ASSESSING THE ADAPTABILITY OF SOCIAL PROTECTION AND ENHANCING HERDER RESILIENCE AGAINST CLIMATE SHOCKS IN MONGOLIA May 2025 2 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 2. Assessment of the adaptability of the social protection system in Mongolia 3 ASSESSING THE ADAPTABILITY OF SOCIAL PROTECTION AND ENHANCING HERDER RESILIENCE AGAINST CLIMATE SHOCKS IN MONGOLIA May 2025 4 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia © 2025 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Contents iii CONTENTS Foreword iv 4 RECOMMENDATIONS 47 Acknowledgements v 4.1 Recommendations for the social protection 48 Acronyms and Abbreviations vi system in relation to covariate shocks Executive Summary viii 4.1.1 Policies and institutional arrangements 48 4.1.2 Programs and Delivery systems 49 1 BACKGROUND 1 4.1.3 Information systems 49 1.1 Poverty, vulnerability, and climate shocks 1 4.1.4 Finance 49 1.2 The role of adaptive social protection in 4 4.2 Recommendations to enhance the resilience of 49 responding to covariate shocks poor and vulnerable herders with regard to dzud 1.3 Purpose of this report 5 4.2.1 Preparedness (pre-dzud) 50 1.4 Conceptual and analytical framework for the 6 4.2.2 Response actions (after a dzud) 52 ASP assessment 4.2.3 Complementary (non-social protection) 53 1.5 Methodology 7 recommendations 1.6 Report Structure 7 REFERENCES 56 2 ASSESSMENT OF THE ADAPTABILITY OF THE 9 SOCIAL PROTECTION SYSTEM IN MONGOLIA ANNEXES 60 2.1 Institutional arrangements and partnerships 10 Annex A. Selection of Mongolia’s social assistance 60 2.1.1 Government leadership and coordination 11 responses to the COVID-19 pandemic 2.1.2 Laws and strategies 15 Annex B. Disaster protection institutional framework in 62 2.2 Programs and delivery systems 18 Mongolia 2.2.1 Analysis of social assistance programs 19 Annex C. NEMA organizational chart 63 with regard to ASP Annex D. Examples of Adaptive Social Protection 64 2.2.2 Government social protection response 19 to COVID-19 shocks and subsequent high inflation BOXES 2.2.3 Emergency (humanitarian) assistance 21 Box 1. Collaboration between national and subnational 14 2.2.4 Delivery systems 22 actors in responding to the 2023 floods 2.3 Data and information management systems 24 Box 2. Integrated Household Administrative Database 26 2.3.1 Appraisal of existing information systems 24 (IHAD) for the purposes of ASP Box 3. Social Protection and Climate Change in 36 2.3.2 Access by non-government actors to 28 Mongolia information Box 4. Overview of Local Development Fund 54 2.4 Financing 29 3 ASP FOR POOR AND VULNERABLE DZUD- 33 FIGURES AFFECTED HERDERS Figure 1. Percentage of poor under different scenarios, 20 3.1 Programs and delivery systems 34 April-September 2020 3.1.1 Government schemes 35 Figure 2. Disaster Risk Financing instruments in 30 3.1.2 Non-government schemes 37 Mongolia in 2023 3.1.3 Delivery systems 39 Figure 3. Purchases made by herders to prepare for 39 3.2 Information Systems and Data 40 winter, 2018-2019 3.2.1 Data and systems that are relevant for 40 Figure 4. Collection of items by herders to prepare for 42 dzud response winter, 2018-2019 3.2.2 Early warning systems 41 3.3 Other challenges faced by herders 43 TABLES Table 1. Coverage of index-based livestock insurance, 44 3.3.1 Index-based livestock insurance 43 2016-2021 3.3.2 Other challenges not directly related to 45 social protection 6 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia FOREWORD Climate shocks, particularly dzud, have a profound and far-reaching impact on the livelihoods of Mongolians, especially herders. Increasingly frequent due to climate change, these extreme weather events not only threaten the immediate survival of livestock but also undermine the long-term resilience and sustainability of herding communities. At the same time, other extreme weather events such as urban floods are also becoming more common. In this context, effective social protection measures are crucial to mitigating the adverse effects and supporting the recovery and adaptation of households. This report presents the results of extensive research and collaborative efforts to improve Mongolia’s social protection system’s ability to adapt to covariate shocks and enhance herder resilience to climate shocks. It analyzes the existing social protection mechanisms, with specific attention to social assistance, and emphasizes the system’s potential for adaptive social protection, as demonstrated by the government’s swift response to the COVID-19 crisis. Nonetheless, the report also identifies gaps and offers practical recommendations to enhance effectiveness across the four pillars of adaptive social protection: (i) Institutional arrangements and partnerships; (ii) Programs and delivery systems; (iii) Data and information; and (iv) Finance. Furthermore, by assessing the system’s responsiveness to the needs of the most vulnerable herders, it aims to foster a more resilient community capable of withstanding and adapting to the inevitable climate shocks. I extend my gratitude to all those who made this report possible, including key stakeholders consulted to assess the current state of Mongolia’s adaptive social protection system, including addressing challenges faced by herding communities. Their insights and experiences were invaluable in shaping the findings and recommendations presented herein. I hope this report will serve as a critical resource for all stakeholders involved in enhancing the resilience of Mongolian households and will drive meaningful action towards strengthening Mongolia’s social protection system, enabling households and, especially herding communities, adapt to and become more resilient to covariate shocks. The report is especially timely, given Mongolia’s increasing vulnerability to climate events such as dzuds and floods. Tae Hyun Lee Country Manager Mongolia 2. Assessment of the adaptability of the social protection system in Mongolia 7 ACKNOWLEDGEMENTS This report was prepared by Edward Archibald (Consultant), Mongolmaa Norjinlkham (Senior Social Protection Specialist), and Shonali Sen (Consultant), under the leadership of Natalia Millan (Economist), Mongolmaa Norjinlkham (Senior Social Protection Specialist), and Yang Huang (Senior Economist). The report benefited from valuable feedback from Asha Williams (Senior Social Protection Specialist), Kenichi Nishikawa Chavez (Senior Economist), Thilasoni Benjamin Musuku (Senior Financial Sector Specialist), Badamchimeg Dondog (Senior Public Sector Specialist), Giovanni Ruta (Lead Economist), Enkhbaatar Ichinnorov (Consultant), and Vanchin Tsogt-Ochir (Consultant) at different stages. The team is also grateful for useful comments received from peer reviewers Sarah Coll-Black (Senior Economist) and Yasuhiro Kawasoe (Disaster Risk Management Specialist). The report was prepared under the guidance of Mara Warwick (Division Director), Alberto Rodriguez (Regional Practice Director), Yasser El-Gammal (Former Practice Manager), Camilla Holmemo (Practice Manager), Tae Hyun Lee (Country Manager), and Maria Ana Lugo (Lead Economist, Program Leader). Badamkhand Bold (Team Assistant) provided invaluable support on administrative affairs. The report greatly benefited from discussions with officials from the Ministry of Family, Labor and Social Protection, Ministry of Finance, Ministry of Food, Agriculture and Light Industry, Ministry for Digital Development and Communications, General Office for Labor and Welfare Services, National Emergency Management Agency, National Statistics Office, National Agency for Meteorology and Environmental Monitoring, representatives of local officials and herders from Erdene Soum of Tuv Aimag, the United Nations Children’s Fund, the Food and Agriculture Organization of the United Nations, the Potsdam Institute for Climate Impact Research, and the Mongolian Red Cross. Photo Baku’s picture vi Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia ACRONYMS AND ABBREVIATIONS ADB Asian Development Bank AIRS Animal Identification and Registration System ASP Adaptive Social Protection CMP Child Money Program DRF Disaster Risk Financing DRM Disaster Risk Management DRR Disaster Risk Reduction EPF Employment Promotion Fund ESCAP Economic Social Commission for Asia Pacific EUR euro EWS Early Warning System FBF Forecast Based Financing FSP Food Support Program (previously Food Stamp Program) GDP Gross Domestic Product GOLWS General Office of Labor and Welfare Services GRM Grievance Redress Mechanism HID Household Information Database IBLI Index-based livestock insurance IHAD Integrated Household Administrative Database IRC International Rescue Committee LDF Local Development Fund LRP Livestock Restocking Program MFLSP Ministry of Family, Labor and Social Protection MIS Management Information System MNT Mongolian tugrik Acronyms and abbreviations vii MOF Ministry of Finance MOFALI Ministry of Food, Agriculture and Light Industry MRC Mongolian Red Cross NAMEM National Agency for Meteorology and Environmental Monitoring NCDDR National Council for Disaster Risk Reduction NDC National Data Center NEMA National Emergency Management Agency NSO National Statistics Office PHRD Population and Household Registration Database PIK Potsdam Institute for Climate Impact Research PMT Proxy Means Test SDC Swiss Development Cooperation SEC State Emergency Commission SHU Sheep Head Unit SPSTT Social Protection Stress Test Tool SRSP Shock Responsive Social Protection SWP Social Welfare Pension TSA Treasury Single Account UNICEF United Nations Children’s Fund USAID United States Agency for International Development USD United States dollar viii Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia EXECUTIVE SUMMARY Mongolia faces significant challenges related to poverty, vulnerability, and climate shocks. Poverty affects both urban and rural areas, especially herders who depend on livestock for income and sustenance. This reliance makes them highly susceptible to the impacts of natural disasters, such as dzud—a slow-onset, recurrent phenomenon specific to Mongolia characterized by summer droughts followed by harsh winters marked by heavy snowfall and extremely low temperatures which threatens the health and survival of livestock and jeopardizes the economic stability of herding families. Climate change will likely exacerbate these challenges, increasing the frequency and intensity of dzud, in addition to floods in urban areas. As these environmental pressures mount, the resilience of vulnerable populations is further compromised, highlighting the need for effective shock response. Adaptive Social Protection (ASP) is essential for enhancing resilience and mitigating the adverse effects of covariate shocks on household wellbeing, as evidenced by Mongolia’s effective response to the COVID-19 pandemic. While significant strides have been made in recent years, demonstrating the Mongolian social protection system’s capacity to expand vertically during shocks, further enhancements are necessary to improve its adaptability to economic and climate-induced challenges and enable Mongolia to more effectively support its vulnerable populations, especially herders, in the face of escalating disaster risks. This report evaluates the adaptability of Mongolia’s social protection system to covariate shocks, including its critical role in enhancing resilience among herders in the face of dzud events. It focuses on how the system supports vulnerable households before, during, and after such crises, offering recommendations to leverage social protection for boosting adaptive capacity among Mongolian households and herders in particular. The methodology includes both primary and secondary data collection, featuring an in-person mission to Mongolia that involved workshops with government representatives, key informant interviews, and field visits to Erdene Soum in Tuv aimag. Secondary data was sourced from government reports, academic publications, and international organizations. The assessment utilized the World Bank’s Social Protection Stress Test Tool as a conceptual framework, providing a standardized approach to Executive Summary ix evaluate the adaptiveness and scalability of social protection systems in response to shocks, structured around four pillars: institutional arrangements and partnerships, programs and delivery systems, data and information, and finance. The report’s key findings and recommendations are summarized below for each of the four pillars, along with the findings related to adaptive social protection for herders. Institutional Arrangements and Partnerships The legal and institutional framework for disaster risk reduction (DRR) and disaster management are well-established in Mongolia supported by disaster protection law and other relevant legislations, DRR strategies, and contingency plans designed for significant or recurring shocks. National and subnational DRR structures are in place at all levels, with key roles played by the National Council for Disaster Risk Reduction, the National Emergency Management under the Deputy Prime Minister and the National Emergency Commission, and with active participation of all relevant ministries and non- governmental organizations. Nevertheless, explicitly including actions for strengthening ASP within the national DRR action plan and local contingency plans would be beneficial. The social assistance legal and institutional framework is well-established with regular programs targeting various vulnerabilities primarily through categorical targeting. To effectively respond to shocks, future amendments to the Social Welfare Law should comprehensively incorporate ASP strategies, including the ability to respond to shocks via horizontal expansion of existing social assistance programs. To facilitate horizontal expansion, strengthening the household-based comprehensive information system would enable effective identification and targeting of assistance to the most vulnerable during crises. Adopting a comprehensive approach for post-disaster household assessment and providing immediate, short-term, and mid-term recovery support from local and central budgets would also be beneficial. Strengthening the role and coordination of subnational disaster risk reduction and social protection actors could also improve household resilience and ensure timely and effective recovery. x Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Programs and Delivery Systems While Mongolia’s COVID-19 response demonstrated the potential for rapid social assistance expansion, significant gaps remain in ensuring adequate support for vulnerable populations in the face of climate and disaster-related risks. Mongolia’s COVID-19 response showcased its ability to rapidly expand social assistance by increasing benefit amounts and implementing one-off universal cash transfers, demonstrating capacity for vertical expansion. However, challenges remain in horizontal expansion, particularly for the Food Support Program—Mongolia’s only means-tested program—hindering effective reach to vulnerable households. Mongolia has digitized 80 percent of social assistance programs, facilitating digital applications, tracking, payment coordination, and real-time information access. While government-to-citizen payment mechanisms are advanced, enabling rapid pandemic response through existing citizen identification and banking systems, there is a need for a dynamic, up-to-date social registry to expand the coverage gaps for the poor and the vulnerable both for effective implementation of existing means-tested programs or expanding programs during shocks. Beyond government efforts, the Mongolian Red Cross, in partnership with NEMA and development partners, provides crucial pre- and post-disaster support, especially for herder households. Enhancing social assistance initiatives that are driven and financed at the subnational level, coupled with enhanced outreach and communication, could help to effectively respond to localized shocks. The existing social assistance program designed for shock response is limited to addressing post-disaster immediate needs with a focus on home loss. While some of the existing programs have potential to be leveraged for anticipatory action and post-disaster short- to mid-term recovery of vulnerable households, local-level support is often ad-hoc and limited by funding. Strengthening local initiatives may involve the allocation of local funds and improving outreach and communication strategies for assessing household needs and ensuring that vulnerable populations are not excluded from assistance during shocks. Integrating grievance redress mechanisms into the MFLSP e-welfare system could further leverage the benefits of digitalization. Data and Information Management Mongolia has developed a comprehensive data and information management system for social protection, anchored by a national ID system and the integrated E-Mongolia platform, which provides access to numerous government services and powered by the “Khur” state data exchange platform that digitizes public services. The newly introduced Integrated Household Administrative Database (IHAD) recently introduced by the MFLSP holds promise as a social registry, contingent on further expanding interoperability, Executive Summary xi effective strategies for household updates and addressing mass data update issues. On the other hand, the existing Household Information Database, crucial for identifying poor households, has limited coverage that could hinder effective response to major shocks. The E-Welfare portal, serving as the social assistance management information system, consolidates beneficiary databases for all social assistance programs, enhancing overall management and delivery. Addressing the challenges of data and information for effective adaptive social protection requires investment in technical solutions for improved data exchange, expanded coverage of the HID, enhanced capabilities of the IHAD as a social registry, and ongoing analytics to refine the proxy means test methodology for more effective targeting and identification of vulnerable households. Financing Although overall social protection spending is high, the primary approach to ASP financing has been ex post, involving reallocation or repurposing of existing revenue budget funds and reliance on the Government Reserve Fund. Disaster risk financing (DRF) relies heavily on post-disaster government funding due to limited DRF product availability, placing significant burden on contingent budgets, reallocations, and household savings. The Government Reserve Fund, the primary DRF source, is allocated annually but not specifically earmarked for disasters, while local authorities play a crucial role in localized shock responses. Though the Law on Disaster Protection mandates budget allocations for disaster risk reduction, enforcement is weak, leaving both government and private entities falling short of required allocations. Mongolia’s DRF framework and risk transfer instruments require further development, as current disaster preparedness relies primarily on fiscal resources, lacking comprehensive DRF tools. A comprehensive DRF strategy should be developed and implemented, incorporating guidelines for financing the ASP. The Mongolia Mid-term Strategy for implementing the Sendai Framework and the Ministry of Finance’s ongoing efforts to draft a Law on Disaster Risk Insurance indicate a growing recognition of the need for improved DRF mechanisms. Notably, the government has begun the process of drafting the DRF Law. Strengthening technical and institutional capacities in DRF at all levels of government and expanding and diversifying proactive DRF approaches and instruments would be beneficial. xii Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Main findings with respect to adaptive social protection for dzud affected herders: Mongolian herders are facing increasingly frequent and severe dzuds, prompting them to diversify and improve preparation and coping measures. However, these efforts are often hampered by low livestock prices, high feed costs, and limited resources. While index-based livestock insurance exists, its cost and stringent indemnity eligibility criteria make it less appealing. The government responds with emergency feed programs and post-dzud non-interest loan initiatives, and development partners have introduced programs like forecast-based financing, showing positive impacts, particularly for households with smaller herds. While national agencies provide early warning forecasts and dzud risk maps, its effective and consistent use at the local level may need to be strengthened. A social protection strategy for supporting resilience of herders in Mongolia against dzud could focus on leveraging existing social assistance programs, improved skills for livestock management, targeted support for vulnerable households, enhanced data accessibility for better targeting. To enhance resilience against dzud, Mongolia could implement livelihood exposure risk maps to identify vulnerable households for targeted support. Providing herders with the option of lump-sum social assistance payments before dzuds can support herder resilience to climate shocks, along with better communication to herders on dzud risks and livestock management strategies. Finetuning of the Livestock Restocking Program planning and delivery for post-dzud support and mandatory assessment of severely impacted herder household’s welfare by the local Livelihood Support Council after climate shocks would be helpful for timely and adequate recovery from shocks. Furthermore, the Animal Information and Registration System (AIRS) recently introduced by the MOFALI, offers opportunities for providing timely data on livestock status, but needs further enhancements for monitoring data accuracy and interoperability with social protection databases. Supporting the anticipatory or post- disaster measures administered by the Mongolian Red Cross via providing access to social welfare data can enhance targeting and reduce duplication. Finally, other challenges facing herders that do not fall directly within the realm of the social protection system rather, within the agriculture development, disaster risk reduction and climate change agendas, need to be addressed for building the resilience of herder households to climate shocks. Improving the coverage and affordability of index-based livestock insurance, promoting commercialization of the livestock system, and aligning efforts with ongoing agriculture and climate change policy reforms are essential components of a comprehensive resilience strategy. Recommendations The report’s recommendations to enhance the adaptability of Mongolia’s social protection system to covariate shocks and to improve the resilience of herders in response to climate shocks are summarized below. Executive Summary xiii Recommendations for the social protection system in relation to covariate shocks Area Recommendation Policies and 1. Explicitly integrate the role of ASP into the social assistance legal framework, including Institutional laws, regulations, and guidelines. Arrangements 2. Incorporate the complementary role of ASP into the disaster risk management framework. Programs and 3. Strengthen subnational-driven and -financed shock-responsive social assistance Delivery Systems actions for responding to localized shocks, including allocation of local funds and effective outreach and communication efforts for household needs assessments. Data and Information 4. Continue building the potential capability of the IHAD to function as a social registry. Management 5. Address the challenge of timely update of household information by citizens by introducing nudging strategies. Finance 6. Develop and implement a comprehensive Disaster Risk Financing (DRF) strategy that includes guidelines for financing ASP. Recommendations to enhance the resilience of poor and vulnerable herders with regard to dzud Area Recommendation Preparedness 7. Carry out ‘livelihood exposure risk maps’ to identify areas with high concentration (pre-dzud) of vulnerable households, facilitating the planning and coordination of ex-ante and ex-post social assistance and humanitarian response. 8. Give herders receiving benefits from social assistance programs such as the Child Money Program, Food Support Program, Social Welfare Pensions, or others considered suitable, the option to receive three months of transfers in a lump sum payment in October and January in anticipation of dzud. 9. Leverage existing social assistance programs and avoid creating a new cash transfer program for dzud-affected herders. 10. Task the Ministry of Food, Agriculture and Light Industry and the Ministry of Family, Labor and Social Protection (MFLSP) with developing and delivering awareness- raising workshops aimed at improving herders’ livestock management practices in preparation for disasters. Response actions 11. Adapt the Livestock Restocking Program to provide post-dzud support to poor and (post- dzud) vulnerable herders. 12. Enhance the function of the Local Livelihood Support Council, especially in areas substantially affected by dzud, so it can expand the coverage of existing social as- sistance programs such as the Food Support Program to assist vulnerable herder households in the post-dzud period. 13. Enable the Mongolian Red Cross to access social welfare information systems with support from the MFLSP in order to improve efficiency, reduce the risk of duplication, and/or target the most vulnerable who are not covered by government administered social welfare programs. 14. Create interoperability between relevant databases that relate to eligibility criteria for a dzud-preparedness or dzud-response initiative. Complementary 15. Establish a dedicated dzud resilience window within the Local Development Fund (non-social to facilitate decisions on government or external funding allocation for herder protection) preparedness, coping, and response efforts. 16. Improve the coverage and affordability of the index-based livestock insurance system. 17. Promote the commercialization and development of livestock systems and address the current incentive structure that prioritizes quantity over quality. 18. Ensure consistency with other ongoing policy reforms, particularly in agriculture and climate change. 16 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Photo Baku’s picture 2. Assessment of the adaptability of the social protection system in Mongolia 1 1. BACKGROUND 2 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 1. BACKGROUND The wellbeing of Mongolian herders has improved 1.1 POVERTY, VULNERABILITY, markedly over the past decade or so, but many are AND CLIMATE SHOCKS still poor and highly vulnerable. Herders make up one fifth (21.4 percent) of the national population and 53 percent of the rural population. They were among the poorest population groups in 2010, when 58 The pace of poverty reduction in Mongolia has percent of them lived below the poverty line. However, slowed in recent years, and poverty remains rising livestock prices and improved market access prevalent in both urban and rural areas. The national have lifted many herders out of poverty. Additionally, poverty headcount ratio decreased from 29.6 percent herder households are diversifying their income in 2016 to 27.8 percent in 2020, a two-percentage sources. Despite these gains, more than a quarter point reduction over four years (Uochi 2020). (More of all herders (27.7 percent) remain poor. Their recent data indicate a poverty rate of 27.1 percent in livelihoods remain heavily reliant on livestock, making 2022, but this figure is not comparable to previous them susceptible to unexpected covariate shocks (i.e. estimates due to a change in methodology.) This those that affect a group of people at the same time) decline was slower than the rate of poverty reduction – both natural disasters, such as dzuds (a multilayer observed during the 2010-2014 economic boom. natural disaster consisting of a summer drought Urban poverty remained stagnant between 2016 and resulting in inadequate pasture and production of hay, 2018 at 27 percent and the rising cost of food has followed by very heavy winter snow, strong winds and disproportionately affected the urban poor, who spend lower-than-normal temperatures), and fluctuations a larger share of their income on food (Uochi 2020). in livestock prices. Pastoral degradation is also a Although rural poverty has declined more rapidly growing concern, threatening the sustainability of than urban poverty, at around 30.8 percent their livestock activities and welfare. (Uochi 2020) (2018), it still exceeds the national average (Uochi 2020.). One-third of Mongolians live in rural areas, with households in the eastern, western and Mongolia’s climate and environment are undergoing highlands regions facing particularly severe rapid changes. Average annual temperatures have poverty (World Bank 2020). While the risen by 2.14 degrees Celsius over the past 80 years, pandemic-induced economic downturn had a and heatwaves are becoming more frequent (GoM tangible impact on poverty, poverty did not 2022). Climate-related events have increased 2.9 increase thanks to timely and generous times since 2015 (GoM 2022),2 affecting 8.9 percent government assistance that helped mitigate the of the rural population (World Bank 2020a). There adverse impacts of this shock (Mikhnev et al. 2022).1 have been changes to 90 percent of Mongolia’s (See section 2.2.2 for details.) 1 Simulations of poverty under a counterfactual scenario indicate that poverty would have declined by a further 3.5 percentage points in the absence of the pandemic (World Bank and NSO 2022). 2 Although not specifically defined in the document, “climate related phenomena” likely include dzud, droughts and floods – as per section 5.1 on p58. 1. Background 3 pastureland, with 77.8 percent of the country’s territory Droughts and dzuds are becoming increasingly already degraded to some extent by desertification. frequent in Mongolia, with severe consequences. The The country’s livestock population has doubled in less country experienced high-intensity drought and dzud than a decade (Kimura et al. 2022), exceeding the events in 2000-01, 2009-10, and 2019-20, resulting in carrying capacity of its rangelands by 22.6 percent on a gross domestic product (GDP) reduction of over 6 average (ADB and World Bank 2021). percent. Livestock losses due to drought and dzud have risen by 0.25 percent annually between 1991 Mongolia faces significant climate risks, and and 2011. The frequency of dzud has also increased the intensity of extreme climate-driven hazards, dramatically, occurring once every four years in nine including river flood, is expected to increase. The provinces and every three years in four provinces cost of floods in Mongolia is substantial in both from 1990 to 2020 compared to once every eight to financial and human terms. The average annual loss nine years nationally from 1944 to 1980.3 Projections from floods is US$24 million, with the highest risk indicate a 10-40 percent decline in pasture plant yield, areas being Darkhan-Uul, Selenge, Khuvsgul and a 40-50 percent increase in winter snowfall, and a rise Ulaanbaatar, where the average annual loss is US$2.3- in unreasonable livestock losses due to drought and 3.5 million. Floods also pose a significant human cost, dzud to 9.4 percent by 2050.4 with an estimated 92 annual fatalities nationwide (CAREC 2022). Floods caused enormous damage The increasing frequency of dzuds in Mongolia in 2023, affecting 128,000 persons in Ulaanbaatar poses a significant threat to herders’ livestock. in July; in August, flash floods in Bayanzurkh district Climate change is expected to exacerbate this risk, caused four casualties plus damage to infrastructure exposing the livestock industry, agriculture, and (Reliefweb 2023). pastureland ecosystem to a high level of disaster. Herder households lacking resilience to dzud – that Ulaanbaatar has not only become more vulnerable is, insufficiently prepared for, and/or unable to cope to floods; its growing urban population is also with, and/or recover from, the impacts of dzud – are exacerbating this risk. Of the 34 floods recorded particularly vulnerable to economic hardship. Over from 1915-2013, about 60 percent occurred between a quarter (26.4 percent) of rural residents struggle 2000-2009 (GFDRR 2015). Narrow valleys in the to cope with shocks, and only a small minority east and west of the city are prone to surface water (6.7 percent) receive government support (World flooding, as are some areas of the city center that Bank 2020a). Even without dzuds, droughts have are close to the Selbe River. In other areas, flash negative consequences, affecting hay and crop flooding occurs in areas with declining soil quality, production, reducing water availability, and forcing high evapotranspiration rates, and where extreme herders to travel long distances for water. Extreme rainfall events of short duration occur during summer. winter events further exacerbate the challenges faced A major flood in 1966 caused significant damage, by pastoralists with marginal herd sizes, which may but the population at the time was approximately not sustain a herding livelihood in the long term. 200,000, whereas it is estimated to have increased more than ninefold since then to around 1.9 million people (CAREC 2022). 3 Data from NSO. In addition, dzud is recorded once every eight years in the remaining seven provinces. 4 See Table 16 p59 in GoM (2022). 4 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Dzud will also have a significant social impact on herders, including negative effects on human 1.2 THE ROLE OF ADAPTIVE health. In addition to livestock losses which threaten SOCIAL PROTECTION IN income, food and wealth of herder households, dzud RESPONDING TO COVARIATE can lead to reduced physical and psychological SHOCKS well-being, as well as lower educational attainment. When faced with hardships, herders may resort to Disasters and climate related shocks coping strategies that perpetuate poverty, such as disproportionately affect the poorest and most reducing food consumption, which can increase vulnerable, keeping them in poverty or pushing the the risk of malnutrition and stunting in children. near poor into poverty. The poor have fewer resources Young children and pregnant women are particularly to prepare for disasters or build resilience. They often vulnerable (Groppo and Krähnert 2016). A household lack savings and have limited or no access to finance panel survey conducted in Western Mongolia during or insurance to aid in recovery. Furthermore, they 2012-2014, following the 2009-2010 dzud, revealed often lack information for effective risk management. that dzud-induced shock significantly slowed the When climate-related disasters or other shocks growth trajectory of exposed children from herding strike, the poor face a prolonged and difficult struggle, households and the negative effect remained three especially when immediate support is unavailable. and four years after the shock. There is indicative They frequently resort to negative coping strategies evidence that the provision of emergency aid such as reducing food intake, including for children; mitigates the negative consequences of the shock withdrawing children from school; selling assets; and (Kraehnert and Groppo 2018). borrowing from informal sources at higher rates. These actions erode human capital, deepen poverty Finally, dzud has also contributed to “distress and vulnerability, and undermine social sustainability. migration” from rural areas to cities. While urban In the post-disaster period, it takes significantly longer migration is not inherently problematic, Mongolia’s for the poor to recover, if they recover at all, due to rapid and unplanned urbanization in recent decades lack of resources to rebuild and adapt. This leaves has led to the formation of large, substandard them chronically vulnerable to future shocks and urban settlements (Singh 2017). Many herders may further erosion of human capital. find themselves living in these areas, which often suffer from environmental pollution, inadequate Globally, there is increasing recognition of the infrastructure, and limited services (ADB 2022). crucial role that adaptive social protection (ASP) can play in bolstering resilience and preventing or mitigating the negative impacts of covariate shocks that tend to affect entire communities, regions or even entire nations. Adaptive social protection helps build the resilience of poor and vulnerable households by investing in their capacity to prepare for, cope with, and adapt to shocks. This approach aims to protect their wellbeing and ensure they do not fall into poverty or become trapped in poverty as a result of these impacts (Bowen et al. 2020). ASP leverages social 1. Background 5 protection systems to support poor and vulnerable households in meeting their basic needs in the short term. Simultaneously, it strengthens medium and long-term resilience by reducing negative coping strategies and protecting human capital and livelihoods. Common ASP strategies include expanding social assistance program coverage to reach new households affected by shocks (horizontal expansion) or increasing transfer values and durations for existing beneficiaries (vertical expansion). These approaches, along with other examples outlined in The two objectives of this report are therefore as Annex D, are essential for enhancing the effectiveness follows: of social protection systems in responding to crises. 1. Assess the adaptive capacity of Mongolia’s social protection system to support households/ individuals in response to covariate shocks (such as climate, economic, health). 1.3 PURPOSE OF THIS REPORT 2. Provide analysis and recommendations regarding the extent to which the social protection system Building upon its experience with ASP, the Govern- could enhance the resilience of poor and vulnerable ment of Mongolia supported this assessment to herders before, during, and/or after a dzud. identify gaps and opportunities for improvement. Mongolia’s successful response to the economic consequences of the COVID-19 pandemic demon- It was also agreed by government officials that strates a strong foundation for ASP.5 Recognizing the the focus of the assessment should be on non- increasing frequency and severity of climate shocks contributory measures. The reasons for this decision like floods and dzuds, the government was keen to include: (a) social assistance is the most common assess the adaptability of its social protection system instrument that the government and non-government to these challenges. Additionally, during the inception actors leverage to respond to covariate shocks; phase of this report, the government requested a par- and (b) while understanding the interplay between ticular focus on the potential contribution of ASP to covariate shocks and social insurance and labor building resilience among poor and vulnerable herd- market programs is crucial, a thorough exploration of ers, who are disproportionately affected by dzud-re- these programs warrants a dedicated study, separate lated risks from the current report. 5 Starting in early 2020, a variety of social protection measures were successfully leveraged to protect households in response to the potential socioeconomic impacts of the pandemic. Key measures included vertical expansions of the Child Money Program (CMP), Food Support Program (FSP), the Social Welfare Pension and the disabled childcare benefit; other responses included social insurance relief and a nationwide cash transfer (these and other measures are outlined in further detail in section 2.2). Previous investment in social protection systems strengthening were exploited as the government was able to leverage existing delivery mechanisms and information systems, while also improving efficiency through expanding the use of digital payments for all beneficiaries. 6 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 1.4 CONCEPTUAL AND ANALYTICAL FRAMEWORK FOR THE ASP ASSESSMENT The conceptual framework for this assessment 4. Finance. Long term and sustainable financing is the World Bank’s Social Protection Stress Test commitments in support of investment in Tool (SPSTT). The SPSTT provides a standardized resilience alongside pre-planned or pre-positioned framework to assess the level of adaptiveness and resources that are linked to responsive programs scalability of social protection systems in the context are necessary. of shocks (Bodewig et al. 2021). It is a targeted assessment tool and is meant to be concise and The four building blocks of ASP are interconnected focus on key necessary elements of an ASP system. and complementary. While they may not be entirely It seeks to capture the level of preparedness of the distinct, each contributes to a holistic assessment social protection system to respond to heightened of a national ASP system. Consider, for example, needs. how stakeholders collaborate regarding beneficiary information stored in a shock response program This conceptual framework of ASP rests on the database. This issue could potentially be discussed following four building blocks: under multiple building blocks, such as institutional arrangements, programs and delivery systems, or 1. Institutional arrangements and partnerships. A data and information. However, the primary goal of this high degree of coordination across government report is not to focus on the specific categorization of line agencies involved in building resilience and issues but to provide a comprehensive view of the ASP responding to shocks and crises is necessary, system and identify opportunities for improvement. including disaster risk management actors and non-governmental players. Applying the SPSTT includes a quantitative and qualitative appraisal of these four building blocks of 2. Programs and delivery systems. Social assistance ASP. It involves an assessment of how social protection programs need to be designed or tailored to support programs operate in times of shock, and associated preparedness and coping capacity of households delivery systems, data and information systems, to shocks, based on risk and vulnerability analysis institutional arrangements, and partnerships. The tool and strengthened information systems. is based on a questionnaire which analyzes each of the four building blocks underlying an ASP system. 3. Data and information. Data, information and analyses are required to better understand risk and household vulnerability to shocks and social protection information systems need to be strengthened to be able to identify households most at risk and to be linked to other external and internal information systems such as early warning information systems and post shock assessments. 1. Background 7 1.5 METHODOLOGY 1.6 REPORT STRUCTURE The report is based on analysis of primary and The report is structured as follows in the sections secondary data. Secondary sources are listed below. in the References section. An in-person mission was conducted in Mongolia from April 18-26, • Section 2 reviews Mongolia’s social protection 2023, including a workshop with representatives system, focusing on social assistance, across the from the Ministry of Family, Labor and Social four building blocks of adaptive social protection. Protection (MFLSP) and other governmental and Each building block is briefly introduced, followed non-governmental stakeholders and development by key findings from the analysis. partners, key informant interviews with a range of • Section 3 specifically examines programs and government and non-government actors, and a field systems designed to support poor and vulnerable visit to Erdene Soum of Tuv aimag (province). herders, particularly those affected by dzud and at risk of poverty. • Section 4 presents recommendations for (i) further enhancing the adaptive capacity of Mongolia’s social protection system for responding to covariate shocks, and (ii) leveraging the social protection system to enhance the resilience of poor and vulnerable herders to cope with the anticipated increase in dzud frequency and severity as well as leveraging the complementarity of other non- social protection policies for the benefit of herder’s protection from climate risks. 8 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Photo Baku’s picture 2. Assessment of the adaptability of the social protection system in Mongolia 9 2. ASSESSMENT OF THE ADAPTABILITY OF THE SOCIAL PROTECTION SYSTEM IN MONGOLIA 10 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 2. ASSESSMENT OF THE ADAPTABILITY OF THE SOCIAL PROTECTION SYSTEM IN MONGOLIA This section summarizes the assessment of the adaptability of the social protection system in Mongolia using the SPSTT. It covers the four building blocks of ASP and focuses on social assistance. 2.1 INSTITUTIONAL ARRANGEMENTS AND PARTNERSHIPS The institutional arrangements and partnerships building block examines the actors, structures, and mechanisms involved in leading and coordinating disaster risk reduction and ASP, focusing on both national and local institutions. Key findings • The national and subnational institutional framework for disaster risk reduction (DRR) and disaster management is well-established through relevant legislation. Laws and strategies for disaster risk reduction, along with contingency plans for major or recurrent shocks, are in place. Nevertheless, explicitly including actions for strengthening ASP within the national DRR action plan and local contingency plans would be beneficial. • DRR structures are established at all levels. The Deputy Prime Minister, State Emergency Commission (SEC) and National Emergency Management Agency (NEMA) provide strong leadership, oversight and coordination role within the DRR institutional framework. The Ministry of Family, Labor and Social Protection (MFLSP) participates in the disaster risk reduction and emergency response coordination framework, and NGOs, such as the Mongolian Red Cross, are also actively involved in coordination structures. • The national and subnational institutional framework for social assistance is well-established. Moreover, regular social assistance programs that target various vulnerabilities exist, primarily using categorical targeting. The capacity for timely vertical expansion of social assistance programs or one- off universal cash transfers administered by the central level actors exists, as demonstrated by the government’s response during the COVID-19 pandemic. However, the institutional capacity for horizontal expansion of social assistance programs or introducing poverty vulnerability-targeted programs during shocks is constrained. • The role of social protection programs in supporting household preparedness and the ability to respond to shocks needs to be explicitly recognized in the Social Welfare Law and in the national disaster risk management plans. Furthermore, introducing a comprehensive approach for post-disaster household assessment and providing immediate, short-term and mid-term recovery support, using both local and central budget resources, would be beneficial. • The role of subnational disaster risk reduction and social protection actors, along with their coordination structures, could be further strengthened to effectively plan and implement measures that enhance the resilience of households (and communities) to shocks and ensure timely response for effective recovery. 2. Assessment of the adaptability of the social protection system in Mongolia 11 2.1.1 Government leadership and coordination The design and delivery of social assistance Social workers serve as the primary point of contact programs in Mongolia are led by the Ministry of for citizens seeking social assistance. They play a Family, Labor and Social Protection (MFLSP). The crucial role by providing information and guidance to MFLSP is mandated to propose social assistance potential applicants or beneficiaries, assisting them legislation or related amendments for approval by with the application process (either through the digital Parliament and the Cabinet, adopt regulations to portal or by collecting paper-based applications), implement approved legislation, secure and oversee and supporting the eligibility determination process the social assistance budget and expenditure, and through household welfare assessments and data guide and monitor the implementation of all social entry into the E-Welfare system. assistance programs and services at the central level. The final decision regarding beneficiary eligibility The General Office for Labor and Social Welfare for certain benefits is confirmed by Livelihood (GOLSW), the MFLSP’s delivery arm, is responsible Support Councils (LSC). LSCs are community-based for assessing eligibility and enrolling beneficiaries, councils established at the lowest administrative ensuring benefit payments, coordinating the unit (soum/khoroo) that includes a social worker, implementation of community-based programs, two representatives from public organizations, and tracking and reporting progress of all social two representatives from non-governmental assistance programs and services. GOLSW receives organizations (NGOs) representatives, and two applications for social assistance benefits through citizen representatives.6 These councils play a vital the E-Mongolia and E-welfare portals. It validates role in making enrollment decisions for select social decisions taken at the local level by local labor and assistance benefits and services, as well as resolving social welfare offices (LSWOs) for some social any related grievances. assistance benefits. GOLSW also consolidates the beneficiary payment list, makes benefit payments The national framework for coordination of through the Treasury Single Account system, disaster protection has been built at the national, maintains the household information databases and sectoral, regional, and local levels as outlined in beneficiary databases, and coordinates and monitors the Law on Disaster Protection. Disaster protection the delivery of social assistance services. Eligibility encompasses a comprehensive set of activities, determination upon receipt of applications, and including disaster risk assessment, disaster risk enrollment in benefits and programs are implemented reduction, emergency response, humanitarian aid, by local agencies operating in each aimag (province) and immediate rehabilitation measures. At the and district (sub-division in the capital city) as well national level, key structures include: National Council as by social workers (as social welfare officers) and on Disaster Risk Reduction (NCDRR), chaired by the Livelihood Support Council (LSC) operating at soum Prime Minister; Deputy Prime Minister in charge of (aimag sub-division) and khoroo (sub-division under the disaster protection portfolio; State Emergency district) levels under the local agencies. Commission (SEC), chaired by the Deputy Prime 6 As per Social Welfare Law, LSCs are established at the lowest administrative unit (soum and khoroo) and serve as a community-based mechanism for making enrollment decisions for select social assistance benefits and services and resolving the related grievances. Such a council could be established in large baghs and would be in addition to the soum/khoroo-level councils. 12 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Minister; National Emergency Management Agency taken by individual ministries or agencies depending (NEMA); and State Disaster Protection Service (non- on the nature and impact of the disaster. In addition staff) established by Deputy Prime Minister Decree in to strategic reserves (material reserves like fuel, hay respective ministries or agencies (including MFLSP and fodder etc.) annually maintained by the NEMA for and MOFALI). These comprehensive institutional responding to disasters and other contingencies, as mechanisms provide a sound platform for integrating per the Law on State Reserves, the SEC can secure and coordination of ASP response at the highest additional budget from the Government Reserve Fund levels. The Parliament and the Cabinet approve by submitting a proposal for Cabinet approval. This disaster protection legislations and regulations and practice is frequently used during dzud risks, where allocate annual budgets. A chart of the national the SEC mobilizes additional resources based on disaster protection institutional framework is provided risk assessments and resource needs requested by in Annex B. local emergency commissions. For instance, the SEC distributes hay and fodder to the required province’s The NCDRR has several key mandates. These emergency commission. include providing policy recommendations, such as ensuring the inclusion of strategic objectives and The disaster protection institutional set-up and required funding resources in government policy and mandates at the subregional (aimag/capital city) planning documents. The NCDRR also plays a vital and local (soum/district) level largely mirror those role in mobilizing public and private partnerships at the national level. In each aimag and the capital and encouraging citizen participation in disaster city, a Local Council on Disaster Risk Reduction is risk reduction measures. Furthermore, the NCDRR established, chaired by the Speaker of the Local provides guidance to regional Councils on Disaster Assembly. Similarly, a Local Emergency Commission Risk Reduction. is established at the aimag/district and soum levels, chaired by the respective governor, with compositions The SEC plays a crucial role in managing and and functions similar to their national counterparts responding to disasters that exceed the capacity (especially at the aimag/district level). of local authorities. The SEC is established by a Cabinet decision and is activated when the impacts Local governments play a crucial role in disaster of a disaster exceed the capacity of local coordination risk reduction by integrating disaster risk reduction and resources. The SEC is responsible for promptly priorities into their annual plans and budgets. The mobilizing human and material resources in line annual priorities determined by the local Disaster with applicable legislations, providing integrated Risk Reduction Council are integrated into the annual leadership, coordination and monitoring of plans of respective agencies and funded through disaster protection, rescue and recovery activities. the budget of the respective level. The Disaster It implements decisions and duties specifically Protection Law mandates that subnational and local assigned by the government, establishes and budgets include provisions for financing disaster risk leads the operation of the ‘national emergency reduction measures. A contingency or local emergency headquarters’ when necessary, and approves fund is maintained to respond to localized shocks, guidelines and by-laws or implementing disaster such as dzud. However, these resources may be protection measures throughout the country. The insufficient to address large-scale local emergencies. SEC comprises management level representatives When the scale of an emergency surpasses the from all relevant ministries and agencies, including capacity of local funds and extends beyond a single representatives from the MFLSP and MOFALI. SEC administrative territory, the emergency response is meeting decisions mandate specific actions to be escalated to the SEC. 2. Assessment of the adaptability of the social protection system in Mongolia 13 NEMA plays a pivotal role in the national institutional coordinating humanitarian activities undertaken set-up and for ensuring the implementation, by non-governmental organizations, governmental coordination and monitoring of disaster protection organizations, the private sector, community groups, policies and contingency plans. It functions as a and international organizations.8 (For details on key implementing agency under the Deputy Prome NEMA’s organizational structure, see Annex C). Minister’s portfolio, as a secretariat of the national level structures such as NCDRR and SEC. NEMA Given the existence of a comprehensive set of also monitors implementation progress of national institutional structures at all levels that involve plans and coordinates emergency assistance and social protection actors, the integration of ASP humanitarian aid provided by partners and non- strategies into disaster preparedness and post- governmental stakeholders. disaster recovery plans for localized shocks, particularly in rural areas, requires further NEMA maintains a strong presence at the strengthening. While the role of local disaster subnational and local levels through a network protection coordination mechanisms has become of branch offices and specialized units, enabling more prominent in emergencies affecting rural effective coordination and support for disaster risk populations, especially the recurring and slow- reduction and emergency response efforts. NEMA onset disaster of dzud, challenges persist in maintains Branch Departments or Divisions in each effectively deploying social protection strategies for aimag, city, district, and soum as well as Fire and preparedness and post-disaster recovery support Rescue Unit and State Reserve Branch Unit in each within dzud-affected communities. Despite increased aimag, district and soum. NEMA branch units play attention being paid to vulnerable household a crucial role within critical subnational and local members during immediate emergency responses, level mechanisms, providing essential coordination post-disaster recovery for household income and and support in disaster risk reduction (DRR) and businesses remains a challenge. emergency response actions at the local level. Addressing the challenges of effectively integrating When a disaster occurs, NEMA administers social protection into disaster response requires a and coordinates the provision of assistance, multi-pronged approach. This includes recognizing humanitarian aid provided by other agencies, to the complementary role of social protection responses affected communities and people. NEMA carries within national and local DRR plans, recognizing and out a wide range of disaster management activities, reflecting the role of ASP within the national social including evaluating disaster risk and vulnerability, protection legal framework, defining the institutional implementing activities to prevent disasters, roles and responsibilities of leading and coordinating reduce their impact, and prepare communities agencies, introducing standardized tools and systems for emergencies, organizing search and rescue for household assessments during the post-disaster operations, responding to disasters by restoring recovery stage, and improving the existing disaster critical infrastructure and facilitating rehabilitation risk financing system. On the other hand, it is to be efforts, and strengthening the capacity of national noted that the coordination between the national and disaster protection agencies.7 EMA has a presence local disaster response mechanisms, as evidenced by throughout Mongolia with emergency management floods in Ulaanbaatar in 2023 (Box 1) has manifested divisions in districts and departments in aimags, effective collaboration between various institutional covering all 21 aimags and the capital city. It also actors for emergency response. plays a crucial role in international cooperation, 7 https://un-spider.org/mongolia-national-emergency-management-agency-nema. 8 Ibid. 14 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Box 1. Collaboration between national and subnational actors in responding to the 2023 floods The respective leadership, coordination and implementation roles of both national and subnational actors in Mongolia’s emergency response system was demonstrated during the significant flooding that affected Mongolia in July and August 2023. The coordination of response efforts in July was initially led by national-level authorities, with the implementation of responses delegated to both national and subnational actors. The SEC coordinated the response, while the NEMA collaborated closely with governmental organizations and military units. In Ulaanbaatar, both national and subnational Emergency Commissions undertook response measures, prioritizing harm reduction and the rescue of people and their assets. These efforts included strengthening dams in flooded areas and rescuing individuals and vehicles trapped in floodwaters. In August 2023, a Cabinet meeting formally assigned the SEC and relevant ministries to provide services and assistance to those affected by the second round of floods. Both the MFLSP and NEMA conducted situation analyses, with MFLSP focusing specifically on affected households and individuals. The response effort involved coordinated action by the SEC, the Emergency Commission for Ulaanbaatar City, and the Bayanzurkh District Emergency Commission. Immediate actions focused on saving lives and protecting assets, including rescuing people and their property (gers, houses, cars, etc.). NEMA and military units led rescue and recovery efforts, while the Bayanzurkh District Emergency Commission provided shelter to those who had lost or suffered damage to their homes. The MFLSP provided crucial support to affected individuals, including cash assistance for those who lost their employment or businesses, food and clothing for those residing in temporary shelters, and psychological support (counseling) to those impacted by the floods. The MFLSP also provided school bags and uniforms to affected children. The governor of the capital city assumed responsibility for reconstruction efforts. All participating actors were required to report their activities to the government, including the SEC. A key challenge facing subnational actors in emergency response has been the availability of adequate funding. Subnational authorities often face limitations in terms of both human and financial resources when significant disasters occur, necessitating them to seek funding support from the national level. In the case of the August floods, the government addressed this challenge by reallocating budget funds and providing resources to the Governor of the Capital City. These funds were specifically allocated for infrastructure reconstruction and supporting affected kindergartens, schools, and health centers. Source: Interviews by authors with MFLSP officials. Non-governmental actors, particularly the The MRC’s significance is further emphasized by its Mongolian Red Cross (MRC), play a vital role in membership in the State Emergency Commission Mongolia’s national humanitarian response sector. (SEC), providing it with a direct role in national-level In 2016, the Law on Legal Status of the Mongolian disaster response coordination. With a vast network Red Cross was amended, changing the MRC’s status of over 800 primary level branches operating across from a “national society” to a “national humanitarian the country, the MRC has a strong community assistance organization.” This change solidified presence and can effectively reach vulnerable the MRC’s position as Mongolia’s sole nationwide populations (IFRC and MRC 2020). An overview of the humanitarian organization, mandated to act as an humanitarian activities implemented by the MRC can auxiliary force to the government’s disaster protection be found in section 2.2.3. and humanitarian aid efforts (IFRC and MRC 2020). 2. Assessment of the adaptability of the social protection system in Mongolia 15 2.1.2 Laws and strategies Mongolia’s Mid-term Strategy for Disaster Risk Reduction (2017-2030) prioritizes public awareness, effective governance, increased investment, and Mongolia has a comprehensive legal framework improved preparedness and recovery capabilities, for disaster risk reduction and management, with the DRR Action Plan, a four-to five-year encompassing a range of laws and strategies. implementation roadmap, being approved and Mongolia’s legislative frameworks for disaster risk executed by local and national authorities. The management include the Law of Disaster Protection government’s disaster risk reduction strategy (revised in 2017), the Insurance Law (2004), the “The Mid-term Strategy for implementing Sendai Index-Based Livestock Insurance Law (2009), the Framework for Disaster Risk Reduction in Mongolia Fire Safety Law (revised in 2015), the State Reserve (2017-2030),” approved by the Cabinet in 2017, Law (2007), the Mid-term Strategy to Implement the identifies four key priorities for DRR: building a public Sendai Framework for DRR in Mongolia for 2017- awareness about DRR, enhancing DRR governance, 2030 (2017), the Action Plan for Implementing Sendai increasing investment for DRR, and improving disaster Framework for DRR 2021-2025 (2021), the National preparedness and recovery capability. The DRR Action Program on Community Participation in Disaster Risk Plan, covering a four- to five-year period, is approved Reduction (2015), and other related regulations and by the Deputy Prime Minister and implemented by guidelines approved by the Cabinet or Deputy Prime local governors and relevant state organizations and Minister, or the NEMA Director. agencies. The Disaster Protection Law (revised in 2017) serves Although the 2021-2025 DRR Action9 plan outlines as the overarching legal framework, establishing crucial measures, such as disaster risk mapping institutional coordination and administrative struc- and insurance systems, it lacks specific provisions tures at national, sectoral and local levels. It outlines to strengthen the social protection sector’s the mandates and powers of these entities, defines adaptability in protecting vulnerable households. necessary measures for pre-disaster, during-disas- The plan includes important measures such as ter, and post-disaster phases, identifies the roles of developing disaster risk mapping, a unified disaster governmental and non-governmental entities, defines information system, disaster warning and emergency NEMA’s legal status, and specifies funding sources management standards, and disaster insurance for disaster protection activities. The Law mandates systems. However, it lacks specific actions to enhance that state organizations and private entities allocate the social protection sector’s ability to support the at least 1 percent and 1.5 percent of their annual bud- most vulnerable households (aside from measures get or production and service costs, respectively, for for developing standards for child protection during disaster risk reduction measures. It also stipulates emergencies). This omission is understandable, that centralized disaster protection measures will be given that adapting the social protection system for financed by the state budget, while local measures effective shock response is a relatively new concept. will be financed by local budgets. The plan does, however, include several measures for DRR in the agriculture sector. Going forward, the next phase of the Action Plan could include actions to strengthen the role and mechanisms of social protection responses before, during and after disasters. 9 Approved by Decree No.51 of the Deputy Prime Minister of Mongolia in 2021. 16 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia The National Disaster Protection Plan covers twelve Mongolia also has a social assistance framework major disaster risks. This national contingency plan that includes temporary legislations designed to was approved by the Cabinet in 201510 and addresses address significant shocks. S everal laws govern twelve key disaster risks: earthquakes, pandemics, this framework11 in Mongolia, with social assistance droughts, dzuds, snow and dust storms, floods, benefits primarily targeting categorical groups such animal zoonotic diseases, forest and steppe fires, as children, mothers, the elderly, single parents, building fires, the release of chemical or radioactive children, people with disabilities, and honored substances, industrial and road accidents, and citizens. While current Social Welfare Law does not food insecurity. Contingency plans have also been provide legal provisions for ASP, the ASP approach developed at all levels: national, aimag, and district. was successfully implemented during the COVID-19 These plans are based on disaster risk assessments pandemic. This involved vertical expansion of existing conducted between 2018 and 2020. Each State social assistance programs. Disaster Protection Service has its own contingency plan (NEMA 2022). A more detailed contingency plan The social protection measures undertaken specifically addresses dzud. This plan is developed at to mitigate the impact of the COVID-19 national, subnational, and local levels by NEMA and pandemic were enacted by adopting dedicated its branches, utilizing early-warning data from the legislations and issuing government resolutions. National Agency for Meteorology and Environmental Parliament passed the Law on Preventing and Monitoring (NAMEM) and comprehensive dzud Combating the COVID-19 Pandemic and Mitigating risk assessments. These plans are approved by the its Negative Impact on Society and the Economy national SEC or subnational Emergency Committees. in April 2020, granting the government the All contingency plans, whether at the national or authority to implement necessary responses and local level, encompass three phases: preparedness, allocate additional fiscal resources or mobilize response, and recovery. Dzud contingency plans are external funding. In May 2020, the regularly updated during implementation to adapt Government Resolution on Measures for Supporting to changing circumstances. They often include Intensifying Economy and Supporting Livelihood of measures to ensure access to health services for Citizens during the COVID-19 Pandemic was vulnerable populations, such as the elderly, pregnant approved. This resolution increased the benefit size women, and children, in affected areas, as well as of the Child Money Program (CMP) and other child protection interventions. social assistance programs (vertical expansion). The Parliament also passed legislation allowing for temporary relief from monthly social insurance contributions for both employers and employees. Furthermore, in April 2021, the Government issued a resolution providing a one-time cash transfer of MNT 300,000 to each Mongolian citizen to support household income during a strict lockdown period and encourage vaccination uptake. The annual budgets were amended as needed to finance these measures. 10 The Contingency Plan was followed during the Covid-19 pandemic. Six laws define the social assistance regulatory framework in Mongolia: Social Welfare Law (2012); Law on the Elderly (2017); Law on the Rights of 11 People with Disabilities (2016); Law on Providing Benefits and Discounts to the Honored Elderly (2017); Law on Rewarding Honored Mothers (2010); Law on Providing Benefits to Mothers, Fathers and Single Parents with Multiple Children (2017). 2. Assessment of the adaptability of the social protection system in Mongolia 17 To effectively respond to shocks, future amendments to the Social Welfare Law should comprehensively incorporate ASP strategies, including the ability to respond to shocks via horizontal expansion of existing social assistance programs. This approach aligns with international best practices in disaster risk management and social protection, which acknowledge the critical role of social safety nets in mitigating the impact of crises. While the current draft amendments to the Social Welfare Law (SWL) primarily focus on increasing assistance amounts for existing beneficiaries (vertical expansion), it is crucial to also consider expanding program coverage to include a wider range of vulnerable households This will help manage public expectations and ensure (horizontal expansion) when necessary. To facilitate the long-term sustainability of social assistance horizontal expansion, strengthening the household- programs. To enhance the effectiveness of local-level based comprehensive information system so that it crisis response, future amendments to the SWL could functions as a social registry is crucial. Such a system clearly define the roles and responsibilities of local would enable the effective identification and targeting assemblies and governors in implementing locally of assistance to the most vulnerable during crises. appropriate and targeted support to assist affected households during and after crises. To ensure effective and sustainable social assistance, the law could specify the need for Furthermore, the important complimentary role regular refinement of vulnerability assessments, of social assistance interventions could be clearly define social protection roles for local systematically reflected in disaster contingency authorities in crisis response and include provisions plans. Mongolia has established detailed contingency for scaling back temporary assistance programs plans, and there is existing experience in implementing when appropriate. The methodology for assessing social assistance and protection interventions during household vulnerability would benefit from regular and after disasters. Leveraging existing social updates incorporating new administrative data to assistance programs funded through the central further refine the targeting of assistance. A more budget, or implementing additional interventions with detailed assessment of the social assistance possible local funding or humanitarian assistance information system can be found in section 2.3. from coordinated actors, can effectively minimize the Furthermore, the law could include provisions for negative impacts of crises and shocks on household scaling back temporary expansions of assistance welfare and human capital accumulation during pre-, programs once the impact of the shock has subsided. during-, and post-disaster periods. 18 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 2.2 PROGRAMS AND DELIVERY SYSTEMS This section assesses the adaptability of existing programs, documents the government’s response to COVID-19 and other emergencies, and discusses social assistance delivery systems. The programs and delivery systems building block focuses on the design and delivery of social assistance interventions that offer timely support to shock-affected populations and promote adaptive and resilient live- lihoods before a shock. It also analyzes the underlying delivery systems, including outreach and communica- tion strategies to disseminate crucial program information to target populations, efficient payment systems to deliver cash transfers, and grievance redress mechanisms (GRM) to address complaints and enhance pro- gram delivery and effectiveness. Key findings • The MFLSP effectively utilized various social assistance programs to safeguard household incomes during the COVID-19 pandemic, and many initiatives have continued beyond the pandemic’s peak. • The extensive coverage of social assistance programs provides a solid foundation for shock response. However, a critical challenge remains in identifying vulnerable households in existing databases. • Despite high coverage of social assistance programs and recent increases in certain transfer levels, the social assistance system needs strengthening for supporting household resilience to shock. • Mongolia’s citizen identification system and payment mechanisms are well-developed and provide a strong foundation for ASP. • Outreach and communication systems require strengthening for both regular and adaptive social protection. Existing communication mechanisms could be leveraged during shocks to inform target beneficiaries in a more systematic manner and with tailored approaches. Mongolia has an extensive history in the design for about 74 percent and 9 percent of SA spending in and implementation of routine social assistance 2022, respectively. Other significant programs include programs. The provision of social assistance the Food Support Program (FSP), childcare benefit, comprises numerous social assistance programs with benefit for honored mothers, age honor allowance, different rules and eligibility criteria, providing more caregiver allowances for the elderly and disabled, than 40 different kinds of benefits,12 including cash and fee-waivers or concessions for sanatorial care transfers, food support, fee-waivers and concessions, and prostheses. Except for the FSP13, all other social as well as community-based services (World Bank assistance programs financed under the Social 2021b). However, spending is concentrated on two Welfare Fund are categorically targeted. Until recently, large programs: the Child Money Program (CMP) eligibility assessment for the FSP (the only poverty- and the Social Welfare Pension (SWP), accounting targeted program) was based on a PMT that is used A program may encompass various benefits with differing beneficiary groups, transfer amounts, and frequencies, with a dozen programs constituting 12 over three-quarters of total spending (World Bank 2020a). 13 Two additional poverty-targeted programs, financed directly from the national budget rather than the Social Welfare Fund, include: (i) monthly health insurance contributions to the Health Insurance Fund for each adult member of poor households, and (ii) free legal services for adult members of poor households. 2. Assessment of the adaptability of the social protection system in Mongolia 19 household survey data is entered into the Household Social assistance programs with a specific focus Information Database. Eligibility re-assessment for on climate-related or man-made risks are limited the FSP on an on-demand basis has been a regular in scope. While Mongolia provides emergency feature of the program, but on-demand enrolment assistance allowances for certain vulnerable groups, has been somewhat limited due to funding and these primarily target households that have lost other considerations. The PMT methodology was their homes due to natural disasters or accidents, revised in 2022 by using both administrative data neglecting other significant risks. NEMA plays an and household survey data, and its application has important role in assessing eligibility for these started only recently. allowances. While there are instances of ad-hoc, one- time cash or material support provided at the local Limited emergency assistance and livelihood level, these are often limited in scale and financed support programs are available to assist households through local budgets. Furthermore, the current affected by unforeseen shocks. The MFLSP can legal framework lacks clear provisions for allocating provide one-time monetary support to households resources at the local level to support households that have lost their dwelling (ger)14 or primary source affected by localized disasters or climate events. of livelihood due to a disaster.15 This program is funded by local budgets and implemented in collaboration 2.2.2 Government social protection with the NEMA, which determines eligibility for the response to COVID-19 shocks and one-time benefit. subsequent high inflation 2.2.1 Analysis of social assistance Mongolia’s existing social protection programs proved programs with regard to ASP valuable in mitigating the impact of the COVID-19 pandemic. The government effectively leveraged these The high coverage of poor households by Mongolia’s programs, introducing a range of measures, including social assistance programs is one of its main vertical expansions of the Child Money Program (CMP), strengths in terms of their potential to respond Food Support Program (FSP), and other cash benefits. to shocks. Nearly the entire population within the In April 2020, the monthly CMP pay was temporarily bottom quintile of the welfare distribution receives at increased from MNT 20,000 per child (USD 7) to MNT least one social assistance benefit either directly or 100,000 per child (USD 35) for all children under 18 indirectly (99.3 percent).16 The CMP has high coverage years. This increased level was subsequently extended among poor households, particularly due to the high throughout 2021 and 2022 due to high inflation and prevalence of poverty among families with children. remains in effect. While there were initial plans to The FSP covers the poorest populations, although its target only the bottom 91 percent of children starting in coverage remains limited (less than 5 percent of the January 2023, this decision was reversed in July 2023, population). This limited coverage restricts its overall with the top 9 percent of children receiving retroactive impact in responding to shocks, despite it being the payments. An analysis by the Asian Development Bank most progressive program. The existing database (ADB) found that the CMP increase alone would have of FSP beneficiaries provides a foundation for swift been sufficient to offset the poverty-inducing effects responses to crises, albeit with limitations due to its of the pandemic and potentially reduce overall poverty relatively narrow coverage. levels compared to pre-pandemic levels (see Figure 1). 14 Ger refers to a traditional Mongolian dwelling. 15 The current value of this one-time benefit is MNT 1,200,000 (approximately US$ 250). 16 Based on 2022 Household Socio-Economic Survey data. Indirect beneficiaries are individuals who benefit from social assistance because of living in a household with a direct benefit recipient. 20 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia In the case of the FSP , the value of the monthly provided social insurance contribution relief for eligible voucher was doubled to MNT 32,000 per adult and participants in both the mandatory and voluntary MNT 16,000 per child from May 2020 to October 2020 schemes. A one-off cash transfer of MNT 300,000 per in response to the COVID-19 pandemic. However, this person was paid to all citizens of Mongolia during the increased support was not sustained. From November strict lockdown of April 2021. A vaccination bonus of 2020 to December 2020, the increased voucher value MNT 50,000 was provided to each person who received was maintained only for adults (UNICEF 2021). From the first and second COVID-19 vaccines. Other COVID-19 January 1st, 2021, the increased benefit for adults was response measures for protecting household income also scaled back to the pre-COVID-19 levels. included the following: cashmere subsidy; deferral of mortgage loan repayments; individual income tax relief; Figure 1. Percentage of poor under different and MNT 200,000 per month per eligible employee scenarios, April-September 2020 allowance for three months from the Unemployment Insurance Fund (UNICEF 2021). 36.7 The impacts of the government’s COVID-19 30.5 28.4 measures have not yet been comprehensively 24.7 evaluated, but the CMP benefit increase helped 17.6 mitigate the impact of the income shock for the poor. The COVID-19 Household Response Phone Survey, implemented by the National Statistics Office (NSO) with support from the World Bank and ADB, found that CMP benefits helped mitigate the adverse effects Baseline Pandemic effect With SSC/PIT waivers only With CMP top-up only With all measures of income shocks. Poor households primarily used the transfers to purchase food. Over 70 percent of respondents agreed that the government’s measures Source: Carraro and Tserennadmid 2020. reached the poorest people (World Bank 2021a). The Note: SSC = social security contributions; PIT = personal income tax. increase of other social assistance benefits targeting pensionless elderly and people with disabilities is likely The government also increased the value of social to have benefited households without children as well. welfare pensions and the disabled childcare benefit Overall, the measures likely help mitigate adverse in response to COVID-19. Beneficiaries of social effects on children’s human capital development welfare pensions (persons with disabilities without caused by the economic downturn and lockdowns social insurance pension, senior citizens who are not caused by the COVID-19 pandemic. However, without entitled to pension benefits from social insurance a comprehensive social registry, there could still be fund, orphaned or half-orphaned children who lost gaps in coverage of social assistance support for the breadwinner and single parents with more than four poor. This further highlights the need for a more up- children aged below 18 years) and the providers to-date social registry. of care for a disabled child received an additional MNT 100,000, resulting in a monthly allowance of In 2021, the Ministry of Food, Agriculture, and Light MNT 288,000. Initially the increase was meant to be Industry (MOFALI) implemented a one-time cash temporary, but these benefits were further increased transfer to all herder households to address the in subsequent years in response to rising inflation. immediate needs arising from a confluence of shocks, including harsh winter conditions, prolonged spring, The government also deployed one-off nationwide severe sand and snowstorms, and the economic cash transfer payments during strict lockdowns and impacts of the COVID-19 pandemic, particularly the initiatives to incentivize the take-up of COVID-19 decline in agricultural product prices. This one-time vaccines, among other measures. The government cash relief of MNT 100,000 was disbursed in May 2. Assessment of the adaptability of the social protection system in Mongolia 21 2021 to approximately 180,000 herder households17 The EPF, a government special fund regulated by through the Livestock Commercialization Project, the Employment Promotion Law, annually allocates financed by the World Bank.18 This intervention budgets for a number of employment promotion utilized the project’s Contingent Emergency Response programs approved by the National Employment Component (CERC), amounting to approximately Council, while the budget planning is originated from USD 6.4 million. The identification of eligible herder local employment offices. households was facilitated by the Livestock Census Database maintained by the NSO, which includes The COVID-19 response highlights the strengths of data on herder households, including bank account the payments system in Mongolia which provides a details. However, approximately 15 percent of the strong foundation for ASP. As discussed in detail in initial transfers were unsuccessful due to outdated the delivery systems subsection, Mongolia’s payment bank account information, requiring ad-hoc measures mechanisms for social assistance are relatively to rectify the issue. mature and provide a strong foundation for ASP. All social assistance benefits are now paid to individual The government continued to address the needs bank accounts, and the FSP paper-based voucher of Mongolian households even after the peak has been replaced by a bank card/digital payment. of the COVID-19 pandemic. In 2022, recognizing This, combined with robust citizen identification the impact of rising prices driven by factors such and banking systems, enabled a rapid expansion of as the closed border with China (and subsequent benefits during the pandemic. reopening challenges) and the war in Ukraine, the government implemented measures to support household incomes. One key measure involved 2.2.3 Emergency (humanitarian) returning 50 percent of social insurance contributions assistance to workers with monthly salaries/incomes of MNT 1 million or less during the period of May to December The government of Mongolia provides emergency 2022. Furthermore, in 2023, the government further (humanitarian) social assistance, but the scope increased the Social Welfare Pension and caregiver and funding of established programs are limited. benefits to mitigate the impact of soaring inflation on Under the Social Welfare Law, emergency support is vulnerable populations. restricted to a one-time cash payment19 for households that have lost their homes or dwellings due to natural The government also offers a low-interest microloan disasters or other unforeseen events. Following program to aid post-shock recovery efforts financed a disaster, the local branch of NEMA conducts a by the Employment Promotion Fund (EPF). This household loss assessment, particularly in cases of program (leveraged in 2024 for dzud-affected herders) fire, flood, and storms. This assessment determines provides loans ranging up to MNT 10 million for those the extent of damage, including loss of dwelling or who are self-employed; up to MNT 25 million for livestock, and establishes eligibility for the one-time citizens establishing partnerships and cooperatives emergency support. Based on NEMA’s assessment or returning from abroad (having previously worked and the household’s application, the aimag and abroad); and up to MNT 50 million for micro-industry district social welfare departments then provide and service providers. This microloan program, the emergency assistance. NEMA also implements administered by the MFLSP/GOLWS, has also been and coordinates disaster response humanitarian instrumental in supporting microenterprises’ recovery initiatives. The initiatives that are focused on herder from the COVID-19 pandemic’s economic impacts. households are outlined in section 3.1. 17 Households that derive their primary livelihood from herding livestock throughout the year were eligible for this cash transfer. 18 This project aims to improve livestock health, productivity, and commercialization of targeted value chains in project locations. 19 The amount of this one-time cash support was MNT 1.2 million in 2023. 22 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Recent responses to localized shocks, such as a consistent approach. This information highlights floods and fires, demonstrate a growing emphasis the crucial role of the MRC as a non-governmental on temporary cash assistance as a key component actor complementing the government’s efforts in of shock response measures. For instance, following addressing humanitarian needs in Mongolia. severe flooding in parts of Ulaanbaatar in July and August 2023, the MFLSP and the District Governor’s Office provided a range of support, including cash 2.2.4 Delivery systems assistance to those who lost their employment or businesses, food and clothing for individuals residing Mongolia has significantly digitized its social in temporary shelters, counseling services for assistance programs, with 80 percent of existing affected individuals, and school bags and uniforms benefits now accessible through the E-welfare for affected children (see Box 1). These measures portal, managed by MFLSP under the GOLWS. This were complemented by humanitarian aid provided online platform facilitates digital applications for by other organizations. Similarly, in response to a most cash benefits, tracks application processing and devastating fire that impacted an entire apartment enrollment, coordinates benefit payments through building in Ulaanbaatar during 2023, the Ulaanbaatar the Treasury Single Account (TSA) of the Ministry of Governor’s Office provided cash assistance to all Finance (MOF) and provides real-time information affected households to assist with temporary housing on payments made to individual beneficiaries. The arrangements. digital application process minimizes the burden on applicants by automatically retrieving available Beyond government efforts, the Mongolian Red information from the E-Mongolia system. However, Cross (MRC) plays a significant role in humanitarian applicants are still required to upload supporting response. As a legally recognized national documents or receipts for certain claims. Social humanitarian aid provider, the MRC collaborates with workers play a crucial role in assisting applicants NEMA on disaster response at both national and sub- with limited digital literacy to navigate the online national levels. Their disaster management program application process. focuses on building capacity for disaster prevention, preparedness, and recovery to safeguard lives and The E-Mongolia system has played a pivotal role in livelihoods. The MRC has a proven track record of modernizing Mongolia’s social protection system. responding to various disasters, including fires, floods, Launched in October 2020, E-Mongolia currently and dzud events (harsh winters with extreme cold and integrates 87 government entities and offers 1,258 little snow) in 2017, 2018, 2020, 2023 (IFRC and MRC government services20, ranging from requesting 2020; ECHO 2023) and 2024. Their operations were an ID card to applying for a business license (as of supported by international organizations such as the November 2024). Beyond streamlining government International Rescue Committee (IRC), International services, E-Mongolia has significantly improved the Federation of Red Cross and Red Crescent Societies efficiency of social assistance programs. For instance, (IFRC), USAID, UNICEF, and Swiss Development registering newborns for child benefits now requires Cooperation (SDC), along with other donors. The only the caregiver’s banking information, as the MRC implements pre-disaster and post-disaster system automatically retrieves necessary data from support programs specifically for herder households, linked databases. Currently, nearly half of all digitized aiming to mitigate the impact of dzud on the most social assistance benefits can be applied for through vulnerable populations. To identify these vulnerable the E-Mongolia portal. E-Mongolia also facilitates the households across different aimags and soums, the application process for other social services, such MRC utilizes standardized assessment tools and as voluntary social insurance and health insurance. 20 https://ema.gov.mn/wp-content/uploads/2024/11/E-Mongolia-academy-introduction-20241118.pdf 2. Assessment of the adaptability of the social protection system in Mongolia 23 Furthermore, the platform enables digital applications, LSC members, soum/khoroo governors, kheseg lead- contract renewals, and social insurance contribution ers, and aimag/district social welfare organizations. payments, while also allowing users to track their In addition to face-to-face outreach, these entities contribution records. The ultimate goal of E-Mongolia utilize various communication channels. The GOLWS is to digitize all public services, creating a unified and aimag/district social welfare organizations post digital platform for citizens to access government service information, and accredited provider details services conveniently and efficiently. on their websites and public notice boards. While the GOLWS designs and distributes nationwide materials, Mongolia boasts a well-developed social assistance shortages often arise after public events. They also payment system, providing a strong foundation rely on TV and social media, but media coverage is for expanding shock-responsive social protection typically limited to new or revised services and pro- coverage. Applicants for social assistance benefits grams (World Bank 2020a). The E-welfare portal pro- are required to provide their bank account details. vides information on types of documents required The E-welfare system, connected to the TSA and for each type of benefit and specifies the documents the Central Repository of Bank Accounts housed to be provided by applicants (while not requiring the in the Bank of Mongolia, facilitates efficient and documents available in the government registry sys- direct benefit disbursement. All social assistance tems), which has made it easier for applicants to benefits are transferred directly to beneficiaries’ navigate the application processes. Nevertheless, bank accounts via the TSA, bypassing commercial social assistance communication needs to be im- bank transactions and eliminating associated fees. proved pre- and during shocks. The evaluation of the Unmatched payments are promptly retrieved, verified, UNICEF’s shock responsive social protection (SRSP) and corrected. Leveraging a robust banking system pilot implemented in 2019-2020, which utilized gov- and well-developed infrastructure, the payment ernment systems, revealed limited formal communi- system has demonstrated its capacity to handle cation between households and local welfare service surges in transactions, as evidenced by its successful officials or social workers responsible for delivering performance during the COVID-19 pandemic. and overseeing the pilot initiative. Furthermore, recent reforms have significantly enhanced the payment system. All social assistance The current grievance redress mechanisms (GRM) benefits are now disbursed directly to individual bank for social assistance offer multiple channels for accounts, and the Food Support Program (FSP) has lodging complaints, but integrating GRM into the transitioned from paper-based vouchers to bank cards MFLSP e-welfare system could leverage the benefits and digital payments. To ensure continued efficiency of digitalization. The existing law allows citizens to and responsiveness, maintaining accurate and up- submit petitions or complaints via various channels, to-date bank account information for beneficiaries such as written submissions, verbal communications, remains crucial. email, or official national or MFLSP hotlines. In practice, citizens often contact social workers directly. Mongolia’s social assistance outreach and commu- However, complaints requiring higher-level decisions nication systems require further strengthening to en- must be documented in writing. Additionally, sure that vulnerable populations are not inadvertently complaints should be resolved within 30 days, with excluded from assistance during shocks, particularly possible extensions. Despite being a self-registration when self-registration or application is required. Pri- and application portal, the MFLSP e-welfare system mary sources of social assistance information and lacks a GRM module. Digitalization could streamline communication include soum/khoroo social workers, processes and enhance efficiency, particularly during crises.21 GRMs often experience higher pressures and caseloads in times of shock. At the time the CMP was being re-designed in 2023, over 200,000 written 21 complaints were made to authorities in the first quarter of 2023 alone. 24 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 2.3 DATA AND INFORMATION MANAGEMENT SYSTEMS The data and information management systems building block focuses on the data requirements for an effective ASP system. The analysis focuses on the availability of household vulnerability information in registries or databases for rapid identification of shock-affected households and subsequent support, and the presence of early warning systems. Key findings • Mongolia’s existing databases and information management systems collectively provide a robust foundation for strengthening ASP. Key strengths include a solid identification frame- work, extensive coverage, and increasing interoperability. • However, challenges remain, such as limited database linkages, nascent state of real-time information on the livestock of herders, and technical constraints associated with en masse data updating through the government’s data exchange platform. • In early 2023, the government established an administrative-data-based Integrated House- hold Administrative Database (IHAD) by integrating data from multiple administrative sources (Box 2), and the IHAD covers all households of the country. Also, the government maintains a smaller Household Information Database (HID) that is used for identifying poor households. • Meteorological data-driven early warning systems are well-established and utilized at both national and subnational levels, particularly for dzud risk assessment, though the extent of their application varies at the local level. 2.3.1 Appraisal of existing information systems for the purposes of ASP Mongolia boasts a robust citizen identification The “Khur” state data exchange platform, launched infrastructure. The ID system, developed in 1983, in 2018, aims to streamline interactions between the assigns a unique national registration of ID number government and citizens. Adhering to international to each citizen and child at birth. According to standards, Khur ensures reliable operations, robust Identification for Development (ID4D) Data, in 2021, information security, and enhanced coordination 98.1 percent of respondents aged 15 and above between organizations. It facilitates public access reported owning a primary foundational ID (national to services through a centralized platform,23 ID).22 This strong ID framework facilitates data managed by the Ministry of Digital Development linkages, enabling the efficient delivery of social and Communications. Currently, the National Data assistance. Center (NDC) contains administrative data from 87 22 https://databank.worldbank.org/source/identification-for-development-(id4d)-data. Accessed January 30, 2024. 23 https://ema.gov.mn/wp-content/uploads/2024/11/E-Mongolia-academy-introduction-20241118.pdf 2. Assessment of the adaptability of the social protection system in Mongolia 25 public entities, enabling digitization of public services. The data exchange platform housed in the NDC has enhanced the capabilities of social assistance databases, improving efficiency.24 Challenges remain in achieving seamless data exchange and interoperability. The recent failure to update household information quickly highlights these difficulties. These challenges appear to stem from technical limitations within the Khur data exchange process. Addressing these issues is crucial for the effective implementation of social policies and for the purposes of the ASP. The Population and Household Registration Database (PHRD), established in 2006 by the household members themselves. The IHAD, updated NSO, serves as a central repository of household in the first half of 2023 to reflect changes related to member information based on data inputs provided the CMP application process, is now the most current and updated by bagh and khoroo administration household information database, surpassing the offices. Initially an offline database, it transitioned PHRD. to a digital format in 2014. The PHRD is linked to the Civil Registry Database for updating the births and deaths, integrated with the Khur system. It The potential of the recently developed Integrated provides comprehensive coverage through a national Household Administrative Database (IHAD) to individual ID system and includes a household function as a more dynamic social registry could registration system, assigning each household a be further nurtured/supported (see Box 2 for more registration number, supporting data interoperability. details). The IHAD, a comprehensive database which As outlined in Box 2, the Integrated Household covers all households of Mongolia, was established Administrative Database (IHAD), maintained by the in early in 2023 in order to assess a household MFLSP, incorporates the household registration welfare using a proxy means test (PMT) based on number from the PHRD. However, there is a growing administrative data. The immediate and necessary concern about the timely updating of household prompt for this development was the need to member information in the PHRD due to migration implement the government decision of providing the and changes in residential locations, which poses a CMP for 91 percent of children at the bottom of the challenge for maintaining accurate and current data, household welfare distribution which required efficient with status updating dependent on the will of the processes for household welfare assessment. 24 A successful example is the IHAD created in January 2023 for providing the Child Money Program for 91 percent of children at the bottom of the welfare distribution (the measure has since then been reversed and the benefit is now universal again). Another recent example is the MOFALI Livestock Database (explained further below) that is linked with the NSO’s Livestock Census database using the household registration number. 26 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Box 2. Integrated Household Administrative Database (IHAD) In January 2023, the government passed Resolution No. 2, establishing an administrative data- based unified social registry known as the “Integrated Household Administrative Database” (IHAD). The Government Resolution No. 2 of 2023 set out the actions for the establishment of this database under the oversight of the MFLSP/GOLWS, aiming to enhance the efficiency and effectiveness of social assistance delivery. The resolution prescribed that the IHAD database would have access to a wide range of databases existing under the authority of various government ministries or agencies, including those relating to civil registration, registration of property, population and household registration, vehicle registration, livestock census database, education, social assistance, social insurance, taxation, and public payroll. The resolution envisioned the IHAD’s ability to rank households based on their livelihoods. To achieve this, an administrative data-based proxy means test (PMT) was developed and initially used for targeting the CMP benefit in early 2023 (the CMP targeting measure has since been reversed, and the benefit is once again universal). The IHAD currently incorporates administrative information from seven databases: civil registry (marriage, death, birth), property, motor vehicles, livestock census, tax, social insurance, and the NSO’s Population and Household Registration data. These databases were used to determine eligibility for the CMP in early 2023. However, the potential incorporation of other data from databases related to health insurance, social assistance, and public service information has been halted or delayed. Notably, the integration of data on the status and size of social assistance benefits, which is under the administration of MFLSP/GOLWS, has not yet occurred. One practical reason for this delay appears to be the capacity required to update the PMT formula after integrating new data into the system. The resolution stipulated that the database would be updated in the first quarter of each year through the Khur platform. It is possible to update individual household-level information within a couple of minutes through a single request action. However, updating the data en masse faces significant challenges due to technical constraints within the Khur data exchange processes. The IHAD is expected to play an important enabling role for both routine and adaptive social protection. Currently, it contains data of 3.47 million citizens (belonging to more than 900,000 households) in Mongolia, fully updated in 2023. If the unified database’s information is expanded over time, updated regularly with more effective interoperability within the Khur platform, and the associated PMT formula is further enhanced, the IHAD, given its comprehensive coverage, could be used to identify individuals for a range of existing or future social protection programs. The database has the potential to underpin evidence-based decision-making, facilitate digitization efforts, support analytical capabilities, and facilitate shock response. Furthermore, the IHAD can play a significant role in implementing education, health, and housing policies that have a targeting design. 2. Assessment of the adaptability of the social protection system in Mongolia 27 Since 2012, the MFLSP has also maintained The IHAD and HID are linked, both maintained by the Household Information Database (HID) for the MFLSP/GOLWS. The IHAD provides implementing poverty-targeted programs. Until administrative data that the MFLSP/GOLWS uses recently, the HID was based on data collected to update corresponding fields in the HID. The HID through large-scale household surveys. The latest is connected to the E-welfare (the management survey, conducted in 2017, covered approximately 73 information system for social assistance programs – percent of the country’s population, or over 600,000 see below), so it includes information about whether households, according to the GOLWS (UNESCAP an individual or child receives social assistance 2019). The HID is particularly relevant for identifying benefits and, if so, the monthly amount. The IHAD, the households in the bottom of the welfare however, does not have this connection. distribution. The household welfare score calculated by the PMT facilitates determining eligibility for the The E-welfare portal, serving as the social assistance FSP, health insurance contribution payment for adult management information system (MIS), provides members of the poor households, and free legal beneficiary databases for all benefits covered by services. HID data updates were initially planned the system. This database includes applicants and to occur every three years, but no new large-scale beneficiaries of all existing social welfare cash transfer surveys have been conducted since 2017. This was and service programs. The E-welfare database initially due to the COVID-19 pandemic and then due operates on an on-demand basis, allowing online to considerations for revising the PMT methodology. application submissions. This on-demand process Data updates since then have been conducted on an provides a strong foundation for reaching households on-demand basis only for small groups of households affected by shocks, with the option of local social requesting reassessment of their welfare status or welfare officers assisting with digital applications if newly applying for the FSP. needed. The social assistance beneficiary databases are now connected to the revised HID to facilitate The coverage of the current HID is limited to less household welfare assessment. E-welfare also than 5 percent of households in Mongolia. In May houses the social assistance payment system, which 2022, the NSO and MFLSP adopted a new hybrid PMT is linked to the Ministry of Finance’s Treasury Single methodology,25 incorporating both administrative Account (as discussed in section 2.4). data (49 variables from 13 databases maintained by nine government organizations) and household Despite advancements in information systems and survey data to assess household living standards. enhanced interoperability, certain challenges persist Consequently, the HID software was re-developed26 in achieving effective ASP. Mongolia has the capacity and the application of the new methodology for to implement vertical expansion of social assistance assessing household welfare began in the second half programs in response to future covariate shocks. of 2024 only, covering less than 30,000 households. However, to ensure greater efficiency in utilizing Therefore, the coverage of the current or recently public resources to protect the most vulnerable and updated HID is very small, representing less than 5 impoverished during such shocks, it is also necessary percent of all households in the country. to consider horizontal expansion of these programs. 25 The revision of the PMT methodology was supported by the World Bank under the Strengthening Fiscal and Financial Sustainability Project (SFFSP). 26 With technical assistance support from the Asian Development Bank. 28 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Identifying all poor households nationwide through New databases relevant to ASP are being developed, the hybrid PMT methodology will require expanding including the Animal Identification and Registration the coverage of the HID, which necessitates increased System (AIRS) by MOFALI. AIRS tracks animals public outreach activities and budget allocation by type, location, and herder units, accounting for household surveys, given the current low HID for changes in livestock due to birth, death (from coverage. Alternatively, efforts should be directed diseases or climate shocks), and sale. This system towards further enhancing the potential capability of helps update livestock numbers regularly, bridging the IHAD to function as a social registry by integrating the gap between annual censuses by the NSO. More more databases as initially planned and revising the details about AIRS are in section 3.2.1. associated household welfare assessment formula. Such a dual path can complement each other and help bridge gaps. Continuous analytics to refine the 2.3.2 Access by non-government actors PMT methodology for both approaches and to assess to information inclusion and exclusion errors in identifying the poor could also be valuable areas of focus. The MRC’s ability to effectively target vulnerable households and avoid duplication is hindered by Current databases do not indicate which poor or limited access to critical government databases, vulnerable populations lack social assistance. As of as outlined in section 2.3.1. Current national laws 2022, the CMP covered 77.5 percent of the population restrict non-governmental organizations from (mainly excluding households without children under accessing vital databases. This lack of access, 18).27 The FSP targets the poorest but only reaches coupled with inadequate coordination between less than 5 percent of households, insufficient given humanitarian actors and government officials, the 27.1 percent poverty rate in 2022. The updated can lead to the creation of parallel systems. Such HID for the FSP (revised in 2024) using a new PMT duplication of efforts not only wastes resources but formula has low household coverage, potentially also compromises the efficiency and effectiveness of reducing ASP effectiveness during future substantial responses to disasters like dzud or floods. A prime shocks. example is the MRC’s development of its own eligibility criteria and database during the implementation The National Agency for Meteorology and of a forecast-based financing initiative, effectively Environmental Monitoring (NAMEM) produces early mirroring existing government systems. warning forecasts using meteorological data. This publicly available data helps NEMA map dzud risks and forecast other climate shocks, like floods. With ADB support, disaster risk mapping is becoming a real-time public platform based on NAMEM’s historical data. There is therefore a good level of ability to predict a dzud – both on behalf of herders (based on their experience) and the government (based on historical modeling which shows that a dzud often follows drought conditions identified by below-average summer rainfall). 27 According to 2022 Household Socio-Economic Survey data. The figure refers to indirect and direct household recipients (only children under 18 can be direct recipients of the benefit). 2. Assessment of the adaptability of the social protection system in Mongolia 29 2.4 FINANCING The financing building block focuses on disaster risk financing (DRF) strategies and instruments essential for financing shock response. It evaluates the government’s approach to financing response costs, comparing reactive ex-post methods to proactive pre-shock measures that establish tools and mechanisms for efficient ASP response financing. Key findings • Mongolia spends an above average amount on social assistance, with total expenditure increasing substantially in recent years. • There is no formal DRF strategy to guide disaster risk management and ASP financing. • Except for a non-compulsory index-based livestock insurance program for herders, there is no other significant risk transfer product. The Disaster Insurance Law is being developed to address the gap in developing disaster risk transfer instruments. • Currently, the existing approach to DRF/disaster risk management combines ex post (reallocation or repurposing of the revenue budget) with limited ex ante financing (building annual strategic reserves and financing DRR activities). • For ASP, the primary approach to financing has been ex post, involving reallocation or repurposing of existing revenue budget funds. The Government Reserve Fund serves as the main national- level source of DRF leveraged for disaster-response. While the current legal framework does not earmark reserve funds for ASP, amendments to the annual budget are made to approve additional resources for shock response by MFLSP or MOFALI. Mongolia’s social assistance spending significantly The availability and affordability of Disaster Risk exceeds regional averages. In 2018, prior to the Financing (DRF) products are limited, leading to COVID-19 pandemic, spending amounted to 2.1 a heavy reliance on post-disaster government percent of GDP, surpassing the East Asia and Pacific funding.29 This lack of diverse risk transfer tools means average (1 percent) and the lower-middle-income the government primarily employs risk retention country average (1.4 percent). However, with a fivefold strategies rather than risk transfer instruments increase in the CMP transfer value starting in 2020 (see Figure 2 on DRF instruments following the risk and increases in the value of several other benefits, layering approach below). The Government Reserve social assistance spending has grown substantially. Fund, budgeted annually, primarily finances response In 2021, it reached 4.3 percent of GDP (MNT 1.86 and relief activities (including some non-disaster trillion).28 While spending fell slightly to 3.1 percent related activities), and the Strategic Reserve Fund of GDP in 2023, it remains significantly higher than supports disaster preparedness by stockpiling prepandemic levels. material reserves to mitigate risks from unforeseen 28 This figure excludes the Livestock Restocking Program (LRP) under the Employment Promotion Fund (EPF). 29 Unless otherwise stated, the remainder of this section draws extensively from 2023 ICEM documents: Disaster Risk Financing Diagnostics and Strategic Priorities on DRF prepared for ADB and NEMA as well as related presentation materials. 30 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia disruptions in domestic production or disaster, including disaster events triggered by natural hazards. At the local level, governors can utilize the Local Governors’ Reserve Funds (or Disaster Protection Fund). Except for a non-compulsory Index-based Livestock Insurance program30 for herders (described in section 3.3.1), there are no other significant risk transfer products. This leaves most of the burden of disaster financing on risk retention instruments such as contingent budget lines, post-disaster budget reallocations, and household savings. Figure 2. Disaster Risk Financing instruments in Mongolia in 2023 protection Post-disaster relief from humanitarian & development partners schemes Adaptive assistance External social Mongolian Red Cross Society Forecast-based Financing microinsurance Indemnity public assets insurance Regional risk pools Forecast risk insurance Bundled Transfer Risk Indemnity property insurance Catastrophe bonds Index-Based Livestock Insurance (IBLI) Catastrophe-linked securities Social protection schemes Adaptive social protection schemes Budget reallocations Pooling funds Special taxes and Contingent & post-disaster credit lines subsidies Natural capital financing facility Retention Severity of disaster Risk National reserve and contingency Post-disaster loans e.g. emergency funds assistance loans from ADB Restoration funds Subnational reserve funds Contingent disaster loans Time after disaster Source: Figure 9, ICEM 2023b. Note: Blue indicates available risk transfer instruments, purple available risk retention instruments, and green the existing external assistance mechanisms. Grey shows the DRF instruments currently unavailable or not in use in Mongolia. The primary national-level source of DRF is the decisions adopted by Parliament and the Cabinet Government Reserve Fund, held under the Prime during the budget year, covering government expenses Minister, though it is not specific to disasters. The associated with international dispute resolution, and Government Reserve Fund (GRF) is governed by the other purposes (World Bank 2015a). Thus, this fund Law on Government Special Fund, which outlines its is not specific to disasters. The annual allocation for use for financing the relief and recovery expenditures the GRF is legislated to be not more than one percent due to natural or man-made disasters, implementing of the anticipated GDP, with the Ministry of Finance 30 Another disaster-related insurance product called the Index-Based Wheat Insurance was introduced in May 2020 but is not operational anymore. 2. Assessment of the adaptability of the social protection system in Mongolia 31 responsible for planning and reflecting this allocation into the annual budget. The law does not earmark reserve funds for specific sectoral ministries, such as MFLSP or MOFALI for ASP. Instead, the decision and implementation of the national disaster response are held with Parliament, the Cabinet or the SEC, depending on the scale and impact of the disaster. Local assemblies and authorities increasingly play protection, while private entities must allocate 1.5 a crucial role in disaster response, as demonstrated percent (ICEM 2023b). While government entities by their actions responding to the 2023 floods in typically plan their budgets to meet this requirement, Ulaanbaatar. For preparedness and response for the actual level of allocation falls far short of the localized shocks, local assemblies and authorities are legal mandate. In 2023, the total budget allocated responsible for planning, financing and implementing for disaster risk reduction measures by government the required measures. This role is most prominently entities was MNT 10.9 billion31 (0.02 percent of implemented for dzud response. The recent 2023 GDP). Furthermore, there is no mechanism to floods in Ulaanbaatar demonstrated the importance ensure compliance with the 1.5 percent allocation by of local-level structures in disaster response. private entities for disaster risk reduction. This lack The Ulaanbaatar City Emergency Committee and of compliance represents a significant untapped NEMA played a critical role in coordinating disaster resource for disaster preparedness and recovery, response and recovery measures. The Ulaanbaatar particularly for diversifying disaster risk financing. City Assembly allocated resources to support affected households, while the Bayanzurkh District Mongolia needs to further develop the effective DRF authorities, including the district Labor and Welfare framework and risk transfer instruments. There is no Division, played key roles in assessing the needs of formal DRF strategy. Currently, disaster preparedness affected households, coordinating and providing and emergency response are primarily financed immediate humanitarian aid and social services, through fiscal resources, lacking a comprehensive including psychological counseling. Additionally, the range of DRF tools (ICEM 2023a). The Law on Disaster MFLSP assisted in raising humanitarian aid from Protection does not provide a legal framework for domestic and international partners. The 2023 floods disaster risk insurance. While the Law on Insurance in Ulaanbaatar highlighted the importance of further (2004) provides the legal framework for the insurance developing disaster risk insurance products. sector, insurance providers offer limited disaster- related coverage, and the costs can be prohibitive. The Law on Disaster Protection mandates that both However, the Mongolia Mid-term Strategy for government and private entities allocate specific implementing the Sendai Framework has recognized portions of their annual budgets to disaster risk the need to develop a disaster risk insurance and reduction, however, enforcement of this law is weak. re-insurance system. Accordingly, it is to be noted that Government entities are mandated to allocate at the Ministry of Finance has been leading the drafting least 1 percent of their budgets annually for disaster of the Law on Disaster Risk Insurance since 2022. 31 Report of National Disaster Risk Reduction Council, Quarter IV of 2023. 32 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Photo Baku’s picture 2. Assessment of the adaptability of the social protection system in Mongolia 33 3. ASP FOR POOR AND VULNERABLE DZUD-AFFECTED HERDERS 34 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 3. ASP FOR POOR AND VULNERABLE DZUD-AFFECTED HERDERS This section examines programs and systems designed to support poor and vulnerable herders in preparing for and responding to shocks. The analysis centers on dzud-affected herder households at risk of poverty or further impoverishment. Wealthier herder households, though also impacted by dzud, are not a primary ASP focus due to limited government resources. While these households may experience larger quantitative or proportional losses, their vulnerability is not considered a priority for ASP. 3.1 PROGRAMS AND DELIVERY SYSTEMS Key findings • Herders face significant challenges in preparing for dzud, with options such as selling livestock, purchasing hay and fodder, and relocating to better pastures. Constraints like declining livestock prices, rising feed costs, and limited resources for poorer herders complicate these efforts. • Government schemes, including NEMA support and the Livestock Restocking Program (LRP), pro- vide crucial assistance. However, clear benefit levels and eligibility criteria are often lacking, with some support potentially favoring less vulnerable herders. • Non-government initiatives, such as forecast-based financing (FBF) efforts by the Mongolian Red Cross and other organizations, have shown positive results in reducing livestock mortality and im- proving survival rates, particularly for smaller herds. These programs emphasize the importance of timely assistance and up-to-date data for effective response. • Cash support is preferred by herders for its flexibility and effectiveness in dzud preparation. 3. ASP for poor and vulnerable dzud-affected herders 35 3.1.1 Government schemes Herders are responsible for preparing their primary To mitigate the impact of dzud, NEMA provides assets –their livestock – for the winter. Following crucial support to herders in the most severely a drought, herder face a critical window to prepare affected provinces, including subsidized or free hay for dzud. They generally have three main options: (i) and fodder. This assistance is distributed from both sell or slaughter a portion of their livestock to protect Local and State Reserves.32 Each aimag and soum the core herd; (ii) purchase or gather hay and fodder is legally obligated to maintain a local reserve of to sustain the herd through the harshest winter hay and fodder to prepare for winter, with the soum months, and repair or construct animal shelters; emergency commissions responsible for reserve and/or (iii) temporarily relocate to another soum or management. Furthermore, NEMA, in accordance aimag (nomadic herding) where pastures are more with the Law on State Reserve, maintains a strategic abundant and/or winter conditions are expected to reserve of hay and fodder. This reserve is established be less severe. annually based on risk assessments, such as drought and dzud, and is financed by the government. By However, herders may face various constraints providing assistance during the critical winter months hindering preparedness actions. Livestock prices when hay and fodder prices can skyrocket, NEMA typically decline during this time of year as supply aims to alleviate the financial burden on herders and exceeds demand, while feed costs rise. Additionally, minimize herd losses. According to interviewees for some poor herders may lack the financial or labor this report, prices in the lead-up to the 2022 dzud resources to prepare sufficient hay or fodder for the reached three to four times their normal levels. harshest winter periods. The index-based livestock insurance (IBLI) scheme is often viewed as an The benefit level and eligibility criteria for the hay unattractive investment due to its cost and indexing and fodder scheme are not clearly defined. There criteria, as discussed later in this section. is no established transfer level (i.e., the amount of hay and fodder provided) based on factors such as Central ministries and local government authorities livestock composition or household welfare/poverty. face a challenge in determining how to enhance the The allocation of emergency support is primarily resilience of herders in the face of dzud. Given that determined by the availability of hay/fodder in local livestock management is a form of small business, and national reserves, and the severity of dzud within the central challenge for government is how to avoid specific aimags and soums. While this scheme distorting the market for livestock. Specifically, how to provides crucial support during dzud, it lacks a ensure that government efforts to help build resilience targeted approach. It does not consider factors such do not (i) reduce the incentive of herders to manage as household vulnerability to livelihood shocks or their stock efficiently, or (ii) “reward” any herders whether herders are already receiving similar support who do not take rational actions that are within their from NGOs. Consequently, the level of hay and fodder capability such as selling some stock and protecting support may disproportionately benefit herders with the core herd. larger herds. The impacts of this scheme have not been systematically evaluated. 32 The information and analysis in this paragraph are based on interviews with stakeholders. 36 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia The Livestock Restocking Program (LRP) serves winter/dzud, the government revised LRP eligibility a dual purpose: supporting employment and criteria in May 2024,33 explicitly recognizing its role assisting herders severely impacted by dzud. It is in shock response. However, the revised criteria part of the recurrent employment support programs raise concerns about benefit progressivity. LRP implemented by the MFLSP and annually financed by budget planning is guided by proposals submitted the Employment Promotion Fund (EPF). Traditionally by local employment departments, as outlined in designed to support eligible young herders with the Employment Promotion Law (EPL). The annual smaller herds, the LRP has been adapted as a shock budget size is consolidated by the GOLWS and response measure during dzud events. The program approved by the National Employment Council. provides non-interest loans repayable within 36 However, there’s little evidence that local employment months. These loans are not disbursed directly to offices incorporate early warning data or dzud risk beneficiaries but transferred to herder households maps into their budget planning. Frequently, the LRP from which animals are to be purchased, based on a budget is revised upwards to accommodate post- tripartite agreement. The type and number of animals dzud response needs. For example, in 2024, the initial are determined solely by the affected herders within annual allocation was increased three times from the approved loan ceiling. Following the 2023-2024 MNT 7 billion to MNT 21 billion. Box 3. Social Protection and Climate Change in Mongolia Climate change poses a significant risk to Mongolia’s economy, with the poorest households likely to be the most vulnerable to climate hazards. The country is experiencing rising temperatures and more unpredictable rainfall and snowfall patterns, leading to more frequent and intense dzuds and flooding. This could result in the 6.5 million animal losses estimated in 2024 becoming the norm in the coming decades, with extreme cases like the 2009 dzud, which killed 22 percent of livestock, potentially becoming even worse. Additionally, several provinces with high rates of climate hazard exposure, including droughts, also have high concentrations of poverty and economic vulnerability. For example, Selenge, Bulgan, Tov, and Khentii aimags face a high risk of climate hazards and have populations where over half are either poor or vulnerable to poverty. Managing these risks is a priority for the Government of Mongolia, which has committed to a more diversified, inclusive, and greener growth model. Mongolia’s Vision 2050, a three-phased overarching development plan, prioritizes inclusive growth through reforms that advance poverty alleviation, gender equality, economic diversification, and a green transition. Ambitious targets for decarbonization and climate resilience have been set in this regard. Achieving these goals will require substantial efforts to reduce reliance on cheap coal, decrease the size of large livestock herds, and improve land and water resource management. However, these actions may have livelihood consequences if not managed effectively. Therefore, concerted efforts to transition to a low-carbon development pathway should prioritize and strengthen the climate resilience of vulnerable and poor households. 33 Specifically, eligibility and benefit size for herders are now revised as follows: up to MNT 8 million for herders owning less than 200 animals; up to MNT 15 million, based on post-disaster assessment, if more than 50 percent of their herd (201-300 animals) perished; and up to MNT 30 million, based on post-disaster assessment, if more than 50 percent of their herd (>300 animals) perished. 3. ASP for poor and vulnerable dzud-affected herders 37 Strategic adaptation measures can also significantly lessen the blow of climate change. Irrigation systems could boost crop yields and enable herders to store winter hay, mitigating the impact of dzuds, while enforced building codes and climate-proofed urban infrastructure can significantly reduce flood damage. These low-cost measures, combined, could reduce impacts by 25 percent (World Bank 2024). Maximizing land use efficiency through incentivizing herd size reduction and enhancing productivity could also significantly mitigate the potential impacts of climate change. Social Protection has an important role to play in mitigating the impact of climate change induced shocks, particularly for the poor and vulnerable, including those in herding and coal mining sectors. To start with, implementing suitable policies to facilitate household adaptation, especially in Mongolian economic sectors that require transformation such as herding and coal mining, is essential. Social protection and labor market policies, including proper means-tested social assistance support for laid off coal mine workers and non-mining workers who are not covered by or are ineligible for unemployment insurance and severance pay, as well as older workers in herder communities who are less likely to acquire new skills and move to new sectors, will be key to protect them from immediate economic consequences. Active labor market programs such as public employment services, entrepreneurship support programs, and reskilling/upskilling programs, paired with mobility support, will also help support affected households in these communities. Well targeted social protection programs will also be needed for households that are adversely impacted by efforts to reduce market distortions and incentivize more sustainable resource use including through phasing out energy subsidies, reforming agricultural subsidies, and enhancing the collection of water usage fees. Using even a small share of the savings from energy tariff reform as targeted transfers to the most vulnerable for example, could minimize negative welfare impacts without increasing fiscal costs. This could also help increase citizen support for tariff reform. Additionally, measures to increase water pollution and livestock tax collection, along with the implementation of a well-designed carbon pricing system, are essential for internalizing the environmental costs of economic activities. These actions would not only promote sustainable practices but would also drive innovation and investment in green technologies. However, it is crucial that these measures are complemented by programs that mitigate welfare impacts on the poor and vulnerable populations impacted by such reforms. Source: World Bank 2024. 3.1.2 Non-government schemes smooth consumption at a time when the harsh winter conditions may have led households to increase their spending for fodder to support/save their livestock. UNICEF conducted a pilot program in 2019 which Households with children ages 0-5 years living in focused on preparedness for dzud although it also areas known to have harsh winters received the included a response dimension. It was implemented monthly CMP payment in doubled amounts (MNT in Zavkhan province over the course of the winter of 20,000 per child/per month at the time).34 According 2019-2020 and made full use of existing government to UNICEF, two of the key lessons from the pilot systems. The objective of the pilot was to help 34 2,730 children received a total of MNT 40,000 in December 2019. In 2020, coverage increased to 6,800, with children receiving an additional MNT 20,000 in February, March, and April 2020. 38 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia were that the vertical expansion did not cause any Save the Children and World Vision implemented additional burden to the national and local social another FBF initiative over the winter of 2018-19 welfare delivery system,35 and that the database used that also demonstrated some positive results on for the response – which dated from 2017 – resulted livestock losses for small herds. In December 2019, in the exclusion of vulnerable households who had after NAMEM had identified those areas at very high moved to the area since the data was collected risk of dzud-like conditions, an initiative by the Start (UNICEF 2020). This points to the significance of Fund (implemented through Save the Children and keeping databases up to date prior to being used for World Vision) distributed cash, hay and fodder, and a shock response. booklet on protection of children and family members and nurturing weak livestock. The key eligibility The Mongolian Red Cross (MRC) introduced a criterion was herders who herded their own livestock forecast-based financing (FBF) initiative over the and owned less than 200 sheep head units (SHU), dzud of 2017-18 which showed some positive and the total cost of the intervention was USD 120 results (Dagys and Dros 2020). The program was per household. Among the findings, median losses quasi-experimental, involving a random sample of in the beneficiary group (who had received hay and vulnerable herder households – both beneficiaries fodder) were 6.95 SHU, compared to 9.25 SHU in the and a comparison group – in some of the most at-risk control group, and members of the beneficiary group soums. Soum selection was based on the dzud risk were 1.34 times more likely than the control group to map which was released by NAMEM in November survive winter without any losses occurring in their 2017. Beneficiaries received an unconditional cash herds (Start Network 2019). grant of USD 100 in December 2017, and animal care kits were delivered in January 2018. The results A recent evaluation of an FBF initiative also found showed that, in comparison to the control group, the positive results for households with small herds. mortality rate of horses for the beneficiary group was The Potsdam Institute for Climate Impact Research approximately 50 percent less, and the survival rates of (PIK) oversaw an intervention which included a goat and sheep offspring were higher by 7 percent and randomly implemented forecast-based cash transfer 5 percent, respectively. The timing of FBF assistance program for 830 herder households living in areas was also found to be crucial, as households who with a forecasted risk of extreme winter conditions. reported the receipt of early assistance experienced The transfer was higher than the MRC initiative, at a significantly more positive effect on livestock approximately EUR 200 (equivalent to 6 percent of losses. MRC continues to implement FBF for herders, median annual income; 2 percent of herd value), but based on NAMEM forecasts. For both ex-ante and the payments were made in March (unlike December, post-dzud support to herder households, the MRC as per the MRC initiative). Across the whole sample, uses vulnerability indicators, developed and adopted there was no significant effect of treatment on through their system, which include household livestock asset holdings, and similar effects were composition and demographic characteristics of found for expenditures (adaptation, consumption). household members. 35 Although the UNICEF report does not elaborate on the precise meaning of “burden”, this is assumed to mean that there was no disruption to the routine functions of the social welfare system as a result of the vertical expansions. 3. ASP for poor and vulnerable dzud-affected herders 39 These results differ from the MRC example; however, Social assistance transfers, particularly cash transfers, the timing of the transfer (early winter / early spring) offer a promising avenue for dzud preparedness, may have been an explanatory factor, but the coping, and response. Given that herders prefer cash evaluation does not make any findings in this regard. support, Mongolia’s existing social assistance system In line with the Save the Children and World Vision could be leveraged before dzud emergencies. However, initiative, households with smaller herds (less than while the FSP serves as a valuable complementary 200 SHU) were positively affected by the transfer.36 mechanism, it may not be the most suitable option for dzud preparedness. This is because the FSP relies on bank cards for purchasing food items only. Recent 3.1.3 Delivery systems forecast-based financing initiatives have shown that herders spend nearly twice as much on livestock feed during dzud preparation than on their own food (see Recent evidence shows that cash is the preferred Figure 3). modality of support for herders for enabling them to better prepare for, cope with, or respond to dzud. As mentioned earlier, when dzud strikes, NEMA distributes Figure 3. Purchases made by herders to prepare for hay and fodder to herders in the most affected regions. winter, 2018-2019 This assistance comes from local and national reserves, often at discounted prices or even free of charge. % However, transporting hay and fodder to herders is 50 expensive and labor-intensive, especially given the long LIVESTOCK distances and harsh weather conditions. Preparing for 40 FEED dzud is the most effective way to mitigate its impact. In this regard, herders strongly favor cash support as a 30 means of preparation. The flexibility offered by cash is a key reason why it is preferred by herder households 20 FOOD ITEMS (UNICEF 2020). Officials interviewed for this report OTHER also expressed a strong preference for cash-based 10 assistance. DUNG, COAL+ WOOD Total Source: Start Network 2019. 36 Presentation by PIK at dissemination conference held on April 20, 2023, in Ulaanbaatar. Also see Mogge et al. 2024. 40 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 3.2 INFORMATION SYSTEMS AND DATA Key findings • The information produced by the annual Livestock Census in Mongolia, conducted in December, is not timely enough to support herders affected by dzud, as the full impact is seen by April. An interim survey in June helps identify affected areas for insurance payouts but lacks detailed household-level data. The MFLSP’s social welfare databases also struggle to identify dzud-af- fected households due to outdated census data. • The MOFALI Animal Information and Registration System (AIRS) tracks livestock between cen- suses but faces challenges like insufficient staff and data accuracy issues. A planned mobile app could improve data updates, but verification is needed. • NAMEM provides early warning forecasts for dzud based on weather and pasture conditions, creating risk maps that guide disaster management. These maps are crucial for herders’ prepa- rations, but there can be a disconnect between early warning information and local actions, with some officials prioritizing the first snowfall date over other indicators. 3.2.1 Data and systems that are relevant provides information at the soum level. It does not for dzud response identify individual affected households; therefore, it cannot be used for the delivery of timely and targeted post-dzud assistance. The annual Livestock Census, conducted by the NSO between December 7th and 17th each year, provides valuable insights into herders’ circumstances, but is The MFLSP’s social welfare program databases lack it insufficient for identifying and supporting dzud- the capacity to identify herder households affected affected poor herders. This is because the full impact by dzud. This limitation arises from the fact that the of dzud typically manifests around April of next year, primary source for livestock numbers is the NSO’s after the census data is collected. While the census Livestock Census database, which is conducted only data could be cross-referenced with geographic once a year, in December. The current IHAD and HID areas affected by dzud, its primary limitation lies in its are linked to the NSO’s Livestock Census database, timing. Collected before significant livestock losses but if household living standards are assessed during occur due to dzud, the data is outdated when herders or after a dzud event, the actual number of animals most urgently require support (March-May). The NSO post-dzud may not accurately reflected in these also conducts an interim livestock sample survey in databases. In essence, the issue lies in the mismatch the first half of June each year, mandated by the Index- between the timing of the annual livestock census based Livestock Insurance Law. This survey covers (December) and the potential for significant herd 16 percent of herder households in selected soums losses during dzud events (assessed in the spring). based on the Population and Housing Registration This data gap affects the ability to effectively target Database. While this survey helps identify soums support programs to herders most severely impacted most affected by dzud for the purpose of index-based by these disasters. livestock insurance (IBLI) indemnity payouts, it only 3. ASP for poor and vulnerable dzud-affected herders 41 The MOFALI Animal Information and Registration System (AIRS) Database has the potential to be a valuable resource for informing timely and targeted responses to dzud-affected herders. Recently established by MOFALI, AIRS aims to track the number and type of livestock held by herders or manipulated information, potentially driven by between the annual NSO livestock censuses. Bagh financial incentives (e.g., inflating livestock numbers governors maintain weekly manual records37 which for loan purposes). Implementing robust data are then entered into a digital database at the soum- verification mechanisms is crucial to ensure the level MOFALI office. This system has the potential to reliability of information collected through the mobile provide real-time information on livestock numbers. application. It is worth noting that NSO may consider However, in many cases, the data may lack integrity or establishing these data as administrative statistics in accuracy as it is entered by Bagh governors is based the future. Such a decision would be beneficial, as it on information provided by herders themselves, would allow to connect the AIRS with the Livestock often communicated via phone due to the logistical Census Database and integrated household and financial challenges of frequent in-person visits databases. during dzud. The MOFALI AIRS Database, while promising, 3.2.2 Early warning systems currently faces several challenges that hinder its effectiveness. Firstly, insufficient human resources As mentioned in section 2.3, NAMEM issues early at the soum level impede timely data entry. Bagh warning forecasts for dzud annually and NEMA has governors collect household-level data manually on a a robust system for activating disaster management weekly basis, but due to limited staff, this information structures. NAMEM’s early warning forecasts are is often entered into the system only as aggregates, based on meteorological data and assessments of rather than for each individual herder household. This pasture and vegetation conditions. This provides delays the real-time updates crucial for effective dzud a strong foundation for ongoing risk assessment response. To address this, MOFALI plans to launch throughout the year. Two key assessments are a mobile application that would enable herders to conducted: During the summer months, rainfall is directly update their livestock information. This has compared to the long-term average (360 mm) to the potential to significantly improve data currency. produce a “drought risk map.” Following the first However, limited internet access and technological snowfall, typically in October or early November, a literacy among herders pose a significant barrier to “dzud risk map” is released. widespread adoption. Furthermore, data accuracy and integrity remain concerns. Allowing herders to These early warning or risk maps guide disaster directly input data raises the possibility of inaccurate management actions at the national and subnational levels. If the scale and intensity of dzud risk are significant, then the Disaster Risk Management (DRM) structure is activated at the regional and national levels. This activation includes SEC meetings, the implementation of preparedness 37 According to manual records observed in Erdene Soum, Bagh governors provide weekly updates on livestock numbers (alive/dead) for each herder household within their jurisdiction. 42 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia plans, and seeking resources from the Cabinet. At the The timing of dzud risk data analysis and publication national level, NEMA utilizes the early warning data is crucial for herders’ preparedness. Herders have and cross-references it with NSO data to assess the a limited window of opportunity to make critical potential impact on people. This information then decisions, such as selling livestock, purchasing informs discussions within the SEC or the Cabinet. additional hay and fodder, or relocating to alternative However, at the soum level, the effectiveness of pastures. As illustrated in Figure 4, while October is the EWS is unclear. Officials sometimes seem to the peak month for winter preparations, this process prioritize the date of the first snowfall over other begins as early as August and September. Therefore, drought indicators, suggesting a potential disconnect timely access to accurate dzud risk information is between the information provided by the EWS and the essential to empower herders to make informed actions taken at the local level. decisions and mitigate potential losses. Figure 4. Collection of items by herders to prepare for winter, 2018-2019 120 BENEFICIARY 100 CONTROL 80 60 40 20 0 MAY 18 JUN 18 JUL 18 AUG 18 SEP 18 OCT 18 NOV 18 DEC 18 JAN 19 FEB 19 MAR 19 APR 19 Source: Start Network 2019. Note: Beneficiary and control refer to the design and implementation of an impact evaluation that looked at the behavior of herders who were supported through an anticipatory action initiative. 3. ASP for poor and vulnerable dzud-affected herders 43 3.3 OTHER CHALLENGES FACED BY HERDERS Key findings • Herders can purchase index-based livestock insurance to manage dzud risks. This insurance pays out when soum-level livestock losses exceed 6 percent, based on a June census. While it has helped insured households recover faster, participation is not expanding due to high costs. Herders paid significantly more in premiums than they received in compensation between 2016 and 2021. The 6 percent loss threshold is problematic, especially for poorer herders who may face higher individual losses. Some herders buy insurance only to access bank loans, and wealthier herders can relocate livestock to safer areas, reducing overall losses and affecting payout eligibility. • The livestock insurance market needs reforms to be more appealing, especially for herders with smaller herds. The government has proposed amendments to the IBLI Law to address payout thresholds and timing. Other challenges faced by herders and livestock sector include: • Emphasis on livestock quantity over quality due to underdeveloped incentives and market access. • Low sale prices for meat during dzud onset, while hay and fodder prices rise. • High-interest commercial loans pose risks to herders’ livelihoods. • Some herders lack knowledge or capacity for effective asset management. • The poorest herders may lack finances or face vulnerabilities that prevent them from preparing for shocks. 3.3.1 Index-based livestock insurance than 6 percent. The sample is based on a sample Livestock Census which is conducted in June to determine the eligibility of the ‘soum’ etc. Available This sub-section highlights an initiative, not formally evidence finds that it increased the resilience of the part of the social protection system, that is particularly livestock sector – with faster recovery for insured relevant to dzuds and was repeatedly discussed households compared to uninsured ones. during consultations carried out for this report: index- based livestock insurance. Index-based livestock insurance is viewed by many herders as a costly investment. NSO data reveals Currently, herders can seek to manage their risk a declining participation rate, with only 10.8 percent by purchasing index-based livestock insurance. of herding households insured in 2023 down from With support from the World Bank, the Government 19 percent in 2021. Furthermore, only 7.4 million of Mongolia developed an index-based insurance livestock are insured, representing approximately 10 program based on livestock mortality rates by percent of all livestock in the country according to species and soum. The Law on Index-Based Livestock the NSO. The financial burden of premiums is also Insurance provides that payout is only possible a concern, as herders paid over four times more when the soum-level livestock losses average more 44 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia in premiums than they received in compensation (iii) Insurance premiums appear to be costly. Those between 2016 and 2021 (Table 1). These factors who take out insurance may only partially insure highlight the need for addressing herders’ concerns their stock and try to assess where the best and improving the cost-effectiveness and perceived value for money lies (i.e. which animals offer the value of index-based livestock insurance. highest payout). (iv) Wealthier herders have the ability to relocate their The legal condition that a payout is only possible livestock to safer pastures outside the soum, when the soum-level livestock losses average more increasing their herd’s survival rate and reducing than 6 percent is widely viewed as problematic, for the overall number of livestock lost in dzud- reasons including the following: affected areas. This can hinder the achievement of the 6 percent threshold for insurance payouts, (i) The use of a 6 percent average loss across potentially affecting the eligibility of herders with a soum, which can encompass a vast area smaller herds, even if they have participated in with varying dzud impacts, may not accurately the insurance scheme. reflect the severity of dzud experienced by some herders. This is particularly problematic for the poorest and most vulnerable herders, who may face significantly higher losses than the average. (ii) Some herders obtain livestock insurance solely as a requirement for accessing commercial bank loans, rather than as a deliberate risk mitigation strategy. Table 1. Coverage of index-based livestock insurance, 2016-2021 Number of As a share of total Number of As a share of Fee income Compensation Year insured herder herder households insured livestock total livestock (billion MNT) (billion MNT) households (percent) (in mln) (percent) 2016 18,378 11.7 4.2 7.5 1.77 0.8 2017 24,148 15.3 5.7 9.2 2.33 1.1 2018 33,719 19.8 7.8 11.8 3.46 0.3 2019 32,337 18.8 7.4 11.2 3.85 0.6 2020 28,527 16.6 7.1 10.2 3.48 2.6 2021 34,709 19.2 7.4 11.0 3.92 -- Source: NEMA 2022. 2. Assessment of the adaptability of the social protection system in Mongolia 45 The livestock insurance market, therefore, requires reforms to make it more appealing to a wider range of herders, including those with smaller herds. While this topic falls outside the scope of this report’s expertise, it is evident that necessary revisions of the current index-based livestock insurance approach could be considered. It is to be noted that the government has recently submitted to the Parliament the draft amendments to the IBLI Law, which concern changes to indemnity eligibility threshold and payment timing. 3.3.2 Other challenges not directly related (ii) The livestock market system often results in low to social protection sale prices for herders, particularly for meat, at the onset of a dzud. This occurs while the prices of hay and fodder increase significantly during the Interviews for this report identified other challenges same period. facing herders that are not directly within the social protection system, but which are important context (iii) Commercial loans available to herders often carry for the recommendations in section 4. These include very high interest rates, posing significant risks the following: to their livelihoods in the event of unexpected shocks. As highlighted in the recent FAO report (i) There are prevailing perceptions among herders “Resilience Capacity Analysis of Mongolian that emphasize quantity of livestock over quality. Herder Households,” loan repayments become a This can be attributed to several factors, including substantial burden for households experiencing underdeveloped incentive mechanisms for quality, significant livestock losses. poorly developed supply chains and market (iv) A lack of capacity and/or knowledge exists access, and subsidies under the Mongolian among some herders regarding effective asset Livestock Program that prioritize the quantity of management practices. wool and hide production over quality. (v) Some of the poorest and most vulnerable herders may genuinely desire to prepare for shocks, such as improving their shelters or purchasing hay and fodder. However, a lack of finances or vulnerabilities like age, chronic illness, or disability prevent them from taking these steps. 46 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 4. RECOMMENDATIONS Photo Baku’s picture 2. Assessment of the adaptability of the social protection system in Mongolia 47 48 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 4. RECOMMENDATIONS This section includes two sets of recommendations which respond to the two overriding purposes of the report: • Assessing the adaptive capacity of the social protection system to support households/individuals in the face of covariate shocks across four pillars: (i) Institutional arrangements and partnerships; (ii) Programs and delivery systems; (iii) Data and information; and (iv) Finance (section 4.1). • Specific analysis and recommendations which focus on measures to enhance the resilience of poor and vulnerable herders before, during, and/or after a dzud (section 4.2). disasters (such as dzuds), should be considered 4.1 RECOMMENDATIONS FOR THE to enhance the resilience of herder households. SOCIAL PROTECTION SYSTEM Moreover, the Social Welfare Law could explicitly IN RELATION TO COVARIATE acknowledge the crucial role of aimag and district SHOCKS assemblies, as well as local governors, in ensuring the timely allocation of funds to respond to localized shocks and support affected vulnerable households. Local authorities should be mandated to allocate funds based on the scale and severity of the impact 4.1.1 Policies and institutional on livelihoods, thereby complementing or filling gaps in central budget funding. arrangements Recommendation 2: Incorporate the complementary Recommendation 1: Explicitly integrate the role of role of ASP into the DRM framework. The Disaster ASP into the social assistance legal framework. The Protection Law could grant the State Emergency Social Welfare Law would significantly benefit from Commission (SEC) the authority to determine if the a provision that explicitly outlines the role of ASP in conditions for triggering social protection expansion protecting the poor and vulnerable from pre-, during, are met in response to a disaster. The SEC should and post-shock events. Specific considerations could then adopt necessary decisions for follow-up with include expanding social assistance programs both social protection responses by the Cabinet and the vertically (increasing the level of assistance) and MFLSP. Furthermore, DRM or contingency plans horizontally (expanding coverage to reach more should be updated to include necessary social vulnerable populations) in response to covariate protection actions for both disaster preparedness shocks. Furthermore, the law could establish a clear and response, establish potential linkages between rule for scaling back the expanded programs once EWS and triggers for social protection interventions, the immediate impact of the disaster has subsided. and clearly specify the role of the MFLSP in relation Proactive measures, such as paying regular social to ASP within the context of these contingency plans. assistance cash transfers in advance of anticipated 4. Recommendations 49 4.1.2 Programs and Delivery systems 4.1.4 Finance Recommendation 6: Develop and implement a Recommendation 3: Strengthen subnational-driven comprehensive Disaster Risk Financing (DRF) and -financed shock-responsive social assistance strategy that includes guidelines for financing ASP. actions for responding to localized shocks. It is to be noted that the government has initiated the This could include allocation of local funds, process of drafting the DRF Law. The government effective outreach and communication efforts, should assess the feasibility of implementing the as well as household needs assessments, and recommendations from the 2023 ADB-funded reports coordination of state- and locally-financed on DRF diagnostics and strategic priorities, including interventions and humanitarian actions, to the need to strengthen technical and institutional support a more effective delivery system for capacities in DRF at all government levels and both preparedness and response actions. expand and diversify proactive DRF approaches and instruments. 4.1.3 Information systems 4.2 RECOMMENDATIONS TO Recommendation 4: Continue building the poten- tial capability of the IHAD to function as a ENHANCE THE RESILIENCE social registry. This could be achieved by OF POOR AND VULNERABLE integrating more databases, as envisioned by the HERDERS WITH REGARD TO 2023 Cabinet reso-lution (such as the social DZUD assistance beneficiary da-tabase and the education sector database), and re-vising the associated The recommendations in this section are grounded household welfare assessment PMT formula. in the principle of ensuring that any approach to Additionally, technical constraints re-lated to the adapting the social protection system should not speed of en masse data exchange under Khur result in harm to the environment. Pastoral herding, should be clearly communicated and addressed a longstanding and valued tradition in Mongolia, through inter-ministerial collaboration. is a primary source of income for approximately one-fifth of the population and contributes around Recommendation 5: Address the challenge of timely 10 percent of the country’s GDP.38 However, as update of household information by citizens by acknowledged by officials interviewed for this introducing nudging strategies. The timely update of report, the potential negative environmental impact household information has been a critical recurrent of future herding practices is a significant concern concern which determines the quality of data. given the anticipated effects of climate change. The Innovative and effective nudging could be piloted and recommendations strive to balance the genuine then scaled-up. These include requiring regular social needs of some herders with the potential drawbacks assistance cash benefit recipients and government of government interventions that may affect livestock staff to digitally update or verify, via the E-Mongolia commercialization. portal, the information regarding household composition, once a year within a certain time frame. 38 Authors’ calculations based on the following data points: agriculture, forestry and fishing represent 13.1 percent of national GDP (2021), World Bank indicators (https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS?locations=MN), and herding accounted for more than 80 percent of agriculture (as of 2009) (https://www.worldbank.org/en/news/feature/2009/09/23/index-based-livestock-insurance-project). 50 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia The recommendations equally stress dzud such transfers can achieve multiple objectives, there preparedness, reflecting the increasing international are inherent trade-offs to consider. In implementing evidence that investing in preparedness is often this recommendation, the government will need more cost-effective than responding to disasters. to ensure that such lumpsum payment is not A large-scale evaluation in Bangladesh assessed automatically drawn back by commercial banks the effectiveness of humanitarian cash transfers to settle any outstanding loans or interest owed by in mitigating the impact of sudden climate shocks. herders. Cash transfers provided before the shock encouraged households to take proactive measures, leading to The primary objective of this recommendation better child food security even three months later. is to assist herders in offsetting the costs of Beneficiaries also experienced reduced borrowing preparedness actions and enhancing their resilience needs and lower borrowing costs. to dzud. By increasing resilience, vulnerable herder households can better withstand the socioeconomic impacts of dzud, which may include livestock losses, 4.2.1 Preparedness (pre-dzud) reduced physical and psychological well-being, and decreased school completion. As the 2019 evaluation Recommendation 7: Carry out ‘livelihood exposure of an FBF initiative and Figure 4 demonstrate, most risk maps’ to identify areas with high concentration winter preparedness activities occur in October. of vulnerable households, facilitating the planning An advance payment in early October could enable and coordination of ex-ante and ex-post social herders to prepare more efficiently and mitigate assistance and humanitarian response. This the financial burden they face when hay and fodder ‘livelihood exposure risk map’ could be developed prices rise after dzud, while livestock prices decline annually by NEMA, utilizing the “Dzud Risk Map” due to market forces. and NSO data on the number of households and livestock, to identify the areas where herder livelihood A secondary objective of this recommendation is to is most at risk. This mapping will help supporting provide support without inadvertently incentivizing the financing and coordination of social assistance herders to maintain excessive livestock numbers. and humanitarian support from the government and While further analysis is needed to confirm this, the donors in a timely and coordinated manner. recommendation aims to balance supporting genuine needs with mitigating the risk of creating perverse Recommendation 8: Give herders receiving benefits incentives. This inherently involves trade-offs. While from social assistance programs such as the CMP, some herders are genuinely poor and vulnerable and FSP, Social Welfare Pensions, or others considered require additional support, such assistance should suitable, the option to receive three months of not discourage them from following government transfers in a lump sum payment in October advice to mitigate the impact of dzud, such as selling and January in anticipation of dzud. This would livestock (and protecting core herds) or relocating. effectively advance payments for October, November, and December to October, and for January, February, The proposed measure is likely to be politically and March to January. These “seasonality payments” viable as it does not require additional funding, being could be implemented in specific locations based an advance payment of existing entitlements. This on early warning data. To mitigate potential impacts could garner widespread political and community on local prices, especially for hay and fodder, these support. While a three-month payment may not fully payments should be limited to soums identified as address the preparedness needs of all vulnerable having high or moderate dzud risks. This approach herder households, the potential for strong political aligns with international practices of adjusting social and community backing is a significant factor to transfers in response to acute price increases. While consider. 4. Recommendations 51 A potential risk of this recommendation is the This argument stems from several concerns: the risk exclusion of some poor and vulnerable herders who of moral hazard, the potential for perverse incentives may not currently benefit from existing programs. that encourage excessive livestock holdings, and the Although the number of such herder households is need for budget neutrality given Mongolia’s already uncertain and is considered by some stakeholders generous social assistance system. Moreover, to be relatively small, it is nonetheless an important establishing a suitable eligibility threshold for a new exclusion risk to consider. Mitigating this risk is crucial, cash transfer program at the central level presents and recommendations 4 and 5, when implemented significant challenges. The diverse circumstances of in conjunction, will play a vital role in minimizing herder households, including variations in composition, exclusion over time. Furthermore, as outlined in livestock ownership, and management practices, recommendation 16, expanding the coverage and make a top-down approach potentially problematic. affordability of index-based livestock insurance for Importantly, the anticipation or promise of additional low-income herders, including the most vulnerable, funds could create perverse incentives, potentially and actively encouraging greater participation from encouraging some herders to maintain high livestock the financial and private sectors are essential steps. numbers, which can jeopardize pasture health. Given Mongolia’s existing robust social assistance system, Limiting the proposed lump-sum payment achieving political and community consensus for exclusively to the FSP is not recommended. Herders such measures may be difficult. However, Mongolia often face challenges accessing soum centers could revisit this option in the future. This should be for food purchases during the winter due to heavy informed by thorough assessments of the impact of snow and blocked passages. This necessitates current recommendations, including strengthening the purchase of larger quantities of non-perishable existing programs through improved targeting staple foods in preparation for the season. Providing mechanisms, implementing a more systematic advanced lump-sum payments to FSP beneficiaries approach to disaster risk financing and management, in anticipation of dzud could address some needs and strengthening index-based livestock insurance but offering advanced lump-sum payments for other through inclusive consultation processes and social assistance benefits as well might be even more rigorous analytical work. effective. The FSP has limited coverage, and FSP transfers are restricted to food purchases only, while Recommendation 10: Task MOFALI and MFLSP Figure 3 demonstrates that approximately 50 percent with developing and delivering awareness-raising of herders’ preparedness needs involve hay and workshops aimed at improving herders’ livestock fodder. Therefore, limiting the lump-sum payment management practices in preparation for disasters. to the FSP would not be very helpful for herders These sessions should align with best practices preparing for dzud. for managing livestock during periods of dzud risk, including advice on reducing herd size and protecting As outlined in section 4.1, a more systematic core herds, repairing and maintaining solid shelters approach to disaster risk financing and management for the livestock, etc. It is crucial to identify effective is essential to enhance the resilience for poor methodologies for enhancing herders’ capacity. and vulnerable herders towards dzuds and other Interviewees for this report highlighted the challenges disasters. of previous training efforts. The LRP’s existing training program could serve as a valuable platform for delivering this new training, provided it incorporates Recommendation 9: Leverage existing social practical and high-quality content. assistance programs rather than establishing a new cash transfer program. Instead of introducing a separate cash transfer program for poor and vulnerable dzud-affected herders, existing social assistance programs should be leveraged. 52 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 4.2.2 Response actions • Use MOFALI’s AIRS database for targeting the (after a dzud) most affected locations (aimags and soums) and households. As previously discussed, MOFALI’s Once a dzud has occurred, herders may face a range recently introduced AIRS database provides of potential needs. Even with preparedness measures valuable information on household livestock in place, as outlined in recommendations 8-10, some registration at the bagh level. Regularly updated herders may still require assistance. For example, by bagh governors and aggregated at soum a dzud could be more severe than anticipated, or and aimag levels, AIRS offers a more updated allocated funds for preparedness measures might assessment of the impact of dzud on herder prove insufficient. households, particularly in April or May. Aimag employment departments could strengthen their coordination with aimag agricultural departments Recommendation 11: Finetune the existing to receive the most recent data on animal loss and Livestock Restocking Program (LRP) to provide the number of affected households. effective post-dzud support to affected vulnerable herders. The finetuning of LRP implementation could • Adjust the benefit level of the LRP to reflect the involve the following: vulnerability of herder households, ensuring that rewards are not provided to the least • Use the dzud risk map to inform budget planning vulnerable. Currently the program does not for the LRP. To achieve this, local employment consider household size, overlooking the greater offices and the GOLWS should ensure that budget needs of larger households. To address this, the allocations consider the early warning data and benefit level should be more flexible, allowing dzud risk maps produced regularly by NAMEM. for higher benefits for larger households or This includes drought-based data released in those with heightened vulnerability. The MFLSP August, as well as historical data on the impact of could collaborate with MOFALI to determine dzud risks in each aimag. This approach will allow the minimum viable herd size for households of the MLFP and MOF to allocate sufficient funds different sizes and vulnerabilities and incorporate upfront to support the most vulnerable herder this information into revising benefit levels. households after a dzud event. However, the full impact of dzud on livestock losses and herder Recommendation 12: Mandate the local LSC to livelihoods typically becomes apparent in late April assess the living standards of vulnerable herder or early May. Therefore, the GOLWS and MFLSP households in dzud-affected areas and enroll eligible could revise the LRP budget allocation among households into the FSP. Given the low coverage of aimags based on real-time loss data collected the FSP, it is important to ensure that all potentially during this period. This ensures that resources eligible households are enrolled, thereby helping to are effectively directed to the most affected areas prevent further deepening of poverty and erosion of with the highest needs for support. human capital resulting from climatic shocks. This will require that the MFLSP/GOLWS provide additional funds for increased enrolment into the FSP in aimags severely affected by dzud. 4. Recommendations 53 Recommendation 13: Enable the Mongolian Red • Enhance interoperability between the MFLSP’s Cross (MRC) to access social welfare information IHAD and HID with the MOFALI AIRS database. data with support from the MFLSP. The MRC’s role This integration would provide the household in pre-dzud early action and post-dzud humanitarian information system with real-time data on herder aid coordination for herders is expanding. To enhance livestock, especially accounting for losses during efficiency, minimize duplication, and effectively target dzud. This enhanced data flow will enable more vulnerable households not covered by government informed and timely social protection responses programs, the MRC could be authorized, in accordance and improve the accuracy of household living with the applicable law, to access the MFLSP’s social standards assessments. assistance database and the MOFALI’s AIRS database for required fields. Alternatively, clear protocols could be established to ensure the timely provision of 4.2.3 Complementary (non-social necessary information to the MRC by the MFLSP/ protection) recommendations GOLWS. By leveraging the MRC’s capabilities and fostering effective multi-stakeholder collaboration, the MRC can play a pivotal role in coordinating and Areas where reforms or actions outside the mandate delivering humanitarian assistance to both herder of social protection are required to complement the and non-herder households, with the strong support above recommendations include: and involvement of the MFLSP. Recommendation 15: Establish a dedicated dzud Recommendation 14: Establish interoperability resilience window within the Local Development between relevant databases that relate to eligibility Fund (LDF) to facilitate funding decisions for criteria for a dzud-preparedness or dzud-response dzud preparedness, coping, and response efforts. initiative. The LDF is a proven mechanism that government and community interviewees recognize for its effectiveness, efficiency, and transparency at the • Strengthen the real-time functionality and soum level (see Box 4). Creating a dzud resilience interoperability of the MOFALI’s AIRS database. window will raise awareness and promote the LDF’s The AIRS database offers valuable insights into the use for this purpose, while also supporting its ongoing impact of dzud on specific locations and individual role in local development. households. The potential recognition of the AIRS data by the NSO as administrative statistics would further enhance its utility. Integrating the MOFALI AIRS database with PHRD would create a real-time source of comprehensive information integrating livestock numbers and demographic indicators, reducing data gaps and minimizing the risk of manipulation. Importantly, this would also enable authorities to analyze the impact of dzud and other climatic shocks like flood, fire, and wind on individual herder households at an aggregate level (in terms of livestock loss relative to initial status),39 providing valuable insights for improving social protection policies and measures. 39 Currently, the number of herds perished is reported by locations and by the type of animals only. 54 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia Box 4. Overview of Local Development Fund Each soum and district in Mongolia has a Local Development Fund (LDF) which is used to finance investments in infrastructure and services at the local level. The Integrated Budget Law (IBL) of 2013 established the LDF, which devolves authority over substantial amounts of funding to aimag and soum level governments. The LDF’s funding pool is based on certain percentages of state revenues including value-added tax (VAT), royalties, exploration, and mining license incomes, and in 2023 it represented MNT 28.5 billion (approximately USD 8 million). LDF allocations are decided on an annual basis through a robust participatory process at the community level. The IBL prescribes a process of public consultations and inputs to as to how LDF funds are spent. Funds are spent only on the basis of the collective decision of the community. In 2022, e-voting for LDF allocations was launched through the e-Mongolia mobile application (www.emongolia.mn). The LDF is intended to be a multi-sectoral initiative. Its design envisions a collaborative approach involving all relevant ministries to promote its important policy agenda. However, currently, this collaboration is lacking, and the LDF is primarily being used to support a local investment agenda that falls under the purview of the Ministry of Finance. The LDF regulations40 permit funding for disaster and understanding of using LDF funds for these preparedness activities at the soum/district level, purposes, especially when dzud risk is known, such and disaster protection is not excluded from eligible as due to below-average summer rainfall. Successful activities. National-level government stakeholders implementation of this recommendation requires have expressed support for using the LDF as a awareness-raising and advocacy, potentially through mechanism to assist herders in preparing for and joint inter-agency guidance for local communities responding to dzuds. on utilizing the LDF for disaster preparedness and mitigation, particularly for poor and vulnerable This recommendation could be implemented in rural herders. Key stakeholders would include MOF, MFLSP, soums only. Funds from the Dzud Resilience window MOFALI, and potentially NEMA. within the LDF could support community initiatives to assist individual herders and communities in preparing Recommendation 16: Strengthen the index-based for, coping with, or responding to dzud. Soums or livestock insurance system to improve coverage communities facing persistent or increased dzud risk, and affordability. As discussed in section 3.3, there as identified by NAMEM’s historical data, may receive is a need to expand coverage and make index- increased budget allocations from MOF. Annual LDF based livestock insurance more accessible to low- funding can also benefit other rural communities if income herders, including vulnerable households. they choose to implement disaster preparedness and Attracting greater participation from the financial and protection activities, driven by increased awareness private sectors is also crucial. An open and inclusive 40 Regulation adopted by MOF Minister’s Decree No. 86 adopted in 2021. 4. Recommendations 55 consultative process, supported by rigorous technical analysis, should be used to identify challenges, opportunities, and potential innovations for improving coverage and affordability for targeted beneficiaries vulnerable to climate shocks.41 It is to be noted that the government has taken steps to amend the Law on Index-based Livestock Insurance, aiming to refine the eligibility threshold and optimize the timing of indemnity payments to herders. Recommendation 17:Promote the commercialization and development of livestock systems and address the current incentive structure that prioritizes quantity over quality. Many stakeholders highlighted the underdeveloped state of livestock markets in Mongolia. While this topic is beyond the scope of this report, there is a clear consensus on the need for market incentives that encourage herders to produce higher-quality livestock and livestock products. Additionally, the market structure, including supply chains, requires development. The subsidies within the National Livestock Program should be revised to address the current imbalance that incentivizes quantity over quality. Recommendation 18: Ensure consistency with other ongoing policy reforms, particularly in agriculture and climate change (also see Box 4). The interventions proposed in this report may have implications for other public policy priorities and reforms. The MFLSP is recommended to initiate a consultation process with relevant ministries and authorities, including MOF, MOFALI, the Ministry of Environment and Tourism, and NEMA. Prominent international actors and development partners should also consult with their sectoral colleagues to assess the alignment of the recommendations in this report with existing policy objectives. 41 It is to be noted that MOF and Mongolia Re-Insurance initiated consultations in 2024 to further enhancing certain parameters of IBLI. 56 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia REFERENCES ADB (Asian Development Bank) and World Bank. 2021. Climate Risk Country Profile: Mongolia. https://www.adb.org/sites/default/files/publication/709901/climate-risk- country-profile-mongolia.pdf Bertram-Huemmer, V. and Kraehnert, K. 2018. “Does Index Insurance Help Households Recover from Disaster? Evidence from IBLI Mongolia.” American Journal of Agricultural Economics. 100(1): 145–171. 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Ulaanbaatar UNICEF (United Nations Children’s Fund). 2020b. “Summary of shock responsive social protection programme pilot for rural children.” Accessible at. https://www.jointsdgfund. org/article/summary-shock-responsive-social-protection-programme-pilot-rural- children References 59 UNICEF (United Nations Children’s Fund). 2021. Assessment of the Government of Mongolia’s Shock-Responsive Vertical Expansion of Social Assistance in Response to COVID-19. World Bank. 2015a. Mongolia Public Financial Management Performance Report. © Washington, DC. http://hdl.handle net/10986/22093 License: CC BY 3.0 IGO. World Bank. 2015b. Mongolia to Implement Third Phase of Project Promoting Rural Livelihoods. World Bank press release accessible at:https://www.worldbank. org/en/news/press-release/2015/01/30/mongolia-to-implement-third-phase-of- project-promoting-rural-livelihoods World Bank. 2020a. Social Assistance Programs. Mongolia. Mimeo. World Bank. 2020b. Mongolia Social Assistance Delivery Systems. Mimeo. World Bank. 2021a. “Brief: Monitoring COVID-19 Impacts on Households in Mongolia.” Accessible at https://www.worldbank.org/en/country/mongolia/brief/monitoring- covid-19-impacts-on-households-in-mongolia World Bank. 2021b. Mongolia: Strengthening Social Assistance – Synthesis Report. (Unpublished). World Bank. 2023. Stress Testing the Adaptiveness of Mongolia’s Social Protection System. Mimeo. World Bank. 2024. Mongolia Country Climate Development Report. Washington, D.C.: World Bank Group. World Bank and NSO (National Statistics Office). 2022. Mongolia Poverty Update 2020. Washington, D.C.: World Bank Group. 60 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia ANNEX A. SELECTION OF MONGOLIA’S SOCIAL ASSISTANCE RESPONSES TO THE COVID-19 PANDEMIC Child Money Program: This allowance (pre-COVID amount MNT 20,000 per month) was increased to MNT 100,000 per month (about US$35) as part of government fiscal measures to respond to the COVID-19 pandemic. The allowance is transferred to each child of Mongolia aged below 18 years. The increased level of the allowance was implemented for the period between April 1st and September 2020 as per the initial plan; it was then extended until January 1st, 2021 and then again until July 1st, 2021. The effective period was extended further and has remained so to date in view of high inflation. In January 2023, the Parliament decided to provide the child money to 91 percent of children belonging to the bottom of the welfare distribution, but the decision was reversed a few months later, the allowance is once again universal across the country. Social Welfare Pension: This benefit is provided to seniors who are not eligible for the old-age pension from the Social Insurance Fund, persons with disabilities, children who lost a breadwinner, and single and senior parents with 4+ children. The benefit’s pre-COVID level was MNT 188,000 per month. The benefit was increased to MNT 288,000 (about US $101) as part of government fiscal measures to respond to the COVID-19 pandemic. The increased level of allowance was implemented for the period between May through September 2020 as per the initial plan; it was then extended until January 2021 and then extended again until July 2021. Due to rising inflation, the elevated amount was then made permanent, with subsequent increases since then. Food Support Program (previously Food Stamp Program): A monthly benefit is provided to members of poor families in the form of a bank card that can only be used to purchase food. The benefit’s pre-COVID level was MNT 16,000 per adult and MNT 8,000 per child per month. The benefit was temporarily increased to MNT 32,000 (about US$11.2) per adult and MNT 16,000 (about US$5.6) per child per month during May 1st to October 1st, 2020, as part of government fiscal measures to respond to the COVID-19 pandemic. The increased level of the benefit continued only for adults till January 1st, 2021. From January 1st, 2021, the increased benefit for adults was scaled back to the pre-COVID level. Livelihood support allowance: This monthly benefit is provided for a child aged below age 16 years who requires permanent care due to sickness. The benefit’s pre-COVID level was MNT 188,000 per month. The benefit was increased to MNT 288,000 (about US$101) as part of government fiscal measures to respond to the COVID-19 pandemic. The increased level of the allowance was implemented for the period between May and September 2020 as per the initial plan; it was then extended until January 2021 and then again until July 2021. The elevated amount has remained in place since then. One-time universal cash transfer: MNT 300,000 (about US$105) per person was transferred to every citizen in April 2021 to support families during lockdown between April 10-25, 2021 (the lockdown was extended until May 8, 2021). Even those residing in other countries who still hold Mongolian citizenship could obtain the allowance if they applied online and connected their local bank account with the E- Mongolia system. Source: World Bank, internal data. Annexes 61 ANNEX B. DISASTER PROTECTION INSTITUTIONAL FRAMEWORK IN MONGOLIA Source: NEMA (2022). Mongolia’s National Midterm Review of The Sendai Framework for Disaster Risk Annex B. Disaster protection institutional framework in Mongolia Reduction Report. Source: NEMA (2022). Mongolia’s National Midterm Review of The Sendai Framework for Disaster Risk Reduction Report. 62 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia ANNEX C. NEMA ORGANIZATIONAL CHART Annex C. NEMA organizational chart Source: Centerfor Center Source: Excellence for Excellence in Disaster in Disaster Management Management & Humanitarian & Humanitarian Assistance Assistance (2022). (2022). Mongolia disaster manMongolia - disaster management reference agement reference handbook. handbook. Annexes 63 ANNEX D. EXAMPLES OF ADAPTIVE SOCIAL PROTECTION Design tweaks: adjustments to routine social protection programs to increase flexibility and ensure continuity of provision in times of shocks. Examples include waiving conditionality, changing payment delivery methods, or modifying payment schedules. Annex D. Examples of Adaptive Social Protection Piggybacking: Design leveraging one tweaks: adjustments or more to routine elements social of the protection social protection programs to increase system (such flexibility as a and ensure database, beneficiary list, or payment mechanism) to respond to a shock. continuity of provision in times of shocks. Examples include waiving conditionality, changing payment delivery methods, or modifying payment schedules. Alignment: developing or adapting elements of a social protection system with a current hu- manitarian response Piggybacking: (and leveraging onevice versa) or more – such of elements asthe objectives, targeting social protection method, system transfer (such value as a database, or delivery list, beneficiary or payment mechanism – mechanism) with the aim to ofrespond to a shock. preserving, strengthening or expanding the social protection system in future. Alignment: developing or adapting elements of a social protection system with a current humanitarian response Vertical expansion: a (and vice versa) temporary – such increase inas objectives, the targeting transfer value method,of or duration transfer value pro- an existing or delivery mechanism – with the aim of preserving, strengthening or expanding the social protection gram for some or all current beneficiaries (see figure below). New components may also be system in future. added. Vertical expansion: a temporary increase in the transfer value or duration of an existing program for Horizontal some expansion: or all current expanding beneficiaries (seeprogram coverage figure below). Newto new households components affected may also by a shock be added. or developing a new program. Horizontal expansion: expanding program coverage to new households affected by a shock (Error! Not a valid bookmark self-reference.) or developing a new program. Illustration of vertical and horizontal expansion of social assistance programs Illustration of vertical and horizontal expansion of social assistance programs Source: Bowen, T. et al. (2020). Adaptive Social Protection: Building Resilience to Shocks. International Source: Bowen, T. et al. (2020). Adaptive Social Protection: Building Resilience to Shocks. International Development Development in Focus (Washington in Focus (Washington World Bank DC:Group). DC: World Bank Group). https://openknowledge.worldbank.org/entities/publication/153c - https://openknowledge.worldbank.org/entities/publication/153cd49c-bae7-5b92-bdc6-11040915723b d49c-bae7-5b92-bdc6-11040915723b 64 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia 2. Assessment of the adaptability of the social protection system in Mongolia 65 66 Assessing the adaptability of social protection and enhancing herder resilience against climate shocks in Mongolia