OBG talks to Tsagaan Puntsag, Chief of Staff, Office of the President

P. Tsagaan, Chief of Staff, Office of the President

Interview: Tsagaan Puntsag

What short-term impact might the “From Big Government to Smart Government” initiative have?

TSAGAAN PUNTSAG: For the last 20 years, Mongolia has conducted a dual political and economic transition, and we have achieved quite a lot. Yet, we have failed to reduce government inefficiency. Today, we have an electoral democracy, though with shortcomings. After much deliberation, we have concluded that Mongolia needs to reform its government to provide transparency, inclusiveness, fairness and competitiveness. More people should be able to run for parliament, and we have to ensure an equal opportunity for those who want to exercise their right to be elected. To this end, we are working on a number of laws, such as the Election Law, which will regulate important subjects, including the election financing process. On a parallel track, we are drafting the Law on National Development Goals and the Law on National Development Planning. The former aims to standardise measurable and simple macroeconomic statistics to be used by all political parties and candidates in their campaigns and administrations. This is an important step towards correctly measuring major indicators of economic growth in Mongolia.

Our country needs double-digit growth for the next few decades and, in order to achieve this, we need smart macroeconomic policies that will take this country to the next level. We need lower inflation, stable exchange rates and a stable investment environment, among other things. Such smart policies derive from capable, competent and responsible public servants; hence, the ultimate goal of this nationwide initiative is to have a government that has public officials who are better prepared to cope with the challenges ahead. The policies that will result from such a government will have a positive impact on Mongolia’s economy.

How will this governance initiative increase foreign direct investment (FDI) in the country?

TSAGAAN: This is an opportunity for Mongolia to take a big step in economic development by consistently reaching GDP growth numbers close to 20%. In order for this to happen it is crucial to secure, inter alia, FDI for the long run. Our government has made mistakes in the past with regards to the stability and predictability of our policies and regulations. Today, we have learned this lesson and, by instituting smarter governance mechanisms, we will create a more capable, competitive and efficient environment domestically, which will result in a secure and stable business climate.

Investors are taking a risk when they enter Mongolia, and we must work together with them to create mutually beneficial partnerships. In a country with a government that is service-oriented, focused on research and ruled by law, the investor community becomes more confident in the capability of the government to collaborate with them, which in the end will help improve the country’s appeal as an investment destination.

How will the government’s strategy evolve in regards to Mongolia’s two immediate neighbours, as well as relations with third neighbours?

TSAGAAN: Mongolia aims at maintaining a balance between our two immediate neighbours and our third neighbours. We are working to secure more investment sources from foreign partners. As an open country, we seek mutually beneficial relations with all of our neighbours. Mining has been a major focus when it comes to Mongolia’s relationship with foreign partners. Amidst stories of success, we have also had negative experiences due to mistakes and wrongdoing on the part of our government, as well as foreign firms. Moving forward, we need to ensure win-win, fair and transparent cooperation with international partners operating in Mongolia. We need to make sure we are properly understood, leaving no room for misinterpretation. Though a small country in terms of population, we are a highly educated nation. We need to make sure that we are understood correctly, that our good intentions are acknowledged and that the progress and prosperity to which we aspire are shared and inclusive.


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The Report: Mongolia 2014

Economy chapter from The Report: Mongolia 2014

Cover of The Report: Mongolia 2014

The Report

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