Finance minister says one-off law needed to pay 2 trillion tugrik of Oyu Tolgoi dividends to citizens

Finance Minister Z. Mendsaikhan said a new one-off law is needed so that 2 trillion tugrik of the 3 trillion tugrik in Oyu Tolgoi dividends expected in 2027 can be paid out to citizens. He spoke after President U. Khurelsukh met Prime Minister N. Uchral and the finance minister and told the government to transfer the dividends into citizens' accounts each time the money comes in.

2 trillion for citizens, 1 trillion for the fund

According to LiveTV.mn, Mendsaikhan said the government made the decision in light of a public petition on the E-zasag platform backed by more than 100,000 people, the difficult economic situation, a cash shortage in the market after the central bank raised its policy rate, and the need to protect people's real incomes.

Under the current sovereign wealth fund law, dividends go straight to the Future Heritage Fund and are meant to finance health, education and mortgage lending. The government therefore withdrew a one-off bill it had submitted earlier. Mendsaikhan said the 2027 budget already makes room to spend 1 trillion tugrik from the fund, but a new one-off law is needed to pay the remaining 2 trillion to citizens. The arrangement will stay within the budget spending ceiling, and a mechanism will be set up to pay citizens each time a dividend arrives.

Inflation risk

The minister acknowledged that putting 3 trillion tugrik of cash into the market risks pushing up inflation, a concern the prime minister had also raised earlier. A working group on the Oyu Tolgoi dividend is working to finalise talks on when and how the dividend will be paid.

What MPs said

MPs reacted in different ways. J. Zolzhargal said he had always argued that the dividends should be kept in the fund under the law and spent on health, education and housing. B. Jargalan pointed out that the sovereign wealth fund law clearly requires dividends from state-owned companies to be accumulated in citizens' named accounts in the fund, and wrote that the president has no power to direct the government on matters outside his authority. N. Altankhuyag said handing out taxpayers' money in cash is wrong, while U. Shijir said people want the money in their accounts because they do not trust the state.

Sources: LiveTV.mn, iKon.mn, Eguur.mn