Jargal Blog - Budget
Abstract budget and money outside the budget
Exports revenue is essential to our country, which purchases every commodity from abroad except for bread, sweets, alcohol and meat. Therefore, our socio-economic outlook is fully dependent on the prices of coal and copper we are selling to China. In 2012, mining income generated one third of our GDP and coal and copper sales comprised 40 and 20 percent of total export revenue respectively. The Ministry of Finance estimated that one fourth of our total government revenue (1.7 trillion MNT) will be generated by this sector in 2013. This estimation produces a number that is 60 percent higher than that of last year. However, coal prices fell significantly in the first quarter of this year and its sales, which were supposed to generate 466 billion MNT of the budget, was greatly reduced. Although it was planned that 28 million tons ...
Why we need to hear the Cyprus story
April 3, 2013 How much money is needed to maintain the normal economic flow of a country? For example, it is a common view in European Union countries that the total capital in banks should be 3.3 times as much as their economy. Only then is it possible for enough capital exchange needed for economic development. This shall be achieved through the constant flow of money. Metaphorically speaking, it resembles a full bottle, one third of which consists of solid substance and the rest is water. The water allows the solid substances to move freely.This ratio reached one to eight in Cyprus, a small European Union country. The most serious problem is that it had bought Greek government bonds and lent a huge amount of money to its private sector. Following the Greek debt crisis, the European Union made a ...
Tavan tolgoi and tavan challenges
February 20, 2013 If there are no certain laws that put some sort of restraint on the government and its authority, politicians will readily do anything in order to be re-elected. In Mongolia, a new and young democracy, lawmakers managed to seize the executive power for themselves. This turned the government upside down, altered the meaning of public governance and allowed the government structure to serve small interest groups instead of the people.Due to distortion in public governance, our economy is experiencing many negative consequences as well as failing to decrease the inflation rate and reduce poverty. Therefore, if we don’t identify the underlying reason of this risk our governance is facing and resolve it properly, some serious harm will begin to threaten our national security.Five clear challenges faced by Mongolia’s public governance today are illustrated here by the example ...
Economic cold
Nothing happens to Mongolian economy when the world economy starts to feel ill. However, when the world economy catches a cough, Mongolia directly gets a cold. Furthermore, when the world economy has a cold, Mongolia is already in emergency room on a life support machine. It is all because Mongolia is too vulnerable. Another international financial crisis has begun due to the debt crisis in the European Union, which comprises one fifth of the world economy, and economic slowdown in the United States, which makes up one quarter of the world economy. The 3rd quarter economic report shows that the economic decline in the West is slowing down the growth rate of developing countries. China’s foreign trade growth in September was the least of the last seven months. China’s trade with its biggest partner, EU, was ...
Ulaanbaatar and London
Ulaanbaatar and London have two similarities and one dissimilarity. The first similarity Capital cities of both Mongolia and England suffered air pollution that harmed health and cost lives of its dwellers. Ulaanbaatar’s air pollution level has beaten that of London 60 years ago and has been the most air-polluted city of the world for many winters. People living downtown are breathing six times toxic air than normal and those who live in ger districts of Ulaanbaatar are breathing air that is 18 times worse than normal. The Great Smog of London, the capital city of Foggy Albion, took 4000 lives due to fume from incomplete combustion of coal that came out of every single chimney in the city on December 5-9, 1952, when London had one of the coldest temperatures ever. In the next couple of days, 8000 people died ...
Outsourcing the Government
Mongolia’s government recognizes its incapacity to accomplish its duties. So they started to hire foreign management in state-owned enterprises already. The question is, should Mongolia’s government continue in this approach or identify and remove the roots of the inaptitude?For 14 million USD, our government invited a managing team from the London Stock Exchange as a replacement for the executives of Mongolia’s Stock Exchange with hope to awaken the national stock exchange from its long hibernation to raise to an international level.The Korean Development Bank will manage the newly founded Mongolian Development Bank. The Korean government agreed to cover the costs. As the state owned monopoly in aviation, MIAT company recently parted company with the Irish management team from which they long struggled to rid themselves, but the government is planning to hire another foreign management team and pilots.While we are ...
Grant and basis
I transited through Dalanzadgad. While each month every Mongolian citizen receives 21 thousand Tugrogs as “motherland grant,” in addition to that UmnuGobi residents began receive “local grant” in 500 thousand Tugrogs a year. National and local politicians 14 of the 25 members at the Khural of citizens representatives in South Gobi aimag are from Democratic Party are as busy as those in the capital city as they try to keep their election promise to individual citizens in delivering “municipal share” from the 51% shares designated to municipal government from the “Old” Tavan Tolgoi mine. A chauffeur was telling me how his family of four would be receiving 2 million Tugrogs soon. In this way, UmnuGobi residents, who are receiving grants from both the capital and aimag, are less and less interested in digging up earth or working on constructions for ...
Apartment prices will not decline
“Apartment prices will decline, especially when program for 100 thousand apartments starts to take effect housing prices will decline by double” confirmed the president of the Construction association M.Batbaatar. Unfortunately the history of economic development in other countries shows that in fast growing developing economies that are largely based on mining, housing prices never decline. Instead of price decline following an economic crisis, housing prices competed with economic development and increased even more following an upsurge in petroleum prices on the global market. Qatar and Kazakhstan whose economies are similar to Mongolia are clear examples of this situation. Today, Mongolia is repeating this history, as more apartments are put on market, housing price are rising. During this year’s second quarter alone, average apartment price increased by 30% and 1m square costs 1.2 million Turgrogs. Prices for good quality apartments in ...
Hygieia
Although a nation’s development is calculated from the sum total of annual production and service i.e. GDP, or monetary ration per capita this mean average does not always reflect a population’s living standard level accurately as would other statistical data indicate.Recently on BBC, an expert from Singapore proposed to measure the level of nation’s development and living standards by general sanitary conditions e.g. the number of bathrooms with flushing toilets per 100 families. Most basic requirement for a healthy living is access to drinking water followed by water for sanitation. When Singaporean residents first moved to inexpensive apartments with flushing water closets, he says, citizens felt their living standards “brought to a whole new level and felt like the British.” Working presently as a volunteer in a small residential district in Malaysia, he showed the journalist around poor income family ...
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