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MONGOLIA: Government takes steps toward implementing an Alaskan-style BIG

The coalition government of Mongolia is taking steps to make good on promises made in the 2008 election to introduce an Alaska-style resource dividend. Mongolia is a large, sparsely populated land-locked country sandwiched between Russian and China. About half of its citizens still live as nomadic herders. Most of the land in the country is unowned: herders can camp anywhere they find a spot. But the country has recently discovered some of the world’s most valuable mineral deposits, including gold, copper, coal, and other resources. International mining companies, under contract from the Mongolian government are already well on their way to begin exploitation of those resources. Revenues from exportation of those resources have the potential to more than double Mongolia’s GDP.

The Mongolian government is moving toward implementation of three methods to ensure that every Mongolia receives a financial benefit from that sale. The first method—proposed in the coalition governments draft budget for 2011—is the distribution of a dividend of 21,000 Mongolian Tughrik (about US$17) per person per month. Reports are sketchy, but if adopted, that would amount to about $204 per person, or $816 for a family of four by the end of the year. This is a large sum in such a poor country. Mongolia currently has a per capita GDP of about $3600 per year (less than one-tenth of U.S. GDP).

The second method is to make every Mongolian a shareholder in the state’s mining enterprise. The initial plan calls for 50 percent of the enterprise to be owned by the state; 30 percent by international investors; 10 percent by domestic investors; and the remaining 10 percent to be divided equally between all Mongolia citizens. That plan would make each Mongolian the owner of about 550 shares of stock. Initially citizens will be prohibited reselling their shares, and it is unclear whether this prohibition will be relaxed later. Government officials hope that the shares will eventually start paying dividends. Apparently this would mean a second source of basic income from the mining industry, which might replace or supplement the first.

The third method is the creation of a Sovereign Wealth Fund designed after studying the operation of the Alaska Permanent Fund, the Alberta Heritage Fund, and other existing Sovereign Wealth Funds. This fund could pay regular dividends like the Alaska fund but government officials indicated that it might only pay occasional dividends like the Alberta fund.

Government officials hope that once these policies take shape, they will relieve the abject poverty experienced in Mongolia’s capital city, Ulaanbataar, without interfering with the traditional nomadic lifestyle half of Mongolians practice. Terence Ortslan, Managing Director of a Canada-based mining research firm called TSO & Associates, said, “Mongolia should recognize and preserve nomadic lifestyle of its people but in modern level of quality of life that they deserve. I would call it ‘Modern nomadic lifestyle.’” For example Mongolian nomads could use their share of wealth to obtain devices to generate electricity from solar and wind energy.

These policies are just at the stage of transition from planning to implementation, and the form the will eventually take remains to be seen.

More information about these policies in Mongolia is online at the following links:
David Stanway and Khaliun Bayartsogt, “Mongolia frets as giant coal mine launch looms,” Reuters, Mon Aug 8, 2011
http://af.reuters.com/article/energyOilNews/idAFL3E7IP1CG20110808?sp=true
MDNews, “From January, every citizen will get MNT 21,000 per month”
http://www.mongoliaeconomy.com/?p=698
Dale Choi, market commentator of Frontier Securities, “Mongolia is to Set Up a Sovereign Wealth Fund,” UB Post, September 15, 2009 (Source: Bloomberg, Frontier Securities, September 11, 2009)
http://www.fonds-souverains.com/author/admin/page/1590/
D. Jargalsaikhan, “Ulaan Qatar” MongolNews. Friday, 25 February 2011 12:44
http://ubpost.mongolnews.mn/index.php/opinion/5825-ulaan-qatar
P. Shinebayar “Coalition Government Makes Historical Decision” April 5, 2011
http://ubpost.mongolnews.mn/index.php/national-news?layout=default&start=80

About Karl Widerquist

Karl Widerquist has written 974 articles.

Karl Widerquist is an Associate Professor of political philosophy at SFS-Qatar, Georgetown University, specializing in distributive justice—the ethics of who has what. Much of his work involves Universal Basic Income (UBI). He is a co-founder of the U.S. Basic Income Guarantee Network (USBIG). He served as co-chair of the Basic Income Earth Network (BIEN) for 7 years, and now serves as vice-chair. He was the Editor of the USBIG NewsFlash for 15 years and of the BIEN NewsFlash for 4 years. He is a cofounder of BIEN’s news website, Basic Income News, the main source of just-the-facts reporting on UBI worldwide. He is a cofounder and editor of the journal Basic Income Studies, the only academic journal devoted to research on UBI. Widerquist has published several books and many articles on UBI both in academic journals and in the popular media. He has appeared on or been quoted by many major media outlets, such as NPR’s On Point, NPR’s Marketplace, PRI’s the World, CNBC, Al-Jazeera, 538, Vice, Dissent, the New York Times, Forbes, the Financial Times, and the Atlantic Monthly, which called him “a leader of the worldwide basic income movement.” Widerquist holds two doctorates—one in Political Theory form Oxford University (2006) and one in Economics from the City University of New York (1996). He has published seven books, including Prehistoric Myths in Modern Political Philosophy (Edinburgh University Press 2017, coauthored by Grant S. McCall) and Independence, Propertylessness, and Basic Income: A Theory of Freedom as the Power to Say No (Palgrave Macmillan 2013). He has published more than a twenty scholarly articles and book chapters. Most Karl Widerquist’s writing is available on his “Selected Works” website (works.bepress.com/widerquist/). More information about him is available on his BIEN profile and on Wikipedia. He writes the blog "the Indepentarian" for Basic Income News.

The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

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