Ulaanbaatar, September 17, 2015—Rural residents in Mongolia will benefit from a $34.1 million program funded by World Bank and Swiss Agency for Development and Cooperation (SDC) that aims to make the government funding process more transparent and more responsive to community needs.

The program, the third phase of the Sustainable Livelihoods Project, was officially launched today in Ulaanbaatar with a workshop organized by the Ministry of Finance and the World Bank. The three-year program aims to help Mongolia implement the 2011 budget law, which gives rural communities a greater role in the government funding process.

“The project will empower rural communities by providing a transparent mechanism for funding to be transferred to support local development initiatives,” said James Anderson, World Bank Country Manager for Mongolia.

The program will build on the success of the first two phases of the project, which have helped set up community development funds financing more than 6,000 projects, mostly investing in education and health. It will build local government’s capacity for financing investments in infrastructure and services. Based on the budget law, funding allocations are decided each year through robust community participation.

“The Sustainable Livelihood Project has played an important role in developing rural areas in Mongolia through community participation. The Government of Mongolia and World Bank have worked together since 2002 to implement the project and increase the flow of public and private investment to herders’ communities,” said Kh. Gantsogt, State Secretary of the Ministry of Finance.

The project will also support local economic development by promoting investments for private sector growth in the more than 300 soums – or local administrative districts – throughout the country.

It will focus on financing based on governance performance, which awards additional funding for local development investments to local government entities that adopt participatory processes to reflect local needs and priorities in their planning, budgeting, implementation, monitoring and evaluation processes.

“The new phase of the project will ensure that the budget available at local level, especially Local Development Funds, will be managed and used effectively and efficiently, responding to the needs of local people. Strengthening capacities of local governments in rural areas will be key to achieving this goal,” said Markus Waldvogel, Director of Cooperation of Swiss Agency for Development and Cooperation.

The program is funded with a $22.7 million credit from the International Development Association (IDA), the Bank’s fund for the low-income countries and a $11.4 million grant from the Swiss Agency for Development and Cooperation.

The project, funded by the Swiss Agency for Development and Cooperation (SDC), will be implemented by The Asia Foundation in collaboration with the City Municipality of Ulaanbaatar for the next four years. 

The project launch brought together more than 150 representatives from the Capital City Governor’s Office and the Mayor’s Office, Ulaanbaatar districts and khoroos and civil society to discuss the project’s goals, outcomes and future collaboration.

“We are working to strengthen Ulaanbaatar city’s self-governance based on direct citizen participation by ensuring the transparency and openness of our state affairs and improving citizens’ access to public services,” said Head of Ulaanbaatar City Mayor’s Office, B. Badral at the launch workshop. “Our ultimate goal is to build a city that is competitive and provides a safe and healthy environment for its residents.”

The project will focus on empowering district and khoroo governments to deliver public services and involve citizens in budget decision-making. To achieve these objectives, the project will work closely with local governments and citizens to ensure that services and investments respond to citizens’ priorities.
 
“This project marks a milestone for SDC’s presence in Mongolia,” said SDC Director of Cooperation Markus Waldvogel. “It is the first time that SDC has decided to cooperate on improving governance and furthering decentralisation in an urban area, having the capital city municipality as a partner.”

Mr Waldvogel said the project would empower residents of ger areas to participate in, and take responsibility for, improving their livelihoods. It was about fostering citizens’ roles in developing democratic, accountable and transparent local government.

“Now, in multi-partnership, we are pooling our teams and know-how to work hand-in-hand with the city to develop this new project,” said Meloney Lindberg, The Asia Foundation - Mongolia Office Country Representative.

“The project goal will be achieved through the attainment of five outputs, which are: Increasing citizens’ participation in budgeting and planning; improving public service delivery; strengthening the government’s capability, and institutionalising capability-strengthening programmes.”

The project selected 33 khoroos in Ulaanbaatar’s ger areas spanning all nine of the city’s districts, and will reach an estimated 330,000 citizens. The project will be implemented in partnership with civil society organisations represented by the Open Society Forum, Transparency International and the Centre for Democracy Education.