ULAANBAATAR, September 16, 2015—A new World Bank report recommends that the Mongolian government improve the efficiency of welfare spending by consolidating various types of benefits and focusing on households in need of social assistance, especially during times of economic shocks.
The top 40 percent of the population by income receives 28 percent of the total welfare transfers, and just 56 percent of Mongolia’s welfare spending goes to the poorest 40 percent of the population, according to the report released today entitled Review of Program Design and Beneficiary Profiles of Social Welfare Programs in Mongolia.
“As an institution devoted to ending extreme poverty, the World Bank strives to understand the drivers of poverty reduction and the factors affecting how prosperity is shared among the population,” said James Anderson, World Bank Country Manager for Mongolia. “We hope that this review provides the evidence needed for Mongolia’s leaders to create a more effective and efficient social welfare system, one that puts Mongolia’s poor and vulnerable first.”
Today’s launch brought together representatives from government agencies, international organizations and civil society organizations to discuss ways to improve welfare programs in Mongolia.
The report reviews budgets for social welfare programs and analyzes its coverage and beneficiary characteristics. The Government of Mongolia, through the Ministry of Population Development and Social Protection and the General Office of Social Welfare Services, implements 71 social welfare programs. While some programs are needs-oriented, others are merit-oriented.
The report says the most effective way of containing the costs of social welfare programs while making them more effective is to add poverty targeting to existing programs that are currently categorically targeted. That means Mongolia can improve social welfare programs by eliminating or reducing benefits for the richer population using the readily available Proxy Means Test (PMT) database.
This report provides valuable analysis that will help us develop policy solutions for expanding coverage and improving the quality of our social welfare services. It also will be a great contribution to the process of developing a social protection sector strategy for Mongolia.
In 2013, the government spent 2.78 percent of gross domestic product on cash transfers for social welfare, compared with an average of 1.6 percent in developing and emerging countries.