Why do Politicians Have Such a Bad Reputation?

Why do Politicians Have Such a Bad Reputation?

Sometimes, it seems there is a difference between public service and politics, although the two concepts are supposed to be interchangeable. Citizens may support their hardworking elected representatives, but passionately disdain power-hungry dirty politicians. Why do so many politicians have a bad reputation when their job descriptions seem so noble and self-sacrificing? The answer can be a little complicated.

One reason certain politicians have a bad reputation is the election process itself. A life of public service and law making is not an occupation for social introverts, so many candidates for local offices are already notorious overachievers with more than enough self-confidence. Candidates for political office are often very ambitious by nature, and with ambition can come a level of moral and ethical flexibility. Some bad reputations develop because the politician has already had to compromise any number of personal beliefs in order to gain votes or popularity.

There is also the adage that power corrupts, and absolute power corrupts absolutely. Some politicians have a bad reputation because the power of the office has corrupted them in some way. Professional lawmakers, judges and others in position of power over citizens are constantly approached by lobbyists, special interest groups and influential private citizens who all want them to provide favors. Many politicians do have enough integrity to resist corruption, but unfortunately some are not as strong. A politician under significant pressure can make some questionable decisions, which in turn could lead to accusations of wrongdoing or deriving personal benefit from an office.

 

Historically, there have been numerous examples of dirty politics practiced by equally dirty politicians. Unfortunately for the majority of honest office holders, these incidents often dominate the public media. Consequently, a number of effective politicians have a bad reputation only by association. If one politician is capable of dirty tricks or dereliction of duty, then they may all be equally capable of some wrongdoing. This general perception of politicians becomes even more pronounced during election campaigns, where candidates have the leverage to expose each other's political and personal shortcomings.

Professional lawmaking and public service does require a certain amount of personal and professional sacrifice, since many private sector jobs are more lucrative and less demanding than politics. Sometimes, a politician gets a a bad reputation because he or she is driven people with good intentions, but also has poor managerial skills or a controversial public persona. Some very effective politicians look bad on paper, but are in reality well respected in the political arena.

 

What can Mongolia learn from others?

What can Mongolia learn from Norway?

 

As Mongolia develops its mining industry to foster economic and social development, two challenges are key to the country’s long-term prospects: how can Mongolia’s economy move beyond its focus on resources, and how can its resource wealth be used for sustainable development?
One possible answer to these questions, which came up repeatedly during discussions at the World Economic Forum’s Strategic Dialogue on the Future of Mongolia, is to set up a sovereign wealth fund (SWF).
Modeled in part on the success of Norway in turning its oil wealth into a sustainable source of government financing through its Government Pension Fund Global (GPFG), such funds have become widely used by Gulf states as well as throughout Asia, where some SWFs have a strong focus on strategic investments for geopolitical or industrial development goals.
In the Mongolian context, suggestions for the creation of a SWF focus on the need to balance fluctuations in revenue streams to the state stemming from resource activities, to seek a fiscally sustainable benefit from exhaustible resources, and to fund diversification strategies.
However, using a SWF for diversification investment is at odds with frequent calls at the Strategic Dialogue for a withdrawal of the Mongolian government as an active participant in economic activities, to a role that is focused on enabling and regulating business. If investors and financial markets do not want the Mongolian state to continue its involvement and ownership in the resource sector, why does investment in green technologies, for example, seem desirable? What makes the proponents of a liberalization of mining activities believe that the Mongolian state would be particularly good at “picking winners” in efforts to diversify the economy?
Given the Mongolian government’s track record in running state-owned companies, the use of a SWF for diversification investments would raise many concerns about profitability and the likelihood of patronage and corruption in such investments.
To the extent that a SWF can balance fluctuations in revenue streams that are caused by commodity prices, Mongolia already has a Fiscal Stability Fund for this purpose. While this fund is limited in its investment opportunities due to the requirement of constant liquidity, once fully funded, it does allow the government to budget for mining revenues that are based on 10-year running averages of prices rather than on annual oscillations.
One of the express purposes of a SWF is to seek geographic diversification away from the dependence on the domestic economy, which is dominated by resources. Many such funds, including the Norwegian GPFG, are expressly prohibited from investing domestically to avoid distortions in exchange rates, but also out of concern over an investment strategy that increases rather than limits exposure to country risk. Tasking a Mongolian SWF with investment in diversification prevents such a fund’s efforts to reduce exposure to the Mongolian economy and is thus counterproductive.
That is not to say that investment for diversification should not be pursued, but it is unclear whether a SWF is the appropriate vehicle for such efforts. While investments for sectoral diversification should be pursued, a broadly defined SWF is not the appropriate vehicle for such efforts.
Proposals for a Mongolian SWF aimed narrowly at financial stabilization also neglect opportunities for a wider impact that could be built into such a fund. If a SWF could be a model of transparency in investment, this could be a catalyst for deepened transparency in other sectors. Investment choices made by the SWF could be the basis for a concerted effort not only to document these choices, but also to make this documentation available and accessible to the general public.
The activities of such a fund could also be used to structure capacity building in the financial sector. For example, the running of a fund could be contracted primarily to foreign financial professionals initially, but with a clear plan for the education of Mongolian financial managers within such a fund and a gradual shift of management to Mongolian participation keeping in mind the overall aim at maximizing financial benefits.
A SWF is important for Mongolian policy-makers to consider once they overcome current blockages of revenue streams. However, such thinking needs to be targeted very specifically at specific goals. A SWF could do some very important things for Mongolia in the future, but it cannot be expected to be a fix-all.

Mongolia’s Future Framework

Mongolia’s Future Framework

Mongolia’s economic potential is significant, with vast deposits of copper and coking coal situated close to its main market in China. However, this potential is vulnerable as the country is increasingly reliant on two main commodities being exported to one country, making Mongolia susceptible to external shocks such as changes in commodity prices and demand in China.

Charting a course for the country from mineral wealth to long-term sustainable and diversified growth is a key task facing Mongolia’s leaders. Throughout 2013, the World Economic Forum engaged over 250 stakeholders and experts in a dialogue to explore three key strategic decisions on this path:

1. How should the development of the mining industry and its potential revenues be managed to maximize their benefit to the country?
2. What forms of economic diversification should be pursued and how?
3. What trade and investment relationships will be needed to achieve both?

Responding to these questions however, is not straightforward. Developments of mineral deposits and other diversified products and services require long lead times. This means the decisions must take into account not only present contexts but future ones, which are likely to be very different.

Future contexts will be shaped by highly uncertain forces in commodity demand and pricing, regional collaboration, mining investments, and social and environmental norms. These uncertainties will influence whether Mongolia finds it easy or difficult to produce and sell its main minerals (copper and coking coal) over the next few decades.

Similarly, uncertain forces influencing the ability of the country to access the necessary capital, knowledge and skills and compete in markets in which it has a competitive advantage will influence whether Mongolia is able to diversify its economy to produce and sell significant products and services beyond its main minerals.
The possible outcomes of these uncertainties are explored in three scenarios, helping Mongolia to learn and prepare for whichever future arises.


Regional Renaissance: North-East Asia becomes more politically integrated, with strong economic growth. This gives Mongolia the opportunity to sell its main minerals and achieve economic diversification, and the challenge of managing export revenues in a way that prevents economic overheating and social unrest.
China Greening: A revolution in environmental attitudes sees China lead the way in the “circular economy” and pioneering new products and services. This reduces demand for Mongolia’s main minerals, but opens up new opportunities to diversify into greenproducts and services.
Resource Tensions: Geopolitical tensions ravage the region; natural resources are used for political leverage, making trade difficult. Mongolia struggles to access finance and markets for its minerals and to pursue diversification opportunities, but this scenario presents opportunities to carve out a role as a neutral and respected neighbour.



Scenarios Framework

These scenarios suggest policy responses relevant to all three strategic decisions, such as developing a good investment and business climate, with public buy-in, for both minerals and other sectors; designing a form of sovereign wealth fund that can operate as an investment fund or development fund as needed; and actively engaging with neighbours in the region to forge strong political and economic relationships.
The individual scenarios suggest interesting choices for Mongolia to consider, for example facilitating cross-border infrastructure for regional economic cooperation in Regional Renaissance; joining regional supply chains for green and sustainable industries in China Greening; and locking in long-term contracts to hedge against regional instability in Resource Tensions.

 Charting a course for the country, from developing mineral wealth to long-term sustainable and diversified growth, is a key task facing Mongolia’s leaders. On this course, they need to explore and make three strategic decisions related to managing the mining industry and the wealth that it is expected to create, approaching the challenge of diversifying the economy, and building long-term trade and investment relations. The best inroads to these decisions are not straightforward and must take into account uncertain future contexts. Possible future contexts are explored in three scenarios intended to help Mongolia’s leaders to prepare and make the most of whichever future arises.

The integration of Mongolia into global financial flows

    I usually do not like to comment on another's piece of work, but for this one time I like to say about this point "While the lack of research capacity to support decision-making has been lamented in the past, it has become glaringly obvious in the current discussions of governance structures, construction budgets and the integration of Mongolia into global financial flows. A radical investment into such analysis capacity and into governance structures directly involving the Mongolian people may be one of the few solutions here."

    I have worked in Mongolia previously and well aware of the many agencies that are assisting Mongolia in terms of research and more research. Personally, I like research but this maybe excessive especially when these research are often done remotely and without complementing those on the ground. A good example that I read recently was a paper about the future of the meat industry and was written by someone who came to Mongolia for 3 days to give a seminar and his main suggestion was to follow-up with Australian style cattle farming not fully grasping that Mongolians have no idea of land ownership as versus land rights and ancestry law to provide for freedom of animal movement. Mongolian cattle are free to roam the entire country from North to South following the seasons and therefore its beef are tough because those cattle are feed with real grass not synthetic food. I digressed, the current debacle that Mongolia is facing are two folds. While external economic factors do play an important role (and I leave this for the experts to do more research to fix their own governance issues), the main culprit here is the Mongolian politicians themselves. They had overpromised by bribing for votes leaving nothing at all for the next government to work with from day one. No research is needed to reach this conclusion as this is common knowledge. When the new government came it, they replaced most of the current heads with their own people (usually from the same province). There is a learning curve which means all the businesses have to relearn who are their new principals and vice-versa, hence nothing get done for the next 12 months to allow them to settle in. Understandably the Mongolians are reserve when dealing with foreigners especially Chinese. No marks for guessing why even though for some unknown reason, Mongols consider Manchus and Hans to be the same. The current government needs to consider how to extract more $$ to get mileage for their own promises to their people during the election (its a face thing too). Again no guesses from whom. If RT does not want to play because of some IA then it is RT's prerogative but they still need to negotiate with the current government. Will foreigners abandon Mongolia because of less friendly investment laws ? My response is no as Mongolia will need to consider the consequences as well, they need to improve their own infrastructure (roads/power) and to provide for a growing younger generation who are quickly adapting themselves with the western ("english") world instead of old russian (even though most would prefer Korean TV soaps). There will be compromise (deals) and JVs are already in the pipeline to tap into rich resources which China and the rest of the world are hungry for (read Japan and Korea and as far as Indonesia). Mongolia's attitude in terms of governance, budget and global financial integration are similar in many respects to other developing countries (Malaysia is the most prominent. Malaysia even trained Mongolians Anti-Corruption Officers which is an irony). They have the appearance but lack the will and compulsion to act on them. Again no amount of research can solve these issues. The only cure is time and lessons to be learned (better to have tried and failed then not at all). Just like any foreigner, I find Mongolians are eager to learn about the outside world to meet their internal challenges (example over half a million still live in Gers ("tents") at the outskirt of UB without much sanitation), they have short term views because they are at each other throats trying to lineup their pockets (particular when in a coalition). When they are not fighting, they are pretty savvy businessmen (not the Abe Lincoln type). Politically, Mongolians are ferocious inline with their history (take no prisoner other than to fight for them like a trained warhorse). They had their first political assassination at the dawn of their democratic reforms so there is no love between the many political factions other than a common desire to rule Mongolia like many of their counterparts in developing countries (I must admit at least the Mongolians are better educated though - in order to be a Member of Parliament they have to gain at least a recognised University degree). They are meat eaters and frowned on those who prefer vegetarian, liken them to animals. Need I say more on how to deal with them ? Research is great but seldom do they meet practice. Give them time, they are still planning to return to China (symbolically the famous Gengkhis Khan statue (affectionately known as grand-daddy to all mongols) looks to China for a good reason). BTW in case you need to ask, Mongolians' view of the world remain the same during their grand-daddy's time (stretching from China to the steps of Europe). When you are negotiating with them, give them respect, not more research. As the Chinese used to say giving respect is free and will return even more.

Mongolia’s economy is at a crossroads

A sudden sense of economic crisis is spoiling the mood over Mongolia’s three years of world-beating economic growth. This crisis stems from the huge decline in foreign investment and ongoing uncertainty surrounding the partnership with Rio Tinto in the Oyu Tolgoi mine project. In the coming week, two events will seek to address this crisis.
Mongolia is on an economic fault line. Growth rates of 10+% for the past three years, at a time when the world is still struggling to climb out of the post-Lehman hole, have not only brought rising incomes to many Mongolians and spawned a construction boom in the capital Ulaanbaatar but also have focused the world’s attention on Mongolia in a new way.
This growth has been built almost entirely on mining exploration, coal production and construction associated with the Oyu Tolgoi project. Now, however, growth seems threatened by three challenges: nervous foreign investors; a drop in Chinese demand for coal; and uncertainty surrounding Oyu Tolgoi. Foreign investment – apart from Rio Tinto’s engagement in Oyu Tolgoi – has fallen precipitously since the passage of a foreign investment law in May 2012. The relative slowdown of the Chinese economy, meanwhile, has led to a steep decline in purchases of Mongolian coal.
On top of this, Mongolian politicians and the public have been grappling with the implications of being a part-owner in the Oyu Tolgoi project and the governance and financial challenges that this ownership implies. Oyu Tolgoi represents the economic future, but also the thorny challenge of trying to balance the population’s expectations of immediate and equitable benefits, the need for foreign expertise and financing, and environmental stewardship. The challenges have found their expression in public disputes with Rio Tinto over the Oyu Tolgoi construction budget just as the project is poised for production. These disputes have led to a financing crunch that has forced the company to suspend underground construction and to let 1,700 workers go.
Over the next week, two events in Ulaanbaatar will address the crisis brought about by the Oyu Tolgoi job losses and the tanking of Mongolia’s currency, the tugrik, by roughly 20% since the triumphant oversubscription of a Chinggis Bond last November. The first is a workshop, led by the World Economic Forum’s Strategic Foresight team, with Mongolian decision-makers and stakeholders, which will examine future scenarios and possible policies. The likely focus will be on Mongolia’s mining and related industries, and the country’s main customer, China.
The second event is parliament convening for an extraordinary session to discuss the revision of the foreign investment law, as well as proposed changes to the mining law. Hints about the provisions of the foreign investment law suggest that it will retain controls over state-owned investments but clarify these to create less hindrances for the sale of assets by non-state-owned foreign investors. Specifics of these revisions will show whether they will actually be significant enough to lead to a return of investment, especially if discussions of the mining law remain at a relatively early stage.
Neither of these initiatives addresses the ongoing challenges surrounding Oyu Tolgoi, which is governed by an Investment Agreement.
While the lack of research capacity to support decision-making has been lamented in the past, it has become glaringly obvious in the current discussions of governance structures, construction budgets and the integration of Mongolia into global financial flows. A radical investment into such analysis capacity and into governance structures directly involving the Mongolian people may be one of the few solutions here.
Alternatively, a sale of the state’s share in Oyu Tolgoi would not only allow the company access to financing, but also shift the government’s responsibility to that of regulation and of decision-making about revenue streams that now seem threatened.
To continue on its path of rapid economic growth and development, Mongolian leaders will have to take decisive action on mining regulation and Oyu Tolgoi. In this, they will need the backing of the Mongolian people who continue to enjoy a vibrant democracy. Consideration of long-term scenarios and solutions for a lack of policy analysis capacity and governance challenges will play a crucial role in selecting courses of action.

 

ХӨРӨНГӨ ОРУУЛАЛТ ГЭЖ ЮУ ВЭ?

ХӨРӨНГӨ ОРУУЛАЛТ ГЭЖ ЮУ ВЭ?

Хөрөнгө оруулалтын цаана мөнгө гэсэн ойлголт байнга дагадаг бөгөөд мөнгөнөөс мөнгө олох арга гэж хөрөнгө оруулалтыг нэрлэж болох юм. Мөнгө хэрэглэснийхээ төлөө хүү төлөх сонирхол хүмүүсийн дунд их байдаг. Үүнийг мөнгө эзэмшигч өөрт байгаа мөнгөөрөө эрсдэл хүлээн мөнгө худалдаж авч байгаа үйлдэл гэж хэлж болно. Бэлэн мөнгөөр хадгаламж нээх, хувьцаа, бонд худалдаж авах, дундын сангуудад зээлэх гэх мэт олон аргаар хөрөнгө оруулалт хийж болдог.

Хөрөнгө оруулалтын тухай хамгийн зөв ойлголт бол өөрт хуримтлагдсан мөнгийг цаг хугацаа өнгөрөх тусам улам үнэд хүргэх гэсэн үзэл юм. Та мөнгөө бэлнээр нь хадгалах тусам мөнгө таны хяналтанд ордог бол мөнгөөрөө хөрөнгө оруулалт хийх тусам эргээд хэд дахин өсдөг гэсэн үг. Тиймээс мөнгийг та сүүлд хуримтлуулахаас илүү эртнээс хуримтлуулах нь илүү ашигтай. Мөнгөний үнэ цэнийг цаг хугацаа тодорхойлдог учраас ирээдүйд олох мөнгөнөөс илүү өнөөдөр таны олсон мөнгө хамгаас үнэтэй гэдгийг сайн санаж явах хэрэгтэй. Мөнгийг ирээдүйд хүлээн зөвшөөрөгдөх хэмжээнд хүртэл хуримтлуулах нь мөнгөний үнэ цэнийг улам өсгөдөг.

Нөгөө талаар, өөрт хуримтлагдсан бэлэн мөнгийг хөрөнгө оруулалтын хэлбэрээр ашиглахгүй бол одоогийн үнэ цэнээ ирээдүйд алддаг. Учир нь мөнгөний ханш цаг хугацаа өнгөрөх тусам өсдөг ч нөлөө нь багасдаг. Үүний гол шалтгаан нь инфляци. Мөнгийг хөрөнгө оруулалт хийлгүйгээр зүгээр хадгаламжинд хийсэн тохиолдолд удаан хадгалах тусам инфляцийн нөлөөгөөр ханш нь хүүгийн хамт улам багассаар байдаг. Тиймээс хөрөнгө оруулалт нь мөнгө өсгөөд зогсохгүй ирээдүйн эрсдэлээс мөнгөө хамгаалах гол хэрэгсэл болдог.

Хоорондоо холбоотой олон янзын хөрөнгө оруулалтын аргууд байдаг. Үүний хамгийн түгээмэл нь тодорхой хугацаанд тогтмол хүү авдаг хөрөнгө оруулалтын арга байдаг. Нэг үгээр бол хадгаламжийн хүү юм. Үндсэн мөнгөн дээр хүү нэмэгдэх нь жам ёсных ч түүнээс илүү их хүү авах боломж бас бий. Та чадах чинээгээрээ их мөнгө хуримтлуулж чадвал түүний хүүгээс олох ашиг өндөр байдаг. Их мөнгө их хүү дагуулдаг бол их хүү их мөнгийг шаарддаг. Энэ аргыг банкин дахь данс, хувьцааны ноогдол ашиг гэх мэт бага эрсдэлтэй хөрөнгө оруулалтуудаас авах хүүгийн нийлэмжийг бүрдүүлэхэд ашиглах нь зүйтэй. Гэхдээ таны хөрөнгө оруулалтын хэмжээ аль болох их байх ёстой. Учир нь дундаж болон бага хэмжээний мөнгөнөөс зөвхөн өдөр тутмын хэрэглээнд зарцуулагдах хэмжээний хүү  авдаг.

Санамж:

Хөрөнгө оруулалт, азын сугалаа хоёрын хооронд маш их ялгаа бий гэдгийг мартаж болохгүй. Их мөнгөний хүү болон хөрөнгө оруулалтаас олох ашиг нь азын сугалаа сугалахтай ижил биш ч эрсдэлээ тооцоогүй хөрөнгө оруулалт аюулгүй, урт хугацааны хөрөнгө оруулалтаас ч илүү их алдагдал хүлээх магадлалыг ихэсгэдэг. Их хэмжээний мөнгөөр ганц хувьцаа худалдаж авах нь харин азын сугалаа сугалахтай ижил зүйл юм. Үүнээс ашиг бараг гардаггүй бөгөөд бага алдагдал хүлээвэл таны аз. Аюулгүй, олон төрлийн хөрөнгө оруулалт нь ашгаа удаан өгдөг ч мөнгөө алдах эрсдэлээс хамгаалдаг. 

 

양식의 맨 위

양식의 맨 아래

Laws of Mongolia in English

Laws of Mongolia  in English 

The rule of law in Mongolia is a key factor in evaluating trade and investment opportunities. This section contains the country's laws most relevant to business. For each law, click on the pdf link for the English version. We should mention that the laws may not be up to date and amendments may occur that are not reflected in the body of the laws. If necessary, interested parties should check for themselves or with a law firm.

1. Accounting Law
2. Anti-Corruption Law
3. Banking Law
4. Law on Conducting Settlement in National Currency
5. Economic Entity Income Tax LawAmendments
6. Environmental Impact Assessment Law
7. Environmental Protection Law
8. Civil Code 
9. Concession Law
10. Company Law (revised) by Hogan Lovells LLC
11. Company Law
12. Customs Law
13. Energy Law
14. Explanation of Foreign Investment Law 
15. Law on Regulation of foreign investment in economic entities operating in sectors of strategic importance (mongolian)
16. Foreign Investment Law (unofficial translation)
17. General Taxation LawAmendments
18. Hazardous and Toxic Chemicals Law
19. Land Law
20. Licensing Law
21. Minerals Law
22. On Combating Money Laundering and Terrorism Financing 
23. Petroleum Law
24. Securities Law (MNG)
25. Securities Law (ENG) ("Unoffcial translation" draft of 10/22/2011)
26. Securities Markets Law (revised and unofficial translation)
27. Securities Markets Law (revised and unofficial translation)
28. REVISED SECURITIES MARKET LAW OF MONGOLIA by Mongolian Stock Exchange, Aug 2013
29. Social Insurance Law
30. Tourism Law
31. VAT LawAmendments
32. Water Law