Establishment of “Development Bank” was included in the main principle

Nov 8 • Economy, Finance, Government, Mining, News, Politics • 630 Views • No Comments on Establishment of “Development Bank” was included in the main principle

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The main principle to develop economy and society in year 2009 was discussed by the State Great Khural. The draft of the main principle to develop economy and society of Mongolia in year 2009 was presented by the Minister for Finance S.Bayartsogt. When developing the draft, it was based on the mid term plan and evaluation and conclusion of economy and society of this year. Minister briefly introduced the background of this year’s development in economy and problems. He also continued that Mongolian economy is the highest in Asia with its inflation rate. But the urgent reaction of Government such as Atar III campaign, compensation on price difference, establish state reserve, soft agreement on wheat and grain import, was essential to harness soaring inflation.

Due to the commodity price fall, economy growth is decelerating, but in order to overcome the current challenges, Minister for Finance emphasizes many important measures and actions in the next year. The new amendments in Mineral Law of Mongolia, realization of Oyu Tolgoi and Tavan Tolgoi projects, adoption of the financial and legal resource to provide the grants from mining projects are included in the main principle of year 2009.
Moreover, according to the main principle, there are many initiatives  included such as new industrialization policy, regional technical and technology centres, domestic oil production, Power Plant V, extract liquid fuel from coal and natural gas, expanding Atar III campaign in order to supply vegetable domestically and 60% of wheat demand.
It also prediceted that petroleum, heating and electricity price will not be increased sharply, therefore there will not be expense related inflation. The draft says that economy growth will be 11.5% and GDP per capita is 2027 US$. After the presentation MPs clarified some issues and are as follows:

MP Ts.Sukhbaatar
Q: It said that Bayangol and Tumurtei deposits will be mined. I think Bayangol deposit is already under mining operation?
S.Bayartsogt, Minister for Finance
Tumurtei, Khustai, Bayangol group deposits in Eruu, Khuder soums of Selenge aimag and Khongor soum of Darkhan Uul aimag were included in the action plan of the Government and main principle. As for now, Tumurtei and Bayangol open pit deposits can be mined. There is an goal to build steel factory based on the Tumurtei mine.

MP N.Ganbyamba:
Q: Our economy has two pillars. What goal is planned to convert it into the multi-pillar economy? People criticize that economy growth is not felt by people. Economy growth must show its impact on people’s life and living?
S.Bayartsogt, Minister for Finance
I agree with you comment on two-pillar economy: mining and agriculture. Therefore, we are pursuing strict policy on supporting SME. Even separate agency is established. Even it has 1 billion MNT fund, it will surely develop in the future. Unemployment and poverty can be the reflection of economy growth of fall. Therefore, the Government sets its target to decrease unemployment down to 2.5%.
MP P.Altangerel:
Q: Establishment of “Bank of Development” is included. All the state banks are privatized. Do we need to have another one again? Why can refinery be built in the east region where the oil drilling is actively carried out?
S.Bayartsogt, Minister for Finance
Politicians have different position towards the Bank of Development. There are several countries such as Japan and South Korea, where this Development Bank was built successfully. It will be built by the Japanese experience and we are considering not allowing any participation of political parties in the management os the bank. There was a decision to built refinery in the central region. As for the east region, small refinery can be built, according to the capacity of oil production.

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