By Elena Fehrbach
Mongolia is making another step forward in the direction of establishment of their own Treasury Fund. The President of Mongolia has initiated the establishment of the Treasury Fund that should be based on the Government revenue from the mining industry. The first draft has just been discussed by the Parliament of Mongolia and on an opening remark, Mr. L.Dashdorj, the advisor to the President, stressed upon the lack of system and policy on saving of wealth for the long-term future usage by the next generation.
The idea behind the Treasury Fund is to keep saving US$500 million annually to save a sizeable amount for future spending. The source of money savings is supposed to be the Government’s revenue from the mining sector. The savings are planned to start in 2016. In 2025 the Government plans to spend up to 25 percent of accumulated money on education. The core savings from the Treasury Fund are proposed to start being spent in 2050 by the future generation of Mongolian citizens. If the savings program goes as it is expected, it will totally accumulate up to US$17 billion by 2050.
The draft bill on the Treasury Fund is suggested to include the Policy that will support Central Bank’s currency reserves. The Treasury Fund expects to create the possibility of protection from losses resulted from the declined external trade and significant losses in the budget during 20 years term.