The Mongolian Parliament has approved plans to transfer a number of state-owned companies to partial public control during 2022-23, with the proceeds to be used to invest in technological innovation.

At the regular session of the Parliament held on 29th June, legislators instructed shareholders of a number of state-owned entities to prepare additional stock offerings and register on the Mongolian Stock Exchange. Mongolia Telecom Company LC, Information Communication Network LLC, Information Technology Park, and road maintenance companies were included in the list of state-owned companies, up to 34% of which will be transferred to public control via. brokers.

The Mongolian Prime Minister, L. Oyun-Erdene, has instructed relevant officials to boost the process of transferring the control of state-owned entities to the public and give support to the development of the Mongolian Stock Exchange.

Commenting, Deputy Prime Minister of Mongolia Amarsaikhan Sainbuyan said: “The decision to open up these state-owned assets and place them in public control is a vital step in making them fit for the future and in driving the wider modernisation of the Mongolian economy.

“The pace of technological change demands that organisations adapt to continue to meet the needs of citizens, and by increasing the funds available to these entities this programme will provide a significant boost to this process.”

This development is the latest example of how Mongolia is implementing its ‘New Recovery Policy’, designed to boost the living standards of Mongolian citizens and attract more international investment into the country. The Policy invites local businesses, foreign partners and international organisations to cooperate on a 150 trillion MNT investment goal that aims to double GDP by addressing current issues in six key areas: energy, border ports, industrialization, urban and rural recovery, green development, and public sector efficiency.

Parliament also took the decision on 29th June to merge a number of state-owned companies, as well as approve other changes.

Transferring state-owned companies to public control: next steps

Following the decision to approve the list of state-owned companies to be transferred to public control, Parliament gave an order to call for shareholders' meetings of approved state-owned entities, to decide on additional stock quantity and its price, to provide an initial offering of the additional stock to current shareholders, and to get the entities registered on the Mongolian Stock Exchange.

In accordance with the Mongolian Government's policy, the Cabinet has ordered the representatives and executives of each entity to hold the listed shareholders meeting immediately, to release additional shares and unit prices and offer them to the current shareholders, to register at the Mongolian Stock Exchange, and to invest the revenues of the stock in the company's technological innovations. The Chief of the Cabinet Secretariat of the Government of Mongolia, Ts. Nyamdorj, and the Head of State Procurement Agency, B. Tsengel, have been ordered to carry out the release of the additional shares, to legally provide the availabilities of public exchanges, and to present to the Cabinet.

Merger of and other changes to state-owned entities

The following mergers and other decisions relating to state-owned companies were agreed during the regular Parliamentary session on 29th June:

The “Mongolian water” state-owned enterprise factory was closed down

The “White falcon” state-owned factory was merged with the “Burte” state-owned factory

“Buyant Ukhaa” sports hall was merged with the “Training and learning center of the National team”

Relevant authorities have been ordered to carry out the process of merging the "Energy development center" and the "Geology research center" and turning them into a state-owned LLC, and to present to the Cabinet

Operating entities such as "Mongolian National Radio and Television Broadcasting Network", "Climate Change Research and Cooperation Centre", "Mongolian Tourism Organization", "Mongolia-Kuwait Nature Reserve Center", "Mongolian Commodity Exchange", "Auto Impex", and "Darkhan Hides Complex Establishment", that do not require state cooperation and are manageable by private sector, are to be closed down or to be merged with similar operating entities

Relevant ministry and agencies and State procurement agency have been ordered to carry out such structural changes and have it discussed by the cabinet by August 2022