Prime Minister Ch. Saikhanbileg: Interview

Interview: Prime Minister Ch. Saikhanbileg

What are your government’s priorities, and how is your government working to overcome the current economic downturn?

PRIME MINISTER CH. SAIKHANBILEG: Following my appointment as prime minister I made it clear that I have only three priorities: the economy, the economy, the economy. Over the coming year, my government and I will work tirelessly to stabilise the economy and thereby create the right conditions for sustainable, inclusive growth.

There will be no more business as usual: my government will make the tough decisions that are right for Mongolia even if they are not immediately politically popular. To support this, I have built a government of national unity, based on a “grand coalition” of all of the political parties, and I have established a National Economic Committee to ensure that ministries work closely together to tackle economic challenges and create a stable platform for investment and long-term growth.

What short-term policies will the government implement to boost economic growth? What is being done to increase investment?

SAIKHANBILEG: We need a stable macroeconomic environment combined with a plan for supporting investment and growth. To start with, this means putting our public finances in order. We are working to accomplish this in two ways: first, by managing our finances in a more transparent and accurate manner by bringing spending by the Development Bank of Mongolia on-budget and establishing more accurate methods for estimating state revenues in order to avoid subsequent revisions to the budget; and second, by making MNT1trn ($600m) of cuts to expenditure in the 2015 budget.

In addition to these fiscal reforms, my government has begun to take steps to increase investment. Among other measures, this means unlocking investment in key mining projects that are vital to Mongolia’s future, including Oyu Tolgoi and Tavan Tolgoi.

How does Mongolia compare to other regional countries in terms of its business environment? What is being done to improve its standing, and how are these new developments being funded?

SAIKHANBILEG: For the private sector to thrive, the government must create the right conditions and avoid creating unnecessary obstacles to business. While the economy has had a difficult couple of years, the overall business environment in Mongolia is good: we now rank 72nd on the World Bank’s Ease of Doing Business Index, ahead of other fast-growing Asian economies such as Vietnam and China. Yet to fuel private-sector-led growth, much more needs to be done to make Mongolia an easier and more predictable place for both foreign and domestic investors.

In this spirit, I have already set out my government’s plans to make the state more efficient and cut bureaucracy, including by reducing the size of the civil service by 15% and lowering the mandatory level of state ownership in firms following partial privatisations to 34% from the current level of 51%. In addition, we are supporting investment by developing enabling infrastructure, such as a new, world-class power station for Ulaanbaatar as well as roads connecting the provinces to the capital. Such investments – funded through public-private partnerships as well as directly from the public budget – will be key to attracting private capital to Mongolia.

In closing, I wish to emphasise that Mongolia welcomes the contributions that foreign citizens and businesses make to our economy and society. We have been working hard to address disputes that have arisen from past mistakes and misunderstandings on both sides of the table. There are still challenges ahead, but they will be overcome through open communication and increasingly effective government. Investors should be in absolutely no doubt: Mongolia is well and truly open for business again.

This interview was conducted in January 2015.