‘Poverty and inequality during COVID-19 using big data’ report launched

2021-07-09 12:29:15

Ulaanbaatar /MONTSAME/. On 8 July, 2021, Key findings were introduced from a joint research study report on “Mongolia: Poverty and inequality during COVID-19 using big data” conducted in partnership with the National Statistical Office (NSO), the National University of Mongolia (NUM), the Ministry of Finance, and the Information Technology Center for Custom, Taxation, and Finance.  

Highly engaging panel discussion with leading experts discussed the opportunities and challenges in employing big data for socio-economic assessment. It addressed insights and key challenges in harnessing the potential of big data analytics in Mongolia, especially for tracking changes in spending, poverty, and inequality.

The COVID-19 pandemic has escalated into health and socio-economic crises across the globe. In many countries, during the earlier days of the pandemic, the lockdowns resulted in decreased spending, an increase in poverty, and exacerbated inequalities. In this regard, the UNDP and National Statistical Office collaborated with national academia and the government agencies to conduct this pilot research to examine the impact of COVID-19 on consumption, poverty, and inequality in Mongolia in 2020 by using big data – the data generated by the Value-Added Tax (VAT) e-system. This is the first time that big data generated from value-added tax (VAT) records is being used for research and analysis to generate alternative estimates of poverty and inequality in the country. 

“During times of crises, timely and reliable data is essential for supporting the decision-makers to make policies that are relevant and effective in providing relief to affected groups of the population. It can be shown that well developed and effective policy responses helped countries tackle crises in many ways. We hope the study will overall contribute to a more effective recovery from the impacts of the COVID-19 pandemic on the lives of Mongolians,” highlighted Mr Elaine Conkievich, UNDP Resident Representative, in her remarks.

Having and analyzing such fast-moving data is critical for policymakers to rapidly see the impact of decisions and make adjustments, especially critical during this fast-evolving crisis. This pilot study can also be helpful for other countries seeking ways to analyze poverty, inequality, and the impacts of shocks when opportunities for traditional data collection are severely restricted.

Mr Batdavaa Batmunkh, Chairperson of the National Statistics Office, acknowledged that ““The study provides an in-depth understanding of changes in the consumption of Mongolian households. It is the beginning of the development of innovative methodologies for estimating poverty and inequality. We are confident that the results of this study and the proposed new methodology will make a valuable contribution to intensifying the use of big data in Mongolia.”

This work has provided us with an opportunity to understand the changes in household spending in Mongolia due to COVID-19 related shocks to the economy. Most importantly, it showed how VAT data can be used to track changes in spending, poverty, and inequality much more frequently than was possible until now.

The results seem to suggest that, on average, households’ spending increased during the pandemic year of 2020, while poverty and inequality of spending slightly declined. This could be explained by a significant social protection fiscal stimulus and related spending. The study concludes that the shock of the pandemic on household spending, especially that of the poorest 40 per cent of the households, was softened by an economic stimulus package introduced in April 2020.

Though the methodology employed by this study differs from the historical measures of poverty and inequality yet the results employing big data can be useful. It may present an opportunity to the researchers and policymakers to analyze poverty, inequality, and the impacts of shocks when opportunities for traditional data collection are severely restricted.

Source: UNDP Mongolia