Saturday, February 7, 2015

Mongolia Brief February 6, 2015 Part III

Official ceremony to honour the 3 millionth citizen and contemporaries
By B. Ireedui
February 6 ( First baby girl Mongoljin to father E.Khatanbold, natives of Dalanzadgad soum, Umnugobi aimag has been announced as the 3 millionth citizen of Mongolia.

Contemporaries will be awarded with MNT 3 million. It is expected that about 250 babies are to be included in the list and moreover, local authorities are permitted to award contemporary baby born at the local region in close proximity of timeframe with the 3 millionth citizen with apartment worth of MNT 70 million as well.
All aimags and districts are to award contemporary baby born at the local region in close proximity of timeframe with the 3 millionth citizen. 
Ministry of Population Development and Social Welfare initiated to organize official ceremony to honour 3 millionth citizen and contemporaries. 
Official ceremony will hold at 11am at Mongolian Children`s House. 

Prime Minister will pay an official visit to Japan
February 6 ( As reported by the Ministry of Foreign Affairs, Prime Minister of Mongolia Ch.Saikhanbileg will pay an official visit to Japan from February 9 to 11.
This visit will be his first foreign visit since his appointment as Prime Minister of Mongolia. 
During his visit to Japan, the Prime Minister will meet with Japanese Prime Minister Shinzo Abe and Head of the Japanese Parliamentarian's Counselor Cabinet Masaaki Yamazaki, and will participate  in a business meeting organized by the Japanese foreign trade support organization JETRO and the Mongolian government.
The Prime Minister will also meet with several Japanese officials during his official visit to Japan.   
One of the most important aims of this official visit will be the strengthening of strategic partnership and co-operation with Japan.
Premier to visit JapanMontsame, February 6

Draft resolution on overcoming economic difficulties presented
By B. Khuder
Ulaanbaatar, February 6 (MONTSAME) Head of the Cabinet Secretariat for Government S.Bayartsogt Friday submitted to the Speaker Z.Enkhbold a draft resolution of parliament on overcoming current economic difficulties.
A difficulty in payment balance, which started late 2012 at the national economy, became a crisis in 2013 and affected the economy throughout 2014. If the downturn of the biggest projects’ implementation and a poor chance of external market continue, the national economic will decline and the growth of fiscal supply will decrease. Thus, the government has drawn up the draft resolution that will be implemented for five years in three phases until 2030.
In accordance with the document, outcomes of developmental works will be put into an economic circulation by developing industrial and technological parks, industrial cluster and logistic network. It is believed that Mongolia will become a competitive exporter of final products thanks to realizing the document.  

Minister submits draft amendments to Law on Minerals
By B. Amarsaikhan
Ulaanbaatar, February 6 (MONTSAME) Chairman of the State Great Khural Mr Z.Enkhbold received Friday a draft amendments to the Law on Mineral Resources from the Minister of Mining R.Jigjid.
The latter said that it is demanded, considering the current economic situations, to earn the yield of mineral deposits with strategic importance, to define and stabilize the percentages of state stakes, and to increase the revenue according to current rates, through establishing a legal environment where a certain amount of payment is collected from a license-owner in return for keeping the state ownership percentages.
Therefore, the amendments have been developed for regulating the setting of payments to be collected from license-owners in cases of withholding the state ownership stakes.

Bill on ratification of financing agreement submitted
By B. Khuder
Ulaanbaatar, February 6 (MONTSAME) The Minister of Finance J.Erdenebat Friday submitted to the Speaker Z.Enkhbold a draft law on ratifying a financing agreement on implementing the “Sustainable livelihood-3” project.
The financing agreement has been established between the government of Mongolia and the World Bank’s International Development Association (IDA).
A method and mechanism of the previous projects implemented in Mongolia will be fully formed in frames of the “Sustainable livelihood-3” project. Moreover, technical assistance will be rendered to support the implementation of the budget law in localities and to improve skills and knowledge. Works will be done to analyze actions of local developmental funds, to encourage the best performance and to run monitoring over budgets.
A soft-loan from the IDA will be given Mongolia for the project’s implementation with the special drawing rights (SDR). The IDA expresses a readiness to give extra money as a non-refundable aid of the Swiss Agency for Development and Cooperation (SDC).     

Draft resolution about Gatsuurt deposit presented
By B. Amarsaikhan
Ulaanbaatar, February 6 (MONTSAME) The Minister of Mining R.Jigjid presented to the Speaker Z.Enkhbold the draft parliamentary resolution on designating the state ownership percentage of Gatsuurt deposit, on February 6.
A working group for negotiations, formed under the direction of the Minister of Mining, held a meeting with leaders of Centerra Gold Mongolia LLC and agreed on the state and company ownership percentages from the deposit.
The motives for the inclusion of Gatsuurt into the list of deposits of strategic importance is "its identification as a part of the North-Khentii Gold Ring and it riches of high-content ore, as well as the deposit’s future contribution to the local infrastructure and development", said the Minister. "The estimated reserves of the deposit have a probability to increase," he added. 

Draft resolution on state policy on industry presented
By B. Khuder
Ulaanbaatar, February 6 (MONTSAME) The Minister of Industry D.Erdenebat MP Friday submitted to parliament a draft resolution on approving a state policy on industry.
Total production of industrial goods accounted for 30.3% of the national Gross Domestic Product (GDP) in 2013, reaching MNT 9.8 trillion. This growth was directly affected by the mining exploitation, but the amount of processing industrial sector tends to decline in the GDP, said D.Erdenebat.
Moreover, policies and programmes on the industrial sector, approved by resolutions of parliament and government, have not been implemented successfully due to an unclear mechanism of realization. Thus, the draft resolution has been worked out by a working group, he said.
The policy’s main objective is to make the industrial sector the prior sphere that will ensure the sustainable development of Mongolia, by boosting high-competitive industries and services based on progressive techniques and technologies, he explained.   

Mongolian and Japanese scholars meet in Tokyo
By B. Khuder
Ulaanbaatar, February 6 (MONTSAME) Anthropology and genetics scientists from the two countries gathered February 3 in Tokyo, Japan.
Executive director of the “Mongol Tolbo” /Mongolian spot/ society Dr J.Batsuuri delivered scientific reports titled “Origin and prevalence of Mongolian blue spot” and “Studies of Mongolian blue spot in Mongolia”, and proposed conducting a joint research into this phenomenon. 
At the were also Ts.Gombosuren, head of the “Mongol Tolbo” society; H.Toda, head of the society’s branch in Tokyo; K.Omoto, an honorary professor of the University of Tokyo; Yo.Satta, a professor of the Japan’s National Institute on Genetics; scholars from the universities of Tokai, Ryukyu, Nagoya and Kitasato; Mongolists K.Konagaya and Sh.Kubota.
The participants shares information on the issue and concurred to run a join research.  

UB ice-hockey Cup tournament starts
By B. Khuder
Ulaanbaatar, February 6 (MONTSAME) The Ulaanbaatar Cup 2nd international tournament for ice-hockey started Friday on the ice rink in front of Chingis Khaan’s Square.
Organized by Mongolia’s Federation of Ice-Hockey (MFIC), the tournament attracted two teams from Mongolia and Russia each, and six teams from China and Finland. This year’s events are co-sponsored by some ten companies such as the “Kapital” bank, the Mobicom Corporation and the “Erdenes Mongol” company.
The first UB Cup took place in 2011 in Erdenet city.
The MFIC is building ice rinks in localities with aims to develop ice-hockey sport. As of present, ice rinks have been built in eight provinces including Sukhbaatar, Erdenet and Khentii. 

120 license application numbers to be issued per week
February 6 ( The Mineral Resources Authority has announced that it will now issue 120 minerals exploration license application numbers every Monday.
Starting on January 26, the Mineral Resources Authority began to provide numbers for applications for exploration licenses online.
As reported by the Mineral Resources Authority several changes have been made to the online application process based on proposals from enterprises. 
Head of the Mineral Resources Authority, D.Uurintuya reported, “During this period, 536 enterprises bought VPN equipment and 458 of them have received the authority to enter the system.  
"As of today, we have assigned 90 application submission numbers and received 71 applications and have reviewed them. Thirteen entities have not submitted their applications on time and six enterprises entered wrong coordinates, thus, their applications haven’t been registered.  
"So, after the review process, it has been decided that it is possible to issue exploration licenses for 47 applied areas. 
"Moreover, based on proposals made by enterprises in compliance with appropriate organizations, it has been decided to issue 120 application numbers each week instead of 30."

Open house at the Mongolian Stock Exchange takes place
February 6 ( An open house at the Mongolian Stock Exchange was carried out at the Commercial Hall of the Mongolian Stock Exchange today.
Representatives from the Ministry of Finance, Financial Coordination Board, Mongolian Stock Exchange, and representatives from security, payment, savings, and share holding companies participated in the event.
During the open house, the Mongolian Stock Exchange provided information on the following topics:
Information regarding dividends
Advice regarding investments
Advice on stock and shares dealers
How to create a brokerage account
How to open a payment account
Registration of public proposals on securities
Essential knowledge regarding securities

Glutted Mongolia
By D. Jargalsaikhan
February 6 ( It is said that everything constantly changes and the only thing that does not change is change itself. Some changes, especially the changes in technology, start a revolution in our life. For example, a computer was bigger and thicker than a person in 1990 whereas people have been getting bigger and computers have become thinner for the last 25 years.
Another example would be mobile phones. There were very few households that owned a mobile phone in 1990, but the statistics today suggest that we have more mobile phones than our population in Mongolia. More importantly, smartphones are used by half of the population and it has become very common to use a mobile phone to get many kinds of services. This revolutionary change took place because of fierce competition between communication companies from the private sector, but not the government.
Meanwhile, Mongolia's society has undergone a significant change. In our past history, we have never used as many cars, variety of food, and good quality apartments as we have today. Mongolians have never been able to travel to any desired country in the world as we do today. It turns out that the life expectancy in Mongolia grew by 7 years in the last 15 years.
However, one area that produces the least significant effect on the essence of this great change, but is hindering the development of Mongolia, is public governance.
Professor James Gwartney, an economist and an acquaintance of mine, said that the size of government can be viewed in analogy with how much food a person consumes. If you do not eat at all or do not consume sufficient food, you will not be able to get enough nutrients, which could make you sick and even lead to death. Similarly, if you consume too much food, you will suffer from cardiovascular diseases.
Consuming adequate amount of food helps health. Likewise, the size of government should be adequate to its economy. However, in order to determine the optimal size of government, the first step must be defining why governments exist and what functions they perform.
Economist James Buchanan, a Nobel Prize winner, wrote that the government has two main responsibilities. The first responsibility is to ensure the protection of rights, freedom, and property. The property should be earned or gained lawfully, not stolen or embezzled. The second responsibility is the production of public goods, which can include national security and flood protection dams.
When the government starts doing additional jobs other than fulfilling their main responsibilities, the size of government grows bigger. This process of growth in size without control brings about a political crisis, especially in a country like Mongolia where the government operations are secretive and without public scrutiny.
The costs required by the government to fulfil those two responsibilities are collected from people through taxes. Buying something with someone else's money and with your own money are two different things that give you two different feelings. The authorities quickly understand this difference, get used to it, and believe that taxes should be high while telling people that taxes should be low.
The classic example would be Mongolian government. It has been a long time since our government willingly assumed the responsibility to regulate the market despite being unable to fulfil its two main responsibilities. As a result, both the government and the economy are suffering from disruptions in their normal flow. Therefore, the slightest disruption now leads to an economic recession.
The main reason why the government has taken over the job to regulate the market is that one can still find the means to do business in the name of the government and seize opportunities outside the law to take part in highly profitable, large projects. Such activities are still taking place in the young democracy of Mongolia.
The biggest channel or the most secretive tunnel where public scrutiny cannot be exercised today is buying off political parties. The first step is to give large amounts of donations to political parties and the second step is to enter the management and governance of those political parties. Afterwards, using the connections, businesses can be expanded.
Another reason why the government is expanding is the increase of state-owned companies. The management of state-owned companies is changed to allow donations and loans to go to individuals or political parties, and procurements to be done at higher prices. These activities are being allowed to take place, which is why Mongolia now has as many state-owned companies as they claim to have privatized.
The total debt of more than 100 state-owned companies today exceeds the debt from Chinggis bond. It is impossible to reduce government involvement in economy without privatizing these so-called state-owned, de facto political-party-owned companies.
When the government talks about cutting expenditure, public servants, including government employees, doctors, and teachers, are targeted. However, if the ownership of those state-owned companies is made clear, there will be less stealing and more profits. Nevertheless, during the recession today, this topic is barely mentioned.
Our government has been on this path for many years and has become too large in size, which made Mongolia glutted on its government. Our economy faces theft, not a crisis. It was not caused by the investors going out of the country, which is being talked about by politicians with great enthusiasm. It was caused by the government becoming too large.
One of the main drivers of this enlargement is political parties. Mongolia's political parties today, especially the one that currently have the ruling power, are exempt from public scrutiny. Their own party members who are blind followers with a distant hope to go to a senior position someday do not know where the financing comes from and how come they have so much money available. These political parties are the most secretive institutions today.
Political parties have become a secret network where power in the form of seats and positions is traded. Only the most senior leaders are aware of where the financing comes from. This is why it is almost impossible to change and replace the leaders of the ruling political parties.
In order to free the government from corruption, we need to have every political party that has a seat in the parliament to release their revenue report of 2012, the election year, and since. Independent audit with representation from the public must be done. It is set out in the law.
If we manage to disqualify the political parties who fail to provide accurate reports from the next election, Mongolia's huge corruption network will be brought down. Until then, the incapable government will keep changing its structure, replacing actors to play characters, and switching deels working with the parliament. A lot of time will be lost while they continue increasing government expenditure and acquiring domestic and foreign loans to make up for deficits. Should it continue from an election to an election?
The 2015 budget amendment erased the faith and patience Mongolians had. It was the first time ever that Mongolians made an amendment to the public budget after only two months since the approval. The amendment did not change the government expenditure, but they "zaisan-ed" to change the law to reduce the budget revenue and increase the deficit 2.5 times higher. It is causing ordinary people have red faces out of embarrassment as the 'actors' of parliament are not. It proves that no Prime Minister, regardless of who he is, can bring about a change.
Nothing will change unless the roots of Mongolia's public governance are reformed, the current political parties are changed, and all politicians today are replaced. A new generation needs new political leaders who are young, not affected by corruption, and capable of making a change.
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