Friday, July 25, 2014

Mongolia Brief July 24, 2014 Part II

Ger area around Gandan Monastery connects to central lines
July 24 (UB Post) A total of 31 households in Orkhon Street no.6 in Gandan Monastery neighborhood have been successfully connected to state central lines for water and sanitary pipelines, heating and other engineering infrastructure in the past two months.
Official opening of the street is scheduled to take place today at 12 a.m.
New Urbanism LLC completed the design and Ikh Zam Buteen Baiguulalt LLC constructed the project, as part of the government’s Street Project.
Fences of each household in the street have been replaced to match and the street has been fully paved.
Some 30 other streets in the neighborhood will be renovated and connected to the central lines in the near future in the same manner, said officials.

The pace of Mongolia’s economic growth to slow
July 24 (UB Post) The World Bank Group has lowered its previous forecast of Mongolia’s economic growth from double-digits to 9.5 percent, coinciding with an April forecast by the Asian Development Bank which predicted a growth rate of 9.5 percent. Two international financial organizations that actively operate in Mongolia have now predicted that Mongolia’s economic growth will decelerate.
However, also in April, analysts at the International Monetary Fund forecasted economic growth at 12.9 percent. Nevertheless, the Government of Mongolia has a much more positive outlook. In a 2014 economic projection, the government estimated Gross Domestic Product (GDP) growth of 14.7 percent.
This year’s economic environment and opportunities are evidently weaker than those of previous years. Hence, economic growth may not reach the expected 14 percent. In addition, analysts keep warning that Mongolia’s economic growth will slow down considerably, so forecasts of the World Bank and Asian Development Bank are likely to be accurate.
China’s economy significantly impacts the growth of Mongolia’s GDP, for China accounts for 90 percent of Mongolia’s exports and 50 percent of imports. Published by Mongolian Financial Market Association, Purple Book Magazine said that China’s economy will grow by 7.5 percent in 2014. Not only Purple Book but also many financial organizations, reports and analysts forecast China’s economic growth at between 7.5 to 7.7 percent. Even the Government of China itself announced the same estimate. Generally, our economy grows at a higher rate than our southern neighbor’s, so Mongolia’s economy will not abruptly decelerate if China’s economy grows by about seven percent.
Mongolbank identified two factors as causes of economic growth deceleration, namely the decrease of foreign direct investment and the decrease of mineral product prices in international markets.
Chief Economist of Mongolbank S.Bold once said, “Mongolia’s economic growth won’t fall from double-digit growth if Mongolia earns 5 billion USD from mineral sales and 5 billion USD from direct foreign investment.” However, as of the first five months of 2014, Mongolia has attracted 402.3 million USD in direct foreign investment. Income from mineral exports decreased as well due to mineral price decreases in the international market, although the amount of mineral exports increased by 25 percent. As you can see, the amount of foreign direct investment sharply fell below the “threshold” stated by the chief economist of Mongolbank. In other words, we don’t have enough “fuel” to maintain the pace of economic growth. The Government for Change took some futile measures to increase foreign investment. Authorities submitted a draft bill to make amendments to the Budget Sustainability Law, to increase the limit of external debt to 70 percent of GDP, but couldn’t get it approved. Had the draft bill passed, the Government could raise 3 billion USD.
Unofficial sources claim that Mongolia and China will sign agreements of several billion USD during the visit of Xi Jinping, the President of China, in August. Nevertheless, it’s known that the two countries will carry out a 30 billion USD coal gasification project. The upcoming visit of the President of China might change the course of Mongolia’s economic growth. But currently, Mongolia’s economic growth is likely to decelerate and slip into the single-digits.

Number of foreign visitors in Mongolia declines
July 24 (UB Post) The National Statistical Office (NSO) reports that Mongolia received 154,533 foreign visitors in the first half of this year, which is a decrease of 8.5 percent from last year’s data. However, the number of visitors from North Korea, the Russian Federation, Poland, and Taiwan are up 0.6 to 8.8 percent. In a World Economic Forum study that shows tourism competitiveness around the world, Mongolia ranked 99 out of 140 countries, and 19th in Asia out of 25 countries.
In the first half of this year, 936,000,000 citizens and foreigners crossed the Mongolian border. More than 44 percent crossed the Zamiin-Uudborder port by rail and automobile, and 17.7 percent crossed the Buyant-Ukhaa port by airplane. The number of people who crossed the border is down 2.1 percent, compared to 2011.
Before Naadam, State Secretary of the Ministry of Culture, Sport and TourismP.Altangerel said, “We are actualizing new policy in the tourism sector. Thanks to this policy, the number of tourists to Mongolia will reach one million by 2017.”
The results of the NSO study shows that, on average, a foreign visitor who comes to Mongolia spends 170,000 to 190,000 MNT, around 100 USD a day.
To attract more tourists, Mongolia needs better quality roads, renovate its entertainment centers and cultural exhibits, facilitate visa-free travel and more. Mongolia is the land of dinosaurs and has a rich history, but tourism is still being poorly developed. Experts say that the main reasons for the slow development of tourism are an inhospitable nation and bad infrastructure.
Some visitors to Mongolia point out that there are many nationalists in Mongolia, and some foreigners feel threatened. “If you face that kind of problem, no one will help you,” said one visitor.
The tourism industry generates 1.8 trillion USD worldwide. Every year Mongolia makes 200 to 300 million USD from tourism, which is significantly less than other countries.
Source: Unuudur

Mongolia issues 2.36 trillion MNT in housing loans
July 24 (UB Post) This week the Central Bank of Mongolia released a May 2014 report on the annual eight percent interest housing loan issued by the government through commercial banks.
The report said that in May 2014, a total of 112.3 billion MNT was issued to 2,084 borrowers through the housing loan program. The bank said that total outstanding mortgage loans reached 2.36 trillion MNT and the total number of borrowers reached 57,579.
The eight percent housing loan program was initiated by Prime Minister N.Altankhuyag in an effort to stabilize housing prices and provide affordable housing to ger district residents to reduce air pollution caused by coal burning stoves in ger area.
Over 60 percent of Ulaanbaatar’s 1.3 million resident live in ger districts and use coal stoves for home heating in the winter and for cooking year round. Air pollution caused largely by coal burning is estimated to be responsible for over one in four deaths in Ulaanbaatar.
“The growth rate of total outstanding mortgage loans has accelerated since June 2013, as the government launched the Housing Mortgage Program with an interest rate of eight percent per annum. Year-on-year growth of total mortgage loans outstanding increased by 1.6 percent from the previous month, 10.4 percent from the beginning of year, and 103.9 percent compared to the same period of the previous year,” the Central Bank said.
Of the outstanding mortgage loans, 68.4 percent (1.61 trillion MNT) was issued by the Housing Mortgage Program, including refinanced mortgage loans with reduced interest rates of eight percent per annum, 28.5 percent (674.5 billion MNT) was financed by commercial bank capital, and 3.1 percent (72.8 billion MNT) was issued from other sources, reported the bank.
By the end of May 2014, domestic currency mortgage loans made up to 97.4 percent of total outstanding mortgage loans. The comparative share of past due, in arrears, and non-performing loans in total outstanding mortgage loans is stable.
The report added that by the end of May 2014, the share of non-performing loans in total outstanding mortgage loans was 0.4 percent.
Mortgage loans issued in May 2014
The Central Bank report said that mortgage loans issued in May 2014 increased by 0.6 percent since April, and 80.7 percent since 2013.
Some 82.3 billion MNT, which made up 73.2 percent of mortgage loans issued in the reporting month, was issued by the Housing Mortgage Program at an interest rate of eight percent per annum.
Since the midterm of 2010, the amount of issued loans per borrower has increased steadily and reached 53.9 million MNT by the end of May 2014, the report said.
In May, 28.2 billion MNT in mortgage loans was repaid, that is 54.2 percent more compared to the corresponding period of the previous year.
Number of borrowers
The report said that in May, mortgage loans were issued to 1,395 borrowers, and mortgage loans from commercial bank capital were issued to 688 borrowers. By the end of May 2014, the total number of borrowers reached 57,579.
Terms and interest rates of mortgage loans
The terms of mortgage loans issued in the reporting month ranged between 0.5 to 20 years and had a weighted average term of 15.8 years, the Central Bank reported. The weighted average term of total outstanding mortgage loans was 14.9 years.
The weighted average interest rate of issued mortgage loans stood at 10 percent. The weighted average interest rate of mortgage loans issued in the reporting month by commercial banks own capital in domestic currency was 15.6 percent, while the foreign currency average was 8.7 percent per annum.

D.Battsogt: Faction leaders negotiate among themselves and impose decisions on members
July 24 (UB Post) The following is an interview with MP and the Chairman of Parliamentary Standing Committee on Social Policy, Education, Culture and Science D.Battsogt, highlighting important aspects of the 2014 Spring Parliamentary Session and future plans of the Standing Committee on Social Policy, Education, Culture and Science.
During the closing of the 2014 Spring Session, you said some harsh words to leaders of parties and coalition groups in Parliament. Were issues of the Standing Committee on Social Policy, Education, Culture and Science listed in the agenda for the 2014 Autumn Session?
I only told them that there shouldn’t be cases of approving laws through negotiations between party and coalition leaders. If thing are done in this manner, what’s the point of having 76 members in Parliament? Laws to be discussed in the following sessions have become dependent on [faction] leaders’ perspectives. For example, our standing committee submitted over ten legal drafts but only two were scheduled to be discussed in the Autumn Session.
Important social issues should be tied to the economy and money. Laws related to them are being postponed. For instance, it was possible to approve government policy documents for medicine and medical equipment.
In the meeting of the Standing Committee on Social Policy, Education, Culture and Science, we had finished the final discussion for the above legal draft and prepared it for approval. It only takes few minutes to discuss and approve it during the session. However, this draft was left out due to pre-negotiated legal drafts and provisions of faction leaders. If it was approved, it would have been put into effect at this moment.
How do you assess the outcome of the Spring Session?
I think many issues were covered during the Spring Session. It was a busy period of time with overload of issues to be discussed and position related disputes. Concurrent to economic difficult conditions and state budget revenue, there were many other problems.
Parliament approved many issues that weren’t planned within the boundary. For instance, issues concerning minerals and economy within the framework of the 100 day plan for intensifying the economy. From this aspect, the Spring Session was effective. Nonetheless, there were also many time-consuming things.
The “Double Deel” bill was able to come to the final stage for approval after a half a year of discussion. Majority of the MPs are also in the government.
There are criticisms saying that the government has become more powerful than Parliament. It’s unfortunate that this sort of issue was talked so much and then disposed of without any results. A considerable amount of time was wasted on matters related to positions of ministers.
This sort of issue should be discussed within a week and if the respective minister is to be dismissed, dismiss him or her. If not, then forget about it. Due to prolonging and breaks for many issues, it wasn’t resolved. It’s a fact that laws and provisions that would have been approved were deferred.
To conclude, the outcome of the Spring Session was average. Besides accomplishing many things, there were equal amount of questionable issues.
People are suspicious that MPs approved important laws during the last few weeks regarding issues of public interest of dismissal and appointment of ministers. Can you comment on this?
I agree that it that the case was resolved as stated above. It was a session with strong politicization, party interests, and split groups. Everyone will agree that laws were rushed and approved hastily on the last day of the session.
If Parliament started discussing a law, until the approval, everything should be decided in detail. MPs should be deciding things based on their own opinion. However,  all of this is now decided through agreements between parties. This is wrong. It shouldn’t be like this.
I hope these mistakes are fixed in the following sessions. It’s very unfortunate that MPs are giving more credit to dismissal and appointment issues of other people instead of issues in front of them that are the legal drafts being processed for approval.
What kind of laws did the Standing Committee on Social Policy, Education, Culture and Science submit? How effective was the work?
Our standing committee had a lot of workload. We finalized the Law on Protection of Cultural Heritage and submitted the finalized Health Insurance Law for approval.
We worked very hard on government policy documents for education and organized discussion sessions. Outside of school, teachers are able to meet their students for discussions. We’re doing our best to develop laws that will benefit our lives when adopted.
Although we prepared government policy documents for medicines and medical equipment, it unfortunately didn’t receive approval. It’ll probably be approved in the Autumn Session. We also finished discussions for the Joint Pension Law.
We did a large discussion for the Domestic Violence Law and Pension Reform laws. For these reasons, I think the Standing Committee on Social Policy, Education, Culture and Science is working considerably well.
That’s why there isn’t any politicization or disunity during standing committee meetings.
What are you expecting to happen if the government policy documents on medicine and medical equipment is approved?
Chaotic drug trade and prices will be supervised and controlled. Activities of Medicine and Drug Administration will be improved. Unfortunately, party leaders approached this issue in their own views so it was postponed.
Did you resign from your faction, the Justice Coalition, due to these sorts of issues?
There were many aspects where I disagreed with the faction leader. In my opinion, there shouldn’t be cases of faction leaders negotiating among themselves and then imposing them on faction members.
If leaders start to make decisions for others and force them to follow, there’ll be no one to represent the people of Mongolia. In my case, I don’t want to follow someone’s orders or get compressed in a policy box but be a representative of my voters.
Does it make a difference when you don’t have a faction?
At the moment, I haven’t faced difficulties as an independent member without a faction. Instead of being associated with a faction and compressed in a box, being the chairman of a standing committee is much easier.
I don’t discriminate members based on their party. This side of me is better for members. Due to this, the operations of our standing committee is more progressive and less argumentative.
When you announced that you were withdrawing, there was a presumption that you’ll be giving up your position at the standing committee. Do you have any comments on this notion?
I’m ready to give up my position as the chairman of the standing committee if the faction decides that they’ll change the chairman as it was given to me under the Justice Coalition’s campaign. On the other side, faction members want me to do my work until my term ends.
In the Autumn Session, what kind of issues will the Standing Committee on Social Policy, Education, Culture and Science discuss?
Our standing committee has discussed and transferred many issues for final discussions. For instance, there are government policies for science and education sectors.
Following the government policy documents for the education sector, there will be significant amount of changes in the Education Law. We’ll also be submitting several legal drafts, including drafts on the Health Law, Social Insurance Law and Pension Law.
Generally, the standing committee’s workload during Autumn Session will be heavy. In the culture sector, we submitted the Library Law and we’ll renew the government policy on arts and culture. The standing committee will start a large discussion session for cinematography.
Mongolian government needs to focus on cinematography. Foreign films are coming into Mongolia in large quantities. TV Series which distorts Mongolian history are being screened. Through these films and series, foreign countries are implementing their cultural policies.
Mongolia on the other hand, is lacking in this aspect. Therefore, in the meeting, we discussed how much demand-supply for a series there is in Mongolia. We gave advice to the government underlining the need for parliamentary support on this. It’s also crucial to start installing funds in the state budget for cinematography.
It’s said that the number of young men doing military service increased after the Mongolian series “Special Force”. In this sort of manner, cinematography needs to be developed. Furthermore, labor policy will be introduced. Like so, our standing committee has a lot to do.

Mongolian Steppe International Marathon takes place at Tuv Province
July 24 (UB Post) The 18th Mongolian Steppe International Marathon was held on July 20 in Tuv Province.
Over 550 athletes competed in this year’s marathon from Japan, China, Russia, South Korea and other countries. Approximately 60 athletes were from Japan. In addition, specialized soldiers of the Mongolian Military Force participated in this year’s competition.
Traditionally, athletes run in distances of three, five, 10 and 21 km races. Winners of the 21 km race were awarded with a race bred colt.
International Sports Master Ts.Byambajav won the men’s 21 km and Sports Master B.Munkhzaya won the women’s 21 km category.
Athletes who won the 10 and 21 km categories were also awarded rights to participate in the 17th Asian Games which will be held from September 19 until October 4 in Incheon, South Korea.

Prague Zoo Park builds Mongolian ger for Wild Horse Day
July 24 (UB Post) The Zoo Park of Prague of the Czech Republic organized a Wild Horse Day on July 20. During the event, a Mongolian ger was set up near the Przewalski horse fence. Mongolian singers that live in Czech performed a concert, an archery contest was held and an exhibition showing Mongolian life, culture and tradition was unveiled.
The event was partially aimed at promoting Mongolian culture and customs to visitors.
The Zoo’s workers, delegates of the Ministry of Nature, Environment, and Green Developments of Mongolia and Przewalski horse project of Gobi-Altai Province, and Mongolian ambassador to the Czech Republic attended in the event.
Miroslav Bobek, director of the Zoo emphasized that three wild horses were delivered to Mongolia’s Shar Mountain, and B.Baasansuren, advisor of the embassy to the Czech Republic expressed his appreciation to the officials that are contributing to the protection of Przewalski horses.
The Zoo has been sending three to four wild horses to Mongolia every year in the past four years to protect wild horses.
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