Debt belongs to the people, not the government

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  • Oct 16,2016
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William Deming (1900-1993), who fully reinvented quality control systems, saw the management process of institutions through four different components, and suggested that improvements can be achieved by effectively managing and controlling those components. The components are plan, do, check, and act, which are known as the PDCA cycle. In a democracy, the government is an institution that is established by the political party who has gathered the most support in public elections. The political party appoints its people to government positions for executive roles and to serve in the judicial branch of government. If we look at the work that the Mongolian government has been doing through the Deming lens, the first two components of institutional management (plan and do) are very weak, the third component (check) is not really done, and the fourth component (act) is non-existent. Although the government is supposed to check itself and fix its problems, media is often the independent mechanism that provides oversight of all aspects of the work the government is doing and informs the public. Such oversight and reporting is also done by informed individuals, who are sometimes actively engaged in non-governmental organizations (NGOs) and civil society. However, what we are seeing more of in Mongolia today are people who know how the government works and what has to be done in order to reap personal gains while working for the government. We call these people politicians. GOVERNMENT WITHOUT OVERSIGHT Politicians today own the media and are able to depict themselves to the public in any way they want. Given our weak civil society and NGOs that are not truly independent, Mongolia has not had the chance to evaluate what has been happening, verify what is true and false, and resolve problems. Mongolia’s legislative, executive, and judicial branches of government have been weakening, and – in some instances – they are indistinguishable from each other due to each of them serving a single political group. For example, let’s have a look at how Mongolia’s state budget works. The planning stage relies on guesses and incredibly rough estimates, and are based on the wish lists of politicians, as opposed to scientific data. This is the reason why Mongolia amends its state budget three times a year now. The decision makers do not care whether budget expenditures actually benefit society and the Mongolian people. The only interest they pursue is what gains they can make from the state budget. This is revealed through public tenders, where the state's  decision makers ensure that the final outcome is to their advantage. They also receive rewards in exchange for appointing people to different positions. These are acts of corruption. When uncontrolled, corruption can grow into a cancer for society. Corruption has become normal in our country. Mongolia’s growing debt and penalties from international courts keep reminding us how large the corruption has grown. The Mongolian people still do not understand that the government's debt actually belongs to citizens rather than the government. Every time the economy goes into decline, we learn that taking out loans domestically or internationally, and giving them fancy names such as "Chinggis" and "Ugudei", do not solve the problem. The people understand this  because our purchasing power declines as the tugrug weakens. Today we are struggling with an insufficient number of schools and kindergartens, and developing respiratory diseases because of polluted air in winter. It makes everyone wonder why we are unable to solve these problems and get out of this situation. WHY CORRUPTION IS GROWING Mongolia actually has the financial capacity to resolve these issues. However, the capital required to do so is being stolen by a handful of people who hide behind their political parties. They are never held accountable for their unlawful actions. Moreover, these people continue working for their personal gain and controlling others. When a penalty is imposed on our government due to the operations of state-owned companies, every Mongolian pays for it. We pay the penalties because the government does not have its own money; all of the government's financial capital comes from the mandatory taxes we pay and the fees the government collects from mining exports and the import of goods. Any payment the government makes  is actually paid by the people. For example, when the government withdrew Canadian company Khan Resources' mining license and transferred it to a different company, the International Court of Arbitration ruled against the government and imposed a penalty of 100 million USD. We, the people, paid this penalty this summer. Furthermore, the private Mongolian company Just Group borrowed 120 million USD from Standard Bank with a guarantee from state-owned Erdenet Mining Corporation. They were not able to pay off the debt. Mongolian media reported that after a long dialogue with the International Court of Arbitration, it was ruled that Erdenet Mining Corporation would be responsible for paying  170 million USD, the loan plus interest payments and legal fees. Bloomberg reported that, despite claims by the Executive Director and the Chairman of Erdenet Mining Corporation that their signatures were forged, it was established by the court that the signatures were genuine. PEOPLE PAY FOR THE GAINS GOVERNMENT OFFICIALS COLLECT There is a trend in Mongolia where people who have not committed any illegal actions end up paying for the unlawful gains made by those who steal from public funds and are never held accountable. Since they have already received their share of the profits, the senior officials in government don't really do anything to those who have been convicted, or make them pay for what they stole. Those who end up behind bars get out after a while or they're pardoned. Only a few examples have been shared here. It is hard to guess how many others there are because the media does not tell us everything, since they are being paid not to talk about specific issues. Unless we tackle corruption, Mongolia will never be able to get rid of poverty, solve the air pollution problem, or achieve flourishing development. Trans. by B.Amar