Leather industries to be supported with Tgs200 billion in bonds

National milk industry proposed
Parliament is deliberating to issue Tgs200 billion in bonds to support leather industries. On December 18,
the budget and economic standing committees of parliament met and discussed this issue and the majority of MPs supported Parliament’s resolution draft to issue bonds.
“Issuing Tgs300 billion in bonds with 7 percent interest for 7 years to support the wool and cashmere branch was successful; this is why parliament decided to propose issuing the following securities”, declared Kh.Battulga, Minister of industry and agriculture. “Mongolia produces good leather boots but has no domestic processing industries. By importing processed hides from Russia, we experience significant economic losses, said the minister, pointing out the importance of developing national leather processing industries.
The draft resolution envisaged spending Tgs140 billion of the total Tgs200 billion on leather and hide manufacturing and Tgs60 billion as encouragement to herders who provide and supply raw material. MP G.Uyanga proposed increasing the capacity of waste water purification facilities engaged in leather production, introduce technology for primary chemical cleaning of leather and hides, and close industries that pour sewage and waste into the central purification facility.
MP S.Byambatsogt proposed to issue Tgs100 billion in addition to the Tgs200 billion to support milk and dairy production. Mongolia consumes 380 million liters of milk each year. The country has more than 40 million head of animals but imports more than 70 percent of its milk need from abroad. “We have all the conditions to develop a national milk industry and supply the population with safe, good quality of Mongolian milk. By issuing bonds and supporting national milk dairy production, we will be able to ensure the population with good quality, inexpensive milk and dairy products”, said S.Byambatsogt.
By developing the national farming economy, Mongolia will succeed to produce milk products, increase technology of milk industries and produce dry power milk at home, thus reducing milk prices which today is being imported for US $3.7 per kilo. The standing committees agreed to set up a working group to study the proposal of the MPs expressed in connection with the draft Bill.
On November 28, the government sold Tgs 1.5 billion in bonds on the world market. US $500 million in bonds has been loaned for five years at 4.125 percent interest, and US $1 billion for ten years at 5.125 percent interest. Much money will be paid in interest every day. While the government has not yet defined how to spend this money, much money is lost every passing day, criticize some MPs, economists and press. For instance, the ‘Undesnii Shuudan’ Daily posted a warning in its December 19 issue saying ‘The government debt for this day reached Tgs4 billion, 117 million in interest. On which project has the bond money started to be spent? . On December 17, Prime Minister N.Altanhuyag made a statement to the DP group about how to spend the money they received from the bond. Construction of the projects to be implemented with Tgs 1.5 billion bond will start next spring. In the first stage, this money will be spent to build paved roads connecting six aimags with Ulaanbaatar, to build oil refineries and reduce housing prices by balancing the housing demand and supply. Also, the 5th power plant in Ulaanbaatar and other power plants relying on coal mines will be built. “For the purpose of effectively managing the spending of the Tgs 1.5 billion and guarantying positive macro-economic influence, the government decided to conclude an agreement with the Mongolbank”, said the Prime Minister.

Source: THE MONGOL MESSENGER
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