Mr. Davaadalai, Mr. Jambaltseren, Distinguished guests and ladies and gentlemen, 

UNDP is pleased to support and partner with Mongolia’s Sustainable Finance Week for the second year. 

The agriculture sector is of great importance for Mongolia, economically and socially. It comprises 15% of the national GDP and over 85% percent of the all-provincial economies are agriculture-based. 

Animal husbandry makes up 90% of the agriculture sector and the livelihood of over 300 thousand herders are heavily, if not, entirely dependent on it. 

Thus, we can clearly see why sustainable agriculture is crucial for Mongolia’s long-term sustainable development priorities. 

However, Mongolia is also among the countries most severely affected by climate change. 

Over the past 70 years, Mongolia has experienced a rate of global warming three times faster than the global average, leading to more frequent and severe natural disasters. 

As of 2021, the assessment of desertification and land degradation in Mongolia reveals that 23% of the land is severely degraded due to climate change and overgrazing. 

According to our assessment, as of 2022, Mongolia’s pasture capacity is exceeded 2.6 times, causing rapid pastureland quality degradation and which results in declining quality of livestock products. 

These challenges are dealing a major blow to the livelihoods of rural residents and herders, pushing them to poverty and heightening the internal migration to cities. 

Therefore, now is the opportune moment, born out of necessity, to take concrete actions to support sustainable agriculture and shift gears in terms of leveraging green financing to do so. 

UNDP is implementing multiple projects, supporting the Government of Mongolia, to increase its access to and volume of the sustainable financing across sectors, including the agriculture sector, in light of the devasting aspects, and urgency of addressing the climate change impact. 

While there is a need to add clarity in the agricultural sector policy to encourage sustainable agricultural practices, Mongolia also needs to take environmental and social impact, not just the economic impact, into an account, when providing subsidies and other incentives to the sector. 

There also needs to be stronger collaboration in public and private partnership, as well as targeted investment in the traceability system to improve market access of quality products, which will encourage sustainable livestock practices among herder communities, and leverage more blended financing that supports sustainable agriculture. 

Moreover, substantial investment needs to be made in research and development, as well as innovation and capacity building, that are key to shifting the sector’s policy, and partnerships, towards sustainability. 

We also propose to add climate risk criteria, when deciding on the budget allocation for local development funds, as some regions of Mongolia are at greater risk than other regions, in terms of the climate change induced impacts mentioned earlier. 

More importantly, all of these changes, can only be made a reality, when there is the concerted effort and commitment, from all the actors to promote and advocate for sustainable practices. 

One of the key successes of OECD countries’ budget reform was emphasis on environmental protection in all economic activities, and proactive communication, of the importance of the policy shift, which Mongolia can adopt and apply. 

Private sector, particularly banks, need to issue green loans to SMEs, who are working sustainably in animal husbandry, to those that are assessing the sourcing of raw material and its environmental impact. 

UNDP has been actively working with our partners to support the Government of Mongolia in these areas through our projects on climate adaptation, introduction of payment for ecosystem services, results based and SDG aligned budgeting, the sustainable cashmere platform, establishing a traceability mechanism, and helping to apply a systems approach to development. 

I encourage all the participants here today to take this opportunity to explore and discuss innovative, green financing mechanisms, and fiscal incentives for sustainable agriculture in Mongolia. 

As I conclude, I would like to express my sincere appreciation to our valued partners, including the European Union, Green Climate Fund, Global Environment Facility, and UNDP’s core partners who are supporting globally, and in Mongolia, the BioFIN initiative, including Germany, Norway, Switzerland, Belgium, United Kingdom, and Canada. 

Your continued support has been invaluable in driving the success of UNDP’s overarching mission to support Mongolia in building an inclusive, sustainable, and prosperous future for all. 

Thank you.