ULAANBAATAR, MONGOLIA — Ganzul Munkhsaikhan is desperate. Since June, she has sought to hire four people to work for her office cleaning business, but neither she nor her company’s human resources department has been able to find anyone to take the jobs. Browsing through job posting groups and websites has been fruitless, so Ganzul has begun calling acquaintances.
“I am looking for cleaning staff,” she says on the phone. But even offering a higher-than-normal salary hasn’t helped.
To Ganzul, there is a simple and frustrating explanation for this: Mongolia’s welfare system has discouraged people from looking for work. She says she spoke with one woman who told her she wasn’t interested in a cleaning position because she was already getting enough financial support from the government.
“How can people who are capable of employment work when the government keeps handing them money as welfare?” Ganzul says.
To ease the pandemic’s impact on citizens and the economy, the Mongolian government approved a robust package of welfare measures, including nutrition support services, discounts for seniors and people with disabilities, and increased aid for single parents and families. A key decision was to increase monthly child allowance payments fivefold, from 20,000 Mongolian togrogs ($7) to 100,000 togrogs ($35) per child.
“People’s lives are hard, and they have no money,” President Khurelsukh Ukhnaa said in August 2020, justifying the increased government expenditure.
All told, from 2019 to 2020, the government more than doubled its welfare spending, from 671 billion togrogs ($235 million) to 1.5 trillion togrogs ($525 million), says Gereltuya Dorjsuren, a senior expert in charge of social welfare issues at the Ministry of Labor and Social Protection. And the rate of welfare spending has continued to increase. In the first half of 2021 alone, the government spent more than 1.7 trillion togrogs ($596 million) on welfare programs. Gereltuya says that 98% of all households in Mongolia have benefited from the increased child allowance.
“Our view is that the welfare policy yielded various positive impacts for each family, and it was a timely decision,” Gereltuya says.
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Experts agree that the move to expand welfare payments was a good one. “In such special cases, it is right to support the livelihood of the family through child allowance payments,” says Enkhbadral Myagmar, a sociologist and the executive director of the National Center for Comprehensive Development, an independent political and social research organization.
But he acknowledges that by increasing the child allowance for all families, the policy inevitably benefited some who were not hurting for money. “It is also true that many families do not need support,” Enkhbadral says.
For Munkhbat Vaanchig, a resident of Umnugovi province in southern Mongolia, the increased child welfare payments aren’t a lifeline but a means to afford a better quality of life. Munkhbat has been able to work throughout the pandemic — he sells coal and firewood in the winter and does construction work during the summer. His wife has also kept her job as an assistant at one of the country’s largest manufacturing, retail and online shopping companies. But with six children, they needed a larger place to live. The increased welfare payments have allowed them to save enough money to build a house.
“When we received a child allowance of 120,000 togrogs [$42] per month, it was just enough for our consumption,” Munkhbat says. “But when it went up to 600,000 togrogs [$211], we started saving it in the bank to build a house.”
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The family lives in a five-sided Mongolian ger, or yurt, which is about 30 square meters (322 square feet). Their new house will eventually be about 108 square meters (1,163 square feet), allowing them to live more comfortably.
“We saved our child allowance without spending a penny and laid the foundation of the house this summer,” Munkhbat says. “We want to create a comfortable environment in the yard, grow our own vegetables, raise chickens and birds, and have a good life.”
While families like Munkhbat’s have benefited from the increased welfare payments, business owners remain frustrated.
“Finding a workforce has become a headache for most organizations,” says Bayarmagnai Shiilegmaa, a founder of the HR Consulting Firm and head of a professional organization that serves human-resource experts and managers.
That may change, if business owners stay patient. The government plans to provide the increased child allowance payments until June, says Khishigbayar Amarsaikhan, head of the Policy and Planning Department at the Ministry of Labor and Social Protection. But according to a statement issued by the State Great Khural (Parliament of Mongolia), the government also plans to gradually reduce other welfare subsidies this year and shift the emphasis from welfare to employment.