Mongolia is heavily dependent on its extractives sector and revenues from mineral exports, but has experienced increasing debt and fiscal deficit as expenditures soared on over-optimistic revenue projections. The effectiveness of government spending has been questionable amid lack of fiscal discipline and effective fiscal oversight. The government has broken or circumvented many fiscal rules and legal requirements resulting in increased debt burden and risk of default, and the country has resorted to an International Monetary Fund bailout package.
In June, NRGI hosted a breakfast discussion among members of the Economic Club of Mongolia in Ulaanbaatar on the subject of enforcing fiscal discipline in Mongolia. B. Munkhsoyol, a consultant for the Natural Resource Governance Institute (NRGI) presented the findings of her research, entitled “Can the proposed fiscal council help improve fiscal discipline in Mongolia?” to a diverse audience of government officials, researchers, private sector executives and citizens. The presentation and the lively discussion that followed highlighted the need for improving fiscal discipline, and suggested that Mongolia’s newly proposed Fiscal Stability Council could perform many functions that will aid this objective. At the same time, many participants voiced skepticism about the regulation that established the council, arguing that the proposed council would not be sufficiently independent or funded.
A short briefing in Mongolian related to Munkhsoyol’s presentation is here. A longer briefing in English is here.
Dorjdari Namkhaijantsan is the Mongolia manager for the Natural Resource Governance Institute (NRGI).