Social  welfare distribution & poverty

       Current period Mongolia classifies as lower middle income country with a Gross National Income per capita of US $1,890 & ranked 110 out of 187 countries in terms of Human Development with a HDI of 0.647 in 2010. Also official source shows more than 30% of the population live on less than US $1.25 a day. It conforms via researcher’s survey in which by 40% of population or 2,754,600*0.4 = 1,101,840 people live on poverty. The country has 130,000 poor households, which amounts 18.2% in total sum. Hence family members per capita of poor households amounts to 1,101,840:130,000=8.5 persons, which is 2.2 times more than average level over the country. Monthly average family income is amounted to 513,000 MNT or US $ 366.4 from all sources as of November, 2010 which announced by National Statistical Office. Herein monthly real income per capita of households would be computed 366.4:3.8=US $96.4 if consider every family consists from 3.8 members according to population census. If compute daily income per capita of households the given indicator amounts 96.4:30= US $3.21 in other words that only just higher than in poor African countries, namely Congo & Niger etc. Also takes place declining tendency in birth-rate, less than 2 children apply to per capita of households according to census, on which likely affect as: shortage of family income, winter’s dangerous air pollution (smokescreen), seldom maternity homes in residential districts, poor social security aimed to family having many children & continuously increased purchasing price for private apartments etc. Never seem changes in standard of living for common citizen as before although highest authorities confirm that economic growth has exceeded 20% for last year & Gross National Income per capita in next few years expects by US $ 5,000. Poverty reduction measurement still remains as declaration as before. For last decade hadn’t observed declining of poverty as 40% of the population is still remained on poverty. Here should create the identical & understandable methodologies of population’s classification with socially poverty group in accordance with their income taking into account Mongolian specific condition. For instance everybody has to have clothes suitable for passing 4 seasons as Mongolia has severe continental climate. Its territorial location is never Ecuadorian geographical longitude. Everybody even if should have warmest outer clothing & boots for spring & autumn wear. Ulaanbaatar is high coldest capital city in the world. Indeed in Mongolia average temperature range reaches as 30 degrees below zero in winter & more than 30 degrees above zero in summer. Impossible to suffer hash winter by means of wearing Chinese rubber slipper & spending the snowy night in cardboard box at street bench, besides people must have calorie content foods to support vital activity with irreplaceable vitamins, protein, fat & dairy supplement etc.  Researcher’s review shows that more than 95 % of social welfare had accumulated in disposal of 2% of the population or 14,276 households with 55,100 family members, herein by results of census conducted at the end of 2010 total population amounted to 2,754,6 thousand which officially announced. So scanty part of population live at fresh area & in beautiful valley of a natural protected mountain, spend summer vacation in Hawaii Island along with their family members, & educate their children at foreign renowned universities at budget expenses. In fact during past 20 years total population has separated into diametrically opposed polarization of social population groups with standard of living & means of subsistence which has been connected with unfairness distribution as of social welfare, planning of local & united budgets, competition on participation of profitable projects, incorrect privatization, giving out licenses on mineral resources, tax evasion & making good career etc. Here should recall that in socialistic regime all citizen have lived without private properties, as land, manufacturing facilities & licenses on private business etc otherwise they had the same economics conditions to start open market. All people had acquainted vouchers of small & big privatizations in equivalent numbers & nominal value. Actually has set monthly salary 325,000MNT or US $232.1 for physician or teacher who engages at state owned organizations (sub district hospital or secondary school) with work length up to 25 years. For years grows labor exploitation which became reality & affects on living standard of wage works, namely in private sector no exist external public & governmental controls & trade union that responsible for protecting interests of workers. Here given following assumption of 50.5% of 200 accountants, who has been covered with random sample in which they demonstrated themselves opinion of tax burden affected on taxable income evasion & reasons of preparing double financial statements at entities. Let’s consider physician’s salary & any deductions & personal income tax for January, 2012.                              Payroll for January, 2012.

Takes place perceptible gap between nominal salary & net salary at hand, which described below with computing of tentative current expenses.                                                   Current expenses

     Hence her net salary amounts by 59.6% of nominal salary (193,550:325,000)100 = 59.6%. Actually policy of tax exemption & its reduction for taxpayers couldn’t affect on poverty reduction. High education institutions in disposal of richest persons by 20 years were exempted from all kind of tax, which receive subsidiary on current expenses applied to per capita of learners, in addition to that get scholarship of 500,000 MNT per every learner from Human Development Fund every year & plus differences in training payments between planned sum & above cited scholarship. In return even nursing baby pay value added tax (VAT) on account of that baby’s mother buy milk at price into which putted VAT of 10%. For instance, 1 liter cattle milk costs 1,100 MNT into which included 10% of VAT or 1,100:1.1-1,000=100MNT. Main component of Mongolian’s meal are meat, flour, rice, vegetable oil also a cookie fried in butter etc. But price for all kind of meats is sharply rising, especially 1 kilogram beef costs 7,000 MNT or US $4.9. Actually it is highest price for agriculture country because of that by census of livestock as of end, 2011 its number amounted to 36,005,8 thousand, hence livestock per capita of cattle-householders calculates 36,005,8:130,0 = 277. One household could be bought through allowance from Human Development Fund only 3.8*20,650:[(5,000+7,000):2]=13 kilogram meat which would be met its poor demand of supper for 26 days. Retail price of meat rose at 12% within last month, National Statistical Office conformed. Authorities of tax administration say that in country tax level is lowest over the world. But this argument doesn’t accord to continuing for long time’s measurement of poverty reduction which wasn’t achieved desirable efficiency. Nor seems declining on number of homeless & wanderer people over the country, they live in holes & tunnels of heating pipe-lines in the winter, in corridor, door-way space under stairs & overnight visitors at railway station. If refer to census country has 713,780 households, of which 8,064 dwell in non-purpose homes, otherwise 8,064*3.8= 30,643 homeless people, including 8,064*2 = 16,128 children. Breeding livestock is main livelihood for herdsmen. Job searchers who separated from livestock due to continued natural disaster as drought, dzud-abundant snowfall which causes grassless, extending desert area, shortage of livestock pasture, cattle disease, lack of infrastructure (internet, wholesale, surfaced road, central heating system, medical diagnostic center), namely shortage of school facilities & skilled teachers. Some province parents have came to towns with main goals aimed to giving good education to their children. Review shows by 61,0 thousand job hunters are searching operator’s positions actively. Job hunters continuously move to capital city from provinces, they survive many troubles as, find shelter, registering & obtaining civil passport of capital city, purchasing countryside land to place felt ger, enrolling children in school or kindergarten, getting permission to use electricity etc. Although everybody has right to own 0.5-0.7 hectare a land free of charge according to legislation but common citizen had have to buy a land at money only. It connects with that a land distribution is authority’s disposal & competence of 6 districts of city. Meanwhile acquiring felt ger is only dream for poor job searchers owing to they haven’t got income except monthly benefit from Human Development Fund of 21,000MNT or US $14.7, but however complex ger costs 2,363,600 MNT or US $1,657.5. Continuously weakens exchange rate of NMT against US dollar & its exchange rate shows 1,426 MNT= US $1(as of 6^th January, 2011), in fact it’s the same coefficient as period of great recession started since 2008-2009.  By the way Mongol bank (The State Bank) couldn’t cope with managing of rational means on bridling inflation boast & making of which understandable interpretation publicly so far, though it has professional, analytical department that responsible for steering of money policy & therefore foreign currency resources in its disposal have exceeded US $3,0 billion. Funny, the management of floating exchange rate still exists in disposal of currency black market. The State Bank couldn’t control both flows of convertible currencies properly: outflows as revenue, net income, dividend, wage & bonus transmitted from foreign investment companies, inflows as their payables & money transfers etc. Fuel price roughly grew at 260-300 MNT within first weak as of January, 2012 which compared to end of last year. Meanwhile over 90% of country’s fuel demand meets by means of supplies from neighboring Russia. Changing in fuel price from overseas suppliers sensitively reflects on price raising all of domestic productions & services as basic price. But however country has huge resources of coking coal & vast steppe-area of oil prospecting & exploitation, they export to China at extremely lowest price than world coal price. Besides incomprehensible that authorities couldn’t deal with establishment of oil-refinery properly so far, which counts one rational way to solve countries shortage in fuel & keep basic prices under state control. Transportation service price of city taxi per every kilometer rose at 30-50% or increased from 600 MNT up to 1000 MNT within 1 day. Review confirms by 1,400 women & children surfer any violence. Sampling review expresses around 30,000 children engage physical labor, who undertakes feeding & maintaining their members of households, including parents, sometimes happen some of them are drinkers. Mongolia is the biggest consumer of alcohols & cigarettes, which negatively affects on family divorces, income shortage for households & worsening of crime situations. Mongolian’s alcohol consume per capita during past decade has doubled & reached 9.2 liter in 2009. Labor children earn scanty money at food & goods bazaar as porters by leasing cart or watching after motor vehicles, loading goods, washing floor, breeding & watering livestock, also majority of them collect secondary raw materials at refuse collection points along with parents etc. Some of homeless persons by chance find operator’s position as entrance man/woman on duty, who watch after dwellers & spend night in little space under stairs with spacious by of 2.0*1.5=3.0 cubic meter without washing tap & toilet. Should take into account official minimum of labor wage, which was set at 144,400MNT or US $.101.3, but however exchange rate against foreign currencies is dropping & inflation index is rising everyday & even every hours. 107,140 capable of working people live abroad for more than one year in order to collect money for buying various types of houses & meet consumer’s demand. Indeed it connected with labor exploitation, especially at private sector doesn’t establish trade union, which responsible to protect interests of employees. For instance some solvency entities weren’t paid social insurance applied to employee’s wage, which covered with law of tax annulment, including mining enterprises. Passed for long time when owners of private sectors press new employees to work without salary or set up for them probation wage at the minimum of labor wage. The owners became establish monthly nominal wage for employees at 15% of earned revenue per month by him/her. Some foreign investment companies don’t respect & follow labor & social laws of country. Recently has been raised quarrel between operators & headquarters of foreign investment company “South Gobi Sand”, which engages exploitation of mineral resources & had cut positions for 45 operators illegally. Has failed pledge of coalition government to construct housings devoted to100,000 households. Ulaanbaatar counted as highest pollution city in the world under review of international researching groups. Toxic substances per capita of Ulaanbaatar dwellers are 243.6 kilogram, reports Air Pollution Control Office. Researchers confirmed that dangerously were polluted air & land in area of ger district as with open hole toilet, shortage of natural grass-plot, trees, heating oven of coal burning, air dust, toxic gas (carbon dioxide) isolated from vehicular motor etc. They seriously affect on sickness of citizen & spreading of infection among them, namely dysentery, tuberculosis & hepatitis etc. If refer to barilga.mn WEB site 1 room’s & 2 room’s apartments cost US $30,000 & US $45,000 respectively. Moreover the benchmark interest rate for last year was reported at 12.25%. Recall that monthly real income per capita of households would be computed 366.4:3.8=US $96.4 if consider every family consists from 3.8 members according to population census. Obviously lower result of any measurements, including poverty reduction projects may connected with which poor organization activities, as weak project team, insufficient methodology of collecting & processing empiric data, correction of researching results in accordance with leadership’s instruction, shortage of required financial sources & duration period, poor legislation environment & bureaucracy in its improvements etc. We think of that should be conducted tender of any measurement (especially it belongs to project) faithfully & openly, team members could be possessed modern researching methods of applied mathematics, econometrics, & mathematical statistics, they must be motivated & able to themselves create, develop, distribute, export & outsource new ideas & innovations etc. Popular such troubles for project teams, first of all they search & copy any foreign economics models or computer application programs in order to put they into Mongolian conditions in despite of their specifics, collect financial instructions & than distribute standardized questionnaires among involved participants in sampling, demand final reports, researching empiric materials from functional departments & agencies, & finally summit hacked resume to the higher organs of power etc. Likely attaining through close friends right to conduct a lot of projects in parallel by one team seriously affects on quality of any projects within planned time. The term members should be preferred themselves creating feasible economics models, affordable researching questionnaires & methodologies suitable for Mongolian specific in despite of copying from abroad or from internet anything.