CLOSING REMARKS BY H.E. MR. M.ENKHBOLD,

CHAIRMAN OF THE STATE GREAT HURAL (PARLIAMENT) OF MONGOLIA,

AT THE CLOSING OF THE 2016 AUTUMN SESSION

Honorable Members of the State Great Hural,

The 2016 autumn session of the State Great Hural has convened for 85 working days and successfully solved its prearranged issues.

The State Great Hural, during its autumn session, discussed and adopted the state budget for 2017, economy recovery program, basic guidelines for development of economy and society, the state’s monetary policy and some other emerging legislations and thus provided the government and other state institutions with an opportunity to freely work. In addition, it has adopted the key guidelines to refine the legislations until 2020 according to which there are 201 laws and 12 resolutions need to be adopted till 2020.

During the autumn session, plenary sessions have convened 34 times, Standing committees and sub-committees 140 times, and it has adopted 15 laws, amended 190 laws, ratified 3 loan agreement and 59 resolutions.

The autumn session of the State Great Hural focused on modifying the mistakes made in the past few years.

The principle to flexibly regulate exchange rate of MNT against foreign currencies in consistent with the basic economic conditions is being reflected in the monetary policy and budget estimation became compatible with it.

The external debt has become an obsession not only for government, but also for each person who loves its motherland. It is important for government to fully make a Development Bank’s US $ 580 million of Euro bonds notes payment coming due in the first half of 2017 on time according to the plan without losing the investors’ confidence. 

The State Great Hural, while approved the budget, strictly adhered to the principles of cutting possible spending, transferring nation into economy mode, realistically estimating the budget’s revenue and expenditures, ensuring the budgetary discipline. In the state budget, the state’s administrative expenses (salaries and other asset expenses) were cut by one percent, unreasonably cost-increased investment financing for state-funded projects was cut by 58.0 billion MNT, the ratio of the budget deficit was reduced from the 9.9% to 9.1% of GDP which means improved by 0.8 % and lowered by 180.0 billion MNT. In other words, misguided standard insubstantially estimating the budget revenue and increasing the expenditures was abolished.

The economy recovery program was approved in order to provide the economic stabilization and growth. This program includes measures to restore confidence of foreign investors towards Mongolia, reduce the cost of government borrowing as well as to intensify the large-scaled projects in mining, agriculture, processing industry and energy sectors.

As a result of implementation of mining and infrastructure projects stated in this program there will be some positive results such as reaching the export of $ 4.9 billion and import of $ 4.4 billion, total foreign trade turnover of $ 9.3 billion, foreign direct investment to Mongolia from $ 1.7 billion to $ 2.0 billion per year by 2019. There will be an estimated economic growth of 3.0% in 2017, 5.1% in 2018, 7.1 % in 2019 after implementing this program.

Since approving the program will not be enough, the State Great Hural will require from government, government institutions and officials the implementation of each provision of this program. Therefore, the State Great Hural is obliged government to present the implementation process of the economy recovery program at the spring session. 

We all have agreed that the activities and operation of the Development bank responsible for accumulating the capital funding from foreign and domestic sources and financing large-scaled development projects /programs, and ensuring sustainable growth of Mongolia have been acting up and became a major problem of the state budget and debt notes since its establishment.

First of all, in order to solve this problem, the short term financial capacity of the Development bank was stabilized and its operational stability was ensured.

In addition, the revision of the law on the Development bank of Mongolia was adopted in order to improve the legal environment for it to conduct the operation. This law allows the Development bank to improve its governance, transparency and independence, and also ensures the legal environment to issue repayable, important for Mongolian development loans to needed entities without command of any politicians or political groups.

In order to support national industries forming the substantial working place and income, the law on amendments to the law on Income tax of entities was adopted by the Parliament. According to this law, approximately 4700 SMEs with less than 1.5 billion MNT annually in sales operating in the agricultural and livestock industries and its supplementary sectors, the food production industry, the clothing and textiles industry, the production of construction materials will be eligible to pay a 1% tax on business

In addition, despite the lack of fiscal revenue, imported small and medium-sized industrial equipment has been decided to be exempted from custom duty until 2018. Thus, it is providing over 54 thousand small and medium enterprises with an opportunity to expand their industry and increase productivity. As a result, working place of 767 thousand of civilian working in these sectors will be securely remained.

In order to support by tax policy and promote business activities, the account of 3993 tax payers which have been closed due to not paying the tax were opened, and it is considered as an appropriate step for overcoming their economic difficulties.

Dear Members of Parliament,

Even though the economy is at hard condition and macroeconomics status is getting worse, the policy and decision made on strengthening the budget discipline are starting to show their benefits, and also positive changes in some economic indicators can be noticed for the last few months.

For example, according to the preliminary data of 2016, the budget revenue disrupted for the last four years reached for over 9.4% of the budget plan which is 504.8 billion MNT, and expenditure was saved by 173.5 billion MNT, which is lower than the expected expenditure by 1.8%.

Export of non-mineral products increased by 442.3 million USD from one year before and reached 1.4 billion USD, which shows some 1.5 billion USD possible profit in foreign trade. The tentative performance of 2016 evidences that the total product of the industry sector reached 9.9 trillion MNT and it is esteemed higher than the previous year by 1.2 trillion MNT.

According to the tentative performance of 2016, the gold bought by Central Bank of Mongolia reached 18.3 tones, which is 3.2 tones more than the last year's. Thus, by reaching 1.3 billion USD by the end of the year, official reserve of the foreign currency is creating condition ensuring stabilization of the foreign currency exchange rate in the internal market and decreasing the sharp change in the rate. Maintaining and improving such positive circumstances will be directly depending on the activities of the State Great Hural and the Government.

It is important not just to spend budget assets for planned measures, but also to achieve useful and substantial for citizen results from all spending. For example, as a result of funding of 2.0 billion MNT for establishing the energy supply infrastructure for households of Bayanzurkh, Songinokhairkhan ger districts of Uaanbaatar struggling without energy, 1562 households could be supplied with energy

Dear Member of Parliament,

Even though there are restricted budget and financial opportunities, hard economic conditions, social welfare and protection issue is still stays as a spotlight of the State Great Hural. Several decisions about vulnerable and target groups were made during this session.

Due to adoption of law on elders, "Age Endowment" of 100,000-500,000 MNT will be given to elders twice a year at the first day of Spring according to Lunar Calendar and also at National Great Naadam Festival. The "Age Endowment" of 20.5 billion MNT will be issues to about 122 thousand elders with the occasion of upcoming Tsagaan Sar.

In addition, pension loan's annual interest of 18% was reduced by 3%. Further, it is important to make an effort on decreasing the pension loan interest sequentially without burden on the budget.  In addition, it was decided that the invalid pension receiver lost their fosterer will be issued deposit of equal to 50 % of pension up to 3 months from the insurance fund of pension, of disease caused by industry accident or profession.

Even though the mothers have a right to look after her child until he or she reaches the age of 3, their social insurance premium is paid only during the time of pregnancy and post-partum allowance, and because of this, rest 2 years’ social insurance premium is left unpaid. A pension scale of mothers gave a birth to many children used to be low, because they work for few years and retire earlier. We could regulate such problems, which have been discussed for many years without any solutions. By adopting the law, social insurance premiums would be paid every year for around 92 thousand mothers who look after their children, and also in relevance of the children number, 1.5 year will be added to working year record of 5800 mothers.

The State Great Hural considered correct to advance the pension age of herders conserving a traditional livestock industry, nomadic culture and lifestyle by 5 years and also to record herders’ social insurance premium paid one year as 1.5 year.

In addition, we have passed the law on compensation of the pension insurance premium for herders and self-employed individuals, and provided the onetime opportunity to make the compensation of pension insurance premium for herders and self-employed individuals whose employment status have been changed due to social transition and were not able to make the payment on time.

The system to issue the long-term study loan with law interest to students was established and operation of the study loan fund has already commenced. Thus 70.0 thousand students met the certain criteria of study achievement became able to be issued this loan. The 90.0 billion MNT needed for study loan fund is being reflected in the 2017 budget.  

Through amending the law on pensions and allowances for the military, we have provided the opportunity to fix military pensions by equaling 1 year of employment in a civil organization with full payment of insurance premiums to 6 months of service in a military organization, an issue that remained unsolved for 7 years since 2010.

The action that we have discussed and adopted the Anti-corruption program, which could not be solved by the previous parliament and even though the project was submitted to the State Great Hural again, it was not discussed, is showing our will to fight the corruption. The main purpose of the program is to make the government's all level sectors, officers and also citizens to have a valuable thought and mindset about view of not having no corruption and the result of this project accomplishment definitely will give a better economy and be a base of the sustainable development.

It is inarguable that the health issue of the citizens is one of the issues which must be permanently at the spotlight of the Parliament. Thus, it has paid special attention to combating some diseases with high spread and complicated to treat. For example, 40 % of the price of “Harvoni” for leaver, the full payment of patients treated permanently in hemodialysis apparatus would be covered by the government and for this 24.2 billion MNT was set at the budget.  

Dear Member of Parliament,

The action that this Parliament discussed and adopted the program on combating corruption, which could not be solved and returned by the previous parliament and even though it was submitted again to the State Great Hural could not be discussed, is showing our will to fight the corruption. The main purpose of the program is to make the government's all level institutions, officials and also citizens to have a valuable thought and mindset to be free of corruption, and as a result to contribute to the economic growth and be a base of the sustainable development.

It is necessary for organizations implementing and oversighting the policy, particularly Anti-corruption agency to sequentially carry out the program with certain plan to achieve the practical results. Although, internationally, there are some indexes to assess the fight of the government with the corruption, the real achievement of the program would be evaluated by the citizen of Mongolia.

The autumn session of the Parliament has made efforts to improve the laws covering the legal sector and providing peaceful life of citizens by renovation of laws on the Mongolian border, Police, Domestic Violence and International Treaties, and in order to ensure civil political rights, approved the new law on Consultative Referendum.

We are confident that the revised Law on Combating Domestic Violence shall bring progress to providing favorable condition for family members, including children and woman to live a peaceful life within their families, and fighting any trends or incidents that could turn them into victims of violence.

The problem of the air pollution and environmental contamination of the capital city in where more than half of the total population of the country lives have already exceeded the livable amount. Recently, National security Council held an expanded meeting on this problem and delivered the recommendation to the Parliament, the Government and other related bodies. It is necessary for reorganized National Committee for Air Pollution Reduction and emergency operation to begin its activities urgently and make some substantial results.  In case, if the Government will submit the draft of certain proposal and decision, it is always available to convoke the Parliamentary session. We must not forget that Ulaanbaatar is not only the capital of Mongolia, but also its our face and the place where the most of our future generation will leave. 

The Parliament has made efforts toward executing its power given by the Constitution of Mongolia to oversight the implementation of laws and other regulations issued by the Parliament. During the session, 13 working groups have been appointed by the decision of relevant standing committees, 4 of which have already integrated their conclusions and issued concrete instructions and direction to respective entities on providing and intensification of works aimed at implementation of laws and regulations. For example, relevant standing committees have discussed and resolved proposals and conclusions made by working groups on Tuul River pollution, economic and financial situation at state budget enterprises and state property companies, implementation of laws on the Rights of Persons with Disabilities and the law on Public Radio and Television.

Parliament members have personally visited 17 organizations including the Central Bank of Mongolia, the Financial Regulatory Committee, some of the ministries, agencies, schools and kindergartens, the Public Housing Corporation and well acquainted with the implementation of relevant laws and regulations.

A working group assigned by the Standing committee on Legal affairs has investigated for quite long time how did Mongolian Copper Corp purchase the 49 percent stakes in both Erdenet Mining Corp. and Mongolrostsvetmet LLC owned by Russian. Accordingly, the Parliament has made a decision on the result of the investigation and measures to be taken. The Government and the Standing committee should implement the made decision as soon as possible. Further, it is considered important and urgent to improve activities, transparency and independency of Erdenet Mining Corp., and transfer the body into the type of the organization with public monitoring and good governance.

In addition, the Working Group responsible for making proposals and conclusions on the implementation of the law on Education and Pre-school Education is currently working in rural areas.

Dear Members of Parliament,

Although the autumn session of the Parliament is taking a break, we, Members of the Parliament who represent our people, should continue our work without interruption. At the outset, working in your respective constituencies, advertising adopted laws and regulations, providing their implementation, listening to voices and opinions of citizens, mutual dialogues and ensuring their participation in realization of the decision made are waiting for us. It is up to the electors to make the judgment and evaluate our work, and tell us what we should pay attention to, and what kind of decisions we should make.

In the background of the pausing regular session, there are a number of draft laws and resolutions waiting for their turn to be resolved. We should not forget that this Parliament is bearing key responsibilities of overcoming the obstacles and complication facing our country, recovering our deteriorated economy, improving the livelihood of our people and forming the basis for further development and prosperity through providing a proper legal environment and policy support. Therefore, during the break, I would like to request you all to focus on providing proper preparations for the spring session, finding solutions to problematic issues, and meeting the expectations of your voters. Hence, I would like to declare the fall session of the Parliament closed.

In conclusion, let me extend my best wishes to the Mongolian people and all members of the Parliament.