The FINANCIAL — Rural residents in Mongolia will benefit from a $34.1 million program funded by World Bank and Swiss Agency for Development and Cooperation (SDC) that aims to make the government funding process more transparent and more responsive to community needs.
The program, the third phase of the Sustainable Livelihoods Project, was officially launched on September 17 in Ulaanbaatar with a workshop organized by the Ministry of Finance and the World Bank. The three-year program aims to help Mongolia implement the 2011 budget law, which gives rural communities a greater role in the government funding process.
“The project will empower rural communities by providing a transparent mechanism for funding to be transferred to support local development initiatives,” said James Anderson, World Bank Country Manager for Mongolia.
The program will build on the success of the first two phases of the project, which have helped set up community development funds financing more than 6,000 projects, mostly investing in education and health. It will build local government’s capacity for financing investments in infrastructure and services. Based on the budget law, funding allocations are decided each year through robust community participation, according to the World Bank.
“The Sustainable Livelihood Project has played an important role in developing rural areas in Mongolia through community participation. The Government of Mongolia and World Bank have worked together since 2002 to implement the project and increase the flow of public and private investment to herders’ communities,” said Kh. Gantsogt, State Secretary of the Ministry of Finance.
The project will also support local economic development by promoting investments for private sector growth in the more than 300 soums – or local administrative districts – throughout the country.
It will focus on financing based on governance performance, which awards additional funding for local development investments to local government entities that adopt participatory processes to reflect local needs and priorities in their planning, budgeting, implementation, monitoring and evaluation processes.
“The new phase of the project will ensure that the budget available at local level, especially Local Development Funds, will be managed and used effectively and efficiently, responding to the needs of local people. Strengthening capacities of local governments in rural areas will be key to achieving this goal,” said Markus Waldvogel, Director of Cooperation of Swiss Agency for Development and Cooperation.
The program is funded with a $22.7 million credit from the International Development Association (IDA), the Bank’s fund for the low-income countries and a $11.4 million grant from the Swiss Agency for Development and Cooperation.