Mongolia is facing renewed calls for the creation of a national sovereignty fund as public dissatisfaction over economic inequality and corruption grows. Recent political unrest, including the resignation of Prime Minister Oyun-Erdene Luvsannamsrai, has brought this issue to the forefront, with thousands of protesters demanding a fairer distribution of the country’s vast mineral wealth. Many of the demonstrators, particularly younger Mongolians, view a national sovereignty fund as a potential solution to decades of mismanagement and favoritism that have left much of the population struggling despite the nation’s resource-rich economy.
The concept of a national sovereignty fund in Mongolia is inspired by sovereign wealth funds that exist in other resource-rich countries. These are government-run investment funds that manage national revenues, typically derived from oil, gas, or minerals. The funds are designed to serve long-term public interests, offering financial stability, saving for future generations, and in some cases, providing direct dividends to citizens. Mongolia, with its rich deposits of coal, copper, and other valuable minerals, has long been a candidate for such a fund. Yet, unlike countries such as Norway or the United Arab Emirates, Mongolia has not established a comprehensive sovereign wealth fund capable of addressing its economic imbalances.
Mongolia’s economy heavily relies on mining, which accounts for over 20 percent of the country’s GDP. However, this wealth has not translated into widespread prosperity. Many Mongolians continue to live in poverty, and allegations of corruption involving high-level officials have only deepened public frustration. A recent scandal involving the lavish spending of the prime minister’s son sparked nationwide protests and renewed public interest in how the government handles mining revenue. Citizens are now demanding a mechanism that ensures transparency and fairness in the use of national resources. For many, the answer lies in establishing a national sovereignty fund that is accountable and benefits the entire population.
The national sovereignty fund being proposed by activists and civil society groups would aim to do several things. First, it would act as a savings mechanism to preserve wealth for future generations. Second, it would stabilize the economy by managing fluctuations in commodity prices. Third, it would finance public services such as education, healthcare, and infrastructure, particularly in rural areas that often see little benefit from national revenues. Finally, it could reduce Mongolia’s economic dependence on China, which currently purchases 92 percent of the country’s exports.
Calls for a national sovereignty fund are also driven by public concern over secret mining deals and perceived elite enrichment. Many Mongolians believe that current resource revenues are not being used effectively or transparently. The idea of a centralized, well-managed fund offers a sense of hope that corruption can be reduced and that wealth will be shared more equitably. Some civil society leaders have also proposed that such a fund could issue annual dividends to citizens, similar to Alaska’s Permanent Fund, which distributes a portion of oil revenues directly to residents.
Despite the support for a national sovereignty fund, several challenges remain. Mongolia’s political instability poses a significant risk to the successful implementation of such a fund. Leadership changes and shifting political alliances can derail long-term planning. Additionally, existing institutions lack the strength and transparency required to manage large sums of money without corruption or inefficiency. Any move toward creating a national sovereignty fund would require strong legal safeguards, independent oversight, and broad public engagement to be effective.
Still, the growing public demand for fairer wealth distribution and economic justice suggests that the idea of a national sovereignty fund is gaining traction. For a country strategically located between China and Russia, and possessing considerable natural wealth, the way Mongolia chooses to manage its resources will shape its democratic future. With a population of just 3.5 million people, even modest improvements in revenue management could make a significant impact on national well-being. As Mongolia navigates its political transition, the national sovereignty fund remains a focal point in discussions about the country’s path forward.
