THE NEW REGIONAL DEVELOPMENT POLICY CANNOT BE ALLOWED TO FAIL

B. Ariunaa

The draft resolution on declaring the current year as the Year of Regional Development Support was discussed and approved at a regular Cabinet meeting on 27 December 2023. During the break in the 2023 autumn session of the Parliament, officials were instructed to organize meetings and discussions to explain policies and regulations on regional development to the public. 

It has been 22 years since the Regional Development Concept of Mongolia was approved by Parliamentary Resolution No. 57 in 2001. 

Let’s recall  the main objective of the Regional Development Concept of Mongolia adopted in 2001. This  aimed to “eliminate the existing unjustified agglomeration of population and industry, reduce disparities between urban and rural development, reduce inequalities and imbalances between provinces and regions and bring their development levels closer to each other, create favorable internal and external conditions for accelerating national economic and social progress through optimal utilization of the country’s land, its wealth, agricultural and livestock raw materials, intellectual potential based on the environmental capacity”.

It is not only Resolution No. 57 of 2001 that has remained unimplemented. Many development documents such as the Regional Development Management and Coordination Law of 2003 and the Comprehensive National Development Policy of 2007 have not been implemented. 

One does not have to look far for answers to the question of why these were  not realized. The current situation in Ulaanbaatar clearly demonstrates this. If we take into account excessive concentration, urban-rural differences and uneven development, nothing has been achieved under  the concept of regional development. 

But the new concept of regional development has no right to fail. Careful design, proper planning and implementation of the ten-year development vision has become a priority.

Therefore, the draft resolution of the parliament “On Measures to Determine the Regional Development Policy of Mongolia” was discussed and adopted at the parliamentary session on January 12, 2024. 

There are several reasons why the previous concept did not work. First of all, it was influenced by the electoral system. Mongolia’s development as a large, economically independent and competitive region with several development centers is still hindered by the interests of parliament members who channel budget money to their constituencies. It is interesting to see how many MPs have worked hard for Mongolia’s development and how many have traveled to their constituencies to score points.  

However, the fact that the Constitution was amended during this Parliament to hold elections by expanded constituencies has begun to increase confidence in the realization of regional development.  
Once this concept is adopted, there is an urgent need to amend the law on administrative division and  management.  

It is advisable to reorganize administrative units in order to increase the population of remote areas, create a favorable living environment and improve business conditions. It should be noted that the relevant decision was discussed at the regular meeting of the government. u
At the general session of the Parliament on January 12, 2024, 57.7% of the members supported and approved the draft resolution of the Parliament “On regionalization of state institutions” put to a vote by the Standing Committee on State Development.  

Regional specificities will be taken into account in the implementation of this resolution. There are many issues to be discussed. For instance, where the Ministry of Mining and Heavy Industry should be located - in Umnugobi aimag, where Mongolia’s mining sector is rapidly developing, or in Dornogobi and Gobi-Sumber aimags, where an industrial complex will be built.

Mongolia’s economy is based on the export of mining products. In particular, coal exports play a key role in economic growth. 

The total income from the mineral resources sector accounts for 27% of Mongolia’s budget revenue, 77% of  industrial sector revenues and 98.7% of export revenues. In addition, this sector receives 73% of all foreign direct investment.

With such  reality,, declaring the mining sector as a priority in the regional development concept would be a right and bold decision. It is already clear that the country’s economic development over coming years will depend on the mining sector. 

Therefore, when diversifying regional development policy, it is advisable to follow a flexible strategy of supporting the sector that brings the greatest benefit to the economy and developing other sectors in line with it.

Of course, the mining industry cannot be developed in all aimags and soums. However, there are opportunities for the development of other sectors of the economy, such as food production, tailoring, shoe production, equipment manufacturing and delivery of goods.
 
Citizens want these sectors to develop in a coordinated manner, to complement each other, and to make everything clear to those who live and work there.

For example, there is no need for entrepreneurs from the western region to export their goods through Ulaanbaatar. Let’s reorganize border customs and trade with our  two neighbors, as well as with third neighbors. Let’s support business diversification in the region and adopt flexible tax policies suitable for these diverse businesses. Improving the investment climate at the policy level and empowering local communities to manage investment funds means that expanding constituencies was the right decision.  

The budget will be amended in the spring 2024 session. Budget allocations will most likely be aligned with the regional development concept. If we can allocate funds according to a regional development model, rather than focusing on monuments, local school renovations and various awards, the government resolution declaring 2024 as the year of regional development support could become a reality. 

Speaker of the Parliament, G. Zandanshatar, emphasized in his closing speech of the autumn session that “this autumn session was a session of reforms”. Whether the winds of reform will blow in the regions directly depends on the government pursuing stable policies.