Economic transition in Mongolia, started in 1991, has had far-reaching effects on Mongolian society. At its height, Soviet assistance (mostly in the form of subsidies) had totalled USD 900 million, or 30 per cent of Mongolia's GDP. The Government adopted a "shock therapy" approach to privatisation in an attempt to achieve a market economy as quickly as possible to lessen the hardship to its citizens. With the withdrawal of Soviet support, and drastic privatisation policies, GDP dropped severely, hitting a low of -9.5 in 1992. Privatisation proved to be relatively successful, by 1999 the private sector accounted for 64 per cent of enterprises, and GDP had risen to 3 per cent, from a high in 1995 of 6.3.

Like other transitional economies, Mongolia is experiencing increased poverty, virtually non-existent during the many years of Soviet influence. Nearly 36.3 per cent of the population live below the national poverty line of US$17 a month. Of these, about 18 per cent are destitute with monthly incomes below US$10. Poverty is marginally more severe in urban areas.

Mongolia's economy is based on just two sectors - minerals, particularly copper, and livestock. Two thirds of the countr's total population of 2.5 million live outside the capital, with the main occupation in the countryside being herding and livestock trading. In rural areas, privatisation of herds has led to greater rural income inequality and marginalisation of small herders.

Mongolia is currently experiencing an environmental crisis called a dzud. This condition has been created through a combination of a drought in the summers of 1999 and 2000, with extremely cold winters in between. There has been a massive death of livestock B over 1.4 million have been recorded as perished out of the 33.5 million in the country. The actual numbers are likely to be higher. Livestock is the sole source of income for most herders, and this loss has affected 500,000 people (20% of the total population). The effects of the disaster, however, will extend to the cities as former herders will move to the cities, especially Ulaanbaatar, further saturating the labour market.

For all the economic instability of the country, the political situation has become relatively stable, and democracy is strongly supported. The communist Mongolian People's Revolutionary Party ruled the country without any competition through the Soviet period. With the end of Soviet influence, grass-root pressure and protest forced the Government to accept more democratic practices, with the newly formed opposition, the Democratic Coalition, taking power in 1996. This coalition, however, never proved to be solid, and the now formerly communist MPRP regained control in elections held during the summer of 2000.

In August 2000, the new MPRP Government created a new ministry, the Ministry of Social Welfare and Labour, establishing a labour-focussed ministry for the first time in five years. Mr. S. Batbayar serves as minister, and Ms. T. Gerelgua, Deputy Head of the International Relations Division, has overall responsibility for ILO activities for the government. The development of this ministry will be a step forward in the cooperation between the ILO and the Government of Mongolia as an absence of a line ministry or even department dealing with labour issues had hindered work in the country.

The Confederation of Mongolian Trade Unions (CMTU) was established in 1927, and newly re-established in 1992. The Membership became voluntary in 1990. The Confederation covers 18 aimags and three cities, and is an umbrella organisation for 12 independent trade unions with approximately 430,000 members. Its main goal is to support the transition to a market economy and a democratic society. The President of CMTU is Mr. G. Adiya, while Mr. Z. Sukhbaatar, Assistant President for International Relations, is the focal point for ILO activities.

The Mongolian Employers' Federation (MONEF, formerly MEA) was established in 1990 with some 4,000 members and now has approximately 6,500 members. It deals with all matters related to the interests of the employers in collaboration with the Government/Parliament as well as CMTU. The Federation has actively assisted in the drafting of laws such as the Labour Law, Tax Law, Business Law for economic entities, Customs Law and Law on Collective Disputes. Mr. L. Nyamsambuu is President, while Mr. Kh. Ganbaatar, Acting Executive Director, is responsible for relations with the ILO.

A tripartite meeting was held November 2000 to reevaluate cooperation priorities. It was decided after discussion that the priorities would be:

• employment promotion, especially SME and the informal sector
• industrial relations, including collective bargaining, working conditions and remuneration policies

An IPEC Memorandum of Understanding was signed in May 1999, and the IPEC office started work the following November. The programme is currently running smoothly with a fully participating National Steering Committee. ILO/IPEC Mongolia focuses on the following five points in its strategy to combat child labour: capacity building, advocacy and awareness raising, direct action for working children and their families, improving working conditions as a transitional measure, and reproducing successful projects.

Fundamental Conventions Nos. 87, 98, 100 and 111 have already been ratified. Government consultations are taking place as regards ratification of Conventions No. 29 and 105. Convention 182 was ratified by the Great Kural (Parliament) during the Autumn Session, 2000 (ratification registered on 26 February 2001). Out of the eight core conventions, this leaves only one (C. 138) where further ILO assistance will be required to facilitate ratification. It should be noted that Conventions No. 155; Occupational Safety and Health Convention, 1981 and No. 159; Vocational Rehabilitation and Employment (Disabled Persons), 1983, were ratified in 1998.

Although workers and employers are now fully independent from the government, further ILO assistance will be necessary to ensure effective tripartism, particularly in view of the long history of the trade unions under the socialist regime and the more recent emergence of employers' organisations in the wake of democratic transition.

The ILO, together with the UNDP, is planning a high level seminar on employment, now scheduled for September 2001. This conference is to address employment issues in Mongolia and identify the priorities for the coming years.