Transcript No silver bullet” “ Complementary approaches to supporting pastoral risk management in Mongolia

“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)
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
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 actionresearch 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
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
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!
The result...
Those not related to others tended to be among both richest and poorest
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 (19952000): ‘welfarist’
• Household Livelihoods Capacity Support
Programme (2000-date): emphasis on ‘self-help’
World Bank-supported
interventions
• Poverty Alleviation for Vulnerable Groups Project (19962000)
– 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, microfinance outreach
– Japan Social Development Fund supporting ‘Community
Mobilization for Sustainable Livelihoods’
• Index-Based Livestock Insurance Project (2004-date)
Conceptual framework for PRM
Strategies ►
Levels of
intervention
▼
National
Sub-national
(‘meso’)
Community
Disaster
General risk Diversification
management management
& market
access
(land, NRM
etc.)
The Mongolia case: 1
Strategies ►
Levels of
intervention
▼
National
Sub-national
(‘meso’)
Community
Disaster
General risk Diversification
management management
& market
access
(land, NRM
etc.)
Index-based livestock
insurance
Grazing
reserves
Mobility
dzud preparedness/
contingency
Restocking
planning
Why Insurance?
Livestock losses in Mongolia
% 2002 GDP year % livestock value
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Dundgov’ aimag in April
2000, following the worst
dzud in living memory
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)
Spatial data product example:
DEPARTURE FROM AVERAGE VEGETATION
INDEX
Animals Losses – Bad Years
Value Animals
2001
25%
17%
2000
15%
12%
2002
11%
13%
1977
8%
9%
2003
7%
5%
1993
7%
6%
1983
7%
7%
1980
7%
6%
Differences in Relative Risk Will Result in
Different Premium Rates
Pilot Scheme
Layers the Risk
100% Mortality
Disaster Relief Program
30% Mortality
Base Insurance Product
Retained by
Herders and Banks
10% Mortality
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
The Mongolia case: 1
Strategies ►
Levels of
intervention
▼
National
Sub-national
(‘meso’)
Community
Disaster
General risk Diversification
management management
& market
access
(land, NRM
etc.)
Index-based livestock
insurance
Grazing
reserves
Mobility
dzud preparedness/
contingency
Restocking
planning
On the move:
◄ otor
Bag meeting ►
Restocking beneficiaries
Bayarsaikhan and his son, Gurvanbulag sum, Bayankhongor;
Naranchimeg and Sarav of Zag sum, Bayankhongor
August 9, 2000
The Mongolia case: 2
Strategies ►
Levels of
intervention
▼
National
Disaster
General risk Diversification
management management
& market
access
(land, NRM
etc.)
National Council
Index-based livestock
Insurance
on PRM
Meso
Grazing
reserves
Water point
rehab
Mobility
Community
Restocking
dzud preparedness/
contingency
planning
Public awareness
Herder groups
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
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
The Mongolia case: 3
Strategies ►
Levels of
intervention
▼
National
Disaster
General risk Diversification
management management
& market
access
(land, NRM
etc.)
Index-based livestock National Council
on PRM
Insurance
Meso
Grazing
reserves
Water point
rehab
Microfinance
outreach
Value-chain
activities?
(SLP2)
Mobility
Community
Restocking
dzud preparedness/
contingency
Public
planning
awareness‘CDD’/basic
Herder groups infrastructure
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 US$7.2 million
 61% of sub-projects in education sector
 30% for improvement of hospital facilities
 7% for drinking water, bath houses, and other
Microfinance Outreach
Key Achievements
 Wholesale loans to 15 PFIs (commercial banks and non-bank FIs)
totalling US$7 million
 Has resulted in US$12 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