2022 – A year with high inflation and public bitterness
- By Misheel Lkhasuren -
- Dec 28,2022
Unuudur and The UB Post are spotlighting key events of 2022.
State visits symbolize peace and tranquility
Antonio Guterres, the ninth secretary-general of the United Nations (UN), paid an official visit to our country last August. The visit coincided with the 60th and 61st anniversaries of Mongolia’s accession to the UN, the 30th anniversary of declaring its territory free of nuclear weapons and the 20th anniversary of its participation in peacekeeping operations.
Four of the dignitaries who served as the secretary-general have visited Mongolia, including Kofi Annan in 2002 and Ban Ki-moon in 2009. All of them came to our country at the invitation of the prime minister, while Guterres was an honored guest of President U.Khurelsukh.
Guterres described his visit to Mongolia as a “symbol of peace” at a time when peace and tranquility are becoming increasingly rare in the world. This is an indication of how the UN and the international community value and attach importance to its alliance with our country. Mongolia, which sits in the middle of two big neighbors, declared its desire to always respect peace, democracy and human rights by bringing the UN secretary-general to the country at a critical time.
When Guterres landed, Chinese Foreign Minister Wang Yi had just concluded his official visit to Mongolia. Many international researchers assessed that such an overlap of diplomatic events is a sign that Mongolia’s foreign policy is “active” and “balanced”. Just over a month before the arrival of the secretary-general, Minister of Foreign Affairs of Russia Sergey Lavrov visited Mongolia, as well as the foreign ministers of Japan and Poland.
Series of mass protests
Citizens and young people peacefully marched all over the country regardless of the spring chill, summer heat and winter cold. In some foreign countries, Mongolians, who couldn’t join demonstrations in person in Mongolia, marched wherever they could and expressed their support for the cause and even sent donations. The youth demanded the government and authorities to do their jobs properly.
At the April, August and December demonstrations of this year, protesters easily filled Sukhbaatar Square and organized the demonstrations differently from previous ones that mostly included hired and paid protesters. They did not hold colorful placards printed on expensive cardboard or linoleum. Instead, they simply wrote their own wishes and demands on paper and expressed their desire to be able to live happily in Mongolia.
People have been actively taking part in demonstrations because they can no longer tolerate the “ruling class” that has been stealing opportunities from others for generations, the unfair and illegal society they created, the theft and fraud that looted and emptied the Tavan Tolgoi mine, corruption behind Development Bank and the SME Development Fund and the irreconcilable distortions created in all sectors as a result of all of this.
At every demonstration, the authorities, starting with the prime minister, met citizens and “took measures according to their demands” but still couldn’t satisfy their needs effectively, leading to one protest after another. Citizens lodged a major mass protest at Sukhbaatar Square earlier this month against recent allegations of high-ranking officials scheming and pocketing around 44 trillion MNT by smuggling coal out of the country, which lasted for over two weeks until the police forcefully dispersed the crowd.
Protesters were criticized for not having unified demands and not being able to organize demonstrations effectively. On the other hand, professional organizations pointed out that, the measures taken by law enforcement agencies during and in between the demonstrations to maintain order and security may invoke human rights issues.
Law amendments allow more ministers to put on ‘double deel’
The amendments made to the Constitution three years ago have been changed again this year. More constitutional changes are also planned for introduction next year.
The Constitutional Court annulled the amendment limiting the number of ministers with “double deel” (holding dual posts in Cabinet and Parliament) to four, considering it to be in conflict with the Constitution and Parliament was quick on its foot to amend the relevant laws and even the Constitution.
As a result, Prime Minister L.Oyun-Erdene dismissed six ministers and appointed 10 new ministers, expanding the composition of his cabinet, and now, 13 ministers have “double deels”. Although this doesn’t sound that much compared to the past governments, 21 ministers have been appointed in addition to the prime minister, making the biggest Cabinet to date.
Thanks to the 2019 constitutional amendments, only the premier has the right to dismiss and appoint Cabinet members. However, L.Oyun-Erdene did not make any changes to his cabinet, except for dismissing Minister of Environment and Tourism N.Urtnasan for failing to perform her duties just one year and seven months after becoming the prime minister. After that, he fired Minister of Labor and Social Protection D.Sarangerel for insulting citizens by comparing their lives to foot soles.
Khuvsgul National Park put under UNESCO protection
The government has begun paying special attention to Khuvsgul Lake. A national conference on the protection of the lake’s ecosystem was held for the first time this year at the State Palace.
Moreover, a permanent working group was set up to protect the lake. Within the framework of the goal of fully removing vehicles and other machinery that sank in the lake by 2024, joint training and exercises were conducted with Russia and Japan, creating conditions for receiving technical and humanitarian assistance.
Last June, Khuvsgul Lake was also registered in the World Network of Man and Biosphere or UNESCO. From 1990 to 2021, our country’s eight places were registered in this network. Last October, the international representatives officially handed over the documents to the minister of environment and tourism to confirm the registration of these places in UNESCO. This creates the necessary conditions to improve the protection of Khuvsgul Lake, which contains 70 percent of Mongolia’s freshwater and 0.4 percent of the world’s freshwater, study human-induced impacts from many aspects and take countermeasures.
Hustle and bustle of education sector
2022 was a year of struggle for the education sector as it took strides to carry out new reforms. First of all, restrictions established due to the pandemic were canceled and all levels of schools and kindergartens reopened classroom activities this year. Students who have been under quarantine and taking online classes for two years have faced a huge problem of learning delay. The education lag has not been completely eliminated and researchers estimate that it will take three years to fully eliminate learning delays in students.
Another issue that arose out of this was the competence of teachers. In particular, whether there are qualified teachers in our country who can eliminate two whole years of academic backlog has become a “headache” for the management of the sector. In fact, only 40 percent of all teachers received satisfactory results in the nationwide performance evaluation.
Moreover, when teachers’ diplomas were checked, more than 700 were found to be fake. It is still not clear how the problem was solved even though it caused a huge controversy and backlash among society.
This year, the line ministry and authorities decided to hold the General Entrance Exam twice a year, which has become one of the outstanding activities in the sector. This has provided an opportunity for students who scored poorly in their previous exams to retest themselves and improve their scores.
Fraud of Development Bank, misappropriation of coal exposed
This year, cases of high government officials stealing opportunities from taxpayers and businesses, abusing their authority and creating advantages for themselves were unmasked.
In the past years, the Independent Authority Against Corruption (IAAC) has been investigating several cases of fraudulently taking a large loan from Development Bank and evading its repayment. Some companies that have not repaid their loans have been transferred to the law and judicial authorities. In addition, the names of borrowers with non-performing loans were disclosed to the public at the beginning of this year, putting them in a tight spot and pushing them to pay off their debt as soon as possible. Now that the investigation has been completed, the prosecutor’s office is preparing to file an indictment against the bank’s former executives, board members, bad borrowers, four members of Parliament and a former minister involved in this case.
As part of the Development Bank case, which involved more than 80 people, IAAC has investigated and solved most cases and the companies that evaded billions and trillions of MNT have started to pay off their loans while the assets of some borrowers have been frozen to compensate for the losses. The court will resolve this scandalous case within the next year.
On top of that, the Ulaanbaatar-Darkhan-Uul road project, which had been delayed for several years and caused tremendous losses for drivers and passengers and even death, was put into operation this year. At the same time, law enforcers began to investigate relevant politically influential officials and their subordinates who blocked the construction of the road, took bribes and gained unjustified wealth, which is definitely another highlight of the year.
But it is about to be forgotten due to various scandals that broke out subsequently. The coal theft allegations, which seem to have “covered up” the road scandal, are now in the limelight. So far, 17 politicians have been named in connection with the case, which will definitely be in the spotlight in early 2023 and perhaps mid-2023.
MSE becomes open joint stock company
Last September, the FTSE Russell Group, a leader in international stock market index calculation and research, confirmed the stock market of Mongolia in the Frontier Market classification. After 10 years since the country was first placed on the Frontier Market’s Watch List classification in 2012, it has been included in the above category, which is important for the implementation of banking reforms and governance reform of state-owned companies, not to mention attracting more capital from large funds both domestically and internationally.
Moreover, commercial banks will continue to release their IPOs next year and the remaining three large banks will offer their shares to the public. The government has issued a list of 25 state-owned companies to be privatized, one of which is the Mongolian Stock Exchange. The exchange is preparing to trade coal for the first time in its 31-year history. After more than 10 years, the exchange, which is the main infrastructure of the Mongolian capital market, has become an open joint stock company. Its market value has even jumped from 5.97 trillion MNT last year to an all-time high of 6.69 trillion MNT this year.
Publicizing state-owned companies is expected to improve governance and transparency.
New railways laid after 67 years
This year, Mongolia put into operation the Tavan Tolgoi-Gashuunsukhait and Zuunbayan-Khangi railway lines. Specifically, the first-class Tavan Tolgoi-Gashuunsukhait line with two stations, six crossings and 16 bridges and a length of 233.6 kilometers was commissioned last September.
By connecting Gashuunsukhait and Gantzmod ports, the country has increased the capacity of loading facilities and created a cross-border railway route. The cost of export transportation is expected to drop fourfold, with an estimated 30 to 50 million tons of cargo transported annually.
Thanks to the Zuunbayan-Khangi railway, the capacity of importing and exporting goods and products are projected to grow by 20 million tons and the capacity of railway transportation by 65 percent. The government plans to raise the amount of cargo to be transported via the Zuunbayan-Khangi railway to 15 million tons next year and 20 million to 25 million tons in 2024.
In 1955, the first railway in Mongolia was put into operation with the help of Russian experts. Exactly 67 years later, Mongolians have built a new railway in two directions with their own investment and the participation of domestic engineers and workers, making a huge national development.
Policy interest rate reaches its highest level in 4 years
Mongol Bank raised the benchmark interest rate five times this year. Last January, the interest rate was raised by 0.5 percent to 6.5 percent but in March, June and September, it was increased by 1 to 2.5 percent and now, it stands at 13 percent.
By raising the policy interest rate, the central bank aims to stabilize inflation expectations and increase the value of the tugrug in the medium term. As of last November, inflation reached 14.5 percent nationwide, which is more than double the target level of the central bank. Inflation was 13.8 percent last September but fluctuated between 14.2 percent and 16.1 percent in other months and remained consistently high.
This is mainly due to the increase in the prices of imported goods and products. Mongol Bank and the National Statistics Office explain that the increase in the cost of consumer goods, transportation, housing, water, electricity, gas and other fuels, medicines, crops and medical services also attributed to the rise in inflation.
One of the highlights of this year was the government’s decision to conduct preventive medical examinations for all citizens.
Over the past two years, COVID-19 has spread widely in our country and official information indicates that more than 1 million people have been infected in duplicate. However, there are unofficial estimates that this number has exceeded 2 million. The government has set a goal to include every citizen in the medical examination to detect the negative consequences of the novel virus and other types of diseases among the population to fully “assess” the state of their health and accurately plan the next course of action.
Eight months have already passed since the start of early detection screening, but the number of citizens covered is yet to reach 1 million. There are still problems such as ineffective promotions and slow services.
On the other hand, citizens are not active in getting preventive health checkups. In general, the “norm” of neglecting medical examinations in this way is not new to us. Before that, the country made several attempts to organize early detection among the population. In 2006, for example, the government decided to implement the Healthy Mongolian Program across the whole country. Unfortunately, it didn’t produce significant results. As mentioned above, the reason for this was the inactivity of the health sector and low participation of citizens. There is a need for both sides to start caring about health-related issues in order to finish the nationwide health screening campaign successfully, prevent and treat diseases in their early stages and protect the health of the entire population.