WASHINGTON DC, June 09, 2011 – The World Bank’s Board of Executive Directors has approved an investment credit of US$ 11.0 million as Additional Financing for the Sustainable Livelihoods Project II (SLP II) in Mongolia. This will increase the impact of SLPII by further scaling up institutional mechanisms that reduce vulnerability and promote livelihoods in communities throughout Mongolia.
Mongolia’s economy has grown rapidly in recent years. However, the country still faces considerable social challenges. Despite encouraging trends in poverty reduction, there is substantial variation within the country. Poverty incidence in Mongolia is higher in rural areas, where almost half of the population lives. Semi-nomadic herder households constitute the single largest group amongst the poor.
SLP II is the second phase of the three phase Sustainable Livelihoods Program which started in 2002. SLP II is supported by the World Bank, European Union and Japanese Government and aims to enhance livelihood security and sustainability of communities throughout Mongolia.
The first phase of SLP from 2002-2007 piloted innovative approaches to reducing herder risk, building local-level assets through citizens’ engagement and contributions and increasing access to financial products. These tested approaches and institutional mechanisms have been scaled up nationwide during the second phase of the program since 2007. The final phase of the program, if approved, would aim to institutionalize the approaches and mechanisms developed and demonstrated under the program.
“As one of the funding institutions of the SLP, we are proud of the results achieved to date.” said Coralie Gevers, Country Manager for the World Bank Mongolia. “The community-driven model in all rural and urban areas of Mongolia has been piloted and developed. Through this key mechanism, over 1300 sub-projects are implemented every year across the country to improve basic public services, local infrastructure and improved pastoral management plan. In addition, around 35,000 people per year have also been able to create their own opportunities thanks to micro-finance.”
But these good results can only be sustained once an appropriate policy framework is in place as the Bank team emphasizes. Currently, the country is debating moving to a decentralized fiscal system with a shift of budgetary responsibilities to local level and requiring community engagement and participation. This would be consistent with the approaches now being supported under SLPII. “The Additional Financing will provide support to further develop and deepen the approaches under the project. And, as the policy framework evolves, the project will support the transition in preparation for the third phase." explained Andrew Goodland, World Bank Senior Agricultural Economist and Task Team Leader of SLP.
The additional financing will provide one additional year for financing SLP II, principally the Pastoral Risk Management and Community Initiatives components.
The project will continue to be implemented by the Sustainable Livelihoods Project Office, with sub-offices in each aimag (province) and soum/ duureg (district) throughout the country. The Project is under the overall responsibility of the Ministry of Finance and include a Project Steering Committee comprised of relevant government and non-governmental agencies. With the Additional Financing, SLP II will be extended 12 months and will be implemented until June 2013.