On December 19th, 2014 PM Ch. Saikhanbileg delivered his speech at State Great Khural reporting on the current socio-economic situation of Mongolia and introduced his ways to overcome the economic downturn.
Government for Solution targeted social welfare for children, students and mothers with four or more children, therefore triggering the discontent among the public. We have approached experts and economist questioning the solutions of the Government to overcome the current slowdown.
Question 1
-PM Ch.Saikhanbileg outlined the main diagnosis for the current economic downturn as overspending and in order to fix the economy Mongolia needs to shift for savings and first targeted the social welfare programs including children, students and state employees. Is it the right cure for the PM’s diagnosis?
Question 2
-If not, what are the main reasons for the economic downturn? What are the proper ways to overcome the current situation?
N.DASHZEVEG: PM’S DIAGNOSIS IS NOT COMPLETE
PhD N.Dashzeveg, President of MONGOL College, State Honored Economist:
1. Diagnosis for the economy is not complete. I see that PM was more focusing on budget. I agree that students should receive MNT 70,000 based on merits. I did not see anything wrong with budget cuts. He did not say that he will cut children money, but to direct it to the most needed ones. - Economic downturn we are facing at the moment is mostly due to the faulty budget and fiscal policies. It is actually good that PM seeks to cut the budget spending, yet it is not an easy task to so, as we have expanded the budget as the mineral sector started to generate income
Most of the countries tend to accumulate those funds. Our mistake was we didn’t. in 2011 and 2012 our budget seen some surplus, yet at that time Government and State Great Khural did not pay much attention to accumulate those funds for days like this. We could have had funds to disburse at current economic downturn.
I agree that students should receive stipend of MNT 70,000 based on merits. I did not see anything wrong with budget cuts. He did not say that he will cut children money, but to direct it to the most needed ones.
Biggest mistake of Government was the negligent expansion of 2013 budget and the disbursement of the funds to aimag and soum governments. It inflated the prices and led the dollar to skyrocket.
Budget cuts should have targeted areas and sectors that less affect people’s lives. For instance, state expenditures. If one really wanted to do the cutbacks, he should have started with eliminating positions of Deputy Ministers. Secondly, City Council members receive 10 million MNT every quarter. He didn’t do cutbacks there.
2. Main reason behind the economic downturn is the faults in fiscal and monetary policies. Moreover, the negative impacts of external economy should have been neutralized with proper monetary and fiscal policies. In order to overcome the current economic situation we have to establish the Ecoonomic Council. PM have mentioned about it too in his speech. He needs to invite the experts, researchers and economists to do the fundamental analysis. What PM did to diagnose the economy was not enough and was taken lightly. Analysis should be comprised of facts, numbers and evidence. Of course, this is not an easy task for the Government itself. It needs help of experts and research. There is more to do to come up with proper diagnosis.
R.AMARJARGAL: FIRING EMPLOYEES WON’T HELP MUCH WITH CURRENT ECONOMIC SITUATION
MP R.Amarjargal:
1. I have read PM’s speech. Firstly, it seemed like it was the collection of the complaints we heard for the last 2 years. Secondly, I doubted if the diagnosis was correct. Basically he blamed previous Government. I doubted even more the solutions of PM. He said that he can overcome the economic downturn through eliminating some of the jobs and imposing taxes on herders.
2. Firing employees won’t help much with current economic situation. I also wanted to ask what will the price for all those solutions suggested.
CH.KHASHCHULUUN: SOCIAL WELFARE IS NOT THE MAIN REASON OF THE ECONOMIC DOWNTURN
Ch.Khashchuluun, Lecturer at NUM, economist:
1. I do not think that is proper to target the social welfare in order to do cutbacks in budget, although the idea of cutting the expenditure is good. In our country wealth distribution is not even. There are more children and elders that need the welfare programs. It is not such a good idea to cut on the poor. Social welfare is not the main reason of the economic downturn. Amount of funds directed for social welfare is not high compared to other expenditures. He should have talked about cutting on the subsidies that state companies receive.
Support is needed in the three sectors. Construction. Mining. Trade.
Criticism that there is too much social welfare programs is true. But then the reason behind the current situation is more on the plunging foreign investments, which dropped by 70 percent. Also the lack of the support of the private businesses added much to the current slowdown.
2. Support is needed in the three sectors. Construction. Mining. Trade. Out of these three mining was hit the hardest in the last two years. Although many would refer to the global slowdown of the commodities market, Australia is not experiencing any slowdown, as they export same products as we do like coal and copper.
Our mistake was we have created the unfriendly environment for investors and delayed the mega projects. These were the main reasons behind the economic downturn. Secondly, construction sector have received a lot of subsidies in 2013. Subsidies were both for constructing and buying the housings. This expenditure is not related to the poor at all. Thirdly, price stabilization program consumed MNT 3 trillion, which is a lot. Trade is dependent on the first two sectors. These were the main triggers for the current situation and if we are to solve the problems we need to start with these, not with cutting the social welfare at all.
B.BYAMBASAIKHAN: WE HAVE LOST TRUST WE BUILT FOR 25 YEARS IN JUST 2 YEARS.
B.Baymbasaikhan, Chairmain of BD, Mongolian Business Council:
1. I don’t know what PM speech was, therefore I cannot comment on it
2. We need investments. Direct foreign investments and financing of the mega projects dropped enormously.
It is true that our spending was increasing day by day in last 25 years. But today there is no cash flow to secure that spending. We need to increase direct foreign investments and start the delayed projects in order to create jobs. These are main reasons for the economic downturn. We have lost trust that we built for 25 years in just 2 years.
We have to work hard to regain the trust of the foreign investors. Investment environment should pick up if we pay attention to infrastructure and mining sectors. Government should be more open and reliable for investors to come in and make deals.
D.JARGALSAIKHAN: CH.SAIHANBILEG IS DOING WHAT OTHERS WEREN’T.
It is correct that social welfare programs should be optimized. Also Government structure should be reduced. It is inevitable that budget cannot support such big structure anymore. Moreover, government needs to work on improving the business environment. There is no other choice for us anyhow. Everything is limited.
I think PM is doing what others were not doing at all and were afraid to do. It is time pay attention on how we can increase labor capacity, which leads to increased output.
M.KHALIUNBAT: PM’S SPEECH IS POLITICAL STUNT
M.Khaliunbat, President of Silk Road Foundation:
Generally there is that custom that when one receives job he tries to make it look like there is a lot of faults and lots of room to improve, while the one who resigns makes it look like one did a lot already and there is just few left to work at, but the new person ruined everything. This is common everywhere. PM’s speech proved it once again.
It is good he tries to state the facts as they are. On the other hand, it looks like small political stunt.
Lately President Nazarbaev, Putin and our leaders repeat that it is time economic downturn and that we need to do cutbacks. On one hand it is good that they state the facts as they are. On the other hand, it looks like political stunt. Honestly, I don’t see any proper diagnosis in his speech. Frankly saying, there are many things that is good and much more things that need improvement.
Main point here is to have proper diagnosis. PM’s speech proved that there is more work needed to come up with constructive diagnosis. There is no institution in Mongolia that analyses the whole economy, leading to statements that cover only some of the angles of the bigger aspect.
It is obvious that Mongolia needs to take matters in its hands regarding the budget. I don’t agree with saying that in last few years budget has seen expansions like never before and it needs to be cut. There is no notion of saving on budget. There is only reduction to normal. For that we need to reduce some of the expenditures. But which expenditures is the next important question. Children money and student stipend are on the list, I agree with that, but there are far more to be added to this list. It was the main mistake of PM that triggered the negative sentiment on his speech.
On December 19th, 2014 PM Ch. Saikhanbileg delivered his speech at State Great Khural reporting on the current socio-economic situation of Mongolia and introduced his ways to overcome the economic downturn.
Government for Solution targeted social welfare for children, students and mothers with four or more children, therefore triggering the discontent among the public. We have approached experts and economist questioning the solutions of the Government to overcome the current slowdown.
Question 1
-PM Ch.Saikhanbileg outlined the main diagnosis for the current economic downturn as overspending and in order to fix the economy Mongolia needs to shift for savings and first targeted the social welfare programs including children, students and state employees. Is it the right cure for the PM’s diagnosis?
Question 2
-If not, what are the main reasons for the economic downturn? What are the proper ways to overcome the current situation?
N.DASHZEVEG: PM’S DIAGNOSIS IS NOT COMPLETE
PhD N.Dashzeveg, President of MONGOL College, State Honored Economist:
- 1. Diagnosis for the economy is not complete. I see that PM was more focusing on budget. I agree that students should receive MNT 70,000 based on merits. I did not see anything wrong with budget cuts. He did not say that he will cut children money, but to direct it to the most needed ones.
- Economic downturn we are facing at the moment is mostly due to the faulty budget and fiscal policies. It is actually good that PM seeks to cut the budget spending, yet it is not an easy task to so, as we have expanded the budget as the mineral sector started to generate income
Most of the countries tend to accumulate those funds. Our mistake was we didn’t. in 2011 and 2012 our budget seen some surplus, yet at that time Government and State Great Khural did not pay much attention to accumulate those funds for days like this. We could have had funds to disburse at current economic downturn.
I agree that students should receive stipend of MNT 70,000 based on merits. I did not see anything wrong with budget cuts. He did not say that he will cut children money, but to direct it to the most needed ones.
Biggest mistake of Government was the negligent expansion of 2013 budget and the disbursement of the funds to aimag and soum governments. It inflated the prices and led the dollar to skyrocket.
Budget cuts should have targeted areas and sectors that less affect people’s lives. For instance, state expenditures. If one really wanted to do the cutbacks, he should have started with eliminating positions of Deputy Ministers. Secondly, City Council members receive 10 million MNT every quarter. He didn’t do cutbacks there.
2. Main reason behind the economic downturn is the faults in fiscal and monetary policies. Moreover, the negative impacts of external economy should have been neutralized with proper monetary and fiscal policies. In order to overcome the current economic situation we have to establish the Ecoonomic Council. PM have mentioned about it too in his speech. He needs to invite the experts, researchers and economists to do the fundamental analysis. What PM did to diagnose the economy was not enough and was taken lightly. Analysis should be comprised of facts, numbers and evidence. Of course, this is not an easy task for the Government itself. It needs help of experts and research. There is more to do to come up with proper diagnosis.
R.AMARJARGAL: FIRING EMPLOYEES WON’T HELP MUCH WITH CURRENT ECONOMIC SITUATION
MP R.Amarjargal:
1. I have read PM’s speech. Firstly, it seemed like it was the collection of the complaints we heard for the last 2 years. Secondly, I doubted if the diagnosis was correct. Basically he blamed previous Government. I doubted even more the solutions of PM. He said that he can overcome the economic downturn through eliminating some of the jobs and imposing taxes on herders.
2. Firing employees won’t help much with current economic situation. I also wanted to ask what will the price for all those solutions suggested.
CH.KHASHCHULUUN: SOCIAL WELFARE IS NOT THE MAIN REASON OF THE ECONOMIC DOWNTURN
Ch.Khashchuluun, Lecturer at NUM, economist:
1. I do not think that is proper to target the social welfare in order to do cutbacks in budget, although the idea of cutting the expenditure is good. In our country wealth distribution is not even. There are more children and elders that need the welfare programs. It is not such a good idea to cut on the poor. Social welfare is not the main reason of the economic downturn. Amount of funds directed for social welfare is not high compared to other expenditures. He should have talked about cutting on the subsidies that state companies receive.
Support is needed in the three sectors. Construction. Mining. Trade.
Criticism that there is too much social welfare programs is true. But then the reason behind the current situation is more on the plunging foreign investments, which dropped by 70 percent. Also the lack of the support of the private businesses added much to the current slowdown.
2. Support is needed in the three sectors. Construction. Mining. Trade. Out of these three mining was hit the hardest in the last two years. Although many would refer to the global slowdown of the commodities market, Australia is not experiencing any slowdown, as they export same products as we do like coal and copper.
Our mistake was we have created the unfriendly environment for investors and delayed the mega projects. These were the main reasons behind the economic downturn. Secondly, construction sector have received a lot of subsidies in 2013. Subsidies were both for constructing and buying the housings. This expenditure is not related to the poor at all. Thirdly, price stabilization program consumed MNT 3 trillion, which is a lot. Trade is dependent on the first two sectors. These were the main triggers for the current situation and if we are to solve the problems we need to start with these, not with cutting the social welfare at all.
B.BYAMBASAIKHAN: WE HAVE LOST TRUST WE BUILT FOR 25 YEARS IN JUST 2 YEARS.
B.Baymbasaikhan, Chairmain of BD, Mongolian Business Council:
1. I don’t know what PM speech was, therefore I cannot comment on it
2. We need investments. Direct foreign investments and financing of the mega projects dropped enormously.
It is true that our spending was increasing day by day in last 25 years. But today there is no cash flow to secure that spending. We need to increase direct foreign investments and start the delayed projects in order to create jobs. These are main reasons for the economic downturn. We have lost trust that we built for 25 years in just 2 years.
We have to work hard to regain the trust of the foreign investors. Investment environment should pick up if we pay attention to infrastructure and mining sectors. Government should be more open and reliable for investors to come in and make deals.
D.JARGALSAIKHAN: CH.SAIHANBILEG IS DOING WHAT OTHERS WEREN’T.
It is correct that social welfare programs should be optimized. Also Government structure should be reduced. It is inevitable that budget cannot support such big structure anymore. Moreover, government needs to work on improving the business environment. There is no other choice for us anyhow. Everything is limited.
I think PM is doing what others were not doing at all and were afraid to do. It is time pay attention on how we can increase labor capacity, which leads to increased output.
M.KHALIUNBAT: PM’S SPEECH IS POLITICAL STUNT
M.Khaliunbat, President of Silk Road Foundation:
Generally there is that custom that when one receives job he tries to make it look like there is a lot of faults and lots of room to improve, while the one who resigns makes it look like one did a lot already and there is just few left to work at, but the new person ruined everything. This is common everywhere. PM’s speech proved it once again.
It is good he tries to state the facts as they are. On the other hand, it looks like small political stunt.
Lately President Nazarbaev, Putin and our leaders repeat that it is time economic downturn and that we need to do cutbacks. On one hand it is good that they state the facts as they are. On the other hand, it looks like political stunt. Honestly, I don’t see any proper diagnosis in his speech. Frankly saying, there are many things that is good and much more things that need improvement.
Main point here is to have proper diagnosis. PM’s speech proved that there is more work needed to come up with constructive diagnosis. There is no institution in Mongolia that analyses the whole economy, leading to statements that cover only some of the angles of the bigger aspect.
It is obvious that Mongolia needs to take matters in its hands regarding the budget. I don’t agree with saying that in last few years budget has seen expansions like never before and it needs to be cut. There is no notion of saving on budget. There is only reduction to normal. For that we need to reduce some of the expenditures. But which expenditures is the next important question. Children money and student stipend are on the list, I agree with that, but there are far more to be added to this list. It was the main mistake of PM that triggered the negative sentiment on his speech.