Ulaanbaatar /MONTSAME/. At the plenary session of the parliament on October 14, the first discussions are taking place for the bills on the 2022 State budget, the 2022 Budget for the Social Insurance Fund, the 2022 Budget for the Health Insurance Fund, and the 2022 Budget for the Future Heritage Fund.

Highlighting that Mongolia is currently in a risk of having a budget deficit of 12 percent of the GDP, and losing 250 thousand jobs due to factors related to the COVID-19 pandemic, including disruptions in the export of goods and decrease in the speeds of freight and transport circulation by 5-9 times, the Prime Minister noted that the only solution to overcoming the challenging circumstance without much losses is vaccination. As of today, 65.6 percent of the total population of Mongolia have been fully vaccinated against COVID-19, with over 350 thousand people involved in an additional dose of the vaccine to restore the vaccine’s efficacy. A study has also found that the lives of 46 thousand citizens would have been put in risk if the vaccination drive had not been quickly launched, he noted at the start of his remarks.

“International organizations continue to warn that the crisis in the transport sector, shortages of goods, and increase in prices are likely to continue due to the pandemic in the first half of the coming year. Moreover, international organizations have yet to determine how many times the pandemic circumstance will change in the future. Thus, we must face and overcome the challenges by adapting to the situation. As such, we drafted the next year’s budget with positive expectations, and have presented a bill with a budget of MNT 18 trillion to the parliament for the very first time.”

The 2022 Budget focuses on expanding the economy and strengthening the public-private partnership. Furthermore, the budget also focuses on supporting the processing industry and the sectors of tourism and IT alongside mining, underlined the Prime Minister. The Government aims to not only put launch underground mine operations by advancing the talks on Oyu Tolgoi, but also accelerate the projects such as the construction projects for the oil refinery as well as the Tavan Tolgoi power plant and Erdeneburen hydropower plant.

The 2022 State Budget bill: Despite having an economic growth of -4.6 percent and a budget deficit reaching 12 percent of the GDP as infections began to rise from 2020, the Government of Mongolia implemented a MNT 2.6 trillion package measure to protect public health and support the private sector.

By implementing the MNT 10 trillion Comprehensive Plan for Health Protection and Economic Recovery from February 2021, and involving target groups in COVID-19 vaccinations from April, corresponding restrictions were lifted in phases to allow the operations of entities and businesses to resume, which brought the country’s economic growth in the first half of 2021 to 6.3 percent. As a result of the MNT 10 trillion comprehensive plan, loans in the banking sector were kept at an increase rate of 6.5 percent - and the total amount of loans reached MNT 18.1 trillion, restoring it to the pre-pandemic levels in 2019.

With a budget policy to support ‘LABOR, PRODUCTIVITY, GROWTH’ by fully lifting the restrictions on business operations, increasing export, launching large-scale projects, and expanding the economy with a focus on infrastructure projects in 2022, the economic growth for Mongolia has been estimated to be 5 percent.

In order to reduce budget expenditure, it has been reflected that ALL LEVELS OF GOVERNMENT ORGANIZATIONS WILL BE SAVING ON COSTS through measures such as more effectively distributing funds and digitizing government services.

The budget also reflects creating a SMALL YET SKILLED AND RESPONSIBLE TEAM OF CIVIL SERVANTS through methods, such as procuring certain services and operations that can be run by private entities instead of running by the government and making payments for services based on STANDARD-QUALITY-COMPETITIVENESS, and having public organizations that provide basic social services become “semi-independent” financially.

As for the healthcare sector, the reforms that began to be implemented this year will be accelerated, involving CITIZENS IN ANNUAL EARLY-DETECTION CHECKUPS. From 2018, the Health Insurance Fund has been providing financing for involving citizens aged over 18 in a package of 12 types of diagnostic tests ranging between MNT 43,000-75,000 at hospitals. Statistics for the year of 2020 shows that 7.9 percent of citizens aged over 18 have been involved in the package diagnostic tests. Thus, in aims of increasing its range, it has been planned to renew the package, and launch works to involve the population in annual checkups from 2022.

Another measure reflected in the budget is the program, ‘CHILDREN WITH SAVINGS’. Aimed at improving access to income being earned from natural resources, and helping children learn about the importance of savings, and grow up to become citizens that are properly informed and have financial capability, the Future Heritage Fund was added to the budget. The fund’s source of income is planned to be transferred to each child’s savings account at commercial banks.

Reforms will be implemented to transition FROM WELFARE TO LABOR by supporting citizens with low income through employment rather than welfare, and further specifying the requirements for some welfare programs.

The 2022 state budget bill estimates equilibrated revenue to be at MNT 15.8 trillion or 33.7 percent of GDP, and expenditure to be at MNT 18.2 trillion or 38.8 percent, with a deficit of MNT 2.4 trillion or 5.1 percent of GDP which is a decrease of MNT 1.3 trillion.