The Action Plan of the Government of Mongolia 2016-2020

1.BACKGROUND:

The draft of this resolution was first submitted by the Government of Mongolia to the Parliament of Mongolia on the 24th of August 2016. It was then ratified on the 9th of September 2016. It contains the policies and national programs the new Government of Mongolia will implement from 2016 to 2020. It is based on the Government Action Plan of the Mongolian People’s Party used in the 2016 elections, the opinions of citizens and civil society organizations, international agreements and the “Sustainable Development Concept of Mongolia 2030”. The resolution is divided into four chapters of: Economic policy, Social policy, Environment and Green Development policy and Governance policy.

2.ECONOMIC POLICY:

First Stage: Overcoming Economic Difficulty

  • Generally, these policies aim to overcome economic difficulties in the short run, attract domestic and foreign investment and to relieve economic pressure on citizens and domestic business brought on by debt, by creating a more favorable business environment. Debt and loan conditions will be improved and repayment periods are to be extended to relieve pressure from the State Budget. The State Budget will be shifted to a “saving mode” to increase discipline and cut costs, and in order to increase efficiency, extra-budgetary funding will be stopped and up to date policies and plans on investment will be developed.
  • Domestic and foreign investment will be increased through stabilization of the macro-economy. Further, evaluation will be made to the bonds and loans provided by the Development Bank and payments will need to be made for those which were used for improper purposes or are late on payment.
  • Support will be shown to businesses who have been affected by the economic situation. Those carrying out business for more than 5 years continuously and providing jobs will benefit from long term, low interest loans and those who have fallen behind on loan payments and are classified as “doubtful borrowers” will be given a chance to repay their loans and improve their credit rating.
  • The operations of ‘Erdenes Mongol’ and the Oyu Tolgoi project will be intensified and Tavantolgoi and other relevant strategic deposits will be entered into the economic cycle.
  • In relation to Corporate and Personal Income Tax, the amount of tax to be paid will be determined by a progressive level system, depending on the amount of yearly income. New taxes will not be introduced and within the policy of supporting domestic produce, the corporate income tax for businesses in relevant sectors with a yearly income below 1.5. billion MNT will be reduced to 1%.
  • The fees for State services will be decreased and the number of special licenses provided by the State will be decreased by 3 times but the duration for which they are valid will be increased.

Second Stage: Sustainable Growth of the Economy

  • In order to achieve sustainable growth, the focus is on increasing domestic production and exports, through customs and tax policies as well as by simplifying the process. For example, businesses who export more than 50% of their total production will benefit from lenient tax policies.
  • The plan is also to create a legal environment which encourages fair competition between businesses whilst protecting the rights of consumers. In relation to the standards of production, the law on standardization and measurements will be renewed to meet international standards and the “National Quality Program” will be implemented. Also, in order to increase the competitiveness of products, and to decrease technical obstacles of sales, the mechanism by which standardization and conformity assessment results are accepted and implemented will be improved.
  • Support will be provided to all types of businesses. Those implementing large projects will benefit from loans with lower interest rates, over a longer period of time and small, medium sized production businesses, family businesses and micro businesses will be supported by “Trust Loans”. As for businesses operating in isolated rural areas, they will be covered by the “Regional Discount” program. In production generally, the tariff of gas, water, heating and electricity used in the production process will be stabilized and decreased gradually, as will the price pressures of fuel, in response to the global market price.

Food, Agriculture and Light Industry

  • The “Healthy Food – Healthy Mongolian Citizen” national program, “Industrialization 21:100” program, “National Production” program and “First Meat and Milk Campaign” programs will be newly implemented. The “Third Atriin Campaign” program will continue to be implemented.
  • With regard to food production, the main aim is to increase the quality, safety and competitiveness of food produce for both domestic and exports use.
  • As for animal husbandry, the “Mongolian Livestock” program will be intensified and the “Policy on State Administration of Herders”, “Mongolian Herder” and “Re-Stocking” programs will be newly implemented. The export of meat and meat products will be supported through loan, investment, insurance and tax policies.

Geology, Mining and Heavy Industry

  • A favorable environment for investment in the geology and mining sector will be created to achieve sustainable growth of the mining sector and the competitiveness of Mongolia in the international minerals market.
  • State interference in Mining will be kept at an appropriate level, the Cadastre registration system will be updated and developed and the process of granting mining licenses will be simplified.
  • A National Geology Department and a National Geo-information database will be created.
  • A legal environment will be developed to facilitate the use of secondary minerals, and mining reclamation and closure processes will be improved to meet international standards.
  • The activities of traditional and non-traditional petroleum exploration will be intensified to build up resources and a refinery plant will be built.
  • Gold mining, copper concentrate smelting and refining, and coal washing and processing will be supported.

Infrastructure

  • Construction and Urban Development: the priority is on safety for both residents and the environment. This will be done through changing norms and normative to meet international standards and improving the quality of constructions, the materials used and the water supply system. It will also be easier to fulfill the demand for housing with more lenient mortgage conditions and the implementation of the “Affordable Housing” program. Green areas of rural areas will increase by 3 times and in the capital city, buildings will undergo reconstruction and ger districts will undergo redevelopment. Furthermore, the amount of current parking spaces will be doubled by building underground and multi-level spaces and the river flow of the Selbe and Dund gol rivers will be increased with a recreational area built along the riverside.
  • Energy Sector: the main aim is for reliability, stability and the increase of exports. In order to meet growing demand, the production capacity of the Choibalsan Power Plant and Ulaanbaatar Power Plant Number 3 will be increased and renovation works will take place. In Province centers and other major cities, projects on building thermal plants and transmission lines to fully meet demand of energy will begin. The production of renewable energy will be increased accordingly and the Egiin gol hydro-electric plant project will begin construction. A decision will be made with regard to the power plant powered by the coal of the Tavantolgoi mine for use by the South Gobi mining project. A project will begin on building a large scale power plant and power transmission lines for export use as well as to support the Shivee-Ovoo, Tevshiin Gobi and other coal mines. Research will be intensified on the potential use of methane gas, the development of the supply of gas will be facilitated and a project will be implemented on extracting smokeless gas fuel from coal. The price of heating and electricity will be stabilized and decreased, and new technology will be introduced for the efficient use of energy.
  • Road and Transportation Sector: In order to support economic growth; road, transportation and logistics networks will be expanded. Particularly in the Capital City where new routes will be built and the Bus Rapid Transit system will be introduced and new roads to Bayanzurkh, Yarmag, Sonsgolon Bridge and Nalaikh will be built. The network of paved roads will be expanded to reach all Province Centers from the Capital City and works on the Millennium Road will continue. Rail networks will also be expanded including new rail lines from Tavantolgoi to Gashuun Suhait to the Oyu Tolgoi branch rail, Shiveehuren to Sekhe, Huut to Bichigt, Zuunbayan to Khangi and Erdenet to Ovoot. A mixed logistics center will be built in the “Hushigiin Hundii”. In order to increase the number of flights and competitiveness of the air transportation sector, the tariffs will be decreased. Development of water transport and helicopter transport for tourism and other purposes will also be implemented.

3.SOCIAL POLICY:

Health, Education, Culture, Science and Sports:

  • The policy in relation to the health sector is to improve the access to quality methods of prevention, diagnosis and treatment of diseases in order to strengthen the human resources capacity. Also, a national program will be implemented on the prevention of communicable and non-communicable diseases as well as on improving the services provided for education of society on the prevention and treatment of diseases. A long and medium term program will be developed on improving the access to quality health services. The labor force of the health sector will be developed to ensure the safety of society as well as the funding system to ensure quality services. The funding system of the health sector will be increased 2 times and a fund will be established for the support of the health sector.
  • The access to education will be increased and in urban areas, each child will be able to attend nursery, students will be able to use public transport for free and schools will not have 3 terms. In rural areas, the children of herders will have the opportunity to attend school and dormitory facilities will be improved. The quality of education at all levels will be improved and the national scholarship of 70200MNT will be distributed.
  • The management and organization system of the science sector will be developed to meet international standards, the production of innovation and technology will be increased and a results based funding system will be introduced.
  • In relation to culture, the legal environment will be updated and developed, as will the policy on the funding and management of the sector. National and classical arts, and nomadic culture will stay under the State patronage, and in general, the access to the arts and related services will be increased. “Mongol Content” will be increased and National arts services and products will be created to encourage tourism. A new natural history museum which meets international standards will be built and the preservation and protection of standards of museums will also be improved to meet international standards.
  • As for sports, facilities for the public will be improved and national, cultural traditions will be developed and disseminated. The science of sports will be developed, as will the training environment of athletes, as well as the games and competition framework overall. The social welfare of the trainers of athletes will be improved, and the access to sports services and its quality will also be improved.

Increase of Employment and Improvement of Social Welfare

  • In order to increase the size of the middle income class and to increase social welfare, the number of skilled workers will be increased, compatible to the demand of labor.
  • Young Mongolians will be trained and provided with jobs whereas the amount of labor force and specialists received from abroad will be decreased by at least 50%.
  • In the health insurance sector, public private partnerships will be created and expensive domestic treatments will be covered by insurance. Progress will be made towards gender equality and policy will be developed to better integrate disabled citizens into society.
  • The family unit will be strengthened, children’s rights will be respected and a favorable environment will be created to facilitate the development of young adults.

4.ENVIRONMENT AND GREEN DEVELOPMENT POLICY:

  • To preserve the ecosystem balance and the untouched nature of the environment to pass onto the next generation, to protect natural resources and prevent shortage through appropriate use and provide opportunity for recovery. To engage in economic growth that is not only environmentally sustainable but affects the environment positively. The policy contains action to take which are beneficial to the health of people and the environment, such as the development of renewable sources of energy and reduction in pollution of air, water and soil in urban areas. It also contains action to encourage participation of society in the protection of the environment, which includes introducing rewards as a form of incentive and in the tourism sector, natural tourist attractions will be made more “tourist-friendly”.

5.GOVERNANCE POLICY:

  • To develop a stable and accountable political culture and to build a strong and able statehood which follows the rule of law. The Constitution will be amended to suit the needs of today, based on the opinion of the citizens. The responsibility of civil servants will be increased, as well as their skills and in order to ensure the stability of the Civil Service in general, a draft “Law on the Stability of the Civil Service” will be proposed.
  • The importance of a sustainable business and economic environment is emphasized and а culture on taking into account the views and interests of all stakeholders affected when making decisions will be adopted. The use of State and Local Property, the profitability of State or Locally owned companies will be improved, as will the policy on privatization and public private partnerships will be moved to a new stage. The “Glass Tender Selection” policy will be implemented for a transparent tender process and the law on rights of ownership of both movable and immovable property will be strengthened. Furthermore, State registration will be shifted to a digital process as will the archiving system.
  • The rule of law will be upheld and the structure of the court system and the process of the selection of judges will be improved. The Civil Procedure on the Arbitration Law will be updated and amended, and new standards of human rights protection will be introduced.
  • The operations of law enforcement authorities will be made more transparent and disciplined but also humane and beneficial to society.
  • The legal environment of defense will be improved and defense will be strengthened as well as the armed forces. The scope of co-operation with other countries and parties in relation to defense will also be widened.
  • Peaceful, independent and multi-pillar foreign policies will be implemented and friendly relations with other countries will be maintained and developed in the politics, trade, economy, culture and other sectors. Furthermore, the objective is to strengthen our status in the international community and effectively participate in regional cooperation. Also, projects on protecting Mongolian citizens abroad and on improving the travel conditions to attract foreign citizens into the country will be intensified. Especially in relation to foreign investors who will be supported by a better environment for foreign investment and by improving legal certainty of the implementation of domestic law and international treaties.
  • A better environment for foreign trade will be provided by increasing the benefits, by improving the infrastructure of border ports to facilitate ease of cross border trade, and by improving travel conditions to the borders to encourage travel.

BATTUSHIG.B, Partner (battushig@gtsadvocates.mn, tel+976 331020)

KHULAN.B, Paralegal (khulan@gtsadvocates.mn, tel+976 331020)


gtsadvocates: 27 9 2016