Mongolia Grants Free Money to Government Employees

Mongolia Grants Free Money to Government Employees

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Fresh off being approved as Finance Minister by Parliament, Ch.Khurelbaatar has announced a one time grant of 300,000 (USD ~$122) for 192,000 government employees.

Interestingly, Finance Minister Ch.Khurelbaatar and the former Finance Minister B.Choijilsuren, stood together to response to inquiries in connection with the move at a recent meeting of the parliamentary budget committee. former Minister B.Choijilsuren had taken lead in preparing the payment prior to his departure from the position.

At the meeting with members of Parliament it was suggested that the one time payment is designed as a form of remuneration to civil servants and a work around of budgetary restrictions imposed on Mongolia by the terms of its IMF package. The agreement with the IMF does not allow an increase to monthly salaries, but apparently is silent regarding one time payments. The total payment expected will be 55 billion MNT (~$22,485,000). Judges and prosecutors will not receive a payment.

The stated purpose of the payment is to alleviate tensions form civil servants regarding salaries which have not increased since 2014. Questions raised at the meeting with parliament suggest that the government will want to discuss with the IMF the possibility of implementing a real salary increase for civil servants.

The IMF package has gone a long way toward helping to stabilize the Mongolian economy, and the government will not want to jeopardize the agreement. Still, the recent move brings to mind issues with extravagant government spending Mongolia has seen in the past.

Meanwhile, The National Statistics Office (NSO) and World Bank released the Poverty Profile 2016 study on October 17. The results of the study show that about 30% of Mongolians live in poverty, an increase from the numbers in 2014. The reduction in living standards is directly connected to the economic slowdown Mongolia has experienced since 2012, itself caused by a slump in global demand for commodities such as copper.

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