MONGOLIAN CIVIL SERVICE PROFILE MAP - TRACK · 1 Mongolian Civil Service Proﬁ le Map MONGOLIAN...

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Mongolian Civil Service Profi le Map

MONGOLIAN CIVIL SERVICE PROFILE MAP

Ulaanbaatar 2008

THE GOVERNMENT OF MONGOLIA

GOVERNMENT SERVICE COUNCIL

OF MONGOLIA


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PrefaceWe are presenting to the attention of esteemed readers this booklet called the “Mon-golian Civil Service Profi le Map” printed in both the Mongolian and English lan-guages. This booklet has been developed within the framework of Modernizing Pub-lic Administration and Civil Service, Component 2A, Economic Capacity Technical Assistance Credit Project implemented jointy by the Government of Mongolia and the World Bank at the Government Service Council of Mongolia.

The content of this booklet was developed by the Government Service Council with extensive input from national and international consultants.

Chapters 1 and 2 were prepared by national consultant Mr. R. Batmend. Chapters 3, 4, 6, and 7 were prepared by international consultant Mr. Clive Parry. Chapter 5 was prepared by international consultant Mr. Clive Parry and national consultant Mr. R. Batmend. International consultants Mike McCandless and Christopher Jones took part in the preparation of Chapter 3 of this Profi le Map.

Certain print materials (N.Enkhbayar, “Mongolian Public Administration Reform: Theory, Practice, and Future Objective”, “Public Administration” Magazine, Acad-emy of Management, Ulaanbaatar, 2003, Numbers 1 and 2) and certain materials developed by international consultant Mark Johnston have been used for the deve-lopment of several sub-chapters in Chapter 5 related to the Civil Service’s long-term policies and strategies.

I would like to express my gratitude to international consultants for their efforts and hard work. I thank Team Leader Mr. Darrell Freund for his effi cient contributions and on-going management of this task, and to Mr.Ts.Samballkhundev, Ph.D., Profes-sor and Mr. R. Batmend for editing this booklet and preparing for the print.

J.NorovsambuuChairmanGovernment Service Council of Mongolia


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ContentsPages

Preface ...............................................................................................................................1

Introduction ......................................................................................................................2

Chapter 1: General Information4

1.1 Mongolia4

1.2 Workforce6

1.3 Economy7

1.4 Public Spending9

1.5 Public Sector Employment12

Chapter 2: The Structure of Mongolian State15

2.1 The State Great Hural of Mongolia15

2.2 The President of Mongolia17

2.3 The Government of Mongolia17

2.4 Judicial Power20

2.5 Administrative and Territorial Units of Mongolia and their Governing Bodies20

2.6 The Constitutional Court of Mongolia ................................................................21

Chapter 3: Present State of Mongolian Civil Service ............................................23

3.1 Legal Environment for the Civil Service ............................................................23

3.2 Main Principle of State Activity and Principles for the Civil Service ..................25

3.3 The Rationale for a Civil Service26

3.4 Government Posts Classifi cation, Grades, Financing and Wages28

3.5 Common Duties and Rights of Core Civil Servants and Restrictions on

ContentsIntroduction.............................................................................................1Chapter 1: General Information ..........................................................3

1.1 Mongolia..................................................................................... 31.2 Workforce................................................................................... 51.3 Economy..................................................................................... 61.4 Public Spending.......................................................................... 81.5 Public Sector Employment........................................................ 11

Chapter 2: The Structure of Mongolian State...................................132.1 The State Great Hural of Mongolia........................................... 132.2 The President of Mongolia ....................................................... 152.3 The Government of Mongolia .................................................. 152.4 Judicial Power............................................................................ 182.5 Administrative and Territorial Units of Mongolia and their Governing Bodies ........................................... 192.6 The Constitutional Court of Mongolia ..................................... 19

Chapter 3: Present State of Mongolian Civil Service....................... 203.1 Legal Environment for the Civil Service.................................. 203.2 Main Principle of State Activity and Principles for the Civil Service.................................................................................... 233.3 The Rationale for a Civil Service ............................................. 233.4 Government Posts Classifi cation, Grades, Financing and Wages.............................................................................................. 263.5 Common Duties and Rights of Core Civil Servants and Restrictions on Their Activities ..................................................... 303.6 Mongolian Civil Service Size, Structure, Composition, and Movement ......................................................... 333.7 Demand for Improving Civil Service Leadership Skills ............................................................................ 373.8 Government Service Council and its Roles............................... 393.9 Mongolia Public Administration and Civil Service Reform Process and Results ........................................................................ 42

Chapter 4: The Demand for Civil Service Reform ....................................................................................47

4.1 International Best Practice in Civil Service Reform............................................................................................ 474.2 Civil Service Strengths, Weaknesses, Opportunities and Threats............................................................... 51

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Their Activities31

3.6 Mongolian Civil Service Size, Structure, Composition, and Movement ............34

3.7 Demand for Improving Civil Service Leadership Skills37

3.8 Government Service Council and its Roles39

3.9 Mongolia Public Administration and Civil Service Reform Process and Results39

Chapter 4: The Demand for Civil Service Reform39

4.1 International Best Practice in Civil Service Reform39

4.2 Civil Service Strengths, Weaknesses, Opportunities and Threats39

Chapter 5. Future State of the Civil Service in Mongolia39

5.1 National Development Comprehensive Policy Based on Millennium Development Goals of Mongolia39

5.2 Medium-Term Civil Service Reform Strategy39

5.3 Civil Service Reform Long-Term Challenges39

5.4 Civil Service Reform Long-Term Strategies39

Chapter 6: Civil Service Reform Implementation Strategies39

6.1 Roles of Medium-Term Civil Service Reform Strategy Implementing Institutions39

6.2 Coordination and Capacity Building Roles39

6.3 Action Plan for the Implementation of the Medium-Term Civil Service Reform Strategy39

Chapter 7: Conclusion39

Reference Sources .........................................................................................................

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Chapter 5. Future State of the Civil Service in Mongolia...................................................................53

5.1 National Development Comprehensive Policy Based on Millennium Development Goals of Mongolia ................ 535.2 Medium-Term Civil Service Reform Strategy........................... 595.3 Civil Service Reform Long-Term Challenges........................... 655.4 Civil Service Reform Long-Term Strategies ............................ 73

Chapter 6: Civil Service Reform Implementation Strategies ..............................................................................................78

6.1 Roles of Medium-Term Civil Service Reform Strategy Implementing Institutions................................................................ 786.2 Coordination and Capacity Building Roles .............................. 826.3 Action Plan for the Implementation of the Medium-Term Civil Service Reform Strategy................................ 83

Chapter 7: Conclusion.........................................................................92Reference Sources ...............................................................................94

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IntroductionPurpose. This Profi le Map seeks to provide a basic introduction to the Civil Service of Mongolia and the context in which it operates. The Civil Service of Mongolia has been the subject of enormous changes and reforms in recent years, a process that will undoubtedly continue to enable the Government of Mongolia to maintain and improve its capacity to deliver essential public services. The Mongolian Civil Ser-vice Profi le Map sets out the main achievements so far and describes the future scope and direction of the reform program. Taken together, this represents a substantial body of work, which is a credit not only to successive Governments but also to the civil servants who have shown by their adaptability and responsiveness that they are committed to the improvement and modernization of the organizations in which they work in the interests of their fellow citizens.

The Profi le Map describes the position as it exists at the end of 2007. Information about future initiatives and developments may be obtained from www.pmis.gov.mn/gsc .

Target Groups. This Profi le Map will be of interest to a wide range of stakeholders. It details the current state of the Civil Service and explains the government’s plan to implement medium and long term Civil Service Reform Strategies. Members of the public, including international organizations, donors, the diplomatic community and NGOs will fi nd its background and descriptions of the Civil Service and reform strategies particularly useful. Individuals interested in seeking Civil Service Employ-ment will fi nd valuable information about the Civil Service. Offi cials who currently occupy posts in the Civil Service will likely take interest in the Medium Term Civil Service Reform Strategy and Action Plan. The Action Plan includes six main strate-gies the Government of Mongolia plans to implement in the coming years to achieve economies of scale, and a Civil Service that is fl exible and adaptive to the needs of a market economy.

Description of the Content. The structure and contents of the Profi le Map is designed to describe and explain the current status and future reform strategies of the Civil Service. Chapter one provides some general background and information about Mongolia. This chapter includes a description of the history and workforce of Mongolia before introducing some important information about the economy and the public sector.

Chapter two discusses the structure of the Mongolian state. This chapter briefl y ex-plains the structure and functions of the executive, legislative and judicial branches of government.

Chapter three explains the present state of Civil Service reform in Mongolia. This


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chapter discusses the Law on Government Service and the Public Sector Manage-ment and Finance Law and the steps the Government of Mongolia has taken to imple-ment Civil Service reform in Mongolia.

Chapter four goes on to discuss the demand for Civil Service reform in Mongolia. This chapter introduces best international reform practices and fi ndings of Civil Ser-vice SWOT analysis

Chapter fi ve goes into details about concept and directions of the medium term strate-gies as well as long term policies and strategies of the Civil Service reform.

Chapter six discusses Civil Service reform implementation strategies and expected outcomes as well as performance indicators and their measurement.

Chapter seven refl ects certain conclusions related to the implementation of civil ser-vice medium and long term policies and strategies.

This Profi le Map is the fi rst attempt to provide basic information about the Mongo-lian Civil Service. Therefore, there is the potential for some content to be incomplete and some statistics, terms and phrases to be inaccurate. The Government Service Council welcomes comments and suggestions to further improve the Profi le Map.

Government Service Council of Mongolia

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Chapter 1: General Information 1.1 Mongolia

History: The name “Mongol” was fi rst recorded by the Chinese during the Tang Dynasty (AD 618-907). Mongolia was established in the 13th Century by Chinggis Khan when he conquered and unifi ed the numerous tribes and states living in the Asian steppe and nearby terrain.

The Mongols gained fame when under Chinggis Khan they conquered huge areas of Eurasia. After the death of Chinggis Khan, the empire he established (the larg-est land empire in recorded history) slowly disintegrated over the course of several centuries.

In the 17th Century Mongolia came under Manchu-Qing rule for over two centu-ries. In 1911 Mongolia gained its semi-independence and established an Autono-mous Mongolian State after declaring independence from China’s last Qing em-peror. A theocratic government, under Jabtzun Damba (declared Bodg Khan) lasted eight years until the Russian Revolution of October 1917 sent powerful shockwaves throughout the region.

Mongolia was not immune to the spirit of proletarian revolution that gripped its larg-er neighbor. China, sensing weakness on the part of the Russians, mobilized troops lead by warlords to occupy Khuree, the Mongolian capital, and completely dismissed Mongolia’s autonomy.

In 1921, with the backing of the Soviet Union, the Mongolian army lead by D. Sukh-bataar fought Chinese soldiers and the White Russian army to gain legitimate inde -


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pendence and a democratic state. It soon became apparent that the Soviet Union had other plans and a socialist regime supported by the Kremlin was installed in 1924.

For 75 years Mongolia remained under the sphere of Soviet infl uence until 1990 when Mongolia embarked on its transition from a socialist, centrally planned econ-omy to a democracy and market economy. Reforms lead by young intellectuals re-sulted in the establishment of several political parties. In August 1990 the country held its fi rst parliamentary elections, and the opposition party won 40 percent of the seats. A new Constitution developed by State Baga Khural in May 1991 was adopted by the State Great Khural in January 1992 and the name of the country changed from the People’s Republic of Mongolia to Mongolia. The new Constitution established Mongolia as a democratic parliamentary state with independent legislative, executive and judicial branches. The new Constitution guarantees freedom of speech, religious tolerance, basic human rights and the rights of citizens to own property and engage in the business of their choice.

Geography: Mongolia is located in the heart of Central Asia. It shares a 3,543 kilo-meter border with Russia and 4,677 kilometer border with China. Mongolia’s total area is 1.5 million square kilometers. It is 2.8 times the size of France, twice the size of Texas and approximately the same size as Queensland, Australia. Mongolia is a landlocked country with its highest point (Mount Huytnii Orgil) 4,374 meters above sea level.

Climate: Mongolia has an extreme continental climate with four distinct seasons. The country averages 257 cloudless days per year. In the summer, the Gobi region averages 25 degrees Celsius and Ulaanbaatar averages 20 degrees Celsius. Average temperature from November throughout March is below freezing and this period is called cold season. Ulaanbaatar lies in the Tuul River Valley and is 1,350 meters above sea level. Average annual precipitation varies from 31 centimeters in Ulaan-baatar to 25 centimeters in the south. Approximately eight percent of Mongolia is covered by forest and the remaining areas include grasslands, mountains and arid regions. People: Mongolia has a population of 2.6 million and the present annual rate of pop-ulation growth is estimated at 1.4 per cent. Two thirds of the Mongolian population is below 30 years old, and two fi fths of the population is 14 years or younger. Much of the population growth of Mongolia has been absorbed in urban areas. The nation’s capital, Ulaanbaatar, has approximately 1.1 million inhabitants. However a signifi -cant portion of the population still live in traditional, white felt tents called gers.

The Mongolian language is member of the Ural-Altaic family of languages, which includes Finish, Turkish, Kazak, Uzbek and Korean. Mongolia had traditional Mon-golian script that is written vertically, but since 1944 the Russian Cyrillic alphabet has been used to write Mongolian. About 75 percent of the population of Mongolia speaks Khalha Mongol, the offi cial language, while another 15 per cent speak other Mongolian dialects. Ethnic minorities are mainly speakers of Turkic languages, such

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as Kazakh, Tuvinian, Urianhai and Hoton. Culture: Mongolian culture is rooted in nomadic traditions and it is intimately con-nected with nature and livestock. Despite urbanization in recent years, the tradition of the nomadic lifestyle lives on. Mongolians have wholeheartedly taken to Tibetan Buddhism and therefore the links between the Mongolian and Tibetan cultures are signifi cant. Before the installment of a socialist regime, Mongolia had over 700 mon-asteries where 110,000 lamas (monks) used to reside. During oppression in 1930s, 32,000 lamas were subject to mass arrests and majority of them were executed. At that time, almost all the monasteries were closed or, destroyed and religious activi-ties were prohibited. Since the 1990s, religious traditions have seen a revival of Bud-dhism and other faiths. The minority Kazakhs, who live in western Mongolia have been free to worship and practice their Islamic traditions.

1.2 WorkforceThe working age population of Mongolia accounts for 62.4 percent of the total popu-lation in 2006 and increased 4.3 percent compared to 2005. The unemployment rate has remained relatively constant at 3.2 percent for the past several years. In 2006, more then 43,000 jobs have been created thanks to the government’s macro-eco-nomic stabilization program and the improved confi dence people have in the services of state agencies to support employment. The number of the working age citizens is 1,619.6 thousand including 1,042.8 thou-sand in the workforce, of which 1,009.9 thousand are employed in aimags and the capital city. Total public sector employment is 195,400 with 140,200 working for Government budget organizations and 55.2 thousand for state owned enterprises. Total employment fi gures are provided below in Table 1 and dynamics of total em-ployees, public and private sector employment are shown in Figure 1 below.

Table 1: Employment of Mongolia (in thousands)

Source: National Statistical Offi ce of Mongolia

INDICATORS

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95

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96

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97

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98

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99

20

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20

01

20

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03

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1.Population2317.5 2353.5 2387.0 2420.5 2382.5 2475.0 2442.5 2475.4 2476.6 2533.1 2562.4 2594.1

2.Labor re-sources /Work-age population numbers/

1186.7 1212.8 1229.6 1256.8 1279.3 1347.4 1402.8 1439.2 1488.9 1431.1 1577.0 1619.6

3.Workforce 839.8 847.2 852.0 859.3 869.8 847.6 872.6 901.7 959.8 986.1 1001.2 1042.8

4.Employees 794.7 791.8 788.3 809.5 813.6 809.0 832.3 870.8 926.5 950.5 968.3 1009.9

5.Unemployed population

217.7 227.2 278.6 271.2 248.4 282.7 278.9 265.8 233.0 248.3 260.4 257.6

6.Number of Unemployed listed in Labor and Welfare Service Depart-ment

45.1 55.4 63.7 49.8 39.8 38.3 40.3 30.9 33.3 35.6 32.9 32.9


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Figure 1: Dynamics of Total Employees, Public and Private Sector Employment (in thousands)

Source: National Statistical Offi ce of Mongolia, Labor Resources Balance (1990-1997)National Statistical Offi ce of Mongolia, Employment – 1997, 1998, 1999, 2000, 2001, 2002, 2003,

2004, 2005, 2006, and 2007

1.3 Economy

Mongolians have been breeding livestock for centuries. As Russian scientist N.Mayskii wrote in his book “Contemporary Mongolia: In the Dawn of the 20th Century” that “in Mongolia the only business that every men and women is occupied with is livestock breeding. There is no other occupation”. Mongolia’s reliance on livestock, combined with foreign occupation that was not interested in economically developing Mongolia or Mongolians, limited the development of other viable sectors for many years.

Since 1990, Mongolia has begun the transition from a centrally controlled economy to a market oriented economy. The demise of the Soviet Union meant the halt of many important subsidies that kept the Mongolian economy afl oat for decades. An economic crisis ensued closing many dozens of industrial facilities. Unemployment spiked following a period of economic stagnation and high infl ation. Unwise mon-etary policy coupled with a poorly planned privatization program saw the state sell

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off assets at undervalued prices. Unemployment from 1991 to 1993 averaged 10 percent. The annual infl ation rate rose by 326 percent in 1992. The budget defi cit accounted for 17 percent of the country GDP in 1992.

In 1994 the economic slide of the nation was slowed and the course to prosperity was charted thanks to sound economic and monetary policy provided by various interna-tional donors and experts. New laws strengthening and modernizing the tax, banking and investment sectors in Mongolia were introduced. A stock exchange appeared in Mongolia and GDP grew at an annual rate of 4 percent in 1994 until it reached 10.6 percent in 2000, modestly declined to 8.6 percent in 2006, and soared to 9.9 percent in 2007.

Per capita GDP rose from $435 in 1994 to $1,220 in 2006. The mining sector, mostly leaning on copper and gold, greatly contributed to economic growth.

Figure 2: GDP per Capita (in thousand tugrugs)

Mongolia’s foreign partners consider Mongolian economic growth sustainable when compared to neighboring countries that face similar development challenges. Live-stock increased by 14.4 percent in 2006 to 34.8 million heads, agricultural production increased two fold, and growth in the mining sector reached 6.3 percent.

Figure 3: Real Growth of the Economy


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The structure of Mongolia’s GDP and share of minerals processing have changed as a result of the expansion of the mining sector. The processing of Mongolia’s minerals has reached 3.5 percent of GDP. The agricultural sector was responsible for 19.0 per-cent of GDP in 2006 that refl ects its declining share in total GDP. The service sector accounted slightly decline in 2006 and was responsible for 41.0 percent of GDP.

Figure 4: The Structure of the Economy

However Mongolian economy is still vulnerable to metal price fl uctuations on world markets and has low diversifi cation since it’s heavily dependent on mining sector production.

1.4 Public SpendingThe State Budget of Mongolia had a signifi cant defi cit from 1990 to 1993. The bud-get revenue of Mongolia was 30.1 percent of GDP in 2005. In 2006 budget revenue was 36.6 percent of GDP.

Figure 5: Consolidated Budget Revenue and Expenditure Share to GDP

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Mongolia’s budget revenue in 2006 consisted of tax from business entities (16.3 per-cent) and personnel income tax (5.7 percent). Windfall tax comprised 13.0 percent and custom duty and other taxes accounted for 5.3 percent of revenue in 2006.

Figure 6: The Balance of Consolidate Budget of Mongolia

The Consolidated State Budget and Current Account Balances were positive in 2006. The Current Account Balance equals 10 percent of GDP and the overall budget bal-ance is 3.3 percent of GDP. Investment share in GDP accounted for 5.5 percent in 2006 that is double the fi gure in 2005. Investment in roads and transportation equals 27.0 percent of overall expenditures. In 2006, 22.6 percent of all investments went to the fuel and energy sectors. Education, culture, science and health and social security sectors’ investment share in 2006 was 12.4 percent. Considering 23.4 percent of total expenditures going into education, culture, and science, as well as 27.9 percent into health sector, total expenditure in the social sector comprised 63.6 percent of total Government expenditure.

Government expenditure in the Consolidated State Budget was 33.3 percent of GDP. Of which 15.9 percent went to fi nancing public sector employees’ wages and salaries, 40.1 percent to fi nance goods and services. Financing goods and services delivered to the public sector has been increased to reach 8.2 percent in 2006.

Figure 7: The Structure of the Consolidated Budget Expenditure


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Although the early 1990s saw a signifi cant reduction in Civil Service employment in Mongolia as part of the transition process, since 1995 the Government wage bill has increased signifi cantly, largely because of wage increases.

Mongolia’s initial transition to a market economy saw the public sector’s role in the economy drop from 51.8 percent of GDP in 1993 to 31.5 in 1995. Before 1997 the share of government wages to GDP was on relatively similar level compared to num-ber of other similar transition economies and other countries in the region. After 1997, Civil Service wages and salaries increased signifi cantly relative to GDP. Wages and salaries are projected to fall slightly over the period 2003-06, as shown in Figure 8 below, based on 2004 budget and MTBF fi gures (local and central break-downs are not shown beyond 2002 because of a change in this classifi cation).

While share of government wages in GDP was 8.6 percent in 2003, this fi gure changed to 7.1 percent in 2004, 6.3 percent in 2005, 8.3 percent in 2006, and 8.9 percent in 2007.

Figure 8: Government Wages as Share of GDP

Although the 1997-2003 increase in the wage bill was partly caused by the increase in number of civil servants mentioned in the previous section, it mostly refl ects in-creases in civil service wage rates. Base salaries were increased by 25 percent in 2000, and then by a further 25 percent in 2001 and 20 in October 2002. Over this period there were signifi cant budget overruns on wages.

Current expenditure rose by 1 percentage point of GDP in 2002, after having surged by more than 5 percentage points of GDP in 2000-01, largely as a result of these wage increases. The full-year impact of the October 2002 increase is also refl ected in the 2003 budget, which anticipated a further rise in the total wage bill as a proportion of GDP. This was offset by the decision to reduce civil service numbers during 2003. These trends are shown in Figure 9 below.

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Figure 9: Government Expenditure and Wage Bill as % of GDP

1.5 Public Sector EmploymentThe public sector in Mongolia consists of the civil service (including security and social services), infrastructure, utility, social security and the labor sectors.

There are over 1,500 primary and secondary schools in Mongolia serving 542,000 students. There are 168,000 students enrolled in 214 colleges and universities. In In 2006, 18.0 percent of the national budget was spent on educating Mongolian citi-zens.

The Government has made great progress in providing health care services to its citizens. The health care sector employs 34,200 professionals. Doctors, nurses and other health care professionals work out of 15 tertiary level hospitals and centers, 34 aimag and district level general hospitals, 34 inter soum hospitals, 288 soum hospi-tals, 780 private hospitals and 224 family hospitals. Currently, there are 28 doctors for every 1,000 Mongolians. Since 1990 (See fi gure 10) infant mortality decreased substantially and reached targets indicated in Mongolia’s Millennium Development Goals.

Figure 10: Infant Mortality (per 1,000 births)


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Health sector expenditure was four percent of GDP in 2006.

Figure 11: Health Sector Expenditure (2006)

Although the number of civil servants in the health and education sectors account for approximately 57 percent of the total number of civil servants, the remaining sectors have an equally important role in providing important services to the citizens of Mongolia.

Central and local administrations are responsible for ensuring the smooth operations of the Civil Service. Civil servants occupying positions in these organizations ensure sector-wide polices and programs link to national plans.

Court administrators and offi cials upheld the Constitution and laws of the state and ensure court decisions are followed through. Judges, attorneys, clerks and other pro-fessional and support staff represent the state in all types of legal proceedings and ensure individuals are granted rights guaranteed by the Constitution and other laws.

Taxation, custom and fi nance offi cials are responsible for collecting the government’s revenue and ensuring that individuals and businesses remit the proper amount of taxes to the government. Civil servants in the tax, custom and fi nance sectors are located throughout the country.

Civil servants in local administrations provide important services to people located throughout Mongolia. Veterinary doctors and animal husbandry experts provide ad-vice and scientifi c guidance to herders and farmers in an effort to improve livestock and agriculture yields.

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Chapter 2: The Structure of Mongolian State

The Constitution of Mongolia (Article 2) established Mongolia as a unitary state divided into administrative units. According to the Constitution (Article 3) the power of the State rests with the people of Mongolia. The people of Mongolia exercise their rights through their direct participation in State affairs as well as through the elected, representative bodies of State power. The Constitution of Mongolia distributes State power in a balanced way. According to the Constitution, State structure of Mongolia has the following elements:

• The State Great Hural of Mongolia• The President of Mongolia• The Government of Mongolia• The Judiciary• Administrative and Territorial Units of Mongolia and their Governing Bodies• The Constitutional Court of Mongolia

2.1 The State Great Hural of Mongolia

The People’s Great Hural of Mongolian People’s Republic on January 13, 1992 approved the Constitution of Mongolia. The Constitution declared the State Great Hural of Mongolia as the highest organ of State power and supreme legislative power is vested only in the State Great Hural. Its mandate is regulated by Law of Mongolia on the State Great Hural.

The main goals of the State Great Hural are to protect the independence and sover-eignty of Mongolia, to consolidate legal government, to uphold the desires, interests, rights and unity of the nation, and to strengthen democracy, justice and human rights. The State Great Hural is a unicameral legislative assembly with 76 members and exercises its legislative power through its sessions. The State Great Hural Members are elected by popular vote and serve four-year terms. The last election occurred in June 2004. The next election is scheduled for June 2008.

The State Great Hural meets during sessions that are held once in six months. The sessions may not last less than 50 working days. Autumn session opens on 1st Octo-ber and spring session opens on the 5th April. The Great State Hural has a Chairman and a Vice-Chairman. The State Great Hural implements its powers by means of a Plenary Session, Standing Committees, ad-hoc Sub-Committees and other organiza-tional forums.

The State Great Hural may at its initiative consider any issue pertaining to domestic and foreign policies of the country and Article 25 of the Constitution provides issues


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of its exclusive competence.

Figure 12: Structure of the State Great Hural

Members of the State Great Hural

Members of the State Great Hural represent and uphold the interests of all citizens and the State. A citizen of Mongolia who has reached the age of 25 is eligible to be elected to the State Great Hural on the basis of common free electoral rights. The mandate of a member begins with an oath taken before the State Emblem and fi nishes with an oath taken by a member of the next Parliament.

Functions of the Standing Committees of the State Great Hural

The State Great Hural has seven Standing Committees. Their functions include:

• Summarizing and making recommendations on draft bills and other issues sub-mitted to the State Great Hural.

• Controlling enforcement of laws.• Recommending the appointment of heads of organizations that are established

by the State Great Hural.• Requesting information and reports from government organizations and offi -

cials in order to make informed decisions on the future course of the nation.• Surveying and polling among the public and forming expert working groups to

gauge opinions on certain issues.

Standing Committees shall not have less then 12 members. The State Great Hural may establish sub-committees within Standing Committee structures.

Political Parties and Coalitions

Political parties with eight or more seats in the State Great Hural are eligible to form

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a fraction. Any party or coalition which has won more than 38 seats in Parliament is considered a majority. A party or coalition with less than 38 seats is considered a minority.

2.2 The President of Mongolia The Constitution (Article 30) defi nes the President as the Head of State and embodi-ment of the unity of the people. An indigenous citizen who has attained the age of 45 years and has permanently resided at a minimum for the last fi ve years in Mongolia is eligible for election to the post of the President for a term of four years. Political parties with seats in the State Great Hural individually or collectively nominate one presidential candidate per a party or a coalition. The President can be re-elected only once. The President is prohibited by the Constitution to hold any other posts and pursue any occupation not relating to his duties assigned by law.

The mandate of the President is specifi ed by the Constitution (Article 33). The Presi-dent is the Commander-in-Chief of the armed forces of Mongolia. The mandate of the President becomes effective with an oath taken by him/her and expires with an oath taken by the newly elected President. The President within his powers issues decrees in conformity with law. He/she is responsible to the State Great Hural. In the temporary absence, resignation, death or voluntary retirement of the President his/her mandate is exercised by the Chairman of the State Great Hural.

2.3 The Government of Mongolia For the Government of Mongolia executive power is defi ned by Article 38 and Article 46 of the Constitution. The Government of Mongolia is the highest executive organ of the State. The Government comprises the Prime Minister and Members of Cabi-net. The Prime Minister leads the Government. The Members of the Government are appointed by the State Great Hural by nomination of the Prime Minister who consults with the President of Mongolia. The Prime Minister is responsible to the State Great Hural for the implementation of state laws. The Government is accountable to the State Great Hural, implements below functions and is responsible for:

• Organizing and ensuring nationwide implementation of the Constitution and other laws;

• Working out a comprehensive policy on science and technology, basic guide-lines for economic and social development, the State Budget, credits and fi scal plans;

• Implementing comprehensive measures on sectoral and intersectoral, as well as regional development;

• Undertaking measures that protect the environment and rationally use and re-store natural resources;

• Providing effi cient leadership of central state administrative bodies and direct-ing the activities of local administrations;


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• Strengthening the country’s defense capabilities and ensure national security;• Taking measures that protect human rights and freedoms, enforce public order

and prevent crimes;• Implementing the State’s foreign policies; and• Concluding and implementing international treaties with the consent of and sub-

sequent ratifi cation by the State Great Hural as well as concluding and abrogat-ing intergovernmental treaties.

The specifi c powers, structure and procedures of the Government are determined by the laws of Mongolia.

The policy making of the Government infl uences fi ve basic, distinct and specifi c sectors:

• The environmental sector covering natural resources (land, water, fl ora/fauna). The goals of this sector are to maintain the quality of the environment and re-sources while maximizing the benefi ts the nation’s natural assets.

• The productive sector covering agriculture, industry and mining. The goals of this sector are to carry out growth and development that increases the well being of the nation.

• The infrastructure sector covering energy, public utilities, construction, road and transport, communication and information. The goal is to build and maintain the nation’s physical assets.

• The social sectors covering health, education, culture and welfare. The goals of this sector are enriching and sustaining the quality of life for the Mongolian people.

• The core function sector covering fi nance and economy, justice, defense, exter-nal affairs. The goals of this sector are upholding and maintaining core national values.

The Government business structure general model is shown below in Figure 13.

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Figure 13: Business Structure General Model for the Government(The State Great Hural Decree #38 of 1996)

Within each of these sectors, the business of Government is organized according to the following functional alignments:

• Line ministries assuming strategic planning, providing policy guidance, formu-lating programs, regulating, monitoring, evaluating and assessing functions.

• Regulating agencies assuming legislation and standards enforcing functions.• Implementing agencies and budget organizations assuming policy implementa-

tion functions. The policy implementing functions might also be assumed by economic entities with whole and partial state ownership, by the private sector or non-governmental organizations (NGOs) on contract basis with the Govern-ment.


18

• Local administrative entities – all level Governors’ offi ce assuming local ter-ritorial strategic planning, providing policy guidance, formulating programs, regulating and monitoring, evaluating and assessing functions.

• Local implementing agencies and budget organizations assuming policy imple-mentation functions. The policy implementing functions might also be assumed by private sector or non-governmental organizations on contract basis with the Government.

• Entities with central management functions (national development planning, macro-economic analyses, fi nancial, personnel, supporting executive manage-ment) and inter-sectoral government agencies assuming other functions (trade, labor, customs and tax) support the operation of line ministries.

The Government will assume leadership functions. The Cabinet Secretariat is the Government apparatus designed to support the leadership functions of the Prime Minister and the Cabinet.

The public and private sectors will assume the role of generator of national develop-ment, progress, and economic growth.

2.4 Judicial PowerArticle 47 of the Constitution of Mongolia defi nes that judicial power vests exclu-sively in the courts. Article 49 stipulates that judges are independent and subject only to law. Section 2 of Article 49 expressly provides that neither any private person, nor the President, Prime Minister, members of the State Great Hural or the Government, offi cials of the state, political parties or other voluntary organizations may interfere with the way in which judges exercise their duties.

The Court structure: The court system of Mongolia consists of three levels of or-dinary courts. At the lowest level of the ordinary courts are the Soum, Intersoum and District Courts. These are courts of fi rst instance for misdemeanors, less serious crimes and civil cases with relatively small sums in dispute. There are currently 39 of these courts with 246 judges. Aimag courts, which function in aimag centers, and the Capital City Court in Ulaanbaatar, are courts for more serious crimes such as felony cases of murder and rape, and civil cases with large sums of money in dispute. They also hear appeals from lower levels of courts. Currently there are 22 of these courts with 97 judges.

The Supreme Court of Mongolia is the highest judicial organ. It is the court of fi rst instance for criminal cases that do not fall within the jurisdiction of the lower courts. The Supreme Court examines decisions of lower-instance courts through appeal and supervision. It decides on matters referred by the Constitutional Court and the

19


Prosecutor General. It rules on the offi cial interpretation of all laws, except the Con-stitution. It may also consider all other matters assigned to it by other laws. The Supreme Court is comprised of the Chief Justice and 16 judges who serve six-year terms. All levels of court judges are appointed by the President of Mongolia on the proposal of the General Council of Courts.

Prosecutors: The Prosecutor General and his/her deputies are appointed by the Presi-dent in consultation with the State Great Hural for a term of six years. Prosecutors ex-ercise supervision over the investigation of cases and the execution of punishment.

2.5 Administrative and Territorial Units of Mongolia and their Governing Bodies Chapter four (Articles 57 to 63) of the Mongolian Constitution establishes the pow-ers, functions and mandate of local administrations and their Governors. The Con-stitution also divides the territory of Mongolia administratively into aimags and the capital city. Aimags are sub-divided into soums. Soums are divided into baghs. The capital city is divided into districts and districts are divided into horoos. Currently there are 21 aimags, 329 soums, 1559 baghs, nine districts and 125 horoos in Mon-golia.

State power is exercised in the territories of aimags, the capital city, soums, districts, baghs and horoos by their respective Governors. The self-governing bodies in aimag, capital city, soum and districts are hurals of citizens representatives of the respective territories. The detailed mandate and functions of hurals and respective Governors are established by the Law on Administrative and Territorial Units and their Gover-nance. There are more than 150 laws that lay the foundation of the powers and the functions of hurals and Governors.

Legal framework for local governments includes the following:

• Constitution of Mongolia, 1992• Law on the Government, 1993• Law on Administrative and Territorial Units and their Governance, 1992• Law on Election of Aimags, Capital City and Soums Representatives of HCR,

1996• Law on Central Budget of Mongolia, 2002• Law on Statute of Cities and Villages, 1993• Public Sector Management and Finance Law, 2002• Law on State and Local Property, 1996 • Law on Statute of Capital City, 1994• More than 150 other laws and regulations

2.6 The Constitutional Court of Mongolia The Constitutional Court consisting of 9 members and has a mandate to exercise


20

supreme supervision over the implementation of the Constitution of Mongolia and resolve any Constitutional disputes. Three members of the Constitutional Court are appointed by the State Great Hural, three by the President, and three by State Great Hural upon presentation by Supreme Court, all for a term of six years. Citizens of Mongolia who are 40 years of age and highly skilled in law or politics may be ap-pointed to the Supreme Court. The Chairman of the Constitutional Court is elected among 9 members for a term of three years and may be re-elected once.

The President, members of the State Great Hural, the Prime Minister, members of the Government, and members of the Supreme Court can not be nominated to serve on the Constitutional Court.

The Constitutional Court examines and settles constitutional disputes at the request of the State Great Hural, the President, the Prime Minister, the Supreme Court and the Prosecutor General and/or on its own initiative on the basis of petitions and infor-mation received from citizens. Article 66 of the Constitution defi nes issues in dispute for the Constitutional Court judgement and its submission to the State Great Hural. If the Constitutional Court decides that the laws, decrees and other decisions of the State Great Hural and the President as well as Government decisions and internation-al treaties concluded by Mongolia are incongruous with the Constitution, the laws, decrees, instruments of ratifi cation and decisions in question are considered invalid; decisions of the Constitutional Court enter into force immediately.

Chapter 3: Present State of Mongolian Civil Service

3.1 Legal Environment for the Civil ServiceAdhering to the provision of the Constitution of Mongolia’s Article 46.2 “Core civil servants of Mongolia … shall strictly abide by the Constitution and other laws and work for the benefi t of the people and in the interests of the State” the Law on Gov-ernment Service Article 13.1.4 provides “execute legitimate decisions of higher level offi cials”, the same law’s Article 13.1.8 “in executing the position mandate be free from any political infl uence and serve in a neutral manner”, the same law’s Article 13.1.9 “be intolerant to any illegal and unfair behavior of offi cials” thus determining the common duties of the core civil servants.

The legal framework for Mongolia’s Civil Service for the fi rst time was established in 1995 and consists of two pieces of legislation, the Law on Government Service 2002 and the Public Sector Management and Finance Law 2002. For non-core civil servants who are classifi ed as support service staff, the Labor Law of Mongolia 1999 is also applicable.Law on Government Service 2002This Law governs the establishment of the Government Service, its classifi cation, government posts, the legal status of employees, and the terms and conditions of their

21


service (Article 1). It provides for the Government Service Council as the central body responsible for government service matters (Articles 34 and 35).

Government service posts are divided into four categories: political, administrative, special and support (Articles 3.3 and 5.1). Political posts include elected offi cials and governors, and persons who serve them directly in their political positions (Article 6). Administrative posts include all executive positions in 14 categories from minis-try state secretaries down to assistant inspectors (Article 7). Special service posts in-clude judges, military and police offi cers (Article 8). Government administrative and government special posts are described as core government posts (Article 5.2). Gov-ernment support service posts are those that serve the normal functioning of govern-ment bodies, and include governing, executive and supporting posts in government bodies in the fi eld of education, science, health care, culture and art. The government defi nes the classifi cation and categories of core government posts in ministries and other government bodies (Article 7.10) and support service posts (Article 9.2).

Chapter 3 of the Law on Government Service sets out the common duties, rights and restrictions on the activities of core government employees. The conditions for obtaining and holding core government posts (administrative and special) are set out in Chapter 4 of the Law. A person must have passed the government service qualifi cation test to be eligible for appointment (Article 17.3). A system of four ranks is provided for, with the authority to grant the ranks dependent on the category of offi cer. For example, the “leading offi cers” rank is granted by the President (Article 20). Government offi cer performance evaluation occurs based on the provision of the Law (Article 19). The Law also set out rules for transfer to another post, demotion, dismissal, discipline and retirement (Articles 22 – 26).

Certain benefi ts are guaranteed to government employees by the Law. They include the provision of housing, medical care (including expenses above those covered by medical insurance and 60% of the cost of necessary medical treatment abroad), and post-secondary tuition fees for one child (Article 27.1). Core government employees have the additional guarantee of job tenure, and those with stable and effective service are entitled to concessionary loans for housing, necessities or children’s education (Article 27.2). Gratuities may be given to employees for various purposes, including a trip once every two years to the family’s native home, death of a relative, or a fam-ily member unable to work due to illness. The Government sets the conditions for these gratuities (Article 30). Criteria are specifi ed for setting remuneration,


22

reimbursement of expenses, and rewards and bonuses (Articles 28, 29 and 31). Legal status of government support service workers that are not dealt with in this Law is regulated by Labor Law of Mongolia 1999.

The Government Service Council (GSC) reports directly to the State Great Hural (Article 34.2). It is responsible for the standards for government employees of all kinds (Article 33.2). It has Branch Councils that report to it (Article 34.13). Mandate of GSC is also specifi ed by this Law (Article 35.1).

GSC has a direct role in the hiring of core government employees in that it appraises applicants. This is carried out in accordance with procedures ratifi ed by State Great Hural (Article 35.1.6).

Disputes of certain kinds between core civil servants and their employers may be taken to GSC for review and resolution. Appeals may be claimed in courts (Article 39) if a civil servant is not satisfi ed with a GSC decision.

Public Sector Management and Finance Law 2002

Staffi ng assignments and salaries are determined by state secretaries, heads of local Governor offi ces or offi cials of equivalent rank – referred to as General Managers in the Law (Article 17.1.5). General Managers make hiring and fi ring decisions. Hiring is to be on the basis of merit. Under Article 5.1.3, all bodies funded from state and local budgets must appoint civil servants only on the basis of their knowledge, educa-tion, qualifi cation, experience and professional skills through open and competitive recruitment procedures, and fairly assess their work performance. General Managers (and equivalent) are bound by the merit criteria of the law in hiring staff and the GSC has no power to intervene. When General Managers appoint a candidate to a mana-gerial position, they must report to GSC on the criteria used. The GSC is to make the report available to the public (Article 48).

Special procedures apply to the hiring of State Secretaries, General Managers and offi cials of equivalent positions, including heads of local Governor Offi ces (Articles 43.1, 44.1.3, 44.1.5 and 45). GSC advertises the position and selects 3 to 5 candidates for the portfolio minister (or equivalent) to choose from. The selection of the candi-dates and the choice by the appointing authority must be based on the criteria set out in Article 5.1.3. GSC also has the following roles under this law:

• Controlling human resource policy in state and local administrations (Article 44.1.1).

23


• Ensuring the observance of a code of ethics by employees of the state and local budget organizations (Article 44.1.4).

• Making recommendations as to the remuneration of a number of specifi ed se-nior offi cials (Article 46.1).

• Making rules and directives as to assessment of performance contracts to be signed between General Managers and respective managers as well as between General Managers and government employees and monitor their implementa-tion (Article 47).

3.2 Main Principle of State Activity and Principles for the Civil ServiceThe Main Principles of State Activity of Mongolia have been defi ned by the Consti-tution of Mongolia. In the Paragraph 2 of Article One in Chapter 1 of the Constitu-tion states “The supreme principles of the activities of the State shall be to give effect to democracy, justice, freedom, equality and national unity and respect of law”. Main Civil Service PrinciplesArticle 4.2 of the Law on Government Service 2002 states that the government ser-vice shall be guided by seven principles:• To administer and be administered;• Transparency;• Service to the public;• Equal opportunities for all citizens to be employed in government service in

conformity with conditions and procedures prescribed in law;• A highly qualifi ed and stable Government Service;• Provision by the Government of guarantees and conditions under which govern-

ment employees can exercise their rights;• Government compensation for damages incurred as a result of wrongful action

taken by a government offi cial in the course of exercising his or her legal powers.Fiscal ManagementThe above principles are reinforced by Article 5.1 of the Public Sector Management and Finance Law 2002, which sets out the following principles of fi scal management to which budgetary bodies and offi cials must conform. • Clearly identify at the beginning of the year the objectives and outcomes to be

achieved.• Deliver the outputs for the fi scal year on a contractual basis and receive budget

funding.• Appoint civil servants only on the basis of their knowledge, education, qualifi -

cation, experience and professional skills through open and competitive recruit-ment procedures; and fairly assess their work performance.

• Effi ciently manage fi nance and budget; and avoid incurring receivables and li-abilities.


24

3.3 The Rationale for a Civil Service The ultimate reason for Government operations in a democratic society is to provide services to the people within a framework set by Parliament. This framework is usu-ally referred to as “state goals and functions” and the Government is called upon by Parliament to implement them. In order to do this, a Civil Service, often described as a government administrative service, is set up. This organization is usually guided by the Constitution, legislation, resolutions, and instructions of various kinds.

The civil service consists of a number of posts organized in structural units that form ministries, agencies and other entities. A common term for these organizations is “government administrative organizations”. For each Civil Service post within these organizations, there is a job description and requirements. However, the establish-ment of a Civil Service and all the necessary posts will not, in themselves, ensure that State goals and objectives will be met.

In order for Government administrative organizations to work effectively, there has to be a proper recruitment process. Additionally, there has to be infrastructure (build-ings, vehicles, computers, etc.), and budget (cash money or drawing rights) for pro-curement and payment of running costs. The activities for implementation of State goals and functions are usually carried out by civil servants. The outcomes of these activities are then compared and appraised against the objectives of the particular organization. In summary, therefore, the activities of the Government administrative organizations are parts of a process that includes: state goals and functions; gov-ernment administrative organizations; civil service (or government administrative service) posts; civil servants (or government administrative employees); activities; outcomes; appraisal and setting of new goals and functions. This process is a system that can be described as follows:

• The input into the system consists of all the resources that are necessary, i.e. organizational structures, civil service (or administrative service) posts and of-fi cers, funds and infrastructure. The offi cers are guided by the state goals and functions.

• The activities performed are in accordance with the Constitution and all neces-sary legislation, and these activities are directed towards achieving all the state goals and functions.

• The outputs are the different decisions and actions taken by the government organizations. These decisions and actions concern and affect the citizens of the country, private sector organizations and businesses, and all other stakeholders in society.

• The results and effects of these decisions and actions are continuous improve-ments in society.

• The evaluation of the process is made both by the Government itself and by the citizens of the country.

25


Basic Framework for Continuous Improvement ProcessGovernment organizations are learning organizations. The objective is always to im-prove their services to the citizens of the country. To do this, it is necessary to under-take the following processes:

• Defi ne the present state and the problem to be solved.• Defi ne the future state (the objective).• Defi ne the method to be used to reach this objective.• Defi ne the available resources.• Defi ne the work plan.• Proceed with the work plan.

Collectively, these elements of the process are described as “management by ob-jectives”. Transforming the State goals and functions at the National level to cor-responding goals and functions at organizational level involves making a “mission statement”. This document sets out what the particular government organization ex-pects to achieve for the good of the nation on a long-term basis. This basis is often estimated to be a period of about 15 years.

The goals and functions at organizational level are further organized along “priority guidelines” set by the Government. These guidelines collectively form the Govern-ment’s strategy. Of course, there is concurrently more than one process and activity going on at the same time. Therefore, there can be different strategies relating to dif-ferent activities by different government organizations that all combine together to form the overall strategy directed towards achievement of the state’s goals.

To accomplish the Government strategy, government organizations might have to be restructured. This restructuring process involves the following:

• Internal organizational structure (government posts);• Staff (government employees);• Budget (cash funds and drawing rights); and• Methods and tools.

An activity strategy (also called a business plan) is developed to bring the organiza-tion from its present state to its future state. This activity strategy involves the fol-lowing components:

• Undertaking functional reviews of the organizations.• Defi ning the structural units of the organization.• Reviewing and renewing job descriptions for the organization’s posts.• Selecting government employees who suit the job requirements.• Developing individual work plans agreed with each government employee.

(These work plans include goals and objectives, job tasks, and intended out-comes).

• Developing manpower planning strategies to ensure that employees are trained


26

(or retrained) as necessary in order to execute their tasks successfully.• Appraising and evaluating individual performance and achievements every

year.

By this means, organization and group objectives are the base from which individual objectives are established. It is also the case that the total achievements of the or-ganization are larger than the sum of the work of individual employees. There is, therefore, a very close relationship between the activities undertaken to implement government strategy and the human resources management and development func-tion.

3.4 Government Posts Classifi cation, Grades, Financing and WagesIntroductionThe Law on Government Service 2002 is the key piece of legislation for the Mongo-lian Civil Service and for establishing a classifi cation requirement for civil service positions. This Law provides:

“The purpose of this law is to regulate the classifi cations, principles, government posts and their requirements, conditions of serving a duty, rules, legal status of gov-ernment employees, and conditions, procedures, and guarantees of government em-ployees of the government service of Mongolia ………” (Article 1).

This Law set the government civil service classifi cation system in a four-system ap-proach, with below classifi cations:

• The Political Service posts (GH)• The Administrative Service posts (AA)• The Special Service posts (SpS)• The Support Service posts (SuS)

The government service post classifi cation is the means by which the State can de-sign the Government Service and allocate the resources to fi nance it.

Classifi cation and Grades of government service posts

Government service posts are classifi ed and graded according to the matrix set out in Table 2 below.

27


Table 2: Government Service Posts Classifi cations and Grades MatrixRanks for Government Political Posts or Government High Offi cials

Grades for Offi cials Equivalent to Ranks of Government High Offi cials

Government Administrative or Offi ces AA Posts

Govern-ment Admi- nistrative Posts

Government Special Ser-vice Posts

Government Support Ser-vice Posts

GH GHE AA GA SpS SuSGH-1GH-2GH-3GH-4 GHE-4AGH-5 GHE-5A SuS-14GH-6 GHE-6A AA-1 GA-13 SpS-18 SuS-13

AA-2 GA-12 SpS-17AA-3 GA-11 SpS-16 SuS-12AA-4 GA-10 SpS-15 SuS-12AA-5 GA-9 SpS-14AA-6 GA-8 SpS-13 SuS-11AA-7 GA-7 SpS-12,

SpS-11SuS-10

AA-8 GA-6 SpS-10, SpS-9

SuS-9

AA-9 GA-5 SpS-8, SpS-7

SuS-8

AA-10 GA-4 SpS-7,SpS-6,SpS-5

SuS-7

AA-11 GA-3GA-2

SpS-5, SpS-4,SpS-3

SuS-6SuS-5

GA-1 SpS-3,SpS-2SpS-2

SuS-4SuS-3

SpS-1 SuS-2SuS-1

Source: “Human Resources Management and Development (Hand-Book)”, Government of Mongo-lia Management Development Program, Ulaanbaatar City, 1996

Notes:• GH – Ranks for the government high offi cials. • GHE – Grades for offi cials equivalent to ranks of the government high offi -

cials. • AA – Classifi cation and grades of governing and executive posts at offi ces of the

State Great Hural, President, Government, Supreme Court, General Prosecutor, Constitutional Court and other similar organizations.

• GA – Classifi cation and grades of government administrative posts at ministries and other government organizations.

• SpS – Classifi cation and grades of government special service posts.• SuS – Classifi cation and grades of government support service posts.

Posts in the Government Administrative (GA) classifi cation are further classifi ed ac-cording to one of 5 categories, i.e. Leading Offi cer, Principal Offi cer, Senior Offi cer,


28

Executive Offi cer, and Assistant Offi cer. These categories according to the Govern-ment of Mongolia Decree number 354 issued in 2007 are shown in below Table 3.

Table 3: Government Administrative Posts Classifi cations and Grades

Classifi cation Post Title Grades

Leading Offi cer State secretary of ministry and equivalent posts

GA-13, GA-14

Principal Offi cer Director and deputy director of ministry department and equivalent posts

GA-10, GA-11, GA-12

Senior Offi cer Director of ministry section, ministry se-nior expert and equivalent posts

GA-9, GA-8, GA-7

Executive Offi cer Ministry offi cer and equivalent posts GA-6, GA-5, GA-4

Assistant Offi cer Soum Governor Offi ce offi cer and equi-valent posts

GA-3, GA-2, GA-1

Each of these classifi cations has a defi nition of the tasks and responsibilities, as fol-lows:

29


Table 4: Government Administrative Posts Classifi cation Defi nitions

Classifi cation Defi nition

Leading Offi cer • Accountable for performing activities of an organiza-tion with roles to develop and implement specifi c sec-tor and framework policies of the Government activi-ties and their results to General Manager.

• Responsible for utilization of the organization’s bud-get and government special funds.

Principal Offi cer • Responsible for managing and implementing specifi c directions of an organizational unit with roles to de-velop and implement specifi c sector and framework policies of the Government activities and accountable for its results to Leading Offi cer.

Senior Offi cer • Take leading role in professionalism and skills within development and implementation of specifi c sector and framework policies of the Government activities, and accountable for the work results to Principal Of-fi cer.

Executive Offi cer • Responsible for coordination of the development and implementation of policies related to certain issues within the Government activities’ specifi c sector and framework and accountable for performance and re-sults to Principal Offi cer.

Assistant Offi cer • Information research and analyses in support of pol-icy development and accountable for the quality of performed work.

• Responsible for managing general service staff.

The grades are defi ned by a process of job evaluation based upon approved job de-scriptions. These job descriptions contain data about the post tasks, objectives, work to be performed, general and specifi c requirements for the post.

Financing and wages

A Government employee is remunerated by the Government for fulfi lling his offi cial post commission. Based on the classifi cations and grades shown above, and as set out in Article 28.3 of the Law on Government Service, a system of remuneration has been established. Government employee remuneration amount, scale, and rate take into account the following requirements:

• A similar rate of remuneration is fi xed for similar Government posts.• The amount of remuneration of Government employees will be correlated with

the average living standard of society and with the average salary level of pri-vate sector employees.


30

• The scale and rate of remuneration for Government employees is defi ned ac-cording to the post classifi cation, grade and length of government service for each type of Government service branch and area of activity.

Remuneration for each Government employee consists of the post remuneration and supplementary payments for special working conditions, length of government ser-vice, rank, and possession of scholarly title or degree.

3.5 Common Duties and Rights of Core Civil Servants and Restrictions on Their Activities The core Civil Service consists of the Government Administrative Service and the Government Special Service, which are defi ned in detail in Articles 7 and 8 respec-tively of the Law on Government Service 2002. The Law also sets out the common duties of core civil servants (Article 13), their common rights (Article 14) and the restrictions on their activities (Article 15).

The Public Sector Management and Finance Law 2002 introduced a new title of General Manager to describe those offi cials who are responsible for the day-to-day management of budgetary bodies on the basis of a performance agreement with the relevant Portfolio Minister. Article 17 of the Law details the authorities that General Managers have to enable them to discharge their duties.

Common Duties of Core Civil ServantsMembers of the core Civil Service have the following duties in common:

• To respect and observe the Constitution and laws of Mongolia.• To be loyal to the oath taken on entering the core Civil Service.• To work within the powers vested in them for the benefi t of the country and its

people; and to act in accordance with the interests of the State.• To implement the lawful decisions of higher ranking offi cers.• To observe the offi cial Code of Conduct for government employees and the

culture and rules of the government bodies for which they work; and to respect the prestige of all government bodies and government employees.

• To obtain additional qualifi cations in accordance with the requirements for per-forming the functions of their posts.

• To keep State secrets and to maintain the confi dentiality of organizations and individuals protected by law, both during the discharge of offi cial duties and after the termination of offi ce.

• To maintain political neutrality while performing the functions of their posts, express only offi cial views on issues related to the State and the Government policies while communicating with media.

• To confront illegal or unfair actions by other offi cials.

31


• To declare the extent of their property and income upon taking up a core Civil service position and to notify the relevant government organizations of any sub-sequent changes.

• To undertake other duties provided for in law.

The Public Sector Management and Finance Law 2002 gives General Managers the following authorities to enable them to discharge their duties:

• To make payments subject to appropriate limits and output purchase agree-ments.

• To invest within limits established by the Government.• To open a bank account for the budgetary body with the approval of the State

Central Administrative Body responsible for fi nancial and budgetary matters.• To manage the budgetary body’s assets in line with its Strategic Business Plan.• To determine the staffi ng and salary budget of the budgetary body.• To achieve the operational performance levels of the budgetary body as speci-

fi ed in its Strategic Business Plan.• To provide effi cient budgetary management to the budgetary body.• To establish an effi cient internal fi nancial control system. • To invest effi ciently from State budget and other sources and exercise control

over investment growth and income.• To ensure the integrity of the budgetary body’s fi nancial statements.• To ensure that timely information is presented in the form required by the State

Central Administrative Body responsible for fi nancial and budgetary matters.• To observe the principles set out in this Law relating to the appointment, dis-

missal and remuneration of the staff of the budgetary body.• To act in accordance with the fi nancial instructions, accounting standards and

other relevant rules and regulations that apply to the budgetary body.• To exercise any other authorities specifi ed in this Law.

Common Rights of Core Civil ServantsMembers of the core Civil Service have the following rights in common:

• To request an offi cial defi nition of the functions and competency requirements of their posts and the associated working conditions.

• To accept or reject assessment of higher ranking offi cer on annual work plan and its performance indicators, activity results, and profi ciency levels.

• To submit proposals to their supervising offi cer, either orally or in writing, relat-ing to increases in remuneration, promotion, improvements in working condi-tions and guarantees.

• To have access to their personal fi le and its contents, including job references, and to enter additional comments if they deem it necessary to do so.


32

• To defend their legitimate rights and interests in a court of law or other relevant organizations.

• To provide professional advice and to be involved in academic studies and re-search.

• To profi t from personally operating a family smallholding, or by owning a busi-ness that is managed by a representative in ways not prohibited by law and where there is no confl ict of interest with the post.

• To leave the government service.• Other rights provided for in law.

Restrictions on the Activities of Core Civil ServantsMembers of the core Civil Service are prohibited from carrying out the following activities:

• Participating in an offi cial capacity in the activities of political parties, public organizations or religious organizations in connection with matters that are not directly related to their offi cial duties.

• Planning, organizing or participating in strikes or other actions aimed at disrupt-ing the normal activities of government organizations.

• Using the powers vested in an offi cial post for religious or non-religious propa-ganda or agitation.

• Accepting state titles, orders, medals and other government awards from foreign countries without the consent of the President of Mongolia.

• Traveling abroad or within Mongolia on offi cial business at the expense of eco-nomic entities or citizens, including foreign organizations and citizens, except where the travel is connected with an assignment covered by an international treaty with Mongolia, or by mutual agreement between the Government of Mongolia and a foreign country and is undertaken with the consent of the rel-evant competent authority in the employing organization.

• Receiving gifts, monetary payment, rewards, loans, free or discounted services, or other preferential treatment from other organizations, economic entities, or citizens for performing offi cial functions.

• Using offi cial government property, technical facilities, fi nancial resources, in-formation or data for non-offi cial purposes.

• Concurrently holding a permanent position in a local self-governed organiza-tion, economic entity, political organization or public organization.

• Personally administering the operations of an economic entity, or acting as a mediator for others unless provided for in law.

• Managing a joint-stock company directly, or serving as a member of the govern-ing or management board of a joint-stock company, unless otherwise provided for in law.

• Acting as an agent of, or otherwise representing, a third party in the same gov-ernment organization, or in an organization under their direct supervision.

33


• Accepting responsibilities, or fi nancial or other assistance in their own interests, from foreign or Mongolian citizens, economic entities, or other organizations.

• During the two years following the termination of offi ce, holding a position in a private economic entity with which they had direct relations in an offi cial capacity during the last fi ve years, except in cases permitted by the Government Service Council or otherwise provided for in law.

3.6 Mongolian Civil Service Size, Structure, Composition, and Movement

The Mongolian Government Service employed as of January 1, 2007 total of 128,088 civil servants including 46,348 employees or 36 percent working in central Govern-ment administrative and subordinate organizations, 81,740 employees or 64 percent working in local administrative and subordinate organizations.

Figure 14. Number of Civil Servants, by Locations and Actual Number /January 1, 2007/

Source: Statistics on Government employees structure and movement, GSC, 2006

The total number of civil servants (128,088) totaled 2,727 or 2 percent occupying political posts, 9,940 or 8 percent in government administrative posts, 24,105 or 19 percent in government special service posts, and 91,316 or 71 percent in government support service posts.


34

Figure 15. Number of Civil Servants, by Classifi cations and Actual Numbers /January 1, 2007/


Age classifi cation reveals that 42.5 percent of all civil servants are youth below 35, 46.0 percent are middle age people between 35 – 50, 10.4 percent are senior people between 51 – 60, and 1.1 percent are elderly people over 60.

Figure 16. Number of Civil Servants /by Age Group/


Education classifi cation reveals 46.7 percent of all civil servants possess gradu-ate and higher education including 38.5 percent having diploma high education and bachelor degree, 5.7 percent master degree, 1.4 percent Ph.D. degree, 0.4 percent

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54444 /42.5%/ 55956 /46%/ 13378 /10.4%/

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35


Dr.Sc. degree.

43.8 percent of all civil servants have special/vocational and complete secondary education, 9.2 percent incomplete secondary and primary education, and 0.2 percent have no formal education.

Figure 17. Education Levels of Civil Servants /persons/


Gender composition of civil servants shows that 60 percent of total employees are female and 40 percent are male.

Figure 18: Number of Civil Servants, by Gender


552 1424 7352 35507 15063 28655 27416 10933 941 245 128088

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Special 24105 5455 22.6 18650 77Support 91316 65445 71.7 25871 28TOTAL 128088 76819 60.0 51269 40


36

The change dynamics of the public employees in Mongolia is shown below in Figure 19. The total number of public employees has not changed dramatically in last 10 years.

Figure 19: The Change Dynamics of the Public Employees /by year /

Source: National Statistical Offi ce, Labor Resource Balance, 1996 – 2006

Figure 20: Movement of Civil Servants in 2006/by reasons, number of civil servants, and percentage/


6733 263 116 181 357 163 16 133 76 960 4 2938 1331 16 2 177

Total

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37


In 2006, 6,733 civil servants were transferred (moved) due to different reasons which constituted 5.2 percent of the total number (128,088) of civil servants.

The state of the Government Service structure, system, civil servants composition and movement depicted in the above data solely represents the present state of the Government Service

3.7 Demand for Improving Civil Service Leadership Skills

IntroductionNumerous studies of successful organizations around the world, both in the public and private sectors, have shown that strong leadership is essential if change is to be achieved successfully. Leaders are needed at all levels in an organization, but especially at the most senior levels where a clear sense of direction and the ability to inspire and motivate more junior staff are critical success factors in all change programs.

The Public Sector Management and Finance Law 2002 give General Managers a central role to play in Mongolia’s Civil Service and fi nancial management reforms. Under the legislation, they are empowered to manage and control their organizations and to make key personnel decisions.

Leadership and Management Emphasizing the importance of leadership inevitably draws a distinction between leadership and management. This is not to suggest that managers and leaders are two different sets of people, but rather that managers need to display and develop addi-tional skills that are best described in generic terms as leadership. In essence, leader-ship is concerned with organizational vision and the motivation of people – helping the organization adapt to changes in its environment and bringing about change.


38

Traditional Management Skills Leadership Skills• Planning and budgeting• Creating systems and policies• Achieving tasks and solving prob-

lems• Ensuring effi cient administration and

allocating work• Organizing and controlling staff

• Articulating and sharing a vision• Setting direction• Evolving strategy

• Ensuring compatibility between roles and resources

• Coaching, enabling, motivating and inspiring

Managers create order Leaders produce change

It is important to achieve a balance between these two sets of attributes in order to avoid the shortcomings that would arise from an over-emphasis on either aspect.

Strategy to Improve Leadership in the Mongolian Civil Service

The Government set out in its 2004 “Medium-Term Civil Service Reform Strategy” a framework for the improvement of leadership in the Mongolian Civil Service based on two strategic objectives.

1. To implement transparent, competitive selection processes for senior civil ser-vants, especially general managers.

The Government is committed to taking advantage of best world practice in recruit-ing chief executives in the public and private sector organizations. It is in the process of introducing a range of new procedures, all of which are based on the fundamental principle of selection on merit. In effect, this means that the selection process for all positions will be fair and completely objective at each stage; successful candidates will have the necessary qualifi cations, skills and competencies for the job; and the best candidate for the job, not someone who is judged to be the best candidate with-out regard to the requirements of the job, will be selected and appointed. The vast majority of these appointments at senior levels will be made through fair and open competition and job opportunities will be publicized widely and effectively, both externally and within the Civil Service.

2. To develop the leadership skills of those selected to be General Managers or to hold other senior civil service positions.

Selecting the best people is not enough on its own to ensure effective leadership. A range of actions is also being taken to develop leadership and team building skills.

39


At the heart of these initiatives will be a comprehensive and intensive Civil Service Leadership Program for General Managers and those working directly to them. The Program will cover strategic thinking, working relationships, communication, per-sonal drive and integrity and the achievement of results.

Leadership Competency Framework

Competencies are the skills, knowledge and behaviors that organizations expect their staff to use in their work. Most modern civil services now use competency frame-works as a basis for defi ning the capacities required for specifi c positions or levels; and, in the case of senior levels, there is a trend towards generic competency frame-works that emphasize leadership and management skills, knowledge and behavior as opposed to technical expertise. It is then the job of the employing organization to identify the right mix of generic and technical competencies that the specifi c position requires.

The Government has developed a generic competency framework to support the se-lection and development processes for all senior positions. One key component is “leadership”, which comprises the following units of competence:

• Develops and shares a vision• Encourages and secures commitment• Initiates and manages change• Inspires colleagues and staff and shows loyalty• Builds high-performing teams and supports them• Risk-aware but acts decisively• Accepts responsibility for team actions• Demonstrates high standards of fairness, honesty and integrity

3.8 Government Service Council and its RolesThe Government Service Council (GSC), which formally came into existence in its present form in 1995, is effectively the “Central Offi ce” of the government service. It is an independent body accountable directly to the State Great Hural.

The GSC is responsible for managing the Government of Mongolia’s Civil Service reform program, which is aimed at establishing a Civil Service that is oriented to meeting the needs of citizens, fl exible in responding to changing circumstances, pro-active, lean, capable, and outcome-oriented. Although the day-to-day management of civil servants is for the individual government organizations that employ them, the GSC also has responsibility for managing government service standards and for certain other specifi c human resource management functions relating to core civil service positions.


40

Government Service Council StructureThe current structure of the GSC is prescribed in Article 34 of the Law on Gov-ernment Service 2002. It functions on collegiate principles and consists of seven members, three of which are permanent and four non-permanent. The Secretariat of the State Great Hural, the Government’s Cabinet Secretariat and the General Court Council each proposes one candidate for the three permanent member positions. They are then appointed by the State Great Hural for a period of six years, one of them also being appointed as Chairman of the Council for the same period. The non-permanent members, all ex offi cio appointments, are the Secretary General of the Secretariat of the State Great Hural, the Deputy Head of the Offi ce of the President, the First Deputy Head of the Government’s Cabinet Secretariat, and the Secretary of the General Court Council.

There is a legal requirement (Article 44.2 of the Public Sector Management and Fi-nance Law 2002) that the GSC should have “the offi ce staff necessary to perform its functions”. It currently has a staffi ng complement of 14 posts. The GSC also operates a network of Branch Councils, which act as executive offi ces in ministries, agencies and aimags. There are currently 47 Branch Councils – 13 in ministries, 12 in agencies, one in the Ulaanbaatar City, and 21 in aimags.Government Service Council FunctionsThe GSC’s functions are prescribed in Article 35 of the Law on Government Service 2002 and supplemented by Articles 43-48 of the Public Sector Management and Fi-nance Law 2002.Law on Government Service 2002Article 35 of the Law states that the GSC shall have the following authorities:

• To co-ordinate activities that relate to the implementation of policies to develop national management capability.

• To enforce legislation on the government service; to provide professional and methodological management; to observe the principles of justice in the work of the core government service; and to review and resolve disputes relating to the violation of the rights of core civil servants or applicants for positions in the core government service according to provisions of Article 39.1 of the Law on Government Service.

• To make decisions on the application of current legislation within its area of competence; to introduce changes thereto; and to ensure that those changes are implemented.

• To establish an integrated system of the personal fi les and records of govern-ment employees; and to ensure there are proper arrangements in place to pro-vide the State Great Hural, the President, the Government and the General Court Council with information relating to the government service and government employees.

• To co-ordinate and provide to government organizations professional and meth-odological assistance on issues relating to the management of core civil servants.

• To evaluate the legal status of core civil servants unless otherwise provided for in law.

• To establish a reserved employee list according to need and plan for its proper

41


usage.• To provide methodological and organizational assistance relating to the apprais-

al of performance and qualifi cation levels of core civil servants and applicants for core government positions.

• To organize the training of core civil servants and research relating to the gov-ernment service.

• To make proposals on the structure of government organizations; job classifi ca-tion, levels and ranks; and the scales and rates of remuneration.

• To analyze the performance of the government service; to develop proposals to improve its effi ciency by reference to budgeted administrative costs at a domes-tic and national level; and to make proposals for the supervision and implemen-tation of such projects.

• To manage at a strategic level the implementation of programs by government organizations to protect the working conditions and rights of government em-ployees.

• Other authorities provided for in law.

Public Sector Management and Finance Law 2002Article 44.1 of the Law prescribes that the GSC shall have the following authorities in addition to those specifi ed in the Law on Government Service 2002:

• Control the implementation of human resource policy in state and local budget-ary bodies.

• Receive and require from state and local budgetary bodies information concern-ing the implementation of human resource policy.

• Nominate candidates for a number of senior core civil service positions (as specifi ed in Article 45.1 of the Law); and compile a list of skilled candidates to work in those positions and provide budgetary bodies with the relevant informa-tion.

• Ensure the observance of a code of conduct to govern the ethical behavior of civil servants.

• Study and maintain register of people capable to work for state and local budget-ary organizations, provide budgetary organizations with information as speci-fi ed in Article 45.1 of the Law.

In addition, the Public Sector Management and Finance Law 2002 sets out the proce-dures which the GSC follows for the nomination and appointment of staff to senior positions in budgetary organizations (Articles 45 and 48 respectively); the submis-sion of recommendations on the remuneration of specifi ed senior offi cials (Article 46); and the assessment of performance agreements between (a) Portfolio Ministers and their senior offi cials and (b) General Managers and their employees in budgetary organizations (Article 47).

Article 48.3 of the Law makes clear that the GSC has no authority to interfere with the employment authorities of General Managers.


42

3.9 Mongolia Public Administration and Civil Service Reform Process and Results

Introduction An ineffi cient and ineffective bureaucratic system was predominant in the state gov-ernance of Mongolia prior to 1990 system combining characteristics and elements of totalitarian and authoritarian regime content and its activities were mainly us-ing commanding, enforcing and mobilizing methods. All resources including budget expenditures, material and human sources were centralized and mobilized to solve larger social, economic and cultural goals and issues, and this approach brought at the time appropriate results.

However, similarly to developed countries’ rationalism based traditional bureaucratic system, ineffi cient and ineffective bureaucratic systems of socialist countries went into crisis therefore it was attempted to introduce in public governance new manage-ment tools like “New planning and economic incentive system”, “Perestroika”, “New economic mechanism”, which did not bring appropriate results. These new systems and experiments were dimensionally and time-wise overlapping with developed countries’ post-industrial era public governance or non-traditional post-bureaucratic paradigm theory evolution, therefore were just its refl ection. Just after 1990, pro-cesses of democratic changes and reforms covering all spheres of Mongolian politics, economy and society demanded the need for fundamental changes in prior period public governance irrational bureaucratic system’s operational principles, functions, structure, organization, state human resource policy, and their legal environment.

The Mongolia public administration and civil service has been undergoing reforms since 1990. The process of further reforms on one hand have been overlapping with the evolution and development of new non-traditional post-bureaucratic paradigm theories and practices in developed countries.

Civil Service Reform StagesIn course of democratic changes and reforms covering all spheres of society that have been taking place in Mongolia since 1990 Mongolia’s public administration and Civil Service has gone through three reform stages shown below:

The fi rst stage to create new system for the state structure in Mongolia (1990-1993):

During this stage a new Constitution of Mongolia was adopted (January 13, 1992)

43


and according to the consecutively approved laws the party centered political sys-tem was dismantled and transferred to the state centered system, on the basis of state power distribution theory and practice the new democratic state institutions (legislative, executive and judicial powers) and multi-party system were created and launched their operations in Mongolia.

The second stage to create Mongolia’s new public administration and civil service system (1993-2000):

During this stage the Law on Government Service was approved (January 30, 1994) based on merit principles in accordance with the Law and 20 legal acts is-sued in compliance with the Mongolian Civil Service. This created a favorable legal environment for Civil Service reform. In order to keep the professional Civil Service free from any political infl uence and ensure the management of human resources that used to be in sole discretion of a single party.

Also during this stage the Government of Mongolia, with support from UNDP and other international organizations and donor countries, implemented in 1993-1996 “Management Development Program”. The framework of this program policy document “Mongolian State Policy on Reforming Government Processes and the General State Structure” was developed and approved by the State Great Hural’s Decree Number 38 in 1996. It has been serving as an essential foundation for re-structuring executive branch institutions’ business strategy and new organizational structures in line with requirements of democratic society and market economy.

In accordance with these policy documents a brand new structure consisting of a few compact functional and line ministries responsible for strategic planning, policy guidance, programming, coordination, monitoring and assessment functions were created. In addition, Government regulatory agencies responsible for laws and stan-dards enforcement functions, and Government implementing agencies and budget-ary organizations responsible for policy implementation functions were created.

The third stage to strengthen the governance institutional capacity and its opera-tional effi ciency and effectiveness (2000-present):

The focus of this current stage of Mongolian public administration reform is de-fi ned by setting and implementing wide range policies and goals in the framework of consecutive Government action guidelines. This includes implementation action plans, “Sound Governance” components of the Government of Mongolia “Good


44

Governance for Human Security Programs” aimed at strengthening capacities and operational effi ciency (productivity) and effectiveness (quality) of the governance institutions through developing all level public administration organizations and im-proving knowledge and skills of human resources in public sector.

The success or failure of public administration reform to produce expected outcomes depends on whether the Government will succeed in studying and adopting local conditions of public management post-bureaucratic paradigm theories, concepts, and best practices that have been proven to be success in developed countries such as the New Public Management Model.

New Public Management (strategic management, concern organizational model, compact management model, quality management, business re-engineering, pub-lic choice theory, agency theory, transaction cost theory, contract management, management by objectives and results, performance management etc.) consoli-dates or combines numerous theories, concepts and models depending on individual country reform objectives. The policies and goals of the Mongolian public administration and Civil Service reform third stage were based on developed countries’ post-bureaucratic paradigm theoretical concept and practice. The Public Sector Management and Finance Law 2003 serves as an essential impetus to sped up Mongolian public administration and Civil Service reforms, strengthen its operational effi ciency and effectiveness, and improve the quality and access of government services,

The Public Sector Management and Finance Law includes a tripartite relationship among customers, owners and agents.

45


For example, based on the demand of the customer (“King”) or citizens the owner (portfolio minister) or minister determines the need for the deliverables, signs per-formance agreements (attaching the mid-term strategic business plan) with the Agent (General Manager) or ministry state secretary whose performance is reported to the owner (portfolio minister) or minister for assessment. The customer (“King”) as-sesses the owner or minister’s deliverables.

This new performance management system regulates relations and includes compre-hensive strategic planning at all levels public administration central or local organi-zations General Managers, accountability for performance in delivering outputs be-ing purchased by the Government of Mongolia according to “purchase agreements”, providing with authority to make decisions on public organizations human resource management issues (hire and fi re staff, determine their remuneration, bonuses, incen-tives, assign disciplinary sanctions).

Mongolia has been implementing the Public Sector Management and Finance Law for fi ve years. As a result, a new atmosphere in work methods, attitudes, behavior, and a new culture and climate that prioritizes outputs rather then inputs. In line with the concept of this Law and according to the concept of strengthening civil servants work performance assesment and upgrading accountability for the work performance fi rst time revision of Law on Government Service was developed and approved in 2002.

Third stage of Mongolia public administration and civil service reform with the ma-jor context of strengthening governance institutional capacity and its operational ef-fi ciency and effectiveness is overlapping with the era of intensive development of non-traditional post-bureaucratic paradigm theory and concept in developed coun-tries and generation of practically proven implementation models and methods, thus providing our country with unique opportunity for the intensive and successful im-plementation.

In other words if political stability and succession is maintained, if sustainable eco-nomic growth is generated, if social development is present, if the quality of citizens’ life is improving, then it means Mongolian civil service is doing well in implement-ing its guide roles and if any of these fi elds faces drawbacks it means the civil service is unable to perform its role as a guide. Since success of Mongolia reforms in political, economic and social spheres heavily depends on the governance cap acity, the Civil Service should become the majorguide for the reforms in political, economic and social spheres.


46

According to the Constitution of Mongolia (1992) a new institutional framework for the State’s structure (legislative, executive and judicial powers) was created and is operational now.

Figure 21: Layout of State Institution System of Mongolia

47


Chapter 4: The Demand for Civil Service Reform

4.1 International Best Practice in Civil Service ReformCivil Service reform has been a central feature of government policy in most coun-tries over the last 25 years. Its purpose is to improve the effi ciency and effectiveness of the Civil Service in a way that ensures it is both affordable and sustainable over time. The overall aim is to improve the quality of public services to citizens and to increase the capacity to deliver core government functions. Civil Service reform is essential for the promotion of sustained economic and social development.

Most Civil Service reform programs also have as one of their major goals the strengthening or establishment of a professional, merit-based, non-partisan Civil Ser-vice. Such an arrangement is an essential part of any democratic system, not least by helping to ensure peaceful and orderly political succession.

International Best PracticeAlthough there are numerous examples of successful Civil Service reform programs in the public domain, there is no universal model as such. Both the content and conduct of Civil Service reform programs - and their success or failure - will depend largely on the institutional and political context. For example, the presence of an underdeveloped private sector in a less developed country will force the public sec-tor to play a major role in the delivery of services that would have been privatized or contracted-out to the private sector in more developed countries.

There are numerous sources of advice on international best practice, including the websites of international organizations such as the Asian Development Bank (www.adb.org), the World Bank (www.worldbank.org), the United Nations Development Program (www.undp.org) and SIGMA (Support for Improvement in Governance and Management), which is funded jointly by the OECD and the European Commission (www.sigmaweb.org), and those of individual governments.

The United Nations Online Network in Public Administration and Finance (www.unpan.org) is also a very valuable source of information. In particular, it contains some very useful advice for countries that are at the early stages of their Civil Service reform programs, not least by pointing out that the more radical public administration reforms attempted in countries such as New Zealand and the United Kingdom are too ambitious and present real dangers for most developing countries. It suggests that


48

simply getting the public administration to execute the will of its political masters is often a challenge in itself in developing countries.

UNPAN goes on to recommend that capacity development in public administration needs to be addressed at three levels: individual, institutional and societal. It also sug-gests that the reform process can be divided into four main areas: • Civil Service reform;• Increasing the effi ciency and responsiveness of the policy-making system;• Reforming the machinery of government, which is concerned with the rules, in-

stitutions and structure of the administration necessary to carry out government policy, including new tools for public administration such as e-governance and e-government; and

• Reforming the public sector revenue and expenditure management system.

As UNPAN points out, most reforms in government are only partially successful be-cause they never get past the implementation stage. Unfortunately, in some countries, they often never get past the planning stage. It is important, therefore, to promote a strong bias for action at senior political and management levels to demonstrate that change can take place successfully in the particular context of that country and thus fuel the demand for more ambitious change programs. Inevitably, there is an element of risk of occasional failure in such a strategy, but learning from one’s own mistakes can often be an extremely useful driver of change.

Although learning lessons from experience and applying them is crucial, copying successful models from other countries without due regard to environmental differ-ences is too simple and usually leads to failure. The main lessons from UNDP's experience, for example, are:

• keeping the scope of change well focused and setting realistic and well-defi ned targets;

• recognizing that reform takes time; • making sure there is full understanding of the reforms, and support for them,

not only at the leadership level but also amongst line managers, civil servants in general and the public;

• Identifying and publicizing good results and providing incentives for continued support and achievements;

• making sure there is continued political will and support throughout all phases of the reform program; and

• remembering that donor support, despite its good intentions, can have a perverse effect on the political economy by generating greater resistance to change in all areas of public management.

49


Civil Service Reform PoliciesMost successful Civil Service reform policies can demonstrate a number of common success factors, which serve to complement the UNDP’s advice. These include: • strong and visible leadership, both at the political and administrative level;• a strong central unit with suffi cient authority and resources to act as the driver,

catalyst and monitor of change throughout the Civil Service;• securing ownership of the reforms in government organizations through good

communication from the centre and by involving the staff of those organizations directly in the change process;

• adopting a bias for action with the aim of getting things done as quickly and as pragmatically as possible;

• taking an evolutionary and incremental approach - continuous improvement - that builds on earlier successes and not being afraid to admit and correct mis-takes;

• encouraging greater delegation of management responsibilities from the centre to individual Ministries, and, within Ministries, to managers at all appropriate levels; and

• valuing public servants, but, at the same time, operating rigorous performance management systems that deal promptly with unsatisfactory performance.

A fairly typical approach to Civil Service reform will include some or even all the following initiatives over time:

• Functional Reviews, which examine current organizational functions and struc-tures to provide advice on:

• the functional implications of the Government’s major national develop-ment and other policies;

• the structural implications of strategic decisions;• functions that are no longer required;• functions that require substantial re-engineering or alternative delivery

mechanisms; and• the identifi cation of innovative delivery mechanisms that may cut across

traditional institutional boundaries.

• Effi ciency Scrutinies, which examine a specifi c policy, activity or function with a view to identifying ways of achieving savings or increased effectiveness.

• The development of Financial Management or Management Accounting Sys-tems, which give managers a clear understanding of their objectives and of their performance in relation to them; well-defi ned responsibility for the value for money provided by their resources through increased budgetary responsibility; and the necessary information and advice to enable them to exercise their re-sponsibilities effectively.

• Organizational restructuring, often through the establishment of ”agencies” to


50

carry out the executive functions of government within a policy and resource framework set by a Portfolio Minister.

• A sharper focus on service delivery by raising standards of customer service, be-ing more responsive to the needs of the users of government services, publishing principles of good practice and monitoring performance against them.

• The privatization of government organizations or services, with the result that the Government ceases to have any direct responsibility for them, or contract-ing-out government services, usually through market testing and/or competitive tendering.

• A sharper focus on performance management both at an organizational level and at the level of the individual civil servant.

• Greater delegation of management responsibilities from the central units of government to line Ministries and other government organizations and, within line Ministries and other government organizations, to managers at lower lev-els.

• Strengthening or introducing merit-based systems for recruitment and promo-tion that are aimed at getting the best person for the job, often by using more sophisticated techniques such as pre-determined selection criteria, occupational testing and assessment centers.

• An increased focus on ethical behavior by Ministers and civil servants.

• Pay reform to provide for the payment of more competitive salaries to civil ser-vants, particularly for certain groups of staff with skills that are in short supply nationally or are otherwise crucial to the effi cient and effective operation of the public service.

• New training and development programs in key areas such as leadership, stra-tegic management and policy development.

• E-Government (or electronic government), to increase the use by government of information technology to exchange information and services with citizens, businesses, and other arms of government

Taken together, these initiatives constitute a very ambitious agenda. Some developed countries have taken over 20 years to put them all in place and to ensure their effec-tive operation. While it is often tempting for less well-developed countries to put in place comprehensive Civil Service reform programs covering all or most of these ini-tiatives, a more effective approach is to prioritize carefully, working towards realistic and achievable short and medium-term targets that will provide a solid foundation for an extension of the reform program as capacity increases.

51


4.2 Civil Service Strengths, Weaknesses, Opportunities and ThreatsOne of the strategic planning tools used in the change management process is the SWOT Analysis, which helps to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a specifi c project or an entire program of work.

The process itself is relatively straightforward. The SWOT Analysis groups together key pieces of information into two main categories:

• Internal factors: the strengths and weaknesses internal to the organization.• External factors: the opportunities and threats presented by the external environ-

ment.

In other words:

• Strengths are the internal attributes of the organization that are helpful to achiev-ing the desired end state or set of objectives.

• Weaknesses are the internal attributes of the organization that are harmful to achieving the desired end state or set of objectives.

• Opportunities are the external conditions that are helpful to achieving the de-sired end state or set of objectives.

• Threats are the external conditions that are harmful to achieving the desired end state or set of objectives.

In 2005, the staff of the Government Service Council conducted a SWOT Analysis to identify Strengths, Weaknesses, Opportunities and Threats in the light of the Me-dium-Term Civil Service Reform Strategy and a proposed Five Year Strategic Plan for the Government Service Council itself. The results are set out below.

Internal Environment: Strengths and Weaknesses The Government Service Council is effectively the “Central Offi ce” of the govern-ment service. It is responsible for managing the Government of Mongolia’s Civil Ser-vice reform program, which is aimed at establishing a Civil Service that is oriented to meeting the needs of citizens, fl exible in responding to changing circumstances, proactive, lean, capable, and outcome-oriented. Although the day-to-day manage-ment of civil servants is for the individual government organizations that employ them, the Government Service Council also has responsibility for managing govern-ment service standards and for certain other specifi c human resource management functions relating to core civil service positions. The staff of the Government Service Council identifi ed the following strengths and weaknesses when considering the in-ternal environment as part of the SWOT Analysis.

Strengths:1. The necessary legislative framework is in place in the form of the Law on Govern-

ment Service 2002 and the Public Sector Management and Finance Law 2002.


52

2. The GSC is an independent body, appointed by and reporting directly to Parlia-ment.

3. The GSC has good management systems, organizational arrangements, prem-ises and adequate equipment.

4. The GSC has clearly defi ned goals and functions, which are understood by the staff.

5. The Offi ce of the GSC contains a mixture of experienced and young staff and there is a good team spirit.

Weaknesses:1. Staff numbers in the Offi ce of the GSC are limited, with varied skill levels and

an uneven workload.2. There is lack of capacity in the GSC’s Branch Councils in terms of staff num-

bers and budget.3. There is poor co-ordination with other state organizations and limited ability to

infl uence other key stakeholders (e.g. the Ministry of Finance and the Cabinet Secretariat).

4. There is poor communication with external stakeholders, both as regards satis-fying client needs and with the general public.

5. There is limited ability to enforce or guarantee proper application of the prin-ciple of selection on merit.

External Environment: Opportunities and Threats The staff of the Government Service Council identifi ed the following opportunities and threats when considering the external environment as part of the SWOT Analy-sis

Opportunities:1. Political stability is likely to continue.2. The current Government allows for popular decisions to be taken in a politically

neutral way.3. The approved Medium-Term Civil Service Reform Strategy gives the GSC a

clear role as a change agent. 4. Both Government and donors give Civil Service reform a high priority: it is

already established as part of the current agenda.5. There is every indication that support and assistance from international organi-

zations and donor countries to implement programs and projects and build staff capacity will continue.

6. The planned introduction of a new Human Resource Management Information System will provide scope to improve analysis and control of the Civil Ser-vice.

7. The pending introduction of website www.taz.mn presents an opportunity to publicize GSC activities more widely and effectively.

Threats:1. Civil Service reform will move too slowly to prevent quick decisions by politi-

cal leaders that are inconsistent with the Medium-Term Civil Service Reform

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Strategy.2. Political infl uence is undermining the merit principle.3. There is lack of support for mandated GSC measures and activities by legisla-

tive and executive bodies.4. Failure to implement GSC decisions strengthens the perception that it lacks ca-

pacity to lead the Civil Service reform programme.

ConclusionThe results of this SWOT Analysis, and of a number of similar exercises, have been taken into account by the Government Service Council in drawing up the Medium-Term Civil Service Reform Strategy and its Implementation Action Plans.

Chapter 5. Future State of the Civil Service in Mongolia

5.1 National Development Comprehensive Policy Based on Millennium Development Goals of Mongolia

Since the early 1990s, Mongolia has witnessed a rapid transition from a command-administrative system to a multiparty democratic system, and from a centrally-planned economy to a market economy with numerous challenges being overcome in chang-ing the country’s social relations, consciousness and mentality. Currently, the transition period is nearly over and the country is entering into a stage of dynamic development. However, there has been no signifi cant reduction in the number of poor people with un-fair distribution of national income creating a trend toward increasing social inequality.

The technological progress and the process of globalization have become a reality and major changes have occurred in the external environment of the country. New political and economic groupings as well as infl uential powers are emerging in the Eurasian region with their economies becoming increasingly interrelated. The rapid economic growth of neighboring countries brings both new opportunities and new challenges.

The aforementioned context and the need to rapidly develop the country’s economy, address pressing social issues and duly meet Mongolia’s international commitments toward achieving Millennium Development Goals underlie the demand for defi ning medium and long-term state policy and strategic framework for national development. In order to meet these needs the Government of Mongolia has defi ned “National De-velopment Comprehensive Policy Based on Millennium Development Goals of Mon-golia” to be implemented by 2021 and the State Great Hural approved it by its Decree number 12 of January 31, 2008. It shall be implemented in the framework of the fol-lowing six priorities:


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1. Achieve Millennium Development Goals and provide for an all-round develop-ment of Mongolian people.

2. Actively develop export-oriented, private sector-led, high technology-driven manufacturing and services, create a knowledge-based economy.

3. Exploit strategically important mineral deposits build up savings, ensure high rate of economic growth, and develop modern processing industry.

4. Actively develop regions and infrastructure to reduce urban-rural disparities. 5. Halt imbalances in the ecosystem and implement protective measures to create

an environment for sustainable development. 6. Further consolidate the system of political democracy in the country, foster an

accountable, just system free from corruption and red tape.

The main goal of the economic policy is (2007-2015) to achieve the Millennium Development Goals objectives, attain annual economic growth of at least 14 percent, increase GDP per capita to at least $5,000, and establish the basis for intensive eco-nomic development; in 2016-2021, to increase average annual economic growth to at least 12%, customize and develop knowledge-based economy, increase GDP per capita to a minimum of $12,000, create economic capacity and resources to join the ranks of middle income countries.

The economic development goals will be achieved by increasing labor productiv-ity and investment effi ciency creating intensive economic growth. At fi rst, it will dynamically develop mineral extraction industry, later shifting to the intensive de-velopment of the processing industry. Consequently, a well developed and private sector-led, high-tech based and export-oriented processing industry shall diversify the economy making the country relatively less dependent on mineral resources.

Economic growth will be achieved by actively enhancing regional and infrastructure development, eliminating growth disparity in rural areas and establishing favorable business environments in rural areas. The State’s budget policy will be directed at enhancing macroeconomic growth and a sustainable budget balance, increasing the real income of the population and its access to social services. Budget policy shall be aimed at implementing MDGs through commercialization of mineral deposits, form-ing a “Treasure Fund” distributing funds to the citizens and properly utilizing income from tax and natural resources usage fee. The tax policy will be directed at actively supporting export-oriented industry and services.

The economic policy will support export oriented production, attain a realistic ex-change rate for the Mongolian currency and further maintain stability of the exchange

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rate. It will create favorable investment and business environment through enhance-ment of banking and fi nance system and services, and lowering loan interest rates on the basis of market signals.

Private business based on market economic principle and fair competition shall play a leading role in the National Development Strategy of Mongolia, including creation of new jobs and increasing the income of citizens. It will be the responsibility of the State to provide support for the private business, to remove the obstacles it faces, and to create a favorable environment in foreign markets. The development of real economic sectors will be directed toward the implementation of MDGs, the acceleration of the economic growth, and establishment of knowledge-based economy. Systematically, the State will increase the share of services and industrial sector in GDP to 85% in 2015, 92% in 2021, and create an economic structure that is comparable with middle income countries. Key goals will stress the exploitation of mineral deposits of strategic importance based on advanced technologies, intensify economic development, improve the structure of eco-nomic sectors, build fi nancial capacity and the capital accumulation in order to establish a knowledge-based economy. Advanced machinery and technology will be introduced in the mining and natural resources sector. Processing and the sale of end products will be expanded through advanced, sophisticated technology that minimizes waste and is environmentally friendly.

Economic policy will direct the development of the agriculture and food sectors into a modern agricultural and industrial complex and will pursue a policy to fully satisfy do-mestic food and water supply for the rural population.

The policy to develop infrastructure will take into account demands of the population and the economic needs of the country. Infrastructure development policy will be directed at exporting energy, transforming regional transport routes into a “bridge” connecting two neighbors, Asia and Europe, and upgrading them to a new level of transport brokerage services. Private sector participation in infrastructure development will be encouraged.

Responsible economic development will establish an “Integrated Energy System of Mongolia” increasing the profi tability of energy sector and by creating the most fa-vorable conditions for its development. This includes:• Defi ning the policy of supplying electricity to Gobi region and providing min-

ing plants to be built in the near future at Oyu Tolgoi, Tavan Tolgoi and Tsagaan Suvarga mining deposits with sources of energy supply.

• Connecting the power systems of the Eastern and Western regions with the Cen-tral power system.

• Enhancing energy security, establishing infrastructure links with two neighbor-ing countries, and resolving the issue of exports and imports based on patterns of consumption.

• Building and using new sources of electric and thermal power in Ulaanbaatar City.• Completing the “Integrated Energy System” Program and fully providing for

the country’s domestic energy needs. • Building hydroelectric power plants on big rivers.


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• Joining regional energy integration initiatives. • Implementing a step-by-step policy of utilizing nuclear energy, including working

towards building a nuclear power plant. To this end, creating the legal framework allowing state ownership of uranium deposits and pursuing a policy of cooperation with well-established state-owned foreign companies.

• Creating a modern system of regulating energy fl ows. The Government will seek to improve economic development while also reducing poverty and improving the quality of life for Mongolians. To do this, the Government will pursue a policy to fully achieve MDGs by 2015 and reach 0.830 Human Development Index by 2021. The Government will strive to continuously improve the “quality of life of Mon-golians” through enabling favorable conditions for living healthy, long and peaceful life, respecting one’s history and culture, working creatively, uncovering and developing one’s intellectual abilities, talents and skills and expanding one’s choices and opportunities.

Creating conditions for families and children to live a healthy life and develop in a safe environment demonstrate the Government’s commitment to improving the economic and social development of the nation. A National Health Development Policy provides equal, accessible, fair, qualitative and effective medical services and assistance to the population, steadily reduce disease and mortality rates, support population net growth and increase life expectancy.

Implementing a social welfare policy targeting low-income, vulnerable groups and sup-porting economic growth is another development objective. This includes developing policies that envisage a set integrated social, economic and ecological measures directed at protecting the environment, including efforts at protecting atmosphere, land, mineral wealth, water, forests, as well as fauna and fl ora; proper utilization of mineral resources; reducing the effects of desertifi cation and droughts; cutting the emission of hazardous chemicals and radioactive waste; and improving waste management

According to the GMF model calculation, Mongolia will need approximately $14 bil-lion between 2007 and 2015 in order to achieve MDGs. Out of which 28 percent will be directed to infrastructure, 27 percent to education and 19 percent towards achieving health sector goals. Fifty-one percent of the total expenses are operational expenses, while 49.0 percent are capital expenses. According to the yearly breakdown of investment, 2010 is the year with highest investment rates due to the planned implementation of large infra-structure projects and programs.

Financing of $21.0 billion is needed between 2007 and 2021 to implement real sector goals. Adding $8.0 billion to be spent on infrastructure within the framework of achiev-ing MDGs, total investment will reach $29 billion. Financing for the real sector will be put together from the following sources:• Funds by the Government of Mongolia – 10 percent,• Private sector investment and foreign direct investment – 75 percent, • Foreign aid and loans – 15 percent;Expected results of National Development Strategy:Fully implement Millennium Development Goals by 2015:

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• As a result of active and rapid economic growth many new jobs created, poverty halved.

• In comparison to the year 2000, under-fi ve mortality rate down by two-thirds, maternal mortality by three-forth and the spread of the HIV/AIDS consistently reduced.

• A notable progress achieved in fostering gender equality in all areas.• By 2015 all children of school age fully enrolled in primary education, gender

gap completely eliminated. • General education schools transferred to 12-year system, multi-alternative cur-

ricula and programs elaborated and implemented.• Average annual economic growth not less than 14 percent, GDP per capita to

reach USD 5,000.• Extraction of mineral resources increased noticeably. Share of processing in-

dustry in GDP increased fourfold, high technologies introduced and product competitiveness increased.

• Industry for extraction of oil and chemical products from coal established. By 2015 Mongolia’s own industry supplied not less than 50 percent of the country’s consumption of oil and oil products.

• Tourism sector developed, number of tourists visiting the country in one year reached one million.

• Brain-intensive industry and service industry developed and foundation for a knowledge-based economy laid.

• A favorable environment for the development of SME achieved. Unemploy-ment noticeably decreased.

• Opportunities for software production and export created, consumption in-creased.

• 20-30 thousand households in ger districts of the Capital City connected to the central power lines; nationwide average of 10 thousand households improved their housing conditions annually.

• Agricultural production intensifi ed provision of food products to population im-proved.

• Livestock breeding quality improved by using biotechnology and genetic engi-neering, harvest of crops increased. Average annual wheat production increased fourfold, annual production of potatoes and vegetables increased by 1.5 times on average.

• In infrastructure, signifi cant objectives achieved, the length of paved roads reached 8,000 km. Construction of railroad in Gobi and Eastern region accom-plished by 60 percent. 70 percent of the construction work of the second rail-road completed. Electrifi cation of the main railroad ensured.

• All soums of Mongolia have permanent power supply, all herder households supplied with solar and wind energy. Domestic power needs fully satisfi ed, furthermore exporting of electricity started.

• Regional development intensifi ed excessive concentration of population in Ulaanbaatar halted. Population of some main regional centers exceeded 50 thousand.


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• Modern towns with population of 10-20 thousand appeared alongside strategic deposits, such as Tavan Tolgoi and Oyu Tolgoi.

• Family strengthened and population increased. Comprehensive measures to eradicate domestic violence taken.

• By 2015 enrollment of children in primary education reached 99.1 percent, in secondary education - 97.2 percent and in basic education - 98.3 percent.

• Number of state or non-state owned general education school centers corre-sponding to or nearing the international standards to be more than 10.

• Have more than two universities, nearing the international standards.• Family doctor system fully customized. • 60 percent of soum and aimag hospitals and 100 percent of the district hospitals

equipped with treatment and diagnostics equipment.• Medical case records 100 percent transferred to electronic cards. • Number of patients from rural areas arriving for diagnostics decreased by more

than 50 percent.• A treatment and diagnostics center that meets international standards estab-

lished, number of patients going oversees for treatment and diagnostics notice-ably decreased.

• Accessibility and quality of medical services reached 75 percent.• Air pollution in Ulaanbaatar and other big cities halted. Comprehensive man-

agement of garbage and waste implemented, thus sharply decreasing sources of environmental pollution.

• The size of territories playing special role in the preservation of the ecosystem balance of Mongolia will reach more than 20 percent of its total territory, i.e. more than 30 million hectares.

• Drinking water needs of the 70 percent of the urban population and 60 percent of the rural population satisfi ed.

Transition to knowledge-based economy (2016-2021)• At this stage average annual economic growth not less than 12 percent, GDP

per capita reaches USD 12,000, brain-intensive industry and services expand-ed, knowledge-based economy developed, Mongolia became a middle-income country.

• Mongolian economy as a whole will become signifi cantly more effi cient and competitive.

• Transfer from extraction of mineral resources to production of end products ac-celerated.

• Average of not less than 15,000 households will improve their housing condi-tions nationwide annually.

• By 2021 middle-income citizens constituted 60 percent of the total population, Human Development Index reached 0.830.

• By 2021 enrollment at all school levels reached 100 percent.• Number of schools and universities with curriculum fully corresponding to the

international standards increased.

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• Financing of research work reached 2 percent of GDP in 2015 and 3 percent of GDP in 2021. One-third of these expenses shouldered by the private sector.

• Mongolia became a country that adopted and mastered modern technology. • Tourism developed, number of tourists visiting Mongolia a year equaled the

country’s population. • Effi cient agriculture and farming developed, food needs of the population satis-

fi ed mainly by domestic ecologically clean products, export of food products increased.

• Consumption of oil products fully supplied by domestic production. • Modern transportation, communication and energy infrastructure, competitive

in the region and in Asia, created. Length of paved roads reached 11 thousand km. Exploitation of second railway started, a railroad network in Western, Gobi and Eastern regions established.

• By 2021 Mongolia fully and reliably satisfi ed its power, heating and energy needs by domestic sources, furthermore it supplied power and energy to the world market.

• Regional main centers developed, their population topped 100 thousand people each, favorable conditions for people to permanently live and work in their lo-calities created.

• Average life expectancy will be 72.• Needs of soum and aimag hospitals fully satisfi ed.• Number of patients arriving for diagnostics and treatment from rural areas to the

city decreased by 95 percent.• Accessibility and quality of medical services reached 95 percent.• Targeting of social welfare services improved and their effi ciency increased.

5.2 Medium-Term Civil Service Reform Strategy

In 2004 State Great Hural by its Decree Number 24 approved the “Mongolia Me-dium-Term Civil Service Reform Strategy”.

Civil Service reform mission is:The mission of this reform strategy is to establish a Civil Service that is: oriented to meeting the needs of citizens; fl exible in responding to changing circumstances; pro-active; lean; capable; and outcome-oriented.

The values that underpin Civil Service reform include:• Effective delivery of public services. Civil Service reform will lead to improved

service delivery and is a key part of the poverty reduction strategy.


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• Performance and output-orientation. The reform strategy is based on the achievement of results or outputs, not inputs. Performance criteria include eq-uitable access to government services, particularly for the poor and other disad-vantaged groups.

• Effi ciency and affordability. Mongolia needs a Civil Service that provides maximum services at the least cost and stays within tight Budget expenditure constraints. An effi cient Civil Service is essential to encourage and leave room for private sector economic growth.

Principles of Civil Service Reform

The principles upon which civil service reform is based include:

• Public service – members of the Mongolian Civil Service recognize their pri-mary duty is to the government and people of Mongolia above their personal interests.

• Merit – all appointments and career advancement of individuals should be based solely on qualifi cations and performance.

• Right people in the right job – the objective of the appointment process is to have the most appropriate qualifi ed person in each position, regardless of orga-nizational affi liation. This is supported by the merit principle.

• Equal opportunity – the government is the leader in establishing good employ-ment practices. Public sector employment should be an open process that in-cludes selection criteria that redresses any discrimination against disadvantaged groups.

• Letting the managers manage – managers need to take responsibility for achiev-ing the outputs and outcomes of the organizations and activities they control. They will be given the authority and fl exibility to undertake this role and be held accountable for results.

• Steering not rowing – separating policy from operational activities, and achiev-ing the appropriate balance between them. It implies the role of government should be about establishing policies for the provision of public goods and ser-vices, within which the production of those goods and services is undertaken by the most appropriate mix of public/private/social sector resources.

• Structure follows strategy – organizational design should be determined by ob-jectives and the best methods of achieving goals, not the other way around.

• From inputs to outputs – the management of public resources is best served by encouraging achievement of results or outputs rather than by controlling inputs. This approach has been applied in the fi nancial management and budgetary re-forms over all the Mongolian public sector.

• The Mongolian civil service as a Learning Community – all organizations and individuals in the public sector should have the ability and desire to be receptive to new ideas and to learn from the past.

• Providing authority with responsibility – to make managers responsible for out-

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comes it must be accompanied by suffi cient control over inputs, including ap-propriate authority. Accountability can only be obtained where there is a clear line of responsibility.

• Performance-related rewards – public sector employees should be rewarded for performance.

• Economy of size - to develop lean and capable Civil Service, which is effective for the development of Mongolia.

These mission, values, and principles are the foundation for Mongolia Medium-Term Civil Service Reform policies.

Mongolia’s Medium-Term Civil Service Reform Policies:• Strengthen the strategic planning and performance capacities of state and bud-

getary organizations;• Improve civil service human resource management;• Ensure the optimal size of the civil service and modernize the remuneration

system for civil servants.

In the framework of aforementioned three policies below mentioned six strategies have been set:

• Strategic planning and performance management strategy• Leadership and selection of senior managers strategy• Organization and human resource development strategy• Policy analysis and data strategy• Optimum size and functions of the civil service strategy• Remuneration and benefi ts strategy

Interrelation of six strategies of the Civil Service reform is presented in below Fig-ure.


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Figure 22: Interrelation Model of Mongolia’s Civil Service Reform Strategies

Interrelation of Civil Service reform principles, policies and strategies determined in “Mongolia Medium-Term Civil Service Reform Strategy” is presented in below Figure:

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Figure 23: Interrelation Model of Mongolia’s Civil Service Re-form Principles, Policies, and Strategies

Strategic objectives set within the framework of six strategies of Mongolian Civil Service reform are listed below:

Within the Framework of the Strategic Planning and Performance Manage-ment Strategy: Strategic Objective: to strengthen the capacity of the civil service, espe-cially General Managers, to undertake strategic planning. Strategic Objective: to strengthen the capacity of the civil service to man-age on a performance basis, including measurement, monitoring, and assessment, with progressive relaxation of some input controls. Within the Framework of the Leadership and Selection of Senior Managers Strategy: Strategic Objective: to implement transparent, competitive selection pro-cesses for senior civil servants, especially General Managers. Strategic Objective: to develop the leadership skills of those selected to be General Managers or to hold other senior civil service positions.Within the Framework of the Organization and Human Resource Develop-ment Strategy: Strategic Objective: to develop human resource management procedures and systems within civil service organizations to ensure that internal decisions are transparent, fair and performance oriented.


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Strategic Objective: to provide individual civil servants with essential skills, especially service-wide skills in policy analysis, risk management, use of information technology and human resource management, as well as performance management. Within the Framework of the Policy Analysis and Data Strategy: Strategic Objective: to strengthen personnel management and control through the development of a civil service database and monitoring capacity. Strategic Objective: to develop the analytical capacities of central agen-cies. Within the Framework of the Optimum Size and Functions of the Civil Service Strategy: Strategic Objective: to progressively “right-size” the Civil Service by re-viewing the functions and services the government wants the Civil Service to provide and appropriate delivery mechanisms. Within the Framework of the Remuneration and Benefi ts Strategy: Strategic Objective: to modernize the remuneration system for civil ser-vants, by making it more responsive to labor market conditions, more devolved in line with the PSMFL, more transparent and more performance-based. Strategic Objective: to ensure that the Civil Service wage bill is fi scally sustainable, and does not undermine the Government’s capacity to deliver effective public services, especially those designed to reduce poverty.

Long-term effects deriving from the implementation of above medium-term Civil Service reform strategies and objectives set within their framework shall be mea-sured in sustainable economic growth, poverty reduction to levels set in Millennium Development Goals, as well as in increased reputation of the Civil Service.

The full implementation of the Mongolia Medium-Term Public Administration and Civil Service Reform Policies and Strategies is likely to have the following implica-tions for the Civil Service:

• Fiscal discipline will be maintained through improved monitoring of Civil Ser-vice employment and enhanced resource management skills in all Civil service organizations. This will be evident through minimal overspending on budgets and greater consistency between annual budgets and the wages policy estab-lished in the Medium-Term Budget Forecast, with deviations having to be justi-fi ed in terms of the circumstances prevailing at the time.

• The work of the Civil Service will be more focused as a result of strategic func-tional reviews of whole sectors and particular functions. This will not necessar-ily mean a reduction in the size of the Civil Service per se, but it will lead to

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greater concentration on the appropriate role of the State in a market economy and greater usage of the most effi cient delivery mechanisms. Budgetary savings will be important outcome measures.

• Improved management practices will be applied throughout the Civil Service – in particular, effective strategic planning, performance assessment and policy analysis – and this will lead to greater effi ciency and effectiveness in service delivery by Civil Service organizations. In turn, there will be greater fl exibility in resource allocations, allowing the Government to devote a greater share of scarce resources to key priorities, including poverty reduction. In the framework of gradual reform process many state and budgetary organizations shall be clas-sifi ed as “best practice” organizations.

• Better human resource management techniques, including more transparent, per-formance-related remuneration procedures, will improve employment practices in the Civil Service, thereby helping to minimize the loss of key trained staff and protecting the government’s investment in skilled people. Salary compression for non-political civil servants will be reduced and specifi c salary anomalies will be addressed.

• More focused training for Civil Service General Managers will raise the com-petencies and skill levels of public employees, improve the professionalism of the Civil Service and enable Civil Service organizations to achieve high perfor-mance levels.

• A greater concentration on governance and risk management principles in Civil Service management will improve the structure of government and reduce the risk of wasting resources through poor decision-making and/or poor internal controls.

• The Government Service Council’s role will shift from a largely regulatory one to a more policy-driven, service-oriented one, assisting the Civil Service to im-prove management techniques and implement the requirements of the Law on Government Service 2002 and the Public Sector Management and Finance Law 2002. This will assist the Government to achieve its vision of a professional, fl exible and customer-oriented Civil Service. A key outcome indicator will be feedback from General Managers in budgetary organizations.

5.3 Civil Service Reform Long-Term ChallengesMongolia’s public administration and civil service reform long-term policies and strategies are inseparable part of Mongolia National Development Comprehensive Policy and must be interlinked to expected long-term results of other economic and social sectors. The administrative machinery of the public sector is a major tool that the nation has to drive national priorities.

Driving the national priorities included in the National Comprehensive Development Policy will require fostering relationships, leadership, skills, structures and technol-ogy that are currently lacking in the Civil Service. Action is needed now to reform


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selection processes to recruit a new generation of civil servants, to establish working conditions and remuneration that will encourage them to remain in the public sector, and to equip them for their future roles.

In connection with the need to ensure implementation of the national comprehensive development policy, Mongolian public administration and Civil Service faces long-term challenges listed below.

Long-term investments require predictable policies and procedures.Implementation of the long-term priorities in the National Comprehensive NationalDevelopment Policy will require many long-term investment decisions. And these long-term investments will not occur, or will be more expensive, if investors are uncertain about future policies and administrative procedures. This applies particularly to foreign private investors, as well as domestic private capital and public sector organizations.

All investors are concerned that the rules may be changed in ways that would reduce their returns. This applies to purely private investors – for example in the mining sector, where risks of increased taxes or royalties are factored into the calculations of foreign investors.

It also applies where domestic or foreign private investors are bidding to provide major infrastructure. And it applies even to public sector investment, where the strategies of one ministry rely on another agency achieving its goals – for example where economic development strategies rely on a road being constructed on time.

Investors may decide to proceed even if there are signifi cant “political risks” to their in-vestments, but they will always factor these risks into their calculations and negotiations. The investment may proceed, but with higher profi ts to allow for the risks, which in the long run will reduce the national benefi ts of the investments in one way or another.

Establishing a National Comprehensive Development Policy is an important step to in-creasing policy predictability by setting agreed goals and targets for ministries (and future governments).

However, long-term investors are also looking for predictability in the procedures and administrative practices used to implement national policies. Signifi cant bureaucratic dis-cretion in the implementation of national comprehensive development policy can be just as disruptive as unpredictable policies, especially if there are frequent changes in the Civil Service personnel responsible for implementing key policies. This is especially a problem if political considerations, rather than merit appointments, drive changes in Civil Service personnel.

A stable and professional Civil Service is thus an essential foundation for long-term investment decisions in Mongolia.Excessive turnover in senior Civil Service positions not only adds to uncertainty, as each new appointee makes his or her own judgments on key issues, but also un-

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dermines steps to build Civil Service capacity. Compared to many other countries, Mongolia has underinvested in the capacity of its civil servants. The capacity build-ing that has been undertaken (usually donor funded) has often not been sustained because of the turnover in senior positions, sometimes apparently for political rather than performance reasons.

Mongolia requires more stability in Civil Service employment, combined with a greater commitment to building the capacity of its civil servants. There are too few people in Mongolia with the necessary expertise to increase capacity merely through hiring and fi ring staff. The approved medium term Civil Service Reform Strategy highlights the need for a comprehensive training strategy. But this will only be effec-tive if those who are trained are retained in key positions relevant to their skills and experience, and are neither dismissed or transferred for political reasons nor lost to the private sector because of inadequate remuneration.

Persistent poor performance and corruption should be grounds for dismissal, but this should be a last resort and only take place after proper procedures are followed.

Clearly, assistance will be required from donors to build Civil Service capacity to meet the future challenges. Greater Mongolian control of Civil Service capacity building is required to ensure that it focuses on Mongolian priorities, especially lon-ger term priorities, and not just the priorities of donors. This is included in the Me-dium-Term Civil Service Reform Strategy, which emphasizes the need to increase the GSC’s role in coordinating donor assistance.

A more professional and sustainable Civil Service is needed to cope with increasing demands on government.Policy problems in the future will require more complex solutions, placing greater demands on the Civil Service to help governments to respond to na-tional and, increasingly, international problems.This is not just because some of the easier problems have already been addressed. Over the last 5-10 years, governments in all countries are facing a wide range of signifi cant and complex policy issues. These include issues related to globalization, security, greater transparency and ready information fl ows, environmental degrada-tion and protection, and international health issues such as SARS and bird fl u.

Increasingly, governments are facing international problems, and effective responses are more likely to require international action.All countries are experiencing what has been described as “the internationalization of governance”. In the face of globalization, Mongolia will have to grapple with in-ternational treaties, standards and norms, and international obligations. For example, many other countries are fi nding that their government procurement processes are being affected by free trade agreements.

Public administration agencies, and civil servants, will need to be far more agile to be able to quickly respond to the changing agendas of governments and the fast moving


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pace of their operating environment. The stability needed for predictable policies and procedures cannot be achieved through rigid structures or conservative cultures that resist change or external infl uence.

Civil servants, and the agencies that employ them, need to be more responsive to their environments, including political priorities and international developments.

The Civil Service will also come under greater pressure from citizens, busi-nesses and local communities to perform.Increasing per capita incomes will affect community priorities and expectations. AsMongolians become wealthier, they will become much better educated about their rights as consumers of government services. They will have greater expectations of what services and how services will be delivered.

If the per capita income of the average Mongolian increases from $1,000 to $10,000, this will increase, rather than reduce, the demands on the public sector, as well as change the nature of that demand. Rising incomes will reduce absolute needs for government assistance (e.g. as the proportion of the population in absolute poverty decreases), but citizens’ expectations of government performance are likely to in-crease, reinforced by increasing education and communications. This can be seen by looking at other countries that have already reached such income levels, and also the already rising demands of middle class urban Mongolians. The increasing numbers of Mongolians returning from work or study in other countries will bring with expec-tations of quality service that in most sectors is lacking in Mongolia.

With much higher income and education levels, and greater access to global informa-tion and knowledge, most Mongolians will be far more sophisticated consumers of government services than they are today. The focus is likely to shift from expecting the Government to provide the basic fundamentals of health care, shelter and welfare, towards the overall quality and standard of government services.

Experience in many developed countries suggests that the typical Mongolian in 2021 will expect high quality, seamless, accessible and responsive service delivery that is tailored to individual needs, and where outcomes are transparent. They are also likely to demand a greater say in the development of policies and programs. Current public administration paradigms, which do not emphasize entitlement or transparency, will come under increasing pressure.The nature of the work of the Civil Service is therefore likely to change dramatically over the next 15 years, becoming increasingly complex and challenging. Mongolia will need a workforce that is multi-skilled, fl exible and able to respond to changing circumstances and demands.

The demand for services and infrastructure will increase in both urban and rural areas.Some of these increasing demands will result from greater urbanization, with city dwellers asking governments to provide more services and infrastructure than their

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parents or grandparents expected. This will be especially true in the four proposed regional growth centers, which will require a well coordinated program of infra-structure development and service delivery to overcome the diffi culties that other countries have faced in trying to establish new population centers.

However, probably the greatest challenge will be to meet the increasing demands from those remaining in remote areas for improved access to services and infrastruc-ture. Technology (see below) and rising national incomes will create opportunities to respond to these demands, but experience in other countries suggests that citizen de-mands in rural areas will increase faster than the government’s capacity to respond.

More complex policy problems and growing demands from citizens will require more coordinated solutions from the public sector - often ‘whole of government’ responses.Experience in many developed countries since the turn of the 21st century suggests that these more complex policy problems will often require concerted action from many government agencies. Increasingly, the problems being faced by national gov-ernments do not respect agency or jurisdictional boundaries, requiring agencies to work in a ‘whole of government’ approach.

In developed countries, whole of government activity is already well underway in areas such as security, natural resource management and the environment, and health. Another example is the problem of delivering services in remote areas, where the population does not justify full-scale separate services.

Cooperation between agencies and between sectors can allow multi-purpose services and greater use of technology in service delivery.

Public administration in Mongolia is not well prepared to work in this way. Minis-tries and other agencies do not have a good record of coordinating action, and some reforms over the last decade have focused on clarifying roles, responsibilities and accountability in a way that has exacerbated the boundaries between agencies. Mon-golia is the most individualistic Civil Service we have worked with.

Many of the policies that Mongolia will attempt to implement over the next 15 years will require a whole of government approach. This will require public administra-tion that looks beyond the strategies, business plans and performance of individual ministries and agencies.

We need to look at the systems level, to ensure that underpinning fi nancial andICT frameworks support collaboration. We also need to develop and reinforce the appropriate agency culture and capability.

Strong central institutions are needed, which do not meddle unnecessarily in the day-today decisions of agency managers, but do effectively orchestrate combined action when it is required.


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Delivering national development policies will require new partnerships and relationships.The need for better coordination is not limited to working more effectively within government. The national development policies identifi ed will require the Civil Ser-vice to strengthen its ability to work with all partners, irrespective of whether they are from the community, business, or local government.

Agency collaborations with NGOs have the potential to greatly improve the effi cien-cy and effectiveness of service delivery in many areas. And contracting out services to the private sector will be increasingly common.

Effective use of contracting out not only requires new skills in the Civil Service, but also a shift in attitudes.

Future Civil Service managers will not see contracting out as a threat to the public sector or their bureaucratic power, but an opportunity to improve their performance and achievement of outputs and outcomes. They will identify where collaborations with external stakeholders will add the most value, and where work should be done in-house. They will need to think about how to loosen some of their controls and guidelines to facilitate more fl exibility, innovation and effectiveness on the ground, while retaining high standards of accountability. The more that unnecessary red tape can be reduced, the better the delivery arrangements will be for everyone.

In some developed countries this approach has led to consideration of radically dif-ferent governance arrangements, beyond traditional Civil Service delivery and con-tracting out options. These include:

“Distributed government” where Government works in direct partnership with other government and non-government bodies, to address systems or networked issues, such as the provision of employment services; and

“Government by market” where the Government uses its power to create a mar-ket that serves a public purpose. This is perhaps the most powerful mechanism to drive behavioral change, yet is very complex to implement.

The term “distributed government” has been inspired by the Internet – not what it does, but how it is managed. It is not governed by the UN or a global Internet agency, but works effectively (even if strained by demand and security assaults) through global cooperation between especially on protocols that enable data to move seam-lessly between systems managed by different organizations. A system of distributed government is an extension of this model, an extension moving the authority of gov-ernment from a centralized body to one refl ecting the interests and concerns of those directly impacted by such policies.

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Success in ensuring effective delivery of services in this environment will depend increasingly on how well the Civil Service can manage a diverse and complex web of relationships.

The current global debate about carbon trading and carbon taxes as a response to global warming is an example of “government by market”. Another is the proposal to establish a “water trading market” in Australia (an option that may have relevance for Mongolia at some stage in the future).

Technology provides opportunities to increase public sector effectiveness and productivity, but also increases the pressure on public administration to respond quickly.

Over the next 15 years technology will support collaborative approaches across pub-lic sector agencies and even across national boundaries, probably in ways that are hard to imagine at the moment. But technology isn’t just an enabler - it also infl u-ences the public’s expectations of how the public sector should work - their expecta-tions of seamless service delivery.

The dilemma for the public sector is discussed in a recent book by William Egg-ers “Government 2.0: Using technology to improve education, cut red tape, reduce gridlock, and enhance democracy”. Eggers argues that the United States public sec-tor is struggling with the shift from government in the industrial age (hierarchical and agency-centered) to government in the information age (less-hierarchical and citizen-focused). While existing technologies give legislators and civil servants the power to transform almost everything, he argues, their thinking has not yet caught up with their technological tools. The industrial age mindset lingers to the detriment of public policy.

Egger’s book refers to the United States experience, but it applies with even greater force in countries like Mongolia. Many have not realized the speed at which things are moving - enabled by technology - and how responsive the Civil Service needs to be to government an d to the community.

Mongolia is at least 15 years behind countries like Singapore, Korea and Estonia in the use of technology in government. The introduction of e-government in these countries is not about putting computers on the desks of civil servants or computer-izing the internal processes of government agencies – these steps were taken long ago – but about using technology to enable businesses and individual clients to interact with public sector organizations. This goes well beyond providing information, with technology allowing clients to use ICT to submit tax forms, process imports through customs, obtain visas and submit tenders for government procurement. For example, some 90% of visas to visit Australia are now processed via the Internet, despite


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Australia’s very tough security procedures and the vigilance it has exercised since September 2001. The demand for e-government in Mongolia has been low, especial-ly domestically. But this will change as the local private sector expands, as Mongolia seeks to engage more in the global economy, and more Mongolians experience the advantages of e-government in other countries. In the next 15 years, the public sector in Mongolia must not only catch up on past innovations, but also adapt to the further technological advances that will inevitably be made in public administration.

Mongolia’s success in implementing new approaches to governance and in har-nessing technology will require a new generation of civil servants, who have the skills to manage a diverse and complex web of relationships and technology.New forms of governance have important implications for the future capability re-quirements for the Civil Service. It will be hard to develop a critical mass of em-ployees with high-level research and policy skills, and the demand for such skills will only increase. The Civil Service will need to market itself as an employer of choice for people with these skills, and ensure these skills are developed in existing employees.

The Civil Service will require people who have strong relationship management skills, willingness and an ability to listen to the views of others, confl ict resolution and negotiation skills, and a focus on achieving the best outcomes.

Part of this mix will be developing the capacity of Civil Service leaders so that they can successfully drive and implement future reform, and ensure the Civil Service has the organizational capacity to deal with the challenges ahead. This requires chang-es in the current concepts of leadership, to update them so they have relevance for younger generations of public servants and those who come to the Civil Service from other sectors. Civil service leaders have an important role to play in fostering the right Civil Service culture for the future; one that facilitates creativity and innovation, and where staff are willing, and supported, to try out new things.

Structured approaches to leadership development become even more important in this environment. There needs to be greater emphasis on effective work force plan-ning and work place training - which will be necessary if the Civil Service is to com-pete successfully in the market for talented staff with the professional skills it needs and to retain those skilled people.

They will also be necessary to assist public sector agencies to deal with the increas-ingly complex whole of government and individual policy, program and service de-livery approaches that will be expected of them in the future.

Yet the Civil Service may well fi nd it harder to recruit and retain the multi-skilled Civil Service workforce that is needed.Mongolia’s Civil Service is much younger than in many other countries. The last Civil Service census revealed that in 2003, 76% of civil servants were under 45 years and only 5% are over 55. This means that, compared to many other countries, the

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Mongolian Civil Service is fortunate that it does not face the imminent loss of much of its workforce in the next 15 years through retirement.

Among the 76% under 45 years are many of the Civil Service leaders of the next 15 years. However, in 15 years there is signifi cant risk of inadequate numbers of civil servants in the middle level, especially in middle management and technical posi-tions:

Private sector growth, with more competitive remuneration, will make it harder to recruit and retain civil servants with key skills;

While population ageing in Mongolia will not generate general labor shortages to the extent that other countries will face, this will not necessarily be the case for skilled labor;

Any signifi cant reductions in Civil Service numbers will make it even harder to recruit the next generation of middle managers and technical experts – not just because the reduced recruitment that is needed to reduce the size of government employment, but also because Civil Service employment may seem less attrac-tive for talented young people.

For these reasons, the long-term effectiveness of the Civil Service depends on effec-tive human resource planning and comprehensive salary reform now.

5.4 Civil Service Reform Long-Term Strategies The Mission of Mongolian Public Administration and Civil Service, the needs relat-ing to long term reform, and issues for meeting these needs give us an opportunity to defi ne the Vision of the Public Administration long term reform as it follows:

PROXIMATE TO THE CITIZENS AND FLEXIBLE policy for public ad-ministration development;

Competent, specialized, committed and CAPABLE Civil Servants; Highly skilled Managers with PROACTIVE AND INNOVATIVE LEADER-

SHIP; Continuously developing and learning public administration COMPACT enti-

ties with good capacity for policy implementation actions; High level productivity, quality and coverage of Civil Service RESPECTING

FINAL PERFORMANCES, which meets the expectations of people and citi-zens.

The fi ve visions are closely linked to the mission statement of Public Administration and Civil Service Reform. The scheme below details the interrelations:


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Because the interrelations of the fi ve visions of Long Term Public Administration and Civil Service Reform based on customer superiority principles it is promoting the following priorities of Public Administration and Civil Service long term reform within the frame of those visions that started with nine letters of word of “CUS-TOMER” in Mongolian:

Proximate to citizen and fl exible proximity to citizens; Value based policy development and decision making and their implementa-

tion; Radical reform and continuous innovation; Power devolution and strengthening of market competition and thinking; Building of new management and fi nance system based on performances and

results; Setting up new ICT system underpinned by reliable information and facts; Building up new feedback system; Planning of executive management needs and demands, coordinating of their

provisions vigilantly feeling the external environment and market changes; Constitute the Public Administration and Civil Service with good capacity.

These priorities are rising from fi ve visions of Public Administration and Civil Ser-vice long term reform and devoted to their implementation.

The priorities rising from vision of “PROXIMATE TO THE CITIZENS AND FLEXIBLE policy for public administration development”:

Customer superiority and proximity to citizens; Value based policy development and decision making and their implementa-

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tion. The priorities rising from vision of “Competent, specialized, committed and CA-PABLE Civil Servants”

Radical reform and continuous innovation.

The priorities rising from vision of “Highly skilled Managers with PROACTIVE AND INNOVATIVE LEADERSHIP”

Power devolution and strengthening of market competition and thinking; Building of new management and fi nance system based on performances and

results.

The priorities rising from vision of “Continuously developing and learning public administration COMPACT entities with good capacity for policy implementa-tion actions”

Setting up a new E-Governance System underpinned by reliable information and facts

Building up new feedback system

The priorities rising from vision of “High level productivity, quality and coverage of Civil Service RESPECTING FINAL PERFORMANCES, which meets the expectations of people and citizens”

Planning of executive management needs and demands, coordinating of their provisions vigilantly sensing the external environment and market changes;

Constitute the Public Administration and Civil Service with good capacity.

The priority of “Proximate to the citizens and fl exible Policy for Public Admin-istration Development” is directed to satisfaction of customer requirements and it can base on customer superiority, citizen proximity and value warship culture. In other words, it has to direct to building a faire accountability system, which amenable by meeting or dismissing the desired expectations of people and driven by citizen’s requirements and taking responsibility for reaching sound results.

Within the priority framework of “Value based policy development and decision making and their implementation” it shall develop and implement a Public Admin-istration and Civil Service Reform policy and decision directed to real value creation expected by people and citizens based on publicly accepted values.

Within the priority framework of “Radical reform, continuous innovation and long term human resource planning and training” it will continue radical reform and innovation of Public Administration for fl exible approach to the raised require-ments and immediately resolution of raising issues when it has been indicated.

The Government Service Council will concentrate on Public Administration human resource and long term human resource planning of National Development Com-prehensive Policy and shall have a replacement planning capacity in accordance


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with demographic trends and market competition behavior for hunting highly skilled staffs and overseeing the demography planning.

Within the priority framework of “Power devolution and strengthening of market competition and thinking, and providing of future manager’s development”- it will taken actions directed to decreasing of state budget load by assumption of some state fi nanced functions to private and other party contractors through devolution of powers, strengthening of market competition and thinking, and minimizing the service delivery costs and proximate the services to the customers through sequenc-ing of relationship functions from non-relationship one, advisory functions from service and regulatory functions, and decreasing of huge overload of budget through dismantling complicated administrative structure, making the administrative units self-dependent, and building up non-centralized structures.

On the basis of competency assessments of executive staffs it will developed and implemented future leaders development program attracting talented young people to Civil Services, which will provide their long term professional development and accord a possibility of faster career development assistance.

A leadership skill development program will be developed for centrally supervised executives in accordance with National Development Policy’s Long-Term Strate-gies.

Within the priority framework of “Planning of executive management needs and de-mands, coordinating of their provisions vigilantly sensing the external environment and market changes”- it will continuously increase the trust of people and citizens to the government through searching of foremost ways and meeting the requirements for diversifi cation of services and improvement of service quality and coverage.

Within the priority framework of “Setting up new E-Governance System under-pinned by reliable information and facts”- it will build up modern and powerful ELECTRONIC INFORMATION SYSTEM capable to provide real support to POLICY DEVELOPMENT and decision making.

Within the priority framework of “Building up new feedback system”- it will im-plement mechanisms for assuming duties, reporting, accountability, monitoring and evaluation at all levels of budget entities.

More interrelated management will develop through enabling Executive Services with required skills and ensuring centralized appointment of their employment with proper fl exibility.

It will use centralized payroll method according to their performances assessing es-sentially required knowledge and skills of executive staffs.

Taskforces and joint budget methods will use as effi cient methods for coordination

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among sectors and between organizations.

Within the priority framework of “Building of new management and fi nance sys-tem based on performances and results”- it will form a new management method-ology with private sector like rational techniques of reporting and accountability with possibility of performance and result assessment, and rewarding through building of cost effective, effi cient and economic Public Administration and Civil Services advancing objective and performance oriented management and fi nance system, and improvement of Public Administration and Civil Service effi ciency/productivity and effectiveness/quality.

Within the priority framework of “Constitute the Public Administration and Civil Service with good capacity”- it will improve the business capacity for state and gov-ernment policy implementation through continuous development of public admin-istration organizations, advancing public employees’ competencies, and improving leadership skills of all levels executives and managers. The former will play crucial role in improvement of their business effi ciency and effectiveness to the level of meeting customer expectations. It will build integrated action capacity of the Government which shall refl ect to so-phisticated complex issues by using of new performance oriented mechanisms with-out new bureaucracy for new issues.

It will introduce a new form of cooperation with state organization, private sector and NGOs as Distributed Government and Government by Market that already imple-mented in other countries. Implementing actions of above mentioned priorities of the Public Administration and Civil Service long term Reform will be periodically planned and commenced.

In the result of Long term Public Administration and Civil Service Reform policy and strategy implementation it will reach the following outcomes:

A more stable Civil Service will help to increase the predictability of policies and, especially, their implementation. While there will always be some turnover in the Civil Service and changes in elected Governments, a stable Civil Service will ensure that policy decisions take into account previous commitments and undertaking made on behalf of the Government, and will mean that public sec-tor managers have a much deeper understanding of the public administration. No longer would a Minister be able to dismiss senior civil servants without due process.

Mongolia will have a reputation as friendly to long-term investors – protecting its legitimate national interests but fair to its foreign partners. A country that keeps it promises to foreign and domestic investors alike.

Increasing Civil Service stability and undertaking the key components of the Medium Term Reform policies and strategies (including salary reform, revised


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code of ethics and greater focus on performance) are also likely to reduce cor-ruption in the longer run.

A more professional and cohesive Civil Service will be better equipped to tackle the more complex problems of the 2020s, especially those that require coor-dinated action across government agencies. Although it will take a decade to achieve, a more cooperative culture in the Civil Service will provide Govern-ments with better advise on how to respond to threats – e.g. new pandemics or security threats – and to take advantage of global economic and technological opportunities.

Taking advantage of innovations in how services are delivered, government agencies will respond to the demands of an increasingly affl uent and educated population. This will apply in urban areas, including new growth centers devel-oped under the National Comprehensive Development Policy.

Government agencies will be entering into new partnerships with the private

sector and NGOs, beyond privatization and contracting out.

Businesses and citizens will use the latest digital technology to submit applica-tions, track decision-making and even obtain decisions from government agen-cies. E-government will utilize 2020s technology, not 1996 or 2006 technology to do so.

There will be a new generation of civil servants, with the skills, professionalism and commitment to make all this happen.

Chapter 6: Civil Service Reform Implementation Strategies

6.1 Roles of Medium-Term Civil Service Reform Strategy Implementing Institutions

The role of the Government Service Council

The Government Service Council shall perform the following functions under the LGS and the PSMFL: (1) controlling the implementation of human resource policy in state and local budgetary bodies; (2) nominating candidates for specifi ed senior managerial positions; (3) ensuring the observance of a code of conduct to ensure ethi-cal behavior of civil servants; (4) establishing an integrated database of government employees; (5) overseeing the appraisal of performance and qualifi cations of civil servants and applicants for government administrative posts through a qualifi cation test; (6) organizing training programs for civil servants and research into civil

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service issues; (7) proposing changes to the structure of government organizations, classifi cation levels, grades, salary scales and remuneration rates; (8) analyzing the performance of the civil service and developing proposals on its improvement; (9) considering appeals against certain personnel decisions.

While many of the Government Service Council’s decision-making and enforcement functions will continue, it will have a greatly expanded role in change management and capacity building. This will include the establishment of civil service policies and guidelines, providing advisory services to general managers on human resource management and other public sector management issues, and coordinating civil ser-vice training. Having this role performed by the Government Service Council, which reports directly to Parliament and is independent of the Executive, will reinforce the political neutrality of the civil service.

This greatly expanded role for the Government Service Council refl ects: (a) the need to support the increased role of general managers under the PSMFL; (b) the current absence of a central pool of expertise and knowledge in civil service reform; (c) cur-rent duplication and ineffi cient use of international consultancy advice; (d) missed opportunities to share the results of technical assistance and consulting studies; (e) the need to fi nd offi ce accommodation and support services for cross-agency techni-cal assistance projects; and (f) limited availability of training services outside the Academy of Management.

The Government Service Council has an important role as the champion of change to support the public sector management reforms and application of good governance principles. The Government Service Council will become a knowledge center for public sector reform and good governance.

To support civil service reform and good governance, the Government Service Coun-cil will undertake the following services in addition to its current functions of devel-oping policy and guidelines:

1. Developing a pool of local consultants specializing in public sector management reform and all aspects of management that would be available to all public sec-tor bodies. This would be supplemented by international consultants provided through funding agencies on the basis that they contribute technical knowledge to the pool as well as the client.

2. Maintain a central reference library of all reports and documents related to pub-lic sector management reform and governance studies, supported by an Internet site with links to other related sites, both local and international.


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3. Providing a “clearing house” for international consultants – a consultant man-agement service available to any consultancy including offi ce accommodation (if required), facilities and offi ce support.

4. Coordinating civil service management training, including training needs analy-sis, recommending training programs, developing competencies, and encourag-ing training providers to enter the market of civil service training.

5. Providing advice to government on civil service reform and governance issues.

The Government Service Council will also have the central role in civil service remuneration policy, including on relativities and classifi cations. A separate unit within the Government Service Council will be established to support this role.

Current functions of the Government Service Council and the Ministry of Social Wel-fare and Labor (MSW&L) will be split. Except where provided in legislation, these policies are applied to civil service employment. The Government Service Council and the MSW&L will cooperate in undertaking labor market research, for example on emerging skill shortages or remuneration trends, to avoid unnecessary duplication and provide the government with the best quality advice. But it is important to distin-guish the government’s role as employer of the civil service, and its broader policy and regulatory role with respect to the wider labor market.

With devolution of day-to-day controls on staffi ng inputs under the PSMFL, there is a greater role for the Government Service Council in strategically monitoring compli-ance systems, to ensure that general managers are meeting governance requirements and individual civil servants are complying with the code of conduct.

These strategies will:

• Ensure that all civil servants observe newly revised code of conduct;

• Require all general managers to take primary responsibility for compliance by his or her staff and to have an enforcement plan for the agency;

• Target direct Government Service Council monitoring on checking implementa-tion of agency compliance and enforcement plans and directly monitor high risk areas.

The role of the Cabinet SecretariatWith the establishment of the Government Service Council as an independent agency in 2003, the Cabinet Secretariat’s involvement in detailed human resources issues has reduced, although it retains a coordinating role, especially with respect to issues being submitted to Cabinet and the implementation of Government decisions, as in other areas.

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The Cabinet Secretariat’s general role is to support the leadership functions of the Prime Minister and the Cabinet. In implementing its primary functions of policy management and strategic planning, it supports the line ministries by making recom-mendations on issues of national development, strategic planning, macro economic analysis, and fi nancial, human resource and executive management. It has a particu-lar responsibility for coordinating public administration reform.

Given its day-to-day role in supporting the Government’s strategic decision-making and the Cabinet process, the Cabinet Secretariat will be closely involved in oversee-ing the strategic planning process in line ministries, to make sure that civil service planning processes are consistent with the Government’s agendas and with Gov-ernment resolutions. Under the civil service reform strategy, the Cabinet Secretariat will therefore take particular responsibility for coordinating the strategic functional reviews – not to conduct the reviews, but to work with the Government Service Council, MoF and specifi c line ministries to identify priority sectors/functions to be reviewed, to submit the review program for Cabinet consideration, to develop terms of reference, to monitor progress and to submit results for Cabinet decision.

The role of the Ministry of FinanceThe role of Ministry of Finance is to undertake the central economic, fi scal and fi -nancial management functions for the government. The key focus of Ministry of Finance is to develop policies for the effective fi nancial management of the public sector. By clearly distinguishing between the broad economic responsibility to guide the economy and the fi nancial management of the public sector, Ministry of Finance has achieved substantial improvement in the overall fi nancial condition of Mongolia. A key measure over the recent years has been to obtain tighter control over cash ex-penditure in the general government sector of the economy. This has been achieved through the cooperation of the Treasury Department of Ministry of Finance and the assistance from the International Monetary Fund (IMF). Using Government Finan-cial Statistics (GFS) formats, the fi rst Government fi nancial statements on an accrual basis for the year ended December 31, 2002 have been produced providing evidence of the improved control through fi nancial reporting.

Ministry of Finance is applying the provisions of the PSMFL by adopting output budgeting, introducing accrual accounting, and pushing forward with the associated reforms. This will enable all public bodies to continue the development of their ac-counting systems to produce accurate and relevant output costings for budget devel-opment purposes and to assist in the management of their agencies. The objective of the accounting improvements is to produce a consolidated fi nancial statement for the GOM under IPSAS requirements as soon as possible.

The next phase of development for Ministry of Finance will be to provide compre-hensive policy statements on the economic and fi nancial issues facing the govern-ment. These policies will assist the government in reducing the structural Budget


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defi cit, eliminate the dependency on foreign aid and enable them to allocate scarce resources to the most needy areas for improving infrastructure, developing a profes-sional public service and delivering better services to the community.

6.2 Coordination and Capacity Building Roles The Government Service Council, the Cabinet Secretariat, and Ministry of Fi-nance, supported by other relevant ministries, are responsible for overall over-sight of the Civil Service, and these agencies need to be effectively linked and require further capacity building.The Government Service Council, the Cabinet Secretariat and Ministry of Finance with respect to civil service reform:

• The Government Service Council shall coordinate service-wide training and capac-ity building for civil servants, and shall perform a change management role.

• The Cabinet Secretariat has overriding responsibility for coordinating public sector reform, as in many priority areas of government policy where a number of central agencies or ministries are involved. This is in addition to its more particular respon-sibility for commissioning high level functional reviews. The Cabinet Secretariat, in consultation with the Government Service Council, will submit, jointly with Ministry of Finance and Ministry of Social Welfare and Labor, to the Cabinet all proposals that could have employment or fi scal implications.

• Ministry of Finance will continue to advise the government on fi scal policy issues and manage the overall budget process, consistent with the PSMFL. It will be criti-cal for Ministry of Finance and the Government Service Council to coordinate their activities.

A key interface between these agencies will be the development and approval of the capacity building strategy.

The Government Service Council will be responsible for undertaking a training needs analysis, in consultation with Ministry of Finance and relevant line ministries, including Ministry of Social Welfare and Labor, Ministry of Education, Science & Technology, Ministry of Health, and other agencies, with the support of international consultants. The draft training strategy will then be costed in consultation with Min-istry of Finance and submitted to the Government for its consideration. The Cabinet Secretariat would be responsible for ensuring that the strategy is consistent with the Government’s broader reform agenda and for the consideration of the strategy by Cabinet at the appropriate time.

A second important interface is the modelling salary reform proposals. A remunera-tion unit will be established under the Government Service Council to analyze remu-neration issues, including labor market conditions, specifi c skill shortages and clas-

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sifi cations. Government Service Council will also be responsible at the national level for maintaining the HRMIS, which will provide the basis for updating the Wages Ex-penditure Analysis Model developed and used in Ministry of Finance. Cooperation between the Government Service Council and Ministry of Finance will be critical to the continued value of this analytic tool.

A third example is the commissioning of strategic functional reviews. Especially at the sector level, these reviews should be commissioned at the highest level of Gov-ernment, to ensure that they refl ect the strategic priorities of the Government. These and other requirements will stretch the current resources in the Government Service Council, the Cabinet Secretariat and Ministry of Finance beyond reasonable limits. Thus there is a need to strengthen human and budget resources of these agencies.

Skills in the Cabinet Secretariat, Government Service Council, Ministry of Finance, Ministry of Social Welfare and Labor, Ministry of Education, Science and Technol-ogy, and Ministry of Health will be upgraded over the next 3 years with support from donors such as the World Bank and Asian Development Bank, consistent with this civil service reform strategy.

The Government Service Council and Ministry of Finance are already moving to-wards an effective partnership. Fiscal realities dictate the need for effective coor-dination between the Government Service Council and Ministry of Finance, so that human resource policy and expenditure formulation and execution can be more re-alistic and sustainable. At the same time, building adequate institutional capacity in the Government Service Council and Ministry of Finance is critical for effective cooperation and coordination between these two entities critical for human resource policy and expenditure formulation and implementation.

The Government also believes there should be improved coordination of donor sup-port for civil service capacity building. While Ministry of Finance manages the fi nan-cial aspects of donor programs, including loans and credits, there is a need for stron-ger coordination of technical assistance provided to the civil service to strengthen public administration.

6.3 Action Plan for the Implementation of the Medium-Term Civil Service Reform StrategyIn consultation with ministries, the Government Service Council has drawn up a de-tailed Action Plan for the Implementation of the Medium-Term Civil Service Reform Strategy. The Implementation Action Plan, which has been approved by Govern-ment, specifi es strategic objectives and specifi c actions, output measures and out-come indicators for each strategic objective.


84

1. WITHIN THE FRAMEWORK OF THE STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT STRATEGY:

Strategic Objective 1.1: To deepen the strategic planning capacity of the Civil Ser-vice, especially for General Managers.Actions• Review current processes and guidelines for developing strategic business

plans (2007 onwards).• Organize training for General Managers and associated manuals on strategic

planning, budget planning, performance assessment, and the monitoring and evaluation of performance agreements and budget performance (2007 on-wards).

• Provide further training on strategic planning techniques for General Manag-ers and other key staff (2007 onwards).

Strategic Objective 1.2: To strengthen the capacity of the Civil Service to manage on a results basis, including measurement, monitoring and assessment, with gradual relaxation of some input controls. Actions• Provide further training for General Managers and key staff building on previ-

ous capacity building by the ADB (2007-2009).• Review and simplify rules and procedures issued by the GSC on establishing

civil servants’ performance agreements (2007 onwards).• Develop and gradually introduce in relevant government agencies a methodol-

ogy for conducting social audits (2007-2010).• Conduct regular user surveys to monitor activities and assess the performance

of government organizations (2007 onwards).• Relax some specifi ed input controls (e.g. staff ceilings and some central staff-

ing rules) for individual budgetary organizations on a step-by-step basis (2007-2010).

• Develop procedures for reviewing General Manager performance agreements (2007 onwards).

Key Output Measures: (a) total number of training days completed on strategic planning; (b) new, consolidated procedures issued by the GSC and the Ministry of Finance on the preparation, negotiation and evaluation of managers performance agreements; (c) conduct user surveys by agencies publish the results. Key Outcome Indicator: (a) improvements in the quality, transparency and open-ness of service delivery evident in successive user surveys.

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2. WITHIN THE FRAMEWORK OF THE LEADERSHIP AND SELECTION OF SENIOR MANAGERS STRATEGY:

Strategic Objective 2.1: To implement transparent, competitive selection processes for senior civil servants, especially General Managers.Actions• Develop transparent testing/assessment procedures and make appropriate leg-

islative amendments relating to GSC’s powers in this area (2007 onwards).• Review procedures for selecting other senior civil servants with a view to in-

troducing open and competitive selection processes similar to those for Gen-eral Managers (2007)

• Make legislative and procedural changes to reduce political infl uence and bu-reaucracy in senior Civil Service selection processes (2007 onwards).

Strategic Objective 2.2: To develop leadership skills of those selected to be General Managers or hold other senior civil service positions.Actions• Develop a leadership training manual and conduct 14 days’ training for 3,000

General Managers (2007-2009). • Develop a comprehensive, on-going Civil Service Leadership Program for

General Managers and those working directly to them (2008-2009).• Amend the GSC’s procedures for assessing the performance of General Man-

agers to include specifi c assessment of leadership performance, based on simi-lar criteria to those used in selection (2007 onwards).

Key Output Measures: (a) percentage of General Managers and other managerial appointments using transparent qualifi cation testing and assessment procedures; (b) number of managers enrolled in the Civil Service Leadership Program.Key Outcome Indicator: (a) reduction in the proportion of General Manager and other senior appointments perceived by independent commentators to be politically infl uenced.


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3. WITHIN THE FRAMEWORK OF THE ORGANISATION AND HUMAN RESOURCE DEVELOPMENT STRATEGY:

Strategic Objective 3.1: To develop human resource management procedures and systems within Civil Service organizations to ensure that internal decisions are transparent, fair and performance-oriented.Actions• Develop a Civil Service-wide model for human resource management; build

capacity in government organizations; and develop and disseminate good practice guidelines (2008-2009).

• Review current legislative provisions and procedures for appointment to all core Civil Service posts (2007 onwards).

• Review the appeals procedures under Article 39 of the Law on Government Service (2007 onwards).

• Develop and implement a qualifi cation test on managerial skills for selection to mid-level supervisory administrative posts (2008 onwards).

• Advertise publicly vacancies and appointments to all administrative posi-tions and, if necessary, amend the current legislation in this respect (2008 on-wards).

• Service grades (2007-2008).• Develop an anti-discrimination policy and program to promote a balanced

Civil Service and equal employment opportunities for women, people with disability and members of racial, ethnic and ethno-religious groups (2008).

Strategic Objective 3.2: To provide individual civil servants with essential skills, especially Service-wide skills in policy analysis, risk management, use of informa-tion technology and human resource management, as well as performance manage-ment.Actions• Conduct a comprehensive training needs analysis for the Civil Service (2008

onwards).• Develop a Civil Service training strategy based in the analysis (2008 on-

wards).• Develop and provide Service-wide short training courses to relevant civil ser-

vants in policy analysis, risk management, human resource management and IT usage (2008-2010).

• Base the delivery of Civil Service training on a purchaser/provider model, with government organizations and, for priority central initiatives, the GSC purchasing training services from providers; encourage competition between providers; and, in the longer term, provide government organizations with their own training budgets (2009-2010)

Key Output Measures: (a) enactment of revised legislation on appointments which in-creases transparency and the use of competitive selection processes; (b) wide circle adver-tising of vacancies and appointments to administrative posts; (c) increase in Civil Service training (number of participants and length of training) in line with the training needs analysis as measured in Government Service Council surveys on civil service training.

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Key Outcome Indicator: (a) improved effectiveness and integrity of Civil Service agencies, as measured in regular user and public opinion surveys.

4. WITHIN THE FRAMEWORK OF THE POLICY ANALYSIS AND DATA STRATEGY:

Strategic Objective 4.1: To strengthen personnel management and control through development of a Civil Service database and monitoring capacity.Actions• Design and implement a Human Resource Management Information System

(HRMIS) for use by central and line agencies to monitor employment deci-sions and outcomes (2007 onwards).

• Conduct a full Civil Service census to provide baseline data for the HRMIS (2007 onwards).

Strategic Objective 4.2: To develop the analytical capacities of central agencies. Actions• Develop and implement a specifi c capacity building program for the GSC,

Cabinet Secretariat and the Ministry of Finance to enhance their analytical skills (2007-2008).

• Conduct training for the managers and staff of central agencies to strengthen their knowledge of policy analysis and to provide them with relevant skills; develop and publish associated manuals (2007 onwards).

Key Output Measures: (a) completion of the civil servants census to provide base data for the HRMIS; (b) commencing the implementation of the HRMIS by the end of 2008.Key Outcome Indicator: (a) improved policy development and enforcement result-ing from effective monitoring and evaluation of employment decisions and trends through the HRMIS.


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5. WITHIN THE FRAMEWORK OF THE OPTIMUM SIZE AND FUNCTIONS OF THE CIVIL SERVICE STRATEGY:

Strategic Objective 5.1: To progressively “right-size” the Civil Service by review-ing the functions and services the Government wants the Civil Service to provide and the appropriate delivery mechanisms.Actions• Conduct pilot functional reviews in the Ministry of Social Welfare and Labor,

the Ministry of Education, Culture and Science and the Ministry of Finance (2007).

• Undertake strategic functional reviews for all other agencies, as well as for selected sectors and common support functions (2008-2009).

• Establish a high-level Civil Service Reform Steering Committee to manage a step-by-step process of Civil Service reform (2007 onwards).

• Fill positions in new structures with signifi cantly higher salaries through com-petitive, merit-based promotion processes (2007-2009).

• Decide whether or not civil servants made redundant because the employing organization is abolished or restructured, or for any other reason outside the individual’s control, should receive the appropriate benefi ts (2007-2009).

• Take steps to prevent the re-hiring of civil servants contrary to the law, in part by using the HRMIS to block salary payments (2007-2009).

• Introduce, if necessary, a Civil Service Reform Law to provide for special redundancy incentives and other transitional arrangements (2007).

• Review the current scope and classifi cation of the Civil Service in Article 3.1 of the Law on Government Service, including the status of support service workers and the boundary between administrative and special civil servants; as necessary, prepare legislative amendments and develop transitional arrange-ments (2007).

Key Output Measures: (a) functional reviews undertaken; (b) percentage of agen-cies with approved new structures; (c) percentage of savings achieved through Civil Service “right-sizing”.Key Outcome Indicators: (a) functions identifi ed for abolition or reduction in line with Government priorities; (b) effi ciency gains from alternative delivery mecha-nisms or productivity improvements; (c) downsizing of employees number in bud-getary organizations.

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6. WITHIN THE FRAMEWORK OF THE REMUNERATION AND BENEFITS STRATEGY:

Strategic Objective 6.1: To modernize the remuneration system for civil servants by making it more responsive to labor market conditions, more devolved in line with the Public Sector Management and Finance Law, more transparent and more performance-based.Actions• Develop a new Civil Service classifi cation, pay schedule and methodology

(2007 onwards).• Establish a Remuneration Unit in charge of conducting research, providing

information and developing proposals (2007 onwards).• Review through the new Remuneration Unit the current legal framework

regulating classifi cation, ranks, salary scales/schemes and the impact on the recruitment, retention and performance of civil servants, as well as their stan-dard of living and social welfare (2007-2008).

Strategic Objective 6.2: To ensure that the Civil Service wage bill is fi scally sustain-able and does not undermine the Government’s capacity to deliver effective public services, especially those designed to reduce poverty.Actions• Cost future Service-wide salary increases fully using a Wage Expenditure

Control Model (2007 onwards). • Ensure that real salary increases for civil servants employed under the new

salary structure will depend on real increases in GDP and on the successful implementation of the Civil Service Reform strategy, especially staffi ng re-ductions from the strategic functional reviews (2007 onwards).

Key Output Measures: (a) new salary scale approved with substantially reduced compression; (b) set the extent to which allowances and other non-salary benefi ts are absorbed into base salaries; (c) implementation of interim and fi nal salary in-crease stages under the new salary scales.Key Outcome Indicators: (a) success in attracting and retaining competent manag-ers and other key staff; (b) adequacy of lowest Civil Service salaries relative to living costs.


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7. WITHIN THE FRAMEWORK OF CHANGE MANAGEMENT PROGRAM:

Strategic Objective 7.1: To implement a pro-active change management program that will inform all relevant stakeholders of the approved Civil Service Reform Strategy and this Action Plan and help to build capacity to implement it. Actions• Undertake a series of seminars for Ministries, Aimag Governors, other Civil

Service organizations, donors and Parliamentarians to explain the step-by-step process of implementing Civil Service Reform, especially the links between restructuring and the gradual implementation of the new salary structure (2007 onwards).

• Publish copies of key documents, including the Civil Service Reform Strategy and this Action Plan; publish a quarterly newsletter on Civil Service Reform; and establish a Civil Service Reform website (2007-2009).

• Convene monthly meetings of State Secretaries to discuss Civil Service Re-form and the implementation of the Public Sector Management and Finance Law (2007-2009).

• Develop the role of the GSC as a champion of change to support the public administration management reforms and the application of good governance principles; and establish the GSC as a knowledge centre for public sector re-form and good governance (2007-2010).

Strategic Objective 7.2: To ensure that General Managers are meeting governance requirements and individual civil servants are complying with the Code of Con-duct, especially as day-to-day controls on staffi ng inputs are devolved under the Public Sector Management and Finance Law. Actions• Issue a revised Code of Conduct for civil servants to provide clear information

on the ethical behavior that is expected of them (2007). • Strategically monitor compliance systems in Civil Service organizations (2008

onwards).• Encourage all Civil Service organizations to develop internal grievance pro-

cedures to deal with complaints on personnel decisions, effi ciency, ethics and other issues (2007 onwards).

Key Output Measures: (a) publication of quarterly Civil Service Reform newslet-ters; (b) establishment and operation of the Civil Service Reform website with links from and to government sites of other countries; (c) regularly updated schedule of Civil Service training and technical assistance; (d) central reference library of public sector management reform documents, sector studies and training materials is established.Key Outcome Indicators: (a) adequate understanding and support among key stake-holders; (b) effective implementation of the activities in this Action Plan.

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Prioritization The implementation of the Medium-Term Civil Service Reform Strategy constitutes a substantial body of work and, even though the various activities have been carefully scheduled, it will be necessary to prioritize them carefully throughout the implemen-tation period. The Government Service Council has decided that the following six specifi c activities should be given the highest priority in the current work program in terms of receiving immediate attention:

• Strategic Business Planning• Functional Reviews• Leadership• Selection Procedures for Senior Civil Servants• Performance Agreement and Performance Appraisal/Assessment• Human Resource Management Information System


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Chapter 7: ConclusionMongolia has recognized that its Civil Service needs continuing adjustment and de-velopment to take account of the evolving role of the State, changes in socio-eco-nomic and service delivery needs, and fi scal realities. Specifi c steps have already been taken to strengthen Civil Service effi ciency, accountability and capacity and this process continues. The overall Civil Service reform strategy continues to be under-pinned by three sets of objectives to ensure that:

• The size, structure and remuneration of the Civil Service is consistent with Mongolia’s fi scal position, to maintain macro-economic stability and provide a sound basis for economic growth;

• Staffi ng resources are allocated in a way that is consistent with the government’s strategic priorities, especially to reduce poverty;

• The Civil Service has the skills motivation and institutional arrangements to deliver quality public services, including necessary regulation, effectively and effi ciently within the Government’s policy framework.

A great deal has already been achieved and further improvements in the way in which the Civil Service is organized and managed are currently being implemented or are in prospect. The Medium-Term Civil Service Reform Strategy will strengthen the strategic planning and performance management capacities of State and budgetary organizations; improve human resource management in the Civil Service; ensure the optimal size of the Civil Service; and modernize the remuneration system for civil servants.

Much of this work is being supported by donor organizations. The Government be-lieves that there should be improved co-ordination of donor support for Civil Service capacity building, particularly as regards the provision of technical assistance. In conjunction with major donors, therefore, the Government is reviewing project sup-port arrangements and tasking the Government service Council with the co-ordina-tion of donor support for Civil service capacity building.

All government organizations should be learning organizations and one of the main thrusts of the Civil Service reform program is to ensure that this applies in Mongolia too. Civil servants are responsible for:

• Advising government ministers on policy matters and implementing their deci-sions;

• Making decisions on the basis of the authority that government ministers have delegated to civil servants;

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• Carrying out the day-to-day administration of government ministries and agen-cies; and

• Managing the use of government resources.

As such, the Civil Service has a key role to play in ensuring Mongolia’s economic growth and social development. It must not only be fi t for purpose but also in a state of continuous improvement if it is to meet the changing demands and challenges of the modern world. Civil servants in Mongolia have already demonstrated their will-ingness to adapt to change and to adopt new working arrangements and practices. The Government is confi dent that they will continue to do so in the future in the interests of good government and a desire to meet the needs of their fellow citizens.


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Reference Sources A) Laws

• The Constitution of Mongolia (January 13, 1992);

• Law on the State Great Hural of Mongolia (January 26, 2006);

• Law on the President of Mongolia (June 5, 1993);

• Law on the Government (May 6, 1993);

• Law on Legal Status of Mongolian Ministries (April 15, 2004);

• Law on Legal Status of Governmental Agencies (April 15, 2004);

• Law on Administrative and Territorial Units and their Governance (December

15, 2000);

• Law on Legal Status of the Capital City (July 5, 1994);

• Law on Elections of Aimags, Capital City, Soums, and Districts Citizens’ Rep-

resentatives Hurals (August 27, 1996);

• Law on Constitutional Court (May 8, 1992);

• Law on Courts (December 20, 2002);

• Law on Prosecutor Organization (July 4, 2002);

• Law on Government Service (June 28, 2002);

• Public Sector Management and Finance Law (June 27, 2002);

• Law on Legal Status of Towns and Villages (December 20, 1993);

• Law on State and Local Property (May 27, 1996);

• Law on Central Budget of Mongolia (November 20, 2002);

• Law on Anti-Corruption (July 6, 2006);

• Law on Regional Development Management and Coordination (May 30,

2003).

B) Legislative Acts

• “Mongolian State Policy on Reforming Government Processes and the General System of Structure” (State Great Hural Decree number 38 of May 21, 1996, originals in Mongolian and English);

• “Medium-Term Civil Service Reform Strategy of Mongolia” (State Great Hural Decree number 24 of April 24, 2004, originals in Mongolian and English);

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• “Action Plan for the Implementation of the Medium-Term Civil Service Reform Strategy of Mongolia” (The Government of Mongolia Decree number 186 of July 25, 2007, originals in Mongolian and English);

• “National Development Comprehensive Policy Based on Millennium Develop-ment Goals” (State Great Hural Decree number 12 of January 31, 2007, origi-nals in Mongolian and English).

C) Other Sources

• The Government of Mongolia “Mongolian Management Development Policy”, Ulaanbaatar, 1995 (originals in Mongolian and English);

• “Human Resources Management and Development (Hand-Book)”, Ulaanbaatar, 1996 (originals in Mongolian and English);

• The Government of Mongolia “Good Governance for Human Security Pro-gramme” Policy Document, Ulaanbaatar, 2001 (originals in Mongolian and English);

• The Government of Mongolia “Good Governance for Human Security Pro-gram”, Programme Components Mid-Term Workplan (2001–2004), Ulaan-baatar, 2001 (originals in Mongolian and English).

D) Other Materials

• N.Enhbayar, “Mongolian Government Administration Reform: Theory, Practice, and Further Goals”, “Public Administration” Magazine, Academy of Manage-ment, Ulaanbaatar, 2003, Issues 1 and 2, Pages 4-17 (original in Mongolian);

• Statistical Overview on Government Employees Structure and Movement of Mongolia, Government Service Council, Ulaanbaatar, 2007 (originals in Mon-golian and English).

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