We give below selected parts of the 2012-2016 Action Plan formulated by the Government and awaiting approval by Parliament.
Every Mongolian to have a job and an income • Keep inflation in single digit and the purchasing power of the MNT stable.
• Restrict budget deficit to no more than 2% of GDP.
• 80% of imports by sectors other than mining will be exempt from tax.
• Export tax waived on all products except from mines.
• Construction of Ulaanbaatar-ZamiinUud road.
• Increase carrying capacity of ZamiinUud port to resist artificially induced inflation.
• Consult public opinion when passing fresh amendments to tax regulations.
In order to fulfil the goals and principles mentioned above, the Reform Government will implement the following:
• Development Bank will increase special-condition financing to support infrastructure and processing.
• Double taxation agreements with other countries will be revisedor annulled to ensure Mongolian interests are safeguarded.
• 90% of tax paid by enterprises with annual sales revenue of less than MNT1.5 billion will be refunded in sectors other than mining, minerals, import of petroleum products, export of crude, mobile operators, liquors and vodka, and cigarettes.
• Limits will be placed on investment by state owned companies of other countries.
• Capital markets development will be endorsed by supporting activities of the Mongolian Stock Exchange and by creating more opportunity for private sector investment.
Mining sector • State regulation and control in mining will be strengthened but state participation limited; national enterprises and entrepreneurs will be supported.
• Views of local citizens will be respected beforegrant of mineral licence and signing of agreement (CWGP, Coalition).
• The Government will issue mineral licences in place of the Mineral Resources Agency.
• Limits will be imposed on the number of licences any single legal entity can hold.
• All work related to minerals exports will be done through a “One window”policy.
• Laws will be enacted to ensure Mongolian stake in new mining deposit companies isno less than 51%.
• Mining activities likely to result in poor economic benefits or significant environmental damage will be prohibited.
• Introduction of environment-friendly and best technology will be supported, identification work of damaged areas completed, and rehabilitation by the responsible party enforced. Rehabilitation costs will be placed in state budget account in advance.
• Extent of processing mining products will be increased and those adding value to final products will be offered tax incentives.
• Using national enterprises as subcontractors to supply goods and services to mining and other major projects in Mongolia will be made legally mandatory.
• The State will own not less than 51% of companies to be established on deposits explored with State funds.
• There will be a special policy for strategic minerals such as thermal and coking coal, copper, iron ore and rare earth elements.
• A policy will be formulated to add value to mineral sector raw materials, and to allow export of only semi-processed and final products.
The ultimate goal of the national economic policy will be to reduce reliance on the mining sector, provide long-term sustainable development opportunities, and to make the economy competitive. The goal will be reached through following certain principles (CWGP).
Industrialisation policy• The first industrial park to house processing units for mining products will be established in Sainshand town of Dornogovi aimag (CWGP).
• The Darkhan metallurgical plant will be renovated and will process iron ore concentrate.
• Construction of the ZamiinUud,Altanbulag and Tsagaannuurfree trade zones will be completed. The basic infrastructure for the Choir logistics centre will be set up.
• Construction material production will be developed and consumption of domestically produced cement, steel structures and insulation material will be mandatory.
• Thermal power plants will be established in aimags with thermal coal mines.
• Power will be produced from the sun, wind and coal and supply will be connected to the Asian power grid.
• Those working in the field of renewable energy will be offered tax incentives(CWGP).
• A hydropower plant will be established on the Selenge river.
• The first phase of the 5th power plant to supply power to UB will be commissioned.
• A 60-MW thermal power plant based on the Mogoigol coal deposit will be built to work as a permanent and reliable source of power for the Altai-Uliastai system.
Import and export policy• Processing plants will be established to supply, at the initial stage, minerals and petroleum products to the national factories.
• It will be made legally compulsory for mining plants to purchase necessary products and services from domestic enterprises.
• To strengthen economic security, petroleum exploration activity will be increased and petroleum processing plants will be established in Dornod and Zuunbayan aimags.
• A larger stock will be maintained in order to ensure stability in petroleum product supply.
• The wholesale trade practices in petroleum will be changed and retail prices will be kept stable (CWGP).
• Research work on coal gasification and liquefaction will be supported. New technologies will be adopted to get access to a domestic source of fuel and to be free of dependence on foreign sources.
• Liquid gas consumption will be increased by improving transportation standards and enforcing better security standards.
• Research on methane gas, oil shale and other energy sources will be supported. Policy will be formulated regarding their exploration and usage.
Infrastructure, urban development and provincial development policy• The present regional development principles will be reviewed and industrial and ecological priority regions identified.
• Basic infrastructure will be constructed in all regions and development pursued using the economic and human resources identified in core cities.
• Railways will be included in the “New Development” programme adopted by the State Great Khural and a railway policy will be formulated, defining the stages of the programme.
• Aimagcentres will be connected with Ulaanbaatar and with the nearest border check point by asphalt road.
• The Altanbulag-Ulaanbaatar-ZamiinUud highway will be built and commissioned to improve transit transportation.
• The AN-4 Ulaanbaishint-Ulgii-Khovd-Yarant-Ulaangom road will be commissioned.
• Mongolia being a landlocked country, air service will be considered as a priority sector of the economy and will be developed and supported through State policy.
• The international airport to be built in Khushigt valley will be made a competitive international freight and passenger transportation centre.
• The air transportation policy will be liberalised in phases until 2016.
• MIAT will be granted the status of national carrier and the State will retain at least 51 per cent of its ownership.
• Projects and programmes approved by the State Great Hural and the Government of Mongolia, such as “New Development”, “Railway Policy”, “Mongol Livestock”, “Third Phase of Virgin Land Campaign”, “Industrialisation”, “Agricultural Stock Exchange” and others,will be implemented expeditiously.
• Industrial and technology parks will be established in core cities.
Social welfare policy• A multi-tier pension system will be introduced and a wealth fund from revenue generated by mining resources will be set up. At least 60 per cent of the fund’s capital will be put aside for future pension fund.
Mongolians in a safe environment• Green development will be the cornerstone of the country’s development strategy.
• The Ministry of Environment will play a larger role and will be given a higher status.
• Development of renewable energy sources will be encouraged.
The following steps will be taken to reach the above goals.
• Use of radioactive substance and toxic chemicals, which have a negative impact on human health, the environment and livestock will be reduced and control over the sale, use, transportation, storage and import of exceptionally hazardous substances will be tightened.
• Reservoirs will be built at major rivers by adjusting the flow to meet the water demand of the region. Pools will be set up in every aimag (Coalition).
• The network of state special protected areas will be extended(CWGP).
• Responsible mining and use of advanced technology will be enforced. A system of depositing capital guarantees for rehabilitation will be adopted (CWGP).
• “Equivalent protection” mechanism will be adopted in mining rehabilitation(CWGP).
• A system of rewarding citizens who provide accurate information on damage to the environment will be put in place.
Foreign relations policyStrengthen strategic and complete partnership relations with Russia, China and third neighbouring countries and federations.
Social safety policy• Burying of nuclear waste in the territory of Mongolia will be strictly prohibited (CWGP).
• Industrial activity on nuclear energy further than “Shar nuntag”will be prohibited by law in the territory of Mongolia.
A Mongolia with freedom• Comprehensive measures will be taken to ensure transparency in State activites.
• State service will be changed to public service.
• The number of licences and permissions generally required will be reduced.
• A new system will be introduced where the permission of a government organisation is taken for granted if it does not make its views known within a given time.
• The procedures to get permissions and licences will be simplified.
• Products that meet ISO standards of the EU or the USA will be granted licences directly.
To reach the goals mentioned above, some responsibilities of the State will be transferred to NGOs and professional associations (Coalition, CWGP).
We give below selected parts of the 2012-2016 Action Plan formulated by the Government and awaiting approval by Parliament.