SDG-Aligned Budgeting to Transform Employment In Mongolia

Project summary

Result-based budgeting has been a popular reform among ministries of finance globally to make national budgeting processes more aligned with long and medium-term strategic plans. It also helps provide incentives to improve public service delivery. This project aims to support employment and promotion of decent work and improved public finance management systems through results-oriented budget initiatives as direct contribution to the attainment of the SDGs and the country in delivering sustainable growth and its transformation into a sustainable development model with more employment opportunities for all social groups, especially the more vulnerable and disadvantaged.

The project is implemented by UNDP Mongolia in partnership with UN Food and Agriculture Organization (FAO) and the International Labour Organization (ILO) and closely work with the Parliament of Mongolia, the National Audit Office, the Ministry of Finance, the Ministry of Food, Agriculture and Light Industry, the Ministry of Labor and Social Welfare, and civil society organizations. 

Project objectives

The overall objective of the action is to increase employment and promote decent work in Mongolia and the Technical Assistance component of the Action are supporting efficient, accountable and responsive delivery of public services in the Labour and Employment sector supporting the modernisation of Mongolia’s Public Finance Management (PFM) systems and strengthening institutional capacities.

The Project plans to achieve the objectives by conjoining two main streams of activities below: 

i) Enabling and promoting employability in Mongolia via direct interventions and policy improvements, and

ii) Improving the PFM systems to absorb results-oriented, effective and evidence-based policies and budget initiatives in employment and labour sectors.

Expected results

Component A. Bridging policies with budgets

Key result area A.1. Results-Informed strategic budgeting Mid-Term Expenditure Framework (MTEF)

  • Reforms Plan to upgrade the MTEF: The project will develop a reforms plan for specific elements of Results-Based Budgeting in Mongolia in the context of SDGs.  
  • Results-informed MTEF process established: This addresses PFM functions that aim at improving Strategic Budget Allocative function, primarily via improved MTEF system.

Key result area A.2. Result-Based Budget Presentation

  • Budget programmes aligned with policies and results: Ensuring the bridging of national policies, strategic plans with the way budgets are formulated, negotiated, approved, executed and reported against 
  • Results-based Budget Monitoring and Reporting: Provide the technical recommendations for enhancing the budget reporting system with the results-based framework, i.e. the progress presentation on performance of programmes in line with the financial performance information 
  • Citizen’s SDG Budget: Presentation of information on expected results in line with the proposed budget allocations by sectors and ministries in a simple format for a wide range of stakeholders ensuring fiscal transparency of national budgets. 

Key result area A.3. Evidence-Based Budget Formulation

  • Sector Public Expenditure and Institutional Reviews for informed budget decision-making
  • Improved prioritization of sectors programmes aims at improving the cross-sector and intra-sector prioritization and project selection processes.
  • Improved costing of policies: Assist the national counterparts in delivering the costing information on relevant national programmes. The programme costing is key in driving the budgeting process in a smooth and effective manner. 

Key result area A.4. Enhanced capacity of MOF and line ministries in RBB and budgeting for SDGs

  • Strategic Advisory Services: Reforms using international best practices and experience from countries where RBB and MTEF processes 
  • Regional Peer Learning and Study Tours: Capacity Building is one of the core functions to organize study visits and participation to regional peer learning conventions on MTEF and RBB practices
  • Training On-the-job Capacity Building: The extensive set of trainings, both via formal training sessions and on-the-job training processes on MTEF and RBB for the Ministry of Finance and line ministries staff 

Component B. Budget Oversight and Transparency

Key result area B.1. Enhanced Parliamentary Role in Budget Oversight  

  • Results-based policy analysis and oversight: Work with the Parliament Committees on reviewing the implementation status of various sector policies enabling Parliament Committees and members to validate the policy-budget linkage via better understanding of the progress status of relevant policies.
  • Results-based budget scrutiny and monitoring which aims to deliver an improved know-how on the Parliament’s budget oversight function. 
  • Parliament oversight on effective Policy-Budget linking via two main activities – i) studies on coherence of the MTEF with long-term development programmes approved by the Parliament and the Government, ii) regular reviews of budget execution variance using financial and programme performance information. 
  • Enhanced capacity of the Parliament in budget oversight to ensure enough capacity building activities are delivered to the newly elected members of Parliament and committees for sustainable budget oversight functions in place. 

Key result area B.2. Increased Role of CSOs in Budget Analysis and Oversight Functions 

  • Sector Policy Analyses Performed that aims at improving the scope and quality of budget oversight by the civil society organizations, i.e. via improved research and policy advisory functions. 
  • Budget Monitoring by CSOs: Parliaments and ministries of finance are interested in receiving third-party and independent opinion over the budget programmes (BP) implementation and the project will support CSOs in playing that critical role by monitoring of BPs using both the financial and non-financial performance monitoring aspects (RBB principles).
  • Capacity building for CSOs and media on budget monitoring and oversight functions: Work on capacity development activities, including to other stakeholders such as the media on RBB, budget analytical toolkit, bridging research with policies and budgets, and other aspects of budget oversight and transparency.

Key result area B.3. Strengthened and Transparent Performance Audit

  • Performance Audit of SDG priority programmes: The project will provide on-the-job support in mapping national programmes (planning documents) with line-item nature of the budget. 
  • Civil Hall (Social) Audit: The national stakeholders in learning the best practices in this regard and combining those with effective social audit functions, including via public expenditure tracking surveys (PETS) and other tools for civic engagement in auditing budget compliance and performance.
  • Capacity Building on Performance Audit: Capacity building activities for NAO staff (study visits, development of guidelines and trainings) on effective performance audit and lining those with the overall SDG framework will be organized. 

Component C. Employment promotion to boost employability

Key result area C.1. National programs on employment promotion strengthened and more coherent 

  • Mapping and assessment of existing programs to identify bottlenecks (gaps, duplications, and contradictions)
  • Support services for coherent program implementation designed, taking into account the labour market and local economic policies, as well as prevailing economic conditions, covering financial and non-financial support
  • Support services incorporated in the national programmes, and reflected in Ministry budget, ensuring responsibility and resources

Key result area C.2. Ecosystem for innovation, start-ups, technology, business incubation, and enterprising reinforced 

  • A common platform for innovative and start-up initiatives, including for crisis responses, designed and established for customized support and knowledge exchange, covering employers, workers, and job seekers [on-line and off-line]
  • Mapping and integrated assessment carried out of donor/partners-supported initiatives towards employment (mainly or significantly), to strengthen the forward-looking ecosystem for employability, including bridging periods of temporary job-market disruptions.
  • Start-up businesses supported with a particular focus on youth, remotely located job seekers and persons with disabilities, as well as short- and medium-term opportunities for those temporarily laid-off due to external shocks.

Key result area C.3. Capacity and skills for wage and self-employment boosted 

  • Institutionalized capacity development services for facilitators in Design Thinking and Behavioural Insights and Education institutes in Enterprise Education Pedagogy
  • Expanded distance/on-line platforms for career advisory master trainings and increased capacity to deliver employment services remotely for strengthened inclusion
  • Regular platform for Implementation of employer-oriented measures and employer-employee interactions 

Key result area C.4. Pilots for employment promotion undertaken with scope for scaling-up to build evidence, lessons and support policy

  • Effective public-private partnership models with large scale youth employment potential in agriculture value chains identified, designed and piloted to strengthen coherent on-ground implementation of the National programs
  • Organizational and technical innovations promoted to support Mongolian agribusiness enterprises move up the agri value chains
  • Support building of competitive national Mongolian food brands in national and international markets that meet national and international quality/safety standards
  • Agribusiness based youth employment policy and action plan for Mongolia developed, challenges identified, designed and piloted
  • A model training hub for leather and fibre non-food agri-sector production set up and piloted

Component D: Effective application of international labour standards by strengthening institutions of work

Key result area D.1. Regulatory frameworks aligned with international labour standards

  • Ratification of the ILO Labour Inspection Convention, 1947 (No. 81) and the ILO Labour Inspection (Agriculture) Convention, 1969 (No. 129) and effective application of ILO occupational safety and health and employment-related conventions promoted
  • Advice on improving legal environments to increase the efficiency of labour inspection and employment promotion, including changes and amendments to the Law on State Inspection
  • The Sub-Committee on Application of International Labour Standards assisted in their reviews and discussions of international labour standards and Mongolia’s related obligations
  • Law and practice research conducted to identify implementation gaps and areas for alignment with ILS and formalization of employment
  • MONEF and CMTU supported in their effective promotion of fundamental principles and rights at work, decent working conditions, formalization of employment and collective bargaining
  • Professional groups and the Mongolia Decent Work for Youth Network (DWYN) supported to promote action to realize labour rights and formalization of employment for young workers

Key result area D.2. Compliance boosted through strengthened capacity of labour inspection system

  • Support provided for the formulation of annual Strategic Compliance Plan (SCP)
  • Assessment of case management system, inspection data collection, analyses and dissemination, including sex- and age-disaggregated data, conducted with a view to develop evidence-based interventions
  • Recommendations on improving and upgrading inspection data system provided to GASI and improvements of the existing data collection of occupational accidents and acute poisoning