Mongolia, one of the poorest
countries in Asia, is in the sights of foreign investors looking to cash in on
the landlocked country”s bounty of natural resources, including vast untapped
mineral deposits. Luxury brands including Louis Vuitton and Burberry have
opened boutiques on Ulaanbaatar”s Sukhbaatar Square, which is also home to the
country”s parliament. Hummers and European sports cars are commonly seen on the
pot-holed streets.

But for most of Mongolia”s
2.7 million citizens, poverty is still the reality. And 20 years after
embracing democracy and capitalism, the government is struggling to meet the
increasingly urban population”s social needs, says a report by Agence France
Presse (AFP). More than 40 percent of the country”s total population lives in
the capital city. Thousands of herders have abandoned a traditional nomadic
life in search of economic opportunity, or were driven to Mongolia”s cities
after a devastating winter that killed off much of their livestock.

Munkherdene should be in
high school. Instead the 15-year-old sifts through mountains of garbage each
day at a rubbish tip in Ulaanbaatar, collecting scraps of steel, copper and
plastic. Munkherdene, his widower father and elder sister — who moved into a
traditional ger closer to the dump after his mother died — sell their wares at
the markets. For his toil, the teen makes MNT 3,000, or USD2.30, a day. “I
couldn”t enroll at a new school so it”s easier for me to work at the tip,”
Munkherdene said, explaining that when the family moved they lost their legal
urban registration — and with it the right to education and healthcare.

“Ulaanbaatar”s
population grew from 600,000 in 1989 to 1,000,000 in 2007 and it”s expected to
be 1.3 million in 2025,” UNICEF Deputy Representative Gilles Fagninou
said, adding overcrowding is a major obstacle to poverty alleviation.

Outside the city centre,
almost half of the capital”s population lives in the sprawling ger districts,
with no access to running water, poor sanitation and limited social services.
In parliamentary elections in 2008, both main parties talked about a better
distribution of wealth and promised cash payments of about USD1,150 to each
citizen but those handouts never came, leading to public protests this year in
Ulaanbaatar and the country”s west. About 5,000 marched on the capital in
April.

“We unfortunately don”t
have a professional government. It consists of a bunch of politicians who were not
properly trained,” said Jargalsaikhan, a leading Mongolian economist and
political analyst.

Beyond the problem of the
long-promised one-off handouts, the country”s welfare scheme is woefully
flawed. A UN Development Program report points to a failure in the system —
not only were 89.1 percent of poor households receiving cash welfare payments,
but 72.2 percent of non-poor households were also getting benefits. “Cash
payments solve short-term problems. But what really needs to be looked at is
who is targeted,” said UNICEF”s Fagninou.

Experts say mining revenues
will not necessarily trickle down to those who need them the most. “I
think the expectations are different from the realities,” said Mr. Arshad
Sayed, who completed his term as the World Bank”s country manager for Mongolia
in July. “Several things need to be done to generate employment. One of them
is realizing mining will not generate jobs. We need to look at other industries
where you can add more value, like meat and cashmere,” he said.

For the foreseeable future,
the more than one-third of Mongolia”s people living below the poverty line have
no way out, but have not forsaken their dreams of a better life. Ariunzaya,
just nine years old, cares for her six-year-old sister and three-year-old
brother while her parents work at the rubbish tip. The children eat only twice
a day, as they are not old enough to use the stove unsupervised.

“I want to be a
professional dancer when I get older,” Ariunzaya says, seemingly unfazed
by her plight. She shows off a few moves learned from other children — but her
home has no electricity, so there is no music. Munkherdene meanwhile says he
wants to be a truck driver when he comes of age. “I”ll work here until I”m
old enough to get my license,” he says.