Impact of Corruption in Mongolia

Prepared by Sant Maral Foundation

Stability indicators

• Arrogance level

• Ignorance level

• Corruption level

Arrogance

Ignorance

Do political parties represent public opinion?

Corruption

Most important socio-political or economic problems in Mongolia today (nationwide)

(each respondent could give two answers; only the ten highest ranking problems are shown)

Nov 2000

Unemployment 25

Poverty 21.3

Manufacturing 19

Education 13.3

National Economy 10.2

Life Level 10.1

Corruption 5.8

Rule of Law 5.7

Alcoholism 5.2

Low Morals 4.9

Nov 1995

Education 34.7

Unemployment 18.6

National Economy 17.0

Life level 12.3

Poverty 12.3

Inflation 9.6

Health 9.3

Youth 6.1

Order 5.2

Law 4.9

Major Problem

33.8%

7.5%

7.4%

7.2%

0.5%

3.9%

6.0%

4.3%

4.5%

0.8%

24.4%

21.5%

7.0%

4.3%

4.0%

3.8%

3.7%

3.4%

2.6%

2.5%

Unemployment

Inflation

Corruption

Poverty

National Economy

Alcoholism

Ecology

Bureaucracy

Living Standard

Low income

Mar-13 Sep-13

2006-2013 trends of highest ranking problem Unemployment against Corruption

Nowadays a big part of Mongolian economy is operating in a shadow out of legal

area or under limited legal coverage. What are the reasons that people avoid

contacts with the legal system? (2000 Feb, “Business community, perception of legal environment”, 1235 respondents,

Each respondent could make up to two choices; ranking is based on a number of cases).

PICS 2004

Extent to which corruption affects personal life, business

environment, and politics

Mar-06

Sep-06

Mar-07

Sep-07

Mar-08

Sep-08

Mar-09

Sep-09

Mar-10

Sep-10

Nov-12

Mar-13

Sep-13

Personal life 2.39 2.11 2.17 2.35 2.22 2.30 2.25 2.26 2.22 2.14 2.24 2.14 2.05

Business Environment 3.15 2.99 3.08 3.16 3.20 3.02 2.93 3.12 3.24 3.19 3.28 3.13 3.11

Political life 3.31 3.17 3.25 3.39 3.41 3.16 3.22 3.36 3.43 3.36 3.48 3.37 3.39

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00To a large extent

(3.00-4.00)

To a moderate extent (2.00-3.00)

To a small extent (1.00-2.00)

Not at all (0.00-1.00)

Public perception of top 5 most corruption affected areas 2006-2013

1 rank 2 rank 3 rank 4 rank 5 rank

Mar-06 Land Utilization Customs Mining Judges Police

Sep-06 Land Utilization Customs Mining Judges Police

Mar-07 Land Utilization Customs Mining Judges

Registry and Permit

Service

Sep-07 Land Utilization Mining Customs Registry and Permit Service Judges

Mar-08 Land Utilization Mining Customs Registry and Permit Service Judges

Sep-08 Land Utilization Mining Customs Judges Prosecutors

Mar-09 Land Utilization Mining Judges Customs Prosecutors

Sep-09 Land Utilization Judges Police Prosecutors Mining

Mar-10 Land Utilization Mining Political Parties Customs Parliament/ Legislature

Sep-10 Land Utilization Mining Judges Customs Political Parties

Apr-11 Land Utilization Mining Judges Customs Political Parties

Nov-12 Land Utilization Mining

Local Procurement

Tenders

Professional Inspection

Agency Political Parties

Mar-13 Land Utilization

State Mining

regulation

Local Procurement

Tenders Political Parties Customs

Sep-13 Land Utilization

State Mining

regulation

Local Procurement

Tenders Political Parties

Private companies in

Mining Sector

In the past three months have you or anyone of your household paid a bribe in any form? (Yes)

In your opinion, who should organize and lead the effort to combat corruption (1 choice)

Change in corruption in the last 3 years and expectations for the next 3 years

Increased a lot 18%

Increased a little

23%

Is the same 31%

Decreased a little

26%

Decreased a lot 2%

Last 3 years

Increase a lot 8% Increase

a little 12%

Remain the same

27%

Decrease a little

44%

Decrease a lot 9%

Next 3 years

Factors hindering fight against corruption (Sep 2013)

Most possible action if asked for a bribe by an official

36%

12% 26%

14%

6% 6%

Sep-13

I will not pay

I will report

I shall pay if I havemoney

I will look for help

I will do nothing justwait

DK/NA

How satisfied or dissatisfied are you with the general business environment in Mongolia?

Verysatisfied

Somewhatsatisfied

Somewhatdissatisfied

Verydissatisfied

DK

Dec-12 2.4% 24.8% 49.7% 17.6% 5.5%

May-13 0.0% 20.3% 52.7% 18.5% 8.5%

Oct-13 1.2% 19.4% 48.5% 23.9% 7.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

In the lastmonth

In the last 2-3months

In the last 4-6months

In the last 7months to a

year

More than ayear ago

Never DK

Dec-12 16.4% 12.1% 8.8% 11.2% 13.0% 10.0% 28.5%

May-13 15.8% 9.4% 9.4% 7.3% 12.4% 7.9% 37.9%

Oct-13 20.0% 19.1% 10.9% 6.4% 7.3% 8.5% 27.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

When was the last time you had personal knowledge of a corruption transaction with government by a company in your sector of

business?

During the last 6 months have investment conditions for company operations improved, worsened or stayed the same?

In the next 6 months, do you expect that company's investment will …?

42.4%

33.3%

30.3%

39.7%

46.4%

39.7%

11.8%

11.5%

23.3%

6.1%

8.8%

6.7%

Dec-12

May-13

Oct-13

Improved Stayed the same Worsened DK

57.0%

58.2%

49.7%

18.2%

23.3%

28.8%

2.7%

1.2%

5.8%

22.1%

17.3%

15.8%

Dec-12

May-13

Oct-13

Improve Stay the same Worsen DK

Main obstacles for businesses*

60.2%

34.8%

24.1%

22.3%

16.0%

11.6%

17.6%

11.3%

10.0%

4.4%

13.8%

16.6%

10.3%

6.3%

4.4%

1.3%

53.8%

23.6%

22.0%

29.5%

17.0%

14.8%

10.5%

9.5%

11.5%

7.5%

14.8%

11.5%

5.2%

11.5%

3.9%

1.0%

56.1%

25.5%

24.2%

21.8%

18.8%

14.8%

11.2%

10.6%

10.6%

10.3%

10.0%

9.1%

6.7%

5.5%

3.9%

6.1%

High taxes

Obtaining, renewing licenses and permissions

Low level of professionalism

Access to credit

Temporary prohibitions, restrictions

Strong competition from other companies

Unofficial charges

Permanent prohibitions, restrictions

Conditions of the labor market

Lack of market research

Availability and cost of transport

Duties, official charges

Availability and accuracy of the information

Standards

Lack of management training

Other

Dec-12 May-13 Oct-13

*Multiple choice

Organizations creating obstacles to businesses

35.4%

28.0%

15.2%

9.9%

6.2%

8.1%

1.2%

2.5%

3.7%

13.7%

29.1%

23.6%

13.3%

10.6%

5.8%

5.2%

1.2%

2.7%

5.8%

20.0%

26.7%

19.1%

13.6%

7.3%

5.8%

3.3%

1.2%

0.6%

4.5%

16.1%

Tax office

Specialized Inspection Agency

Customs

Local authority

Land Utilization Agency

Police

City Regulatory Agency

Hygienic Agency

Other

DK

Dec-12 May-13 Oct-13

In your opinion, how much corruption do you think there is in …

Public sector

A lot SomeA

littleNone DK

Dec-12 42.1% 40.9% 8.8% 0.9% 7.3%

May-13 40.6% 37.6% 10.0% 0.0% 11.8%

Oct-13 46.7% 37.3% 10.6% 0.6% 4.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Private sector

A lot SomeA

littleNone DK

Dec-12 9.7% 22.7% 39.4% 16.1% 12.1%

May-13 7.3% 21.2% 40.0% 15.8% 15.8%

Oct-13 5.8% 20.6% 39.1% 21.8% 12.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Sectors most vulnerable to corruption

50.6%

57.0%

49.1%

15.5%

11.5%

10.9%

10.3%

5.5%

8.5%

54.8%

60.3%

47.3%

10.3%

7.6%

6.1%

4.2%

3.0%

7.0%

67.6%

59.4%

58.2%

11.5%

9.1%

8.8%

8.5%

1.8%

2.7%

Government services

Mining

Construction

Finance

Manufacturing

Electricity, heating and water

Trade

Other private services

DK

Dec-12 May-13 Oct-13

Best three ways to reduce corruption

62.7%

40.3%

40.3%

32.4%

24.5%

23.3%

15.8%

5.2%

60.9%

33.0%

27.6%

30.6%

13.3%

18.8%

7.6%

9.4%

60.0%

35.5%

33.6%

27.9%

21.2%

17.3%

7.0%

11.5%

Use honest business practices at all time

Know the laws and rules of government

Campaign against corrupt political candidates

Never pay bribes

Report corruption to mass media

Report government corruption to the officials

Join a civil society organization

Other

Dec-12 May-13 Oct-13