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  • Writer's pictureAmar Adiya

Khurelsukh seeks to remake economics and embraces Nordic model

This week Prime Minister Ukhnaagiin Khurelsukh was seen on the TV crisscrossing the country from Bulgan to Uvurkhangai and inspecting the work of ministries and agencies.

In one of his public appearances, he proclaimed government needs to fix 'free market' failures and regulate the economy. This sparked public outcry about the extent of state intervention in the economy.

The opposition called out prime minister's remarks as a death knell to the free-market economy citing the fact the country has become one of the least economically free countries in the world by the Heritage Foundation estimation.

Khurelsukh pressed on that Mongolia should follow the Nordic economic model. The state should control 'strategic' products and prices to prevent market manipulation and failures.

But the prime minister didn't mention sky-high taxes and highly unionized labour common in the Nordic countries.

Khurelsukh's remarks came after rumours of the electricity price increase in October. Energy Minister Tavinbekh promised no tariff hikes in the immediate future but he didn't know how to cover increasing costs of power plants.

During the live TV interview, PM Khurelsukh pressed domestic manufacturers why they kept raising bread prices while electricity, fuel and flour prices were unchanged. (President Battulga owns one of the largest pastries - Talkh Chiher).

He then called the competition and consumer watchdog agency (now headed by PM's protege Bat-Erdene) to look into alleged price gouging during the pandemic difficulties.

The consumer watchdog's new head Bat-Erdene has been recently making headlines by probing MIAT flight ticket prices, milk prices and gas stations for selling allegedly diluted gasoline.

Pro-Khurelsukh media outlets accused previous governments in giving out large mineral deposits to foreign and private hands. They referred to the Norwegian success in achieving high living standards through state ownership of the major businesses.

Prime minister's anti-free market remarks were full of hot air intended for the consumption for voters, who are heading for the October local elections.

However, Norwegian-type resource governance model has been brought up several times lately. As lawmakers look into revision of the mineral law Nordic model of state ownership may become a key feature in the mining sector.


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