MONGOLIA’S ECONOMIC GROWTH INCREASES IN FIRST HALF OF 2017

Mongolia’s economic growth accelerated sharply in the first half of 2017, the government said, helped by a revived coal market and a bailout package led by the International Monetary Fund.

The country’s gross domestic product (GDP) expanded 5.3 percent from a year earlier, to 12.8 trillion tugrik ($5.26 billion), the National Statistics Office said on Tuesday.

In the first quarter, Mongolia reported 4.2 percent annual growth. For all of 2016, the economy expanded only 1 percent, the slowest pace in seven years.

The northeast Asian country’s economy has improved since an agreement in May for a $5.5 billion economic rescue package from the IMF and partners helped prevent defaults on sovereign loans and bolstered the flagging currency.

The coal industry in Mongolia has also seen a boon from a Chinese ban on coal from North Korea and curbs on deliveries into smaller ports.

Coal exports grew more than four times from January through July compared with the same period last year, to $1.4 billion. Mongolia sold 97 percent of its coal to China, with the remainder going to Russia and the United Kingdom.

Copper exports in the first seven months this year fell by 14.3 percent to $888.75 million, the statistics office reported.

EUROPEAN INVESTMENT BANK TO SUPPORT GOBI WIND FARM

The European Investment Bank (EIB) has signed a financing agreement to back the construction of a 54-MW Sainshand wind park in Mongolia’s Gobi desert.

According to the lender’s website, the amount of the approved financing is EUR 45 million (USD 53.1m), while the total cost of the scheme is estimated at EUR 95 million. The company behind the project is Sainshand Salkhin Park LLC, a special purpose limited liability entity owned by French energy major Engie (EPA:ENGI), the IFU, Germany-based Ferrostaal GmbH and a local partner.

The project envisages erecting 25 wind turbines on government-owned land to the southeast of Sainshand city, in Dornogobi Province. The developers have already secured a power purchase agreement (PPA) and obtained all needed licences, Ferrostaal says. Once operational, the wind farm is expected to generate about 190,000 MWh of electricity per year.

Under its national power policy Mongolia aims for a renewables share of 20% by 2020 and of 30% by 2030.

SUMMARY OF PLENARY SESSION – BUILDING AN INCLUSIVE ECONOMY

SUMMARY OF PLENARY SESSION – BUILDING AN INCLUSIVE ECONOMY MODERATED BY: MR.AMARJARGAL RINCHINNYAM, FORMER PRIME MINISTER, MONGOLIA

July 14, 2016

Ladies and Gentlemen’s,

The concept of inclusive growth is “a very big umbrella”, so we were given guidance to keep the discussion within a scope of economic growth, income inequality, corporate social responsibility, citizen participation, multilateral trading system, economic integration between EU and ASEAN, special and differential treatment, landlocked, small and remote island economies.

We had two keynote speakers:

  • Bert Hoffman, Country director for China, Mongolia and Korea, east Asia and pacific region, World Bank group – Talked about the changes in composition of growth, productivity slow down in overall and as result – less investment demands despite loosen monetary policy, and very low interest rates. He also mentioned education, R&D, business climate, rapid reduction of poverty as forces, among others, that affecting the inclusive growth.
  • Ito Masatoshi, Chair of committee on Asia and Oceania, Keidanren (Japan business federation), Chairman of the board, Ajinomoto co., Inc. stressed an importance of international environment for free and open trade including trilateral relations and cooperation of NorthAmerica, Europe and Asia. He strongly advocated for trans pacific free trade and possible FTA between Japan S.Korea and China. He also mentioned the role of PPP, social and cultural factors for promoting inclusive growth.

Three panelists:

  • Rafael Goue, Chairman, consumer finance and non-banking financial institutions, General manager of euracific strategies – highlighted the issue of financial inclusion, in this regard, the role of NGO type of non-banking institutions. The role of communication technology development, big data, strengthening of regulatory framework in order to facilitate the microfinance were also addressed.
  • Yolanda Fernandez Lommen, Country director for Mongolia, Asian development bank – saw a weak transport infrastructure as a key factorwhich holds back the inclusive growth, and messaged to look for drivers of growth which do not dependon transport infrastructure, such as services.
  • Batsukh Galsan, Chairman of Board of directors, OyuTolgoi llc – highlighted the key challenges for small, landlocked countries. The role of corporate and social responsibility was demonstrated in the case of OT.

During Q&A, there were issues raised on inclusive institutions, SME and interest rate, technology and private sector.

In general, I would say that it was a very lively, provoking session and I want to thankall of speakers, panel , and audiencefor active participation.

Ladies and gentlemen’s,

The concept of inclusive growth is gaining ground in the last few years. Academicians are debating on theoretical aspects such as direct relationship between stability of society, individual freedom and inclusive economic growth. It is more and more clear that land, education, technology, innovation, SME are the key drivers of inclusive growth. Corruption, poverty, unemployment are anti-forces. Fundamental dilemmas of inclusive growth, such as inner vs. outer, economic vs. social, individual vs. community are still in needto be addressed in terms of practical application. I personally do believe that inclusive growth means going far beyond the welfare, it is an interaction of all components in order to create a new synergy. The vision for inclusive growth should be considered in the stages of designing the policy, delivering it, and sharing the output. Inclusive growth is economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society.

In practical terms, the expected outcomes of the session were:

  • Acknowledge the important role of Asian and European businesses including SMEs, in contributing to the inclusive growth of economy;
  • Recognize the untapped potentials in investment and trade between two continents;
  • Deliver the message to the business leaders and policy makers to reduce the income inequality;
  • Point out the challenges, that landlocked and small remote island economies face;
  • How to build inclusive economies, that upgrade the living standards;

In conclusion of the discussions, we recommend to consider following points:

  • Ensure that the developing nations’ economic benefits such as unimpeded access and favorable condition for transit countries from political and economic union
  • Stress the central role of the wto in setting global trade rules, administering a rules-based multilateral trading system and enhancing the rule of law.
  • Welcome the positive outcomes of the tenth wto ministerial conference held in Nairobi in 2015. Advancing negotiations on remaining Doha issues and addressing in the wto the other issues of importance to today’s global economy that would bring significant economic results.
  • Create conditions that the corporate social responsibilities of multinational corporations contribute to the community and regional development and assist SMEs;
  • Establish   stable   macro-economic   frameworks   that   encourage   and   facilitate   trade   and investments, commit to further liberalization of economies, fight protectionism and refrain from policies that impede free flow of trade and investments;
  • Ensure coherence between parallel trade initiatives, work towards the adoption of global standards, as well as promoting the harmonization and mutual recognition of technical regulations and standards in order to prevent regulatory divergences;
  • Ensure the respect and effective protection of intellectual property rights at a global level, facilitate business-to-business cooperation and transfer of technology;
  • Commit to reinforce joint efforts in fighting infringements of intellectual property rights, including in particular the online counterfeiting and piracy.
  • Strengthen dialogues among the civil society, private sector, government and multilateral institutions.
  • Ensure transparency and the rule of law in order to prevent and fight corruption.

Mongolia parliament elects new prime minister

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Mongolia’s parliament on Friday elected a new prime minister amid signs that continued weakness in the landlocked nation’s economy is leading to a widening of political discord. Saikhanbileg Chimed, cabinet secretary for the previous prime minister ousted earlier this month, was elected by 44 of 46 members of the parliament, known as the Grand Hural, although another 32 parliamentary members from the opposition Mongolia People’s party boycotted the election. The ruling Democratic party has been under siege by the MPP since the decision in August by Norov Altankhuyag, the former prime minister, to consolidate the number of ministries in Mongolia from 16 to 13. The DP has also been affected by damaging internal squabbling. Rinchinnyam Amarjargal, a Russia-educated democracy activist who briefly served as prime minister in 1999, was one of eight DP members who backed the opposition’s no-confidence vote against Mr Altankhuyag. In a speech on Friday, Mr Saikhanbileg said he would seek a $1bn soft loan from China, promised a rouble swap with the Russian central bank by January and settle fuel import payments in roubles, according to a summary provided by Independent Mongolian Metals & Mining Research, a consultancy. The proposals follow Beijing’s move in August to expand a swap agreement with Mongolia from Rmb10bn to Rmb15bn, which helped stabilise the currency, the tugrik. Mongolia’s economic problems are increasing its dependence on China, and to a lesser extent Russia, despite attempts during the commodities boom to forge new ties by attracting investment from further afield. Neither the MPP or DP have an easy fix for Mongolia’s economy. Previous promises to increase social spending and government salaries are running up against budget limits, while the banking sector is heavily exposed to mining and related industries. The tugrik has fallen 5 per cent in the past six months against the US dollar to 1,879. Foreign investment has also plummeted thanks to falling prices for Mongolia’s main exports, copper and coal, as well as a longstanding dispute between the government and mining group Rio Tinto over the terms of investment in the $5bn underground stage of the Oyu Tolgoi mine. Earlier this month, Rio Tinto replaced two of the most senior executives in its Mongolian operations. Kay Priestly and David Klinger were chief executive and chairman respectively of Turquoise Hill, the Canadian-listed subsidiary that controls two-thirds of Oyu Tolgoi. Ms Priestly also headed coal miner SouthGobi Resources, which on Thursday delayed payment of $8.1m in interest on a convertible debenture owed to China Investment Corp, the sovereign wealth fund. CIC already owns 16.5 per cent of the company. SouthGobi has until December 1 to make the payment.

Speaking notes for “8th Asia-Europe Parliamentary Partnership (ASEP) Meeting”

REMARKS BY H.E. MR. AMARJARGAL RINCHINYAM,

MEMBER OF THE STATE GREAT KHURAL (PARLIAMENT) OF MONGOLIA,

AT THE ASIA-EUROPE PARLIAMENTARY PARTNERSHIP MEETING,

ROME, ITALY

/October 7, 2014/

 

Mr. Chairman,

Colleagues,

Ladies and gentlemen,

It is an honor for me to be here in Rome, attending the Asia-Europe Parliamentary Partnership Meeting. I would like to join my colleagues in expressing my deepest gratitude to the government of Italy for successfully hosting this meeting with great hospitality and warmth. I am pleased to see such a large number of high-level representatives from Member States. Your attendance underlines the importance of this Meeting.

As a member of the Asia-Europe Meeting, we share a view that by addressing political, economic and cultural issues, we will be able to meet the ASEM objective – strengthening the relationship between our two regions, in a spirit of mutual respect and equal partnership.

I am confident that the discussions and talks here at this Meeting, including of adoption of laws and regulations by member countries aimed to easing the boarder barriers, free flow of goods, services, investment and transport infrastructure would serve its purpose and help to gradually achieve equal development opportunities, sustainable development and shared prosperity in Asia-Europe region.

Making full use of its location Mongolia could become a bridge, connecting Asia and Europe since the closest route linking Eurasia is through Mongolia. With its strategically important location, Mongolia could be an important partner within Eurasia and ‘Silk road Initiative’, and strengthen our connectivity with the Asia-Europe countries by expanding cooperation in logistics and transport infrastructure.

The Parliament of Mongolia has been taking several measures to improve business environment and investment conditions in Mongolia, so that both the host and the investors find mutually profitable projects to develop in the country.

It gives me a great pleasure to inform that the Parliament of Mongolia applied to host the Asia-Europe Parliamentary Partnership Meeting in Ulaanbaatar in 2016. I am confident that visiting my beautiful country and getting acquainted with the Mongolian culture and custom, you will understand what Mongolia can do for development of Asia-Europe connectivity.

Thank you for your attention.

Speaking notes for Asia Regional Civil Society Experience Summit

SPEAKING NOTES FOR ASIA REGIONAL CIVIL SOCIETY EXPERIENCE SUMMIT

(Jakarta, 8-10 September 2014)

At the outset, I wish to thank the USAID, the UNDP, the Asia Foundation and all of you for inviting me to this interesting meeting.

I also salute the distinguished representatives of civil society from our Asia-Pacific region. You are the genuine advocates for democracy, human rights and social progress in your countries.

I’ve been asked to share with you the experience and lessons of Mongolia in developing the civil society sector and my views on challenges and opportunities facing the civil society in the region.

Experience of Mongolia

As you may know, some 25 years ago Mongolia was a totalitarian regime. Our transition to a democracy began only in 1990. During the last years, the civil society organizations in Mongolia have grown from a handful numbers to several thousands.

The civil society in Mongolia enjoys generally broad freedom and favorable environment. However, recently the government has become very slow and reluctant to update and upgrade its policies to match the increasing sophistication and advancement of the professionalism of the civil society.

In my view, the CSOs in Mongolia can be divided into two major categories.

First, those who work in the areas where the government cannot reach out or is weak. This category of CSOs seems to have some sort of comforts with the government. Even the government is willing to delegate to the CSOs some of its social services.

Second, there are many CSOs who operate to influence and to take part in the decision-making at all levels of government. Organizations in this category usually have some confrontation with the authorities and face certain discrimination and ignorance on the part of the government.

Another challenge for the Mongolian CSOs is their lack of experience in mobilizing funding from within the country. While many rely on external financing, the domestic resource mobilization is highly inadequate. Therefore, when there is no external funding, those NGOs cease to operate. Sustainability is a great challenge in Mongolia.

I think we will learn a great deal from the Session on Institutional Sustainability in this respect.

The CSOs in Mongolia are currently undergoing a substantial reform process. If they were mushrooming chaotically in the past, now they have understood that they need to work on consolidation and cooperation in their respective fields. The CSOs are successful where they have established their networking and an umbrella organization.

Individualistic approach and competition for funding among similar CSOs are being replaced by collective approach and network-based consolidation.

The Mongolian civil society is poorly represented in rural areas. Many look at CSOs as employment opportunities rather than working for the betterment of the society. Therefore, the capital city where all government agencies and large corporations headquarter is home to a large majority of the CSOs. That is to be changed.

Philanthropy among the private sector is not well developed. This needs to be tackled too.

Regional and International Dimensions

As you may know also, Mongolia chaired the Community of Democracies (CD) for 2011-2013. It was a successful chairmanship. We laid down the foundation for the establishment of the Asian civil society umbrella organization uniting all CSOs working in the field of democracy and human rights. It is the Asia Democracy Network (ADN) launched in Seoul in 2013 by 50 civil society groups representing 20 countries in Asia. It is a very new organization that needs to be nurtured and supported by all means and by all stakeholders.

Mongolia also helped launch the Asia Democracy Research Network in Seoul last November which is another regional umbrella body of think tanks on democracy-related issues. The network has at present 13 academic institutions as members.

Internationally, Mongolia participates actively in the work of the Working Group on Enabling and Protecting Civil Society of the Community of Democracies. We closely cooperate with the CD’s civil society arm – International Steering Committee.

Mongolia has just assumed the Chairmanship of the Freedom Online Coalition which is an intergovernmental coalition committed to advancing internet freedom – free expression, association, assembly, and privacy online – worldwide.

In this capacity, we are planning to work actively in Asia to expand our ranks. So far only 3 governments in Asia – Japan, the Maldives and Mongolia – have joined the Coalition. I would ask the Asian civil society activists to call on their governments to uphold Internet Freedom which is declared by the United Nations as a fundamental human right and to join the Coalition.

Some thoughts

Finally, I wish to share with you some of my thoughts that are provoked by the lessons in Mongolia.

  • It is essential that the CSOs have stable financial sources. Governments should commit a certain percentage of their annual budget to fund activities of CSOs that would be substituting the governmental functions. Delegating some of the public services to CSOs would play a crucial role.
  • CSOs need to establish partnership with private sector where possible to help make them transparent, socially responsible and philanthropic.
  • In terms of organization, it is a must that similar CSOs become united, networked and appoint an umbrella body. It will help use efficiently the scarce resources and negotiate with the government with one united front.
  • Besides a few professional civil society activists, the CSOs need to mobilize public support and volunteering from among the citizens to expand the grass-root base.
  • CSOs must use social media and Internet intensively to present their voices and to campaign for and to support their cause.

Thank you.

Standing Committee of State Structure convened to discuss the MP’s resignation request

MP R. Amarjargal gives speech at the December 10, 2013 sitting of the Standing Committee of State Structure convened to discuss the MP’s resignation request.

First of all, I want to express my utter respect to the people of Mongolia, especially to Sukhbaatar district electorate who had sent me to this high office. Your trust and support not only had me reelected four times but also allowed me serve as a Prime Minister of Mongolia. I do not regard these as my own achievements, instead it is a fruit of the unwavering support of the Mongolian people and NPC, MNPP, MNDP and DP that I took part in forming of and thousand of their members, and I carry deepest respect for all.

Ever since my first election as a member of parliament, I have tried to uphold the trust and belief bestowed on me, held high principles, stood for integrity and consistency.

I. My resignation request may have startled some, but if you think about it there is nothing surprising about it. And there is nothing sudden about it either.

Speaking subjectively, anyone with a sense of shame would do the same looking at the state of state affairs, decisions and their implications. If not today, the honorable members of the parliament who entered this hall having accepted the mandate of the people of Mongolia to stay firm in resisting the wrong, will likely seek resignation as expression of political responsibility for the irresponsibility that has embroiled entirely our high offices, wrongdoings and deficiencies.

Objectively speaking, the evolution and the logic of Mongolian parliamentary democracy have led me to take this step. Today all of the western nations that we so like to follow are in earnest quest for good governance, the kind that would stand any global political and economic crisis.    But what choices the Mongolian parliamentary democracy that has reached today’s crossroads having journeyed through bumps and challenges is facing:

  • The choice between the tackling of real issues concerning the development prospects of the country or the empty talk – is the omnipresent populism to continue?
  • The choice between a professional and expertly skilled parliament or a band of amateur actors – is the circus to continue?
  • The choice between being trapped by oligarchs marred by conflicts of interest, more vocal than anyone ‘patriots’ or being respectful of technocrats and implementation of consistent policies and sustainable principles
  • The choice between shallow decisions taken at will or thoroughly thought out considerations;
  • The choice between visionary national strategies or chase after immediate gratification;
  • The choice between considering objectively global economic cyclicality or working on  4-year election cycles,
  • The choice between a parliament capable of combining innovation with convention or a parliament pursuing the semblance of reforms,
  • The choice between ability to hold fellow party/faction members accountable or continuing to be trapped in a common web falling hostage to each other

Mongolia needs a parliament that is capable of resolving efficiently a whole spectrum of exigent matters in the political, economical, ethical and legal sphere.  However, we have failed to form such a capable body. For that, I consider myself liable to take political responsibility.

I want to stress specifically that at this level of parliamentary democracy morals and ethics are what are lacking the most.  I would really wish that going forward the parliament, if it doesn’t use the morals of right and wrong, concepts and categories of integrity as its operational criteria, it would at least remember always about their existence.

Democratic regards and values may seem to be universal but these need to be mainstreamed in Mongolia. The very way for democratic values to be incorporated, the very character of the Mongolian democracy and its sole is social accord, political harmony and tolerance, ethical mutual understanding and economic balance.  I take a broad view in stating this – other political forces and civil society are not excluded.

From this perspective, our 24 yearlong democracy is becoming more and more murky. To quote my 1999 statement during a parliamentary session: “We lack a disciplined system, characterized by essentials ranging from ethical values, discipline and accountability to property and political culture, that lets different segments of the society to carry equitable burdens,  has checks and balances where political forces are concerned, facilitates social consensus.  We do lack social consensus. Provided that we fail in forming it, the political stability and democracy will sustain damage.”

I would like to repeat the above said and also warn that for Mongolian politics ignoring the consensus, acting bullishly will not only undermine our democracy but will risk its demise, for that it should be regarded as a crime against state.

II.  Governance issues. It has been long enough since we lost any sense of governance balance and ratio. It is time now to remedy this in the spirit of and compliance to Constitution. For instance, some may view that the parliament has unlimited powers that it impedes the functioning of the government, while others be saying that the government is too much. Everyone knows how much change the presidential power has been subject to in the last 20 years. The fact that off-budget funds almost equaling entire year fiscal budget are in circulation is a testament to public sector gone off public accountability. It illustrates that the parliament does not voice concerns of the public and is not transparent.  The parliament needs to take responsibility for such a state of affairs.

Some may remember my plea to the parliament back in 2004 to resolve the issue of governing balance one way or another. One may also remember all ended then with empty slogans of ‘king choice’.

Mongolia needs to choose one and for all between a parliamentary state or presidential state. If presidents were elected by the parliament the choice would have been made and the executive branch of the government would gain at least one more year for working undistracted by populism.

I am supportive of parliamentary regime where a winning party leader assumes the role of prime minister, and these views were expressed in my 1998 article. On the surface, it could seem that such system is in fact in place. Looking deeper, however, it is evident that prime ministers lack two essential instruments. First, the power to dissolve the parliament; second, the right or the freedom to form his/her cabinet as seen appropriate.  Once the parliament bestowed its confidence and appointed the prime minister it would seem logical to grant full freedoms to form a government. Done otherwise, political forces taking mutual hostage will continue sabotaging the workings of the state as we have it today. In general, it can be summarized that the performance and accountability in the executive branch have hit the weakest point.

There is constant talk of who is to be cabinet member. I personally think that a cabinet member not in possession of people’s mandate is nonsense.  Sheer common sense would dictate that. Principles ought to be crystal clear. There should not be such a thing as cabinet member not in receipt of people’s mandate. In order to resolve this, we have to get our election system out of the lame duck position it is in. It should be noted that political parties are another pollutant of the system.

The Constitution stipulates that the parliament is the highest power body. In my understanding, the parliament is just a legislative body. If we don’t get things straight, we have a speaker acting as a prime minister. Global history offers one too many lessons of states failing due to their ‘multi-headedness’.

III. Economic issues. Could discuss for days this subject. The situation is complicated and worrisome indeed.

  • Fiscal deficit reached almost 7-8 percent of GDP. Debt pressures are at unprecedented levels. Frankly, I don’t think we manage to keep accurate tabs of debts and no longer are able to tell the exact truth.
  • Investments went down by over 30 percent from 10 months ago. FDI plummeted by 70% in the non-mining and 30% in the mining sector. Investor sentiment is rather weak at this point.
  • Second phase of OT project is effectively stalled. If one assumes most optimistically that negotiations succeed, realistically two more years would need to pass before any real work can be done.
  • How TT infrastructure issues are going to be resolved still remains very vague. Thermal coal prices remain not viable and coking coal prices are way too low.
  • The banking sector is weak and vulnerable. Most recently we had the fifth biggest bank go belly up. Two of remaining big four banks have issues. Limited equities, declining deposits, and rising credit demand are the cause for their enormous capital crunch.
  • 21 percent of bank assets are effectively in the hands of the central bank. The dependency of some of our commercial banks on the central bank now exceeds that of Greek banks.
  • There is no end in sight for tugrug depreciation. 1740MNT. At the same time, one third of all credits are directly susceptible to exchange rate changes. .
  • Inflation is now in two digits. There is no hiding anymore.

The very people who have led to this deterioration, who have inflicted this are no doubt sitting in this room.  Are they not to take responsibility?  I spoke and wrote back in April about alarming signs. Let us hope our largest companies will not soon start collapsing domino style.

There is another issue I have to touch. This is the issue of economic security. Today, at the core of economic security of the country is the fuels and energy sector.

I would really want us to produce a liter of own fuel and adopt the technology. Would also want us to meet percent, through own sources, electric energy needs. If these two are fulfilled, Mongolia can be in a position to discuss anything with anyone. And it’s possible. Was telling about it back in 2000 speaking before the parliament as prime minister. 13 years later these issues are still not resolved and remain critical. In the future other issues may take front row but now, in the near future it is energy and fuel.

Ministers who do not understand these strategic tasks need to go, need to be made go ruthlessly. Everyone heard a recent criticism by the president of some ministers acting as if they were there for own, friends’ and business group interests as opposed to interests of the country. Self-enrichment is often mistaken with the country’s progress.

Events of 2007-2013 have shown vulnerability, fragility of our economy. It grows amazingly one day and frails the next.  At least such tendencies must be observed. The latest example is recently approved 2014 budget. Sometimes frustration alone seems not enough.

In the last 23 years we have witnessed two super cycles of unprecedented commodity price hikes. Unfortunately, only witness we did. We have failed to grasp the golden opportunity and take comprehensive future-looking measures leading to sustainable growth of the economy. Mongolians have failed to accumulate capital savings (I am referring to mid-90s, 2010, early 2011)

There is another thing that merits attention. In 2012\2013 the time of sharp declining FDI, the old agriculture, namely animal husbandry, got us through. Let us not discriminate herders and animal husbandry.

How do we achieve economic security? We hear only about increasing the involvement of state. We seem incapable of finding any alternative solutions. The state itself is problematic and its increased involvement in all things would mean even more problem. We have travelled this path way too long. In the meantime, the security has not strengthened instead it is only compromised. In my understanding, solutions need to be based on private holdings and initiatives of private founders. With the rise of private capital and national investors our interests, namely political and economic interest can be safeguarded. Our national capitalists’ aggregate assets (capitalization) that amount to USD6bln currently need to expand to USD60bln at least.

State involvement needs to be in refraining from taking things away from each other (nationalization), from pirating under the prowess of the state. The state needs to be that platform on which the economy, the private sector are nurtured, a soil that fosters economic growth of the country.

IY. The strengthening of the state is inherently linked with integrity and provision thereof. One recent survey shows that 84 percent of respondents are not happy with our judiciary one way or another. There is a deep seated belief in our judiciary that state is always right. .Its supposed independence is not materialized in essence. Only when a judiciary is able to annul decisions of authorities and require due execution, people will have faith in justice. Only then we can rid ourselves of justice-by-order.

The strengthening of the state is a function of human resource quality and systems for qualification, selection and nomination of cadre.  The inertia or the public sector governance legacy retained from socialist times are fast depleted. The new people frankly lack the attitude to handle state affairs as statesmen and the culture of discipline and accountability. Those entering public service with their party mandates in hand and under someone’s protective wings simply cannot work, .do not have mentality of statesmen. Honestly, one can’t help but ask whether they care about anything else besides turning signatures into cash or stacking their vallets.

Corruption has become a norm of the day. We have come to a point where some say ‘it is our time now to pocket’ and others agree and oblige unconditionally. We will be hard pressed to find investors interested in investing in such economy, they will have to depart when everything initiated is taken back under the pretense of the state. He was referring to this when D. Byambasuren said, “Governing of oblivious of state affairs statesmen is heavier than a mountain”.

It is time now to wake comprehensive, systematic actions to clean and strengthen the public service in every possible aspect. This is a priority of primary importance, because for Mongolia the most valuable asset is its human resources. Human resources that are educated, skilled, ethical, highly disciplined and responsible. Too much of this valuable asset has been discriminated by party affiliation and put on the street. Such behavior is an unacceptable luxury for Mongolia. Establishment of a system whereby talent can be utilized fully regardless his/her party affiliation is a matter of to be or not to be for Mongolia, a country of only 3 million.

Statehood, equity, bravery, bloodline, rules, hierarchy, priority, seniority, patience, will, honor, loyalty, restraint, polite care, graciousness, customs, taboos, integrity, solidarity – these words may seem intangible or trivial, but these concepts must be incorporated into the criterion on which hiring decisions are based as such notions are vitally important elements of a strong Mongolian state.  . Needless to say that in the absence of these elements states crack, gaps are created, weakening and further weakening the state till their complete crumbling.

All things I was referring to have not come to existence today. They are unresolved issues that have accumulating through the years, becoming stale in the process due to nonexistence of desire to tackle them. That is why after 12 years the people of the country voted for the Democratic Party and gave it the reign. A lot of hope and trust has been placed with the DP. On the same par, high expectations were formed. We have to work commensurately with that expectation. Have to show example. Responsibility, discipline, organization need to be highest. However, it is not so. We are making it even worse. Citizens are saying in frustration that there is no difference with democrats in power. For this, someone from the Democratic Party needs to take responsibility.

Lastly, would like to say the following: criticism is thrown at me blaming for going against at the party being one of members, for criticizing the still young government which I helped in establishing. I respect this criticism. But, precisely because

– I am one of founders of the Democratic Party,

– I cherish the mandate of the people who have sent me here to stand for truth and integrity

– Most importantly, because I have consciousness I have submitted my request for resignation.

This is my way of taking a step toward political accountability, needed accountability for irresponsible decisions and actions of the parliament and the government.  There has to be a standard set for political culture. I have to doubt whatsoever that this is a right step from political culture, accountability, but also simple morals and beliefs point of view. I humbly thank Sukhbaatar district constituency for all the understanding and support given to me.

World Economic Forum Human capital index 2013

World Economic Forum Human capital index 2013

Mongolia                                                RANK/122                SCORE

Education                                                76                             -0.2

Health and Wellness                               80                             -0.1

Workforce and Employment                  106                           -0.6

Enabling Environment                            92                             -0.7

Overall                                                     89                             -0.4

FRIEDRICH A. von HAYEK (1899 -1992) by Kurt R. Leube*

FRIEDRICH A. von HAYEK (1899 -1992)
A Short Appreciation 20 Years after his Death
by Kurt R. Leube*

“Before we explain why people commit mistakes, we must first explain why they should ever be right.” F.A. von Hayek
I
It is 2012, and lest we forget one of the most seminal minds of our times, we should recall the important work of Friedrich A. von Hayek who died 20 years ago, on March 23, 1992.
F.A.von Hayek grew up in a typical Austrian family that could lay claim to an academic tradition of well over three generations. At the age of 18, to avoid his failing at several schools in Vienna he voluntarily joined the Austro-Hungarian Army and served as an artillery officer until the end of WWI.
Immediately after his return from the Italian front, Hayek enrolled in the University of Vienna and, only three years later obtained his law degree (Dr. jur.). While Hayek studied for his second doctoral degree in Political Science (Dr. rer. pol.) which he earned in 1923, he began to work under Ludwig von Mises’ directorship in the “Abrechnungsamt”, a Vienna based office for the settlement of pre-war debts. As the most eminent scholar of the third generation of the Austrian School of Economics, Mises (1881-1973), soon became Hayek’s mentor and in 1927 they succeeded in founding the “Austrian Institute for Business Cycle Research” which soon gained high academic reputation under Hayek’s and later Oskar Morgenstern’s leadership.
II
The culturally vibrating climate of interwar Vienna provided the stimulating background for many scholarly circles and schools, such as the “Vienna Circle of Philosophy”, the “Vienna School of Psychoanalysis”, or the “Mises Private Seminar”. This famous “Seminar” which between 1921-1934 von Mises conducted off campus in his Chamber of Commerce office was the nucleus of the fourth generation of the Austrian School, the most important representative of which was Hayek. It is remarkable that far more than half of its participants later became world-famous in their respective academic fields. Yet, with the Nazi terror on the rise and almost no prospects of ever gaining access to an adequate academic position, all but a very few of these uniquely talented scholars left Austria for good. Schumpeter and Hayek were the first, many others were soon to follow. This “brain drain” lead to devastating consequences in the intellectual life in Austria and Germany which still can be felt.

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