Today is the 100th day of Ch.Saikhanbileg's cabinet.
We are delivering the main solutions the Government has brought during its firts 100 days.
First, let's have a look at what solutions have been brought by the cabinet about the worsening economic situation.
PM Ch.Saikhanbileg conducted public voting on the future steps to overcome the economic downturn.
Residents have voted to proceed with the mega projects like Oyu Tolgoi and Tavan Tolgoi and to stabilize the soaring inflation.
Unfortunately, Oyu Tolgoi and Tavan Tolgoi projects are still at the negotiations stage.
D.Ganbold, Board Member at Oyu Tolgoi: “Additional investments are needed to kick start the second phase of Oyu Tolgoi operations. We hope that financing of the undeground mine is to be resolved soon, as the operations of it is planned to commence in 2016. Without underground operations Oyu Tolgoi economic value is not as high.”
J.Erdenebat, Minister of Finance: “As of Tavan Tolgoi working group has been established and if the conditions are favourable to Mongolian side the project will start immediately. If negotiations to fail to be beneficial for our side, it is inevitable that this project will fail as well.”
Everyone is awaiting for the good news on both projects.
PM's first official visit abroad
First official visit of PM Ch.Saikhanbileg targeted Japan and the resulted in signing of the EPA with Japanese side, which is the first of its kind for Mongolia and 15th for Japan.
Prime Minister Ch.Saikhanbileg: “It is a great opportunity for Mongolian manufacturers to export its products into Japanese market with discounted rates and tax exemptions. We need to utilize this opportunity 100 percent. February 10th is the historical date for Mongolia and Japan. We managed to advance our relations with Japan into economic partnership.“
Bad news from Minister of Finance
Few days before the cabinet reached its 100th day milestone Minister of Finance J.Erdenebat made a statement with bad news: “Mega projects are still stalled, if the situation continues with limited foreign credit, money supply is to decrease in 2015 therefore having drastic impacts on loans and economy will shrink."
"We have to pay attention to payment balance, which accrued losses of USD 1.4 billion on top of the budget deficit of MNT 1.2 trillion. As of current, Government have issued bonds worth of MNT 3 trillion, which equals to 25 percent of the total loan sources of commercial banks. It is hard to expand the economy while the government itself has gathered 25 percent of the means."
As a solution he suggested: "In order to decrease the budget deficit it is better to get long term soft loan from foreign financial institutions. We are issuing domestinc bonds with annual interest of 15-16 percent, while there is possibility to get long term loans with annual loan interest at most 2 percent. This way we can reduce the budget decifit and debt costs as well."
Moreover, Minister of Financial added that according to Program to overcome the economic downturn approved by the government Bank of Mongolia. Financial Regulatory Commission and Government of Mongolia have developed detailed plan and started its implementation.
Resolutions by the Government
Trade and Development Bank and State Bank have been granted the approval for issuing bonds. State Bank is now able to trade long term securities worth USD 300 million on international markets with low interest. Resolutions for extracting 12 tons of gold with the deposits worth USD 200 million in order to increase the gold mining.
Next is the resolution to implement saving of the state budget. It was ordered to state entities to stop using high capacity vehicles within the city.
In order to decrease dependency of MIAT on only one fuel supplier it was ordered to have two fuel suppliers.
Government has set the excise duty on strategic products such as fuel and diesel fuel. Credit lines were approved for imports of fuel from Russian Federation in order to stabilize the foreign currency flow. Credit line is avaiable for 36 months and up to USD 300 million will help to stabilize and decrease the fuel prices, increase the fuel reserves and acts the stable financing for the importers. Agreement with Rosnefti secured the stable reserves of fuel for 100 days.
Some of the notable resolutions
Prime Minister banned the state employees to be included in the Board of Directors of State Owned Entities. State Property Committee is now in charge of appointing skilled professionals at those posts. Government decided to increase the pension funds by 10 percent, thus resulting the pensions to increase to MNT 126,500 and nursing subsidies to be MNT 58,000. Exploration license applications are now being received online, resulting in reduced bureaucracy and hassle, on top of resolving 106 license issues.
Draft bills submitted by Government:
- Amednments to the regulations of Long Name Law.
- Draft law on Civil Service.
- Draft of order on Pension Reforms State Policy.
- Laws on Economic Transparency, Economic Pardoning, renewed Criminal Code and Violations.
- Main Directions on Privatization of the State Properties and Entities.
- Laws on Casino and Hippodrome.
Development projects sumbitted by the Government:
- 72 elementary schools and kindergartens to be constructed with the concession agreement, 21 school buildings to be built with Chinese aid.
- 6 aimag centers will be connected with the paved roads with Ulaanbaatar city through concession agreements, therefore having all the 21 aimags to be connected with capital city.
- Start the negotiations with Chinese investors to finance with soft loans the Egiin River Hydropower station.
- Commencement of the road to Khushigt Valley Airport in the second quarter of 2016 as the Ulaanbaatar city will host 11th ASEM meeting in 2016. The road construction is to be financed with loans from China.
- Erdenebureg Hydropower plant to be constructed in Khovd aimag.
- Construction of 700 MW power plant in Baganuur.
- Resolved financing and construction of the Buuruljuut power plant.
- Resolved to sell the Government Building number 10 through the auction and use the proceeds of the sales to finance the construction of the maternity hospital in Yarmag area.
- Concession agreement to develop the Dornod power plant.
- Resolved the financing of the gas manufacture in the scope of program to reduce the Ulaanbaatar city smoke pollution.
Today is the 100th day of Ch.Saikhanbileg's cabinet.
We are delivering the main solutions the Government has brought during its firts 100 days.
First, let's have a look at what solutions have been brought by the cabinet about the worsening economic situation.
PM Ch.Saikhanbileg conducted public voting on the future steps to overcome the economic downturn.
Residents have voted to proceed with the mega projects like Oyu Tolgoi and Tavan Tolgoi and to stabilize the soaring inflation.
Unfortunately, Oyu Tolgoi and Tavan Tolgoi projects are still at the negotiations stage.
D.Ganbold, Board Member at Oyu Tolgoi: “Additional investments are needed to kick start the second phase of Oyu Tolgoi operations. We hope that financing of the undeground mine is to be resolved soon, as the operations of it is planned to commence in 2016. Without underground operations Oyu Tolgoi economic value is not as high.”
J.Erdenebat, Minister of Finance: “As of Tavan Tolgoi working group has been established and if the conditions are favourable to Mongolian side the project will start immediately. If negotiations to fail to be beneficial for our side, it is inevitable that this project will fail as well.”
Everyone is awaiting for the good news on both projects.
PM's first official visit abroad
First official visit of PM Ch.Saikhanbileg targeted Japan and the resulted in signing of the EPA with Japanese side, which is the first of its kind for Mongolia and 15th for Japan.
Prime Minister Ch.Saikhanbileg: “It is a great opportunity for Mongolian manufacturers to export its products into Japanese market with discounted rates and tax exemptions. We need to utilize this opportunity 100 percent. February 10th is the historical date for Mongolia and Japan. We managed to advance our relations with Japan into economic partnership.“
Bad news from Minister of Finance
Few days before the cabinet reached its 100th day milestone Minister of Finance J.Erdenebat made a statement with bad news: “Mega projects are still stalled, if the situation continues with limited foreign credit, money supply is to decrease in 2015 therefore having drastic impacts on loans and economy will shrink."
"We have to pay attention to payment balance, which accrued losses of USD 1.4 billion on top of the budget deficit of MNT 1.2 trillion. As of current, Government have issued bonds worth of MNT 3 trillion, which equals to 25 percent of the total loan sources of commercial banks. It is hard to expand the economy while the government itself has gathered 25 percent of the means."
As a solution he suggested: "In order to decrease the budget deficit it is better to get long term soft loan from foreign financial institutions. We are issuing domestinc bonds with annual interest of 15-16 percent, while there is possibility to get long term loans with annual loan interest at most 2 percent. This way we can reduce the budget decifit and debt costs as well."
Moreover, Minister of Financial added that according to Program to overcome the economic downturn approved by the government Bank of Mongolia. Financial Regulatory Commission and Government of Mongolia have developed detailed plan and started its implementation.
Resolutions by the Government
Trade and Development Bank and State Bank have been granted the approval for issuing bonds. State Bank is now able to trade long term securities worth USD 300 million on international markets with low interest. Resolutions for extracting 12 tons of gold with the deposits worth USD 200 million in order to increase the gold mining.
Next is the resolution to implement saving of the state budget. It was ordered to state entities to stop using high capacity vehicles within the city.
In order to decrease dependency of MIAT on only one fuel supplier it was ordered to have two fuel suppliers.
Government has set the excise duty on strategic products such as fuel and diesel fuel. Credit lines were approved for imports of fuel from Russian Federation in order to stabilize the foreign currency flow. Credit line is avaiable for 36 months and up to USD 300 million will help to stabilize and decrease the fuel prices, increase the fuel reserves and acts the stable financing for the importers. Agreement with Rosnefti secured the stable reserves of fuel for 100 days.
Some of the notable resolutions
Prime Minister banned the state employees to be included in the Board of Directors of State Owned Entities. State Property Committee is now in charge of appointing skilled professionals at those posts. Government decided to increase the pension funds by 10 percent, thus resulting the pensions to increase to MNT 126,500 and nursing subsidies to be MNT 58,000. Exploration license applications are now being received online, resulting in reduced bureaucracy and hassle, on top of resolving 106 license issues.
Draft bills submitted by Government:
- Amednments to the regulations of Long Name Law.
- Draft law on Civil Service.
- Draft of order on Pension Reforms State Policy.
- Laws on Economic Transparency, Economic Pardoning, renewed Criminal Code and Violations.
- Main Directions on Privatization of the State Properties and Entities.
- Laws on Casino and Hippodrome.
Development projects sumbitted by the Government:
- 72 elementary schools and kindergartens to be constructed with the concession agreement, 21 school buildings to be built with Chinese aid.
- 6 aimag centers will be connected with the paved roads with Ulaanbaatar city through concession agreements, therefore having all the 21 aimags to be connected with capital city.
- Start the negotiations with Chinese investors to finance with soft loans the Egiin River Hydropower station.
- Commencement of the road to Khushigt Valley Airport in the second quarter of 2016 as the Ulaanbaatar city will host 11th ASEM meeting in 2016. The road construction is to be financed with loans from China.
- Erdenebureg Hydropower plant to be constructed in Khovd aimag.
- Construction of 700 MW power plant in Baganuur.
- Resolved financing and construction of the Buuruljuut power plant.
- Resolved to sell the Government Building number 10 through the auction and use the proceeds of the sales to finance the construction of the maternity hospital in Yarmag area.
- Concession agreement to develop the Dornod power plant.
- Resolved the financing of the gas manufacture in the scope of program to reduce the Ulaanbaatar city smoke pollution.