Mongolia Brief May 20, 2014 Part III
Who are the secret owners of political parties?
May 20 (UB
Post) Who is the most influential person in Mongolia? For whom exactly does the
authority make decisions for? In order to answer these questions fully and
accurately, we, the citizens, must at least be aware of who exactly is funding
political parties that are producing authorities. In other words, we must know
where political parties get their financing from.
Without
investigating who donated how much, to which political parties, under whose
names, and whether those who made donations or their relatives have been given
senior positions inside the government, and without disclosing such information
to the public, Mongolia can never stop corruption and remove the biased
influence that wealthy individuals and companies have on the decisions that are
coming from the government.
Given that they
are keeping the financial information of political parties undisclosed to the
public, it sounds like a bad joke when the government announces that they will
become a “smart government” and have a “glass purse” (meaning their financing
will become transparent). The financing of political parties have been
increasing after every election, reaching dozens of billions of MNT and there
is no transparency in where or from whom political parties get their campaign
finance and how they are paying it back.
If a country
cannot stop its government policy from serving only few wealthy individuals,
people lose their trust in the government and a dictatorship gradually sets in.
When that happens, democracy, human rights, and an increase in the living
standards of ordinary people become nothing more than a dream.
The life of
political parties in Mongolia has two seasons: election season and non-election
season. During an election season, financing of political parties is regulated
by the election law. If it is a non-election season, the Law on Political
Parties governs the funding of political parties.
It is stated by
the law that political parties must submit their campaign finance reports to
the General Election Committee within a month after the conclusion of an
election. According to the General Election Committee, the Democratic Party
spent 11.2 billion MNT while the Mongolian People’s Party spent 10.1 billion
MNT for the 2012 parliamentary elections. The total expenditure of all
political parties was 35.7 billion MNT that year. The committee’s report states
that a total of 2,525 people donated up to one million MNT, the maximum amount
allowed by law, to the Mongolian People’s party (MPP) whereas the Democratic
Party (DP) and Justice Coalition had 3,000 and 1,300 individual donators
respectively. If you exclude the donations that came from individuals, the
remaining financing of political parties is made up by donations offered by
companies. Legally, a company can make a donation of up to 10 million MNT to a
political party. However, there should have been independent audits performed
on those reports.
The 2012
parliamentary election, the first ever majoritarian and proportional mixed one,
had 76 electoral districts and a total of 544 candidates, including 354
candidates by political parties, 190 nominees listed by political parties and
26 independent candidates. If we take these numbers into account, the campaign
finance report suggests that each candidate spent 65 million MNT (approximately
50,000 USD) on average. However, the election campaign costs were much higher
in reality. The report obviously did not include the hundreds of millions of
MNT that the political parties charged their members for nominating them in the
party lists.
The finance
reports of political parties from a non-election season are never made public.
The actual numbers are not even known to ordinary members of political parties.
The only glimpse we can have in those finance reports is when such information
is sometimes leaked to the media due to internal conflicts within a political
party. For example, Ts.Shinebayar, a former member of Parliament, stated in
March 2012 that “During the 26th Conference of the Mongolian People’s
Revolutionary Party (currently Mongolian People’s Party) U.Khurelsukh, who was
the general secretary of the party at the time, said that MAK (Mongolyn Alt
Corporation) and NIC (Petrovis) companies each made donations of one billion MNT
to the party while members of Parliament Sh.Saikhansambuu, B.Choijilsuren, and
Ts.Sodbileg also donated one billion MNT each. D.Damba-Ochir donated 500
million MNT.” The non-election season financing of the Democratic Party is also
undisclosed and the total amount of donations they received would presumable be
not less than that of the Mongolian People’s Party.
This secrecy
surrounding political finance makes people doubt whether the current
authorities received some benefits lawfully, by providing cheaper loans to
banks and companies, in which they had vested interests, when allocating the
proceeds of 1.5 billion USD acquired by the issuance of government bonds. The
government needs to have an independent audit carried out on itself, and inform
the public of the results.
Viewed as
“questionable” by the current Parliament, 130 of the total 260 projects that
are funded by the public budget were commenced in 2012, which was an election
year. It shows how greatly campaign finance has become dependent on public
budget.
At any rate,
there is a huge amount of undisclosed financing in Mongolia’s politics. This
secret political finance include money collected from state-owned companies’
income rather than profits, all kinds of formal and informal fees charged from
large infrastructure projects, under the table dealings for the issuance of
government permits, and other donations.
As the real
income of the people decreases every year due to weaker MNT rates, the wealth
of our senior state officials keeps growing. Therefore, transparency in
political finance is one way to achieve justice. A great hope lies in the
belief that the new bill on the transparency of financing of political parties
will not go up in smoke in Parliament.
We see the need
for our country to develop and implement specific laws to regulate the cash
flow that is coming in and out of political parties. If there is transparency
in political finance, people will be able to oversee the flow of huge amounts
of cash found in our political sphere today. It will be great contribution to
letting people make informed decisions and boosting their trust in democracy as
well as politicians.
Healthy
competition in politics is clearly dependent on economic sources. However,
there should be a good regulation that allows the oversight on the acquisition
of economic sources and their use. A timely report to the public should also be
ensured.
In Mongolia,
the public budget provides a certain amount of funding to political parties.
Ten million MNT for each seat in Parliament was allocated to political parties
from the public budget. It was provided once a year and half the money was
spent on the electoral districts by the relevant members of Parliament.
However, the money given to members of Parliament has been increased to one
billion MNT each, which drew a lot of criticisms from the public. The State
Fund informed that a total of six trillion MNT were provided as financial
assistance to political parties who had seats in Parliament from 2009-2012.
Since they are receiving funding from the public budget, political parties are
supposed to produce their financial reports on a regular basis as state funded
organizations do. However, they seem to have “forgotten” to do this.
International
practices show that there are three main components in the expenditures of
political parties. These include non-election expenditures (costs associated
with structure, organization, and routine operations of political parties),
election expenditures (campaign finance), and independent expenditures (when a
candidate raises funds independently from the political party). Independent
audits are performed on each of these expenditures and detailed reports are
released.
It is viewed by
policy researchers that the public funding for political parties encourages
transparency in public governance, supports healthy political competition, and
contributes to the establishment of strong and responsible political
institutions. Laws alone will not be enough to ensure transparency in political
party funding. In order to make sure that laws are fully implemented, all
related stakeholders including political parties, government organizations,
media and civil society must work together in harmony.
Every support
should be given to government organizations that ensure the implementation of
the law on political party finance and to the media, political oppositions,
universities, and research organizations that contribute to transparency.
Strengthening
democracy is like nurturing a tree. When you plant a tree in the ground, you
cannot leave it as if it is a 100-year-old oak, but nurture the tree regularly
by watering and protecting it. In a democratic society, the ruling power goes
to the political party that has won the public election. The winning political
party assumes a great power, which is accompanied by a great responsibility.
This responsibility of theirs must start from being able to provide their
financial reports on time and make it available to the public. Just as we must
constantly nurture the trees, we, the voters, must always make such demands to
the political party and start providing regular oversight. This way, our
democracy can be strengthened. As our tree grows bigger, there will be more
reliable guarantees for less corruption, stronger democracy, and better
protection of our rights.
Translated by
B.AMAR
Thought’s Track
May 20 (UB
Post) Thought’s Track, a joint exhibition by B.Bayartsengel and T.Soyol-Erdene,
opened on May 15.
The artists
strived to show that all things have their own features and beauty in life and
the main idea of their work is based on the simplicity of life. But it would be
quite one-sided if we just judged the artists by their work, as these works are
the current impressions and expressions of the artists.
In my opinion,
these talented artists have expressed the truth of today’s society through
their artwork, such as “Nomadic Movement”, which shows the important historical
generations of Mongolia.
The exhibition
will continued through May 26, and is available for viewing from 10:00 a.m. to
7:00 p.m. at Red Ger Art Gallery, located on the first floor of Central Khan
Bank.
D.Byambasuren: We cannot complete a work we’ve tried to do for two years in 100 days
May 20 (UB
Post) The following is an interview with
former Prime Minister D.Byambasuren about current economic issues.
Inflation was supposed to be kept at a
single digit rate but it wasn’t. Will inflation decrease in the future?
The Mongolian
economy absorbs inflation increase in June. Before the 2012 election, it was
decreasing but for the last two years, the economy wasn’t able to absorb it.
This is connected to adverse government policies. We’re unable to detect the
main cause of inflation. Inflation continues to rise and the current situation
isn’t good. Since government policies are stimulating major issues, instead of
grasping them, inflation will not decrease.
Inflation
increase is connected to deficit in balance of payment and foreign trade as
well as decrease in currency reserves. Parliament approved the state budget
taking into account that one USD will cost 1,380 MNT when its rate was 1,700
USD. It’s wrong for them to approve official rate for USD at 1,400 MNT when the
recent budget reports estimates show that it was at 1,800 MNT. This sort of
pathetic conduct prevents inflation from dropping. Reducing inflation is not a
child’s play.
The “100 day plan to stimulate the economy”
was approved. How realistic do you think this idea is?
How can they
achieve something that they weren’t able to do for two years in just 100 days?
It’s just a cheap deceit created by the government who are running out of options
to temporarily maintain current situations.
It seems that if we can find the correct
baseline now, we can get a huge advantage for stimulating the economy?
When we can’t
straighten the policies for stabilization, it’s impossible. The government
isn’t grasping the main problem of the economy. They need to become aware of
the fact that they’re going in the wrong direction. There isn’t any guarantee
that situations will become better.
One part of economic recovery is the budget
report. What’s your opinion on this?
The main aspect
the government is interested in is to discover something that can make up 70
percent of the GDP by itself. This is absurd. Budget reports used to be made
rather late but now, they are about to make it when not even half of the year
has passed. They’ll probably discuss this again in autumn. They’re taking this
issue very lightly.
In the first half of the year, the GDP
growth decreased to 7.4 percent. More decrease is expected in the future. What
is your thought on the matter?
The capacity of
the Mongolian economy itself can only sustain five to seven percent growth.
Other factors affect in artificial growth. It’s unnecessary to run after
extremely high growth. It’s better to develop programs to stabilize it while we
have it.
Many buildings with zero budgets were
included in the state budget report. The deadline for their commissioning is
approaching. What’s your assessment for this?
It’s true that
the little amount of money Mongolia has is being used for new buildings. This
is worsening the economy. Internal balance of the economy is being lost. We’re
unable to put it back into balance through policies. Evidently, the aftermath
of incorrect policies is giving negative effects to the economy.
What is causing USD rates to near 2,000 MNT
in your opinion?
Propaganda
about Mongolian economic crisis from the decreasing foreign investments has
continued for over a year. The majority of foreign investments are owned by Oyu
Tolgoi. Investments for open pit and underground mines will progress in precise
stages. You’re daydreaming if you think large amounts of investments will come
flooding in billions of MNT each year.
USD exchange
rate reaching 2,000 MNT is a conspiracy of those interested in using the current
situations to their own profit and stay in power at the government. From export
level and profit, two trends can be observed. Although export levels are
increasing, foreign trade is losing its balance even more rapidly. Behind the
increasing quantity, many challenges are emerging. Prices of products exported
from Mongolia are falling. For instance, in 2010, a ton of coal used to be sold
for 101 USD. Now, it only costs 39 USD. This shows that Mongolia is getting two
to three times less profit even with the increase in quantity. Revenues from
goods which were supposed to be exported in 2011 and at the beginning of 2012
was taken out in advance and wasted. Although export levels and evaluations are
being reviewed, the 350 million USD from CHALCO, 100 million USD from Erdenet
and 250 million USD from Oyu Tolgoi was wasted away so we will not get any
profit. Exports may seem to be rising but there’ll be no currency inflow. More
economic crisis and expense are inevitable for Mongolia.
Another factor affecting the economic
crisis is said to be inconsistent government decision related to the monetary
policy. What’s your opinion on this?
It’s true that
we’re weak on money supply. The index for economic growth is completely
different from the reality. The amount of coal sold increased but the price has
halved. Furthermore, revenues are taken in advance and wasted. Even though
we’re exporting coal, we need to rationally consider that money isn’t coming
in. Mongolians have talked about exporting goods and saving money abroad. This
is related to the underground economy. With customs registration, we can
calculate how much each company is exporting. Mongolia doesn’t have a bank
monitoring system to indicate how much revenue is coming in.
Economists reported that information from
customs registration and statistical data don’t match. What’s your take on the
matter?
Goods coming in
and out of the customs can be verified through data. For example, Oyu Tolgoi
started exporting copper concentrate, from which some 20 tons of gold and some
100 tons of silver are extracted each year. Mongolia doesn’t have laboratories
to analyze this. The customs sector will become powerless someday. On the other
hand, we can calculate how much iron ore was exported. In any case, issues to
equip customs with high capacity technologies and personnel issues must be
urgently resolved. The current capacity must also monitor everything very well.
Notably, it’s stated in article 9.13 of the Oyu Tolgoi contract that revenue
from exported goods will not come to Mongolia. The two presidents should take
responsibility. During contract verification, specialists informed about this
article plenty of times. I don’t understand these people who are causing so
much panic when they’ve signed the contract in this format.
Lately, there’s been a talk of developing
national industries and establishing Mongolian brands. The Mongolian Economic
Forum was also held under the motto “Let’s create in Mongolia.” Will this objective
of the forum be able to become the bridge to escaping the economic crisis?
We’re
interpreting the economic forum as nothing but an advertisement bogus. Since
the autumn session begun last year, the Investment Promotion Law was adopted.
This doesn’t support small and medium factories. The government gave a law to
ensure stability to major investors with several billions and put up a big
white banner to support small and medium factories; yet, they’re running
policies for stock domination and strengthen their position. While major
investors have contracts for 30 years of stability, small producers constantly
fear tax increase. Soon small and medium producers will be driven into a corner
to give up their entity to larger producers. I see this as an indication of
adverse government policy.
For the economy to recover, does the proper
consumption of the people give any significant effects?
That’s not
something an economist would say. It’s too primitive. To narrow economy is the
same as saying that Mongolian poverty is a good thing. When there’s economic
crisis, all countries go into economizing mode. This isn’t appraisable. During
crises, savings need to be accumulated. The government should reduce budget
expenditures and the people should reduce inefficient spending. Presently,
Mongolia doesn’t have such programs. In 2008 and 2009, Mongolia became the
laughing stock of the world. A resolution with five provisions to overcome the
crisis was submitted to Parliament including provisions about getting a 500
million USD loan and building a 21 km long power line to Govi-Altai Province.
For Mongolia,
government policies are the main factors for economic crisis. The current
economic crisis is the result of distributing cash handouts, being unable to
implement the policy to stabilize internal economy and giving excessive
attention to mining and construction sectors in 2011 and 2012. Without noticing
this and talking about shrinking Mongolian internal economy is too ignorant.
Seven gilded Buddhist deity stolen from Erdenezuu Museum
May 20 (UB
Post) Seven gilded Buddhist deity and several other religious artifacts were
stolen on Monday night from the Museum of Erdenezuu Monastery in Kharkhorin
soum of Uvurkhangai Province.
Police
inspectors, inspection agencies, and the Ministry of Culture, Sport and Tourism
are currently working at the museum after receiving a report from the General
Police Department.
Erdenezuu
Museum has an alarm installed at every glass display and a 24/7 security
guards, reported officials.
Three of the
deity are masterpieces of finest handicrafts dating back to the 17th century
and are considered unparalleled artifacts of Mongolia.
A source from
the museum said, “Gilded Manjusri, Duinhor, Jugdernamjil and four gilded
Maitreya were stolen. We are not sure how the thieves sneaked through and got
out of the museum without being noticed by the guards.”
All law
enforcement organizations including border and customs departments were
notified of the case, and are working to find the stolen artifacts.
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