Putin wipes Mongolia’s slate clean

On 27^th January, the Russian State Duma approved a bill to cancel the Mongolian national debt. On Monday 1^st February, President Vladimir Putin signed the contract to annulling the debt. The agreement onthe contract took place in 2010. From the Mongolian side, S.Bayartsogt who is now Director of the Government Administration, but was then Minister of Finance contributed much to the preparation of this contract. In short,97% of the Mongolian debt of USD 174.2 million has been nullified.

We therefore spoke to MrBayartsogt about the Russian agreement.

-During the Coalition Government of 2009-2012, I worked on three important agreements; namely,Oyu-Tolgoi, the International Monetary Fund (IMF) and the Russian debt. All of them went successfully. At the time when the Coalition Government was established, Mongolia owed money to two countries, namely Russia and Finland. It can be said that these debts were entirely solved during the time of the Coalition Government.

The Russian debt was connected to the “Mongolrostsvetmet” Joint Venture. In 2003, Mongolia owed USD 124.6 million and its rates. “Mongolrostsvetmet”, however, was not able to pay what it owed; this was where the problem began. In 2009, during the meeting of World Bank and IMF, Russian Deputy Minister of Finance D.Pankin said that Russia would take Mongolia to the Paris Club. Therefore, the National Security Council tasked me with making an agreement with Russia.

As a result, we had several meetings in Moscow, Ulaanbaatar, and Washington with the working group, headed by the then Russian Finance MinisterAlekseiKudrin and Deputy Finance Minister Pankin. As a result of the long agreements, which lasted about a year, we decided to cancel 97.8% of the total USD 174.2 million. On 14^th December 2010, the Russian and Mongolian Ministers of Finance signed a contract to this effect in Moscow. The contract included the payment of the remaining USD 3.8 million within 30 days from the day when the final contract would be approved. This is the story of how the “Mongolrostsvetmet” debt to Russia was solved.

Also, in November 2009, Mongolia solved the debt to Finland during an agreement in Helsinki. As a result, Mongolia now does not have any old debt to any country – that is as long as Mongolia pays USD 3.8 million (MNT 7.6 billion) to Russia within 30 days.