Opening Remarks by Ms. Nashida Sattar

Deputy Resident Representative, UNDP Mongolia

13 August 2020

UN House, Mongolia

Good morning and welcome to the UN House,

The importance of cashmere for Mongolia cannot be overestimated. As the second largest producer of cashmere in the world, it is a fundamental value chain that majority of the herders in Mongolia depend on.

The increasing global demand for cashmere in the past decade resulted in expansion of goat herding in the country which certainly benefited Mongolia. However, it also resulted in environmental degradation due to overgrazing, deforestation, erosion of the landscape and rangeland, and loss of biodiversity. While the herders acknowledge and face the disappearing pastureland, they struggle to change everyday practices and are largely unable to shift to more sustainable ways

UNDP recognized the need to introduce sustainability measures to the cashmere sector and last year rolled out the Sustainable Cashmere Platform with the objective of positioning Mongolia as a global leader of sustainable cashmere. The Platform’s Steering Committee has been established in May 2020 and three technical working groups (TWG) are operational as part of the Platform’s planned activities.

With the outbreak of Covid-19 and the global collapse of the cashmere sector, we are faced with a fresh set of unprecedented challenges. Demand for raw cashmere has fallen sharply. As Mongolia has closed its border, neighboring traders are unable to enter the country. Furthermore, with severу Covid-19 outbreaks in China and Northern Italy, the largest buyers of raw cashmere from Mongolia, they face impediments too.

This has resulted in decrease of raw cashmere price by at least 50% from last year. Household income of herder families has been disrupted drastically causing livelihood uncertainty and risks. At the processor’s level, sector-wide cancellations of export contracts resulted in 70-80 percent of decrease in sales. Most enterprises are running at 20-30 percent of full operation potential and are trying hard to keep jobs.

As such, we are leveraging the platform to respond to these challenges and come up with solutions through a Systems Thinking lens. The purpose is to develop strategic recommendations that will be included in the COVID-19 recovery plans for Mongolia.

I would like to thank everyone for being here. You all have a stake in reviving the cashmere sector in Mongolia. And I wish you a successful workshop.