The Foreign Service Journal, January-February 2019

46 JANUARY-FEBRUARY 2019 | THE FOREIGN SERVICE JOURNAL than 10 million jobs. Our dedicated team, both in Brazil and in Washington, made this important U.S. industry even stronger. Paul A. Brown is the director of the Office of Aviation Negotiations in the Bureau of Economic and Business Affairs. He joined the Foreign Service in 1988 and has served overseas in São Paulo, London, Manila, Sin- gapore and Kuala Lumpur. His assignments in the department have focused on trade, nonproliferation, global health, climate change, anti-corruption and investment, among other issues. Mr. Brown served on a detail to the National Security Council as director for the Group of 8 and as senior adviser to the under secretary for eco- nomic, business and agricultural affairs. Naomi C. Fellows is the deputy economic coun- selor in Brasilia, Brazil. She joined the Foreign Service in 1996 and has served in Conakry, Bogotá, Yaoundé, Managua and Moscow. Her domestic assignments include tours as staff assistant in the Bureau of West- ern Hemisphere Affairs; desk officer for Rwanda, Burundi and the Democratic Republic of the Congo; and deputy director for the AF/PD, INL/I Policy Program. The authors would like to thank Gabriela Fontenele, Nathan Halat, Adedeji “Deji” Okedeji, Kevin O’Reilly, Francisco Sadeck, James Story and Ricardo Zuniga for their input and for their work on the Open Skies program. Transforming the Agricultural Bank of Mongolia Mongolia, 2003 By Jonathan Addleton Financial sector reform is not for the fainthearted. But the transfor- mation of Mongolia’s Agricultural Bank is an inspiring example of what can happen when the embassy country teamworks together. Ed Birgells, my predecessor as USAIDmission director to Mon- golia, was a major contributor, as was Pete Morrow, a financial consultant and banker from Arizona. Ambassadors John Dinger and Pamela Slutz also supported this risky endeavor, one that could have blown up in our faces. When I arrived at post in August 2001, Pete Morrow was already several months into his new job as Khan Bank CEO. At the time it was still referred to as the Agricultural Bank of Mon- golia—Khan Bank came later, when Pete tapped into Mongolia’s history to rebrand the bank and give it a new name. The bank had been launched during Soviet times to furnish credit to herders in Mongolia’s vast countryside. More recently, during the country’s democratic era, it had been bankrupted twice, in each case following elections. After he took over as CEO, Pete often showed visitors the relevant World Bank assess- ment from the time, which gave little cause for optimism: “No amount of financial remediation will save this bank,” it read. “The only thing to do is shut it down.” After the bank’s second bankruptcy, the government of Mon- golia had approached my predecessor at USAID in desperation, asking for help to select and fund a new senior management team—that’s how Pete came to join the bank. I had a bird’s-eye view of what unfolded, both as a Khan Bank board member and as the new director of a five-person USAID mission (myself, three Mongolian office staff and a driver), pos- sibly the smallest USAID mission in the world. USAID contrib- uted $2 million to $3 million over 30 months to support this unlikely effort to save the bank. USAID brought Morrow in, and he ran Khan Bank like a “real” bank, demanding staff accountability and scrutinizing loans to ensure viability. He was especially effective at resisting politically motivated lending and hiring. Usually bank restructuring involves deep cutbacks. But Mor- row increased the number of branches from 269 to more than 350. He also doubled the number of staff from 800 to more than 1,600. Many of his new hires were women, and the senior Khan Bank management team remained overwhelmingly Mongolian, not expatriate. He viewed Khan Bank’s human resources as its most important asset. Morrow introduced new computers and financial products, including a creative new pension loan that ensured elderly herd- ers only had to travel to town once or twice a year rather than monthly to collect their modest pension checks, thus reducing transactional costs. Remarkably, the bank turned a profit after only six months, later emerging as one of the largest corporate taxpayers in the country. Rather than receiving subsidies, it contributed mightily to the national budget.