Page 63 - bne_May magazine 2023_20230503 BRICS

bne May 2023 EuraEusraisaia I 63
Economic derailment prices Mongolians
out of family life
Antonio Graceffo in Ulaanbaatar
“Economic crises. Low income. Inflation,
unemployment, gasoline price hikes ... many Mongolian families
are affected mentally and physically. As a result, a lot of people are leaving Mongolia to begin a better life,” reflects Tuul Chimed, a 26-year-old accountant who lives in Mongolia’s capital, Ulaanbaatar.
The cost-of-living crunch is hitting people all over the world, but there’s
no doubt the Mongolians have it hard. Over the past two years, inflation in the country has been in the double digits.
It moved as high as around 16% in
2022. The average salary, meanwhile, is approximately $450 per month, with a low-level manager on average expected to make toward $480. Apartment rentals cost around $200 to $500 per month.
Among Mongolians there is a tremendous variance in income, with the minimum wage only $142 per month. So, for most young people, there is no option but to remain living in their parents’ home. Marriage is now typically delayed. Prior
to 1990, the average age at marriage was 21.6 years-old. Today, the average is 24.2 for women and 26.2 for men. The number of children per couple is at the same time dropping. In 1993, there were 3.5 children per woman; today that figure is 2.9. In urban areas, the birthrates are even lower.
Udval Battulga, 22, is typical of a growing demographic of young
college graduates in Mongolia who speak English fluently. Shortly after graduating from a foreign university programme in finance, she found work at a consulting company, where her salary was $340 per month. “When it comes to marriage, it’s obviously hard to even imagine that I’m getting married with this low income. Getting married means that we will have to buy an apartment, and raise kids,” she says.
Homes in Ulaanbaatar are extremely expensive. The price ratio is now 10.8 times the average annual disposable income. And, where 90 square metres
is considered as the size of a normal apartment in much of the world, the Mongolian government mortgage programme only provides attractive mortgages for apartments of up to 80 sqm. If you use the 90 sqm figure, then the ratio becomes 11.99 times the average disposable income. This is higher than in New York or San Francisco.
Udval explains: “In order to prepare ourselves for marriage, we must save money and have multiple incomes. To buy an apartment, we will have to take a loan, and pay interest in return. But in today’s society, it’s impossible to save even a small amount of money from our salaries because taxes are too high. My personal income tax rate is 22.5%. After tax, I am receiving around $263
a month. Other expenses are also high and paying a home loan would be even more difficult.”
Twenty-five-year-old Indra Sergelen, is a university graduate and marketing manager, whose salary is just over $700 per month, says: “It’s hard to live in
today’s society with a high inflation rate and tax rate. I don’t have a car, but I took a loan and got an apartment two years ago to live alone without my parents, and to be independent financially. Even though my salary is pretty high and I have multiple income sources, it is still hard to cover all the monthly expenses.”
When asked about her plans for marriage, Indra replies: “I actually don’t have any plans to live as one of
a married couple in Mongolia. If you ask other young adults, they also will answer the same way. It’s impossible to live on only one salary. In order to get married, and build a life together, we must take a loan, buy an apartment and raise kids, which means we should be stable financially.”
An additional burden for a lot of Mongolia’s young people, like Indra,
is that they are helping to support their parents or pay the tuition fees for younger siblings.
Another professional, 30-year-old Anujin Amar, who works as a senior business consultant, says that despite her current large salary of $800 per month, she found it much easier to live five years ago.
Mongolia's fertility rate showing total births per woman (1960-2020)
Source: World Bank
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