MPs criticize bond sales in 2009

The general reaction of MPs to the government’s performance in regard to the economy last year was one of dissatisfaction as Parliament discussed in Friday a report on execution of the general budget of 2009 and another report by the National Audit Agency on the budget. The reports put the budget income at MNT1 trillion 994 billion, or 32.9 percent of GDP, while expenses stood at MNT 2 trillion 336.6 billion, or 38.6 percent of the GDP.

The report said the main reason why income fell short of the estimated MNT 2 trillion 78.5 billion, was that the quantum of tax revenue was MNT 189.5 billion less than expected, because of fluctuation in currency exchange rates. Besides, the recession led to 24,510 companies closing down or failing to make a profit. Some, including state-owned companies or joint ventures, did not pay tax, with no clear legal justification. The report claims Ulaanbaatar Railway, jointly owned by Mongolia and a Russian State-owned company, should have paid MNT 806 million, the Mongolian Stock Exchange MNT 27 million, and Mongolshuudan Bank MNT 125 million, while Mongolbank did not distribute any dividends.

The Government sold bonds to keep itself going. According to the National Audit, a total of MNT 446 billion worth bonds were traded in 2009, way above the figure for the year before. This meant the government paid 2.7 times more as interest. A cross section of MPs criticized the way MNT 219 billion was taken from the Mongolia Development Fund to cover the budget deficit, calling it “extremely poor financial management”. They also said this was one reason behind the inflation, the fall in MNT value, and general economic weakness.

Finance Minister S.Bayartsogt defended the sale of bonds by saying the Government had no choice. MNT 90 billion of bonds were sold to meet constant budget expenses, MNT 6 billion more raised the money to provide apartments to government employees, and another MNT 75 million was spent on providing support to gold miners. He justified these by saying the Government expected demand for apartments to revive construction companies, and increased gold production would replenish foreign currency, arresting the fall of MNT and halting inflation. Since there were no savings from the past when the country had spent all that it earned, the Government could stave off a crisis only by selling bonds and seeking help from the IMF and the World Bank to meet a shortfall of MNT 700 billion.

He reminded MPs that another reason why the Government sold bonds was to save Zoos Bank from going bankrupt. This required MNT 100 billion. He said the Government had been unaware that Ts.Myanganbayar of Mongol Gazar had mortgaged the company’s Olon Ovoot license with Anod Bank.


Post a Comment

Facebook page

Powered by Blogger.


Advertising in Mongolia An Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia agriculture Mongolia analysis Mongolia and Australia Mongolia and Belorussia Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and India Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Israel Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Kyrgyzstan Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Russia Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and US Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia civic society Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia Petroleum Mongolia public announcements Mongolia railways Mongolia Religion Mongolia society Mongolia Sports Mongolia Stamp Mongolia telecommunication Mongolia tourism Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian Archeology Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia

Blog Archive