SDC development cooperation with Mongolia: a spotlight on agriculture, decentralisation and small-scale mining

Article, 14.05.2014

Ten years ago the SDC opened a cooperation office in the Mongolian capital, Ulaanbaatar. Diepak Elmer, deputy director of the SDC’s cooperation office in Mongolia, explains the priorities of Switzerland’s activities there and the political and economic challenges faced.

According to Diepak Elmer, some of the main challenges in Mongolia are the harsh climate, the country’s new-found wealth and youth unemployment.

What are the main areas of focus in Mongolia for Swiss development cooperation?
There are three main ones: agriculture and food security; vocational education and training; and decentralisation. There is also small-scale mining, which is becoming increasingly important in Mongolia and which the SDC would like to give more weight to in the future.

In the area of agriculture, food security is a top priority. Mongolia is not self-sufficient in staple foods, even though it covers an area half the size of Western Europe, has about 50 million livestock and a population of barely 2.9 million. The climate is partially to blame. From November to April the ground is frozen solid, so vegetables can be grown for only half of the year. During the growing season the population must produce enough vegetables to tide them over during the winter, otherwise they must rely on imports from neighbouring countries. The SDC has helped Mongolia to rebuild its potato sector, introducing new varieties of potato and new seed. Mongolia is now practically self-sufficient in potatoes.

In winter the Mongolians are heavily reliant on the meat from their livestock. The country is regularly affected by dry summers followed by extremely hard winters with heavy snowfall and temperatures below 40°C – a phenomenon known as the dzud. The herds can then no longer find enough pasture under the snow to graze. They then die in huge numbers. For herdsmen with only a few hundred animals this can quickly endanger their livelihood. In its cooperation programme in Mongolia the SDC has therefore concentrated on the challenges of livestock raising and pasture management from the outset. The country is now better equipped to deal with such extreme situations.

Vocational education and training is a new SDC focus area in Mongolia. The country has a very high number of young people – a major driver for the economy. And yet, although the economy is booming – growth was almost 12% in 2013 – they cannot find work. Unofficially it is estimated that around 20% of young people leave university or complete an apprenticeship to find themselves jobless. Skilled tradesmen such as bricklayers, plumbers, metalworkers and welders are highly sought after in Mongolia. But the training available in these trades is not good enough to meet the requirements of a modern economy. This is where Switzerland comes in. Swiss aid is strengthening the vocational education and training system, concentrating on the skilled trades.

Let us turn now to the third focus area of decentralisation: what can you tell us about that?
Decentralisation is something that the Mongolian president, Tsakhiagiin Elbegdorj, is keen to promote. The thinking behind it is that the most efficient use is made of public resources when decisions are taken locally. To illustrate this, the official in the Mongolian capital Ulaanbaatar cannot be as well informed of the specific needs of a school or hospital a thousand kilometres away as the local population would be. The point of decentralisation is to move the funding and the decision-making away from central government and out to the local level.

The SDC has introduced a programme to support Mongolia in its first steps towards decentralisation. In 2013 the country went through an initial reform and introduced new budgetary legislation. For the first time a proportion of the investment budget is being transferred to what are known as local development funds. Decisions are then taken with citizen participation at the local level to determine in which projects to invest the funds. Switzerland is helping the government to implement the new law and advising it how to accommodate the wishes of the people.

The SDC is also involved in small-scale mining. Small-scale mining is a source of jobs and opportunities to earn an income for rural and poorer parts of the population. The sector came into being in the 1990s; today up to 100,000 Mongolian families are estimated to earn an income from seasonal employment in small-scale mining. Regulations and guidelines are often non-existent – people simply take a shovel or a pickaxe and start to dig, sometimes in hazardous conditions. Small-scale mining was prohibited up until 2010, when it was made legal. Since 2005 the SDC has been supporting Mongolia in formalising the sector in an environmentally and socially responsible way.

What are the political and economic factors in Mongolia that influence Swiss development cooperation?
A major challenge facing the country is how to manage its new-found wealth. In recent years Mongolia has had double-digit economic growth. The main reasons for this have been investments in the mining sector and exports of raw materials. Mongolia is rich in gold, coal and copper resources. Far more money is now flowing into the country than before. The question is how the government and people manage it.

The wealth of commodities provides the country with exceptional development opportunities, but also brings with it some major challenges. Mongolia has to find a way of taking the revenue from the commodities sector and investing it in the country’s development, sustainably and equitably. If it can achieve that, then within one generation Mongolia will become one of the world’s richest nations. Sustainable management of its resources will be vital for Mongolia if it is to make progress in all other areas. That is the overriding challenge, also for Swiss development cooperation in Mongolia.

The SDC has had a cooperation office in Mongolia since 2004. What were the circumstances surrounding Switzerland’s decision to commence development cooperation activities in Mongolia ten years ago?
From 2001–2004 the SDC was providing humanitarian aid in Mongolia, in response to a UN appeal. Mongolia had just experienced three consecutive dzuds in 1999–2001. Over 160,000 families lost more than half of their livestock and the economy was weak. Many people moved to the capital, Ulaanbaatar, and at the same time poverty shot up. At the turn of the millennium around two thirds of the population was living below the poverty line. The humanitarian aid programmes concentrated on the livelihoods of herdsmen and their families.

Swiss involvement to 2020
Mongolia has been a SDC priority country since 2013. The SDC plans to continue its activities in Mongolia until 2020, working for sustainable, socially just development of the country. Switzerland considers that after 2020 Mongolia will no longer be in need of classic development cooperation. The country is expected instead to opt for international economic and technical cooperation.

Diepak Elmer has been deputy director of the SDC cooperation office in Ulaanbaatar in Mongolia since 2012.

SDC projects mentioned by Diepak Elmer in the interview:

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