COVID-19 means development setbacks for Mongolia
The general picture of the COVID-19 situation in Mongolia is very positive. The Government of Mongolia closed all educational institutions including kindergartens, schools and universities at the beginning of the year. It also introduced strict measures on social distancing, such as a ban on public gatherings, limiting public transportation, closing public spaces such as gyms, and making the wearing of masks in public compulsory. Travel has been very limited, including a complete ban on any international travel by road, rail, or air.
Mongolia has been very vulnerable to the pandemic, not only because of its physical proximity to China and Russia including close links and dependence for economic interests, but also due to its own inadequate health care system.
Despite these challenges, there has been no local transmission reported (cases have been limited to patients importing the virus), and I would say that the leadership of the country has dealt well with the pandemic.
Another factor that has helped in making Mongolia’s response a success story, is that the citizens of the country have diligently complied with the government’s directives and regulations. The requirements to wear masks, ensure good hygiene, such as frequent hand-washing, and physical distancing, have been seriously adhered to. Even during the Tsagaan Sar, the Mongolian Lunar New Year in February, they complied with government orders, and did not even visit their extended families and elders, which is a tradition for Mongolian families.
Minimizing the impact
Several UN agencies are physically present in Mongolia, with more providing support from outside. In response to the COVID-19 crisis, the UN bodies came together under the leadership of the office of the Resident Coordinator, and we have been following the World Health Organization’s response plan, and the UN’s humanitarian and socio-economic response plans. This has involved setting up a socio-economic task force, and identifying the needs and priorities of the most vulnerable people in Mongolian society.
The UN Country Team has utilized well the $1 Million UN Secretary-General's COVID-19 Response and Recovery MPTF (multi-partner trust fund) allocation, for supporting the Government of Mongolia in improving the national testing capacity, and have more supplies of personal protective equipment. We have been also supporting development of the digital learning curriculum to enhance the quality of online learning, as children have not been able to go to school for around six months.
We stand ready to support the Government in every possible way, from their health, humanitarian, and socio-economic response plans, to their longer-term economic recovery.
The economic fallout
We do not know the full impact the pandemic is having yet, but we know it is significant. For instance, in the first quarter of 2020, the economy contracted by 10.7 per cent, and government revenue fell by 8.6 per cent year on year, whilst expenditure went up 19.3 per cent.
Mongolia has a large amount of debt , which means that there is an increased risk of defaulting on debt. According to the IMF, GDP is also expected to fall sharply to minus one per cent this year, down from 5.3 per cent in 2019.
To bolster the economy, the Government approved economic stimulus packages, worth over 10 percent of GDP, which included several measures to support vulnerable groups, including cash benefits; mortgages, consumer and business loan repayments were deferred; and the mortgage rate was reduced.
Unfortunately, it is highly likely that the pandemic will set back the progress we have been making in Mongolia. The Government took early, effective action against the spread of COVID-19, but the increased borrowing, amid an economy hit by reduced exports, means that it will be difficult to recover from the socio-economic impacts of the crisis.
In collaboration with the IMF, World Bank and other partners, we are conducting detailed studies to look at the real impacts, but we are also working with the Government of Mongolia to ensure that the recovery plans do not leave anyone behind.
I only hope that donors provide the funding that is needed to support the most vulnerable people in Mongolia, and help to ensure that the post-pandemic recovery benefits all members of society.