How has MONEF renovated its services offer and policy work to promote transition to the formal economy in Mongolia?In 2014 MONEF collaborated with the ILO to produce a set of findings and recommendations on policy directions to promote the formalization of enterprises in Mongolia. While recognizing many of the policy measures and recommendations remain relevant but unimplemented, MONEF felt that the pace and scale of change in the world of work needed to be taken into account and an agreement was reached to collaborate with the ILO on an updated report. It was at this point in time that the first impacts of COVID-19 began to be felt. Like other countries in the region, Mongolia faced a series of local outbreaks and the closure of borders and disruption to global trade put many businesses under severe strain with cascading effects throughout all sectors of the economy, including informal business units. As a result plans to update the research were put on hold while MONEF focused on policy work related to Mongolia’s COVID-19 Response and Recovery and providing related assistance to member companies. In 2021, work then began to design a targeted service offer for micro and small enterprises within our membership and those in the informal economy. The new service focuses on deployment of the ILOs IN BUSINESS programme, deploying tailored tools on core competency areas for business development and enterprise financial management. While this renovation of our service offer was underway, MONEF then invested in customization of the ITC-ILO CRM software to prepare for a more professional approach to membership engagement and marketing of services.
How has COVID-19 impacted the informal economy?One of the most impacted groups in Mongolia has been sole operators and micro and small business units in the informal economy. Many of these business units were already operating without savings or viable options for income replacement and there were gaps in Mongolia’s COVID-19 Response and Recovery measures meaning many were ineligible for assistance. For this group, being forced to close for extended periods proved to be too much and many businesses have collapsed. At the same time, as the economy has retracted and jobs have been lost in the formal economy, so we have also seen an expansion of the informal economy as individuals try to find any way of generating a livelihood.
What role does the CRM play in MONEFs strategy and approach to organizing business units in the informal economy and marketing services and assistance to this group?Digitalization of our operations and services is a priority for MONEF and the COVID-19 crisis has reinforced the importance of this. The CRM is central to our strategy to adopt more digitalization. The CRM, which we have customized, allows MONEF to monitor the status of our membership in real time and extract insights to inform the way we target different membership segments with services and in our outreach. While the standard CRM database is structured around a member and potential member list, one of the customizations we introduced was to include a separate list for business units in the informal economy. Having this segmented list allows MONEF to build a clearer picture of the status of these business units, our engagement with them, and their uptake of services and assistance over time. We can use the CRM to distribute tailored communications to this group and to conduct surveys among them. And this process of registering informal business units in our CRM is a useful activity to begin organizing these businesses. But our success with the CRM has not been just a matter of installing the software, more critical has been the changes we made to how we manage our work and team and some of the business processes we follow.
By Wade Bromley, Senior Specialist for Employers Activities, ILO DWT for East and Southeast Asia and the Pacific