6 Eradicate extreme hunger and poverty

Where we are?


TARGET 1. Halve, between 1990 and 2015, the proportion of people whose income is below the minimum living standard

Difficult to achieve
* Achievable with more effort
On-track

Fully achievedPoverty incidence has been regularly estimated in Mongolia since 1995. For more than a decade (during 1995-2007/08) Mongolia’s poverty headcount ratio remained in the 35-36 percent range. But because of differences in survey designs, it is not possible to compare the poverty numbers prior to 2007/08. With the resolution in 2012 of the debate over poverty data, there is consensus that poverty in Mongolia has declined steadily from a high of more than 38 percent in 2010 to 27.4 percent in 2012. More than a quarter of Mongolians live in poverty which, in the light of the country’s recent rapid economic growth, is unacceptable. The pace of poverty reduction lags behind economic growth suggesting that higher economic performance has not translated into reducing poverty in a significant way.

The poverty gap ratio remained constant at about 10 percent until 2010, after which it has been reduced to 9.2 percent and 7.1 percent in 2011 and 2012 respectively. While there is considerable regional variation in the poverty gap, declining poverty gap ratio suggests clustering of the poor close to the poverty line.

The share of poorest quintile in national consumption increased from 7.5 to 7.9 percent during 2002-10 but since then has shown little change and is 7.7 percent in 2012. It is unlikely to meet the target of 11 percent by 2015. The proportion of poorest quintile in total national consumption is high in rural areas, particularly in the Western and Khangai regions which also have high poverty headcount rates.

Nature of poverty in Mongolia

As in previous survey years, rural poverty (35.5 percent) is far higher than in urban areas (23.2 percent) in 2012. But with a high level of urbanization in the country, there are more poor people in urban than in the rural areas. Rural areas and the soum centres have witnessed the sharpest declines in poverty in the period 2010-12. The overall low growth of the agricultural sector and slow recovery after the last dzud, is encouraging rural-to-urban migration as people move to the cities in search of alternative livelihoods. Data from the 2011 Agriculture Census suggest that more than 61 percent of rural households feel that their agricultural products fetch very low prices in the market, and 47 percent have limited access to the market due to their remote and isolated locations.3

3 National Statistical Commission, 2013, Report of the Agricultural Census 2011, Ulaanbaatar.

Aimags with poverty headcount rate higher than 40 percent in 2011 are located mostly in Khangai and Western regions. Nearly half the people in Uvurkhangai aimag (45.1 percent) are below the poverty line, followed closely by Gobi-Altai, Arkhangai, Khuvsgul, and Khovd aimags all of which have more than 40 percent poverty. At the other end, Umnugovi has the lowest poverty headcount rate (11.8 percent), followed by Dornogovi (16.9 percent), Uvs (17.7 percent), and Bayan-Ulgii (19.7 percent) aimags, and Ulaanbaatar (23.4 percent).

Livestock ownership is a key determinant of household wealth in the rural areas. The proportion of households with less than 100 heads of livestock constitutes 30.8 percent of the total number of herder households but own only 6.2 percent of the total livestock. Herder households with more than 500 heads of livestock are considered wealthy households while those with less than 100 heads of livestock belong to poor households 4. Field survey respondents identified vulnerability of the livestock sector to natural disasters, droughts and dzuds as a major cause of poverty. Lacking alternative sources of income, poor households migrate to the cities putting additional pressure on the local city administration to provide services.

More than 60 percent of households with eight and above members, 48 percent of households with the head without any education, and about 35 percent of households where the household head is engaged in agriculture are poor5. The most vulnerable members in poor households are children, who have no income of their own. There is evidence that children living in poverty have an elevated probability of experiencing poverty in adulthood.

Conclusion

Mongolia is vulnerable to sharp fluctuations in the food prices, food shortages, earthquakes and other natural disasters which have a negative impact on welfare, and require continuous risk assessment and monitoring.

In spite of the problems of poverty estimation that have seriously affected the design of a poverty reduction policy in the country, the MDG target of reducing poverty to 18 percent by 2015 can be achieved but requires considerable additional effort in the next two years. Diversification of the economy, supporting of alternative livelihoods, and promotion of small and medium enterprises (SMEs) particularly in rural and remote areas, to create jobs can help reduce poverty and economic vulnerability.

In the past the government relied on social transfers as a means to reduce poverty. However, international evidence suggests that social transfers alone rarely provide a sustainable pathway out of poverty.

Poverty reduction is a slow and arduous task. It requires consistent and joint effort of all partners. In line with the objectives of its Action Plan (2012-16), the Government needs to develop a poverty reduction strategy that places strong emphasis on employment creation as a means to reduce poverty and inequality.

4 WB, 2008, Mongolia: Livestock sector study, Volume I-Synthesis Report, Washington, D.C.
5 National Statistical Commission, 2011, Household Socio-Economic Survey Results, Ulaanbaatar.

 

TARGET 2. Reduce by six times, between 1990 and 2015, the proportion of people who suffer from malnutrition

The prevalence of underweight children aged below five accounted for 11.6 percent in 2000 and it fell to 5.3 in 2005 and to 3.3 percent in 2010. This indicator is on the rise for children aged below 6 months. Still good progress was achieved in rural areas and Mongolia is on track to meet the 2 percent target by 2015.

The prevalence of stunting (height for age) for children aged below five was 29.9 percent in 2000. It declined to 27.5 percent in 2005 and has almost halved to 15.3 percent in 2010. In addition, the proportion of stunting among under-five children has declined across all age groups, rural and urban areas, gender, income quintiles, and education level of mothers. Consequently, the target of 13 percent for the prevalence of stunting is likely to be achieved by 2015.

The prevalence of wasting among under-five children (weight for height) accounted for 7.1 percent in 2000, which reduced to 2.7 percent in 2005 and to 1.6 percent in 2010. However, there is some regional variation and the Western and Eastern regions were above the national average in the prevalence of wasting. The prevalence of wasting among rural children has reduced significantly. The target on prevalence of wasting is likely to be achieved by 2015.

TARGET 3. Increase employment rate of population, reduce youth unem ployment rate who are newly entering to the labour market

The MDG target for labour force participation rate is 70 percent and the unemployment rate for 15-24 year old youth is 2.5 percent. Unfortunately, due to changes in the methodology used to estimate these parameters, it is difficult to undertake a comparative assessment over the entire period. Comparable figures are available only for 1998-2008 and 2009-12.

In 2009 the population employment rate was 88.4 percent, which later increased to 92.3 percent and to 91.8 percent in 2011 and 2012 respectively. The expansion of mining and services sectors in the economy has helped increase formal employment rates in recent years. Labour force participation rate is higher in rural areas as compared to Ulaanbaatar which is possibly because of the high levels of rural-to-urban migration. During 2009-12 the unemployment rate among youth declined steadily which could be because of successful organisation of employment support measures and other employment promotion programmes.

Unemployment rate stood at 11.6 percent in 2009, and dropped to 9.9 and 7.7 percent in 2010 and 2011 respectively. In 2011, the Law on Employment Support was amended, which enabled to implement a number of job creating interventions through the various programs. In addition, special measures were introduced for some target groups who experience difficulties to find jobs. These measures have had a positive impact on reducing unemployment rate in 2011 as compared to previous years. However, in 2012 it has grown to 8.2 percent. The unemployment rate for males was always higher than the female rate in 2009-12.

The unemployment rate of youth aged 15-24 increased to 22 percent in 2009, possibly due to a change in methodology. From the next year it started to decline steadily and by 2012 it had reached 14 percent. This declining trend in youth unemployment rate could be attributable to the implementation of various programs such as ‘Pre-employability Program for Youth’, and ‘Sub-program to support youth and students’ employment’.

As of 2012, the youth unemployment rate is high in Eastern region and Ulaanbaatar and in 11 aimags as compared to the national average. Youth unemployment is major issue in Darkhan-Uul (30.9 percent), Orkhon (26.2 percent), Khentii (21.6 percent), Govisumber (19.8 percent), Bulgan (19.3 percent), Khuvsgul (18.8 percent) aimags and Ulaanbaatar (17.1 percent).

In spite of methodological limitations, additional effort will be required to increase the employment rate and achieve the target by 2015.

TARGET 4. Reduce negative effects of population concentration and migration, provide migrants with basic social services

The rate of urbanization is very rapid in Mongolia. As per 2012 estimate, urban residents make up 67.2 percent or two-third of the total population. Internal migration towards cities and urban settlements has increased since 2000, mainly caused by the harsh winter that results in the loss of animals which are the main source of income for many herder families. Herders who lose their livestock in the severe winter (‘dzud’) migrate to urban areas in search of alternative livelihoods.

Universally, population migration is considered to have a positive influence on economic development and reduce regional imbalances. However in Mongolia, the urbanization process is accompanied by negative effects such as, over concentration of population in Ulaanbaatar City, sharp decrease in the rural population making it difficult to provide services in rural areas, declining economic activity in rural areas, increasing dependency of local economy and social services, and growing disparities between urban and rural areas.

Mongolia faces challenges associated with unplanned urban growth, management and provision services to the migrant population. Specifically, there are constraints in delivery of services caused by the overload of hospitals, schools, roads, water supply, engineering facilities, as well as a shortage of housing and socio-cultural amenities. Additionally, air pollution, soil degradation and water contamination have impacted adversely on peoples’ health.

However, non-availability of accurate records of the number of people who migrate to urban settlements makes it difficult impossible to track achievement of this indicator.

For more information: Full report 

1.42 years
remaining
until 2015

1990 2015
Targets for MDG1
  1. Target 1: Halve, between 1990 and 2015, the proportion of people whose income is below the minimum living standard
  2. Target 2: Reduce by six times, between 1990 and 2015, the proportion of people who suffer from malnutrition
  3. Target 3: Increase employment rate of population, reduce unemployment rate who are newly entering to the labour market
  4. Target 4: Reduce negative effects of population concentration and migration, provide migrants with basic social services