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“ 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.

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No silver bullet

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
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
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


Theoretical underpinnings
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
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
The result...

Those not related to others tended to be among both richest and poorest


Government policy and operational responses
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’


World bank supported interventions
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)



The mongolia case 1
The Mongolia case: 1

Index-based livestock

insurance

Grazing

reserves

Mobility

dzud preparedness/

contingency

planning

Restocking



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
Spatial data product example: during DEPARTURE FROM AVERAGE VEGETATION INDEX


Animals losses bad years value animals
Animals Losses – Bad Years during Value Animals



Pilot scheme layers the risk
Pilot Scheme Premium Rates Layers the Risk

Disaster Relief Program

100% Mortality

30% Mortality

10% Mortality

Base Insurance Product

Retained by

Herders and Banks


Index based livestock insurance pilot
Index-based livestock insurance pilot Premium Rates

  • 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 11
The Mongolia case: 1 Premium Rates

Index-based livestock

insurance

Grazing

reserves

Mobility

dzud preparedness/

contingency

planning

Restocking


On the move: Premium Rates

◄ otor

Bag meeting ►


Restocking beneficiaries Premium Rates

Bayarsaikhan and his son, Gurvanbulag sum, Bayankhongor;

Naranchimeg and Sarav of Zag sum, Bayankhongor

August 9, 2000


The mongolia case 2
The Mongolia case: 2 Premium Rates

National Council

on PRM

Index-based livestock

Insurance

Grazing

reserves

Water point

rehab

Mobility

dzud preparedness/

contingency

planning

Public awareness

Herder groups

Restocking


Pastoral risk management component
Pastoral Risk Management Component Premium Rates

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-aimagotor 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 component1
Pastoral Risk Management Component Premium Rates

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
The Mongolia case: 3 Premium Rates

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


Local initiatives fund
Local Initiatives Fund Premium Rates

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
Microfinance Outreach Premium Rates

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


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