MONGOLIA

Mongolia is a unitary country and a semi-presidential republic, according to the 1992 Constitution, last amended in 2019. The legislative power is held by the State’s Great Khural (Parliament; also spelt Hural), made up of 76 members which are directly elected by universal suffrage every four years. The President is the head of the state and is elected for a six-year term, non-renewable. The Prime Minister, appointed by the President with approval of the Parliament, is the head of government (cabinet) and the leader of the majority party in the Parliament. The judiciary system consists of the Constitutional Court, the Supreme Court, provincial and capital city courts, county and district courts.

Following the country´s transition to a multi-party democracy and market economy in the 1990s, the central government of Mongolia introduced several reforms to decentralize its political organization and clarify the structure and functions of the different tiers of government. Mongolia has a three-tier subnational government system: provinces and the capital city of Ulaanbaatar at the regional level; regions and districts at the intermediate level; and communities and neighbourhoods at the first level of local government. The creation and regulation of subnational governments in Mongolia is established in Chapter IV of the Constitution and the Law on Administrative and Territorial Units and their Governance (2006).

Like the central level of government, the regional and intermediate levels of subnational government are composed of two branches: a legislative assembly (Hural) that serves for four years, and an executive branch led by a governor, appointed by the prime minister in the case of the provinces and the capital, and by the provincial governor in the case of regions and districts. In addition to administering their territories, the governors supervise deconcentrated sectoral ministerial departments that have a presence at both subnational levels. Unlike the two upper levels, communities and neighbourhoods at the municipal level do not have a legislative assembly and do not have their own government officials. However, they do have community elected governors (community leaders) and fulfil certain responsibilities in the delivery of services. Other regulations that define the legal status of subnational governments are the Law on the Legal Status of Cities and Towns of 1993, and the Law on Legal Status of the Capital City of 1994.

Recent institutional reforms have mainly focused on administrative rather than fiscal decentralization. These measures have followed a top-down logic and have not had a comprehensive strategy to move towards effective decentralization. As a result, today Mongolia is a deconcentrated state with a certain degree of fiscal decentralisation. However, recent attempts to improve decentralisation and strengthen citizens’ participation in local planning have included the adoption of the Governance and Decentralization Programme (GDP) in collaboration with the Swiss Government, which promoted the new Integrated Budget Law (2013) and the Local Development Fund (LDF) in 2012. The objective of this project has been to deepen fiscal decentralization, empower subnational governments and strengthen citizen participation in decision-making. The Governance and Decentralisation Programme (GDP) has had three phases, and the third phase is currently being implemented and is expected to be completed in 2022.

Mongolia is among the few countries that have used deliberative polling, a form of participatory decision-making process, to amend its constitution. Deliberative polling was first conducted at the Ulaanbaatar city level in 2015 with support from The Asia Foundation and Stanford University. Citizens were invited to participate in the prioritisation of major infrastructure projects proposed in the capital city’s master plan. In 2017, a Law on Deliberative Polling was passed requiring that the deliberative polling method be conducted before amendments to the constitution could be made, as well as for projects to be funded by the local development fund. and for the partial planning of cities’ settlement areas and green facilities in public space. The first nation-wide initiative was launched in 2017, in the framework of the discussions regarding the 2019 constitutional amendments.

TERRITORIAL ORGANISATION
MUNICIPAL LEVEL	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2020)
1 559 rural wards (Bagh) 151 urban wards (Khoroos)	330 regions (Soums) 9 districts (Duuregs)	21 Provinces (Aimags) 1 capital city
Average municipal size: 1 917 inhabitants
1 710	339	22	2 071

OVERALL DESCRIPTION: Mongolia’s three-tier system of subnational government is composed of a capital city (Ulaanbaatar) and provinces (aimags) at the higher level, regions and districts at the intermediate level, and urban neighbourhoods and rural communities at the lower level. The difference in institutional names lies in whether the territories are located in the capital city or in one of the other 21 provinces. Thus, in Ulaanbaatar, the intermediate level of subnational government is made up of 9 districts (duuregs), while in the remaining 21 provinces it is made up of 330 regions (soums, also called districts). At the local level, the capital-city is made up of 151 urban neighbourhoods (khoroos), while the rest of the provinces are made up of 1 559 rural communities (baghs), which are not a formal administrative division of the country. The capital city of Ulaanbaatar holds a provincial status defined by the Law on Legal Status of the Capital City.

Both provinces and districts have a local assembly (hural) composed of democratically elected citizens, that serves for four-year terms, and an executive branch led by an appointed governor, also for four-year terms. Governors are appointed by the governor of the immediate upper tier of government in their territory (the prime minister in the case of provinces, and provincial governors in the case of districts) and are accountable to them. In principle, the governors are responsible for planning, implementation, and reporting on the delivery of local public services, as well as overseeing the operations of deconcentrated ministerial departments in their jurisdictions, while the local assemblies are responsible for setting local policy and priorities and for monitoring and oversight of planning and implementation.

REGIONAL LEVEL: At the higher level of subnational government, the 21 Mongolian provinces (or aimags) and the capital city are based in the same territorial delimitations since 1921. The capital city, sometimes called provincial municipality, has a specific status and is governed independently from the Töv Province in which it is located. The average population size of provinces is approximately 140 thousand inhabitants. However, 44% of the Mongolian population (1.5 million) resides in Ulaanbaatar. The number of the representatives of regional assemblies (aimag hurals) ranges from 25 to 35, depending on the population. The hural of the capital city is composed of 45 representatives.

INTERMEDIATE LEVEL: At the intermediate level of subnational government, Mongolia has 9 municipal districts (duuregs) in Ulaanbaatar, and 330 regions (soums) in the other 21 provinces. Districts and regions have an average population of 4 600 inhabitants. Most soums (93%) are rural and host nomadic populations. Soum hurals are made up of 15 to 25 representatives, while duureg hurals consist of 21 to 35 representatives, according to their population.

MUNICIPAL LEVEL: At the lower local government level, rural baghs and urban khoroos (wards, neighbourhoods or brigades) are the traditional basic jurisdictional unit of the country, dating back to the Mongol empire. Local self-governing bodies of baghs and khoroos (urban) are called General Hurals of Citizens and they work more as virtual jurisdictions with the purpose of sorting nomad communities. Unlike provinces and districts, baghs do not have a permanent settlement (they often correspond to nomadic communities) or an institutionalized local assembly. Therefore, baghs are not considered as a formal administrative subdivision of the country.

HORIZONTAL COOPERATION: Although horizontal cooperation has been encouraged by various development organisations in Mongolia, there are not many examples of cooperation between provinces and districts. There have been some cases of collaborative inter-soum service delivery models in the areas of health and education, however there is no national framework that regulates these initiatives. The Mongolian Association of Local Authorities (MALA) is a non-governmental organization that seeks to encourage cooperation at the subnational level and provides technical and strategic support to the legislative assemblies of the provinces and districts.

According to the 1992 constitution, last amended in 2001, Mongolian local self-governing bodies can make independent decisions regarding economic life in their respective jurisdictions (province, region, district, neighborhood or community) and they can organize citizen participation in decision-making. The details of the distribution of responsibilities are determined by the provisions of the 2002 Public Sector Financial Management Law (PSFML) and the 2006 Law on Administrative and Territorial Units. The PSFML established a detailed regulation of tasks in the field of public finances and assigned both governments and local legislatures the tasks of preparing budgets and action plans (Art. 51). In addition, it established the distribution of tasks between the governments of the provinces and the capital and the regions and districts, and assigned responsibilities to them for the provision of goods and services in areas such as education, health, environmental protection, green areas, local roads, use control land, local infrastructure, among others.

The Mongolian regulation is, however, not entirely clear, as it does not specifically divide tasks between levels of government and makes the intermediate level of government responsible (Art. 53) for supplying some of the goods and services assigned to the higher level (Art. 52). For this reason, whereby the vast majority of the responsibilities of subnational governments are “shared, and agreements between levels of government must be concluded to organize the provision of services.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Regional level	Intermediate level	Municipal level
1. General public services (administration)	Administrative and permit services (shared); Public buildings and facilities (shared)	Administrative and permit services (shared); Public buildings and facilities (shared)	Administrative services (postal services); Basic Research activities (statistical data preparation)
2. Public order and safety	Traffic signs and lights (shared); Defence (military and civil)	Traffic signs and lights (shared)	Community safety
3. Economic affairs / transports	Local economic and social development (shared); Support to local enterprises (shared); Mining (shared); Public transport; Road maintenance (provincial); Telecommunications (shared)	Local economic and social development (shared); Support to local enterprises (shared); Mining (shared); Road maintenance (local); Telecommunications (shared)	Agriculture (livestock)
4. Environment protection	Sustainable utilization ofLand (shared); Soil protection (shared); Environmental protection (shared); Fire and disaster management (shared); Parks and green areas (shared); Sewerage (only management) (shared); Waste management (shared)	Sustainable utilization ofLand (shared); Soil protection (shared); Environmental protection (shared); Fire and disaster management (shared); Parks and green areas (shared); Sewerage (only management) (shared); Waste management (shared)	Nature preservation
5. Housing and community amenities	Housing (only management) (shared); Urban and land use planning (shared); Energy supply	Housing (only management) (shared); Urban and land use planning (shared); Public lightning	Food supply
6. Health	Preventive and primary healthcare (contracts with deconcentrated bodies) (shared)	Preventive and primary healthcare (contracts with deconcentrated bodies) (shared)
7. Culture & Recreation	Sports and recreation (shared); Leisure and cultural activities (shared)	Sports and recreation (shared); Leisure and cultural activities (shared)
8. Education	Secondary and technical education (contracts with deconcentrated bodies) (shared)	Secondary and technical education (contracts with deconcentrated bodies) (shared)	Pre-primary education; Primary education
9. Social Welfare			Social assistance

Scope of fiscal data: provinces (aimags), capital city, soums and districts.

Other

Availability of fiscal data: High

Quality/reliability of fiscal data: High

GENERAL INTRODUCTION: The 1992 Constitution, the Law on Administrative and Territorial Units (2006), the Public Sector Finance and Management Law (2002), the General Taxation Law (2008), the Public Procurement Law of Mongolia (PPLM, 2011), and the Integrated Budget Law (IBL, 2013) set out the first legal framework for subnational government finance systems and mechanisms. According to these regulations, the expenditure of subnational governments must be financed through the collection of regional/local taxes and fiscal transfers (equalisation grant). The IBL is the most important piece of regulation for revenues and expenditure at the subnational level, as it sets the revenue allocation between levels of government. This law also constitutes the most recent reform in favor of fiscal decentralization and a response to the previous recentralization processes. Despite these advances, the level of autonomy in collecting their own revenue remains limited for subnational governments. Provinces and districts in Mongolia rely heavily on grants and subsidies from the central level.

Local governments are empowered to collect subnational revenues from mining exploration. The 2006 Mineral Laws, amended in 2014, acknowledge subnational governments’ capacity to establish agreements between local legislative bodies and mining companies. Provinces and districts that host extractive industries have also established subnational councils to promote transparency in the management of resources at local level. The adoption of the Law of Mongolia on Glass Accounts in 2014 was an important step forward to increase fiscal transparency. The law aims to ensure the efficient use of state and local government funds and assets, improve the transparency of decisions and actions concerning budget management and strengthen citizens’ oversight through an information system.

Subnational government expenditure by economic classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure	1 234	10.0%	24.0%	100%
Inc. current expenditure	944	7.6%	22.7%	76.5%
Compensation of employees	470	3.8%	44.8%	38.1%
Intermediate consumption	300	2.4%	33.0%	24.3%
Social expenditure	18	0.1%	1.1%	1.4%
Subsidies and current transfers	154	1.3%	62.8%	12.5%
Financial charges	2	0.02%	0.7%	0.2%
Others	0	0.0%	0.0%	0.0%
Incl. capital expenditure	290	2.3%	29.5%	23.5%
Capital transfers	0	0.0%	0.0%	0.0%
Direct investment (or GFCF)	290	2.3%	29.5%	23.5%

EXPENDITURE: In 2020, subnational government expenditure represented 24% of general government expenditure. A large proportion of local expenditures are assigned to current expenditures (77%), particularly to staff compensations, which in 2020 accounted for half of current expenditure and 38% of total subnational expenditure. The high spending on staff is explained by the large size of subnational governments’ staffs, which range between 20 and 30 people on average. In addition, 45% of general government employees are employed by subnational governments. Subnational current expenditure per inhabitant increased by 14% between 2016 and 2020. Expenditure on staff is followed by spending on consumption of goods and services (24%) and transfers and grants (13%).

DIRECT INVESTMENT: Under the 2002 Public Sector Finance and Management Law, capital expenditures were an exclusive function of central government, with capital management partly assigned to the aimag and capital city levels and no capital expenditures assigned to the district and soum levels. With the introduction of the 2013 Integrated Budget Law (IBL), capital expenditures became assigned to the aimag and capital city level, and capital maintenance partly assigned to the district and soum level. Article 62 of the 2013 IBL acknowledges community participation in the local budget processes, particularly in the allocation of local development funding. In 2020, subnational governments spent USD PPP 290 per capita on direct investment. Subnational capital expenditure represented 2.3% of Mongolia’s GDP and 29.5% of general government capital expenditure. Ulaanbaatar, the capital city, is responsible for most of the direct investments in Mongolia.

For the past 13 years, since the publication of the State Policy on PPP in 2009, the Government of Mongolia has been seeking ways to encourage private participation in financing public infrastructure through various instruments. First, the Invest Mongolia Agency aims to promote and facilitate foreign investment in Mongolia in strategic development areas such as metals and mining, energy, agribusiness, banking and fintech, and hospitality and tourism. Second, there is the development of PPPs, which is led by the Invest Mongolia Agency, as well as by the PPP Unit and the Ministry of Industry. The 2010 Concession Law regulates PPPs in the country. Although legal instruments make few references to the role of local governments in the implementation of PPPs, the Concession Law gives a special character to the city of Ulaanbaatar, which is a good candidate for PPP projects, as it has more responsibilities compared to other subnational governments, has an independent Budget and generates the majority of its revenue. Until 2017, the Government of Mongolia had signed 39 concession projects in areas such as education (18), infrastructure and transportation (14), energy (5), health (1), sports and culture (1).

Subnational government expenditure by functional classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure by economic function	1 234	10.0%	-	100%
1. General public services	568	4.6%	19.5%	46.0%
2. Defence	4	0.03%	2.8%	0.3%
3. Security and public order	0.8	0.01%	0.3%	0.1%
4. Economic affairs/transport	65	0.5%	19.1%	5.3%
5. Environmental protection	17	0.1%	28.3%	1.4%
6. Housing and community amenities	51	0.4%	100.0%	4.1%
7. Health	58	0.5%	17.3%	4.7%
8. Recreation, culture and religion	32	0.3%	35.1%	2.6%
9. Education	420	3.4%	72.6%	34.1%
10. Social protection	18	0.2%	1.2%	1.5%

Almost half of subnational governments’ resources are spent on general public services and administration (46%), which in 2020 amounted to USD 568 PPP per inhabitant, 4.6% of GDP and 20% of general government expenditure in the same category. It is followed by education (34% of subnational government expenditure), with subnational governments being responsible in particular for spending on secondary education. Other relevant categories of subnational expenditure are economic affairs and transport (5%), health (5%) and housing and community amenities (4%). Due to the structure of distribution of responsibilities between levels of subnational governments, most spending in the areas of public goods and services is shared between aimags, the capital city, municipal districts and soums. Education and health expenditure are mostly funded through special-purpose transfers from the central government.

Subnational government revenue by category
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total revenue	1 245	10.1%	30.5%	100.0%
Tax revenue	405	3.3%	18.8%	32.5%
Grants and subsidies	751	6.1%	-	60.3%
Tariffs and fees	82	0.7%	-	6.6%
Income from assets	8	0.1%	-	0.6%
Other revenues	0	0.0%	-	0.0%

OVERALL DESCRIPTION: Despite decentralization efforts in recent years, public revenue generation remains centralized in Mongolia. Subnational governments’ revenue in 2020 was equivalent to 31% of total general government revenue, while in 2016 it represented 36%. On the other hand, as a percentage of GDP, subnational revenue has barely increased by one percentage point (from 9% to 10%) between 2016 and 2020. Mongolian subnational government revenues are made up of own tax revenue, transfers from the central level and non- tax revenue. To date, all subnational levels rely heavily on vertical transfers: in 2020, for every USD 10 PPP in local budgets, 6 came from central government transfers, which has remained stable since 2016.

TAX REVENUE: The 2013 IBL and the 2008 Law on Taxation provide and regulate the revenue allocation between central, regional and local taxes. First, the IBL establishes that there are two shared taxes: the royalty on minerals and the domestic VAT, of which subnational governments receive 5% and 25%, respectively.

Subnational taxes at the provincial and capital city level include: capital city tax (bars, hotels, resorts, restaurants, alcohol and smoking products), land user fee, immovable property tax, vehicle tax, user fee for water on production use, wage tax, inheritance and gift tax, and stamp duties. Property tax in Mongolia is levied at a flat rate of 0.6% set by the national government, and the base is the registered value of the property. If there is no such registration, the base is the valuation of insurance on the property.

At the intermediate level (soums and districts), taxes include: a share of the PIT, gun tax, stamps, user fees for hunting, licenses for the use of natural resources other than minerals, self-employment, a “dog tax”, and user charges for waste management services. Tax rates are established by the provincial or capital city's local assemblies but require approval by the central government. The long-term development policy of Mongolia, Vision 2050 (published in 2020), mentions the diversification of city taxes and the creation of excise taxes.

In 2020, taxes accounted for 33% of the total subnational government revenue, while in 2016 they represented 37%. In 2020, the two main tax revenues came from the share of the PIT and the property tax: PIT represented 2.2% of GDP, 68% of subnational government tax revenue and 22% of subnational government total revenue, while property taxes amounted respectively to 0.3%, 9% and 3%.

GRANTS AND SUBSIDIES: The 2013 IBL (Article 56) defines three types of transfers to subnational governments: financial support transfers, revenue sharing transfers (through the Local Development Fund) and earmarked transfers to finance functions delegated by respective ministries. These grants and transfers are formula based, depending on population size and density, remoteness, size of the government and levels of regional or local development. There are also conditional elements in the transfer system, which depend on the local tax effort.

Financial Support Transfers (FST) are not earmarked and fulfil the general purpose of covering subnational budget deficits. They are formula-based, depending on the estimated total expenditure of each local budget and annually estimated revenue collection, calculated at minimum tax rates as defined by law.

The Local Development Fund (LDF) introduced a formula-based transfer. It is made up of 25% of VAT, 5% of royalty on minerals, and donations from national and international organizations collected into a single General Local Development Fund (GLDF). At least 60% of the GLDF transferred to aimags and the capital city must be allocated to lower tiers of government, on the principle of regional equalisation and a pre-set formula: one fourth based on the official level of development of aimags; one fourth based on the population; one fourth based on population density, remoteness from Ulaanbaatar, and the area of the aimag; and one fourth based on local tax amounts. The LDF tends to be unpredictable, as revenues from mining royalties vary from year to year and depend on macro-economic cycles. To date, there is no financial mechanism to ensure predictability in revenue allocations.

Earmarked transfers for delegated functions, in particular education and health, are defined by Article 60 of the IBL according to an agreement between governors of subnational governments and the central government. That is, the central government is obligated to transfer the necessary resources for subnational governments to cover the full costs of delegated responsibilities in areas of health and education.

OTHER REVENUE: Other revenues for subnational governments consist of user charges such as market fees, transport fees, refuse collection fees; business permits; and charges for registration. In addition, 30% of mining royalties go directly to aimag from where the minerals are produced, of which one third is reassigned to the soums.

Subnational government fiscal rules and debt
2020	Dollars PPP / inh.	% GDP	% general government debt	% SNG debt	% SNG financial debt
Total outstanding debt (consolidated)	157	1.3%	1.7%	100.0%	-
Financial debt	123	1.0%	1.4%	78.4%	100.0%
Currency and deposits	0	-	-	0.0%	0.0%
Bonds / debt securities	0	-	-	0.0%	0.0%
Loans	123	-	-	78.4%	100.0%
Insurance pensions	0	-	-	0.0%	-
Other accounts payable	34	-	-	21.6%	-

FISCAL RULES: Mongolia established ceilings on the structural budget deficit, expenditure growth and public debt ratio as fiscal rules. The 2013 IBL introduced annual budget ceilings for the budget of governors. Each governor submits its budget proposal to its respective local assembly for approval, then submits it to the State Central Administrative Body responsible for Finance and Budget. The National Audit Office carries out financial audits of all government entities. In 2018, Mongolia established a Fiscal Stability Council to oversee budget execution and ensure fiscal sustainability.

DEBT: The 2013 IBL and the 2015 Debt Management Law (last updated in 2021) allow local assemblies to incur debt, issue loans and guarantees, contingent liabilities and manage debt. Contracting of debt by subnational governments must be approved by the central government. The aimag only borrow from the national treasury. The capital city of Ulaanbaatar, on the other hand, has its own status and can borrow from the capital markets and issue bonds to finance public investment projects, as long as it has the approval of the Ministry of Finance.

The national regulatory framework establishes that the concept of "public debt" comprises all debt contracted by government entities, including subnational governments. For this reason, subnational governments cannot contract more debt if the level of public debt at the national level has already exceeded the current debt ceiling. This debt ceiling has varied in recent years between 40% and 50% of the GDP. In addition, government repayments to central government lending shall not exceed the subnational governments’ base revenue of the previous financial year and the total amount of the debt service shall not exceed 15% of that revenue.

In 2020, subnational debt amounted for only 1.7% of general government debt and 1.3 of the country’s GDP. Subnational government debt was composed mainly of financial debt (78.4%), made up exclusively of loans, and other accounts payable (21.6%).

TERRITORIAL MANAGEMENT OF THE CRISIS: Although the COVID-19 crisis meant the most serious economic crisis in Mongolia since 2009, after the initial outbreak the country deployed a good containment strategy for controlling infections in the first stages of the crisis. However, the government was not as successful in later stages in articulating a solid crisis management strategy, and there was significant lack of coordination in the implementation of health and containment measures emanating from the central level. Part of these difficulties were due to the excessive centralism in the management of the crisis in Mongolia, which led to conflicts between institutions at different levels of government (e.g. between the State Emergency Commission and the Capital City Emergency Commission). In 2021, due to a scandal over the mismanagement of the crisis in one of the main hospitals in Ulaanbaatar, the Mongolian prime minister resigned.

The crisis was mainly managed by the Cabinet and the State Emergency Commission (SEC), which as of February 2020 established mandatory measures for subnational territories. Lockdowns and other restrictions (mobility, transport, etc) were implemented based on the severity of the infections in each province. The SEC is part of the National Emergency Management Agency, which has Emergency Departments in all provinces of the country. However, no details are known about the participation of the provincial or district governments in decision-making in relation to the measures to contain the crisis. The measures implemented directly by subnational governments were limited to managing health centers and carrying out traceability actions.

Several measures taken to fight the pandemic have benefited from external aid. Examples include support from the Government of Luxembourg to the province of Umnugobi for the protection of health workers, or support from the United Nations Population Fund to the province of Dornogobi by providing medical supplies. In addition, the Asian Development Bank has been providing support to Mongolia since 2020 through a COVID-19 Rapid Response Program loan (USD 100 million), as well as through financing projects in the health sector to improve the capacity of hospitals, and through cash transfers to most vulnerable households.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: Almost all of the measures to contain the crisis in Mongolia were designed and adopted at the central level. National public spending on social assistance increased by 129% between 2019 and 2020 due to the aid implemented to alleviate the crisis. The crisis relief package designed by the Government of Mongolia was deployed in three phases and the total amount amounted to MNT 3.6 trillion (around USD 1.2 billion), which is equivalent to more than 9% of GDP. The package was aimed at supporting the poorest households and helping businesses withstand the impact of the crisis. As of February 2021, 36% of businesses in Mongolia had received government aid in the form of cash transfers, 46% in the form of deferral of payments, 35% in access to new credit, 50% in tax relief, and 43% in wage subsidies.

In May 2020, and as a part of the whole recovery package, the Mongolian government issued government resolution No. 167 on social protection measures to activate the economy and support citizens' livelihoods during the COVID-19 crisis. This resolution increased the child allowance for each child under 18 years of age and established the delivery of MNT 100 thousand (approximately USD 35) per month, between April 2020 and January 2022. There are no known aid packages designed and implemented at the subnational level in Mongolia.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: In the first half of 2020, Mongolia's real GDP contracted by 7%, representing the worst economic turn since the 1990s. At the subnational level, this contraction was reflected in public finances with a slowdown in subnational income growth. Although in 2020 there was an increase of 234% in the amounts from grants and subsidies received by subnational government, tax revenue fell by 8% (especially in income taxes and profits, that fell by 11%, and property tax, which decreased by 7%), and revenue from tariffs and fees decreased by 84%.

On the other hand, subnational public spending has remained relatively stable. In 2020, it increased by 7% compared to 2019, while in previous years the growth was 9% (2018-2019) and 14% (2017-2018). In 2020, the area that was most affected was spending on grants to lower levels of government, which fell by 20% compared to 2019. However, spending on current social expenditure increased by 29%, and subnational government staff expenditure increased by 15%.

ECONOMIC AND SOCIAL STIMULUS PLANS: In February 2021, the Government of Mongolia announced a comprehensive economic recovery plan for 2021-23 focused on short-term relief and recovery. The plan’s cost is estimated at around USD 3.4 billion (24% of 2021 GDP) and contains 56 measures such as soft loans, a USD 174 million plan to support youth employment, a USD 1 billion housing programme focused on giving land free of charge for building and a USD 695 million budget for large scale projects in strategic areas, among others.

In December 2021, the Parliament of Mongolia announced the New Revival Policy, a strategy that aims to ensuring political and macroeconomic stability, accelerating public-private partnerships, creating a favourable business environment and improving the environment for foreign and domestic investment. This plan is expected to cost around USD 38 billion in total over the next years.