By Naranzul B
Changes in Mongolia’s political and economic systems have exacerbated income and social inequality. This, in turn, has excluded a large percentage of the population from benefiting from economic growth. One of the ways out of this situation, or to reduce poverty, eliminate inequality, and contribute to economic growth, is skills development. Skills development prevents social exclusion and contributes to the development of human capital development.
Policy Issue
The growth path of Mongolia aspiring to go beyond a resources-driven middle-income trap and strengthen advanced skills and education systems in order to move up global value chains and it requires that the manufacturing base move from a low-technology, low-skills model to a higher-technology, higher-skills model. According to the ADB report on “Role of TVET in Skills Development” in 2015, TVET emerged as formal postsecondary educational institutions during the 1960s in countries such as Australia, Canada, France, Japan, Norway, Thailand, the UK, and the US. As a result, the mandates of TVET lead to expanding the stock of human capital and thereby facilitated economic advance. The key to transitioning to greater value-added processing in the manufacturing sector is shifting the composition of the national skillset toward one in which higher-skills predominate. However, the vocational education and training sector in Mongolia does not have the quantitative or qualitative capacity to meet the industry’s and society’s current and future demands for vocationally-oriented training for skilled workers. Mongolia also suffers from youth underemployment especially among less-educated populations, and it has the potential to create significant social unrest and perpetuate poverty.
Briefly about the TVET (Technical and Vocational Education and Training)
The negative results of insufficient vocational training are that Mongolian employees are not able to participate sufficiently in creating value in the many important sector such as industrial, construction, mineral resource, and service sector due to their lack of expertise.
Only around 40% of the population are employed in the formal sector of the economy and around 30% of the population have to live on an income below the poverty line.
While the need for skilled specialists is met by recruiting staff from abroad, many young Mongolians are working as unskilled labourers in developed Asian economies (especially South Korea). The lack of skilled workers in Mongolia has recently led to a substantial increase in salaries for well-trained workers and to a loss in added value in the Mongolian economy.
The first Vocational Education and Training Center was opened in 1921 and the number of institutions grew from 46 to 60 in 1960- 1990, however, since 1990 the sector has down and institution numbers decreased to 31 due to the social and economic transformation. However, due to recent government attention to the sector’s development, as of 2015, TVET increased to 81 (49 state, 32 private and some colleges specialize in particular fields such as art and design, catering, technology and engineering), 4520 teachers and employees, and offer 2-3-year programs leading to an associate’s degree in 193 a broad range of vocational areas with an average of about 20,000 professional workers graduates per year. In recent years, enrollments and graduates’ employment have been increasing due to the reputation of vocational education growing. For example, the employment rate for graduates in 2015 has increased from 41.5 to 62.4% compared to 2009. As of 2015-2016, the majority of TVET students (82.9%) are vocational education and 15.6% are studying technical education.
Also, the Government of Mongolia developed a Master Plan to Develop Education of Mongolia in 2016-2021 and Vision 2050 a policy document that has the potential to reform the vocational education and training sector.
Not only to mention above policy documents, but the government has also made a commitment to improving the relevance and quality of vocational training that is available and to creating the necessary conditions to achieve this. With this in mind, the vocational training law has been repeatedly reformed in recent years, and the proportion of practical training in vocational colleges has been increased to over 50%. According to the law, quotas on the number of skilled Mongolians that companies must employ (usually 90%) were also introduced to restrict recruitment of foreign workers and encourage industry to invest in training Mongolian specialists. National and international companies are also increasingly providing in-company training to Mongolian workers in limited numbers.
Meanwhile, government attention to the sector, some international organizations and donor countries have also been involved in reforming the TVET system in Mongolia. For example: Australian Department of Foreign Affairs and Trade (DFAT), German Federal Ministry for Economic Cooperation and Development, and Swiss Development Agency (SDC) co-financed the establishment of Cooperative Vocational Training in the Mineral Resource Sector at Umnugobi Polytechnic College in South Gobi. The project was implemented between 2013 – 2019.
Furthermore, the GIZ, DFAT and Korean International Cooperation Agency (KOICA) are co-financing a project to support the Ministry of Labour and Social Protection in the sustainable development of 7 TVET Capacity Development Centres (CDCs) and related framework in all regions throughout Mongolia. The project will be implemented between 2019-2022.
Problems in the TVET Sector and Their Causes
Despite the above-mentioned developments, Mongolia’s vocational education system has not evolved to serve the demands of a modern, private-sector-led economy and does not have sufficient financial, human resources or educational base to practice. Essential partnerships between the government and business to ensure that students receive high quality, demand-driven training are largely absent, and credentialing systems are substandard. As a result, Mongolia tends to import skilled labour from other countries, and it exaggerates high rates of unemployment and poverty.
TVET graduates’ skills are highly dependent on the program, teacher’s skills, training environment, and practice. In order to meet the needs of employers, to start small and medium-sized enterprises, to make more innovations, and the ability to replace foreign workers we need to advance TVET colleges and provide high-level (or world standard) trainings to students. Mongolian TVET colleges are not only expected to teach skills relevant to the global perspectives, and equipped with most up to date curriculum and training equipment but also to facilitate learning in countries and cultural contexts outside the home country.
In addition, Mongolia needs to diversify its economy to facilitate stronger, more sustainable economic and employment growth and concurrently, equip its workforce with a variety of advanced skill sets that meet employer needs and competitive in the region.
About Naranzul
Ms. Naranzul Bayasgalan is an advisor at the Zorig Foundation. From 2013 to 2017 she served as a Second Secretary at the Embassy of Mongolia to India and is responsible for Commercial Affairs. Prior to joining the diplomatic service, she was a Green Development Policy Advisor to the Minister of Environment and Green Development, and a Community Relations Manager at the Petro Matad Limited Company. Ms. Bayasgalan also worked as an Executive Director of the Zorig Foundation, whose main mission is to advance the formation of a democratic society and support political reforms in Mongolia. She has also served as a senior staff assistant to a Member of the Parliament of Mongolia. Ms. Bayasgalan holds an MA in Diplomacy, Law, and Business from the Jindal Global University in India (2017), an MA in Asia Pacific Policy Studies from the University of British Columbia in Canada (2010), and an MS and BA in Structural Engineering from the Mongolian University of Science and Technology (2000).
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