Another Strange Mongolian Law

An article at UB Post gives some information about a new law on land property that is drafted right now. Thanks to this tweet by Covermongolia for the link.

From that article:

-If citizens will decide to sell their land, foreign citizens might buy it. Or only a few wealthy citizens may end up with most of the land. How will you manage such issues?
-The current law doesn’t monitor whether Mongolian land is being privatized by foreigners. But if our draft bill is passed, a Land Exchange will be established alongside the Land Corporation. It would manage the land exchange affairs. If any citizen wants to sell their land certificate, it will pass through the Land Exchange. Information on what land is being sold or taken as collateral to which people will be received by the Land Exchange. But it won’t store information about rent. If anyone sells their land to a foreigner, the state will confiscate the land immediately.

How is that supposed to be fair? That would obviously leave the foreigner in question without an asset he has paid for. For the very least, there needs to be compensation.

Giving foreigners only a restricted right to form contracts in this discriminating way obviously is not helpful for attracting investment. On the other hand, I am sure that the local lawyers will find many different ways to work around this particular hurdle.

This obviously also means that the property of each Mongolian owner of land is worth less, since a lot of potential buyers who would have the funds to buy at higher prices are excluded from the market in the first place. So the main effect of this kind of xenophobic discrimination will be to make average Mongolian citizens poorer than they are already anyway.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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