Support to Employment Creation in Mongolia (SECIM)

1. Support to Employment Creation in Mongolia (SECIM)

2. BASIC INFORMATION (1 page/slide) 1) Title: Support to Employment Creation in Mongolia (SECIM) 2) Overall Strategic Goals: Is to contribute to an inclusive economic growth and to contribute to alleviate income inequality through support for diversification of the economy thus increasing employment opportunities and reducing currently growing social and regional imbalances. 3) Target Stakeholder/s: Main beneficiaries includes the rural people and Farmers from agriculture subsectors (livestock husbandry and crop). Women and Youth will benefit through the promotion of employment and income-generating activities. The Government of Mongolia and the country as a whole will benefit regarding safe food processing and better food supply. 4) Origin of Proposal:Ministry of Industry and Agriculture (MoIA) 5) Budget and Proposed Funding Sources: EU Commission: EUR 4,150,000 FAO (co-funding support): USD 200,000 UNIDO (in kind contribution): EUR 150,000 6) Duration: 4 years

3. SITUATION ANALYSIS (max 2 pages/slides) 7) Problem/s Assessment: The agriculture sector plays a major role in the economy of Mongolia. Livestock husbandry and crop production are the main agricultural subsectors. The animal husbandry sector accounts for almost 10% of the total export earnings in Mongolia, constituting about 80% of total agricultural production and employing 35% of the country’s total labourforce. With 25% of the population living below the poverty line, and one third of the youth unemployed and underqualified, the creation of employment opportunities and improvement of livelihoods is a high priority of the Government. In the agriculture sector, key factors continue to hinder development of the country’s agri-sector: chief among these are infrastructural problems that hinders movement of goods to markets; lack of coherent government policy-making and capacity to drive the sector forward in a systematic way. The sector has other inherent problems to be addressed, among which: A small proportion of Agricultural products are currently processed or find their way into diversified higher value products; Few producers have agreements to supply commodities to either processors or markets; Poor linkages between stakeholders who participate in the value chain; Producers can only access relatively short term loans for working capital; An erratic supply of home grown products encourages the entry of outside products to meet demand; The application of higher quality standards of production and hygiene is seriously lacking in many of Mongolia’s markets. Against this background, FAO and UNIDO were invited by the European Union to jointly formulate and implement a project to support employment creation in Mongolia (SECiM). The objective of the intervention is to assist the country to establish a well-functioning labour market capable of supporting a dynamic, diversified economy, while ensuring competitiveness and sustained economic and employment growth and to implement a strategic approach for employment, addressing its specific employment challenges in line with international policies and best practices.

4. SITUATION ANALYSIS (max 2 pages/slides) 8) Identified Solutions: Mongolia wishes to strengthen the governance of its employment policy and promote employment generation in a diversified economy. Agriculture and Rural Development are major sectors, offering indeed opportunities and development potentials. Taking into account that many people working in agriculture are members of poor households, the relationship between job creation, employment, private sector development and trade is pivotal for the diversification of Mongolia's economy. The intervention to be financed by the European Union aims to assist the country in its efforts to establish a well-functioning labour market capable of supporting a dynamic diversified economy while ensuring competitiveness and sustained economic and employment growth, and to implement a strategic approach for employment addressing its specific employment challenges in line with international policies and practices. The Action delivers its support through two components acting on both sides of the employment: 1) the national regulatory framework through a support to the implementation of the National Employment Policy, to improve labour market policy and to have labour standards in line with international standards, and promote decent employment; and 2) on the employment creation side, through a value chain approach, addressing the needs all actors committed to one or two (non-mining) sectors having a high potential for job creation in term of quantity and quality, with a focus on poor households. 9) Counterpart Absorptive Capacity Assessment: Ministry of Industry and Agriculture (MoIA): Ministry faces capacity constraints, in terms of number and expertise of their personnel. It requires extensive technical assistance and capacity building support, especially to develop policies and legislation and to design and/or implement respective strategies linked to employment creation, aiming at mainstreaming employment in other development policies.

5. PROJECT/PROGRAMME DRAFT LOGFRAME (max 2 pages/slides) 10) Logframe

6. MANAGEMENT & SUSTAINABILITY (1 page/slide) 11) Organization of Project/Programme Management: Following on initial in-country policy level discussions, FAO was confirmed as the leader of the "Delegation Agreement" with the EU, which will include UNIDO. The project would, therefore, be anchored in FAO Mongolia. FAO and UNIDO would jointly develop an implementation strategy. As the lead implementing agency, FAO will be vested with the overall responsibility for implementing the project. An Interagency Agreement (IAA) will regulate the internal relations from drafting the ground rules, to managing initiated meetings (by any of the parties) including addressing cross cutting concerns. Each institution shall be in charge of their respective component activities as reflected in Table 1. Cross component updates and sharing of insights will be undertaken through regular meetings, to keep track of activities and progress. The establishment of a pool of experts enabled to spread acquired know how to other provinces of the country will build the backbone for replication and sustainability. The linkage to the pool of experts developed in previous projects implemented by FAO and UNIDO in the country will create the necessary embedding of the experts in an existing structure. 12) Sustainability & Upscaling: The project is based on the principle of ownership by the counterparts and beneficiaries since a demand (and not supply) driven approach has proven successful in many countries, especially in the previous projects implemented by FAO and UNIDO in Mongolia itself. Careful consideration will have been given in selecting the project areas and the project counterparts. The local authorities and farm management are made aware that sustainable and more efficient use of raw material produced locally will bring an advantage in the mid to long-term. The additional capacities and capabilities acquired from the project will enable them to improve their operation.