A discussion on a draft law to ensure the efficient operation of state-owned enterprises was held on January 7, 2025, at the Mongolian National Chamber of Commerce and Industry (MNCCI).

Around 200 representatives from both the public and private sectors attended the legal discussion on the “Law on Increasing the Productivity and Improving the Governance of State- and Local-Government-Owned Companies,” which was jointly organized by the MNCCI and the Cabinet Secretariat of the Government of Mongolia. During the discussion, participants talked about reducing 122 state-owned enterprises to 70. Since state-owned enterprises must contribute to increasing the revenues of the Sovereign Wealth Fund, there should be no state-owned enterprises that generate no profit or operate at a loss. In the future, companies operating without profit will no longer be required to remain state-owned, emphasized Director of the Cabinet Secretariat Chairman Uchral Nyam-Osor.

Director of the Cabinet Secretariat Uchral stated, “By enacting a law that increases productivity and improves the governance of state-owned companies while ensuring transparency, we will reduce political influence. For many years, the criteria put forward by members of the boards of directors and executive directors have been unclear. Although the selection process was deemed open, in reality, it has rarely been so. Therefore, this law would make sure the entire selection process is fully transparent. We will also streamline the status of state-owned companies. Supplementing the new Budget Law, any state-owned entity that has incurred financial losses for three consecutive years will be immediately dissolved by law. Under this draft law on state-owned enterprises, only those companies that operate efficiently and profitably will remain state-owned. Others, operating without profit or at a loss, will be liquidated or merged as part of the reforms. The law will clearly define which businesses the state should engage in and which it should not. The state will participate in four types of business activities. After this law is enacted, based on its principles, we will submit the main policy guidelines for state-owned companies to the State Great Khural for approval.

We have also incorporated the core principle of not competing with the private sector. Currently, as of 2023, 122 state-owned companies have submitted their revenue information to the State Property Policy and Regulation Agency. In total, 51 entities reported profits of MNT 380 billion. Five entities collectively reported MNT 4 trillion in profits. Meanwhile, about five companies are unprofitable and operate at a loss. If state-owned enterprises become more profitable, the revenues of both the Savings Fund and the Sovereign Wealth Fund will increase. Whether state-owned enterprises operate profitably is directly linked to growing the revenues of the sovereign wealth fund. In order to increase their earnings, the governance of state-owned enterprises will be made more transparent and open.”