Monday, July 28, 2014

Mongolia Brief July 25, 2014 Part IV



The other side of the coin
July 27 (UB Post) It seems that everyone is now concerned that Mongolia’s economic growth is not going to be as robust as was expected for 2014, and the country’s future prospects look a bit grey.

This is not just because of the great uncertainty about the Mongolian legal environment, which has persisted since 2012. It is also due to declining commodity prices. Mongolia is very dependent upon revenues from commodities such as the precious and base metals and coal it produces.
With the recently lowered GDP growth rate estimates by international organizations, unimpressive FDI inflow statistics for the first half of 2014, a shocking inflation figure of 14.6 percent and an ever-deteriorating exchange rate, Mongolia is not yet a top destination for foreign investors, even though the country is said to be sitting on minerals worth more than one trillion USD.
However, in spite of the negative outlook from various organizations, I personally believe that predictions of doom and gloom for Mongolia are completely unwarranted, and it is due to misinformation and ignorance about Mongolia’s true potential. In fact, in my opinion, now is the best time to invest in Mongolia. Let me explain why.
Whether you agree or not, I believe my opinion is justified by a number of facts. Firstly, the recent announcements about mega project deals with China such as the one billion ton coal supply contract for the next 20 years, a Sinopec memorandum of understanding (MoU) with the Mining Ministry for a coal gasification plant, and an MoU between the Mongolian government and a consortium of GDF Suez, Sojits Corporation, Posco Energy and Newcom Group for the multi-billion dollar development of CHP-5 (Combined Heating and Power Plant) clearly illustrate Mongolia’s business potential and Mongolia’s willingness and intention to become an important player in the world’s business community.
Secondly, it is well known that commodity prices are always volatile, reflecting events and phases of the global economy and regional economic activity. We are now in a boom-bust economic cycle. When there is downward movement, then upward movement follows. Therefore, even though Mongolia’s main export commodities prices are now significantly lower than in previous years, they will definitely revive sooner than predicted. According to statista.com, the GDP growth rate of China, Mongolia’s biggest buyer of commodities, is predicted to be around six to seven percent until 2020. This means there will be a growing appetite and demand for copper, coal and iron ore from Mongolia’s southern neighbor.
Moreover, in addition to Mongolia’s recently passed Investment Law, Investment Funds Law and the ending of the moratorium on issuing exploration licenses, the amendments to the Mineral Law passed by Mongolian parliament on July 1, 2014, shows that foreign investment is definitely being welcomed in Mongolia from all parts of the world.
The above actions taken by the Mongolian government and the current stage of the general economic lifecycle in the country clearly support my take on Mongolia’s economy in the near future. Accordingly, my expectation is that Mongolia will be back on track again and a big economic expansion is about to happen here. In a nutshell, Mongolia’s long term economic prospects look very promising.
So, my question for you now is, when the world’s once fastest growing economy is back at the center of international investors’ attention, how would you, as a foreign investor, like to be positioned to do business in Mongolia?
My suggestion to people, whether they are professional or amateur investors, or even casual adventurers who are looking for business opportunities in Mongolia, is that now is the best time to come to Mongolia and get your slice of cake.
Because some people are taking a relatively conservative and cautious position on economic prospects and the property market, you can find great properties in Ulaanbaatar for very inexpensive prices to sell later for a profit, provided that you have cash available to invest immediately.
Also, since the government has cancelled its previous ill-advised moratoriums on exploration licenses, mining activities will once again commence. Hence, suppliers’ businesses, such as catering, transportation, mining equipment, and service providers for mining companies are sure to benefit greatly. How about investing in one of these enterprises?
If the above business prospects are not what you are interested in, then, you may be interested in investing in more recession-proof industries such as the food industry, information technology and education in Mongolia, which can generate a comfortable level of income for you. In addition, professional services businesses such as accounting and legal services, and insurance and small loan services are likely to show robust growth due to strong incentives for companies to save HR costs and manage their short-term financial needs. These are just a few of the potentially profitable business opportunities in Mongolia existing now.
In addition, I can assure you that if you are an entrepreneurially minded person, then, you will be pleased to know that there are many well educated, well-qualified, energetic, young people in Mongolia who are willing to work for you during this uncertain economic time at a lower rate of pay so they may gain experience. This is a huge plus that compliments the recently revived economic and legal environment in Mongolia, which now, once more, welcomes foreign investment.
In summary, the economic and legal environment Mongolia is good now overall, and it is rapidly improving every day. There are investment opportunities in Mongolia with great potential. Therefore, my final piece of advice is to see the other side of the coin and remember, from time to time, Brian Cohen’s song “Always Look on the Bright Side of Life” from Monty Python’s “Life of Brian”. Take a closer look and see what Mongolia has to offer you!
Zulbayar Badral works for Lehman Bush LLC, a consulting firm which provides business consulting, market intelligence and corporate services. Lehman Bush LLC has affiliate offices in Beijing, Shanghai, Hong Kong and Houston, Texas. For more information, please visit lehmanbush.mn. You can contactB. Zulbayar at Zbadral@lehmanbush.com.

Natural disaster hits Arkhangai Province
July 27 (UB Post) Rainstorm leaves one dead, 11 injured, 100 livestock missing
A powerful rainstorm with high speed winds hit Khashaat soum in Arkhangai Province on Saturday evening, leaving one person dead, nine injured, and about 100 livestock missing. Two of the injured are now hospitalized and in critical condition.
Three vehicles were carried away in the storm’s winds, with one driver killed while still inside, reported Arkhangai Province Emergency Management Agency (APEMA) officials.
The driver was a resident of Ulaanbaatar and driving a 2.5 ton truck with his friend. They parked beside a house to seek shelter from the rain and winds. His friend got out of the truck, but when the driver tried to follow, the truck was hit by the winds and carried away in the storm. The truck fell 300 meters from where it was parked and the driver died on impact.
Four gers and one log house were destroyed and the people inside were injured. Bag (smallest regional administrative unit) officials in Khashaat also reported that the storm carried away about 100 sheep and goats, according to Uransanaa, an operator with APEMA.
APEMA received a storm report at 7:37 p.m., when wind speeds reached 50 meters per second. However, the National Agency for Meteorology, Hydrology and Environmental Monitoring previously forecasted 12 meters per second wind speeds that evening.
APEMA sent one vehicle and a team of ten rescuers to the assist the affected soum’s residents.

Canadian Foreign Minister John Baird concludes his visit
July 27 (UB Post) Foreign Affairs Minister of Canada John Baird returned home on Friday after a two-day visit to Mongolia. Baird paid a visit to the President of Mongolia, Ts.Elbegdorj, on Thursday and spoke about joint efforts to strengthen the effectiveness of Mongolia’s non-governmental organizations. This discussion began at the 7th Ministerial Conference of the Community of Democracies, which Mongolia hosted last year.
The meeting took place shortly after the President of Mongolia came back from his visit to Japan.
Baird and the president also exchanged thoughts on international and regional partnerships and talked about expanding cooperation on state service reform, expanding the student exchange program between Mongolia and Canada, and concluded an investment treaty.
He also met Deputy Speaker of the Parliament M.Enkhbold and Minister of Economic Development N.Batbayar, calling on them to actively participate in carrying out the discussed plans, rather than waiting.
The Canadian Foreign Minister also watched traditional Naadam celebrations and games at Chinggisiin Khuree tourist camp after his meetings, to learn more about the most popular Mongolian holiday.

Mining adds 481.2 billion MNT to the State Budget
July 27 (UB Post) The mining sector accounts for 18.5 percent of Mongolia’s gross domestic product (GDP), 66 percent of its industry, 83.2 percent of overall exports, 17.5 percent of contributions to the state budget and 81 percent of foreign investment. As of the first half of 2014, Mongolia’s mining industry exploited 479,900 tons of copper concentrates, 11.7 million tons of coal, three tons of gold, 159,500 tons of fluorite concentrates, 2.7 million tons of iron ore, 46,800 tons of zinc concentrates, and 3.6 million barrels of petroleum. The production of copper concentrates, iron ore, fluorite concentrates and petroleum increased by 57.4 percent, 17.5 percent, 17.1 and 53.4 percent respectively from figures from the same period of 2013.
Within the first half of 2014, 481.2 billion MNT was added to the State Budget from taxes in the mining sector.
In the first and second financial quarter of 2014, Mongolia’s mining industry exported 9.4 million tons of coal, 583,500 tons of copper concentrates, 1,700 tons of molybdenum concentrate, 2.5 tons of gold, 138,400 tons of fluorspar, 2.6 million tons of iron ore, 45,400 tons of zinc and 3,400 barrels of petroleum. Exports of zinc concentrates and petroleum increased by 34.5 percent and 39.4 percent respectively.
In the same period, gold trade at the Central Bank of Mongolia was about 4.1 tons, up by 65.5 percent from 2.5 tons traded in 2013. This increase is attributed to changes made to the Minerals Law to increase gold trade transparency.
Mongolia plans to produce and export 5.85 million barrels (782,600 tons) of petroleum this year, and has produced 3.6 million barrels (488,000 tons) and exported 3.4 million barrels (458,000 tons) of petroleum as of July 16. This puts completion of the industry’s plans at 58.63 percent.

T.Purevsukh: Musicians take up every possible job to sustain their livelihood
July 27 (UB Post) As part of the 50th Anniversary of the establishment of Mongolia-Swiss diplomatic relations and the 10th Anniversary of the Swiss Development Cooperation (SDC) Agency in Mongolia, the SDC initiated Agula Swiss-Mongolian joint music production in partnership with the Arts Council of Mongolia (ACM). Argabileg ethno-jazz band from Mongolia was selected for the project.
The following is an interview with one of the best young composers of modern Mongolian music and pianist of Arga Bileg band Purevsukh Tyeliman about his work in the joint Mongolia-Swiss music project as well as other issues.
Despite producing music of many genres, including contemporary, classical, rock, ethno, post-pop, and jazz music, composer T.Purevsukh continues to infuse new styles into his compositions.
Arga Bileg band was selected to participate for the Mongolian side in the implementation of the joint Agula Swiss-Mongolian Music Project, and held the first concert earlier in spring. How is the preparation work for the joint album coming along?
For our band and other Mongolian musicians, Agula album is a huge project that will be internationally released with formal intellectual property rights. The album requires sufficient amount of time as we have to work under contracts approved globally. We held our first concert in spring. The most important thing left now is the joint album. It will be ready in autumn. For starters, we’ll be performing the album in Switzerland and other European countries for introductory purposes.
Out of the few ethno bands in Mongolia, Arga Bileg was selected for the project by the Swiss side. Why do you think that your band was chosen?
The SDC in Mongolia initiated a partnership with the ACM for a joint music production. Mongolia has several ethno bands but no ethno jazz bands. Arga Bileg band is producing music with a motive to develop and flourish music of this specific genre. Ethnic jazz is actually widely spread throughout the world. Mongolia can also advance its music to international levels with a new color. Mongolia has theoretical and methodological expertise in combining folk music with classical music. Many great musicians such as Biligjargal, Khangal, Jantsannorov and Sharav have combined and cultivated theories of classical music with folk music. However, our band is trying to infuse folk music with jazz, specifically with classic and modern jazz music.
You worked as a representative composer of Mongolia for Agula Project. The two countries are different in terms of land, culture, traditions and mentality. Was it difficult to partner musicians of the two countries? What kind of a project is the Swiss composer working on? Was he afraid of facing disagreements with Mongolian artists?
All matters related to Mongolian and Swiss musician’s cooperation was handled by the ACM. The council gave me and Swiss composer Heinrich Kaenzig opportunities to exchange compositions, select our favorite two, and rearrange them. Within Agula Project, we’re writing and performing ten songs in total. I composed the remaining three compositions for this project.
In the beginning, I did worry about who’ll come and what would happen. Since we know which music suits which and have done a lot of research, there weren’t many difficulties. Also, many skilled professional people came from Switzerland. They fit in right into our motive to break the standard sound of Mongolia’s traditional music and perform at a different level. For instance, our band tries to approach and spread yatga (zither), which is famous in Asia, to European music trends at our every performance. Experts and the audience always compliment us after concerts on the usage of yatga instrument in classic jazz music.
Lately, Mongolians are approaching professional musicians with a motive to have their children taught music at a young age. Although not all of them will become ballerinas or musicians, this may be the right attitude. Can you comment on this?
I agree. It’ll be useful for future social education if young children can get closer to arts and grow up with artistic acuity. There’s nothing better than having your child mature with education of the arts. This is very useful. I hope there are many places which give musical education to children. In order to contribute to this, I established a fund for supporting musical education and will be organizing a piano competition for young pianists for the third year. In order to give musical education and not just organize competitions, I’m working at my own capacity to organize trainings and distribute books. Instructors have said it’s beneficial for students in music schools.
It’s said that pianists and violinists don’t do household chores because it damages their hands. Is the length of fingers and state of hands really important for playing instruments?
That’s a misunderstanding. Since it’s a hand, it can do everything any other person can do. Some people say that their child’s hands aren’t suitable for playing instruments. It’s never decided that a child can play an instrument depending on their fingers or hands. The most important priority is whether that child has interests to play an instrument.
Are you saying that any child can play instruments regardless of their fingers and hands?
Any child can. Truthfully, children can play better if instruments suitable for their hand size are chosen for them. Professionally, it’s a bit different. The reason that the Music and Dance College enrolls few students is because instructors know what sorts of difficulties a child with big hands will face when playing major professional music pieces straight away.  In other words, instructors calculate whether a child’s hand will become stronger as he or she learns to play required music pieces before graduation. Professionals only tell parents that their child isn’t suitable to play that instrument since they’ll face such difficulties in the future, but they don’t say that the child can’t play instruments. For instance, let’s say that 100 thousand children play the piano in Mongolia. They don’t all have to play major professional music pieces. There are endless amount of music pieces for piano.
Why did you become a pianist? You could have chosen a different instrument.
I didn’t have a choice. Both of my parents are musicians. My father is a violinist and my mother plays the bass violin. I grew up close to music. When I was six, I was accepted into the piano class at the Music and Dance College. Mongolia’s honorary pianist Dorjpagma taught me everything she knew for 12 years. A teacher-in-training at our school advised that I should learn about jazz music and that I should learn independently since there isn’t a course for it in school.
Your hands look very delicate, almost like a child’s. It may be because you play the piano, but do you take part in household chores?
Of course I do.  How could I live without doing any chores? I clean the floor at my workplace (Laughs). I can’t develop muscles or make it stiff too much. It effects how I press on keys. I mustn’t lift extremely heavy objects just because the arms are strong parts of the body.
Aside from being a member of Arga Bileg band, are you associated with any other organizations?
I partner with some music works at On and Off Production. I’ve been working with them for the last four years.
How do you spend your weekends? Or are you too busy to rest on weekends?
There aren’t any weekends anymore for the band. We’re really busy since we’ve got a lot to do. During concert preparation work, it’s common to work all night, without getting any sleep. You can probably count how many weekends I was at home.
The word “busy” seems to have become the latest trend for Mongolians. How often do you use the words busy and no?
Lately, I’ve been using it a lot. Before, I couldn’t say no and accumulated too much workload by accepted every request and favor. My friends used to even advise me to say no sometimes.
What is Mongolian music industry lacking? As a young musician working hard to eliminate weaknesses, is music able to provide you with opportunities to live a content life?
I sustain my livelihood through music. It feels fantastic to do what I aspired for. However, classical and jazz music that I chose isn’t appreciated as much in Mongolia, compared to other countries. Even when classical music performances are free to watch at the Mongolian State Academic Theater of Opera and Ballet, the audience is considerably few. It’s worse for jazz music. I can’t learn to play all the music styles since it’ll require a long time, maybe even longer than my whole life. In order to sustain their livelihood, musicians have to work in many different genres. We musicians take up every possible work that doesn’t deviate from arts.
Source: Unuudur news http://mongolnews.mn/w/53551
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