The government of Mongolia has been making amendments to its budget very often. If the state budget is changed every few days like this, they should call it seasonal or monthly, not annual budget. This February, they have already begun their work to increase government spending under a fancy name of “re-enhancement”. Cannot they do the government budget planning or are they doing whatever they want under the government’s name?
Teachers who demanded salary increase ended their strike after an agreement to increase salary starting from this February was reached between the Confederation of Mongolian Trade Unions, the Employers United Association and the government of Mongolia. It has been planned to increase salary of teachers altogether with those who work for the government and raise pension. Therefore, a budget amendment to increase the government spending by MNT 172 billion is going to be made. It would have been better for everyone if salary of teachers and doctors had been increased instead of handing out free money they promised during the previous election to everyone every month.
If salary is not increased as promised, there will be another strike and children will not be able to go to school for many days. Instead of increasing salary of every single civil servant, it might be better to take salary rank and assessment of primary school teachers, nurses and traffic officers only to the next level. How accurately salary levels of people of these professions are set?
What is the reason why Mongolia is increasing its budgetary spending while the rest of the world is in a crisis and decreasing spending?
This shows that it has been a long time since Mongolia started following Greece’s path. If you would like to know where this path leads, turn on your television and watch a news program.
You will see that, even though it has only been a few months, their new government has to decrease its spending by 30 percent, average wage by 22 percent, wage of the youth until 25 years old by 32 percent, pension by 7-15 percent and has no choice but to reduce medical, military and local expenditure. Furthermore, the European Union will not bail out Greece for the third time unless Greece takes austerity measures and cuts down its spending.
If they do not do it, Greece will go bankrupt having no money for wages of teachers, doctors, police officers and there will be chaos and disorder in the country. Therefore, having no other choice, Greek parliament passed austerity measures last Sunday.
After losing their jobs and income, people started rioting in several cities burning down houses and cars. They are protesting because the previous administration that spent public properties wrongfully are not held responsible for their actions yet people are paying for their mistake.
If you want to understand how a country like Greece with a beautiful nature and landscape surrounded by the Mediterranean sea, cradle of the world’s history, culture and art, got into a situation like this, you should have a look at what the government of Mongolia is doing now. This is the consequences of faulty economic management. But, what exactly was wrong with Greece?
-There has always been a government budget deficit in Greece and they have been financing this deficit with loans. The previous governments managed to keep the money they borrowed secret by saying those were not debts. However, when tax income was decreased and social benefits were on a rise during 2008 financial crisis, things became clear because Greece could no longer borrow money. Also, many Greeks avoid taxes and it easy to get pension and other benefits. It is just like the way it is in Mongolia.
-Their public sector has low productivity and high expenditure. The public sector wage was doubled in the last 10 years. The Greek national railway company has an income of 100 million euro, but they spend 400 million alone on wages of its workers and 300 million for other purposes. Wages of those who work for this company is four times higher than the average wage. As Stefanos Manos, Greece’s former Minister for Finance, said that it would be cheaper to put the Greeks who took the trains into taxi cabs than to keep the railroad running. It is similar to Mongolian unprofitable state-owned companies.
-Other sectors do not benefit from what the government is doing. Even though their education system is the weakest in Europe, their average number of professors per student is four times more than that of Finland. Mongolians are now willing to do anything in order to acquire education abroad.
-What is worse is that corruption is everywhere in Greece, which makes them the most corrupted country in Europe. But, of course, they cannot compete with Mongolia. While Greeks bribe in order to do something that is not supposed to be done, Mongolians give bribes to do something that is supposed to be done anyways. Therefore, corruption in Mongolia is much bigger than that in Greece. The biggest fault of our economic management is that the public sector keeps expanding and, as it does so, its productivity is reduced and it becomes less responsible.
We need to take many measures such as having private sector more involved in health and education sectors, prices lowered by encouraging competition and a merit-based system introduced in public sector.
Furthermore, budgetary spending needs to be regularly monitored and those who embezzle public properties must be held responsible for their unlawful actions. If these changes are not made from within the ruling political parties, nothing is going to change and it will stay the way it is as we all can see.
It is time that Mongolia stepped off Greece’s path.
Translated by B.AMAR