In an interesting development, the Prime Minister of Mongolia has signed contracts with local governors, and the mayor of Ulaanbaatar, in a move which seems designed to promote accountability and strengthen rule of law in Government.
The contracts set forth the responsibilities of the local governors, and obligations to adhere to the Constitution of Mongolia, and to follow other applicable laws. Additionally, the contracts state clearly that governors are required to fully implement the governmental action program to the benefit of their respective province.
The contracts further provide that local government must be staffed with educated and appropriately skilled personnel, with relevant specializations and expertise. Under the contracts governors are responsible to ensure that provinces maintain and implement budget saving policies and make public services available to more people. Governors will be responsible for enforcing budgeting and discipline, and for enforcing anti-corruption laws.
Governors will be responsible for ensuring that their respective provinces benefit from economic growth, and to ensure equal and well distributed development in areas such as education, culture and general health with a goal to minimize poverty and unemployment.
Under the contract, provincial governors will be subject to punishment for failure to meet the responsibilities as outlined. Governors will be required to submit progress on contractual responsibilities in an annual report to the cabinet.
The take away here is the government’s effort to implement as system of accountability. We are hopeful that the clear guidelines and expectations of the contract will work to increase local government effectiveness. Penalties which the local governors may be subject to for failure to meet expectations are not clear, but the important thing is that each of these governors now knows their performance is being watched. Clear expectations and a little oversight will hopefully go a long way to improve provincial governance.
Accountability and dependability are key factors foreign companies look for when considering a major investment. This applies nationally and at local levels. If provincial governors are able to deliver good results in meeting their responsibilities under the new contracts, foreign investors’ confidence to do business in Mongolia will be greatly improved.