President criticizes 2019 state budget draft

...Kh.Battulga criticized Minister of Finance Ch.Khurelbaatar for proposing investment of 52.8 billion MNT in Uvs Province where he was elected from, which is much higher than other provinces’...

On Friday, Parliament conducted the first review of the draft 2019 state budget. During the parliamentary review, President Kh.Battulga delivered his stance on the draft to lawmakers.

The president started his speech by saying, “The world’s leading finance experts and senior officials of the International Monetary Fund have been repeatedly warning about a looming global financial crisis, when the global financial and economic assumptions are as gloomy, the draft 2019 state budget looks too optimistic and is too far from the real situation, and did not prevent the country from unexpected global economic challenges, which seems to be drafted for the 2020 parliamentary elections.”

He stressed that the government drafted next year’s state budget mainly to fulfill promises put forward by lawmakers during the 2016 parliamentary elections, in a bid to regain credibility with the public.

The president recited a statement made by lawmaker Ch.Ulaan that 375 (66 percent) out of 570 proposed construction projects don’t have blueprints and funds, which violates Section 29.4 of the Law on Budget.

Kh.Battulga criticized Minister of Finance Ch.Khurelbaatar for proposing investment of 52.8 billion MNT in Uvs Province where he was elected from, which is much higher than other provinces’.

He said that the government is announcing that the nation’s economic growth is going up, but in reality the country is experiencing exchange rate fluctuations and the purchasing power of the tugrug is weakening.

The president stated, “Inflation rate was at 1.9 percent by the end of 2015, but it reached 8.8 percent before the end of 2018. The exchange rate of the tugrug against the US dollar was 1,950 MNT in July 2016, but it is 2,552 MNT today. This can only mean that the government and Mongol Bank failed to perform their duties to maintain the inflation and exchange rates, which has led to the increase of the price of commodity and services, because of which the Mongolian people are losing their income. Fuel prices have climbed up by 19 to 30 percent, but the minister in charge of this affairs and the government are still idle to respond this matter.”

“The next subject is debt! Two years ago, the ruling Mongolian People’s Party won the parliamentary elections with the help of debt paranoia. For the last two years, the total debt hasn’t been decreasing, but increasing. The public debt amounted to 16.6 trillion MNT in the first half of 2016, but is 21.1 trillion MNT today. The decision-makers who promised not to increase the debt have borrowed 500 million USD through the Mazaalai Bond, 600 million USD through the Khuraldai Bond, and 800 million USD through the Gerege Bond. It is incomprehensible why they are talking about debt repayment when it is the opposite case,” said Kh.Battulga.

“We can cut 1.4 trillion MNT or over 500 million USD in total if we subtract the wage and pension increase and cut ten percent of the speaker’s budget, which will save almost one trillion MNT, and if we discard the unplanned objects in the draft, it will cut almost 400 billion MNT. I am making a proposal to use this money on establishing a loan fund to support nonmining exports factories. If we save 500 million USD from the respective budgets of the next two years to build processing factories that will enable the export of animal-origin products for our 160,000 herding households annually, one billion USD will be accumulated. I am proposing to resolve the issue through long-term, low-interest loans that will support agricultural exports, which has been on the agenda for many years,” the president noted.

He stated that 570 construction projects worth two trillion MNT will be funded by the state budget throughout the next year, which has doubled compared to the budget of last year’s construction projects.

The president highlighted that a good side of the draft is a proposal put forward by some lawmakers to Parliament, which is the universal coverage of the child money program.

He highlighted that the budget regarding child protection in the next year’s state budget should not be cut as challenges facing child protection in society are become a rising problem.

Kh.Battulga called on lawmakers to fulfill their main duty to take control of the operations of Cabinet without being bribed and practice accountability by putting national interest as their priority.

He said that if Parliament approves the state budget as is without eliminating violations, he will put a veto on the 2019 state budget.

The president suggested the prime minister to cut spending outlined in the draft by 20 percent.