Minister of Finance S.Bayartsogt answers
questions on revisions to the state budget.

The allocation of MNT 1
billion to every Member of Parliament continues to find a place even after
being fiercely criticized by the civil movements. Is it true that Speaker
D.Demberel wanted this to be deleted?

The
money will not be spent through individual MPs. The revised budget has taken
cognizance of a letter from the Constitutional
Court defining the legal position and the entire
amount of MNT76 billion is now part of the Ministries’ budgets and will be
allocated to the relevant state budget disbursement authorities.

How much has been the
raise in the wages of public servants — 30 percent, or 21, as is being
rumored?

During
the trilateral negotiations, the Government proposed a 21 percent increase but
finally agreed to 30 percent. That stands. The increase becomes effective on
October 1, and we shall need MNT 78 billion for this in the initial phase.

Will the Government
continue to review minimum wages periodically? Why do politicians promise
salary increase at every election when this places a burden on the private
sector?

We
are aware of the pressure on the private sector. Many businesses have to make a
choice between conceding employees’ demand for a higher salary and reducing
manpower. We think it would be a good idea not to make such big and public
announcements of any salary increase. The 30 percent increase will prompt
traders to jack up prices of products and services and we have to ready with
measures to avert inflation. 

How much do you think
the salary increase will raise inflation?

Inflation
might reach double digits by the end of the year. This would mean only a 4-5
percent real increase in salary. This is why I warned the negotiators not to
politicize economic issues.

Is the Child
Allowance included in the budget now?

We
have more in the Human Development Fund which will be responsible for paying
the Child Allowance. The budget does not talk about this specific allowance,
but refers to family support programs. Parliament has set up a working group to
study the issue of the child allowance and we shall consider its suggestions
and recommendations.

Some say the
Government is taking too long to proceed with the fiscal stability law favored
by the IMF and the World Bank. What is the present position?

There
has been no pressure from the IMF. We have submitted the draft to Parliament
and hope it will be passed in the Spring session. Once the law is in force,
there will be no need for any more budget revisions. All extra income coming
from increased commodity prices will be automatically transferred into a
stability fund and there will be no demands to increase budget expenses. 

Will there be another
budget revision in case the copper price stumbles?

There
will be no drastic fall in the copper price in the short term. Trade analysts
think prices will be stable for a while as the world economy comes out of
recession.