몽골 자원기반 경제와 재정정책 과제

Resource-Based Economy in Mongolia and Fiscal Policy Issues

This paper investigates some fiscal policy issues to foster macroeconomic stability and growth under the resource-based economy in Mongolia. Mongolia is rich in natural resources, and also one of the top 10 resource abundant countries in the world. The economy depends heavily on the mineral sector, while non-mineral sectors have been running down for years. Mongolia should exploit mineral deposits of strategic importance, generate and accumulate savings, ensure intensive and high economic growth, and support other strategic industries. Mongolia’s midium-term prospect looks excellent from the economic growth perspective. However, there are concerns for inflation, unemployment, poverty, and Dutch disease. To achieve broadly-shared growth and stabilize Mongolian economy in the near future, the following issues of fiscal policy should be resolved. First, the share of fiscal deficits to GDP, as well as that of public debt to GDP, is very high. It should be lowered in the near future, so that government saving should be increased. Second, the pro-cyclical fiscal policy should be terminated immediately to combat Dutch disease. Third, an effective public investment managing system is an essential requirement if Mongolia meets the challenge of ensuring that the mineral assets below the ground are transformed into sustainable capital assets above ground. Mongolia’s current system is inadequate and needs to be urgently improved. Lastly, unconditional cash distribution to every citizen should be discontinued and a cash benefit targeted to the poor should be introduced.