Prime Minister S.Batbold made press conference on “Principles of privatizing the state properties”. Prime Minister was accompanied by Mr. D.Sugar, Chairman of the State Property Committee, MSE Director R.Sodkhuu and other officials when sharing his view towards people’s savings at banks and issuing shares.
Prime Minister stated that “Government’s intention of privatization of the state property in 2010 – 2012 and the state’s support in increasing private companies’ involvement in the privatization” and informed that the plan is presented to the State Great Khural.
Priority is to raise fund for the state owned companies through listing them at the foreign capital markets based on the mineral resources and deposits in Mongolia. According to the Prime Minister, foreign mining companies, operating in Mongolia, managed to raise $15 billion at the international capital market. If the Mongolian companies start operation with its own fund, it will unlock our opportunity to become competent at the foreign markets and relieve Mongolia from short term loan with higher rate.
“This share issuance is not the first experience. We did it in 1990 with red and blue shares. But due to lack of involvement and participation of people, the whole exercise was failure. Therefore, people tended to locate their savings where there were higher rates existed. As a result, we experienced regretful cases of bankruptcy of Credit and Savings Cooperatives.” But this initiative will not repeat the mistake; instead it will invite and hire the most experienced experts and professionals from the major foreign stock exchanges while actively learning from the international market. Therefore, in order to secure well living of its people, the Government will support capable companies and issue reliable shares with options. This share issuing exercise will be implemented in the companies with 51% or more ownership from the state.
After the information, Prime Minister answered question of media.
Q: When the privatization and share issuing activities will start? Will it take long until the next election and disappear?
-This is truly important danger to consider. We failed when we issued red and blue shares in the past. It could be explained that the people’s knowledge was poor. But at this time, the Government will ensure participation of its people, in reaching common consent. Hence, the very first job to accomplish is to present it to the State Great Khural and get adopted. In order not to lose much time, we need to get it adopted by the fall session of the State Great Khural.
Q: Before kicking off this plan, the State Property Committee and MSE shall be reformed?
-There were certain misleading things and arrangements. Therefore, we are planning to invite foreign expert and professionals to get their assistance. After that if necessary, we will reform the State Property Committee and MSE.
Q: People already expect such plan. But people still in hesitation whether those officials such as sitting next to you understand it or not? It is really complicated work when bank owners are uncertain and everything is hidden. People still don’t understand what state property is and what is private?
-At first, this project of the Government shall be adopted by SGK. Whole operation will be made after that international open tender bid is announced and new management introduced. Actually, we want to implement it immediately, but the legal environment is not sufficient enough to regulate such a huge exercise. Therefore, we are planning to invite foreign experts.
Q: Shall we reform legal environment before inviting experts?
– It is hard to accomplish everything in one go. It takes time and effort. I believe that it is wise to invite foreign experts beforehand. We should seek assistance.
Q: Can we fund Tavan Tolgoi by ourselves?
– The most positive news is Tavan Tolgoi is owned by the state. Therefore, even we get foreign investment in TT, people can control its activities.