The head of the National Development and Innovation
Committee, Ch.Khashchuluun, feels it would be difficult to reduce expenses in
the draft 2011 budget. If the economy has to grow, there must be adequate
investment in infrastructure, even if that means a budget deficit. It is
natural at times of growth to have bigger budgets. State expenditure will rise
also because of higher salaries and because more will be distributed from the
Human Development Fund (HDF).

This accumulation of cash in people’s hands could lead to
high inflation, as in 2007, but this is an unavoidable risk. Once
infrastructure and industry are developed, and revenue from mineral resources starts
being put into the Stability Fund and the HDF, expenses will be reduced and
budget deficits checked. He expects this to happen after 2013.

He has mixed feelings about the distribution of mineral
resources revenue to the people and says there is no easy and simple solution
to the problem. The flow of cash will lead to price raise and may very well
encourage laziness. On the other hand, part of the revenue will actually go to the
people, the ultimate owner of the nation’s underground wealth. The important
thing is to ensure productive use of the rest of the revenue, in improving
standard of living, and education and health services.

Mining resources revenue
would be generated for at least 50-60 years, but the country’s development
policy should be for a longer term, say for 60 years after these 60 years of
mining growth. Mineral resources development must be supplemented with human resources
development.

Asked how the projected rise in GDP will impact
individual lives, Khashchuluun said GDP indicated the total value of goods produced
in a country so those not involved in the production process do not directly
benefit. However, everything produced has to be sold, and all the stages
between production and sale will create money for individuals.  For instance, increased production will mean
an increased demand for transportation, and those who provide that service will
benefit.

Economic growth has a positive impact on all spheres of
life, but not equally so. Banking, financial services, transportation and trade
will benefit more than some others. This is why the mineral resources revenue
should be equitably distributed so that no field gets left behind. Some of these
would be intensive agriculture, light industry and local infrastructure. Developing
these will allow many people to increase their income.