In a bid to quell rising discontent, Prime Minister Luvsannamsrain Oyun-Erdene has announced around $100 (MNT 350k) dividend for each Mongolian citizen, funded by profits from state-owned coal miner Erdenes Tavan Tolgoi. This initiative comes as Ulaanbaatar grapples with severe air pollution and unreliable power supply, prompting questions about the government’s resource priorities. While the payout offers temporary relief, critics argue that it distracts from the urgent need for sustainable infrastructure and clean energy solutions in a city where health and environmental crises loom large.
The dispersed dividend, economically speaking, represents a limited fiscal measure within a broader context. Recent budgetary discussions underscore the complex economic realities facing Mongolia. This payment of MNT 350,000 (approximately $102) provides short-term assistance but invites scrutiny against more fundamental economic pressures.
The Prime Minister's focus on ETT's profitability prompts consideration of alternative uses for these financial resources. Observers might contemplate whether allocating these funds to strengthen clean energy infrastructure, improve public transportation, or incentivize alternatives to coal-based heating in Ulaanbaatar would yield more lasting benefits. The dividend risks appearing as a measure prioritizing immediate individual gains over systemic improvement.
The timing of this announcement carries political significance. Ulaanbaatar faces both environmental issues and marked public discontent. Persistent problems with air quality, despite previous state funding, continue to generate public outcry.
Air pollution levels regularly exceed safety thresholds, impacting public health, especially among vulnerable populations, and fueling demands for action. Anti-government demonstrations are scheduled for mid-January, but there is concern the declared heightened preparedness, citing air pollution, could be used to restrict these protests.
Within this context of demonstrable public health worries, the dividend announcement could be viewed as detached from the immediate crisis. Distributing funds as a response to respiratory distress raises questions of effectiveness. While potentially intended to show government responsiveness, the difference between a modest cash allocation and the tangible health consequences of the pollution crisis highlights a potential divergence in perspective between the government and the experiences of Ulaanbaatar’s residents.
Prime Minister Oyun-Erdene has presented a larger framework where resource wealth directly benefits citizens. He points to the growth of the Future Heritage Fund (FHF), reportedly at MNT 4 trillion (approximately $1.2 billion), derived from mineral royalties and a key element of Mongolia’s restructured sovereign wealth fund.
The FHF operates under established legal structures, investing in international financial instruments. Hopefully, FHF generated the funds through investment returns from international financial markets this year.
The MNT 495 billion (approximately $144.7 million) allocated for the ETT dividend is channeled through the Savings Fund, part of the collectively named Chinggis Fund.
Chief Cabinet Secretary Nyam-Osoryn Uchral expresses confidence that further dividend payments, beyond those from Erdenes Tavan Tolgoi, will materialize through the Savings Fund. This expectation is based on ongoing discussions with domestic private entities controlling strategically significant mining operations, such as MAK. The unfolding situation will reveal whether these dividends effectively address public concerns over pollution and infrastructure deficits.
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