No silver bullet

1
No silver bullet

• Complementary approaches to supporting pastoral
  risk management in Mongolia
• Presentation to the
• China Grassland Conservation Network
• Beijing, January 15, 2007
• Dr. Robin Mearns, World Bank (Vietnam Office)

2
Key trends in post-socialist Mongolia

• Decollectivization post-1991 led to hybridization
  of formal rural institutions and decline in
  herder mobility
• Burden of risk shifted dramatically from
  state/collective institutions to herders
• Pastoral livestock sector performed crucial role
  as an economy-wide safety net
• Net urban-to-rural migration in early-mid 1990s
  led to doubling of herder numbers
• Consecutive dzud episodes over 1999-2002
• Subsequent reversal in net migration patterns
  increased concentration in central region

3
Emergent action-research community of practice

• PALD a collaborative research and training
  project between IDS Sussex (UK) and Mongolian
  research institutions (1991-94)
• Same individuals continued to work together in
  action-research and consulting activities for
  ADB, Danida, FAO, World Bank, etc.
• Key Mongolian researchers trained overseas and/or
  collaborated with foreign researchers
• Founding of Centre for Policy Research (CPR)
• Global Livestock Collaborative Research Support
  Program (GL-CRSP) Gobi Forage
• With long gestation, community of practice has
  evolved into a driving force for progressive
  policy development

4
Theoretical underpinnings

• Non-equilibrium perspectives in range ecology
• Fuzzy boundaries, both of resources and groups
  of resource users
• Common-pool resource management where exclusion
  is difficult
• Beyond the tragedy of the commons
• Sustainable livelihoods approaches
• Economies of scope in collective action

5
Kinship and community

• Example of Oroin-Tovgor bag, Tsetsen-Uul sum,
  Zavkhan
• constructed genealogy of bag using card-sorting
  technique
• almost all 100 households inter-related by blood
  or marriage
• these people know each other!

6
The result...
Those not related to others tended to be among
both richest and poorest
7
Government policy and operational responses

• 1994 and 2002 Land Laws
• A broadly permissive framework for pastoral land
  tenure?
• Persistent ambiguities regarding possibility of
  controlling access/ excluding some users
• National Poverty Alleviation Programme
  (1995-2000) welfarist
• Household Livelihoods Capacity Support Programme
  (2000-date) emphasis on self-help

8
World Bank-supported interventions

• Poverty Alleviation for Vulnerable Groups Project
  (1996-2000)
• Local development funds for basic infrastructure
  provision, revolving loan funds for
  income-generating activities, restocking
  (post-1999)
• Participatory Living Standards Assessment 2000
• Focused attention on risk and vulnerability
• Sustainable Livelihoods Program (Phase 1 2002-07
  Phase 2 2007-11)
• Pastoral risk management (new), local initiative
  funds, micro-finance outreach
• Japan Social Development Fund supporting
  Community Mobilization for Sustainable
  Livelihoods
• Index-Based Livestock Insurance Project
  (2004-date)

9
Conceptual framework for PRM
10
The Mongolia case 1
Index-based livestock insurance
Grazing reserves
Mobility
dzud preparedness/ contingency planning
Restocking
11
Why Insurance?
12
Dundgov aimag in April 2000, following the
worst dzud in living memory
13
Expecting a harsh winter again, following severe
drought during the summer, Tsevel of Saintsagaan
sum, Dundgov, shows the only winter feed she
was able to prepare this summer highly inferior
Caragana sp. (August 5, 2000)
14
Spatial data product example DEPARTURE FROM
AVERAGE VEGETATION INDEX
15
Animals Losses Bad Years Value
Animals
16
Differences in Relative Risk Will Result in
Different Premium Rates
17
Pilot Scheme Layers the Risk

• 100 Mortality
• 30 Mortality
• 10 Mortality

Disaster Relief Program
Base Insurance Product
Retained by Herders and Banks
18
Index-based livestock insurance pilot

• 2006 first sales season
• 10 of herders bought insurance twice the
  target
• lenders already offering lower interest rates to
  herders
• with coverage

19
The Mongolia case 1
Index-based livestock insurance
Grazing reserves
Mobility
dzud preparedness/ contingency planning
Restocking
20
On the move ? otor
Bag meeting ?
21
Restocking beneficiaries Bayarsaikhan and his
son, Gurvanbulag sum, Bayankhongor Naranchimeg
and Sarav of Zag sum, Bayankhongor August 9, 2000
22
The Mongolia case 2
National Council on PRM
Index-based livestock Insurance
Grazing reserves
Water point rehab
Mobility
dzud preparedness/ contingency planning
Public awareness Herder groups
Restocking
23
Pastoral Risk Management Component

• Key Achievements
• Development of pasture mapping and preliminary
  risk contingency planning in all 142 sums
• Rehabilitation of 314 engineered wells providing
  additional water resources and improving access
  to underused pasture
• Rehabilitation and construction of 2 inter-aimag
  otor storage facilities, plus rehabilitation of 8
  engineered wells
• 313 herder NGOs formed with the support of the
  project, of which 123 received loans
• 14 hay and fodder emergency storage facilities
  have been rehabilitated which has doubled the
  amount of hay and tripled the amount of fodder
  stored

24
Pastoral Risk Management Component

• Key Challenges
• Establishing an institutional framework for
  pastoral risk management at national level and in
  the project aimags remains a challenge (and a
  requirement to move to Phase 2)
• For long-term sustainability, the activities
  supported by the project need to be
  institutionalized at all levels within government

25
The Mongolia case 3
National Council on PRM
Index-based livestock Insurance
Microfinance outreach
Grazing reserves
Water point rehab
Value-chain activities? (SLP2)
Mobility
dzud preparedness/ contingency planning
CDD/basic infrastructure
Public awareness Herder groups
Restocking
26
Local Initiatives Fund

• A demand-led window for financing public goods
  provision
• Key Achievements
• Implementation of almost 1,983 sub-projects for a
  total value of US7.2 million
• 61 of sub-projects in education sector
• 30 for improvement of hospital facilities
• 7 for drinking water, bath houses, and other

27
Microfinance Outreach

• Key Achievements
• Wholesale loans to 15 PFIs (commercial banks and
  non-bank FIs) totalling US7 million
• Has resulted in US12 million in on-lending to
  rural people (including re-disbursements)
• Over 22,000 sub-loans disbursed, benefiting an
  estimated 111,000 people (14 of target
  population, exceeding target of 10)
• Repayment rate of sub-loans is 98.2 and 100
  from PFIs to the MDF
• Over 60 of on-lending to sub-borrowers at the
  sum and bag level
• Around 40 of sub-loans to poor households
• Over 40 of sub-loans to first-time borrowers
• 92 of loans used for income-generating activities