Living Through Crisis: Social and Gender Impacts of the Food and Financial Crisis in Mongolia

7/30/2019 Living Through Crisis: Social and Gender Impacts of the Food and Financial Crisis in Mongolia

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Wendy Walker

EASSNovember 14, 2012

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or itsBoard of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility

for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarilyconform to ADB's terminology.


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Timeline of crises and responses Food and fuel crisis

Financial crisis

Findings from assessments of impacts Food Crisis

Financial Crisis

Conclusion


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Food and

fuel crisisFinancial

Crisis Dzud

NewInflation

2008 2009-2010 2010-2011 2012- ?

FNSWPP

SSSP

SocialWelfare

Law

February2012

PMT datacapacity

Foodstamps

DraftLawISDB

Medicard

FSPISDB

MedicardEducation

Smallgrants

Poverty

Benefit

End:CMP

Begin:HDF

EndHDF


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+30% inflation: highest in Asia

Food = highest consumption item (70%) for poor

Immediate impact: lower and less quality food consumption (particularlyfor women), postponing expenditures on education, health; limiting

travel; substituting energy sources; moving in with relatives Government Responses:

food donations: limited impact, difficult to implement equitably, timelag

Reliance on CSO not enough and not well distributed

Price protection sets off other instabilities

Request for Food Stamp Program from ADB


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Government budget received 40% of its revenuefrom mining prior to the crisis

Falling commodity prices had economy-wide

impacts and severely impacted Governmentrevenue

Transmission channels: Declining Exports, Imports, Tourism and Remittances;

The Banking Crisis and the Consequences of the Credit Freeze

Falling Government Revenue and Cross-the-Board Budget Cuts

The crisis highlighted the risks of linking socialbenefits to volatile commodity-based revenue


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Copper prices fell by60% from peak of$8,600/ton in 2008to $3,500/ton in April2009

State budget incomedecreased by 33 %(comparing1st Qrts

2008 to 2009) State budget deficit

increased by 4 times


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Social protection expenditures increased significantly from7.0% of GDP in 2001 to 11 % in 2008 and 12% in 2009.

Key SW expenditure: Universalbenefit to all hh with children

With the universalization of the CMP in 2006, the numberof social welfare beneficiaries soared from 160,000 in

2004 to more than 1 million in 2006.

The escalations in expenditures up to 2009 presented thechallenge of cutting entitlements (the total cost of CMP

was MNT 142 billion per year) to restore fiscalsustainability


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Food Crisis: Creation of the Food Stamp Programfocusing on most vulnerable hh, PMT

10,000MNT/adult, 5,000/child

Financial Crisis: Program loan with JICA (100m)

with conditions on targeting and consolidation ofbenefits; creation of medicard program;Education for the poor


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Food Crisis Quantitative food price increase impacts based on

HSES data

Qualitative recall of 2008 and 2010 increases

Financial Crisis (with WB) 4 rounds of qualitative research (May 2009-Jan

2011)

Herders,workers in non tradable sectors likeconstruction and services; youth and recent unigrads; self employed in rural areas


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Food Crisis Financial Crisis


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2008 food price shock

The 2008 food price shock, unit price in Tugrug

Item Before(Q3+4/2007)

After(Q3+4/2008)

Increasecomparedto before(%)

After(Q3+4/2009)

Increasecomparedto before(%)

Mutton 2478 2922 17.9 2319 -6.4

Beef 2766 3230 16.7 2801 1.2

Goat 1979 2247 13.5 1825 -7.8

Horse 1954 2264 15.8 2037 4.2

Bread 433 684 57.9 656 51.4

Rice 652 1189 82.4 1330 104.0

Flour, highest grade 641 1021 59.0 912 42.1

Flour, grade 1 587 910 54.8 755 28.4

Flour, grade 2 477 820 71.8 676 41.4

Potato 438 658 50.1 633 44.5

Cabbage 507 722 42.4 721 42.1

Carrot 514 746 45.0 741 44.0

Milk 574 856 49.2 845 47.2

Yoghurt 593 933 57.3 936 57.8

Dried curds 1605 2299 43.2 2416 50.5Horse milk 709 1053 48.5 1148 61.8

Curds 787 1055 34.0 1556 97.6

Source: HSES 2007/08 and 2009; units vary, e.g. kilogram for meats and litre for milk.


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2007-2009 quantitative findings: caloric intake

Caloric intake per adult

equivalent per day:

before and after pricehike

Caloric intake forPMT

household per adult

equivalent per day: before andafter price hike

Source: HSES 2007/08 and 2009 Source: HSES 2007/08 and 2009


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2010-2011 qualitative findings: food security

Last year we had meat dishes at least twice a day. Now

we have it once in the evening. (FGD, Bayanzurkh)

My family has stopped having vegetables on our meals.

Every day it is the same. We eat meat and flour and

nothing else. (FGD, Bayanzurkh)

Wecant always buy fresh meat, so sometimes well have

to use some spare products like heart, liver, lung, or

ground meat. (FGD, Bayanzurkh)

Dietary diversity

Quality of food

Shopping habits

Quantity consumed

We buy our food in the soum shop. We rarely go toUlaangomcity, because the expenses are highThetransportation fee increased from 2500MNT to 3000MNTbecause of the petrol cost. (FGD, Uvs)


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2007-2009 quantitative findings: health

Mean amount spent (Tugrug) on treatment: PMT

All households: No real

impact on health seeking

behaviour. Expenditure ontreatment is not affected

strongly. Increase from

39,921 MNT before the hike

to 39,653 MNT and 40,670

MNT in the short and

medium term

PMT households: Minor

changes on health seeking

behaviour. Drastic cuts on

their health expenditureespecially in the short term

Even in the medium term,

health expenditure remains

lower than before the shock.

Source: HSES 2007/08 and 2009


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2010-2011 qualitative findings: health

Due to the fact that we do not have cash available inhand, I cannot afford medicines for my two sick children.

The medicine for my children used to be 420 MNT, butnow it is 650 MNT. (FGD, Songino Khairkhan)

People usually buy medicines in small amounts because

they cannot afford the whole package. (Doctor, SXD)Drug dosage

Generic drugs

Health

consequences

Health expenditure

My two kids had long coughs; however I gave them myurine against their high temperature. At the end they gotpneumonia and were treated in hospital (FGD, Khovd)

Informal treatment

My children get sick easily because of low immunity. Afamily doctor advised that we give them healthy qualityfood but I cannot afford them. (Interview, SXD).

They often ask us for cheap and ordinary tablets. We

prescribe the medicines they ask(Doctor, Bayanzurkh)


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2007-2009 quantitative findings: education

School attendance is not affected by the food price hike For PMT eligible households, education expenditure remained constant before and

after the shock

However, the most interesting finding here is that the receipt of assistance foreducational expenses (mainly from relatives/friends) increased drastically with the

shock for PMT eligible.

Percentage of children who received any assistance for educational expenses: PMT eligible

Source: HSES 2007/08 and 2009


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2010-2011 qualitative findings: education

There have been incidents when we decrease ourexpenditure to bear the cost of our childrens education.

We never ask our children to leave school. But wedecrease our food consumption so that our children canbe well educated. (Interview, Bayanzurkh)

Indirect expenditure

Education

outcomes

Attendance

Yes, the food price rises affects educationoutcomes. When I worked as the teacher of primary

school, there were kids who did not consume foodfor long periods as the parents were unemployed. Ifprices keep going up, then such parents will not beable to afford for any food for their children. Forsuch kids, it will be really difficult to make an effortand concentrate on their studies. (Interview with

teacher, Uvs)

He does not have any books to study because the

books cost a lot of money. He does not do hishomework at all.(Interview, Bayanzurkh)


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2010-2011 qualitative findings: relationships

My husband is furious of it. When he arrives from his workin the evening, we talk about our money problems to him.Then he may be tired of it.[FGD Bayanzurkh]

Mutual support

Shame

Stress

I feel ashamed from other people, when I meetsomeone I know. I hardly ever meet my friends andclassmates because I have nothing nice to wear.(FGD, Bayanzurkh)

People want to help each other, but theythemselves do not have extra things to offerothers. So, people usually are not helping eachother, just barely meeting their own needs. (FGD,Bayanzurkh)

Scores from happiness rankings normally

reducingdiscussions indicate that this is related to price

rises.

Happiness

Isolation

Our children are growing up thinking we dont haveanything, so its affecting their future socialstatuswhen they see a rich child, they isolatethemselves from him. (FGD, Songino Khairkhan)

Urban

phenomenon?


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2010-2011 qualitative findings: Debt

We always take loans. The shop owners have a fullbag of the human development money books in it.

The frequency of loans is increasing this year incomparison with last year. Focus group discussion,Uvs.

Asset sales

Goods on credit

and borrowing

I do not have any jewels left because I lost all ofthem to pawn shops as a result of not paying backthe money to them on time. (FGD, Bayanzurkh)

Urban areas largely

Some livestock sold in rural areas as lastresort

Some shops charge interest

Unreliable credit system

Tense relationships


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2010-2011 qualitative findings: Employment

Why?

Transport price increases and mining revenues lead to inflation but not to employmentcreation

Global price inflation does not lead to higher employment

Result

Poor households find it harder to cover essential expenditures but not to findemployment

Rising prices Falling unemployment

Rising prices No change in

unemployment

Theory

Practice


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Four rounds of qualitative: May 2009,September 2009, January 2010, November2010

Transmission channels: Labor market effects

Price shocks

Social changes


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Increased unemployment, reduced salaries and intensified competition for jobs especially

in the informal sector Bargaining power of employers increased (longer working hours,

delays in wage payment and getting less than minimum wage orhiring for short probation periods and then terminated)

discriminatory hiring practices (especially for women) becamemore prevalent based on age, gender and appearance Reductions in sales and profits of small businesses: reduced

demand and depreciation of Mongolian currency; loss of accessto credit; increased selling on credit

Higher transport costs contributed to shift from wage labor tounpaid activities like gardening in urban areas

Long term: even with labor market improvements migrants andlow skilled workers continued to suffer from poor enforcementof labor contracts, low salaries and poor working conditions


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Food price inflation was still high Fall in price of cashmere and livestock products with

depreciation of national currency shifted terms of tradeagainst herders

Big impact because of loans at high interest rates based onprojections for cashmere and meat

Costs of schooling and university increased at the peak ofthe crisis

Herder resilience strongly correlated to herd size (under100 most affected)

Long Term: Economic recovery accompanied by continuedrise in consumer prices. Higher prices for cashmere andskins improved herder livelihoods. Impact of govt socialtransfers in HDF and education subsidies helped.


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Changes in gender roles Women shift fromnon-income domestic work to incomegenerating activities

Increased self esteem and role in hh decision

making Increase apathy, alcohol abuse and crime

especially for youth Rise in domestic violence

Long term: difficult to measure womencontinued in economic activities but otheraspects not readily discussed


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Reduced consumption Diversification of income sources Increased reliance on government assistance (HDF, food stamps,

herder programs) Increased assistance from donors and NGOs Illegal gold ming as diversification strategy and safety net

(women and children involved) Increased borrowing from financial institutions but worse loan

conditions Increased rural-urban migration Reliance of family and community support

Long term: improvements in livelihoods for all were observed inthe 4th round of research. Those who had lost major assets(herders) and faced new vulnerabilities (migrants) could coverfood expenses, but little more. Bank loans without collateralremained inaccesible


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Both crisis reveal a number of economic and social vulnerabilitiesand weaknesses of social safety nets Longer term recovery in both cases for the poor is more than

anticipated and often does not reach where they were before Women played a large part in building resilience of hh and

negotiating strategies to adapt to crises

Mongolia invested in creating social protection systems to betterprepare for the future (PMT, initiation of targeted benefits,emergency warning system with social indicators)

But. Looking forward Growth is back (17%), but so is increasing

inequality These dynamics of vulnerability, resilience and responses to

shocks have important implications for planning for inclusivegrowth, addressing inequality and preparing for future shocks


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Living Through Crisis: Social and Gender Impacts of the Food and Financial Crisis in Mongolia

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