Water Pricing in Mongolia

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Water Pricing in Mongolia



Focus Areas

Geographic Scope




Background and Significance

As a result of human activities, many lakes in Mongolia are severerly depleted or dry. 40% of the population lacks access to safe water resources and only 25% has adequate access to sanitation facilities. Growing urbanization and the mining industry have significantly polluted surface and underground water resources, which has had a significant impact on associated ecosystems. Furthermore, overuse of groundwater resources has led to lowering of the groundwater table, which has consequently caused some springs, lakes and their associated ecosystems to dry up. Increasing numbers of livestock and uncontrolled grazing practices are also affecting the balance of ecosystems.

Average per capita water consumption in Mongolia is also very low. The average water consumption of populations living in yurt (the traditional tent-like structures used by nomads) districts of big settlements is around 10 litres per person per day, far from being enough to meet sanitary requirements. There are 10,000 cases of diarrhoea every year in Mongolia and almost 70 percent of these cases occur in Ulan Bator. Dysentery and hepatitis are also common. These infections stem from a lack of access to safe water and sanitation infrastructure.

In recent years, climate changes have also caused groundwater levels to fall, which has resulted in thre drying up of some wells and springs. This has a great impact on animal herders living in remote areas of Mongolia. Consequently, the risk of livestock losses during the dry periods has increased enormously, and pastures near abundant water sources have become overused.

Additionally, both floods and droughts are common occurences. Central and Northern parts of the country are prone to floods, and the inhabitants of Yurt settlements are most affected, since they are the ones usually located in flood-prone areas. Droughts are most common in the desert-steppe zone of the country, which greatly impacts the agricultural sector. As a result of such droughts, crop cultivation is becoming more and more dependent on large-scale irrigation schemes. Unfortunately, neither flood nor drought prevention measures are organized in a systematic manner. In the case of floods, communities lack the advantage of early warning systems. Furthermore, there is a definite lack of public awareness.

Further problems include water-related policies and programmes developed at the national level often do not reach the local level. Policy implementation and monitoring mechanisms are also strained. At the institutional level, financial and human resource capacity is limited. The coordination of numerous institutions at national and local levels is missing, and the division of responsibility is not clear. Due to financial limits, laws and regulations are not adequately enforced. In terms of water pricing, Mongolia’s pricing policy is decentralized; local authorities are entitled to set up and revise the water tariffs. Although in theory, the Mongolian Government gives priority to the interests and water needs of the poor and marginalized, in practice, the current pricing scheme has become pro-industry and pro-wealthy due to weak regulations. Water tariffs for the mining industry are about US $0.006 per 1,000 L, whereas small businesses pay about US $0.48 per 1,000 L (eighty times more). For metered apartment users, a fixed rate of between US $1.5 and $7.5 per month is charged per inhabitant. The rate for yurt consumers, similar to small businesses, is eighty-four times higher than for industries and mining companies. As a result, those with the lowest income pay the highest and consume the least.

The Experience: Challenges and Solutions

The Government recognizes that conservation of water resources is of primary importance for the long-term development of the economy. This is reflected in the terms of reference of the National Water Programme, which aims to ensure sustainable development of the country by the efficient use and protection of water resources. In 2000, the National Water Committee (NWC) was established with the purpose of coordinating and monitoring the National Water Programme’s implementation. It serves as the coordinating body of a number of ministries and local governments. However, there are no resources allocated for the realization of the National Water Programme. Furthermore, no specific milestones were identified. As a result, the NWC struggles to coordinate the actions of several ministries within the fragmented management scheme of water sector.

The legislative and regulatory framework for the use of water resources is in place and updated when necessary. For example, the Water Law, which was adopted in 1995, was amended in 2004 to integrate river basin management practices (including the establishment of enhanced water resources information systems, the development of River Basin Management Plans and the establishment of River Basin Organizations) with the goal of better utilizing water resources while protecting ecosystems. The Water Law also recognizes the economic value of water, requires capacity building in the water sector, focuses on the decentralization of water management, puts forward the need for [[Environmental Impact Assessments] and sets new penalties for violating water legislation. However, the provisions of the law are vague and open to interpretations by different sectors. Furthermore, although the newly amended law foresees provisions for IWRM, public involvement at the local level is missing. Therefore, developed policies and programmes lack any public ownership. Facilitating the involvement of water users and stakeholders in managing the allocation of water resources remains a challenge.

Results and Impact

After the fall of the Soviet Union, Mongolia has been going through a profound economic and political transition period. Poverty is on the rise, only a limited portion of the population has access to safe water, sanitation facilities are poor, the quality of water resources are decaying, water-related diseases are common, and health services are out of reach for the poor. These problems are further accentuated by water scarcity, a very cold climate and recent disasters. The Government of Mongolia is committed to implementing reforms in water resources management, but various contextual factors are impeding progess.

The Government of Mongolia is committed to implementing reforms in water resources management and environmental protection, but due to lack of financial resources and the limited number of trained personnel, policies cannot be implemented, and laws and regulations cannot be enforced. Improving the implementation of legal frameworks and policy coordination in the water sector are dire necessities. Sectoral interests have prevented the adequate protection of water resources and the environment. The decentralization of water pricing has promoted economic growth by providing low-cost water to business and industry but has disregarded the needs of the poor.

Lessons for Replication

Water related policies developed at the national level must be decentralized down to the local level, for effective policy implementation.

Monitoring and Evaluation networks are paramount for assessing progress made.

Early Warning Systems and sufficient public awareness are vital for effective flood and drought prevention measures.

Testimonies and Stakeholder Perceptions

The Experience at a Glance

Implementing Agency(ies)


See also

Additional case studies in Mongolia

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    External Resources

    WWDR2 case study summary -



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