MPs are divided regarding the issue of placing state money at combanks. MP Kh.Narankhuu has his words regarding this issue.
Q: What is your opinion regarding the decision of placing money at combanks?
MP Kh.Narankhuu: From one hand state money shouldn’t lie idly, but it must be into the market circulation. But it is better be at combanks. But we are not talking about petty saving deposit money at combanks. Mos of the countries are affected by the crisis. Their administration made decision to strengthen banking system. They allocated certain fund at combanks and it was distributed as investment. For example, USA is about to provide 60 billion US$ for its car makers. Also China and Russia are announced to provide a trillion US$ for their light industry, food industry, energy, infrastructure and agriculture industry. Ministries or agencies must not provide it. In the market economy investment must be made through banks. But at the moment we don’t have investment banks, therefore the issue of providing it through combanks was arisen. But it must not be provided only, the government must instruct its usage. I believe that combanks will not distribute it by itself without common consent. Also the selection criteria must be made very clear.
Q: Economists say that financial market is important in the time of crisis. What is your opinion?
MP Kh.Narankhuu: For Mongolia financial market is important when the world is undergoing the economy recession. But it is not effective when the real economy is not strong. Because it is affected at the first instance. Financial market is under crisis but the real economy is strong enough to overcome it. We should evaluate this showings.
Q: If we can implement it, do we have a chance of getting through this crisis with less risk?
MP Kh.Narankhuu: Yes. Real production or material production industry is weak and less developed in Mongolia. At least we are importing the most of our food and especially, goods and garments. But we were talking a lot about stock, bond and shares when we don’t have strong industrial base. We are omitting the general idea of industry and talking about raising fund. Therefore, the industry must be strengthened. All mechanisms such as customs, credit and finance must be directed into this direction. Placing money at combanks is the first step. Afterwards, draft laws to support banking, financial sectors and genuine economy sectors will be proposed.
Q: Mongolia Development Fund money will be used for making reserve of wheat. What is your position towards it?
MP Kh.Narankhuu: Money can’t be lying idly in Mongolia. It is good to make reserve when the price is low, because we are importing almost 50% of our consumption. Also we should make good calculation on wheat price. Ministry of Finance and State Fund which regulates this Fund must make profound calculation. The wheat future prediction was made. According to this prognosis, wheat price will be lower, but spring price will be higher than autumn. As for today its price has fallen twice since the last spring. It can be good to buy cheap wheat. But on the other hand we should calculate the balance of wheat, next year’s consumption and flour mill supply and demand. Poor calculation will bring more harmful result like reserving petrol in spring. But its price has fallen.
Q: What is you opinion towards the Mineral Law of Mongolia?
MP Kh.Narankhuu: Due to the economy crisis in Mongolia, invetsors’ interest in Mongolia has fallen. We should make investment agreement on Oyu Tolgoi and Tavan Tolgoi immediately. It will take 5 years until the production. But it is important for us to build factory on them. Therefore, it should be better to revise Mineral law of Mongolia of year 2006. I am worried about mining industry and its crisis in the world economy recession time. We should study others experience. The Government might conclude an agreement based on the tender bid or competition between investors.
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