Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized URBAN POVERTY IN

Understanding the Dimensions and Addressing the Challenges CONTENTS

1.0 ACKNOWLEDGEMENTS 07 6.0 INCOME POVERTY IN ULAANBAATAR 20-23 6.1 Levels and Trends 20 EXECUTIVE SUMMARY 08-13 2.0 6.2 Spatial Distribution of Income Poverty 20 2.1 Introduction 08 KEY CHARACTERISTICS OF URBAN POOR 24-41 2.2 Background and Context 08 7.0 IN ULAANBAATAR 2.3 Income Poverty in Ulaanbaatar 10 7.1 Typology of Ger Areas and Relationship to Income Poverty 24 2.4 Multidimensional Poverty 11 7.2 Trends of Growing Unemployment 27 2.5 Vulnerable Groups 12 7.3 Mechanisms that Perpetuate Unemployment 28 2.6 Conclusion 13 MULTIDIMENSIONAL POVERTY 42-49

INTRODUCTION: BACKGROUND AND CONTEXT 14-15 8.0 IN ULAANBAATAR 3.0 8.1 Overview of the Methodology 42 3.1 Poverty Decline in : Strong Start but Faltering Progress 14 8.2 Level and Distribution of Multidimensional Poverty in Ulaanbaatar 45 3.2 Uniquely Urban Nature of Poverty in Mongolia 14 8.3 Understanding the Dimensions of Deprivation 46

AIM OF THE REPORT AND METHODOLOGY 16-17 4.0 THE IMPORTANCE OF NON-MONETARY DIMENSIONS 50-67 4.1 Aim of the Report 16 9.0 9.1 Urban Poor’s Access to Municipal Services 52 4.2 Methodology 16 9.2 Urban Poor are Underserviced in terms of Water Delivery 53 5.0 ULAANBAATAR: UNPRECEDENTED 18-19 9.3 Burden of Lack of Access to Sanitation is Disproportionate for Urban Poor 55 GROWTH OF A PRIMATE CITY 9.4 Lack of Effective Solid Waste Management is an Important Dimension of 56 5.1 Rapid Urbanization has Coincided with Urban Sprawl 18 Multidimensional Deprivation for Urban Poor and Non-Poor LIST OF TABLES AND FIGURES 9.5 Urban Poor Bear Disproportionate Burden of 57 Dysfunctional Health Care System TABLES 9.6 Lower Internet Access among Urban Poor is Likely to 60 Table 1: Urban-Rural national poverty trends: 2010 – 14 Table 2. Regional poverty trends: 2010 - 14 Exclude Them from UB’s e-Governance Initiatives Table 3. District Level poverty Headcount Table 4. Poverty by Household Head's Characteristics, Ulaanbaatar 9.7 Neighborhood Relations in Ger Neighborhoods 61 Table 5. Income by Locality Type Table 6. Labor Force Participation Rate in Ulaanbaatar: 2010-14 9.8 Salience of Alcoholism in Ulaanbaatar’s Neighborhoods 62 Table 7. Distribution of Ulaanbaatar's Population by Household Head's Gender and Linkages with Poverty Table 8. Characteristics of Urban Poor by Quintile (percent) Table 9. Deprivation Line Table 10. Key Hotspots of multidimensional poverty MARGINALIZED GROUPS 68-77 Table 11. Poverty Level & Dimensional Contribution to Overall Poverty by Ger & Non-Ger Areas 10.0 Table 12. Absolute dimensional contribution to multidimensional poverty 68 Table 13. Transitional Probabilities comparing Income versus Multidimensional Poor Individuals based on their 10.1 Rural-Urban Migrants: Not Poor but Vulnerable Income Status – Ulaanbaatar, Mongolia: 2012 71 Table 14: Access to water by quintile 10.2 Challenges Related to Obtaining a Plot in the Fringe Table 15. Access to Improved Sanitation Facilities Table 16. Frequency of garbage collection by Income Quintiles and Location in the City Table 17. Distribution of migrants and non-migrants across residential locations 78-79 11.0 COMMUNITY LIVING IN THE DALAN DAVKHAR CEMETERY Table 18. Determinants of (Log) Income in Ulaanbaatar FIGURES OTHER VULNERABLE GROUPS 80-81 Figure 1. Distribution of the poor by location: 2010-14 Figure 2. Average Poverty Headcount per 12.0 Figure 3. Relative Contribution of Each Dimension to Multidimensional Poverty 12.1 Disabled 80 Figure 4. Poverty headcount and centralized water access Figure 5: Ulaanchuluut landfill site – in the territory of 26th khoroo, Songinokhairkhan district 12.2Street Children 80 Figure 6: Administrative procedures for obtaining urban residency status

12.3 Apartment Entrance Hall Watchmen 80 MAPS Map 1. Poverty Headcount Map 2. Kindergartens within a 30 minute walking time: 2014 CONCLUSION 82-85 Map 3. School Capacity by Khoroo: 2014 13.0 Map 4. Kindergartens within a 40 minute walking time: 2014 13.1 Extend Infrastructure in Line with Urban Population Growth 83 Map 5. Multidimensional Poverty Clustering Map Map 6. Clustering of Income and Multi-deprivation BI-LISA 13.2 Migrant Registration Reform 83 Map 7. Ulaanbaatar Poverty Headcount and School Accessibility Map 8. Access to Sanitation Services 13.3 Develop Mechanisms for Improving Regulatory Oversight and 84 Map 9. Access to Garbage Pickup Map 10. Internet Access in Ulaanbaatar Enforcement Around Corruption Map 11. Perceived Alcoholism within communities Map 12: Dalan Davkhar cemetery – surrounded by 7, 10, 11 and 12, district 14.0 REFERENCES 86 15.0 ANNEX 87-97 7

© 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org 1.0 ACKNOWLEDGEMENTS Some rights reserved This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, The report was authored by Gayatri Singh (Urban Development Specialist, GPSURR) under the AAA on Making denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Cities Inclusive (TTL Judy Baker), with contributions from Gilvan Guedes on multi-dimensional poverty analysis Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World (Professor, Federal University of Minas Gerais) Joseph Mulhausen (Consultant), Battuya Dash (Consultant) and Gauri Bank, all of which are specifically reserved. Gadgil (Consultant). Statistics based on National Household Survey 2014 data was provided by Obert Pimhidzai Rights and Permissions (Economist, GPVDR). Background information on social networks in ger areas was also provided by Sabine Willach (Consultant). The report also benefitted from the overall guidance of Judy Baker, Lead Economist as well as from This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org/ inputs during the initial stages from Meskerem Brhane (Practice Manager, GSU19). The report design and layout licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: was done by Seetha Raghupathy with support from Lu Pang. Arailym Murat has been instrumental in facilitating the Attribution—Please cite the work as follows: Singh, Gayatri. 2017. Urban Poverty In Ulaanbaatar: Understanding the Dimensions translation and editing of the Mongolian version of this report. and Addressing the Challenges. World Bank. Washington DC. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank The team is extremely grateful for the active collaboration from the National Statistical Office (NSO) and the shall not be liable for any content or error in this translation. Master Planning Department (MPD) who provided valuable data inputs. Gayatri Singh also led the survey as Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility well as qualitative data collection. The Mongolia Marketing Consulting Group carried out the household survey of the author or authors of the adaptation and are not endorsed by The World Bank. and focus group discussions. Ethnographic research on vulnerable groups was carried out by Bulgan Enkhbat Third-party content—The World Bank does not necessarily own each component of the content contained within the work. (Consultant). Additional interviews with service providers as well as survey supervision was carried out by Battuya The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with Dash, who also provided invaluable assistance in analyzing FGDs and ethnographic interview recordings. you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. The work was carried out under the guidance of Abhas Jha (Practice Manager), Coralie Gevers (former Country All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. Manager for Mongolia), Mark Lundell (former Sector Manager for Sustainable Development for Mongolia and Document design and layout: Seetha Raghupathy China) and James Anderson (Country Manager, Mongolia). Cover design: Seetha Raghupathy Cover photo: © Gayatri Singh/ World Bank The in-depth insights regarding the mechanisms perpetuating urban poverty, which are critical for understanding Pictures. Further permission required for reuse. and addressing the challenges facing Ulaanbaatar, would not have been possible without the information that was p.9 © Gayatri Singh/ World Bank p. 65 © Gayatri Singh/ World Bank generously shared by residents of the city’s ger areas. The team is deeply indebted to all research participants who p.17 © Chandan Desukar/ World Bank p. 67 © Gayatri Singh/ World Bank p. 19 © Ying Yu/ World Bank p. 72 © Bulgan Enkhbat/ World Bank have made this report possible. p. 21 © Chandan Desukar/ World Bank p. 74 © Bulgan Enkhbat/ World Bank p. 23 © Gayatri Singh/ World Bank p. 76 (Box 12) © Bulgan Enkhbat/ World Bank p. 31 © Khasar Sandag/ World Bank p. 76 © Gayatri Singh/ World Bank p.33 © Gayatri Singh/ World Bank p. 77 © Gayatri Singh/ World Bank p. 36 © Khasar Sandag/ World Bank p. 81 © Gayatri Singh/ World Bank p. 44 © Gayatri Singh/ World Bank p. 82 © Khasar Sandag / World Bank p. 64 © Gayatri Singh/ World Bank p. 85 © Gayatri Singh/ World Bank 9

Urban Poverty in Ulaanbaatar: Executive Summary 2.0 EXECUTIVE SUMMARY

2.1 INTRODUCTION The report takes a mixed methods approach, combining quantitative, qualitative and spatial analyses. Availability Mongolia’s economic growth from 2010 has been of rich spatial data and the use of spatial techniques are unprecedented with GDP peaking at 17.5 percent in 2012 used to create a better understanding of the locational when Mongolia was the fastest growing economy globally. distribution of urban poor and the nature of poor places. This unparalleled growth of the economy was accompanied by an equally impressive decline in poverty by 17 percentage points between 2010 to 2014. However, much of this decline 2.2 BACKGROUND AND was during 2010-2012. From 2012-2014 poverty declined by less than 6 percentage points, partly due to slowing growth CONTEXT and declining foreign direct investment. World Bank (2016) Ulaanbaatar generates 65 percent of the country’s GDP1, estimates raise concerns that poverty reduction is likely to 85 percent of power, and 50 percent of investments. come to a standstill due to the negative welfare impact Ulaanbaatar’s average real GDP growth was around 13.3 of the economic slowdown in 2015, which is expected to percent between 2008 and 2012, compared to the national continue through 2016. During 2015-16, urban poverty was growth rate of 8.8 percent. The expansion of Ulaanbaatar projected to increase, and World Bank estimates suggest has been phenomenal, both in terms of population growth as that approximately 6.5 percent of the urban population may well as its urban extent. Ulaanbaatar’s population (housing have already fallen below the poverty line. 42 percent of the nation’s population) rose from about half a million in 2001 to about 1.2 million in 2011, and is projected to rise to 1.7 million by 2025. Much of this population increase The risks of an impending stall in poverty reduction are has been through rapid rural-urban migration in the last two particularly strong in urban areas that are to almost decades. In 1989, 26.8 percent of Mongolia’s population two-thirds of Mongolia’s population and account for 55.6 lived in Ulaanbaatar; by 2006 that number had risen to 38.1 percent of the poor. Given the trends of rapid urbanization percent; and by the 2010 census, 45 percent of Mongolia’s and growing centrality of cities in Mongolia, this report delves population lived in the capital. deep to examine multiple dimensions of urban poverty and how social groups might differ in their experiences of urban poverty. While urbanization presents an enormous opportunity for promoting prosperity, in Ulaanbaatar, urbanization has coincided with low-density sprawl. Instead of being able to The objective of this report is: leverage the benefits of agglomeration and densification, ++ to carry out an in-depth analysis of the extent, nature Ulaanbaatar is struggling with basic service delivery, and spatial distribution of poverty in the capital city especially for urban poor populations. There are three of Ulaanbaatar, which holds the largest proportion of dynamics responsible for the low-density urban development urban population in the country and serves as the most of Ulaanbaatar’s urban form: important destination for rural-urban migrants, ++ identify sources of vulnerability for poor and excluded populations using a variety of data sources that go ++ The city’s soviet style planning legacy and constitutionally beyond income metrics and highlight the deeply mandated land ownership have led to large-sized multidimensional nature of urban poverty in Ulaanbaatar. urban blocks in the city center with low-rise structures.

1 Asia Foundation 2015 estimate: https://asiafoundation.org/resources/pdfs/EconomicDevelopmentMongolia.pdf 10 11

Urban Poverty in Ulaanbaatar: Executive Summary

Mongolian citizens registered who live in Ulaanbaatar household heads, or those dependent on social transfers In Ulaanbaatar, the labor force participation rate steadily employed small-scale traders and vendors also identified are entitled to a free plot of land of up to 700m2 in the and private sector wages. increased for both men and women between 2010 and corruption when attempting to obtain permits to carry fringes and between 400-550m2 in the city center. 2014, However, between 2012 and 2014 the unemployment out their businesses in authorized market spaces. TYPOLOGY OF GER AREAS AND RELATIONSHIP ++ The city has not adequately planned for growth in rate for women almost doubled, signaling that there are ++ Education: Among poor households 68 percent are TO INCOME POVERTY its population, with considerable gaps in availability not sufficient jobs to absorb the increasing number of headed by someone with upper secondary education of affordable housing stock closer to the city center The city classifies Ger areas by three zones, central, mid- women entering the labor force. Unemployment for men in or lower. Only 8 percent are headed by someone with leading to considerable urban sprawl. tier (middle) and fringe based on their location, connectivity Ulaanbaatar also increased slightly. While unemployment higher education. Access to quality education is a ++ The rapid pace of rural-urban migration since the early to engineering networks and housing types. Within the declined overall from 2010 to 2014, some of the gains made key input into the development of human capability 2000s has interacted with the first two conditions and official classification, Central ger areas, where connection between 2010 and 2012 are being reversed. Mechanisms and determines the extent of inter-generational spurred outward growth of the city in its peripheries. for centralized engineering networks is feasible, will be perpetuating unemployment include: disadvantage transferred. An examination of the spatial redeveloped with high-rise and mid-rise buildings. Mid- distribution of schools in Ulaanbaatar highlights the tier ger areas are planned for redevelopment with low-rise inequality of physical access to schools for children from ++ Age and gender bias: Both men and women over The outcome is a patchwork of plots occupied with detached and mid-rise buildings and will be connected to partial urban poor households living in ger areas. 40 report that strict age requirements constrain their single-unit leading to low residential density. Such engineering networks. Redevelopment for Fringe ger opportunities for employment. Men report this bias residential neighborhoods have come to be known as ‘ger areas is planned in phases via land readjustment schemes more in manual labor jobs and link it to perceptions areas’, which are a unique feature of Ulaanbaatar’s urban with onsite networks. “Non-ger areas” typically contain of preference for Chinese workers. For women, 2.4 MULTIDIMENSIONAL landscape. Ger areas, particularly at the periphery, have apartment buildings with some single-home plots and ger the age bias has a gendered dimension as well. become home to many urban poor, whose income poverty structures mixed in. POVERTY Prospective employers demonstrate negative attitudes is worsened by the severe lack of basic services and towards women with children, who are perceived as Conditions in ger areas have meant that the urban poor infrastructure provision in these neighborhoods. unemployable due to their child rearing roles. not only suffer from income poverty but are also adversely There is a clear spatial dimension to the distribution of ++ affected by multiple deprivations due to lack of basic urban poor in Ulaanbaatar across its districts and khoroos. Constraints posed by childcare: Analysis of khoroo services and infrastructure. Focusing solely on income More than half of the urban poor report living in gers (57.5 household registry data shows that public kindergarten poverty rather than multidimensional poverty provides an 2.3 INCOME POVERTY IN percent), compared to less than 1 percent who report living facilities are able to accommodate only 30 percent of incomplete measure of the living conditions faced by the in apartments. However, only 38 percent of people living in children eligible for enrollment. Lack of affordable child ULAANBAATAR urban poor. Identifying additional deprivations is relevant ger areas are poor and poor households seem to be evenly care options are an important constraint on women’s Ulaanbaatar is home to approximately 33 percent of from a policy perspective to enable the design of meaningful spread out across the three classifications of ger areas. access to the job market. In the absence of strong family Mongolia’s poor population, with approximately 16 percent social and economic policies. Poverty is not concentrated solely in the fringe ger areas, support systems, particularly in migrant households, of the city’s households below the poverty line. Given the though the poverty headcount is positively correlated with women must stay at home to take care of children. greater shares of populat