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Economy / Featured News / Mongolia News / September 11, 2014

OPPOSITION CHALLENGES DP CAUCUS TO DELIVER ON ITS PROMISE OF RESPONSIBILITY TO GOM OVER FAILURE OF 100 DAYS PLAN

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According to top-rated Mongolian portal gogo.mn, opposition Mongolian People’ Party (MPP) Caucus has delivered official letter to Democratic Party(DP) Caucus Leader D.Erdenebat saying

  • “Government of Mongolia (GoM) has been instructed by Parliament resolution to boost economic growth, approved on May 8,2014, to improve economy in 100 days with instruction for 26 measures grouped in 4 groups
  • From total of 70 work directions GoM has implemented 18 directions and started implementing 16, and was unable to complete 62.6% of work directions
  • In summary, GoM has failed its ” home work”
  • key economic indicators such as exchange rate appreciation, inflation, FDI, budget deficit have all deteriorated, thus we officially conclude that 100 days plan has failed
  • “You have stated on May 14,2014 that majority will account itself responsibility to Government if there will be no positive effects on the economy”
  • Mongolian people are waiting for see whether the DP Caucus will deliver on its word and account responsibility”

Earlier, MPP Caucus has briefed media in Ulaanbaatar that in 100 days ( reported by major Mongolian portals news.mn and olloo.mn)

  • “36 work directions have not been implemented at all
  • economic growth slowed 3.3 times from 2012 high to 5.3% as of July YTD, inflation reached 14.9%
  • offbudget financing continues and budget consolidation not attempted as proposed
  • prices of consumer goods have increased 21-60%
  • Price of most affordable bread ” Atar” increased 35.3% from MNT850 to MNT1150
  • price of bleached flour ” Altan taria”has increased 47.5% from MNT800 to MNT1180
  • price of white rice increased 20.5% from MNT2200 to MNT 2650
  • price of sugar increased 60.3% from MNT1840 to MNT 2950
  • state universities tuition increased 13-15%, dormitories fee increased by 10-30%
  • only 37% of budget investment has been done this year worth MNT1.266 trillion
  • 5 billion has not been paid for budget loan service payments, which proves late interest payments
  • in month of July YTD NPL increased by ~97% and has reached MNT599.7 billion , loans with late payments increased 6.4 times MNT 550.1 billion
  • NPL and loans with late payments have reached 1.15 trillion MNT and constitute 9.4% of total loans
  • 2706 enterprises have stopped operations and numbers of unemployed citizens increased 14.1% y-o-y according to NSO”

Also, MPP Chairman has said in interview to ” Unuudur” daily

  • “Amendments to Law on Minerals had spirit of colluding and selling off natural resources to foreigners , issuing exploration licenses in state protected areas, preferring foreign monies over national interests
  • 54% of 3245 polled citizens has said that the economy has ,in opposite, has further deteriorated instead of reviving and 29% said economy has not changed
  • FDI has decreased 6.7 times from 2012, confidence of investors that has been built over 20 years has been damaged and lost in just 2 years
  • Mongolia has one of the highest inflation rates globally in company of countries with wars such as Syria, Sudan and Iraq
  • prices of consumer goods have increased in last 2 years by 10.6-177% percent, residential prices by 2.6 times
  • decline of imports is due to decline of purchasing power of citizens not because of achievement of Government
  • When new GoM was formed , there were official reserves of 2.8 billion USD and DBM had 580 million USD. Reserves declined 2.3 times to 1.31 billion USD,
  • Mongolian sovereign credit ratings were downgraded
  • from 107,008 registered enterprises 54.3% have stopped operations
  • revenues of Social Insurance Fund increased in July YTD 4.3% while expenditures increased by 20%
  • budget deficit has reached 160.9 billion MNT in July YTD, budget revenues shortfall has reached 688.4 billion MNT
  • 3 billion MNT budgeted investment has not been done
  • only 28% of 31.2 billion MNT budgeted capital repairs have been done
  • in summary, constructive development has essentially stopped
  • yet budget funded salaries expenditures increased by over 200 billion MNT and social insurance expenditures have increased 22 billion MNT and number of public servants paid by budget has increased by 60,000
  • as of Q1 of this year external debt of GoM increased 1.8 times to 4.5 billion USD and BoM’s debt has increased 3.9 times to 1.04 billion USD
  • total Government debt in 2013 has reached 17.68 trillion MNT or 102% of GDP , without Chingghis and Samurai bonds new GoM incurred 5.8 trillion of new debt
  • total external debt of BoM and GOM has reached 5.546 billion USD or 10.538 trillion MNT by current exchange rate, if we add domestic debt of GoM total debt is 22.13 trillion MNT, 108% of GDP
  • historic visits of neighor countries State Heads have high significance and now it is needed to implement the agreements”
SOURCE: INDEPENDENT MONGOLIAN METALS & MINING RESEARCH




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