Apr 30, 2014

A short-lived citizen ownership democracy in Mongolia

Mongolians enjoyed 2 short years (2010 and 2011) of citizen ownership democracy, where citizens got a direct share of their country's mineral money. It was not a huge windfall. Each citizen received a citizen dividend of only about US$200 a year. It was a significant amount in Mongolia, where the average monthly household expense was about US$500.

Since the citizen dividend was not well protected in law, changing political parties easily changed the laws. The citizen dividend could even be stopped without changing any laws.

The current party in power, the Democratic Party under Prime Minister Altankhuyag, "discard the social welfare policy of universal cash handouts to citizens."

Only a few years back, under a different political party, Mongolia started a citizen ownership democracy:
Independent Mongolian Metals & Mining Research: Law on Human Development Fund. Monglia's sovereign wealth fund to pool in all revenues from mineral resources including OT and TT has been approved: (2009)

Parliament Speaker D.Demberel said :
“ Just now Parliament approved very important law. This is not about simply distributing money to citizens. This has created legal environment that decided to have citizens receive a share from revenues gained from minerals.
Citizen ownership democracy has died in Mongolia.

This death need not be permanent.

The Mongolia experience underlines the importance of protecting the citizen dividend through a "referendum" law so that politicians cannot confiscate it easily. This is what the Alaskans are trying to do: to protect their citizen dividend in their Constitution, which will require a referendum to change.

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