Ulaanbaatar, April 25, 2024 /MONTSAME/. The State Great Khural of Mongolia ratified the Law on Mongolia’s Sovereign Wealth Fund at its plenary session on April 19, 2024.

In his speech, Chairman of the State Great Khural Zandanshatar Gombojav highlighted that the 2019 Amendment to the Constitution of Mongolia provides for the state policy on the use of natural resources to be based on Mongolia's long-term development policy. Furthermore, the Constitution was amended to ensure the right to safe and healthy living conditions for all citizens, generate profits from mineral resources for the Sovereign Wealth Fund while also distributing its benefits fairly and equitably, create the legal framework ensuring the majority of profits from the exploitation of natural resources to be allocated towards citizens. The Chairman commended the Government of Mongolia for its leadership in initiating and developing this important law.

Additionally, upon adopting the Law on Mongolia’s Sovereign Wealth Fund, the legal basis is laid for Mongolians to gain equitable and just benefits from mineral resources. Despite the endorsement of the Law on Development Fund and the Law on Future Heritage Fund, intended to benefit citizens from natural resources, their implementation failed to ensure impartial distribution. In the past four years, the Parliament and the Government of Mongolia have taken a leading role in tackling the misappropriation of assets, undertaking significant changes and reforms.

Through public hearings and rigorous review of the evidence, the Parliament and the Government successfully exposed reality. As of today, we have established a temporary Committee to oversee activities related to granting special permits for mineral exploration and exploitation, as well as payment, taxation, and collection of associated fees. Also, we are planning to organize a public hearing. These efforts will create solid bases for successfully implementing the Law on Mongolia’s Sovereign Wealth Fund.

Within the confines of the Law on Mongolia’s Sovereign Wealth Fund, the Sovereign Wealth Fund will comprise three components: the Future Heritage Fund, the Savings Fund, and the Development Fund. The Future Heritage Fund will accumulate the benefits of natural resources and enhance its value by investing the generated funds in international financial market instruments.

The revenues of the Savings Fund will be utilized to provide financial assistance to Mongolian citizens in critical areas such as healthcare, education, and housing. Revenues from the Development Fund will be used to finance Mongolia’s mega projects and programs. Every Mongolian citizen will have his or her own account where the funds of the Savings Fund will be recorded. Chairman Zandanshatar underscored that the Law on Mongolia’s Sovereign Wealth Fund assigns high responsibility to the Central Bank of Mongolia.

Concluding his speech, the Speaker noted that Mongolia, a country abundant in natural resources and underground treasures, should not let its people live in poverty or lagging in development. It is the fundamental right of Mongolians to properly use and effectively manage the wealth of this rich and expansive land bequeathed to us by our ancestors.