There is no economy chance of distributing “wealth of nation”

Sep 26 • Business, Economy, Finance, Interview • 948 Views • No Comments on There is no economy chance of distributing “wealth of nation”

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S.DEMBEREL, THE PRESIDENT OF THE MONGOLIAN CHAMBER OR COMMERCE AND INDUSTRY

Q: Many people agree with that money is the main leverage power to stimulate society and economy. Nowadays, how to understand value of money?
S.Demberel: As for today, money is in need for many people in Mongolia and everywhere. But distributing it is different issue. Government spends and invests in unfinished old works such as investing heavily to bring electricity to only 100 people. People talks much about Development Bank, because funding such as commercial banks, budget investment and foreign soft loans, grants became lo longer effective. But such experience building such a bank doesn’t bring good result. In fact there are so many Development Banks in Mongolia. Every Ministry throws budget capital ineffective way. I am talking about social care expenditure. Basically money effect is so poor.
Q: New Prime Minister talks about rapid development, like boosting. What shall we do in order to accomplish such a goal or reach such a development?
S.Demberel: We don’t reach to the rapid development when Cabinet Ministers jump. If private sector jumps then it enables rapid development. As I said you before, private sectors which can carry out themselves in good shape but staring at the Government to enable opportunity or unlock barriers, shall jump. A new governance technology that can care about, is required. I exchanged some points of views regarding this issue. We have “Transit Mongolia’ program that can bring Mongolia into the transit power between Russia and China by year 2015.
Q: Foreign investment size increased recent years. What is your opinion towards its benefit? I didn’t mention major mining projects.
S.Demberel: It is time to worry about not for the quantity of the investment but quality. I don’t what will be the reaction of the new Government. Because, the previous government changed the bottom limit of the investment from 10,000 US$ to 100,000 US$. It is not to discriminate foreign investment. But let’s take example; it is hard to name as foreign investment such businesses such as hide processing factory polluting Tuul River, metallurgical small shop that can’t throw away from the city or karaokes or petty restaurants and cafes in every two steps. In order to distinguish such businesses there must be bottom limit. Let’s bring know-how that is unknown to us or technology as investment.
Q: When the election promises come to the people? Are there any possibilities to provide such a big amount to the public?
S.Demberel: The Minister for Finance said that he will propose very strict and “mean” budget. Once both parties promised, it is ridiculous to deny their words. It is also hard to distribute promises from the budget of year 2009. Moreover, providing cash severely damages our economy. There is principle in the agenda of both parties to evenly distribute benefits of mineral resources from major projects. One of the equal distribution methods is stock holding company. It requires 2-4 years to categorize mineral resources into 4-5 categories and establish 4-5 companies for complete IPO. Also there is another 3-4 years to exploit mines. As the result there is only one answer. The election promises can be real only from 2012. But the commodity price is decreasing in the future. In this case, it is better to give up from the idea of 1-1.5 million MNT promises. In my opinion, it is better to support that private sector instead of this money throwing. In other hand there is no sun is shining for our side to harness the inflation when inflation is over 30% and our main exporting commodity price is decreasing. It is better ask official mercy from the people of Mongolia. It is ok to give children money, but don’t promise to make state officials salary 1000 US$. The reason why is there is a big gap between productivity and salary. There is also a tendency that people with less productivity demand increase of salary.
Q: Government decreased its number of Ministries. Can it be good to run the Government with less bureaucracy?
S.Demberel: The issue is not for the number of Ministries. It really depends on the responsibility split of Ministries. The Ministry of Food, Agriculture and Light Industry can hand over some of its duties to Food Association of Mongolia and monitor its activities. Based on this idea, we are preparing to propose our list to the Government about what NGOs can handle what activites. Such maneuver is vital to Mongolia.

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