Unsettled at the Top

August 21, 2013

                Although a whole new generation has emerged since Mongolia’s separation from socialism, there are people who still believe that government is in charge of everything. This deep-seated belief has been influenced greatly by election promises at all levels, and is the outcome of what government and politicians have been doing: A politician once said that a lie told often enough becomes the truth.


Government invading boundaries

                Government involvement in the economy keeps expanding. Almost half of our economy now belongs to the government and half of the public budget goes towards administrative costs. Bigger government is resulting in lower efficiency and greater budget deficit is invading the private sector. Not only is government spending currently financed by taxes, but the government receives 10 percent tax from every single thing you buy.


The term “strategic deposit” was invented and introduced by the mining sector. Afterwards, the government established 10 state-owned companies (each with the word “erdenes” in the name) to own from 34 to 50 percent of mining companies that intended to extract mineral resources. But all mineral resources belong to the people, regardless of whether the companies are state-owned or not. Also, it seems like they failed to realize that being shareholders of a company includes the responsibility to make a certain amount of investment. Not having any capital to do so, the government acquired foreign loans and fell into huge debt.


The government wasted an unnecessary amount of time – the whole summer – to appoint presidents of public universities. It is such a pathetic scene that government officials are becoming political over these decisions and trying to have their associates and relatives appointed to these positions. The government even decides on the headmasters of high schools. (The British practice of managing educational institutions can be seen in the documentary “Making of Ladies and Gentlemen” on www.jargaldefacto.com)


In the market economy, prices are set by supply and demand. However, the government today is playing a big role in setting prices and is implementing many programs aimed at it. Even though their intentions are good, it is not efficient enough in the long term and the general level of prices has increased due to artificially caused market disruptions.


What caused the current situation?


                Mongolians still do not fully understand the true nature of government. A belief that the government has to decide every single thing that concerns the life of its citizens has not diminished. As the government grows, individuals have less say in the decisions that shape their lives. A greater number of people now think that they cannot live without the government.


The government first has to collect or borrow before they can distribute something for free. There is no such thing as a free lunch, but there are people who believe there is. Mongolians, especially, are undoubtedly convinced that education and medical services are provided for free. Citizens demand that these kinds of free services be of decent quality. But, there is neither a teacher nor a doctor who works without pay.


There are many political party members who take advantage of this widespread belief and get themselves appointed to government positions by making promises that give the impression that “everything is free”. After being appointed, they enjoy their authority, go on trips abroad and fulfill their personal interests. Subsequently, they blame everything on systemic flaws and walk away like nothing happened.


Due to instability in the business environment, those who are in the private sector tend to enter politics to protect their businesses. What they attempt to do is to have their business involved in government procurement. It has become the norm that anyone can be appointed to any position, as well as have rumors about them stopped, if they make big enough donations to political parties.


Company operations can now only be successful with government support, and business management is being carried out from the parliament hall, a minister’s office or both. Furthermore, businesses now have their own media and are using them to influence public opinion and silence the voices of those who oppose them.



                In order to have the government involved in everything and make every decision, Mongolia tends to employ the practice of changing its government. However, the current economic problem is not going to be solved no matter what type of government comes next. The only way out is to change the basic principles of governance.


First of all, the legislative and executive branches of our government must be separated. Cabinet members, with the exception of the prime minister, do not need to be members of parliament at the same time. We should follow the principle of appointing technocrats from relevant professional areas to the position of minister.


Social care system needs a change

                People who are free and independent do not ask their government to fund all their endeavors. The government is not a magical box where a person can get everything needed free of charge. On the contrary, the government has a small but fundamental duty to protect freedom and property, and to ensure peace and security. As long as its operations stay out of individual lives and provide equal opportunities to every citizen, the country can develop and flourish.


The government should support those who truly need help in meeting their basic needs. However, they should allow the public to take part in politics aside from government involvement. For example, non-governmental organizations and individuals deliver faster results with more efficient methods than the government does when assisting herders suffering from droughts and zud, a state of animal famine caused by a long and hard winter. Schools and hospitals contributing efforts towards social services should be freed from taxation.


The time and conditions for changing laws regarding the mining industry have now arrived.  Instead of “strategic deposit”, we could use the term “strategic minerals”, which can include uranium, rare earth elements, and spar. Also, the government should stop owning shares in mining companies and creating unnecessary debt burdens.


Major projects would have been implemented efficiently if the government had set operational and environmental standards, ensured compliance and imposed penalties in cases of violations. Furthermore, royalties and taxes collected from mining companies should have been spent on improving education and offering good paying jobs to citizens. The “long-titled laws” that have not been executed properly for many years need to be sorted and finalized for good.


In the education sector, public universities should take the form of independent, shareholding companies, where their presidents are elected by an executive council and contracts are established. The same approach should be used in high schools as well, so that labor contracts can be signed and a headmaster’s performance is constantly reviewed by an executive council. It would also reduce government expenditures spent on review and monitoring educational institutions.


Every social service, except law enforcement and the fire department, could be provided by the private sector. City management as well as local administration should first set specific standards for all provided services and frequently monitor if they are being followed by contracted companies. Contracting other compatible companies in case of violations would encourage higher quality at lower costs.


Price control policies from the government should be restricted since prices should be determined solely by supply and demand, and their relationship with the market. Even if there is a sudden hike in prices, suppliers eventually have to reduce their prices as soon as new competitors emerge.


The Democratic Party, which won the previous parliamentary election and established its government, must not let the budget deficit exceed two percent of the economy in 2013.


All in all, we have to realize that a government capable of supporting its people with funds from others is big enough to take away freedom and possessions one day as well. Government is a powerful force that can destroy everything in a second. Therefore, citizens have a duty to keep the government under control and closely watch every step it takes.

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Posted by on Aug 26 2013. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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