The current higher educational system of Mongolia suffers from low competitiveness because of rural–urban inequalities and systemic constraints, such as low-quality programs designed to yield quick profits for schools, highly bureaucratic governance and weak management of Higher Education Institutions (HEIs), inadequate government financing, and limited opportunities for the poor and people living in rural areas.  Presently, the Mongolian labor market is faced with a threefold challenge; unemployment, lack of job security, and unmatched skills in labor market demands.

This brief summarizes the contributions adopted by the Mongolian government as well as that of the Asian Development Bank (ADB) to drive Mongolia towards a technology and knowledge-based economy. Accordingly, the ADB loan to Mongolia for higher education reform aims to deliver outputs on improving:

• quality and relevance of higher education programs
• effectiveness of higher education management, financing, and governance
• equity and access to higher education

In conclusion, the project will increase the number of globally competitive higher education graduates that are adequately skilled to the needs of the labor market.  Furthermore, it will assist the government to improve financial assistance schemes, in addition to strengthening the management, financing, and governance of the higher education sector and eventually improve Mongolia’s labor market conditions. Thus, supporting higher education has made it imperative to produce a workforce that meets the need of Mongolia’s changing economy.