Ambitious policies and large amounts of international aid since 2000 have not been able to bring the poverty rate in Mongolia down from the 35 percent recorded in 1995. The latest promise to erase the 15-year-old blot comes in the form of a draft law to reform social welfare programs and allowances. If Parliament approves the law, it will take effect in 2011.

The draft proposes several poverty alleviation measures, wants allowances to reach only those who really need them, and combines different kinds of welfare programs for better implementation.

Fresh standards have been adopted to identify beneficiaries. Single elders, disabled citizens, people who have adopted orphans will receive allowances. Some new allowances will also be introduced.

A new income calculation system will be used to determine poverty. The system will define the economic condition of families based on many things such as whether their house is built of brick or wood. A preliminary estimate places the number of poor families in Mongolia at 100,000 and MNT75 billion has been budgeted for the allowances. It has been proposed that the money will be more effective if it is paid as an annual lump sum, and not a smaller amount every month. Reduction in poverty will also keep crimes down.

Transition allowances are proposed to be given to those who will suddenly find themselves losing previous allowances. Special allowances will be given to those who lose their home following a natural disaster as well as to meet the funeral expenses of elders and the disabled. A survey shows that 2,400 families lose their home each year. The homeless also include the 1,000 or so released prisoners and the around 2,500 people who leave “shelters” because they come of age. All of them will be entitled to receive the allowance.

Thanks to an Asia Development Bank program, the Health Ministry is giving food coupons worth MNT14,000 to extremely poor families. It is also providing additional nutrition to pregnant mothers and under-weight babies.

Despite pious wishes, these reforms will also end up perpetuating poverty, instead of removing it. The Government is meeting short-term needs instead of adopting a sustainable policy to create jobs to make the transition to the middle class.