Prime minister praises Mongolians’ resilience, announces MNT 5.1 trillion plan to combat COVID-19

Mongolia’s Prime Minister announcing the MNT 5.1 trillion package (Montsame)

By Tuul Chuluunbaatar

ULAANBAATAR, MONGOLIA: After an extraordinary meeting of the Government of Mongolia, Prime Minister Ukhnaagiin Khürelsükh made a statement on the measures to be taken by the Government to support the economy in connection with the transition to a higher level of preparedness throughout the country amid the coronavirus outbreak.

“As the Prime Minister, I am focusing first and foremost on protecting the lives of Mongolian citizens, and second, on overcoming the difficult economic conditions. Coronavirus infection is under control,” the Prime Minister said in the remarks.

In January, Mongolia announced measures that were the most drastic steps taken by any nation at that time over concerns about the coronavirus that was rapidly spreading across China.

Though Mongolia had no recorded cases of coronavirus, it sealed off the border, refused entry to anyone traveling through China, and suspended China-bound exports of coal- one of the country’s largest sources of foreign trade revenue.

It also suspended public events, shut all levels of schools until April 30, and ordered anyone who went outdoors to wear a mask. The landlocked, Central Asian nation shares a border of nearly 5,000 kilometers with China.

The measures worked. As a result of all the early aggressive “social distancing” measures implemented throughout the entire country, as of March 27, there were only 11 people infected in Mongolia. All the cases come from abroad and there was no domestic COVID-19 case.

The first case of coronavirus infection was reported in Mongolia on March 10. The patient is a French national who arrived from France via the Moscow and Ulaanbaatar flight on March 2.

Other infected persons arrived on the evacuation flights from South Korea and Germany, which was organized by the government.

The country’s successes so far have given Mongolians confidence that they can keep ahead of COVID-19 and earned praises from other countries.

“I am grateful that the awareness and support of the people are helping to prevent the spread of this disease.” Khurelsukh said as he hailed the Mongolian efforts against the pandemic. “As a result of careful gradual implementation of measures taken to prevent the spread of the disease, the situation has not deteriorated.”

As the coronavirus pandemic devastates the economy, Khurelsukh announced the MNT 5 trillion MNT ($1.850 million) relief package to overcome the economic difficulties.

The relief package will provide MNT 200,000 per month to businesses for three months and cancel social security contributions of businesses from April 1 to October 1.

There is no income tax on wages for six months and no tax is levied on companies with income below MNT 1.5bn.

The package also provides a MNT 3bn lending program fund for herders with 3% interest rate.

Due to the suspension of all levels of education, it also increases the child allowance by MNT 10,000 for three months. The government will reduce the fuel price from April 15.

“Commercial banks must be patriotic,” said Khurelsukh. “We met with the management of commercial banks to cancel loans. The economic situation is worsening and the situation of businesses is getting worse. The Bank of Mongolia lowered its policy rate by one percent. We asked the Bank of Mongolia to focus on further lowering the policy rate.”

He warned that commercial banks must lower their interest rate.

“If the banks do not comply with the repeated requests, the government may take unfavorable measures against the commercial banks in the future. In general, banking reform is needed.”

The government has allocated MNT 17bn from the state reserve fund for medicines and medical devices. It also spent MNT 20.3bn on much-needed aid.

In addition, MNT 159bn will be provided to health facilities. This includes spending on protective clothing, medicine and medical supplies. The government is spending a total of MNT 200bn to protect the health of its people.

As the coronavirus pandemic shuts down the Mongolian economy, activists, politicians and many Mongolians say the stimulus package needs to be bigger and provide direct payments to Mongolians to tend to the needs of the working people and help individuals cope with the economic downturn.

During the announcement, the Prime Minister said that as of now the June 24 parliamentary elections would proceed as scheduled.