Fifth election distributing ‘Erdenes Tavan Tolgoi’ dividends
- By Amarjargal Munkhbat -
- Jan 22,2024
The Parliament approved the resolution on measures to be taken regarding the shares of Erdenes Tavan Tolgoi joint stock company submitted by the government last week. Thus, every citizen who was born and became a citizen of Mongolia after April 11, 2012 will receive 1,072 shares of the company. One million and 5,000 people will participate in it, and 27 percent of the company’s shares will go to citizens. In fact, there is no provision in the resolution on whether to give the dividends of 1,072 shares to the citizens, but during the discussion, members of the parliament focused on it and it was decided that the dividends should be “distributed” before the parliamentary election in June. Even if the autumn session is closed, an extraordinary session will soon be called and the legal framework for this will be created by passing the National Wealth Fund Law. In other words, it is not yet known how much money will be given as dividends, but it means that the current authorities will hold a few pieces of paper on behalf of the state and buy their votes in the elections.
This is not to say that it is wrong to give the dividends of 1,072 shares to the people and that the people should not benefit from the income of their natural resources. On the contrary, during the discussion, Member of Parliament J.Bat-Erdene said, “Just give the dividends of the citizens’ shares. It cannot be said that Erdenes Tavan Tolgoi will go bankrupt if the dividends are given to the citizens when the government is spending more money in the name of railway projects. In fact, the government did the work for bankrupting this company,” and I agree with it completely. However, it is a pity that they are continuing their “drama” of distributing money, which has gained momentum and transformed into a more sophisticated form with each of the last few elections. In fact, the Parliament, which was established as a result of the previous election in 2016, made major amendments to the Constitution in 2019. It can be said that the main task of the current parliament was to revise the organic laws accordingly.
For example, as amended in Article 6.2 of the Constitution, “The state policy for the use of natural resources is based on a long-term development policy, to guarantee the right of every citizen of the present and future generations to live in a healthy and safe environment, and to concentrate the benefits of underground resources in the National Wealth Fund equally, aimed at achieving justice. In accordance with the principle that natural resources are in the hands of the people, when using strategic mineral deposits the law shall determine the legal basis for the majority of its benefits to be shared with the people.” To implement this section, the Law on National Wealth Fund should be approved. This law has been brought to the agenda of every session to be approved, and it continues for the fourth year. The ruling Mongolian People’s Party (MPP) is going to finish their term before even approving the Law to collect the revenue from the use of underground resources into the National Wealth Fund and use it to enrich by financing profitable projects and programs and issuing securities. But for now, for the sake of re-election and to distribute the dividend of 1,072 shares, the parliament is going to hold an extraordinary session to discuss the law and repeat their “tradition”.
Four years ago, the government announced that it had decided to distribute 96,480 MNT as a dividend to every citizen who owns 1,072 shares. Thus, in May 2016, before the election, a minimum of 47,130 MNT and a maximum of 96,480 MNT were transferred to the account, corresponding to the number and size of shares held by citizens. 1,072 shares were distributed to every citizen of Mongolia in 2011, and it was the first time that dividends were distributed in 10 years.
Earlier, in the 2008 Election, the Mongolian People’s Revolutionary Party, now MPP, promised 1.5 million MNT under the name “Motherland Endowment” and the Democratic Party (DP) gave 1 million MNT under the title “Erdene’s Share” and gave it to everyone. In doing so, the MPP won the majority in Parliament in the 2008 election and S.Batbold’s government gave 500,000 MNT to each citizen. It can be said that the work of distributing large amounts of cash to every citizen was done in 2010-2012 or until the next election. So, as soon as he was unable to give everyone his promise, he gave 1 million MNT to the elderly and disabled people. As a result, MPP boasted about the 500,000 MNT distributed to all citizens and 1.5 million MNT given to some and followed the tactic of showing off by sharing 1,072 shares in the 2012 election.
Dividends of 1,072 shares will probably be the main topic of the current authorities’ elections. Un-
fortunately, at the end of all this, the Erdenes Tavan Tolgoi company paid the money that was borrowed and dis-
tributed at the expense of the authorities of that time. All the authorities of Erdenes Tavan Tolgoi said during the infamous Coal theft hearing that the payment for every coal exported was spent to close the 300 million USD loan taken by politicians in advance and used to buy voters’ votes. When the past government promised to give 1.5 million MNT to every citizen, it means that the 1,072 shares were “work” done to achieve it by “laughing in front and crying behind doors”.
In the 2012 election, DP won the majority and used Tavan Tolgoi. They “resurrected” 1,072 shares by reimbursing some citizens’ health insurance premiums and paying student tuition. As a result, before the 2016 election, the DP implemented the “Good Shares” program and bought 30 percent of the 1,072 shares of Erdenes Tavan Tolgoi or bought 323 shares from some citizens for 300,000 MNT. This was also a trick to “distribute” money to voters and buy their votes before the elections.
So, there is no difference between these events that are happening 16 years apart. At that time, the greedy politicians took advantage of the lack of legal restrictions and prohibitions to get their money’s worth, but now the authorities are using loopholes to buy citizens’ votes. In general, there is a regulation banning giving rights related to money and property, profits from mining, oil, mineral resources and other sectors, as well as any endowments, percentages or other equivalents from the state and local budgets to citizens, invalidating loans and other liabilities, conversion, provision of services to citizens for free or at a reduced price, job placement, hiring, and distribution or direct spending of state and local budget funds to citizens in the Law on Elections for political parties and candidates from including in their election platform.
Furthermore, there is a law, of which the goals and measures included in the election platform of parties, coalitions and independent candidates should be in line with the development concept of Mongolia, and the State Audit should review and conclude whether the amount of expenses required to implement the work and commitments that require certain financial resources violate or agree with the special budget requirements stipulated in the Law on Budget Stability. On the other hand, from the beginning of the regular election year until the end of voting, there is a provision in the law that prohibits any person from “giving gifts, shares, money, or goods” in order to attract voters’ votes.
Unfortunately, successive governments have cleverly used the “loophole” to attract voters outside of the political agenda and before the elections. Campaigning for your party in the name of the government and parliament and focusing on buying votes is a common feature of any government. It is still in fashion before any election to say nice things to get votes from the voters, and to force them to decide by “beating” them with money. However, it is a shame that they, who are making an election show by disguising themselves as the activities of the government, say that the election competition should start from an equal starting point.