UB Developments

Over the last week, our evaluation team had the opportunity to visit several other international organizations that work in Mongolia. Our meetings covered the whole spectrum of development efforts, from a small religious NGO that works with the extreme poor through self-help group/micro finance programs to the ambitious Asian Development Bank project, which will cooperate with ten large agro-processing companies to increase Mongolia’s ability to capture value from their raw materials, such as cashmere, wool, leather, dairy products, meat, and berries.

As would be expected, there was an incredible amount of development jargon espoused. Some organizations sheepishly admitted that they shunned the concept of value chain analysis, but included these terms in recent funding proposals to attract donors. When I asked one program director about their provision of business development services (BDS), she kidded that the term was no longer “en vogue”.

Although these meeting can become repetitive, it is productive for different organizations to communicate. For example, when we met a large bank, one of our team members pitched the idea of a credit line for herders to purchase veterinary care. It would be less than 300 dollars and could be paid directly from banks to veterinarians. As herders receive most of their income from cashmere and wool sales in the late spring, they find it difficult to purchase veterinary services in early spring months. With the banks providing cash smoothing services, the herder’s would receive payment for their cashmere and then close out their credit line. After hearing this innovative idea, the bank leadership was immediately ready to role out this new product.

While the bank’s interest is flattering, their receptiveness is likely due to high levels of liquidity. Basically, the banks are “swimming in cash”, as interest rates have remained high coupled with herder’s being very reliable clients. This liquidity is also fueled by high prices for all of Mongolia’s commodities, including cooper, gold, and cashmere.

Enough of the theory, I am looking forward to my trip to the Eastern Steppe. I will try to make a post next weekend, hopefully with some pictures.