Abstract

Mongolia is the one of the resource rich countries facing natural resource curse, relatively transparent with satisfactory resource governance. Some would argue establishing sovereign wealth fund (SWF) is beneficial those countries with natural resource curse while others against it. Mongolian government established several SWFs and namely Human Development Fund (HDF- afterwards renamed as Future Heritage Fund) and Fiscal Stability Fund (FSF) but still facing to create an efficient SWF. Some scholars would agree that it is important to find causal relations between management of SWF and its efficiency to establish an efficient and beneficial SWFs. There are several ways to reveal such relations, however, most research centres are using following major methods such as Resource Governance Index (RGI), Truman scoreboard and Linaburg- Maduell Transparency Index (LMTI) and Santiago Principles. This paper is examined Mongolian SWFs namely Human Development Fund (HDF) and Fiscal Stability Fund (FSF) using some of these methods.

Highlights

  • In 2018, according to Sovereign Wealth Fund Institute survey, globally 80 sovereign wealth fund (SWF) of 49 countries accumulated USD7.9 trillion savings (SWFI, Sovereign Wealth Fund Institute, 2018)

  • The overall the Mongolian SWFs have been performing inefficiently according to assessment of SWF using Resource Governance Index (RGI), Truman scoreboard and LinaburgMaduell Transparency Index (LMTI)

  • There were some limits accessing data related to the SWFs, on other hand this situation illustrates the transparency and accountability of the SWFs

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Summary

Introduction

The HDF and FSF were established as a successor of MDF to accumulate asset from mineral revenue and allocate the wealth to Mongolian citizens as well as provide an economic stability. According to law of HDF, the fund was located in special account established in Central Bank of Mongolia and increase saving by accumulating mineral revenue (dividend and royalty) and income from investment. The Human Development Fund The Parliament adopted Law of Human Development Fund (HDF) in 2009 to implement allocating of MNT1.5 million (about USD105417) for every citizen from the prospective mining riches natural wealth according to Action Program of the Government of Mongolia for 2008-2012. 100 100 According to the article According to the 18.1 of HDFL, the annual Budget Law government prepare the the fiscal treatment funds budget and apply integrated with the to the national budget budget. through parliament

Fiscal treatment
Does the SWF 0 0 No information
Investments strategy implementation
Investment activities
Audits 0 According to the article There is no regulation
Are the audits 100 100 National Audit Authority National
Fund manages its own web site
SWF deposit and withdrawal rules
SWF deposit and withdrawal practice
SWF Investment Rules
SWF Investment Practice
SWF Financial Reporting Rules
SWF Financial Reporting Practice
Findings
Conclusion
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