Foreign Chambers’ joint statement to the Government of Mongolia
№ 2020/14 April 3, 2020
Att: Government of Mongolia & Parliament
From: Joint Foreign Chambers’ Statement*
Re: Economic Stimulus for Mongolia.
The Government of Mongolia is to be applauded for their swift and decisive actions that have controlled the spread of COVID-19 disease in Mongolia. This has required many hard but necessary decisions. The Joint Foreign Chambers of Commerce Initiative (JFCCI) would like to extend our thanks to the Mongolian government and to all the Mongolian people involved in this containment operation.
Now a further challenge requires equally tough and vital decisions. The economic situation in Mongolia is beginning to deteriorate rapidly and if this situation is not immediately remedied the consequences will also be devastating. Having conducted independent research and surveys, we all conclude that many member companies are facing severe cash flow issues; this will soon result in the closure of businesses, a significant increase in unemployment and long-term hardship to the Mongolian people. The JFCCI applauds the announcement from Prime Minister U. Khurelsukh dated March 27th, which provides certain assistance; however, we believe that a more extensive action is necessary to safeguard the future of the Mongolian business sector and complement the existing proposals.
The JFCCI are conscious that Public Health must remain the primary consideration in all actions so have built this into our proposals to stimulate a “back-to-work” strategy that assists stalled projects, safeguards the Mongolian people and benefits all levels of society fairly. Therefore, the JFCCI is making the following policy recommendations to the policymakers and government for their immediate actions:
Easing Liquidity pressures
- Arrange for low-interest unsecured loans to be made available to all SMEs – value up to 50% of the Corporate Income Tax paid in 2019;
- General Import Customs Duties set at 0% for April-October 2020 (excluding demerit goods & other special goods e.g. alcohol, cigarettes, etc.);
- All corporate VAT collection deferred for 6 months;
- Arrange for overpaid tax & VAT to be automatically returned to corporate entities within 2 weeks of application;
- Allow the deferral of utility payments for corporate entities.
Addressing the Capacity of the Mongolian Economy and the Domestic Banking System
- Establish a Government Innovation Fund to stimulate local business into generating solutions to the health and financial crisis; with a focus on alleviating challenges to daily life (e.g. e-learning, 3-D printing)
Easing Unemployment Pressures
- Increase salary support measures for Mongolian staff, both for employees and self-employed.
Programs for Maximising Current Opportunities
- Revise the current Mongolian State Budget for 2020 and offer targeted support to vulnerable sectors and industries (e.g. tourism);
- Allow key foreign workers to enter Mongolia in April/May on a well-controlled and restricted basis. E.g. Minimum entry 6 months. Minimum salary levels (e.g. 10xminimum wage). Three weeks’ quarantine (with costs to be met by employer). We consider an additional SHI ‘risk premium’ would be fair recompense for these
- Utilize MIAT passenger planes as dedicated air freight solutions to ease urgent export & import logistics pressures;
- Whilst the COVID-19 disease is limited within quarantine in Mongolia, allow the gradual reopening of the hospitality industry and ease restrictions on public gatherings that maintain strict controls in line with WHO guidelines;
- Fast-track major development projects that have been delayed by bureaucracy. E.g. Railway projects, Energy Projects (Renewable and Traditional), Improved Healthcare, New Airport.
Applied equally and in a timely manner to both foreign-invested and domestic firms, we believe these policies will help Mongolia rebound faster and stronger from the global economic instability.
We welcome the opportunity to engage with the Government and suggest a monthly bi-lateral meeting between the JFCCI and the Office of the Prime Minister and relevant ministries to exchange the necessary information and proposals to ensure the economic prosperity of the Mongolian people.
* The Joint Foreign Chambers of Commerce Initiative is a collaboration of the American Chamber of Commerce in Mongolia (AmCham),
The Mongolia-Australia Chamber of Commerce (AusCham),
The British Business Group (BBG), Deutsch-Mongolischer Unternehmensverband (DMUV),
The Mongolian-European Cooperation Chamber of Commerce and Industry (EuroChamber Mongolia)