Mongolia faces significant challenges in its labor market, including an aging population, low workforce participation, high unemployment rates, and low labor productivity. Recently, the Prime Minister met with private employers to discuss labor force issues and wage policies. As Mongolia seeks solutions, striking a balance between policy reforms and sustainable job creation becomes crucial.

Mongolia's heavy reliance on the public sector, where 22% of the employed population works, is unsustainable.

To address this, the government aims to outsource work to the private sector, reducing the burden on the government while creating job growth opportunities. However, concerns raised by private sector representatives regarding social insurance payment burdens and skill shortages must be considered.

Private sector representatives highlight the tax burden on employers and the scarcity of job-ready skilled workers. They fear that wage increases for public sector employees may disrupt the private sector's competitiveness.

The finance minister proposes performance-based salaries to increase productivity and incentivize employers following recent pockets of strikes by teachers and healthcare workers. Addressing these concerns is crucial for a balanced labor market.

Small businesses in the commerce sector offer promising job prospects, particularly in Ulaanbaatar. While the public sector's influence has diminished, it remains essential in areas with limited alternative job options. However, Mongolia's long, cold winters restrict outdoor operations, leading to a reliance on temporary contract labor. Policies should ensure year-round job opportunities across sectors.

Mongolia has made progress in promoting gender equality, with 53.4% of women participating in the labor force, but there is room for improvement.

Addressing gender inequality in the workplace and at home could boost annual per capita growth by 0.5 percentage points, according to the Asian Development Bank.

Concerns also exist regarding education quality and equity, especially for individuals with lower education levels. Disparities in educational outcomes for males, rural herders, and economically disadvantaged backgrounds need attention.

Outsourcing to the private sector holds potential for job creation, but caution is necessary. Quality jobs, worker protections, and the impact on displaced public sector employees must be considered. Rushing into outsourcing without safeguards may lead to a race to the bottom in terms of wages and working conditions, exacerbating inequalities.

Mongolia's labor landscape presents challenges and opportunities. Addressing low labor force participation, aging demographics, and low labor productivity is crucial for sustainable job creation. Policymakers must carefully navigate reforms to ensure worker protections and equitable outcomes. By balancing policy reforms and sustainable job creation, Mongolia can foster a thriving labor market that benefits all stakeholders while avoiding exacerbation of inequalities.

Amar Adiya is Editor-in-Chief of Mongolia Weekly newsletter.

Minister of Foreign Affairs of the Kyrgyz Republic, J. Kulubayev is currently paying an official visit to Mongolia, commencing on May 29 at the invitation by Minister of Foreign Affairs of Mongolia (MFA) B. Battsetseg.

Minister Kulubayev arrived at the Chingis Khaan International Airport, where he received a warm welcome from the Acting State Secretary and Director General of the Department of Public Administration and Management of MFA, S. Zoljargal and Ambassador Extraordinary and Plenipotentiary of Mongolia to the Kyrgyz Republic S. Ganhuyag, and other dignitaries.

The visit by Minister Kulubayev holds great significance as it marks a decade since the last visit by the Minister of Foreign Affairs of Kyrgyzstan to Mongolia. During the visit, J. Kulubayev will pay a courtesy call to the President of Mongolia Khurelsukh Ukhnaa, and the Foreign Ministers will hold official talks.

During the talks and meetings, the parties will exchange views on strengthening bilateral relations and cooperation, invigorating the dialogue between Mongolia and Kyrgyzstan, fortifying mutual trust and the legal foundation of relations, expanding the scope of traditional cooperation between the Ministries of Foreign Affairs, and regional issues of mutual interest.

In accordance with the Resolution No. 22 of April 24, 2023 of the Board of Directors of the Development Bank of Mongolia, capital equal to USD 75.0 million has been raised from foreign investors by issuing private bonds in OTC market. On May 12 of this year, an agreement was signed with "Mopane Securities" LLC, registered in London, and the aforementioned capital has been raised.

It was informed that investment without risks associated with foreign currency rate or issuing securities in MNT provides an opportunity to diversify the resources of the Development Bank and protect against the risk of foreign exchange rate fluctuations.

Out of USD 500 million “DBM 2023” bond USD 99.7 million was redeemed.

In 2018, the Development Bank of Mongolia issued USD 500.0 million worth "Euro" bonds or "DBM 2023" bonds with 7.25 percent interest rate to the international market independently without government guarantees. The bond is listed on the Singapore Stock Exchange and is publicly traded in international markets.

In order to implement proper debt management in the Development Bank, it was decided to partially cancel the purchase of "DBM 2023" bonds according to Resolution of the Board of Directors No. 52 of 2022 and Resolution No. 3 of this year. In line with the above decisions, the Development Bank has been implementing partial bond cancellation since October 2022. During this period, the bank canceled bonds with a total issued price of USD 99.7 million. As a result, the balance of the "DBM 2023" bond has decreased from USD 500 million to USD 400.2 million.

The Development Bank has saved USD 13.8 million in its current portfolio by redeeming "DB 2023" bonds with an issued price of USD 100.0 prior to its maturity date at a weighted average price of USD 92.4. Specifically, until October 23 of this year or the "DBM 2023" bond repayment deadline, USD 7.54 million has been saved from the principal amount and USD 6.34 million from interest costs respectively.

Thirteen children have been hurt after being blown off an inflatable slide by strong winds in western Mongolia, Xinhua quoted the National Police Agency on Monday.

The incident happened in Ulgii soum, an administrative subdivision of Bayan-Ulgii province on Saturday, the agency said in a statement.

Two of the injured children are still unconscious and being treated in the intensive care unit of a local hospital, it said.

As for the upcoming International Children’s Day, the police agency warned parents to let their children play after carefully checking the safety of such slides in streets and squares.

The Tsagaannuur Free Zone became permanent by decree of the Mongolian government dated from 2022. The official opening of the free zone will take place on June 5.

An international trade fair will be held from June 5 to June 7.

Entrepreneurs and enterprises from Russia, China and Mongolia will take part in the exhibition and exchange experience, promoting their products. The parties are also expected to sign a cooperation agreement in future.

The working group, established by the decree of the governor of Bayan-Olgiy province of 2023, is working on preparations to open the Tsagaanuur free zone and the international trade fair.

A section of the Asian Highway AN-4 or the western vertical axis was put into operation in the Tsagaannuur free zone, which is located 65 km north of Bayan-Olgiy province.

The construction of a 7.1 km railway connecting the Mongolian port Shiveekhuren with the Chinese port Sekhe started on May 27. Shiveekhuren border port, located in Gurvantes soum of Umnugobi aimag is a strategically important port through which 48 percent of Mongolian export coal is transported to China.

According to the Governmental Resolution No.186 of May 17, a permit for the construction of the basic structure of the Shiveekhuren-Sekhe port cross-border narrow-gauge railway was granted to "Nariinsukhait Railway" LLC, and the construction is scheduled to be completed by October of next year.

Prime Minister of Mongolia L. Oyun-Erdene attended the opening ceremony of the construction and delivered a speech.

The Prime Minister underlined that connecting Shiveekhuren-Sekhe ports by railway is of exceptional strategic significance since it is a part of the western vertical axis railway of Mongolia in route of Shiveekhuren-Nariinsukhait-Artssuuri, which will be the cross-border railway of the "Economic Corridor" of Mongolia, the Russian Federation, and the People's Republic of China.

PM Oyun-Erdene said, "The economy continues to recover day by day due to the restoration of the port, the disintegration of the corrupt system, and the revelation of the hidden economy. The economy, which was -4.6 percent in 2020, grew by 1.6 percent in 2021, 4.8 percent in 2022, and 7.9 percent in the first quarter of 2023. The state budget revenue was exceeded by MNT 1.1 trillion, foreign exchange reserves reached USD 3.8 billion, and the gross domestic product per capita reached USD 5,000 for the first time. Today, in the scope of the Port Revival, as part of the "New Revival Policy," we are starting the construction work to connect Shiveekhuren Port of Mongolia with Sekhe Port of China by railway through public-private partnerships, which will make an important contribution to the economy of the country.”

With the completion of the Shiveekhuren-Sekhe port cross-border railway, the port's export capacity, including coal export will double reaching 20 million tonnes. In this way, based on free market competition, it will become possible to export the coal, mined in the region saving time and costs, and procure to the main export markets, as well as to increase the value of the mineral deposits in the Gobi region and open up new opportunities for economic turnover.

On the day, Prime Minister L. Oyun-Erdene got acquainted with the work of transporting coal with driverless smart transport or AGV at Shiveekhuren port. The transport has been in operation since December 2022 and can transport 6.5 million tons of coal per year.

The meeting of the council of Governor of the capital city was held on May 25, and led by Deputy Governor in charge of the Social Sector, Green Development, and Air and Environmental Pollution Z.Tumurtumuu. At the meeting, the issue of determining the location and size of public tenure land was presented.

In order to ensure the right of citizens of the capital city to live in a healthy and safe environment, to improve land use, and to increase the number of public land, sidewalks, and green areas, and garages are being demolished and registered as public land according to the resolution of the Citizens’ Representative Khural. In this context, since 2019, 227.97 hectares of land in 145 locations have been registered for public tenure. Currently, a survey was conducted on the land use situation, and it was discussed at the council meeting to register 7.72 hectares of land in 47 locations as public tenure.

Council members emphasized that this work is a good example, and the minutes of the meeting were taken to discuss this decision by the Citizens’ Representative Khural.

Changes to be made to temporary gathering and evacuation points during disasters

In the territory of the capital city, 192 temporary gathering places and 31 evacuation locations and sizes have been approved by the Citizens’ Representative Khural’s resolutions. However, due to the construction of buildings in those locations, changes in the administrative units of some districts, and the increase in earthquake activity, there was a requirement to re-determine the location and size of the evacuation and temporary gathering areas. Based on the these reasons and the proposal submitted by the National Emergency Management Agency, a draft resolution of the Citizens’ Representative Khural was processed to re-approve 164.6 hectares of 203 locations for temporary gathering and 1430.4 hectares of 33 evacuation locations.

Council members said that attention should be paid on not to change those locations again. The minutes of the meeting were taken to discuss this decision by the Citizens’ Representative Khural.

Proposal submitted to add the location of the ger areas housing project

Within the framework of the goal of reducing air pollution, providing housing in the ger areas, and ensuring the right of citizens to live in a healthy and safe environment, the project for redevelopment and housing the ger areas is implemented. About 50% of the citizens of Ulaanbaatar live in ger areas, which occupies an area of 23,206 hectares.

By the resolution of the Citizens’ Representative Khural, 85 partial areas of 28 locations in the territory of eight districts of the capital city were approved as the location of the project for redevelopment and housing of ger areas. It occupies 18,843 units or 1,631 hectares of land. 148,323 households apartment, 60 schools, 92 kindergartens, and 14 hospitals are planned to be built and put into operation in those areas. As of this year, 45 contractors are operating in 51 partial areas of 18 locations. Currently, 3,023 units of land have been vacated and 16,671 households apartment have been put into use.

In this context, 158 hectares of land in the 14th and 18th khoroos of Chingeltei district, 14th and 15th khoroos of the Sukhbaatar district, and 162 hectares of land in the 7th-11th, 28th and 40th khoroos of the Songinokhairkhan district have been proposed to be the location of the redevelopment and housing project.

Minutes of the council meeting were issued, and the issue of determining the location, size, boundaries, and purpose of the redevelopment and housing project of the ger areas was decided to be discussed by the Citizens’ Representative Khural.

MEDIA AND PUBLIC RELATIONS DEPARTMENT OF THE GOVERNOR’S OFFICE OF THE CAPITAL CITY

On the occasion of the 98th anniversary of the Air Force, Buyant-Ukhaa Air Show was held on May 26 and 27.

Internationally, this type of air show is widely held, and air force aircraft exhibitions and air shows are also distinguished by the fact that they promote and present the profession of this industry to the public.

For our country, the show was held on a large scale for the first time on the 12-hectare runway of Buyant Ukhaa Airport.

During the two days of the show, many exciting events happened such as parachute demonstrations, aircraft displays, parades, high-altitude search and rescue demonstrations, vintage and modern aircraft displays, and art performances.

Among these, the organizers highlighted MiG-29 combat aircraft the most. There are six MiG-29 aircraft in our country, which were first ordered in 2011 and received in 2018. The maximum speed of the MiG-29 aircraft is 2,450 km/h, and the flight altitude is 18,013 meters.

At the airport, 28 types of airplanes, both large and small were presented, and you could enter and take pictures freely. A total of 15 parachutists from the Mongolian Parachute Sports Association and NEMA performed.

In addition, festival participants were offered a 30-minute flight around Ulaanbaatar and also, small aircraft flied around Buyant-Ukhaa.

The show consisted of two parts, where an air show and other activities aimed at families and children took place, and after 17:00 there was a music festival featuring international DJs and Mongolian singers and rappers. The organizers emphasized that it is a rare opportunity to listen to a DJ set at a special national facility.

Afterwards, there was a dog show, which exhibited of trained dogs of NEMA in practice and how they could smell illegal substances and tricks by jumping and running.

As the 98th anniversary of Air Force takes place, it’s important to give some information regarding the first airplane. In 1924, there was a decision made by the administrators of Ulaanbaatar city to purchase an airplane. At that time, Mongolia’s economic situation was difficult, so they started collecting donations from citizens to buy airplanes.

In order to buy airplanes for the country, citizens donated everything from gold and silver items to horses. A native of Bogd Khan mountain province (now Bulgan province) Lama Navaan, once gave the largest donation (500 horses) for the purchase of a plane.

Thus, on May 25, 1925, Mongolia was able to purchase with public funds, the six-seater “Yunkers F-13” (YU-13) aircraft manufactured in Germany. The plane was driven by four Russian pilots led by A. Lapin from Ulaan-Uud and landed at the aerodrome specially prepared for by the Consulate. This is how the history of Mongolia’s air force began. Even great writer D.Natsagdorj, wrote his famous story “Surprised by Culture” about this important event.

A month after receiving the first plane, two more “Yu-13” planes were added. Soon after that, the arrival of three “R-1” fighter planes marked the establishment of the first flying squadron named after Sukhbaatar.

Interestingly, even before A. Lapin, in June 1921, at the request of the Provisional Government of Mongolia, two airplanes of the aviation detachment commanded by F. Astakhov landed on the north bank of the Selenge River near the Ahai Monastery, which was the first time Mongolians heard of and saw the magic of an aircraft.