The UB Post interviewed UNDP Resident Representative Beate Trankmann about sustainable development and mining issues in Mongolia.
In your view, can Mongolia stick to the UN Development Goals when it comes to the protection of the environment?
As an early adopter of the United Nations Sustainable Development Goals, Mongolia has shown a strong commitment to ending poverty, improving social equality and protecting its diverse and rich environment. In its own version of the SDGs – the Mongolia 2030 Sustainable Development Vision – Mongolia put these ambitious global goals into a local context, including preserving the country’s ecological balance while continuing to develop the economy and raise living standards for all.
In June 2014, the State Great Khural (Parliament) had already approved Mongolia’s Green Development Policy, which aims to ensure that green development becomes one of the country’s fundamental goals. This was backed up by an action plan for the implementation of Green Development Policy approved by the government in January 2016, which outlines measures to support amongst other things the creation of green jobs and ecological infrastructure, as well as strengthening waste management systems and facilities. Mongolia was also the first country to join PAGE (the UN Partnership for Action on Green Economy) in 2013 and is reframing its economic policies around sustainability and green growth. Hence, at the policy and planning level, Mongolia is certainly heading in the right direction. In the long-term, thanks to its vast mineral wealth, Mongolia’s macroeconomic prospects look promising. However, in the short-term and in the face of the current economic down-turn and tightening fiscal space, the challenge will be translating this green development vision into immediate steps, budget allocations and investments that can stimulate much needed growth without compromising on environmental protection and sustainability. Investing into environmental capital now will be critical in this regard.
Key environmental challenges to overcome include rangeland degradation, desertification, melting glaciers and urban air pollution. Mongolia’s capital has one of the world’s worst winter air pollution. Annual particulate matter (PM 2.5) of air pollution averages nearly 70 micrograms per cubic meter (µg/m3) in Ulaanbaatar, more than double the World Health Organization’s safe limit. This has contributed to a rise in pneumonia, cardiovascular disease and other illnesses. With 87 percent of this pollution coming from household stoves, further efforts are needed by all stakeholders to ensure alternative forms of cost-effective heating to families in ger districts. Clean burning stoves have helped to reduce the problem in recent years – such initiatives towards cleaner energy consumption in cities should be expanded further. It is however clear that reducing air pollution in UB and decreasing Mongolia’s comparatively high per capita carbon footprint will require interventions on multiple fronts. These include moving out of fossil fuel based forms of energy generation wherever possible and increasing the percentage of renewable sources of energy in the energy mix by, for example, incentivizing investments into green energy, as well as gradually reducing coal subsidies and changing consumer behavior through pricing measures. It also entails enhancing the energy efficiency of buildings and limiting heat loss in winter in addition to strengthening public transport systems as a viable alternative to the ever increasing fleet of private vehicles, which also constitute a source of pollution and emissions.
The government and the UN recently signed the UN Development Assistant Framework for 2017-2021, which includes promoting the sustainable management of natural resources as a key focus area. Growth strategies, especially in Mongolia’s mining, energy and agricultural sectors, may need to be adjusted so that environmental and climate change objectives can be reached in parallel with meeting the economic objectives. We are optimistic that with careful management and the right choices these ambitious objectives can be reached, and the UN stands ready to support Mongolia in achieving that.
Knowing that mineral commodities represent about 80 percent of Mongolia’s exports, what other products from a greener economy could Mongolia start commercializing?
Agriculture, which is already a main stay of the economy, as well as eco-tourism and the cashmere industry have the potential to lead to the creation of green jobs and diversify Mongolia’s economy to reduce the dependency on mining. However, the current record high number of 85 million heads of livestock in Mongolia (as per National Statistical Office 2014 count) doesn’t only put pressure on prices due to an oversupply in the market but also puts pressure on the land and Mongolia’s ecosystems, which are increasingly threatened by overgrazing. Rather than achieving growth in these sectors through further volume increases, it will be important to enhance the productivity of herding and farming through smart and eco-friendly agricultural techniques and to develop the downstream processing industries to generate value addition in country, complementing the export of primary products.
Building on its free range herding and organic farming and with the introduction of the right standards and certification systems, Mongolia has an opportunity to develop a green and organic branding for its meat and agricultural produce and target consumers in overseas markets who are increasingly willing to pay higher prices for healthy products. Accessing these lifestyle oriented, exclusive and high return niche markets would allow Mongolia to shift the emphasis in agriculture but also cashmere and other industries from quantity to quality and from traditional to green approaches. The same logic applies to tourism where the natural beauty and the pristine landscape and ecosystems of Mongolia have a lot to offer. Well targeted government policies and programs that incentivise investments into these areas and put a price on the environment can help facilitate this shift.
Another treasure of Mongolia is its highly-educated youth. Mongolia has the youngest population in Northeast Asia. At close to 35 percent of the country’s people, Mongolians aged 15 to 34 years old are the largest demographic group, according to the latest National Human Development Report, developed by national and international experts with the support of the United Nations Development Programme (UNDP) in Mongolia.
Even by 2040, young people will still make up one third of the population, and higher levels of education are helping to unlock their capabilities. About 96 percent of Mongolian students were attending high school as of last year, while college enrollments have tripled between the years 2000 to 2010. This group is more informed, tech-savvy and globally connected than any generation before them. They represent an opportunity to further diversify into light industries such as electronics, the online economy, new technology and services. The country’s traditional nomadic lifestyle is geared towards rapidly adapting to change and solving problems with limited resources. When you combine this with an increasingly well-educated youth and openness to new ideas, there is potential for technology and innovation to play a much bigger role in Mongolia’s economy. To achieve that, considerable investments in human capital and technology are needed by the government and private sector, along with policy action to support that.
With mining accounting for around 40 percent of the government’s total revenues, is it conceivable that the Mongolia would drop part of this polluting industry to invest in a more sustainable activity?
Any diversification or change will be a transition that takes time, so it’s important to keep the long-term vision in mind.
The government must think of the trade-offs and implications for the environment. Polluting first and cleaning up later is no longer an option. It not only exponentially increases the costs of environmental damage, many of which already have a direct bearing, for example, on public health through air, water and soil pollution, and will have to be borne by current and future generations. It also brings humanity closer to the so-called planetary boundaries such as the 2°C threshold beyond which irreversible and potentially catastrophic consequences of climate change can no longer be excluded. It is not a question of either or – even during the most recent discussions globally on the subject at the World Economic Forum, mining representatives themselves were saying that reducing CO2 emissions is unavoidable, given the challenges we are facing due to climate change. Change must happen, so the question is how fast, in what sequence and what is the best way.
Conceptually, part of the answer lies in defining economic growth differently and establishing a new measure of green growth or green GDP that factors in the costs caused by environmental degradation, which inevitably come back to public coffers either through increased health expenditure for example or expenditures for clean-up operations, as an externality. The higher these costs are, the less the growth. Some countries in the region such as Indonesia, for example, are already experimenting with measures like this with support from the UN and UNDP.
Concretely, renewable energies such as solar, wind and biomass that are already being explored in Mongolia should be developed further. With prices for renewable energy technology continuing to decline, the price of needed investments itself may not be the main barrier in years to come. While mining is likely to remain the part of the mix – the currently low commodity prices bring an opportunity to firstly, start pricing it adequately and secondly, gradually decrease its share in the mix by expanding the menu.
Urbanization is currently accompanying the switch to a greener economy; in what fields could the young people coming from the countryside find new jobs?
Given how competitive cities are, there must be more focus on creating the right environment to support decent jobs in the first place. Many new migrants arrive in Ulaanbaatar with valuable skills that, with vocational re-training, could be used in other form. In a market economy, many herders are increasingly thinking more like entrepreneurs, with sales and marketing playing a greater role than in the past. There may be young people among them who if properly supported, could help develop small and medium sized enterprises in towns and cities.
Despite higher educational attainment, the unemployment rate among Mongolians aged 20 to 24 years old is 17 percent – well above the national average, 7.5 percent, according to the National Human Development Report. This is partly due to a mismatch between academic programs and what employers want. By increasing the availability of training and internship programs, graduates can acquire the required initial work experience to make them fit for the employment market.
In addition, entrepreneurship and start-ups should be supported to create new jobs for youth. This requires further policy initiatives to encourage companies to train young people, as well as building a strong legal environment and offering entry capital assistance at lower interest rates. Banks see youth as higher risk as they have no credit history, so the government should offer collateral to buffer that risk. Employers should also be supported to hire graduates, for example through tax incentives and be encouraged to create close partnerships with schools and universities so that graduates do have some employment history and practical skills that would make them more marketable.
Young people are the future of Mongolia. To turn this vast group into a demographic dividend in decades to come, we must support and create opportunities for them today.