Mining sector faces need to serve sustainable development
The economic downturn of 2015-2016 triggered poverty and inequality to increase
6 өдөр, 11 цаг өмнө
The UN study on Mongolia’s financial and economic issues emphasized that the mining sector in Mongolia should play a positively transformative role and serve as a catalyst to ensure the realization of economic, social and cultural rights, and spur human development. Changes in international mineral prices can affect the economy of Mongolia and consequently human rights. The economic downturn of 2015-2016, due to a sharp fall in commodity prices, contributed to an increase in both poverty and inequality.
The tax stabilization clause targeting the mining industry must not allow the private sector to fully appropriate windfall profits which are produced at the expense of Mongolia’s natural resources. Implementing a floating royalty system with a rate that changes according to the market should be considered as well.
“Mongolia is rich in natural resources which can be both a blessing and a curse. Its current economic model is based on mineral extraction and the exploitation, management, and sharing of mineral revenue should help to secure the realization of rights,” said the Independent Expert on foreign debt and human rights, Juan Pablo Bohoslavsky.
The current public debt of 58.9 percent of GDP is not alarming. However, debt sustainability analysis should include a human rights dimension by the relevant financial authorities, the survey states. It also recommended the Government to establish a permanent multi-stakeholder platform to discuss environmental claims in the mining sector.
Mongolian laws oblige the Government to conduct an environmental impact assessment that also includes a social dimension before granting mining licenses. According to the study, the tax stabilization clause targeting the mining industry must not allow the private sector to fully appropriate windfall profits which are produced at the expense of Mongolia’s natural resources.