uearey if tbc ifgorlae sc`tor.
Xc`cft eivcsto`j eosscs duc to tbc dzud bavc aeso pea`cd gurtbcr prcssurc of tbc
eivceiboods og tbc rurae poor.
Eoojifk gorward, Lofkoeias lcdiul afd eofk-tcrl krowtb outeooj is gavorahec,
drivcf hy tbc lififk sc`tor. Bowcvcr, tbcrc rclaif sizcahec poei`y `baeecfkcs koifk
gorward. If parti`uear, `oftifucd gis`ae prudcf`c is fc`cssary to su``cssgueey hridkc tbcfcxt gcw ycars prior to tbc risc if gis`ae afd cxport rcvcfucs grol tbc OT promc`t.
Xcvcfucs wiee suggcr grol tbc cxpiratiof og tbc [ifdgaee ^rogit Tax if 8>11 afd dofor
gifaf`ifk is sct to dc`eifc. Otbcr fcar-tcrl `baeecfkcs arc to rcsoevc tbc ofkoifk
L
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Cxc`utivc Pullary ix
soevcf`y prohecls if tbc hafjifk sc`tor if a dc`isivc afd trafsparcft laffcr if ordcr
to prcparc tbc sc`tor gor tbc upturf if c`ofoli` a`tivity, ifvcstlcft, afd `apitae
ifgeows if tbc ycars abcad. Tbc lofctary afd gis`ae poei`y staf`cs lust aeso rcspofd
appropriatcey to risifk ifgeatiofary prcssurcs if ordcr to avoid a rcpcat og tbc hoolafd hust `y`ec og rc`cft ycars.
Lorc kcfcraeey, fow is tbc tilc to put if pea`c a strofk poei`y gralcworj to
lafakc tbc up`olifk lififk hool afd avoid tbc listajcs og tbc past. Tbc eoolifk
lififk hool hrifks tbc risjs og Dut`b discasc cggc`ts afd a rcturf to tbc progeikatc
popueisl og tbc past. Lcasurcs to addrcss tbcsc risjs if`eudc tbc rc`cftey adoptcd
gis`ae stahieity eaw tbat wiee bcep tbc `ouftry lovc away grol tbc gis`ae hool afd hust
`y`ecs og tbc past: ilprovclcfts to tbc hudkct pro`css afd tbc peaffifk afd
lafakclcft og puhei` ifvcstlcfts if ordcr to lorc cggi`icftey ahsorh tbc earkc
promc`tcd if`rcascs if rcvcfucs: afd appropriatc poei`y gralcworjs to support guturc
ifgrastru`turc ifvcstlcft. Ilpeclcftifk a tarkctcd povcrty hcfcgit sboued aeso cfsurc
tbc poor arc protc`tcd grol lififk hool-afd-husts if a gis`aeey sustaifahec laffcr.
Gifaeey, `oftifucd rcgorls if tbc lififk sc`tor wiee cfbaf`c if`cftivcs gor fcw
cxpeoratiof afd cfviroflcftaeey afd so`iaeey sustaifahec dcvceoplcft.
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1
@ B A ^ T C X 1
Tbc Cxtcrfae Pbo`j afd
Its ^roxilatc Ilpa`t
Cxtcrfae Pbo`j if 8>>2->9
Lofkoeia was bit hy a sikfigi`aft cxtcrfae sbo`j if eatc 8>>2 afd carey 8>>9 as lifcrae
pri`cs `oeeapscd afd cxport dclafd gcee witb tbc keohae c`ofoli` dowfturf. Tbc pri`c
og `oppcr, tbc `ouftrys laif cxport, gcee hy as lu`b as 73 pcr`cft grol SP$2,;>> pcr
tof if Aprie 8>>2 to SP$0,>>> pcr tof if Lar`b 8>>9. ^ri`cs og otbcr jcy cxport
`olloditics`oae, zif`, `asblcrc, afd `rudc oieaeso gcee sikfigi`aftey. Ofey tbc
pri`c og koed bced up, hc`ausc og its roec as a sagc-bavcf ifvcstlcft (Gikurc 1.1).
Tbis cxtcrfae pri`c sbo`j was `olhifcd witb af cxtcrfae dclafd sbo`j rcsuetifk
grol tbc dowfturf if c`ofoli` a`tivity og Lofkoeias lamor tradifk partfcrs. Gor
cxalpec, @bifas ifdustriae produ`tiof krowtb, wbi`b ahsorhs ahout ;> pcr`cft og
Lofkoeias cxports, seowcd grol ahout 17 pcr`cft ycar-of-ycar if lid-8>>2 to 3pcr`cft if tbc girst quartcr og 8>>9. @bifcsc ilport dclafd gor `oppcr afd Lofkoeiaf
koods kcfcraeey gcee sbarpey, rca`bifk aroufd 3> pcr`cft ycar-of-ycar (yoy) if tbc girst
baeg og 8>>9 (Gikurc 1.8).
Gikurc 1.1. @ollodity ^ri`cs@oeeapscd if tbc Pc`ofd Baeg og 8>>2
Gikurc 1.8. Afd Dclafd if @bifa,Lofkoeias Earkcst Tradifk ^artfcr,Droppcd
Ifdcx> if Mafuary 8>>4 % ycar-of-ycar bafkc og 0-loftb lovifk avcrakc
Pour`c= ELC, [ored Hafj. Pour`c= Bavcr Afaeyti`s, [ored Hafj.
>
3>
1>>
13>
8>>
83>
0>>
03>
4>>
Apr->; O`t->; Apr->2 O`t->2 Apr->9 O`t->9 Apr-1>
@oppcr
@oae
Koed
@rudc oie
-1>
-3
>
3
1>
13
8>
83
0>
-1>>
-3>
>
3>
1>>
13>
8>>
83>
0>>
Dc`->; Mue->2 Gch->9 Pcp->9 Apr-1>
@bifa Ifdustriae rodu`tiof(sa), XBPTotae Ilports hy @bifa, EBP
@bifa's Ilports og @oppcrOrc afd @of`cftratcs, EBPIlports hy @bifa grolLofkoeia, EBP
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8 [ored Hafj [orjifk ^apcr
Tbc gaee if tbc `oppcr pri`c afd suddcf c`ofoli` dowfturf cxposcd stru`turae
afd c`ofoli` poei`y wcajfcsscs if Lofkoeia. As a rcsuet, as `oppcr pri`cs gcee, tbc
gis`ae afd `urrcft a``ouft dcgi`its widcfcd. Dclafd gor eo`ae `urrcf`y droppcd afd
rcscrvc eosscs wcrc if`urrcd if support og tbc dolcsti` `urrcf`y, wbi`b dcprc`iatcdsbarpey tbroukb carey 8>>9. @ofgidcf`c if tbc ovcrbcatifk hafjifk sc`tor gcee, witb a
lamor hafj gaieifk if eatc 8>>2, afd dcposits gaeeifk rapidey.
Pbarp Dctcrioratiof if Gis`ae Haeaf`cs
Tbc `oppcr pri`c `oeeapsc rcsuetcd if a sbarp dctcrioratiof if tbc gis`ae haeaf`c duc to
tbc bikb rceiaf`c of lifcrae rcvcfucs afd tbc gaieurc to savc durifk tbc hool. Tbc
kovcrflcft bad ruf ofey lodcst gis`ae surpeuscs durifk tbc hool ycars (8>>3->;),
wbi`b wcrc ifsuggi`icft to ahsorh tbc gis`ae sbo`j `auscd hy tbc `oeeapsc og tbc lifcrae
pri`cs. If additiof, durifk tbc hool pcriod, tbc kovcrflcft bad sbigtcd tbc gis`aehurdcf away grol tbc fof-lififk sc`tor, ecavifk tbc hudkct if`rcasifkey dcpcfdcft
of lififk rcvcfucs. At its pcaj if 8>>; lififk-rceatcd rcvcfuc `oftrihutcd fcarey 4>
pcr`cft to totae rcvcfuc or 13 pcr`cft og KD^. If additiof, tbc `cftrae hafj pursucd a dc
ga`to pck og tbc eo`ae `urrcf`y to tbc doeear, wbi`b rcsuetcd if dirc`t trafslissiof og tbc
gaeeifk iftcrfatiofae `oppcr pri`c to tax rcvcfucs. Tbc fof-lififk gis`ae dcgi`it if`rcascd
dralati`aeey grol ;.0 pcr`cft og KD^ if 8>>7 to a 13.0 pcr`cft dcgi`it if 8>>2 (Gikurc 1.0).
Xisifk rcvcfucs durifk tbc hool pcriod bad guceecd ufsustaifahec afd ifcggi`icft
cxpcfditurc trcfds wbi`b gurtbcr iftcfsigicd tbc gis`ae prcssurcs duc to tbc `risis.
Po`iae trafsgcrs proeigcratcd, hc`olifk ufivcrsaeizcd durifk hool ycars. Tbc lost
ilportaft so`iae trafsgcr prokral was tbc @bied Lofcy ^rokral (@L^), wbi`bdishurscd ahout LFT 14> hieeiof pcr ycar (3.7 pcr`cft og gis`ae spcfdifk if 8>>2). [itb
voeatiec lififk rcvcfucs a``ouftifk gor roukbey tbrcc quartcrs og @L^s gifaf`ifk: tbc
laif so`iae sagcty fct gor tbc poor was dcpcfdcft of geu`tuatifk iftcrfatiofae `oppcr
pri`c. Gurtbcrlorc tbc @L^ was fot wcee-tarkctcd, witb cxtcfsivc ecajakc og hcfcgits
to fofpoor bouscboeds. Ppcfdifk of wakcs, saearics, `apitae cxpcfditurcs, afd
suhsidics as a sbarc og KD^ aeso if`rcascd sbarpey if 8>>2 (Gikurc 1.4). Bowcvcr, as
dis`usscd if @baptcr 3, lafy og tbc ifvcstlcft promc`ts gufdcd durifk tbc hool
grcqucftey ea`jcd cvcf hasi` gcasihieity studics. Ycars og cxtrclcey poor puhei`
ifvcstlcft peaffifk bad aeso rcsuetcd if poor opcratiofae cggi`icf`y og fcw
ifvcstlcfts. Lcafwbiec, kross ufdcrspcfdifk of `apitae laiftcfaf`c bad ecd todisrcpair if tbc cfcrky afd roads sc`tors.
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 0
Gikurc 1.0. Tbc Gis`ae Haeaf`c Lovcdifto Dcgi`it if 8>>2 witb tbc Fof-LififkDcgi`it Xisifk if tbc Hool
Gikurc 1.4. Xisifk Pbarc ogCxpcfditurcs of Puhsidics afdTrafsgcrs Goeeowcd hy Hool if
Ifvcstlcft
% og KD^ % og totae cxpcfditurc
Pour`c= Lifistry og Gifaf`c, [ored Hafj.
Fotc= @cftrae/statc afd eo`ae hudkct, LDG, afd
so`iae sc`urity gufd. * @orporatc if`olc tax afd
dividcfds grol lififk `olpafics, tbc [^T, afd
royaetics.
Pour`c= Lifistry og Gifaf`c afd [ored Hafj.
Fotc= * Laiftcfaf`c dcgifcd as @apitae Xcpairs
(if hudkct): prohahey ufdcrcstilatcs a`tuae
`apitae rcpairs, as part is if`eudcd if otbcr
itcls. ** Fcw ifvcstlcft dcgifcd as Dolcsti`
Ifvcstlcft ofey.
@urrcft A``ouft, Purpeus to Dcgi`it
Tbc `urrcft a``ouft haeaf`c swufk grol surpeus to dcgi`it. Duc to tbc gaee if
`ollodity pri`cs afd cxport vaeucs, tbc tradc haeaf`c dctcrioratcd larjcdey tbroukb
eatc 8>>2 afd carey 8>>9 (Gikurc 1.3). Tbc vaeuc og cxports gcee witb iftcrfatiofae
`ollodity pri`cs, lorc tbaf outstrippifk lodcratiof if tbc ratc og krowtb og ilports.
As a rcsuet tbc `urrcft a``ouft haeaf`c lovcd grol a surpeus og 7.; pcr`cft og KD^ if
8>>; to a dcgi`it og 14 pcr`cft if 8>>2 `eilhifk to ovcr 13 pcr`cft if tbc girst two
quartcrs og 8>>9 (Gikurc 1.7).
Puhstaftiae Xcscrvc Eosscs
[itb dclafd gor eo`ae `urrcf`y gaeeifk if eatc 8>>2 afd carey 8>>9, suhstaftiae rcscrvc
eosscs wcrc if`urrcd if support og tbc `urrcf`y. @urrcf`y geikbt durifk tbc `risis
pcriod was gurtbcr akkravatcd hy tbc Hafj og Lofkoeias (HoL) attclpt to boed of to
its dc ga`to `urrcf`y pck to tbc S.P. doeear. Tbis was if `oftrast to otbcr lamor
`ollodity cxportcrs tbat ect tbcir `urrcf`ics grccey dcprc`iatc as a girst dcgcfsc
lc`bafisl akaifst gaeeifk iftcrfatiofae `ollodity pri`cs. If tbc pro`css, tbc HoL eost
SP$3>> lieeiof og iftcrfatiofae rcscrvcs hctwccf Muey 8>>2 afd Gchruary 8>>9. Tbc
`urrcf`y dcprc`iatcd afyway, hy ahout 02 pcr`cft hctwccf tbc cfd og O`tohcr afd tbc
liddec og Lar`b 8>>9 (Gikurcs 1.; afd 1.2).
-8>
-13
-1>
-3
>
3
1>
13
8> Lififk-rceatcd rcvcfuc*
Hudkct haeaf`c
Fof-lififk haeaf`c*
>
8>
4>
7>
2>
1>>
8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9
Laiftcfaf`c*
Fcw Ifvcstlcft**
Puhsidics &Trafsgcrs
[akcs & Paearics
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 3
Hafjifk Pc`tor [cajfcsscs
[cajfcsscs if tbc hafjifk sc`tor cxposcd hy tbc cxtcrfae sbo`j rcsuetcd if a `risis og
`ofgidcf`c if eatc 8>>2 afd dcposit geikbt. Tbc keohae dowfturf cxposcd prohecls ifLofkoeias gifaf`iae sc`tor, wbi`b bad hccf ovcrbcatifk durifk tbc hool ycars. Wcry
bikb dolcsti` ifgeatiof00.; pcr`cft yoy if Aukust 8>>2, tbc bikbcst if Cast Asia if
8>>2afd eoosc lofctary poei`y ecd to a `rcdit hool (Gikurc 1.9), wbi`b bid tbc
krowtb if fofpcrgorlifk eoafs (F^Es) afd wcajfcsscs if `rcdit quaeity. Ecfdifk
portgoeios cftcrcd tbc `risis bcaviey `of`cftratcd of sc`tors su`b as `ofstru`tiof afd
rcae cstatc. Cxposurcs to ifdividuae lamor horrowcrs wcrc bikb, if`rcasifk tbc
vuefcrahieity og a hafjs eoaf portgoeio to sbo`js bittifk ifdividuae `rcditors. Gor
cxalpec, grol lid-8>>2 ofwards, eoafs a``ouftcd gor hy tbc top 3> horrowcrs hy eoaf
sizc if`rcascd grol aroufd 8> pcr`cft to 0> pcr`cft (Gikurc 1.1>). Tbcsc gikurcs arc of
af akkrckatc hasis afd ifdividuae hafjs lay wcee bavc bikbcr cxposurcs.
Tbc bikb ecvce og ifgeatiof rcsuetcd if fckativc rcae iftcrcst ratcs of eo`ae `urrcf`y
dcposits, `oftrihutifk to tbc lovclcft og eo`ae `urrcf`y (LFT) savifks ifto GR
dcposits grol lid-8>>2 (Gikurc 1.11). [bcf Afod Hafj, tbc gourtb earkcst hafj, was
tajcf ufdcr `ofscrvatorsbip hy tbc HoL, at tbc cfd og 8>>2, tbc puhei` startcd to eosc
`ofgidcf`c if tbc hafjifk sc`tor. Lamor sbortakcs og gorcikf `urrcf`y clcrkcd afd tbc
HoL ratiofcd GR ecadifk to a suhstaftiae dcviatiof hctwccf tbc oggi`iae HoL cx`bafkc
ratc afd tbc paraeece larjct ratc (rcgcr ha`j to Gikurc 1.;). Tbis ecd to a kcfcraeizcd
geikbt out og hotb LFT afd GR dcposits. To rcstorc puhei` trust, tbc kovcrflcft issucd
a heafjct dcposit kuaraftcc if Fovclhcr 8>>2, hut it ecgt lafy `ustolcrs if
uf`crtaifty ahout wbi`b dcposits wcrc if`eudcd, wbiec rcae iftcrcst ratcs ofLFT dcposits wcrc fckativc.
Gikurc 1.9. A @rcdit Hool Pct tbc Ptakcgor Trouhec if tbc Gifaf`iae Pc`tor
Gikurc 1.1>. @of`cftratcd EcfdifkIf`rcascd Cxposurc to tbc 3> EarkcstHorrowcrs
@rcdit krowtb pcr`cft yoy LFT hf %
Pour`c= [ored Hafj. Pour`c= Hafj og Lofkoeia, [ored Hafj.
> 1> 8> 0> 4> 3> 7>
Lofkoeia
^bieippifcs
Jorca
Tbaieafd
Pifkaporc
Laeaysia
Ifdofcsia
Wictfal
@bifa
Auk'>9 % y-y
Dc`'>2 % y-y
13%
8>%
83%
0>%
03%
>
83>
3>>
;3>
1,>>>
Dc`->; Dc`->2 Dc`->9
LFT hieeiof
Pbarc og totae eoafs outstafdifk
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;
@ B A ^ T C X 8
Lofkoeias Cxpcricf`c
@olparcd to Otbcr
@oppcr ^rodu`crs
ee tbc lamor `oppcr produ`crs if tbc wored wcrc aggc`tcd hy tbc `oeeapsc if `oppcr
pri`cs. Bowcvcr, Lofkoeias cxpcricf`c was pcrbaps tbc lost scvcrc hc`ausc og
its parti`uearey wcaj c`ofoli` afd poei`y cfviroflcft. Tbc earkcst `oppcr cxportcrs
if tbc wored, if tcrls og sbarc og `oppcr to totae cxports, arc ]alhia, @biec, Lofkoeia
(LFK), ^apua Fcw Kuifca (^FK),
afd ^cru (Gikurc 8.1).
Cvcf tboukb tbcsc `ouftrics wcrc
aee cxposcd to tbc salc keohae `oppcrpri`c `oeeapsc, tbc ilpa`t of tbcir
c`ofolics was diggcrcft. Aee givc
`ouftrics ga`cd KD^ krowtb dc`eifcs
if 8>>9, hut ^cru afd Lofkoeia
suggcrcd tbc earkcst dc`eifcs (Gikurc
8.8). Aee `ouftrics gis`ae haeaf`cs
lovcd ifto dcgi`it if 8>>9. @biec afd
^apua Fcw Kuifca bad ruf earkc
gis`ae surpeuscs durifk tbc hool up to
8>>2, wbcrcas Lofkoeia afd ]alhia
wcrc aercady if dcgi`it if 8>>2 (Gikurc
8.0). Lofkoeias fof-lififk gis`ae
dcgi`it was tbc earkcst og aee.
A
Gikurc 8.1. Lofkoeias Cxport@of`cftratiof @olparcd to Otbcr @oppcr
^rodu`crs
Cxport `of`cftratiof ifdcx*(rikbt axis, har), `oppcr sbarcif cxports if 8>>; (ecgt axis, eifc)
Pour`c= SF @oltradc, [ored Hafj.
Fotc= * Bcrgifdabe ifdcx= sul og squarcs og % cxport
sbarcs a`ross aee olloditics (rafkc= >1>>).
;;%
3;%
44%
0>% 8;%
>
1>
8>
0>
4>
3>
7>
>.>
>.1
>.8
>.0
>.4
>.3
>.7
>.;
>.2
>.9
1.>
]alhia @biec Lofkoeia ^FK ^cru
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2 [ored Hafj [orjifk ^apcr
Gikurc 8.8. Lofkoeias Krowtb afdFof-lififk Gis`ae Haeaf`c [orstAggc`tcd alofk @oppcr ^rodu`crs
Gikurc 8.0. Gis`ae Haeaf`cs Dctcrioratcdgor Aee @oppcr ^rodu`crs
^cr`cftakc poift `bafkc (KD^ krowtb)/^cr`cft og KD^(gis`ae haeaf`c)
^cr`cft og KD^
Pour`c= ILG [ored C`ofoli` Outeooj datahasc,
ILG Arti`ec IW rcports, [ored Hafj
Pour`c= ILG [ored C`ofoli` Outeooj Datahasc.
Fotc= Kovcrflcft haeaf`c cx`eudifk krafts.
Tbc `urrcft a``oufts og aee `ouftrics wcrc aeso strofkey ilpa`tcd hy tbc `oppcr
pri`c `oeeapsc. Bowcvcr, Lofkoeia saw a parti`uearey earkc dctcrioratiof if 8>>2
(Gikurc 8.4), witb ]alhia aeso rcqucstifk cxtcrfae assistaf`c.1
Tbc risc if avcrakc @^Iifgeatiof durifk tbc `ollodity pri`c ruf-up was aeso krcatcst if Lofkoeia, cvidcf`c
og tbc earkcst dolcsti` hool, `olparcd to tbc otbcr gour `ouftrics (Gikurc 8.3).
Gikurc 8.4. Hut tbc @urrcft A``ouftXcvcrsae gor Lofkoeia [as ^arti`ueareyLarjcd
Gikurc 8.3. As [as tbc Xisc afd Gaee if@^I Ifgeatiof
^cr`cft og KD^ ^cr`cft ycar-of-ycar
Pour`c= ILG [ored C`ofoli` Outeooj
Datahasc.
Pour`c= ILG [ored C`ofoli` Outeooj Datahasc.
Fotc= Ifgeatiof og avcrakc ofsulcr pri`cs.
-8>
-13
-1>
-3
>
3
@biec LFK ^FK ^cru ]alhia
@bafkc if KD^ krowtb8>>9 to 8>>2Fof-lififk gis`ae haeaf`c8>>2
fa
-13
-1>
-3
>
3
1>
8>>8 8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9
Lofkoeia
@biec
^apua Fcw Kuifca
^cru
]alhia
-8>
-13
-1>
-3
>
3
1>
13
8>>8 8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9
Lofkoeia
@biec
^apua Fcw Kuifca
^cru
]alhia
>
3
1>
13
8>
83
0>
8>>8 8>>0 8>>4 8>>3 8>>7 8>>; 8>>2 8>>9
Lofkoeia
@biec
^apua Fcw Kuifca
^cru
]alhia
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 9
@oppcr cxport dcpcfdcf`c, or a bikb cxport `of`cftratiof, aeofc docs fot cxpeaif
tbc diggcrcf`cs if pcrgorlaf`c durifk tbc `risis. Gor cxalpec, ]alhia afd @biec arc tbc
lost dcpcfdcft of `oppcr cxports, hut tbcir cxpc`tcd drop if KD^ is ecss tbaf tbat og
Lofkoeia afd ^cru. ]alhia opcfcd a lamor fcw `oppcr lifc if eatc 8>>2 (tbc ofey`ouftry to do so).
Tbc if`rcasc if `oppcr output litikatcd tbc dowfturf. ]alhia aeso rclovcd tbc
wifdgaee tax of lififk to `oftifuc to attra`t fcw lififk ifvcstlcfts afd prcvcft
cxistifk opcratiofs grol hcifk s`aecd dowf prclaturcey. ]alhia aeso hcfcgitcd grol
dcht rceicg as a rcsuet og kood c`ofoli` pcrgorlaf`c. ^cru bad a``ulueatcd sizcahec
gis`ae surpeuscs gor tbc prcvious tbrcc ycars, afd uscd tbc lifcrae wifdgaee earkcey hy
if`rcasifk savifks afd rcdu`ifk puhei` dcht.
@biec goufd itsceg if a kood positiof to wcatbcr tbc storl= it hcfcgitcd grol a gis`ae
ruec tbat eilitcd cxpcfditurc durifk hool tilcs, ifgeatiof tarkctifk, a gecxihec cx`bafkc
ratc, a `oppcr stahieizatiof gufd to bcep cfsurc tbat tbc geu`tuatiofs if `oppcr pri`cs do fot
spieeovcr ifto tbc rcst og tbc c`ofoly, afd adcquatc a``css to gorcikf gifaf`ifk.
Ifdccd, tbc `oftrast og Lofkoeias cxpcricf`c witb tbat og @biec is parti`uearey
strijifk= @biecs cx`bafkc ratc was gecxihec (so it ahsorhcd part og tbc sbo`j) afd it was
ahec to sceg-gifaf`c a earkc stilueus pa`jakc to support its c`ofoly. Tbis was a`bicvcd
drawifk of earkc gis`ae savifks ladc grol hool ycars ufdcr its stru`turae haeaf`c ruec
(scc Hox 8.1). @biecs hafjifk sc`tor was aeso ufaggc`tcd duc to prudcft ecfdifk
poei`ics durifk tbc hool pcriod, ufeijc Lofkoeia.
Hox 8.1. @biecs Gis`ae Xckilc
Hox Gikurc 8.1. Bow @biecs Ptru`turae Haeaf`cXuec Ptahieizcd tbc Hudkct Durifk tbc @oppcr^ri`c Hool afd Hust
Pour`c= [ored Hafj, ILG, @cftrae Hafj og @biec afd Lofkoeia.
^rior to tbc iftrodu`tiof og its gis`ae rckilc, @biec bad suggcrcd grol a scclifkey cfdecsssu``cssiof og lififk hools afd husts. If 8>>1, tbc @biecaf Lifistry og Gifaf`c adoptcd astru`turae haeaf`c ruec (Hox Gikurc 8.1) wbi`b eilitcd tbc cggc`ts og `y`ei`aeity of gis`aelafakclcft (lififk rcvcfucs arc if tbc ordcr og 13 pcr`cft og totae rcvcfucs) afd ilprovcd
wcaj puhei` gifaf`cs sccf if tbceatc 199>s. Tbcsc wcajfcsscsif`eudcd a scrics og gis`ae dcgi`its,tbc fckativc fct wortb og tbc@cftrae Hafj (ufdcrlifcd hy aearkc haieout og ifsoevcft hafjs iftbc 192>s afd GR opcratiofs iftbc 199>s), gorcikf dchtvuefcrahieitics, afd tbc earkc`oftifkcft eiahieitics asso`iatcdwitb pcfsiofs afd ifgrastru`turc`of`cssiofs. A fcw gis`ae rckilcwas fccdcd to fcutraeizc tbcgeu`tuatiofs. If ordcr to providclaxilul `earity of tbc gis`aesituatiof afd avoid lafipueatioftbc rckilc bad to hc silpec,`ecarey dcgifcd, afd trafsparcft.
Tbc sour`c og tbc geu`tuatiofs of
gis`ae rcvcfucs was tbrccgoed.Girst, wbcfcvcr `oppcr (afdloeyhdcful) pri`cs wcft up,lififk tax rcvcfucs goeeowcd.
(Hox `oftifucs of fcxt pakc)
1>>>
0>>>
3>>>
;>>>
9>>>
-13
-1>
-3
>
3
1>
199;
1992
1999
8>>>
8>>1
8>>8
8>>0
8>>4
8>>3
8>>7
8>>;
8>>2
@biec's gis`ae haeaf`c (% og KD^)
@biec's stru`turae haeaf`c (% og KD^)
Lofkoeia's gis`ae haeaf`c (% og KD^)
@oppcr pri`c (rikbt axis) if $ pcr lctri` tof
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1> [ored Ha
Hox 8.1 (`ofti
To fcutraeizc geupri`c. Tbis dctcreofk-tcrl pri`cgeu`tuatcd, fof-was cstilatcd,slootbifk lc`b
If ca`b ycar, tbsu`b a way tbattbcrcgorc aeecdsurpeus). Durifkpea`c. @biecs a`eilitcd to 1 pcr`it was aeso rcvis@urrcftey, @biec i
@biecs gis`ae rckcfcratcd hy tbGufd (CPPG) wceo`ae gifaf`iae astbc rc`apitaeizatiafd gifaf`iae as
purposcs ofey= g`ofscrvativc afkovcrflcft hofpcr`cft og KD^hieeiof if savifkstbc gifaf`ifk og t
Tbc stru`turae hsustaifahec hudkog its KD^. @biectbc dowfturf. Tbog 1 pcr`cft ogifvcstlcfts. Tb
`oftrovcrsiae, isPour`c= [ored Hafj
Fotc
1If rcspofsc to t
povcrty rcdu`tio
its quota, wbcrc
83-loftb ILG Pt
witb eow a``css t
j [orjifk ^apcr
ucd)
`tuatiofs, a eofifcd tbc stru`t
promc`tiof, tbcififk tax rcvcf
afd a stru`turaeafisl was adopt
c stru`turae (foa spc`igi` gis`ae hstru`turae haeaftbc lififk hoouae gis`ae surpeuft. Tbc stru`turad dowfward sc
s ufdcr a stru`tu
spofsihieity eawruec. Tbc ^cfsi
rc `rcatcd afdsct larjcts grolf og tbc @cftraect lafakclcft.
ifaf`ifk tbc gis`d lifdgue og tbds og tbc Sfitcdcvcry ycar, witbhcgorc tbc keohaebc gis`ae dcgi`it `
aeaf`c ruec cggccts. @biec wcatbis fow ifmc`tifkc @biecaf gis`aeD^ tax `uts, 1poei`y og ruffif
ow gueey vifdi`atstagg: Heoolhcrk: Hu
bc `risis, ]alhi
f prokral, aetbo
s Lofkoeia rc`c
afd-Hy Arrafkc
o ILG rcsour`cs.
-tcrl `oppcr prirae lififk rcvccaeizcd rcvcfuccs geu`tuatcd. Tfof-lififk taxcd to `oftroe geu`t
t a`tuae) rcvcfuaeaf`c woued hc`c. @biec hckaf
ycars og tbccs woued krow toe haeaf`c tarkct icrae tilcs to hct
rae gis`ae dcgi`it ru
`olpeclcfts tbof Xcscrvc Gufdboeey ifvcstcd agis`ae portgoeio kHafj ovcr givc yTbc savifks sct
ae dcgi`it afd rcp rcquirclcft toPtatcs, scvcrae
a geoor og >.8 pcre `risis. Today, tbuscd hy tbc stil
tivcey cfdcd tbcrcd tbc storl hcufds ifto tbc c`tilueus pa`jakccr`cft if`rcascearkc gis`ae surp
d afd eckitilizcdkcts Hurcau, Lifist
rc`civcd a suhst
ukb its a``css to
ivcd 0>> pcr`cft
cft grol Mafua
`c promc`tiof waucs. Ig tbc a`tua
s woued hc savfcutraeizc tbis,cvcfuc strcaluatiofs og tbc ko
s woued sct a eia`bicvcd. Tbc hitb a stru`turae hid-8>>>s, tbc s
2 or 9 pcr`cft orcvicwcd cvcry
tcr rcspofd to tbec og >.3 pcr`cft.
is rckilc hy l(^XG) afd Po`iroad if ordcr toowtb. Tbc gis`aears afd if`rcascasidc if tbc stah
ayifk puhei` dch hc eiquid: ifvcCS statcs, afd`cft. Tbc stahieisavifks arc do
ueus pa`jakc.
hool afd hustttcr tbaf otbcrsfoly, if`eudifkis cftircey dolc`urrcft cxpcfd
euscs durifk tbc
hy poeiti`ae poeery og Gifaf`c og @bie
aftiae if`rcasc i
LG gifaf`ifk is
ufdcr its PHA.
y 8>>;, hut tbis
s uscd ifstcade lififk pri`c wccd. Pc`ofd, wba eofk-tcrl KDwas `rcatcd. Tbcrflcfts gifaf
lit of a`tuae cxdkct haeaf`c tb
aeaf`c og 1 pcr`tru`turae haeaf`cg KD^, hut cxpcycar, afd if tbcc clcrkifk c`o
afakifk tbc gifae afd C`ofoli`sbiced tbc cx`barcspofsihieity eaws trafsparcf`y oieizatiof gufd arc
t. Tbc ifvcstlcstcd lostey (;>apaf. Tbc ^XGatiof gufd bcedf to SP$; hieeio
`y`ecs, witb prcitb savifks og ah
gufds to protc`t tsti`aeey gifaf`cd,iturcs, afd >.2 plififk hool, wb
.c.
gifaf`ifk og its
tiee ofey aroufd
or `olpectcfcss
as `ofsidcrcd p
og tbc a`tuaeft ahovc tbccfcvcr KD^
krowtb ratcird, a silieariae asscts.
cfditurcs ifs tarkctcd isft og KD^ (aruec was if
diturcs wcrc`asc og @biecoli` trcfds.
f`iae assctsPtahieizatiof
fkc ratc afdaeso pcrlitsg gis`ae poei`yuscd gor two
t stratcky ispcr`cft) if
rc`civcs >.3hout SP$83, hc`ausc og
di`tahec afdout ofc tbirdbc poor grolafd `ofsistscr`cft puhei`i`b bad hccf
fkoifk ILG
3> pcr`cft og
, ^cru bad a
rc`autiofary
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11
@ B A ^ T C X 0
Tbc ^oei`y Xcspofsc
Tbc Kovcrflcfts Ptrofk ^oei`y A`tiofs
Ptrofk poei`y a`tiofs wcrc tajcf hy tbc kovcrflcft if carey 8>>9 to addrcss tbc `risis.
Ga`cd witb tbc rcaeity og tbc scvcrc dowfturf, tbc kovcrflcft ifitiaeey `ofsidcrcd a
varicty og possihec rcspofscs. Tbcsc if`eudcd sikfifk eofk-tcrl lifcrae cxport`oftra`ts if cx`bafkc gor earkc up-groft paylcfts afd ilpeclcftifk a widc-rafkifk
stilueus pa`jakc to hc gufdcd hy a SP$1.8 hieeiof sovcrcikf hofd. As c`ofoli`
`ofditiofs worscfcd, afd a``css to iftcrfatiofae `apitae larjcts of rcasofahec tcrls
scclcd vcry diggi`uet, a hipartisaf `ofscfsus hckaf to clcrkc aroufd a lorc
`olprcbcfsivc poei`y rcspofsc, a rcspofsc tbat `oued hc supportcd hy tbc ILG afd
otbcr dcvceoplcft partfcrs.
Tbcsc poei`y `bafkcs if`eudcd strofk a`tiofs of gis`ae, lofctary, cx`bafkc ratc,
afd gifaf`iae poei`ics (Tahec 0.1). Gor cxalpec, to prcvcft af ovcrsbootifk og tbc
cx`bafkc ratc tbc `cftrae hafj sbarpey raiscd iftcrcst ratcs if Lar`b 8>>9 to 14 pcr`cft
grol 9.;3 pcr`cft. Tbc HoL aeso ahafdofcd its dc ga`to pck afd iftrodu`cd a
trafsparcft hi-wccjey gorcikf cx`bafkc au`tiofifk lc`bafisl to rcstorc `ofgidcf`c if
tbc eo`ae `urrcf`y. Of tbc gis`ae sidc, witbout additiofae lcasurcs, it was gorc`ast if
carey 8>>9 tbat tbc 8>>9 hudkct dcgi`it was bcadifk gor 18 pcr`cft og KD^.
Tahec 0.1. Pullary og ^oei`y A`tiofs Tajcf ovcr 8>>9
Pc`tors ^oei`y a`tiofs=
Gis`ae poei`y Dcgi`it `oftaifcd to 3.4 pcr`cft og KD^, hceow tbc 3.2 pcr`cft tarkct if tbc Mufc 8>>9 hudkct
^uhei` ifvcstlcft `ut
Cxpcfditurc `ut of wakcs afd saearics og puhei` scrvafts: birifk grcczc ilposcd.Fof-`of`cssiofae gorcikf horrowifk eilitcd if 8>>9
Cx`bafkc ratc afdlofctary poei`y
HoL raiscd tbc poei`y ratc to 14% afd iftrodu`cd GR au`tiof
Hafjifk sc`tor Two gaiecd hafjs put ufdcr rc`civcrsbip. Audit hy iftcrfatiofae rcputahec auditor gor ofc hafj`olpectcd afd hafj hcifk eiquidatcd.
Xc`civcr appoiftcd gor sc`ofd hafj afd audit ufdcrway. Ptatc hafj `rcatcd to bousc tbc koodasscts.
HoL if`rcascd `apitae adcqua`y rcquirclcfts.
HoL rcviscd afd `earigicd dcposit kuaraftcc eaw.
Lififk sc`tor Pikfifk og OT akrcclcft afd asso`iatcd poei`y lcasurcs (c.k. `af`ceeatiof og [^T)
^rokrcss of CITI
Pour`c= [ored Hafj stagg.
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18 [ored Hafj [orjifk ^apcr
To jccp tbc gis`ae dcgi`it witbif gifaf`cahec eilits, tbc kovcrflcft `oued `ut spcfdifk
or raisc rcvcfucs, or hotb. Pif`c raisifk rcvcfucs is ifbcrcftey diggi`uet durifk af
c`ofoli` dowfturf, tbc kovcrflcft bad eittec `boi`c hut to `ut spcfdifk drasti`aeey if
its 8>>9 hudkct, witb tbc hudkct alcfdcd if Lar`b afd Mufc 8>>9. Tbc Mufcalcfdlcft tarkctcd a 3.2 pcr`cft og KD^ dcgi`it (LFT 074 hieeiof) wbi`b `olparcs
witb tbc guee ycar outturf og 3.4 pcr`cft og KD^ (LFT 082 hieeiof).
Pupport hy Iftcrfatiofae afd Hieatcrae Dofors
Tbc kovcrflcft prcscftcd its a`tiof peaf to tbc dcvceoplcft partfcrs of Lar`b 14,
8>>9. Of Aprie 1, 8>>9, tbc ILG Hoard approvcd af 12-loftb Ptafd-Hy Arrafkclcft
(PHA)1og SP$889 lieeiof if haeaf`c og paylcfts support to bcep Lofkoeia admust hy
stahieizifk tbc la`roc`ofoli` situatiof.
Tbc jcy ohmc`tivcs og tbc ILG-supportcd prokral arc= to rcstorc la`roc`ofoli`stahieity tbroukb gis`ae, lofctary, afd gifaf`iae sc`tor poei`ics: afd protc`t tbc poor
grol tbc hurdcf og tbc fccdcd admustlcft. Tbc prokral aeso ails to outeifc a soeid
la`roc`ofoli` gralcworj tbat providcs tbc hasis gor tbc autboritics to approa`b tbc
hroadcr iftcrfatiofae `ollufity gor gifaf`iae support.
Bowcvcr, tbc `cftcr pic`c was a suhstaftiae gis`ae admustlcft to dcae witb tbc gaee
if lifcrae rcvcfucs og 1> pcr`cft og KD^. Gis`ae dcgi`its og 7 afd 4 pcr`cft og KD^ if
8>>9 afd 8>1>, rcspc`tivcey, wcrc huiet ifto tbc prokral, witb a totae gis`ae gifaf`ifk
kap at tbc tilc cstilatcd at SP$8>3 lieeiof if 8>>9 afd 8>1>. Tbc gis`ae admustlcft is
`cftcrcd prilariey aroufd cxpcfditurc rcstraift. Tbc hikkcst savifks wiee `olc grol
postpofclcft og dolcsti`aeey gifaf`cd `apitae cxpcfditurc peafs. Additiofae savifkswiee hc kcfcratcd grol a wakc afd birifk grcczc, `uts if solc uftarkctcd so`iae
aeeowaf`cs, afd rcdu`tiofs if otbcr pur`bascs afd koods afd scrvi`cs. To prcvcft tbc
guturc hool-hust gis`ae `y`ec, a strofkcr ifstitutiofae gralcworj wiee hc pea`cd to
cfsurc a krcatcr proportiof og wifdgaee `oppcr rcvcfucs is savcd.
Additiofae rcgorls go`us of lofctary afd cx`bafkc ratc poei`ics, rchuiedifk
`ofgidcf`c if tbc hafjifk systcl, afd protc`tifk tbc lost vuefcrahec grol tbc
dowfturf afd tbc admustlcfts. Tbc prokral cfvisakcs strcfktbcfifk tbc `ouftrys
iftcrfatiofae rcscrvc positiof afd `aeihratifk lofctary poei`y to prcvcft afy ufduc
ovcrsbootifk og tbc cx`bafkc ratc afd to jccp ifgeatiof of a dowfward patb. A fcw
systcl og gorcikf `urrcf`y au`tiof bas hccf iftrodu`cd to bavc a fofdis`rilifatoryafd trafsparcft lc`bafisl to scee gorcikf cx`bafkc tbat aeeows gor larjct
dctcrlifatiof og tbc cx`bafkc ratc. To huied `ofgidcf`c if tbc eo`ae hafjifk systcl,
tbc prokral if`eudcs lcasurcs to gurtbcr strcfktbcf tbc hafjifk systcl hy ilprovifk
tbc `urrcft gralcworj gor dcposit kuaraftccs afd cfbaf`ifk hafj supcrvisiof.
Gifaeey, witb ofc tbird og tbc popueatiof eivifk hceow tbc povcrty eifc, ilprovifk tbc
so`iae sagcty fct is a jcy ceclcft og tbc prokral. Tbis is to cfsurc tbc poorcst scklcfts
og so`icty arc protc`tcd adcquatcey. If `oeeahoratiof witb tbc Asiaf Dcvceoplcft Hafj
(ADH) afd tbc [ored Hafj, tbc autboritics wiee dcsikf a `olprcbcfsivc ovcrbaue og
tbc cxistifk uftarkctcd systcl og so`iae trafsgcr prokrals. Tbc koae wiee hc to hcttcr
tarkct tbcsc prokrals towards tbc vcry poor afd if`rcasc tbc support tbat poorbouscboeds rc`civc.
Adbcrcf`c to tbc ILG prokral bas hccf strofk. If Lar`b 8>1>, tbc ILG Hoard
approvcd tbc `olpectiof og tbc gourtb rcvicw, wbi`b cfahecd tbc illcdiatc
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 10
dishursclcft og af alouft cquivaecft to PDX 13.00 lieeiof (ahout SP$80.4 lieeiof).
Tbis hroukbt totae dishursclcfts ufdcr tbc arrafkclcft to af alouft cquivaecft to
PDX 188.74 lieeiof (ahout SP$12;.4 lieeiof). Tbc Hoard aeso approvcd tbc rcqucst gor
tbc lodigi`atiof og pcrgorlaf`c `ritcria to rcgec`t tbc rcviscd la`roc`ofoli` data afdgralcworj. Tbc Hoards prcss rcecasc fotcd tbc suhstaftiae ilprovclcft og
Lofkoeias la`roc`ofoli` outeooj afd tbc kovcrflcfts prokrcss if strcfktbcfifk
puhei` gifaf`cs. Tbc fccd gor `oftifucd gis`ae admustlcft afd dis`ipeifc was
clpbasizcd, if parti`uear tbroukb tbc carey passakc og tbc `olprcbcfsivc so`iae
trafsgcr afd gis`ae stahieity eaws tbat wcrc suhlittcd to pareialcft. Tbc ilportaf`c og
strcfktbcfifk tbc hafjifk systcl was aeso bikbeikbtcd, witb pareialcftary adoptiof
og a `olprcbcfsivc hafj rcstru`turifk peaf vicwcd as a jcy lcasurc.
To giee tbc gis`ae gifaf`ifk kap, tbc [ored Hafj pecdkcd SP$7> lieeiof. Tbis `alc
if tbc gorl og two sifkec-traf`bc dcvceoplcft poei`y `rcdits (D^@s, SP$4> lieeiof gor
8>>9 afd SP$8> lieeiof gor 8>1>) supportifk rcgorls if tbc poei`y arcas lost aggc`tcd
hy tbc dowfturf. Tbc girst D^@, dishurscd if Muey 8>>9 (Hox 0.1), go`uscd of tbc
goeeowifk poei`y arcas (i) gis`ae poei`y afd lafakclcft, kivcf tbc hudkcts strofk
dcpcfdcf`c of lififk rcvcfucs: (ii) so`iae protc`tiof, kivcf tbc ilpa`t og tbc
c`ofoli` dowfturf of tbc poor: (iii) tbc gifaf`iae sc`tor, wbi`b was ovcrbcatifk wbcf
tbc keohae `risis bit, afd wbi`b cxpcricf`cd a lamor hafj gaieurc if eatc 8>>2: afd (iv)
tbc lififk sc`tor, kivcf tbc sc`tors ilportaf`c if drivifk tbc rc`ovcry.8^rcparatiof
og tbc sc`ofd D^@ is ofkoifk witb gufds bavifk hccf if`rcascd to SP$0> lieeiof.
Tbc kovcrflcft ohtaifcd cquaeey strofk support grol tbc ADH (SP$7> lieeiof) afd
Mapaf (SP$3> lieeiof), afd aeso rc`civcd hudkct support grol Austraeia (SP$0.3 lieeiof),afd a girl pecdkc grol tbc Sfitcd Ptatcs. As a rcsuet, tbc promc`tcd haeaf`c og paylcfts
afd gis`ae kaps wcrc gieecd. Tbc [ored Hafj, Mapaf, tbc ADH, afd Austraeia dishurscd tbcir
pecdkcd aloufts gor hudkct support if 8>>9 (SP$100.3 lieeiof if totae) if Muey 8>>9. Tbc
ILG, lcafwbiec, dishurscd ahout SP$179 lieeiof if 8>>9 ufdcr tbc PHA if haeaf`c og
paylcfts support gor tbc `cftrae hafj.
Lififk Pc`tor Xcgorls
Ilportaft lififk sc`tor rcgorls wcrc aeso ufdcrtajcf witb tbc sikfifk og tbc OT
Ifvcstlcft Akrcclcft. Pikfigi`aft prokrcss if lififk sc`tor rcgorl afd dcvceoplcft
was aeso ladc durifk 8>>9 witb tbc sikfifk og a earkc, wored-`eass lififk promc`takrcclcft= tbc OT Ifvcstlcft Akrcclcft witb Ivafboc Lifcs afd Xio Tifto (Hox 0.8).
If tbc pro`css ecadifk up to tbc sikfifk og tbis akrcclcft of O`tohcr 7, a fulhcr og
poei`y issucs wcrc `earigicd afd solc jcy disif`cftivcs to ifvcstlcft wcrc rclovcd.
If parti`uear, tbc [ifdgaee ^rogits Tax0 was rcpcaecd witb cggc`t grol Mafuary 8>11.
Otbcr positivc `bafkcs if`eudcd pcrlittifk privatc sc`tor `ofstru`tiof afd
lafakclcft og roads afd watcr suppey ga`ieitics, eihcraeizifk tbc poei`y cfviroflcft
afd `bafkifk tbc if`olc tax rckilc to cxtcfd eoss `arry gorward provisiofs. If
additiof, tbc OT akrcclcft `af hc uscd as tbc dragt stafdard akrcclcft upof wbi`b
guturc promc`ts wiee hc fckotiatcd.
Fcvcrtbcecss, otbcr lcasurcs wcrc iftrodu`cd tbat providcd strofk disif`cftivcs
to fcw cxpeoratiof afd dcvceoplcft. Must as tbc OT fckotiatiofs wcrc hcifk
`olpectcd, af alcfdlcft to tbc WAT Eaw was iftrodu`cd. Tbis alcfdlcft cx`eudcd
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14 [ored Hafj [orjifk ^apcr
cxports og lifcrae produ`ts grol `eailifk rcgufds gor tbc WAT paid of tbc ifputs
uscd gor tbcsc lifcrae produ`ts. Tbis `ofstitutcs a sikfigi`aft if`rcasc if opcratifk
`osts to lifcrs afd rcdu`cs progitahieity. If additiof, gorward lovclcft of ilportaft
rckueatory dcvceoplcfts, if rceatiof to lifcrae ei`cfsifk, bas hccf seow.
Hox 0.1. [ored Hafj Hudkct Pupport Approvcd
Of Mufc 83, tbc Hoard approvcd SP$4> lieeiof if hudkct support gor Lofkoeia. It was ratigicd hypareialcft of Muey 8. Tbc support `alc as part og a `of`crtcd cggort hy Lofkoeias dcvceoplcftpartfcrs, if`eudifk tbc ILG, tbc ADH, Mapaf, afd Austraeia, to bcep lafakc tbc dowfturf. Tbc[ored Hafjs hudkct support to Lofkoeia `alc if tbc gorl og a D^@ to Lofkoeia og SP$4>lieeiof of IDA tcrls.a
Tbc D^@ is tbc girst og two `rcditsa D^@8 is peaffcd gor 8>1>dcsikfcd to assist tbckovcrflcft lafakc tbc `urrcft dowfturf, wbi`b was trikkcrcd hy tbc `oeeapsc og tbc `oppcr
pri`c, afd support tbc c`ofoli` rc`ovcry. Tbc D^@8 supports rcgorls if gis`ae poei`y afdlafakclcft, so`iae protc`tiof, tbc gifaf`iae sc`tor, afd tbc lififk sc`tor, kivcf tbc sc`torsilportaf`c if drivifk tbc rc`ovcry.
Xckardifk gis`ae poei`y afd lafakclcft, tbc D^@s support ilprovclcft if `apitae hudkctpeaffifk, if`eudifk tbc protc`tiof og laiftcfaf`c og hasi` ifgrastru`turc. To support tbcscrcgorls, tbc Hafj wiee providc tc`bfi`ae assistaf`c to dcvceop rohust `ritcria gor promc`tprioritizatiof afd scec`tiof, afd tbc gifaf`ifk og promc`t laiftcfaf`c ovcr tbc eigcspaf og tbcifgrastru`turc. If tbc arca og so`iae protc`tiof, tokctbcr witb tbc ADH, tbc Hafj supports so`iaewcegarc rcgorls hy bcepifk to `rcatc a systcl tbat wiee aeeow tbc Lifistry og Po`iae [cegarc tohcttcr tarkct its so`iae assistaf`c to tbc poor. If tbc gifaf`iae sc`tor, tbc ail is to ilprovc`ofgidcf`c if tbc gifaf`iae sc`tor afd strcfktbcf hafjifk supcrvisiof. Tbis is ilportaft hc`auscaddrcssifk tbc prohecls og tbc gifaf`iae sc`tor if a dc`isivc afd trafsparcft laffcr wiee bcep
pavc tbc way gor a lu`b strofkcr hafjifk sc`tor if tbc ycars abcad afd aeso bcep prcparc it gortbc up`olifk c`ofoli` upturf wbcf tbc Oyu Toekoi lifc hc`olcs opcratiofae.
Tbc gifae arca is tbc lififk sc`tor, wbi`b wiee hc a jcy drivcr og krowtb if tbc lcdiul to eofk tcrl.Ssifk `urrcft fckotiatiofs og lamor lififk promc`ts, tbc kovcrflcft is worjifk witb pareialcft to`earigy afd ilprovc its lififk poei`y gralcworj. Tbis if`eudcs ifsistifk of rcspofsihec lififkpra`ti`cs, `ofsistcft witb iftcrfatiofae stafdards (falcey, tbc Cquator ^rif`ipecs), afd hc`olifkvaeidatcd ufdcr tbc Cxtra`tivc Ifdustrics Trafsparcf`y Ifitiativc (CITI) prokral.
Pour`c= Tbc guee D^@ do`ulcft is avaieahec at tbc [ored Hafjs Do`ulcfts afd Xcports [chsitc=bttp=//ko.woredhafj.ork/XOT3TQEW@>.a. It is a `of`cssiofae eoaf, wbi`b wiee fccd to hc paid ha`j if 4> ycars, witb fo paylcfts duc gor tbc girst 1> ycars.Tbcrc is a scrvi`c `barkc og >.;3 pcr`cft pcr ycar.
Hox 0.8. Tbc Oyu Toekoi Ifvcstlcft Akrcclcft
OT is tbc woreds earkcst ufdcvceopcd `oppcr-koed promc`t afd is eo`atcd if tbc Poutbcrf Kohirckiof, must fortb og tbc @bifcsc hordcr. Af ifvcstlcft akrcclcft to dcvceop tbc OT lififkdcposit was su``cssgueey `of`eudcd if O`tohcr 8>>9 hctwccf tbc Kovcrflcft og Lofkoeia afdXio Tifto Iftcrfatiofae (a Hritisb-Austraeiaf lififk `olpafy), Ivafboc Lifcs Eilitcd (@afadiaf),afd Ivafboc Lifcs Lofkoeia If`. EE@ (ILLI) afd tooj guee afd hifdifk cggc`t of Lar`b 01, 8>1>.A jcy aspc`t og tbc akrcclcft is tbat tbc kovcrflcft wiee boed a 04 pcr`cft cquity sbarc if ILLI,wbi`b is tbc ei`cfsc boedcr og tbc OT promc`t.
Lifc `ofstru`tiof `osts arc promc`tcd at roukbey SP$4 hieeiof. Tbc moift Ivafboc-Xio Tifto`ofditiofae hudkct approvcd gor 8>1> to hckif tbc guee-s`aec `ofstru`tiof og tbc lifc is SP$;32lieeiof, afd siliearey earkc aloufts arc cxpc`tcd to hc spcft if tbc fcxt gcw ycars witb sikfigi`aft
jfo`j-of cggc`ts cxpc`tcd gor tbc c`ofoly.
(Hox `oftifucs of fcxt pakc)
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 13
Hox 0.8 (`oftifucd)
^rodu`tiof is cxpc`tcd to `ollcf`c if 8>10 afd to produ`c 3>>,>>> tofs og `oppcr afd3>>,>>> ouf`cs og koed pcr ycar gor at ecast 03 ycars. Tbc eigc og tbc lifc is cstilatcd to hcahout 7> ycars. Xcvcfucs`orporatc if`olc tax, royaetics afd WAT afd dividcfdsgrol OTarc cxpc`tcd to geow ifto tbc hudkct grol 8>10 ofwards. Grol 8>17 tbcrc wiee hc fct rcvcfucs,agtcr tbc alortizatiof og prcpaylcft afd cquity sbarc eoafs (scc hceow) cftcr tbc hudkct. Tbcjcy tcrls og tbc akrcclcft arc as goeeows=
Owfcrsbip afd gifaf`ifk arrafkclcfts= If a``ordaf`c witb Lofkoeias Lifcraes Eaw tbckovcrflcft wiee owf, tbroukb tbc statc-owfcd Crdcfcs LKE, a 04 pcr`cft cquity/ifvcstlcftsbarc if Ivafboc Lifcs Lofkoeia If` (ILLI) EE@ wbi`b is tbc ei`cfsc boedcr og tbc OT promc`t.Ivafboc wiee rctaif a `oftroeeifk 77 pcr`cft cquity sbarc if OT (witb Xio Tifto owfifk a 88 pcr`cftsbarc if Ivafboc). Ivafboc wiee arrafkc gifaf`ifk gor tbc `ofstru`tiof og OT witbif two ycars ogtbc Ifvcstlcft Akrcclcft tajifk cggc`t. ^rodu`tiof lust hckif witbif givc ycars og gifaf`ifkhcifk sc`urcd.
Ivafboc wiee aeso gufd tbc kovcrflcfts 04 pcr`cft sbarc og ifitiae `apitae `osts. Tbis wiee hca`bicvcd tbroukb a dolcsti` hut SP$-dcfolifatcd eoaf cstilatcd at approxilatcey SP$2;>lieeiof eoaf. Tbis is cxpc`tcd to hc rcpaid startifk aroufd 8>14 ofwards of rcdclptiof og tbccquity, dividcfds, afd iftcrcst at a ratc og 9.9 pcr`cft, admustcd to tbc S.P. @^I. Tbc kovcrflcftbas tbc optiof to pur`basc af additiofae cquity iftcrcst og 17 pcr`cft og ILLI. Tbis `af hc dofcofc ycar agtcr tbc cxpiry og tbc ifitiae 0>-ycar tcrl og tbc akrcclcft afd goeeowifk tbc start og tbcpcrlittcd 8>-ycar cxtcfsiof. Bowcvcr, Ivafboc wiee `oftifuc to boed lafakclcft rikbts ovcr tbcpromc`t afd boed a dc`idifk votc at hoard afd sbarcboedcr lcctifks.
Ivafboc bas aeso akrccd to lajc advaf`c paylcfts og SP$83> lieeiof to tbc kovcrflcft iftbrcc traf`bcs gor hudkctary support. Tbcsc wiee hc sc`urcd hy kovcrflcft hofds tbat wieelaturc agtcr givc ycars afd pay affuae iftcrcst og 0.2 pcr`cft. Og tbis SP$83>lf, af ifitiaeSP$1>> lieeiof was trafsgcrrcd to tbc kovcrflcft if 8>>9. [itbif 14 days og tbc OT Ifvcstlcft
Akrcclcft tajifk guee cggc`t, wbi`b bappcfcd at tbc cfd og Lar`b 8>1>, a gurtbcr SP$3> lieeiofwiee hc trafsgcrrcd. Tbc gifae SP$1>> lieeiof wiee hc trafsgcrrcd witbif 14 days og tbc su``cssgueraisifk og gufds rcquircd to huied tbc opcf-pit lifc afd `olpectc sbagt afd tuffce a``css to tbcifitiae ufdcrkroufd dcposit at tbc sitc (cxpc`tcd if 8>11).
Taxatiof= Otbcr ilportaft tcrls if`eudc a stahec opcratiofae afd tax cfviroflcft. Ivafboc wieerc`civc a 1> pcr`cft ifvcstlcft tax `rcdit of aee `apitae cxpcfditurcs afd ifvcstlcfts ladctbroukbout tbc OT `ofstru`tiof pcriod. Afy guturc taxcs iftrodu`cd wiee fot hc ilposcd of tbcpromc`t ufecss tbc eckiseatiof is lorc gavorahec. Ig Lofkoeia cftcrs a trcaty tbat providcs krcatcrhcfcgits to afotbcr ifvcstor, Ivafboc lay rcqucst tbc hcfcgit og tbis to bcep cfsurc tbat a stahectaxatiof cfviroflcft is laiftaifcd.
Clpeoylcft= Tbc akrcclcft aeso if`eudcs spc`igi` `ollitlcfts rckardifk tbc birifk ogLofkoeiaf worjcrs afd `oftra`torsaafd s`boearsbips.hA `olprcbcfsivc, givc-ycar OT Traififk
Ptratcky afd ^eaf wiee hc suhlittcd to tbc kovcrflcft gor tbc traififk og Lofkoeiafs. Tbckovcrflcft wiee aeso support tbc iftrodu`tiof og iftcrfatiofae lififk cdu`atiof afd traififk`ourscs witbif 9> days afd six loftbs rcspc`tivcey og tbc akrcclcft tajifk cggc`t. Ivafboc wieecfsurc paylcft og gair wakcs afd cquae rclufcratiof gor worj og cquae vaeuc.
Husifcss dcvceoplcft= If rcspofsc to tbc kovcrflcfts iftcrcst if addifk vaeuc to Lofkoeiaf`of`cftratc, Ivafboc lust prcparc witbif givc ycars a rcport of tbc c`ofoli` viahieity og huiedifka `oppcr slcetcr if Lofkoeia. Afy slcetcr, ig huiet, lust hc eo`atcd witbif Lofkoeia afd tbckovcrflcft lay rcqucst prcgcrcftiae a``css, of akrccd tcrls, to Xio Tiftos proprictary geasb-slcetifk tc`bfoeoky gor usc at tbc slcetcr. OT `of`cftratc woued hc suppeicd to su`b a slcetcr,if wbi`b tbc kovcrflcft lay bavc af iftcrcst, of `ollcr`iae tcrls afd at iftcrfatiofae pri`ifk.
(Hox `oftifucs of fcxt pakc)
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17 [ored Hafj [orjifk ^apcr
Hox 0.8 (`oftifucd)
Ivafboc afd Xio Tifto bavc aeso akrccd to kivc priority, wbcrc possihec, to huyifk afd usifkscrvi`cs providcd hy Lofkoeiafs. Cquiplcft afd latcriaes ladc if Lofkoeia afd eo`aehusifcsscs wiee hc aeso kivcf girst priority. ^riority wiee hc kivcf to rcsidcfts og eo`ae `ollufiticsgor traififk assistaf`c afd mohs. Pupport wiee hc kivcf to bcep dcvceop eo`ae husifcsscs `apahec ogsuppeyifk OT afd aeso to bcep husifcsscs divcrsigy. Foladi` bcrdcr galieics ilpa`tcd hy tbc OT^romc`t wiee oftifuc to rc`civc olpcfsatiof.
Ivafboc wiee support afd parti`ipatc if tbc Poutbcrf Kohi Xckiofae Dcvceoplcft @ouf`ie, to hccstaheisbcd hy tbc kovcrflcft, wbi`b wiee gorlueatc a dcvceoplcft stratcky gor tbc rckiof. Tbis`ofsuetativc `ouf`ie wiee `ofsidcr issucs rceatifk to kovcrfaf`c, if-likratiof, urhaf peaffifk afddcvceoplcft, afd cdu`atiofae afd vo`atiofae traififk alofk otbcrs.
Hcst-pra`ti`c cfviroflcftae lafakclcft afd watcr rcsour`c usc= Ivafboc wiee appeylodcrf cxtra`tiof afd pro`cssifk tc`bfoeoky, wbi`b lccts Lofkoeiaf afd iftcrfatiofaecfviroflcftae `odcs afd stafdards, if af cggi`icft laffcr tbat lifilizcs cfviroflcftae ilpa`ts
to af c`ofoli`aeey gcasihec cxtcft. Af ifdcpcfdcft rcport of tbc prokrcss og tbc promc`tscfviroflcftae protc`tiof peaf afd lofitorifk prokral wiee hc suhlittcd cvcry tbrcc ycars afdladc puhei`. Tbc `ost og ceilifatifk latcriae, advcrsc ilpa`ts of air, watcr, soie, afilaes, afdpeafts wiee hc horfc hy tbc promc`t.
OT bas tbc rikbt to usc watcr rcsour`cs tbat Ivafboc bas dis`ovcrcd gor afy purposcs `offc`tcdwitb tbc promc`t, durifk tbc eigc og tbc promc`t. Purpeus watcr lay hc ladc avaieahec to otbcrc`ofoli` cftitics providcd Ivafboc is `olpcfsatcd gor its cxpeoratiof `osts. [atcr dis`ovcrcd hyIvafboc wiee hc ladc avaieahec to bcrdcrs afd eo`ae `ollufitics gor bouscboed purposcs afd goreivcsto`j. [atcr surpeus to bouscboed rcquirclcfts wiee hc ladc avaieahec gor eo`ae, fof-`ollcr`iae akri`ueturae uscs.
Lodcrf tc`bfoeoky afd pro`cdurcs wiee hc appeicd to lifilizc watcr usakc afd watcr wiee hcrc`y`ecd wbcrc pra`ti`ahec. Arcas `eoscd to gurtbcr lififk wiee rc`civc cfviroflcftae
rcbahieitatiof afd potcftiae bazards wiee hc addrcsscd to protc`t tbc puhei`. A lifc-`eosurc peafwiee hc gifaf`cd tbroukb gufds aeeo`atcd to af cs`row a``ouft hckiffifk scvcf ycars hcgorca`tuae eosurc.
Cfcrky afd trafsport ifgrastru`turc= [itb tbc suppey og rceiahec cec`tri`ity `riti`ae to tbc promc`t,Ivafboc bas tbc rikbt to ohtaif powcr grol ifsidc or outsidc Lofkoeia, if`eudifk arrafkifk tbc`ofstru`tiof og a bikb-voetakc eifc grol OT to tbc Lofkoeia-@bifa hordcr to `offc`t witb @bifcscsuppey. It aeso bas tbc rikbt to huied or suh`oftra`t `ofstru`tiof og a `oae-guceecd powcr peaft at afappropriatc sitc to suppey tbc promc`t, wbi`b `oued hc suppeclcftcd hy rcfcwahec wifd or soearpowcr. Bowcvcr, witbif gour ycars og tbc start og lifc produ`tiof, aee powcr rcquirclcfts lust hcsour`cd grol witbif Lofkoeia, citbcr grol a `oae-guceecd peaft or grol tbc fatiofae distrihutiofkrid.
Ivafboc lay huied af iftcrfatiofae road grol OT to tbc Kasbuuf Pujbait `rossifk of tbcLofkoeia-@bifa hordcr, witb `osts to hc dcdu`tcd grol affuae taxahec if`olc, witb kovcrflcftrcspofsihec gor road laiftcfaf`c afd uscr gccs `oeec`tiof. Tbc kovcrflcft lay `ofstru`t, orpcrlit a tbird party to `ofstru`t, a raieway if tbc vi`ifity og OT to tbc Lofkoeia-@bifa hordcr, to hcladc avaieahec to OT of `olpctitivc ollcr`iae tcrls witb Ivafboc ofsuetcd of tbc routc.
Pour`c= Xio Tifto, Kovcrflcft og Lofkoeia, [ored Hafj stagg.a. At ecast 9> pcr`cft og tbc promc`ts clpeoyccs wiee hc Lofkoeiaf `itizcfs. Durifk `ofstru`tiof afd afy cxpafsiofpcriods, at ecast 7> pcr`cft og tbc `oftra`tors clpeoyccs wiee hc Lofkoeiaf `itizcfs: afd gor lififk afd lififk-rceatcdworj, at ecast ;3 pcr`cft og `oftra`tors clpeoyccs wiee hc Lofkoeiaf `itizcfs. [itbif givc ycars, at ecast 3> pcr`cft ogcfkifccrs wiee hc Lofkoeiaf `itizcfs, if`rcasifk to at ecast ;> pcr`cft witbif 1> ycars.h. A totae og 18> s`boearsbips wiee hc kivcf ovcr six ycars to Lofkoeiaf studcfts studyifk if Lofkoeia afd 0> to studyat iftcrfatiofae ufivcrsitics
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 1;
Fotcs
1Tbc PHA is a fof`of`cssiofae eoaf to hc rcpaid if gour ycars (witb two ycars kra`c), hut kivcs
Lofkoeia cx`cptiofae a``css to ILG rcsour`cs. Tbis akrcclcft, approvcd hy tbc ILG at its Aprie 1
Hoard lcctifk, rc`okfizcs tbc cxtraordifary cxtcrfae sbo`j `olifk grol tbc `oeeapsc og `oppcr
pri`cs. Tbc totae alouft og tbc ILG rcsour`cs ladc avaieahec ufdcr tbc arrafkclcft cquaes 0>>
pcr`cft og tbc `ouftrys quota. Lofkoeia, wbi`b moifcd tbc Gufd of Gchruary 14, 1991, bas a
quota og PDX 31.1 lieeiof (ahout SP$;7.4 lieeiof).8 [ored Hafj (8>>9), ^rokral Do`ulcft gor a ^roposcd Dcvceoplcft ^oei`y @rcdit, Mufc ([ored
Hafjs Do`ulcfts afd Xcports wchsitc= bttp=//ko.woredhafj.ork/XOT3TQEW@>).0Tbc [^T is a 72 pcr`cft tax appeics to `oppcr afd koed rcvcfucs ig pri`cs cx`ccd SP$87>>/tof
afd SP$23>/ouf`c rcspc`tivcey. Tbc [^T rcvcfucs arc dcpositcd if tbc Lofkoeiaf Dcvceoplcft
Gufd (LDG) to gifaf`c savifks, so`iae prokrals, afd ifgrastru`turc ifvcstlcfts. If pra`ti`c,
hctwccf 8>>7 afd cfd-8>>2, ahout 0> pcr`cft og [^T rcvcfuc was savcd, alouftifk to 4.9
pcr`cft og KD^, afd ;> pcr`cft og rcvcfuc was aeeo`atcd to so`iae trafsgcrs afd ifvcstlcft.
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12
@ B A ^ T C X 4
Bow Did tbc C`ofoly Xcspofd?
bc c`ofoly bas rc`ovcrcd suhstaftiaeey sif`c tbc liddec og 8>>9 supportcd hy tbc
`olprcbcfsivc afd strofk la`roc`ofoli` poei`ics og tbc kovcrflcft as wcee as
iftcrfatiofae afd hieatcrae hudkct afd haeaf`c og paylcfts support, afd tc`bfi`ae
assistaf`c. As lcftiofcd, tbc sikfifk og OT Ifvcstlcft Akrcclcft was aeso afcxtrclcey sikfigi`aft dcvceoplcft, wbi`b bcepcd to rcturf positivc scftilcft to tbc
lififk sc`tor afd trafsgorlcd tbc ovcraee c`ofoli` outeooj.
Xcae A`tivity Xc`ovcrs
Agtcr seowifk sbarpey if carey 8>>9, rcae a`tivity bas rc`ovcrcd strofkey. Lofkoeias
c`ofoli` dowfturf was parti`uearey scvcrc. [biec tbc ifitiae sbo`j `alc grol
`ollodity sc`tor pri`cs afd lififk sc`tor wcajfcsscs, hafjifk sc`tor ifstahieity ecd
to a sbarp `oftra`tiof if `rcdit wbi`b gurtbcr addcd to tbc drak of c`ofoli` a`tivity.
Tbc c`ofoly `oftra`tcd hy 1.7 pcr`cft if 8>>9 goeeowifk krowtb og 2.9 pcr`cft tbc
prcvious ycar. Tbc sc`tor lost aggc`tcd was `ofstru`tiof, wbi`b `oftra`tcd seikbtey
lorc tbaf 3> pcr`cft ovcr tbc ycar, goeeowcd hy wboecsaec afd rctaie tradc afd
lafuga`turifk. Tbcsc sc`tors cxpcricf`cd affuae dc`eifcs og 89 afd 18 pcr`cft
rcspc`tivcey if 8>>9 (Gikurc 4.1).
Bowcvcr, krowtb startcd pi`jifk up if tbc east quartcr og 8>>9 afd rca`bcd ;.7
pcr`cft (yoy) if girst quartcr og 8>1> (Gikurc 4.1). Tbc rc`ovcry if tbc lififk afd rctaie
sc`tors, aeofk witb trafsport afd `ollufi`atiof sc`tor, ecd tbc way. KD^ krowtb gor
8>1> is promc`tcd to risc to ovcr ; pcr`cft og KD^ of tbc ha`j og a bukc if`rcasc if OT-
rceatcd ifgrastru`turc spcfdifk.
Xc`ovcry, Krowtb, afd Xisifk @ofsulcr ^ri`cs
Tbc c`ofoli` rc`ovcry afd tbc prospc`ts og `oftifucd strofk krowtb if 8>1> bavc
`oftrihutcd to rc`cft riscs if `ofsulcr pri`cs. As c`ofoli` a`tivity dc`eifcd if carey
8>>9, tbc bcadeifc @^I ifgeatiof ratc gcee sbarpey, hricgey turfifk fckativc grol Aukust
to Fovclhcr. Tbis aeso rcgec`tcd tbc ufwifdifk og tbc keohae good afd cfcrky pri`c
sbo`j og 8>>2 as wcee tbc wcajfcsscs if tbc ufdcreyifk c`ofoly (Gikurc 4.8).
T
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 19
Gikurc 4.1. Agtcr Gaeeifk if 8>>9 XcaeKD^ Krowtb ^i`jcd up Ptrofkey
Gikurc 4.8.Ifgeatiof Gcee Pbarpey
% ycar-of-ycar ^cr`cftakc poift `oftrihutiof to @^I ifgeatiof if Seaafhaatar
Pour`c= Fatiofae Ptatisti`ae Oggi`c, [ored Hafj. Pour`c= Fatiofae Ptatisti`ae Oggi`c, [ored Hafj.
Fotc= Sfecss statcd otbcrwisc, tbc `bart sbows
@^I data gor Seaafhaatar.
Ifgeatiof turfcd positivc at tbc cfd og 8>>9, afd bas avcrakcd ovcr 2 pcr`cft sif`c
Gchruary 8>1> (Gikurc 4.8). Tbis was laifey drivcf hy a risc if good pri`cs wbi`b
(fotahey lcat rcgec`tifk earkc eivcsto`j eosscs duc to tbc rc`cft dzud) afd aeso a pi`j-
up if tbc ratc og `orc ifgeatiof as tbc rc`ovcry tooj boed. Ifdccd, if tbc gourtb quartcrog 8>>9 afd carey 8>1> tbc scasofaeey-admustcd `orc afd ovcraee Seaafhaatar `ofsulcr
pri`c ifdi`cs sbowcd loftbey krowtb if tbc rafkc og 8 to 0 pcr`cft. Tbc `baeecfkc
koifk gorward is to cfsurc tbat ifgeatiof docs fot a``cecratc gurtbcr as durifk tbc
prcvious hool pcriod wbcf it rca`bcd as bikb as 00.; pcr`cft (if Aukust 8>>2).
^uhei` Gifaf`cs Ilprovcd Puhstaftiaeey if tbc Eattcr Baeg og 8>>9
Cxpcfditurc rcstraift afd a rc`ovcry if rcvcfucs bavc bcepcd ilprovc gis`ae haeaf`cs
if rc`cft loftbs hut `oftifucd gis`ae `ofsoeidatiof rclaifs a priority. If tbc gifae
quartcr og 8>>9, tbc gis`ae dcgi`it ilprovcd as tbc dc`eifc if rcvcfucs stahieizcd afd
spcfdifk was `urtaiecd (Gikurc 4.0). Ovcraee, tbc gis`ae haeaf`c if 8>>9 `alc if at
LFT 082 hieeiof (aroufd 3.4 pcr`cft og KD^) `olparcd witb a guee-ycar hudkct tarkct
og LFT 074 hieeiof (aroufd 3.2 pcr`cft og promc`tcd KD^).
Tbc rcvcfuc iftajc if 8>>9 was solc ;.3 pcr`cft eowcr tbaf if 8>>2 if folifae
tcrls laifey rcgec`tifk tbc gaee if lififk rcvcfucs duc to tbc gaee if `oppcr pri`cs.
Bowcvcr, tbc rc`ovcry if `oppcr pri`cs if rc`cft loftbs bcepcd to stauf`b tbc dc`eifc.
Ovcraee, rcvcfucs afd krafts if`rcascd hy 77 pcr`cft ycar-of-ycar if tbc girst quartcr
og 8>1>, aetboukb positivc hasc cggc`ts (arisifk grol tbc sbarp drop if totae rc`cipts if
Lar`b 8>>9) bavc aeso bcepcd to strcfktbcf tbcsc fulhcrs.
[itb tbc kovcrflcft `uttifk ha`j of spcfdifk if ordcr to laiftaif gis`ae
sustaifahieity afd lcct tbc gis`ae dcgi`it tarkcts, totae spcfdifk was solc 3.; pcr`cft
eowcr if folifae tcrls tbaf if 8>>2. Tbc earkcst `uts wcrc ladc to `apitae cxpcfditurc
afd suhsidics. Oggscttifk tbcsc was af if`rcasc if wakcs afd saearics, ufcxpc`tcd
-7
-4
-8
>
8
4
7
2
1>
Q0->2 Q4->2 Q1->9 Q8->9 Q0->9 Q4->9 Q1-1>
Akr
Lififk
Lafug.
Cec`., ofst. & scrvi`cs
KD^
-3>
3
1>
13
8>
83
0>
03
4>
Apr->; O`t->; Apr->2 O`t->2 Apr->9 O`t->9 Apr-1>
Cfcrky afd guces
Lcat, liej afd`bccsc@orc ifgeatiof
@^I ifgeatiof
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8> [ored Hafj [orjifk ^apcr
rcpair cxpcfditurcs duc to geood dalakc afd spcfdifk of `oftaififk tbc sprcad og
swifc geu afd dzud rceicg cggorts. Tbcrc wcrc aeso suhstaftiae gis`ae `osts asso`iatcd
witb tbc heafjct kuaraftcc eaw afd gaieurcs if tbc hafjifk sc`tor. Ovcraee, LFT 2.7
hieeiof was dishurscd1out og tbc kovcrflcft rcscrvc gufd afd LFT 2 hieeiof out ogGifaf`c Lifistcrs portgoeio.
If tbc girst quartcr og 8>1>, tbc trcfd ilprovclcft if tbc gis`ae dcgi`it staeecd
solcwbat as tbc positivc ilpa`t of tbc dcgi`it og ilprovifk rcvcfucs was oggsct hy
cxpafdifk cxpcfditurcs (Gikurc 4.4). If Aprie, tbc 18-loftb roeeifk dcgi`it dctcrioratcd
seikbtey to 3.2 pcr`cft og KD^, dcspitc ilprovcd rcvcfuc kcfcratiof. Tbcrc arc
krowifk `of`crfs tbat ratbcr tbaf af a``ulueatiof og gis`ae savifks if a pro`css og
sustaifcd `ofsoeidatiof, cxpcfditurcs wiee `oftifuc to risc if stcp witb rcvcfucs,
risjifk a rcturf to tbc hool-afd-hust `y`ec og tbc prc-`risis ycars. @oftifucd
cxpcfditurc rcstraift is fc`cssary kivcf tbc diggi`uet gifaf`ifk `ofditiofs promc`tcd gor
tbc fcxt gcw ycars. If parti`uear, 8>11 wiee hc a diggi`uet ycar gor tbc hudkct duc to tbc
ahoeisbcd [ifdgaee ^rogits Tax afd tbc dwifdecd dofor gufdifk gor hudkct support.
Gikurc 4.0. Tbc 18 Loftb Xoeeifk Gis`aeDcgi`it Ilprovcd if Eatc 8>>9 If Eifcwitb Xcvcfucs
Gikurc 4.4. Hut KovcrflcftPpcfdifk Xosc Ptrofkey if Carey 8>1>
% og KD^ % og KD^*% `ulueativc cxpcfditurc (ycar to datc) `olparcd tosalc pcriod east ycar if rcae tcrls
Pour`c= Lifistry og Gifaf`c, [ored Hafj.
Fotc= *KD^ iftcrpoeatcd usifk a`tuae 8>>2 afd
8>>9 KD^ data afd KD^ promc`tiofs gor 8>1>.
**Admustcd gis`ae haeaf`c cx`eudcs fct ecfdifk
grol cxpcfditurc, ecavifk urrcft afd apitae
cxpcfditurc ofey.
Pour`c= Lifistry og Gifaf`c, [ored Hafj.
Fotc= Fulhcr if hox is tbc if`rcasc if fct
ecfdifk if rcae pcr`cftakc tcrls gor Aprie, 8>1>
`olparcd to Aprie 8>>9.
-8>
-13
-1>
-3
>
3
0>
0804
07
02
4>
48
44
47
42
3>
Apr->2 Pcp->2 Gch->9 Mue->9 Dc`->9
Xcvcfuc & krafts
Totae cxpcfditurc afd fct ecfdifk
Totae cxpcfditurc
Gis`ae haeaf`c (rikbt axis)
399.>
-4>
-8>
>
8>
4>
7>
2>
Totaecxpcfditurcafdfctecfdifk
@urrcftcxpcfditurc
[akcsafdsa
earics
^ur`bascsogkoodsafdscrvi`cs
Puhsidicsafd
trafsgcrs
@apitaecxpcfditurc
Fctecfdifk
Apr->9 Apr-1>
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 81
Tbc @urrcft A``ouft Dcgi`it Farrowcd
Ilprovclcfts if cxtcrfae dclafd afd rc`ovcry if `ollodity pri`cs bavc `oftrihutcd
to tbc strofk `urrcft a``ouft admustlcft if tbc sc`ofd baeg og 8>>9. @bifas strofkc`ofoli` a`tivity bas bad a positivc ilpa`t of Lofkoeias cxtcrfae haeaf`cs (Gikurc
4.3). Ptilueus poei`y lcasurcs strcfktbcfcd ifdustriae produ`tiof, afd if turf, tbc
affuae krowtb og @bifcsc ilports if`eudifk tbosc grol Lofkoeia. Tbcsc ga`tors bavc
`oftrihutcd to tbc rcvivae if Lofkoeias `oppcr afd `oae cxports ovcr tbc east quartcr.
Tbc cxtcrfae positiof bas aeso
hccf bcepcd hy risifk `ollodity
pri`cs. @oppcr pri`cs hy lid-Lar`b
wcrc ofey ahout 1; pcr`cft hceow
tbcir bistori` pcaj if Muey 8>>2. Koed
pri`cs bavc rclaifcd witbif tbcSP$1,>>>-1,8>> pcr troy ouf`c (ozt)
rafkc sif`c Dc`clhcr, wcee ahovc tbc
roukbey SP$2>>/ozt pri`c sccf at tbc
cfd og 8>>2 as tbcy bavc hccf
supportcd hy sagc-bavcf huyifk afd
`cftrae hafj pur`bascs. Tbc doeear
vaeuc og Lofkoeias koed cxports,
bowcvcr, bas `oftifucd to dc`eifc
(Gikurc 4.7). Tbc voeulc og cxports
aelost baevcd if 8>>9 `olparcd to8>>2 if spitc og tbc provisiof og
kovcrflcft-gifaf`cd `rcdit to
support koed produ`crs. Ga`tors
ifgeucf`ifk tbc rcdu`tiof if koed
cxports8 if`eudc tbc [^T ([ifdgaee ^rogit Tax) afd dc`rcascd koed produ`tiof hy a
lamor koed cxportifk `olpafy if Lofkoeia.
Duc to hotb cxpcfditurc-swit`bifk grol tbc risc if tbc pri`c og ilports goeeowifk
tbc dcprc`iatiof afd cxpcfditurc `olprcssiof witb tbc gaee if c`ofoli` a`tivity,
ilports gcee hy up to 3> pcr`cft if tbc girst baeg og 8>>9. [itb tbc rc`ovcry og tbc
dolcsti` c`ofoly, tbc dc`eifc if ilports lodcratcd. Mafuary 8>1> saw tbc girstaffuae if`rcasc if totae ilports sif`c Dc`clhcr 8>>2 (Gikurc 4.;). Pif`c tbcf ilports
bavc aeso strofkey rchoufdcd drivcf laifey hy a surkc if sbiplcfts grol Xussia afd
@bifa (hotb douhecd of tbc ycar). Bowcvcr, if eikbt og tbc cxtrclc wcajfcss if tbc
girst baeg og 8>>9, wbcf ilports peufkcd sbarpey, tbcsc affuae fulhcrs lay ovcrstatc
tbc `urrcft strcfktb og ilport dclafd.
Gikurc 4.3. Xisifk @bifcsc DclafdPupportcd tbc Xc`ovcry if Cxports
% yoy `oftrihutiofs to cxport krowtb hy dcstifatiof
Pour`c= Hafj og Lofkoeia, loftbey hueectif, [ored
Hafj.
-2>%
-4>%
>%
4>%
2>%
18>%
17>%
Lar->9 Muf->9 Pcp->9 Dc`->9 Lar-1>
Xussia
@bifa
Otbcr
Totae
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88 [ored Hafj [orjifk ^apcr
Gikurc 4.7. Ovcraee Cxport KrowtbIlprovcd if tbc Pc`ofd Baeg og 8>>9
Gikurc 4.;. [itb Ilport Dclafd AesoXc`ovcrifk
^cr cftakc poift oftrihutiofs to ycar-of-ycar krowtb ^cr cftakc poift oftrihutiofs to ycar-of-ycar krowtb
Pour`c= Fatiofae Ptatisti`ae Oggi`c, [ored Hafj. Pour`c= Fatiofae Ptatisti`s Oggi`c, [ored Hafj.
As a rcsuet og tbc ilprovcd koods dcgi`it, tbc `urrcft a``ouft dcgi`it farrowcd to 4
pcr`cft og KD^ if tbc gifae quartcr og 8>>9, agtcr pcajifk at 10 pcr`cft if Q1 (rcgcr ha`j
to Gikurc 1.7). Tbc dcgi`it if scrvi`cs tradc bas aeso ilprovcd hut rclaifs rceativcey
bikb at 0 pcr`cft og KD^ (`olparcd witb a bikb og aroufd 4 pcr`cft if Q1) as
trafsport afd tourisl rc`cipts rclaif dcprcsscd.Gor 8>>9 as a wboec, tbc `urrcft a``ouft haeaf`c farrowcd hy SP$04> lieeiof to a
dcgi`it og SP$028 lieeiof (or approxilatcey 9 pcr`cft og KD^). It was prilariey
gifaf`cd hy fct `apitae ifgeows if tbc gifaf`iae a``ouft,0 wbi`b alouftcd to SP$23>
lieeiof (8> pcr`cft og KD^) if 8>>9. Gorcikf dirc`t ifvcstlcft (GDI) , laifey if tbc
lififk sc`tor, if`rcascd suhstaftiaeey ovcr tbc `oursc og tbc ycar, hut stiee rclaifs
ahout 1> pcr`cft eowcr tbaf 8>>2. Fct horrowifk grol ahroad hy hotb kovcrflcft
afd tbc privatc sc`tor mulpcd if 8>>9, duc to tbc dofor dishursclcft afd eoafs to tbc
`ollcr`iae hafjs.
Tbc Cx`bafkc Xatc Ptahieizcd
Goeeowifk its dcprc`iatiof if carey 8>>9 tbc folifae cx`bafkc ratc bas rclaifcd stahec
sif`c Aprie 8>>9. Tbc poei`y a`tiofs of tbc cx`bafkc ratc, if`eudifk ahafdofifk tbc
cx`bafkc ratc pck afd raisifk folifae iftcrcst ratcs, `olhifcd witb tbc farrowifk og
tbc tradc dcgi`it, rcsuetcd if a stahieizatiof og tbc folifae cx`bafkc ratc sif`c Aprie
8>>9. It aeso cfahecd tbc HoL to rchuied iftcrfatiofae rcscrvcs. Xcscrvcs bavc aeso hccf
hoostcd hy tbc dishursclcft og tbc ILG PHA traf`bcs, tbc OT prcpaylcft eoaf,
promc`t gufdifk grol tbc Iftcrfatiofae Gufd gor Akri`ueturae Dcvceoplcft (IGAD), af
PLC Dcvceoplcft ^romc`t grol Mapaf, afd dcposits grol `ollcr`iae hafjs. Xcscrvcs
rca`bcd rc`ord ecvces og SP$1,143 lieeiof if Dc`clhcr 8>>9. Lcafwbiec, tbc sprcadhctwccf tbc asj afd hid ratcs if paraeece afd `ollcr`iae hafj gorcikf cx`bafkc
larjcts bas rclaifcd eow (rcgcr ha`j to Gikurc 1.;).
-2>%
-0>%
8>%
;>%
18>%
Maf->9 Apr->9 Mue->9 O`t->9 Maf-1> Apr-1>
@oppcr of`cftratc
Koed
@oae
Krcasy asblcrc
Otbcr
Totae cxports
-7>%
-4>%
-8>%
>%
8>%
4>%
7>%
2>%
1>>%
18>%
Lifcrae produ`ts
Tr. cquip., la`b. & cquiplcft
Otbcr
Totae ilports
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 80
Hut Hafjifk Pc`tor ^rohecls Eifkcrcd
Goeeowifk tbc stahieizatiof og dcpositor `ofgidcf`c tbc go`us og `of`crf sbigtcd to tbc
bcaetb og hafj haeaf`c sbccts. ^oei`y lcasurcs ufdcrtajcf hy tbc HoL to stahieizc tbccx`bafkc ratc afd rcstorc `ofgidcf`c if tbc eo`ae `urrcf`y `oftrihutcd to a rc`ovcry if
dcposits if tbc sc`ofd baeg og 8>>9. Tbc `cftrae hafj if`rcascd tbc @HH ratc to as bikb
as 14 pcr`cft if Lar`b 8>>9. Of`c gorcikf cx`bafkc larjct `ofditiofs stahieizcd afd
ifgeatiof gcee, it kraduaeey rcdu`cd tbc ratc to 1> pcr`cft if Pcptclhcr 8>>9. It aeso
if`rcascd tbc `apitae adcqua`y ratio og hafjs, rcdu`cd `rcdit risj gufd ratcs afd
iftrodu`cd a gorcikf cx`bafkc au`tiof/tradifk systcl.
Dcspitc tbc HoL bavifk `ut its oggi`iae poei`y ratc tbrcc tilcs sif`c Lay, grol 14
pcr`cft to 1> pcr`cft if Pcptclhcr, folifae iftcrcst ratcs of hotb eo`ae `urrcf`y
dcposits afd eoafs harcey gcee if 8>>9, aidifk dcposit rctcftiof. Of tbc dcposit sidc, tbc
scar`b gor gufds hy hafjs ga`ifk eiquidity diggi`uetics lay bavc hccf af ilportaftdrivcr og tbc bikb ratcs wbiec tbc ecfdifk ratcs eijcey rcgec`tcd `of`crfs ovcr `rcdit
quaeity, afd bikb gufdifk `osts.
Gikurc 4.2. Xcae Dcposit afd EcfdifkXatcs If`rcascd tbroukb 8>>9 hut BavcPif`c Gaeecf as Ifgeatiof Xosc
Gikurc 4.9. Ecfdifk Peowey Xc`ovcrcd
^cr`cft (affuae ratc) % LFT hf
Pour`c= Hafj og Lofkoeia, Fatiofae Ptatisti`aeOggi`c, [ored Hafj.
Pour`c= Hafj og Lofkoeia @ofsoeidatcd EoafXcport, [ored Hafj.
@olhifcd witb tbc sbarp dc`eifc if tbc @^I ifgeatiof ratc ovcr 8>>9, tbc trcfd if
folifae ratcs rcsuetcd if risifk rcae c`ofoly-widc horrowifk `osts. Tbis was
lcasurcd hy tbc cx post rcae iftcrcst ratc (Gikurc 4.2), wbi`b poscd a `ofstraift to tbc
rc`ovcry if privatc sc`tor a`tivity. Bowcvcr, tbc rc`cft upward trcfd if ifgeatiof bas
rcsuetcd if gaeeifk cx post rcae ratcs, aetboukb ratcs gor tbcsc eoafs rclaif bikb at aroufd 10
pcr`cft. [itb strofk krowtb prospc`ts gor 8>1> eijcey ecadifk to bikbcr ifgeatiof
cxpc`tatiofs if rc`cft loftbs, cx aftc horrowifk `osts arc eijcey gaeeifk rapidey.
Tbc avaieahieity og `rcdit aeso dc`eifcd durifk tbc `risis pcriod as cvidcf`cd hyhafjs `boosifk to usc gufds to pur`basc `cftrae hafj hiees. Tbc ovcraee sto`j og
outstafdifk eoafs bas rclaifcd hroadey geat if folifae tcrls sif`c lid-8>>2, up ofey
0 pcr`cft grol 8>>9 Q8 tbroukb to tbc cfd og 8>>9 Q4. Tbc ecvce og fcw eoaf issuaf`c
-8>
-1>
>
1>
8>
0>
4>
Apr->2 Auk->2 Dc`->2 Apr->9 Auk->9 Dc`->9 Apr-1>
@^I ifgeatiof
Xcae laxilul iftcrcst ratc of E@ tilc dcposits
Xcae avcrakc iftcrcst ratc of E@ tilc dcpositsXcae iftcrcst ratc of hafj E@ eoafs
>
3>>
1,>>>
1,3>>
8,>>>
8,3>>
0,>>>
>
1>
8>
0>
4>
3>
7>
8>>;Q4 8>>2Q8 8>>2Q4 8>>9Q8 8>>9Q4
Xatio og fcw issuaf`c to eoaf sto`j at cfd ogprcvious quartcr (EBP)Eoaf sto`j at cfd quartcr (XBP)
Fcw issuaf`c if quartcr (XBP)
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84 [ored Hafj [orjifk ^apcr
gcee larjcdey if eatc 8>>2 afd carey 8>>9 hotb if folifae tcrls, dowf 3; pcr`cft ycar-
of-ycar gor cxalpec if 8>>9 Q1, afd rceativc to tbc outstafdifk sto`j og eoafs. Tbcrc
bas hccf solc rc`ovcry if fcw issuaf`c ecvces if rc`cft quartcrs, bowcvcr, if
parti`uear if tbc lififk sc`tor (Gikurc 4.9).As tbc illcdiatc tbrcat og a eiquidity `risis rc`cdcd, wcajfcsscs if tbc quaeity og
hafjifk sc`tor haeaf`c sbccts hc`alc if`rcasifkey apparcft tbroukbout 8>>9. Eoaf
quaeity, if parti`uear to tbc privatc sc`tor, dctcrioratcd larjcdey witb fofpcrgorlifk
eoafs (F^Es) afd eoafs witb tbcir prif`ipae if arrcars4 as a pcr`cftakc og totae
outstafdifk eoafs risifk to 83 pcr`cft if Fovclhcr 8>>9, a givc-goed if`rcasc grol tbc
prcvious ycar (Gikurc 4.1>).
Gikurc 4.1>. Hut Hafj Assct QuaeityDctcrioratcd
Gikurc 4.11. Assct Quaeity if @ofstru`tiofafd Akri`ueturc Xclaifs ^oor
LFT hieeiof
Pour`c= Hafj og Lofkoeia, Fatiofae Ptatisti`ae
Oggi`c, [ored Hafj.
Fotc= Tbc fulhcrs if hoxcs arc tbc suls og
F^Es to rcsidcfts afd fof-rcsidcfts afd eoafs
witb prif`ipae if arrcars as a pcr`cft og totae
eoafs outstafdifk.
Pour`c= Hafj og Lofkoeia.
Fotc= Otbcr sc`tors laifey `olprisc ecfdifk to
`ofsulcrs c.k. lortkakcs, pcfsiof afd saeary
advaf`cs.
If tbc hafjifk sc`tor, totae F^Es afd eoafs witb prif`ipaes if arrcars dc`eifcd to
aroufd 81 pcr`cft og totae outstafdifk eoafs at tbc cfd og tbc girst quartcr og 8>1>3
(agtcr pcajifk at 83 pcr`cft if Fovclhcr 8>>9), laifey hccf duc to a stahieizatiof if
F^Es. Eoafs witb prif`ipaes if arrcars bowcvcr `oftifuc to louft, rca`bifk LFT 109
hieeiof if Aprie, up 80 pcr`cft sif`c Dc`clhcr. Tbc F^E ratios diggcr a`ross sc`tors,
rcgec`tifk tbc diggcrcftiae ilpa`t og tbc `risis afd ufdcreyifk `rcdit quaeity. Gor
cxalpec, tbc `ofstru`tiof sc`tor if Q4 8>>9 a``ouftcd gor aroufd 14 pcr`cft og tbc
outstafdifk `ofsoeidatcd eoaf sto`j hut aroufd 02 pcr`cft og F^Es afd eoafs if
arrcars, i.c. af ovcraee F^E ratio og ovcr 03 pcr`cft (Gikurc 4.11). Ovcraee tboukb tbcrc
arc tcftativc sikfs tbat tbc hafjifk sc`tor is startifk to stahieizc, witb `ollcr`iae
hafjs carfifk a progit og LFT 1>.4 hieeiof if Aprie `olparcd witb a eoss og LFT 140.4
hieeiof gor 8>>9 as a wboec.7
3.0
18.>
1;.0
84.7
8>.2
>
1>>
8>>0>>
4>>
3>>
7>>
;>>
2>>
9>>
1,>>>
1>/>2 >1/>9 >4/>9 >;/>9 1>/>9 >1/1> >4/1>
Eoafs witb prif`ipae if arrcars
F^Es to fof-rcsidcfts
F^Es to rcsidcfts
F^Es og gaiecd hafjs87.;%
88.>%
84.>%
0;.9%
8>.>%
14.0%
>% 1>% 8>% 0>% 4>%
Akri`ueturc
Lififk afd quarryifk
Lafuga`turifk
@ofstru`tiof
[boecsaec afd rctaie
Otbcr sc`tors
Pbarc og outstafdifk eoafsPbarc og F^Es afd eoafs if arrcars
(Eahce ifdi`atcs F^E ratio)
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Lofkoeia C`ofoli` Xctrospc`tivc= 8>>2-8>1> 83
Ifgorlae Pc`tor [orjcrs Bardcst Bit hy tbc @risis
Xckistcrcd ufclpeoylcft rosc afd gcee durifk tbc `risis afd rc`ovcry, aetboukb tbc
fulhcrs ufdcrcstilatc tbc ilpa`t og tbc `risis of eahor larjcts. Tbc oggi`iaeufclpeoylcft ratc, wbi`b if`eudcs ofey tbosc wbo arc rckistcrcd witb tbc Eahor afd
Po`iae [cegarc Pcrvi`c @cftcr, rosc grol 8.; pcr`cft if Fovclhcr 8>>2 to 0.; pcr`cft if
Muey 8>>9 Gikurc 4.18). Pif`c tbcf ufclpeoylcft bas kraduaeey gaeecf ha`j to aroufd
0.8 pcr`cft if tbc girst quartcr og tbis
ycar. Bowcvcr, it is eijcey tbat tbcsc
fulhcrs krossey ufdcrcstilatc tbc
ilpa`t og tbc c`ofoli` dowfturf of
ufclpeoylcft afd rcae wakcs.
A``ordifk to tbc 4Q Eahor Gor`c
Purvcy, wbi`b aeso tajcs ifto a``oufttbosc wbo arc fot oggi`iaeey rckistcrcd,
tbc ufclpeoylcft ratc stood at 18.2
pcr`cft. Tbis is up grol 1>.3 pcr`cft if
Pcptclhcr 8>>9, witb solc 148,>>>
pcopec ufclpeoycd grol tbc totae
eahor gor`c og 1,18>,>>>.
Tbc advcrsc so`iae ilpa`t og tbc
`risis was visihec if tbc dc`eififk rcae
wakcs if ifgorlae eahor larjcts. Tbc
[ored Hafj `ollissiofcd quartcreysurvcys to cvaeuatc tbc `bafkcs if rcae
if`olc if tbc ifgorlae eahor larjcts
if Seaafhaatar. Tbc survcys goufd
tbat tbc cggc`ts og tbc c`ofoli`
seowdowf wcrc widcsprcad (Tahec
4.1). Gor cxalpec, tbc Aprie 8>>9 survcy ifdi`atcd rcae cggc`tivc if`olcs bad gaeecf hy
ahout 7> pcr`cft if solc ifgorlae urhaf eahor larjcts as ifgeatiof crodcd folifae
wakcs afd as moh eosscs louftcd.;Clpeoylcft `ofditiofs aeso hc`alc ecss gavorahec