|Project Rationale and Linkage to Country/Regional Strategy
The Action Plan of the Mongolian Government (2012-2016) highlights employment as one of five goals within its macroeconomic framework for creation of a sustainable and competitive economy. This emphasis on employment is laid against a background of serious skills mismatch in the labor market. Although there is an acute and immediate need for a skilled workforce in the construction and other sectors, the need is being met by foreign workers in part due to lack of the skilled labor supply available in Mongolia. A strong demand for a skilled workforce is further expected as the government plans to implement key economic development policies. At the same time, however, there is unemployed working age population, whose proportion is higher for women than men, for youth (between the age of 15 and 24 years) than adults, and in urban areas than in rural areas.
One of the reasons for the skills mismatch in the labor market is lack of technical and vocational skills as well as employability skills among graduates from TVET programs. While enrollment in TVET programs has increased in recent years, partly due to monthly stipends given to TVET students under 24 years, most young TVET students view the programs merely as a means to obtain complete secondary certificate in order to apply for admission to a university rather than to acquire skills and get employed. Enrollment of adults and the unemployed in TVET programs has also increased, even though the percentage of TVET graduates who found job within 6 months remains low on average at around 54% over the past several years, with significant variations among graduates from different types of TVET programs. The quality and responsiveness of TVET programs to labor market demands, therefore, remain weak and inadequate to address the skills mismatch problem.
The Mongolian TVET system was first established in the 1960s, the era of the centrally planned economy. During the transition period in the 1990s, the number of TVET schools reduced following decline in demand for a skilled workforce as a result of the closure of state-owned enterprises and de-industrialization. While the number of TVET schools began to increase from the mid-2000s, many TVET schools have largely inherited the pre-transition period set-ups in terms of inadequate teaching and training techniques, outdated equipment, and poor state of training facilities.
In recent years, with a view to enhancing the quality and responsiveness of the TVET system to the labor market, the government has initiated reforms in the TVET sector with the support of development partners and the private sector. The amendment to the TVET law in 2009 was a landmark in the recent TVET sector reforms, establishing the National Council on Vocational Education and Training as an institution for actively engaging employers and industry in TVET policy development. A significant amount of resources has been spent in upgrading of training equipment and facilities, introduction of competency-based training and assessment (CBT&A) and modern teaching and training methodologies, development of National Vocational Qualifications Framework (NVQF) and new qualifications for TVET teachers. However, many important initiatives are still in the process of implementation. Moreover, those initiatives have not been well coordinated and integrated, which has potentially reduced their efficiency and effectiveness.
A challenge, therefore, is to further the ongoing TVET sector reforms and to put them firmly in practice in a well coordinated and integrated manner. To that end, new investments need to be harmonized and integrated within the overall framework. Hence, the proposed project will strengthen CBT&A within the NVQF by developing competency-based training (CBT) curriculum, training materials and assessment criteria, and associated standards for equipment and facilities, training programs for TVET teachers, quality standards and quality assurance mechanisms. Furthermore, the quality and responsiveness of TVET programs to the labor market should be enhanced by more actively engaging employers and industry in TVET policy development and implementation, for which TVET providers, to be supported in the project, will be selected based on their capacity of and/or commitment to developing partnership with industry. In anticipation of increased demands for a skilled workforce required to implement key economic development policies of the government, the proposed project will support the development of human resources in priority sectors of the economy which have high labor absorption capacity (e.g., construction, agriculture, and processing industry), and focus its investments on the development and implementation of quality TVET programs responsive to labor market demands in the sectors. A key factor in the process would be training and professional development of TVET teachers and managers capable of working in partnership with employers and industry, which is better aligned with improved training curriculum and materials and upgraded equipment and facilities. Moreover, the project will support development of preparedness and trainability among students in general secondary and special education schools and the provision of guidance for their future career choice. This is expected to facilitate a smoother transition of students from school to work.
The project is built on the past and ongoing projects in the TVET sector supported by development partners and the private sector. It also draws on lessons learned from the Asian Development Bank's (ADB) previous involvements in the Mongolian TVET sector through the Social Security Sector Development Program (2001-2009), the Non-formal Skills Training for Unemployed Youth and Adults (Japan Fund for Poverty Reduction, 2006-2009), and the Third Education Development Project (2006-2012). One of the lessons learned from those projects is that there would be potential gains in efficiency and effectiveness if various interventions, such as development of training curriculum and materials, upgrading of equipment and facilities, and TVET teacher training, were better aligned with competency standards and vocational qualifications frameworks. Moreover, the quality of short-term employment training programs was poor, as they were largely neglected in the recent projects supported by the other development partners and the private sector. The approach adopted for the project will incorporate these lessons learned.
Strategic fit. The project supports the ongoing reforms of TVET sector undertaken by the government. The project is in line with ADB's country partnership strategy (2012-2016) which has a focus on achieving inclusive growth and social development. The project will promote access and equity for all citizens, in addressing the current skills mismatch and in capitalizing upon the potential for public-private partnerships. The project is included in the 2013 pipeline in the country operations business plan (2012-2014). ADB will coordinate with development partners and promote coherence in policy reforms while maintaining a strong focus of preparing skilled workers for employment in priority sectors of the economy.