April 3, 2020

Ministry of Finance, Ulaanbaatar


Excellency Mr. Khurelbaatar,


UNDP is honoured to sign this Memorandum of Understanding with the Ministry of Finance of Mongolia to cooperate and support the strengthening of Public Financial Management Reform. Today’s MOU marks the strong commitment of the Government of Mongolia to this essential reform and UNDP support to the Government, in particular, the Ministry of Finance in this challenging endeavour.

International experience and lessons tell us that public financial management reform is one the most challenging and painful but rewarding reforms and challenges a country can do- and it takes time to complete the reform but then the benefits become clear.

UNDP appreciates its close collaboration with the Ministry of Finance in improving and strengthening program-based, SDG-aligned and informed budgeting processes and procedures in pilot line Ministries, namely, Ministry of Health in partnership with ADB and Ministry of Environment and Tourism.

UNDP, with ADB, came together to support the Mongolian Government in enhancing the targeting of public resources towards primary health care for a stronger health sector and environmental protection for sustainable growth. Together, we’ve developed a methodology that informs decision making on public investments by the impact they make on advancing the SDGs. Because – as our joint review on SDG Mainstreaming and Acceleration found – policy priorities enshrined in Mongolia’s SDV and the SDGs are currently not sufficiently reflected in budget plans and allocations, which are fundamental to achieving them.

We believe these pilots in these important line Ministries are a good starting point, especially when we consider that due attention is now given to the environment. The linkage between environment and development has long been discussed. In the ‘3 pillars’ approach, the environment was one pillar of development, alongside the economic and social pillars. In principle, the environment appears essential. However, in practice, many governments and experts have often prioritized the economic and social pillars and did not give due attention to the environment. This became a rationale to avoid major strengthening of environmental protections as the economy or social issues were always in focus.

While Mongolia does its contribution to slow climate change, concrete policies can help mitigate its impact while promoting stable and inclusive growth. Addressing these concerns will take time and sustained policy effort. Nonetheless, identifying and understanding these challenges is central to securing sustainable growth.

Looking at the social-economy-environment nexus in an integrated way can bring achievement on the SDGs and Mongolia’s Sustainable Vision and this MoU we sign today is a means by which we can achieve this.

Across this tri-partite nexus, UNDP is committed to mainstreaming gender in the sectoral budgeting processes, drawing on sector specific gender analyses and collaborating with gender experts working on PFM, as it is important to look at the different needs of women and men, girls and boy across each of these areas.

Three ministries – the Ministry of Health, Ministry of Environment and Tourism, and Ministry of Finance – pioneered this initiative together, to ensure more and better targeted money for primary health care and environment programs. They worked in tandem, to prioritize health and environment sector funds, using new criteria and checks for SDG aligned, program-based budgeting and spending.

These pilots are Mongolia’s first SDGs-informed budget, and – I am pleased to say – we will continue in 2020 and beyond with this MoU as a basis, on the health and environment budgets and also hope to expand our efforts to the education sector.

No country can measure progress towards the SDGs, and make necessary modifications, without a well-established Monitoring and Evaluation system. So, UNDP is also supporting the Government of Mongolia through building of the SDGs dashboard.

We look forward to hearing about the results of the monitoring of these first pilots on the SDGs-aligned or program-based sector budgeting, to replicate what works, and address what does not. Work toward establishing the integrated national financing framework and innovative approaches to create an enabling environment to accelerate the 2030 Agenda, to foster sustainable and inclusive growth under the principle of “leaving no one behind is thus our priority.

Thank you and we look forward to our intensified collaboration on this MoU!

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