LOCAL ECONOMIC DEVELOPMENT DESK STUDY

Ulaanbaatar - 51.1 38.7 - 14.6 12.1 - 5.7 5.4
Source: Living Standard Sample Survey Report, NSO, 1998, 2002-2003, Statistical Yearbook of Mongolia, 2006.
In 1998 32.6% of the rural population was below the poverty line which was lower than the country
average whereas it increased to 43.4% in 2003 up by 7.3 points than the country average of 36.1%.
In 2006 the rural poverty level was 4.8 point more than the country average.
The poverty depth and severity indices as indicators of poverty were higher in countryside than in
urban areas. The poverty depth is the indicator that shows how low average consumption level of
the poor was in relation to the poverty line. For example, it means that in 2006 average
consumption level of the rural poor was 11.9% lower than the poverty line. The poverty severity
index shows inequality among the poor.
According to the 2003 and 2006 survey results, the western region has the most widespread poverty
in Mongolia. In 2003 more than half of the western region’s population had incomes below the
poverty line which was much higher than the regional and country average figures.
It shows that the western region is behind in economic development level (lowest GDP per capita)
and has the most widespread poverty.
As for our country the presence of poverty in the population is considered to be due to many factors
such as lack of jobs, widespread unemployment, low income of the unemployed, and increase in the
price of consumer durables and services.
4. THE GOVERNMENT’S POLICY ON ECONOMIC DEVELOPMENT
4.1 The Government’s policy on rural and regional development
Mongolia comprises 1,564.1 thousand square km of land and though it ranks the top 17 th in the
world by territory, its population is 2.6 million. As it has a vast territory and is sparsely populated,
the Government’s policy on regional and rural development is important.
The main documents identifying the Government’s policy on socio-economic development in
Mongolia comprise laws passed by the SIK, policy documents, development programs, and action
plan of the Government, and Government resolutions and decisions.
• Article 25 of the Constitution of Mongolia states "The territory of Mongolia is divided
administratively into provinces and a capital city; provinces are subdivided into regions;
regions into communities; the capital city is divided into districts and districts into
neighborhoods", Article 28 states "The province, the capital city, region, and district are
administrative, territorial, and socio-economic complexes with their functions and
administrations provided for by law", Article 59 states "Governance of administrative and
territorial units of Mongolia is organized on the basis of the principles of both self-
Government and central Government", and Article 62 states "Local self-governing bodies
besides making independent decisions on matters of socio-economic life of the respective
province, the capital city, region, district, community and neighborhood organize the
participation of the population in solving problems of national scale and that of larger
territorial divisions" respectively making it primary provisions that set obligations and
powers of local Government in the state structure of Mongolia.
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