No money left for Mongolia’s poor

Despite an economic boom, lack of forward planning means many of the country’s most vulnerable families are struggling.

The landlocked nation, once known for its nomadic lifestyle, now is associated with mineral-rich mines and a booming economy [Philippa Stewart/Al Jazeera]

Ulaanbaatar, Mongolia Inside her home on the outskirts of Mongolia’s capital, Altanzul Tsend-Atush sits surrounded by her children and other children from neighbouring gers.

Of Ulaanbaatar’s 1.3 million residents, about 800,000 of them live in ger districts scattered throughout the capital. The mix of the traditional nomadic structures, also known as yurts in Russian, and more permanent dwellings give the areas a disjointed feeling. None of the structures, no matter how permanent, have running water and many of the residents are living in poverty.

It is a far cry from the gers’ cultural beginnings as mobile homes used by herdsmen as they roamed through Mongolia’s steppes with their animals. In recent years, the landlocked nation has become less associated with a nomadic lifestyle and more with mineral-rich mines and a booming economy.

Chantasaldulam’s daughters wait for their mother to return home. The girls, aged five and six are often left alone for up to 12 hours a day [Philippa Stewart/Al Jazeera] 

But Altanzul does not think much of the often-touted headlines on Mongolia having, up until recently, one of the fastest growing economies in the world.

“We didn’t see any of that money,” the mother of six told Al Jazeera. “We see a big gap with the way the poor live and the way the rich live – I worry that the children will not have enough food and clothes for the winter.”

Altanzul’s husband died of cirrhosis – a not uncommon illness in a country notorious for its alcohol consumption. He had been too sick to work for some time, and with no palliative care available, he had been staying at home in the ger along with his wife and six children who are aged 3-17.

“All our hopes are now on our eldest daughter to get a job,” said Altanzul. “She wanted to go to college after school and I think she is embarrassed about having to work – but this is the only way, her brothers and sisters need to eat.”

Families in Mongolia receive around $11 a month from the government for each child – not enough to cover food bills in a country suffering from rising prices and currency depreciation. It means families like Altanzul’s are living a hand-to-mouth existence, unable to save or make any provision for the future. 

This is symptomatic of a wider problem with Mongolia’s attitude towards its sudden prosperity, economist Batsuuri Haltar told Al Jazeera.

“We don’t have confidence in ourselves, we don’t have any vision,” Haltar said.

“Because we don’t have confidence in our future, we want to sell everything off and run away. It’s like if you believe there is no tomorrow then what are you going to do with all the things you have? It doesn’t matter what kind of debt we are going to accumulate. As long as we can live today, there is no tomorrow.”

Digging hole for the economy

Mongolia’s economy, which suffered heavy losses following the disintegration of the Soviet Union in the early 1990s, has had to deal with many blows in the past decades, including natural disasters that killed large amounts of livestock in 2000 and 2009.

In 2011, however, Mongolia was heralded as having the fastest growing economy in the world with a GDP increase of 17.3 percent, or about $13.38bn, due to the mining of its mineral-rich land – primarily coal, copper and gold.

According to the World Bank, this figure fell to 11.7 percent in 2012 and again in 2013 to 10 percent. The mining industry makes up about 30 percent of the country’s GDP.

“Industrial manufacturing is only 5-8 percent [of GDP] when it used to be 35 percent,” Haltar said. “The economy is structured in a very fragile way and it is easy to collapse. We depend on mining and we abandoned the traditional ways of life and the traditional economy.”

“No one is really thinking about [the mineral wealth running out]. They think that we are sitting on unlimited resources. With such an industry there is no such thing as an unlimited resource. We have to start investing in other sectors of the economy, especially those areas with increasing returns.

“There were talks about establishing a mining fund. They should do it now otherwise it is going to be too late.”

Government’s mea culpa

The government is among the first to admit fault when it comes to how the influx of mineral wealth was handled.

The vice minister of economic development, Chuluunbat Ochirbat, told Al Jazeera that mistakes had been made following the financial boom.

“[These are] true comments and remarks,” Ochirbat said when asked about a World Bank report criticising the government’s financial policy.

“We have learnt a good lesson. We didn’t spend the money in a positive way or properly. Before 2012 we collected money into a human development fund that was designed as a welfare fund, but just prior to the election we spent all the money in the fund.”

As the welfare fund ran dry, and families began to struggle to survive, Mongolia’s government looked to foreign investment to try to boost the economy once more. Ochirbat told Al Jazeera that approval of a new law would make foreign investment easier. The government also plans to approve oil and gas exploration in the country as a way of making financial gains.

Ochirbat said the welfare fund had been spent too quickly because the country’s rich were given as much as the poor.

“If only the poor part of society had benefitted from the fund, that could have been good, but everybody – even the very wealthy got the money. We should now introduce fund management guidelines and a special law to ensure fair distribution of GDP.”

The impact of this mismanagement on Mongolia’s poorest communities is plain to see.

Often parents must choose between looking after their children and earning enough to make sure they can provide them with a future.

Chantasaldulam Vaanjil, who lives at one of the highest points in an eastern ger district, overlooking the towers and smoke of Ulaanbaatar, works 12- or 14-hour days as a cleaner in a private hospital for $191 a month.

It means her two daughters, aged 5 and 6, are often left to their own devices, or in the care of relatives who live in a nearby ger.

“I worry about them all the time,” Chantasaldulam told Al Jazeera. “They are only at school for three hours a day and I come home very late – they are by themselves too much, but I don’t want them to have the life I had.

“I have to work so I can send them to college and so they can make life better for themselves. We do feel jealous sometimes when we see the richer people but we just have to work and hope it will be better for our children.”

Source: Al Jazeera