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Mongolia

Overview of Australia’s aid program to Mongolia

2013/14 Estimated Outcome: $15.6 million

2014/15 Budget Estimate: $16.3 million

A stable and prosperous Mongolia is in Australia’s national interest, and our aid program promotes a well-governed, economically-resilient and equitable Mongolia. Our areas of investment are where Australia has a comparative advantage and are aligned with the development objectives identified by the Government of Mongolia. Mongolia is a major destination for Australian foreign investment, particularly in its fledgling mining sector. Australia has significant commercial interests with over 50 Australian companies operating in Mongolia. Australia’s investments draw on our strengths as a mining nation and the strong people-to-people links built over time through our scholarships and volunteers programs. Australia is one of the largest grant aid donors to Mongolia.

Mongolia has experienced relatively strong economic growth for the past decade due to high-level foreign investment in its mining industry. However, growth is now slowing and occurring in a climate of high inflation and where governance and accountability is weak. Heavy reliance on the mining sector makes the economy vulnerable to global resource-price fluctuations and financial shocks. There are concerns about the environmental and social impacts of mining. Social and economic inequality is a risk to long-term growth and stability. Approximately one-third of the population lives below the national poverty line, with rural poverty much higher than urban poverty. Access to water, sanitation, and quality education are serious problems, particularly in rural areas and for the approximately 500,000 people living in the urban slums (‘ger’ districts) that surround the capital Ulaanbaatar. As a landlocked nation with a small, dispersed population, Mongolia is also disadvantaged by its severe weather conditions and an increasingly degraded natural environment.

The current Mongolia Country Strategy has three pillars: Human Resource Development; Extractives; and Supporting Vulnerable Communities. In 2013–14, the bilateral program supported these pillars through three main programs: the long-standing Australia Awards Mongolia scholarships program; the World-Bank-led Groundwater Management project; and the UNICEF-led Water, Sanitation and Hygiene (WASH) project. From 2015, the new Aid Investment Plan for Mongolia will focus on the sectors where Australia has a strong track record, while ensuring alignment with the priorities of the new Australian aid policy.

Education

Australia is promoting education opportunities for Mongolians by:

  • Strengthening the capabilities of the Mongolian government and the private sector by providing postgraduate scholarship opportunities in Australia
  • Improving the access of school children to clean water and sanitation facilities in partnership with UNICEF.

Read more about our education assistance to Mongolia

Governance

The mining sector has propelled Mongolia to lower-middle income country status. A well-governed, environmentally and socially responsible mining sector can reduce poverty and promote equitable economic growth. Australia’s significant expertise and experience is helping promote a more stable regulatory environment in the mining sector.

Read more about our governance assistance to Mongolia

Our results

  • The bilateral relationship with Mongolia has strengthened. March 2014 saw the first visit to Australia by a Mongolia Foreign Minister in over 20 years. Foreign Minister Luvsanvandan Bold announced with Foreign Minister Bishop the Australia-Mongolia Extractives Program (AMEP) and an increase in the annual Australia Awards Mongolia (AAM) scholarships from 38 to 43.
  • Implementation of the redesigned Australia Awards Mongolia program since July 2013 is showing promising results from the new features of the program—such as new priority study areas, new activities to support alumni and women’s professional development, and a focus on targeting provincial candidates.
  • The most significant development in 2013–14 is the finalisation of the Australia Mongolia Extractives Program (AMEP) design and tender selection. AMEP represents a concrete escalation in Australia’s engagement with Mongolia. It will help Mongolia progress towards equitable and sustainable economic growth of its extractives sector.

Related documents

Education assistance in Mongolia

Overview

Education is central to reducing poverty—it can drive economic growth, develop leaders, and link people and countries for peace and prosperity. The rapid development of Mongolia’s mining sector has placed significant demands on human resources and for skilled employees in the public and private sectors. Australia Awards in Mongolia offer postgraduate scholarships to individuals in the public and private sector to increase their capacity in areas including health, mining, education and natural resource management. The Australia Awards program is the longest-standing Australian aid program to Mongolia and is highly regarded—producing graduates with advanced capabilities and ongoing linkages with Australia. Alumni of the program, who are known as ‘Mozzies’, have made important contributions to Mongolia’s development, including through holding senior positions in government.

Lack of access to water, sanitation and hygiene (WASH) facilities is a serious problem in Mongolia, particularly in rural areas. Poor water and sanitation facilities and lack of hygiene awareness in schools and kindergartens affects the health of children and their ability to learn. Australia works with the United Nations Children’s Fund (UNICEF) WASH in Schools and Kindergartens program to provide improved facilities to disadvantaged rural children in the country’s northwest. These model systems are informing the Government of Mongolia’s national WASH framework for roll-out in schools across the country.

Related initiatives

Australia Awards in Mongolia

Ongoing. Current program $26.6 million, 2008–2016

The Australia Awards in Mongolia provides post-graduate scholarships to Mongolian professionals from the public, private and civil society sectors to gain qualifications that contribute to the development of Mongolia. Graduates return with knowledge, skills and experience to help develop the economic sectors of priority to Mongolia, and to enhance the opportunities for knowledge-sharing and institutional linkages between Australia and Mongolia.

Masters-level scholarships are offered to Mongolians in areas including health, mining, education and natural resource management, in line with Mongolia’s National Development Strategy. Over 399 scholarships have been awarded since the program began in the 1990s.

The current phase of the program seeks to increase the number of applicants from provincial areas, and also works to ensure better gender equality outcomes during the selection process and for scholars on return to the workforce.

Related documents*
Name of document Year published Type

Program Design Document

2008

Design document

Related links

Australia Awards Mongolia

Water, Sanitation and Hygiene (WASH) in Schools and Kindergartens

$2.8 million, 2011–2015

Improving water, sanitation and hygiene (WASH) systems has significant benefits for the health and livelihoods of people living in poverty. This is critical to achieving Millennium Development Goal 7— to halve the proportion of people without sustainable access to safe drinking water and basic sanitation by 2015—on which the Mongolian Government is lagging.

The WASH in Schools and Kindergartens program will improve access to safe water and basic sanitation, and promote good hygiene practices in 12 schools and 12 kindergartens in Mongolia’s remote Khuvsgul province. The initiative is implemented by the United Nations Children’s Fund (UNICEF) in Mongolia with a contribution from Australia of $2.8 million over four years.

Water, sanitation and hygiene are important prerequisites for ensuring children’s right to education. Mongolian children are often unable to attend classes because they are too busy fetching water from distant sources. Mongolian Government studies have shown that the learning achievements of students are higher where they have access to indoor toilets and water supply.

Related documents*
Name of document Year published Type

Mongolia WASH in schools and kindergartens: Funding proposal

2011

Funding proposal

WASH Independent Appraisal of Draft Project Design Document

2011

Independent appraisal report

WASH Quality at Entry Report

2011

Quality at entry report

WASH Program Design Document

2011

Project design document

Related links

UNICEF in Mongolia

Effective governance assistance in Mongolia

Overview

With its wealth of natural resources, Mongolia has the potential for major economic expansion over the coming decade. However, it faces a range of challenges in harnessing this resource wealth for sustainable and equitable development. These challenges include: high levels of poverty (currently around 27 per cent) and a growing social divide; rapidly rising living costs for the poor owing to rising inflation; environmental degradation; and the narrowing of the country’s economic base. The Mongolian Government has identified key areas of need as: improved mining-sector governance; human-resource development to provide qualified employees; and a more inclusive growth model.

Beginning in 2014–15, the Australia-Mongolia Extractives Program is an expanded suite of assistance to the extractives sector. It will incorporate existing Australian-funded extractives activities under its umbrella, such as a groundwater management project ($5 million) and a minerals sector vocational training project ($4 million).

Related initiatives

Australia-Mongolia Extractives Program

$25 million (total including pre-existing activities), 2014–2018

The extractives sector will be a major focus of Australia’s development cooperation with Mongolia in the years ahead. The Australia-Mongolia Extractives Program (AMEP) will be the main vehicle for our engagement. The program will use Australian expertise to assist the sustainable development of Mongolia’s extractives sector. AMEP will involve a number of new partnership agreements with trusted delivery partners supported by a flexible Facility that will fund pilot projects, research and policy advice. It will also incorporate existing DFAT-funded partnerships such as the World Bank (Groundwater Management Project) and German GIZ (technical and vocational training) within AMEP’s overarching framework.

Mongolia Vocational Training in the Minerals Resource Sector

$4 million, 2014–2018

Australia contributes funding to the GIZ (German aid agency) Cooperative Vocational Training in the Mineral Resource Sector Project .The project provides institutional support to the Dalanzadgad TVET (vocational education and training) Centre in South Gobi (Omnogovi) province. Our investment builds on GIZ’s model, piloting new approaches to improve the Centre’s capacity to provide demand-driven training (based on industry needs) to the South Gobi community. This will help ensure the local community is better equipped to gain employment in the mining industry and other related industries. The investment will also provide lessons at the national level for scale-up in other areas of the country affected by mining.

Related links

GIZ – Cooperative Vocational Training in the Mineral Resource Sector

Groundwater Management in Southern Mongolia

$5 million, 2012–2015

Australia provides support to strengthen groundwater management in Mongolia’s south through a partnership with the World Bank. Delivered as part of the World Bank’s Mining Infrastructure Investment Support Project, the investment strengthens the capacity of Mongolian authorities to manage non-renewable groundwater resources. This will be achieved by piloting new institutional structures for groundwater management in three provincial capitals and by strengthening the Mongolian Water Authority’s ability to monitor groundwater.

Access to water is the linchpin of Mongolia’s long-term economic development. Without access to large, reliable quantities of water, mining operations and large-scale infrastructure in mining areas such as the southern Gobi region will not be possible.

Related documents*
Name of document Year published Type

Groundwater Management in Southern Mongolia: concept note

2011

Concept note

Groundwater Management in Southern Mongolia Quality at Entry Report

2012

Quality at entry report

Groundwater Management in Southern Mongolia Project Design Document

2012

Project design document

Related links

World Bank Mongolia – Mining Infrastructure Investment Support Project

Last reviewed: 16 December, 2014