From Relief to Resilience: Reforming Social Protection in Climate-Stressed Mongolia

A new World Bank report produced in collaboration with the Potsdam Institute for Climate Impact Research, UNICEF, and Mongolia’s Ministry of Family, Labor, and Social Protection shines a spotlight on Mongolia’s deepening climate crisis and the urgent need for a more adaptive social protection system. Titled "Assessing the Adaptability of Social Protection and Enhancing Herder Resilience Against Climate Shocks in Mongolia," the report focuses on the devastating impacts of dzud, a recurring climate phenomenon unique to Mongolia where summer droughts are followed by unusually harsh winters that cause widespread livestock deaths. These disasters, now more frequent due to climate change, threaten not only livelihoods but the cultural identity of Mongolia’s herding communities. As pastures degrade and weather patterns become more extreme, even modest gains in rural poverty reduction risk are being reversed.

Herders, who make up over 20 percent of Mongolia’s population and more than half of its rural residents, are especially exposed. Although many herder households have diversified income sources and benefited from improved market access, more than a quarter remain poor. Their deep reliance on livestock for food, income, and wealth accumulation leaves them susceptible to shocks from both nature and market volatility. According to the report, dzuds have increased in frequency from once every eight years to nearly once every three or four years in some regions, with accompanying droughts threatening hay and water availability. With climate models forecasting even more extreme conditions, the need for a proactive, integrated, and shock-responsive system has never been more pressing.

Progress and Pitfalls in Mongolia’s Social Protection System

Mongolia has taken bold steps toward building a resilient social safety net. Its rapid and inclusive COVID-19 response, which saw vertically expanded benefits under the Child Money Program (CMP) and Food Support Program (FSP), showcased the government's ability to mobilize quickly in a time of crisis. Cash transfers were distributed using Mongolia’s robust digital infrastructure, including the E-Mongolia and E-Welfare platforms, which now deliver 80 percent of all social benefits. The success of these platforms highlights the country’s growing digital capacity, which could be pivotal in managing future shocks.

However, the report highlights important gaps. While vertical expansion, providing more to those already in the system, is relatively strong, horizontal expansion remains weak. The FSP, Mongolia’s only means-tested program, covers fewer than five percent of households, severely limiting its use in crisis response. In practice, this means newly poor or vulnerable households, such as those hit by a dzud, are often excluded. The report calls attention to outdated or fragmented data systems, such as the Household Information Database (HID) and the newer Integrated Household Administrative Database (IHAD), both of which lack real-time updating and are not fully interoperable with one another or with sectoral databases like livestock registration.

Dzud: A Recurring Catastrophe for Herders

Dzuds are more than natural disasters; they are socioeconomic emergencies. Herders often have three coping strategies: sell livestock, buy fodder, or relocate. However, all three are constrained. Feed prices skyrocket during harsh winters, livestock markets become saturated, and nomadic mobility is increasingly restricted by land degradation and overgrazing. While government efforts such as NEMA’s emergency fodder distribution and the Livestock Restocking Program (LRP) offer some relief, they lack precise targeting mechanisms and tend to favor better-resourced households. The report warns that unless these programs are refined, they risk reinforcing inequality rather than alleviating it.

On the insurance front, the Index-Based Livestock Insurance (IBLI) scheme is underperforming. Though innovative in concept, it suffers from low participation due to cost barriers and complex payout criteria. For poorer herders, it offers little protection. Meanwhile, distress migration from rural areas continues as a hidden consequence of dzud, fueling urban sprawl and exposing families to new risks such as unemployment, poor housing, and environmental degradation in informal settlements.

The Role of Non-Governmental Actors and Innovative Tools

The Mongolian Red Cross Society (MRC) has emerged as a vital partner in the country’s disaster response landscape. Its forecast-based financing (FBF) initiatives have shown promising results, delivering early cash transfers and livestock kits to vulnerable herders ahead of severe winters. These programs, supported by international donors and partners such as Save the Children and World Vision, have reduced livestock mortality and improved the survival rate of young animals, particularly for herders with small flocks. However, the report notes that lack of access to government databases hampers the effectiveness of these efforts and can result in duplication or exclusion.

Pilot projects like UNICEF’s dzud-responsive cash top-ups during the winter of 2019–2020 demonstrated that leveraging existing government platforms can ease delivery. Yet these examples remain isolated. A major takeaway from the report is the urgent need to institutionalize data-sharing mechanisms between government and humanitarian actors to ensure better coordination, targeting, and impact during crises.

Path Forward: From Reactive Relief to Resilient Protection

The World Bank report offers an 18-point roadmap to transform Mongolia’s reactive safety net into a proactive, shock-responsive system. Among its key recommendations are legal reforms to integrate adaptive social protection (ASP) into the country’s Social Welfare Law, development of a national disaster risk financing (DRF) strategy, and regular updating of vulnerability data through the IHAD and HID. It advocates for lump-sum pre-dzud transfers to existing beneficiaries in at-risk areas, expanded use of risk maps to target vulnerable households, and capacity building for local Livelihood Support Councils to assess post-dzud damage.

Moreover, it urges the government to improve the affordability and design of livestock insurance schemes and to harmonize social protection efforts with broader agricultural and climate change policy reforms. The creation of a dzud resilience window within the Local Development Fund is also proposed to enhance local preparedness and recovery efforts.

Mongolia stands at a pivotal moment. While it has shown what’s possible under pressure, particularly during COVID-19, the climate crisis demands a more systematic, anticipatory, and inclusive approach. If implemented effectively, the reforms outlined in this report could serve as a global model for integrating social protection and climate resilience in pastoral economies. For Mongolia’s herders, these are not just policies, they are lifelines in an increasingly unpredictable world.