Monday, June 9, 2014

Mongolia Brief June 9, 2014

The two engine economy – a good model

June 9 (Mongolian Economy) Mongolian Economy caught up with Kristel Van der Elst Senior Director, head of Strategic Foresight for the World Economic Forum, to get a better understanding of the scenarios and her impression of Mongolia’s economic future.
Kristel has an MBA from Yale School of Management, is a Fulbright Scholar and has worked on other World Economic Forum scenarios including Mining and Metals: Scenarios to 2025; Euro, Dollar, Yuan Uncertainties – Scenarios on the Future of the International Monetary System; the Future Role of Civil Society; and Scenarios for the Russian Federation.
You have been to Mongolia four times – what is your impression? What is changing and what is not? What is the difference between other emerging economies?
Mongolia is a country with economically great potential because of the mineral wealth obviously and how you can diversify that into different products like agriculture etcetera. There is great potential in this country. There is still a lot of work to be done, obviously, to realise that potential, but clearly there is good thinking about how to move this forward.
One very important point in Mongolia that we find very interesting is your strong commitment to democratic values; to being a democracy and having debate around issues, and that is really important, we think. It’s a bit different from certain other emerging economies. It’s a really great country.
What countries is Mongolia most comparable to?
Already you have great mineral resources like some other countries, of course like Indonesia etcetera, but you have this very strong basis to build off, which is quite great. You have a very strong democracy. You have a relatively small population, compared to some other countries if you look at the population density also, you are slightly less than three million – that’s not that many people actually. So you don’t need to grow that much to provide everyone with more wealth.
You are very dependent on, as you said, two big neighbours, both Russia and China. So you have to take that into account. The physical location: you’re landlocked. You [Mongolia] are completely landlocked and if you have to go to a port you have to go through Russia or China, you have to take that into account.
But you could easily leverage that. It’s a question of perspective. Do you see yourself as landlocked or do you see yourself at the centre of major growth? You have this very particular situation.
As you say it is perspective and how you look at things. I have been through the scenarios and have realised we’re now at the cross road of development.
So how should Mongolia move forward?
So there are three key decisions Mongolia really needs to respond to now. As it is really at a crucial moment. How do we manage the mining and potential revenues? How do we diversify and into what? And which trade and investment relations do we want to have in the future?
So I won’t go through the scenarios in detail because you can read them. Why we use scenarios is because we think the answers to these questions need to be seen in the future context and not only in today’s context. All of these decisions have very long implementation times, very long consequences – you really need to think about the future. 
For the minerals development, it’s really important that Mongolia has a very stable economic environment. We’ve seen over the last years that the boom in commodity prices are becoming volatile and macroeconomic conditions have been changing slightly over the last six months, it might become more difficult for Mongolia to actually sell its minerals out of the ground and into the bank, so it’s really important.
How possible it is for the ‘China Greening’ scenario to eventuate?
It’s not a given that we can predict but it’s possible. 
Which models do you think Mongolia is closer to if you look at the perspectives of Mongolia currently.
Well obviously it’s building on the mineral wealth that you have. That is the cornerstone of your economy. But it’s important to diversify. You have great potential for agriculture, you have more potential to look into some innovative areas like biotech, and the banking sector areas need to be looked at. It’s important that you have a diversified economy not only built on the mineral wealth but this is certainly your cornerstone. So this would be a good model – a two engine economy both from mineral wealth and diversification.
Year by year it seems that Mongolia’s participation in the World Economic Forum is increasing. How do you see Mongolia’s participation in the future?
I think it’s really a good thing that WEF [World Economic Forum] and Mongolia are collaborating more. It shows also that Mongolia is very interested in the forum. And that is what the WEF is about – to commonly find solutions to problems. So we know that Mongolia is very proactive to work in the international community to finding some solutions to issues. There’s been high involvement in the water resource work streams, the anti-corruption work streams, now in this economic development models.
It shows that you might be quite remote but it’s all a question of perspective. You’re very connected to the world. And we’re honoured that we can bring that to Mongolia.
What trends are being discussed at the world economic forum? What would be the topics for next year?
There are a lot of issues that are being discussed because it’s such a broad portfolio. But some of the issues being discussed are the global trade regimes and systems. We look a lot to science and technology and we believe science will transform our society in the coming ten years; the new innovations and where the economy is going; obviously it’s a world economic forum. There is quite some uncertainty the economy is likely recovering but it’s still very fragile. So we’re looking at these types of topics and of course the whole issues around geo politics is becoming more and more on the agenda. 
It also came up a lot more in the global risk report that there is more risk for geo political tensions in the world. So we’re looking more and more into these areas.
We are talking a lot about sustainable development and a green economy  –  is this a common theme being discussed as well?
Yes because the way I talk about it here now – we call it green development, you can also call it resource management – you have the opportunity given that you still have to implement all of the infrastructure, to actually implement from the beginning the good systems that save energy, use water efficiently, and this type of green development.
In the long run, at the life cycle costs, this is a good idea to start doing now. In a lot of countries where we come from, for example, you have to kind of retrofit and this is very expensive so really working on the green development is a good idea for the future.
We even saw that in our scenarios, even if the world doesn’t go green, even if the world stays kind of brown, then it’s still a good idea for Mongolia because it makes you less reliable on your imports for energy. You can have more energy security within the country because you can create wind and solar resources here so why import oil. So you might become energetically more independent and as a country more independent and we know the value to Mongolians about being dependent. It would actually help to develop more green technologies within your infrastructure and in your industries. So any scenario that comes out, even if the world doesn’t go green, it’s a really good idea to have good resource management.
What do you think the biggest concern is for Mongolia’s future growth?
The biggest challenge I think you have is to be able to extract the wealth – its’ the cornerstone of your economy. But for that you need a very stable economic environment, for investment to come and for selling off of these minerals.
The first thing to do is to really stabilise the economy. To be able to extract the wealth, to be able to provide confidence to the international community, to provide you the funds and FDI [foreign direct investment] that you need for the country to prosper. And to think about what to do with those incomes to make sure that we have income equality so that everyone is benefiting from that. These are the major two issues I think, in the very short term. 

2014 National Naadam Festival’s Total Budget Approved at 2.2 Billion MNT
June 9 ( This year’s National Naadam Festival celebrating the 807th Anniversary of the establishment of the Great Mongol Empire and the 93rd Anniversary of the People's Revolution will be marked through Friday and Sunday on July 11-13, 2014.
Accordingly, at the Cabinet meeting held on Saturday, June 07, it was approved the total budget of celebration at 2.2 billion MNT, whereas 369.9 million MNT (Tugrug) are estimated to be funded from celebration income, 500 million MNT from Capital City budget, 57 million from last year’s income leftover and the rest 1.28 billion MNT from Government reserve fund respectively.
The total expenditure’s 291.2 million MNT or 13.1% will be spent for prizes, 946 million MNT or 42.8% for art, culture and ceremonial measures, 494 million or 22.4% for maintenance and other services, 142.5 million MNT or 6.4% for security and emergency costs, and 333.9 million MNT or 15.1% for Naadam Festival organizational and other expenses.
Budget for Naadam ApprovedMontsame, June 9

E.Bat-Uul Meets with Mayor of Beijing
Ulaanbaatar, June 8 (MONTSAME) The Mayor of Ulaanbaatar city E.Bat-Uul held a meeting Thursday with Chinese Bejing's Mayor Mr Wang Anshun.
Our Mayor thanked his counterpart for the warm welcome and said a developing of the multilateral and mutually beneficial relations and cooperation with China is one of the priorities of Mongolia's foreign policy, "in which the ties between the capitals cities are very important".
He also noted that a wide-range measures are being taken within the Year of Mongolia-China friendly exchange, co-announced by the two governments on occasion of the 65th anniversary of the bilateral diplomatic relations and 20th anniversary of the Friendly Relations and Cooperation Treaty, and expressed a satisfaction with visiting Beijing.
In response, Mr Wang said a capital city of any country serves as the economic, social, educational and cultural center, and emphasized that our cities have all possibilities of contributing to the countries’ development "by exploiting historical advantages". With big experiences in implementing an open policy, Beijing wants to collaborate with Ulaanbaatar in urban development and management, to involve its largest companies in Ulaanbaatar's constructions, to expand the cooperation in trade, economy, culture and educational spheres, Mr Wang said.
The UB Mayor supported all these suggestions and the General Planning for Ulaanbaatar, approved by parliament, reflects a policy on gaining achievements in the collaboration with the neighbour countries in the tourism through implementing a "Friendly Ulaanbaatar" programme. "Ulaanbaatar wants to cooperate with Beijing in co-realizing specific programmes and projects," he added.

B.Bat-Erdene MP Turns 50
Ulaanbaatar, June 8 (MONTSAME) The Speaker of the State Great (parliament) Khural Z.Enkhbold Friday received B.Bat-Erdene MP on his 50th birthday.
The Speaker expressed a respect to him and gave him our traditional silver cup with a khadag (silk scarf).
A former wrestler and 11-time champion of the national wrestling of Mongolia, Mr Bat-Erdene was elected the MP three times from the Mongolian People’s Party (MPP) since 2004, worked as a head of the Standing committee on justice in 2009-2010.
In the 2013' Presidential Election, Bat-Erdene was a candidate from his party, collecting 41.97% of votes.

Standing Committee Head Meets HSF Delegation
Ulaanbaatar, June 8 (MONTSAME) Head of the parliamentary Standing committee on justice Sh.Tuvdendorj Friday received Ms Susanne Luther, a director of the International Cooperation Institute at the Hanns Seidel Foundation (HSF), and Mr Gerhard Tiedemann, the Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany (FRG) to Mongolia.
Tuvdendorj thanked Ms Luther for visiting Mongolia and underlined that the HSF significantly contributed to forming a legal state of Mongolia since the democratic revolution.
The legal reforms have been running here from 2009, and Mongolia intends to introduce the German experiences in laws on crime, on conflicts and on monitoring, "all these are being discussed at parliament".
In response, Ms Luther thanked the Standing committee head for the audience and said she is here to participate in a theory-practice conference titled "Decade of administrative case court". She also wants to get au fait with implementation of the HSF's projects and proammes, she added spoke about the foundation. Until today, it realized some 90 projects in 60 countries focusing on developmental cooperation field under a motto "For democracy and peace", and is paying an attention to helping Mongolia develop its legal state and modern democracy.
Mr Tuvdendorj noted that the visit of Ms Luther is coincided with 10th anniversary of foundation of Mongolia’s administrative court and with 40th anniversary of the Mongolia-Germany diplomatic relations. He hoped that the bilateral collaboration will expand.

“11 11” Center Reports
Ulaanbaatar, June 8 (MONTSAME) The “11 11” center, at the cabinet for reforms, received last week 1,439  proposals, gratitude, complaint and critics from people.
A half of them touched upon social matters, said the PM N.Altankhuyag June 4 during a direct TV broadcast. In overall, he gave answers to 180 people.
Many students and their parents complained about increasing fees of universities and institutes, "they even want us to complete the payments before the end of the academic year of 2013-2014". Schools and kindergartens are taking money from parents to repair buildings, others complained. There were also those who said that a survey was run in an unfair way to nominate people in need of food coupons.
Regarding the city matters, 603 people complained that a temporary cut of hot water exceeded a planned period. 

Forum on Health's Economic and Investment Matters Runs
Ulaanbaatar, June 8 (MONTSAME) The Prime Minister N.Altankhuyag addressed a national forum on economic and investment matters for health sector, which kicked off Saturday in the State House.
Co-organized by the Ministry of Health, Ministry of Economic Development and Mongolian National Chamber of Commerce and Industry (MNCCI), the action gathered policy-makers, international partner organizations, domestic and foreign investors. They have discussed the health sphere's economic and investment situation, legal environment, tendencies, investment needs and opportunities.
A main factor of successfully running the great construction and increasing a productivity is the healthy Mongolian people, the Premier highlighted, "the cabinet intends to renovate technologies for the health sphere and to rule it in harmony of nowadays market relations". According to the latest statistics, the migration from countryside to the UB city declined 60% thanks to recently opened diagnostic centers in 11 provinces, he said.
Mongolians spent 24.7 billion togrog in 2012 for having abroad all medical treatment and diagnosis, "we must keep such big money here by supporting the health sphere's private sector and backing foreign investments," Mr Altankhuyag said.

PM: How 50 Billion are Spent
Ulaanbaatar, June 8 (MONTSAME) About it the PM spoke Friday at plenary meeting of the parliamentary session. 
Seven kinds of work have been done under 47.9 billion out of 50 billion togrogs, which had been placed from the state budget in the PM’s package, he said. Some 1.7 billion went for introducing a system thanks to which drivers are fined without cash now. "350 'hand' computers and printers have been purchased, and appropriate software has been installed".
Almost two billion went to the postal services to make it more adequate and quicker, to introduce GPS-based monitoring system for the post delivery, to install smart post boxes. In addition, 9.7 billion has been spent for building indoor-markets in Khovd, Uvs and Bayan-Olgii aimags, moreover, 5.3 billion has been used for erecting a sports complex and bicycle roads in the national garden park, the Premier said.
Some 5.3 billion has been spent for purchasing equipment and facilities for renewing the Center for Children and Youths and for medical tools and apparatus for the National Center for Mother and Infant. Some 23.6 billion has been exploited for establishing diagnostic centers in 11 aimags, he said.
A providing of the city and all provinces with 120 automatic machines of information and inquiries has not been completed yet due to tender matters, the Premier added.  

Some State-Owned Properties to Be Auctioned
Ulaanbaatar, June 9 (MONTSAME) The cabinet meeting on Saturday approved a list of state-owned real estates to be auctioned.
The decision was made in accordance with the parliamentary resolution on some measures for activating the economy and governmental resolution on measures for transferring into a budgetary-saving regime.
Following the decision, obligations were given to Ch.Ulaan, the Minister of Finance, and to A.Tsogtbaatar, a head of the State Property Committee (SPC), to organize the auction in accordance with related laws and resolutions.

High-Level Business Meeting Expected
Ulaanbaatar, June 9 (MONTSAME) A business summit will take place on June 19-21 in Ulaanbaatar with a participation of international investors and domestic businessmen.
Some 50 foreign banking and investment companies have expressed their aspiration to take part in the summit which will be organized by the Mongolian Economic Forum (MEF) in frames of the 100 days for intensifying the national economy.
The participant investors will get acquainted on the spot with investment-needed projects and great construction. The investors say they are interested in the “Tavan tolgoi” power station, ”Eg River” hydro-power station, railway and other biggest projects.
It is believed that the event will contribute to propagandizing Mongolia at international arena, to deliver real information about new great construction and to form good conditions for establishing investment deals.

Cabinet Meeting Resolutions in Brief: June 07, 2014
June 9 ( The regular Cabinet meeting of the Government was held on June 07, 2014, where over 30 issues were revised and some were approved as the following:
- Under the General Port Administration, "Port Development Center" state-owned enterprise is established and relevant rules were approved. The newly formed Port Development Center will be authorized under Border Port Law and relevant regulations and will be administered by Minister of the Cabinet Office of the Government of Mongolia and Chairman of National Ports Council, Ch.Saikhanbileg and Chairman of the General Port Administration L.Gundalai.
- It was resolved to allocate necessary fund of 17.6 billion MNT from Development Bank for road periodic maintenance and repair work that in urgent need of repair in 2014. These roads are between Ulaanbaatar and Darkhan (Darkhan-Uul), Erdenesant Sum Of Tuv Aimag - Arvaikheer (Uvurkhangai) and Ulaanbaatar - Zuunmod (Tuv Aimag) where Minister of Economic Development N.Batbayar and Minister of Roads and Transportation A.Gansukh are entrusted to finance.
- Minister of Foreign Affairs L.Bold is agreed to sign an intergovernmental agreement between Mongolia and the Republic of Latvia on reciprocal visa free travel for nationals holding Diplomatic and Official passports.
- A draft bill on horse race betting, concepts and its relevant regulations were discussed and agreed to submit for ratification by Minister of Justice Kh.Temuujin and Minister of Culture, Sports and Tourism Ts.Oyungerel.
- Some amendments and settlements made by Multilateral Investment Guarantee Agency dated from November 14, 2010 were agreed to submit to the State Great Khural (Parliament) for approval.
- Some amendments to the Law on Amnesty were included and agreed to submit to the Parliament.
The draft bill cites,
- If a person committed a crime and sentenced to prison for the first time;
- A pregnant woman or a woman having a child under 18 years of age, a man, whose child(s) under direct dependent(s);
- A person, who lost work ability up to 70% or more during the sentenced period and become disabled;
- A man over 60 years of age;
- A woman over 55 years of age;
- A person, who committed a crime before 18 years old and being sentenced;
Will be pardoned from the remaining period of imprisonment and additional conviction(s).
In addition, an imprisoned person, who committed a serious crime will be forgiven by two to three years of imprisonment.
Cabinet Meeting in BriefMontsame, June 9

Proposal on Appointing Sh.Tuvdendorj as Minister Submitted
Ulaanbaatar, June 9 (MONTSAME) The head of the Cabinet Secretariat for Government Ch.Saikhanbileg last Friday submitted to the Speaker Z.Enkhbold a proposal on appointing Sh.Tuvdendorj MP as the Minister of Industry and Agriculture.
Earlier, this proposal has been consulted with the President in accordance with the Constitution of Mongolia and the law on government.
Sh.Tuvdendorj was elected MP in 2012 parliamentary election from the Democratic Party (DP), he has been working as head of the Standing committee on justice.

Latvian President to visit Mongolia
June 9 ( Latvian President Andris Berzins is to make an official visit to Mongolia upon the invitation of the President of Mongolia, Ts.Elbegdorj, between June 11th and 13th.
During the visit to Mongolia, President Berzins will have official talks with President Ts.Elbegdorj.
President Berzins will also meet the Prime Minister of Mongolia, N.Altankhuyag.
During the meeting, the Mongolian-Latvian business forum and a round table meeting of education ministries will be held in Ulaanbaatar.

Mongolian Becomes Asian Champion in Greco-Roman Wrestling
Ulaanbaatar, June 8 (MONTSAME) A wrestler from the “Aldar” sports club P.Erdenebileg won gold medal in the men’s 55 kg contest for Greco-Roman at the Asian Youths Wrestling Championships which ran June 5-8 in the “Buyant-Ukhaa” sports complex here.
The events attracted 230 wrestlers from 14 countries such as Japan, China, South Korea, North Korea, India and Iran.
On the first day of the competitions, P.Erdenebileg won the gold medal by defeating rivals from Kazakhstan, China, North Korea and Iran. Another wrestler, N.Amarsaikhan from the “Khargant-Tsamkhag” club, won a bronze medal in the men’s 66 kg tournament. 

Women’s Team Finishes 1st in Asian Youths Wrestling Championship
Ulaanbaatar, June 8 (MONTSAME) Our national youths’ selected team for wrestling took the 1st place in the free-style wrestling tournament of the Asian Youths Wrestling Championships, which was held June 5-8 in the “Buyant-Ukhaa” sports complex.
The women’s team grabbed one gold, three silver and three bronze medals, collecting 67 points. They are followed by Kazakhstan (63 points), India (60 points) and Japan (57 points).
The gold medal went to A.Battsetseg who competed in women’s 55 kg contest and beat her rivals from Kazakhstan, China and Japan. S.Tserenchimed (women’s 59 kg), B.Nyamgerel (63 kg) and O.Oyungerel (women’s 67 kg) won the silver medals, whereas L.Battogtokh (44 kg), B.Monkhtuya (51 kg) and P.Nomin-Erdene (72 kg) grabbed bronze medals.  

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