Prime Minister L. Oyun-Erdene presented a draft law to improve the productivity, transparency, and governance of state and locally owned companies to Chairman of the State Great Hural (Parliament) D. Amarbayasgalan on January 8, 2025.

The draft law outlines principles to ensure that state and locally owned companies operate independently and are free from political influence. It emphasizes accountability, efficiency, and independent oversight. Additionally, it mandates that these companies maintain transparent operations and specifies that they cannot transfer responsibilities assigned to the state or local authorities.

The draft law also prohibits the establishment of new companies in sectors where private enterprises can operate efficiently without government intervention. As a result, state and locally owned companies will only be created in sectors critical to public infrastructure or essential services where private participation is not viable or economically feasible.

Once enacted, the draft law aims to reinforce the constitutional principle that separates state regulation from ownership. This aligns with democratic governance principles and ensures the state participates in economic relations strictly as a regulator. It will also prevent government involvement in sectors where private enterprises can develop under market principles, thus avoiding unnecessary competition and financial risks to the state.

The draft law is expected to enhance corporate governance and oversight systems while increasing transparency, accountability, and profitability of state-owned enterprises. Additionally, it will improve the financial performance and value of companies, leading to increased tax revenues and dividends from state ownership. The legislation is anticipated to create a more efficient and transparent framework for state and locally owned companies, contributing to broader economic stability and market development.