Social Benefit Costs Increased Ten-fold from 2006
Delegates of the World Bank and the Asian Development Bank, Mongolbank’s economist, as well as professors and researchers from universities, attended the conference.
The event explored many topics such as the issue of the so-called “Dutch Disease” and whether Mongolia would suffer from it. Dutch Disease refers to negative consequences arising from large increases in a country’s income, infrastructure development, labour exchange and development of small and medium enterprises.
During the conference Ts. Batsukh, professor of the Mongolian Institution of Finance and Economics stated: “The mining sector alone contributes 20 percent of the GDP and makes up the ten percent of the economic growth of our nation. From 1990 to 2004, 48 percent of total direct foreign investment was designated to this sector alone. By last year, 83 percent of total direct foreign investment went to the mining sector.”
The average salary in the mining sector began to dominate other sectors around 2005. This change can cause an incentive for a large-scale shift in the labour force.
According to S. Davaasuren, professor of Mongolian National University’s Economics School, Mongolia’s current spending on social welfare and benefits is now ten times higher, compared to 2006.
Another noticeable change is the unequal salary levels across the country. About 47 percent of the total population of Mongolia are between 15-40 years of age, making the country rather young in its demographics. Even so, the number of people not participating in the labour exchange is increasing year by year.
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