Prime Minister L. Oyun-Erdene: The Savings Fund is a New National System to Expand the Middle Class

Prime Minister L. Oyun-Erdene has officially inaugurated the "Savings Fund" accounts, marking a critical milestone in the implementation of the National Sovereign Wealth Fund Law.

In his address, the Prime Minister emphasized that the fund represents the culmination of the government's sustained efforts to ensure transparency and equitable distribution in the mining sector, which accounts for 93% of Mongolia's exports.

"We dedicate this success to the Mongolian people who have stood with us in the fight for resource reform," the Prime Minister stated. He highlighted key economic achievements resulting from these reforms, including the resolution of Oyu Tolgoi's $2.3 billion debt, the exposure of corruption schemes at Erdenet Mining Corporation, and the transparency initiatives at "Erdenes Tavantolgoi" JSC.

Economic Milestones: Driven by open exchange trading of commodities and improved governance, Mongolia’s GDP surged from 37 trillion MNT in 2020 to 68.9 trillion MNT in 2023. GDP per capita reached a historic high of $5,875 in 2023. Furthermore, foreign exchange reserves have grown to $5.0 billion, the balance of payments surplus exceeded $1.5 billion, and economic growth has rebounded from a pandemic low of -4.6% to 7%.

The Savings Fund Mechanism: Modeled after Singapore’s Central Provident Fund, the Savings Fund is designed to serve as a new national system to expand the middle class. It accumulates 34% of the dividends from state-owned strategic deposits—specifically Erdenet, Oyu Tolgoi, and Tavantolgoi. These funds are dedicated to supporting citizens in three core areas: housing, education, and healthcare.

To launch the program, "Erdenes Mongol" LLC has transferred 500 billion MNT to the Savings Fund. Combined with resources from the Bank of Mongolia and commercial banks, this injection increases the total available mortgage financing to 1.2 trillion MNT, enabling 10,000 waitlisted households to immediately access the housing loan program.

"By ensuring every citizen has access to housing, health, and quality education, we lay the foundation for a prosperous future for our families and our nation," Prime Minister L. Oyun-Erdene remarked. He characterized the Savings Fund as a "new contract of trust and shared responsibility," calling for public oversight to ensure strategic projects remain profitable.

Current Mortgage Status: As of May 1, over 20,100 citizens have applied for mortgage loans nationwide (16,531 in Ulaanbaatar and 3,520 in rural areas). In the first four months of this year alone, over 300 billion MNT in loans have been issued to more than 2,600 citizens.

Source: Government of Mongolia