Fostering the Transition to Formality of Informal Workers and Economic Units in Mongolia

The project is to provide technical support to tripartite constituents to foster the transition to formality of informal workers and economic units in Mongolia through the implementation of an integrated approach to promote policy coherence, utilisation of technologies to access information & ease registration, and the provision of business development services to enhance businesses formalisation.

To achieve this goal, the project will focus on the following three key areas:
  1. Identify drivers of informality in selected sectors: three sectors have been selected to pilot this initiative: retail trade sector, service sector and livestock herding3. These three sectors have a high prevalence of informality, have been heavily affected by the pandemic, have a relatively high share of women among those employed. In the case of livestock herding, the ILO has already conducted an analysis of the “policy options to extend social protection coverage to Mongolian herders”, this work, done under the Social Protection UN Joint Program, includes a Behavioural Analysis of Herders vis a vis social security and the development of a policy note with options to extend social security through an integrated package.
  2. Develop integrated action-plans for formalization of the informal economy within three sectors: Following the request of the MLSP, the ILO will provide technical support to the GoM and Social Partners for the establishment of a working-group on formalisation, in order to coordinate actions and policies aimed at formalising employment and enterprises; including the elaboration of an action plan for implementing an integrated approach to formalisation to selected sectors, including the extension of social security, and implementing a system for monitoring it. As part of this area of focus, pathways to formalisation of MSMEs and workers will be strengthened at the sectoral level.
  3. Utilisation of digital technologies to ease the transition to formality (e-formalization): the Government of Mongolia has put in place a comprehensive set of platforms of e-governance to interact with citizens either for general services (e-Mongolia), for the labour market (e-jobs) and taxation (e-tax). These platforms can help simplify registration of enterprises and employment, facilitate access to social security, improve access to markets and business development services and enhance productivity.
Target group:
  • Workers and economic units in the informal economy in Mongolia, (50% women);
  • ILO constituents.
Selected sectors: Retail trade sector, service sector and livestock herding or as agreed with the constituents

The geographical location: National scope with a focus on Ulaanbaatar