Formalization

ILO launched a new project to promote transition to formality in Mongolia

On 27 September 2023, the International Labour Organization (ILO) launched the Formalization of the Informal Economy Project in Mongolia. The project will provide technical assistance to the tripartite constituents of Mongolia in implementing an integrated approach to formalization.

Mongolia has a large number of micro, small, and medium enterprises, some of which are operating in the most dynamic sectors of the economy in Mongolia. 82.1 percent of enterprises have up to 9 employees. Many of these workers work informally, without employment contracts or social protection.

Changhee Lee, Director of ILO CO-Beijing
“The project will focus on fostering the transition to the formality of informal workers and economic establishments in Mongolia by taking a multi-pronged integrated approach to tackle the challenges of the high level of informality. The high prevalence of informality is a challenge to many countries, including Mongolia and the Asia-Pacific region” said Changhee Lee, ILO Country Director for China and Mongolia.

Under the project, the integrated approach will bring together 1) formalization of enterprises, 2) extension of social security and 3) e-formality. Through this initiative, the project also seeks to facilitate progressive transitions from informality to formality by using digital technologies. As well as technical assistance will be provided to the Government to provide adequate employment relations, occupational safety, and health services to support the transition to formality.

Gankhuu Enkhtuya, State Secretary, MLSP
“The COVID-19 pandemic has had a negative impact on our economy, leading to an increase in informal workers. To address this issue, transitioning from the informal to the formal economy is crucial. In order to achieve the goals outlined in the Government's development policies, we need to establish a formalization policy, establish priorities and objectives, and involve all relevant stakeholders. We are very grateful to the ILO for implementing this project and providing technical assistance to tripartite constituents.” said Ms Gankhuu Enkhtuya, State Secretary of the Ministry of labour and Social Protection of Mongolia.

Mr Ganbaatar Khuyag, Executive director of Mongolian Employers' Federation and Mr Zolbayar Sundui representing the Confederation of Mongolian Trade Unions have expressed their commitments to support to employers and workers in the informal economy in their transition to formalization.