World Bank2012-03-192012-03-192009-01-02https://hdl.handle.net/10986/3018Mongolia's external economic outlook is dramatically changing as it faces sharp reductions in the copper price, caused by the financial crisis and global downturn. This compels the government now to drastically cut spending to prudently manage the budget. The budget is extremely dependent on mining revenues. Government is taking the right step in proposing a balanced budget for 2009. But further adjustments will be needed given the continuing fall in copper prices. A prudent fiscal stance will also be needed to manage inflation, which accelerated in the past year to over 30 percent. The current situation highlights the need to manage mining revenues better than in recent years. Mongolia saved little during the boom years, but instead dramatically increased expenditures on wages and salaries, and poorly-targeted social transfers. Adopting a multi-year fiscal framework-which enforces saving during the boom years, sets limits to expenditure growth and debt, and ensures transparency to the public-can help. Since much of the past windfall revenues have been spent, the country enters the down-turn with little savings and high inflation, forcing it to cut expenditures with every drop in the copper price. To avoid such situations in the future, the government has the opportunity to adopt a transparent, multi-year budget framework for expenditures and investment. This includes adopting a new fiscal responsibility law. It will ensure that the government saves during the 'boom' years, so that it can continue to spend during the 'bust' years. It will also set limits to expenditure growth and public debt. Within the limits set by this framework, parliament can then exercise its constitutional rights to amend the budget.CC BY 3.0 IGOACCOUNTINGADMINISTRATIVE COSTSANNUAL BUDGETANNUAL BUDGETINGANNUAL RATEAPRAVERAGE GROWTHAVERAGE WAGEAVERAGE WAGESBENEFICIARIESBENEFICIARYBENEFIT FORMULABUDGET CIRCULARBUDGET ENTITYBUDGET EXPENDITUREBUDGET FRAMEWORKBUDGET IMPLEMENTATIONBUDGET LAWBUDGET MANAGERSBUDGET PLANNINGBUDGET PREPARATIONBUDGET PROJECTIONSBUDGET STATEMENTSBUDGETARY CONTROLBUDGETINGBUSINESS PLANBUYERCALCULATIONSCASH TRANSFERSCCCENTRAL GOVERNMENTCHART OF ACCOUNTSCIVIL SERVANTCIVIL SERVANTSCIVIL SERVICECIVIL SERVICE LAWCIVIL SERVICE REFORMCIVIL SERVICE SYSTEMCOLLEGE STUDENTSCONTRIBUTIONCONTRIBUTION RATECONTRIBUTIONSCREDIT RATINGCREDIT RATING AGENCYCSDAILY PAYMENTDISABILITYDISABILITY BENEFITDISABILITY PENSIONDISABLEDDISABLED PERSONSDISADVANTAGED STUDENTSDISASTER RECOVERYDISCRETIONEARLY RETIREMENTECONOMIC AGENTSECONOMIC CLASSIFICATIONECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC MANAGEMENTELECTRONIC FUNDELIGIBILITY CRITERIAEMPLOYEEEMPLOYEREQUIPMENTEXCHANGE RATEEXPENDITURE CONTROLFAMILIESFARMERFINANCIAL ACCOUNTABILITYFINANCIAL AIDFINANCIAL DATAFINANCIAL MANAGEMENTFINANCIAL MANAGEMENT INFORMATIONFINANCIAL MANAGEMENT INFORMATION SYSTEMFINANCIAL POLICYFINANCIAL STATEMENTSGENERAL PUBLICGOVERNMENT POLICYHOLDINGHOSPITAL SERVICESHUMAN RESOURCEHUMAN RESOURCE REQUIREMENTSHUMAN RESOURCESINCOMEINDIVIDUAL ACCOUNTINDIVIDUAL PENSIONINFLATIONINFLATION RATEINFORMATION SYSTEMINITIATIVEINSURANCEINSURANCE PENSIONSINTEGRITYINTERNAL CONTROLINTERNAL CONTROLSLAW ENFORCEMENTLAWSLEADERSHIPLOANLOAN AMOUNTLOAN PROGRAMSLOCAL GOVERNMENTLOCAL GOVERNMENTSLONG-TERM INVESTMENTLOW-INCOMEMARKET ECONOMYMARKET FAILUREMARKET INFORMATIONMARKET PLACEMINIMUM PENSIONMINIMUM WAGEMINISTERMINISTRY CEILINGSMINISTRY OF FINANCEMONETARY POLICYNEEDY STUDENTSNEGATIVE EXTERNALITIESPENSIONPENSION AGEPENSIONSPERFORMANCE ASSESSMENTSPERFORMANCE DATAPERFORMANCE MANAGEMENTPERSONAL COMPUTERPORTFOLIOPOSITIVE EXTERNALITIESPOVERTY REDUCTIONPRIVATE CREDITPRIVATE CREDIT RATINGPRIVATE GOODSPRIVATE SECTORPROCUREMENT LAWPROSECUTIONPUBLIC ADMINISTRATIONPUBLIC EMPLOYEESPUBLIC EXPENDITUREPUBLIC EXPENDITURESPUBLIC GOODSPUBLIC PROCUREMENTPUBLIC SECTORPUBLIC SERVICESRECEIPTREFORM STRATEGYRESPONSIBILITIESRETIREDRETIREMENTRETIREMENT AGERETIREMENT PENSIONRETURNSSALARIESSALARYSALESECONDARY EDUCATIONSECONDARY SCHOOLSECONDARY SCHOOLSSENIORSERVICE DELIVERYSERVICE EMPLOYMENTSINGLE MOTHERSSINGLE PARENTSOCIAL ASSISTANCESOCIAL INSURANCESOCIAL INSURANCE FUNDSOCIAL PROTECTIONSOCIAL WELFARESOFT LOANSTATE BUDGETSTATED OBJECTIVETAXTAX EXEMPTTECHNICAL EDUCATIONTOTAL COSTTOTAL EXPENDITURETOTAL EXPENDITURESTRADINGTRANSACTIONTRANSACTION COSTTRANSACTION COSTSTRANSPARENCYTREASURYTURNOVERUNCERTAINTYUNIVERSITY TUITIONWAGESWARRANTSYEARS OF SERVICEWorld Bank10.1596/3018