“Our politicians must show their capacity to change things for the better”

In this wide-ranging interview, D.Davaasambuu, advisor to the Parliament Speaker, answers questions from MMJ on economic policies and trends.

The Government is confident that inflation can be managed, while the World Bank and the International Monetary Fund keep saying that it would go out of control. What do you think?
Stability is essential for development and normal life, and that way, inflation is an important issue. Inflation can result from several causes. In Mongolia, cash distribution is taken to be the gest danger. When rising wheat and oil prices all over the world led to high inflation here, too, the Government took steps to supply the market with enough goods to keep prices down. The media should not raise fears of inflation. Parliament has asserted  that it would take measures to keep inflation below 10%. This can certainly be done if the Government and the Central Bank cooperate and coordinate their policies and speak to the people in the same voice.

The MNT800 billion to be spent from the Human Development Fund has not been included in the budget. International organizations are against this, but can we afford the enormous deficit that will result if the anticipated budget deficit of MNT700 billion and this MNT800 billion come together?
The Human Development Fund is an integral part of the consolidated budget because the money is collected through the tax law. This may be changed after the coming election. The fund is usually included in the budget. This has its pros and cons. No matter how it is explained, it remains part of the budget, according to law.

Are you worried about the impact of spending the Fund money?
Politicians made a promise and when people demonstrated last spring to demand that it be kept, Parliament came to an understanding with them. The Prime Minister went on TV to announce MNT500,000 in cash would be given to each citizen. So of course the money must be distributed. However, everybody now realizes that this kind of promise must not be made again.

Spending from the budget is showing some good results, such as job creation, even if the deficit reaches MNT700 billion, but the distribution of MNT800 billion could neutralise these gains. Do the two have to be contradictory?
It is not that Mongolians have too much money. The allowance is needed by 80% of the population, many of whom are pensioners receiving MNT100,000 per month and state officers earning MNT200,000. They need this MNT21,000 for each member of the family. This also gives everybody a tangible share of the natural resources. I don’t, however, see this as continuing for long. Also, the present practice of distributing cash must stop, and must be credited to bank accounts. It is a shame to see people queuing for cash in the 21st  century.

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