The 2011 state budget presented by the Government and
approved by Parliament shows a deficit of MNT779.5 billion with no indication
so far on how this will be met. Last year’s budget had a much lower deficit,
amounting to MNT358.6 billion, and this was plugged with the help of the
Oyutolgoi advance payments. It seems that this time it will be the turn of
Tavantolgoi to provide the advance payments to take care of the budget deficit.
With both strategic deposits paying hefty advance deposits even before they
start production, one wonders when Mongolia would have access to funds for
development.

The 2011 deficit equals 9.9% of the estimated GDP. Even
after MNT163.2 billion from Oyutolgoi LLC in tax and a further MNT207.7 billion
from Erdenet factory in increased royalty tax, 
the Government will have to find MNT504 billion to give to  the Human Development Fund MNT805.2 billion
so that promises made during  the last
election can be fulfilled. If these allowances are not paid, the budget will
show a surplus of MNT25.7 billion.