Mongolia’s economy has taken a turn for the better in the last five years, after poverty rose following the fall of the Soviet Union. Mongolia’s poverty rate in 2010 was as high as 38.8, but fell to 21.6 by 2014. And the Asian Development Bank (ADB) delivered more good news for the country at the end of 2015: Mongolia’s Third Health Sector Development Project has been a success.
Mongolia’s poverty problems are unique in that they are new. Prior to the fall of the USSR, extreme poverty was virtually unknown in communist Mongolia. While its citizens were not wealthy by any standard, the Mongolian government provided its people with basic goods and services from birth until death. Through largesse provided by the Soviet Union, Mongolia prospered. Without Soviet backing, Mongolia collapsed.
Transitioning to a market system proved difficult for Mongolia’s economy. Inflation ran rampant. People used to government safety nets found themselves suddenly poor and lacking recourse. Many Mongolians are nomadic herders, and this group suffered the most when collectivist programs ceased to exist.
Thanks to continued investment and international trade, Mongolia’s economy is now on the rise. Life expectancy is up to 69 years from 61 in 1996. Gross National Income (GNI) per capita increased nearly eightfold from $550 to $4280 during the same time period. Enrollment in education has rebounded to levels not seen since the communist era, and health care is now a target for improvement.
With assistance from the ADB, the Third Health Sector Development Project was launched in 2007 with the following goals: improve primary Mongolian healthcare, expand health insurance coverage, reduce infant mortality, and reduce tuberculosis. These goals were to be accomplished through hospital incentive schemes, health insurance recommendations, institutionalized training, equipment and new regulatory and policy frameworks.
The project ended in 2013, and at the end of 2015, the ADB released its evaluation: The project worked. Health insurance coverage increased from 73 percent to 97.7 percent. Per capita spending on primary health care increased from $11 to $22. Over 90 percent of children under five were vaccinated nationwide and over 95 percent of pregnant women received antenatal care in most areas.
Additionally, Mongolia passed a revised Health Insurance Law (2015) designed to increase health insurance subsidies to its most vulnerable populations. This law guarantees coverage to people living below the poverty line as well as the disabled. The lost social safety net has returned.
What this Mongolian healthcare initiative shows is that wise investment can affect powerful change on a developing economy. By providing financing to help governments reform policy, training and healthcare, organizations like the ABD make a lasting impact.
Sources: Asian Development Bank, Rural Poverty Portal, World Bank