Thursday, July 10, 2014

Mongolia Brief July 9, 2014 Part I

Mongolia and Kyrgyz Republic Hold Official Talks Chaired by Two Prime Ministers
July 9 ( Prime Minister of the Kyrgyz Republic, Djoomart Kailovich Otorbaev is paying an official visit to Mongolia these days and on the first day of his visit, Premier Dj.Otorbaev held an official meeting with the Prime Minister of Mongolia N.Altankhuyag in the Government House on July 08, 2014.

Following the bilateral talks, the two Government leaders made briefings during the press conference and Premier N.Altankhuyag noted in his statement that the visit of Kyrgyz Prime Minister to Mongolia opens a new page in the mutual partnership history and during the talks Mongolia and Kyrgyzstan agreed to support each other cooperating in the development of parliamentary democracy. Also, parties negotiated to collaborate on the studies of Mongolia’s experience in the civil registration and electoral systems, besides how to bring close civil servants’ service to public. Moreover, sides reached consensus to forward bilateral economic partnership, for instances, opportunities between entities to export Mongolian wool and cashmere products and to import sugar and various fruit products from the Kyrgyz Republic.
In his statement, Prime Minister Dj.Otorbaev said, “Mongolia’s experience gained in developing democracy is helpful in the development of parliamentary democracy of the Kyrgyz Republic and great potential of opportunities to partner are open in economic sector between the two countries, particularly in the spheres of mining, animal husbandry and tourism”.
On the same day, Kyrgyz delegation led by Prime Minister Dj.Otorbaev was received by Speaker of the State Great Khural (Parliament) Z.Enkhbold, where parties discussed on further inter-parliamentary partnership issues and Premier Dj.Otorbaev conveyed greetings of Speaker of the Jogorku Kengesh (Parliament) Asylbek Sharipovich Jeenbekov to his counterpart of Mongolian Parliament.

President meets Ambassador of Canada
Ulaanbaatar, July 9 (MONTSAME) The leader of Mongolia Ts.Elbegdorj Tuesday received Tuesday Mr Gregory Goldhawk, the Ambassador Extraordinary and Plenipotentiary of Canada to Mongolia.
The Ambassador, who has completed his diplomatic mission here and is to return home soon, "made great contribution to deepening of the bilateral relations", stressed the President and thanked him for these deeds and also for efforts to involve Mongolia in a list of countries to receive the official developmental assistance.
Some high-level visits were paid between the two countries last year, for example, the Governor-General David Johnston visited Mongolia, and the Speaker Z.Enkhbold visited Canada, he went on.  Mongolia is focusing on ensuring its economic development and on attracting foreign investments, the President emphasized and said the two countries have all chances to collaborate in investing Mongolia’s rural development, infrastructure and education. Mongolian parliament recently adopted the new laws on minerals and on oil, he noted.
In response, Mr Goldhawk said Mongolia is one of the countries who prioritize the democracy and human rights, and that he had observed intensive development of our economic growth.
Underlining an importance of the bilateral economic ties, especially a partnership of private sectors of our counties, the President wished the Ambassador all the best.  

President Ts.Elbegdorj Meets Prime Minister of Kyrgyz Republic
July 9 ( The President of Mongolia Ts.Elbegdorj received the Prime Minister of the Kyrgyz Republic, Djoomart Otorbaev at the State Affairs Ger Palace on July 08, 2014.
At the beginning of reception, Premier Dj.Otorbaev conveyed sincere greetings of President of the Kyrgyz Republic Almazbek Atambayev to the state head Ts.Elbegdorj and noted that the President Ts.Elbegdorj’s state visit to Bishkek conducted in 2012 is highly valued. Also, Mr. Djoomart Otorbaev conferred an invitation from the President of Kyrgyzstan to President Ts.Elbegdorj to visit the country to attend the World Nomad Games 2014, where participants from Turkey and Central Asian countries will compete in wrestling, horse races and traditional nomadic games that will take place in September 2014.
Prime Minister Djoomart Otorbaev expressed Kyrgyzstan’s interest to learn Mongolia’s model, experiences and principles of democratic transition, market economy, human rights and democratic fair elections. He emphasized that Mongolia and Kyrgyz peoples have many similarities in customs, lifestyle, culture and history and that is why Mongolia’s model of democracy meet Kyrgyzstan’s need. Prime Minister said that there are wide opportunities for two countries to develop cooperation in mining, animal husbandry and tourism sectors. He underlined possibilities for Mongolian entrepreneurs to come to Kyrgyzstan cooperating in agriculture and farming, because of the country’s pleasant climate.
President Ts.Elbegdorj underlined the importance of fair registration of voters and using electronic voting machines during the elections. President said that it is important to exchange representatives, particularly Parliament members between the two countries to sharing mutual experiences.
President briefed about “From a Big Government to a Smart Government” program that has been implementing and in the scope of this initiative, Budget Transparency Law was ratified recently by the Parliament of Mongolia. Moreover, President noted that the Honorary Consulate of Mongolia will be soon opened in Bishkek, Kyrgyzstan. 

FM meets French Assembly member
Ulaanbaatar, July 9 (MONTSAME) Foreign Minister L.Bold met Tuesday with a French delegation led by a member of the National Assembly Mr Jerome Chartier.
Mr Chartier is also a chairman of the France-Mongolia Friendship Group at the National Assembly.
Mr Bold said a frequency of high level political dialogues and talks has increased and the inter-parliamentary cooperation of the two countries has been expanding.
He confirmed again that the President of the National Assembly of France has been invited to Mongolia, "his visit might be paid next year within the semi-centennial of the establishment of Mongolia-France diplomatic relations", and shared views with the guest on the current state of bilateral relations.
He also promised to support Mr Chartier's initiative to set up a "Friends of Mongolia" association.

Speaker meets member of National Assembly of France
Ulaanbaatar, July 9 (MONTSAME) The Chairman of the State Great Khural (parliament) Z.Enkhbold is happy with active political dialogue between Mongolia and France, particularly with boosting of the inter-parliamentary ties and cooperation.
He spoke about this and other matters at a meeting with Mr Jerome Chartier, a member of the National Assembly of France (lower house of parliament) on Tuesday. The Speaker conveyed greetings to Mr Claude Bartolone, the President of the NA of France, and thanked Mr Chartier--a head of the France-Mongolia friendship group at the NA--for 13-year great efforts to widen the relations and cooperation in all sectors and to propagandize Mongolia to French politicians and businessmen.
He said that "Tractebel", an associated company of the "GDF Suez" French multinational electric utility company, is working out a feasibility study of the "Eg River" hydro power station’s project after having been selected as the consulting company, and added that this station will replace imported electricity.
In response, Mr Chartier expressed a satisfaction with meeting with the Speaker again. “Members of the France-Mongolia friendship group are visiting Mongolia for the first time. It is very important for us," he said and introduced to the Speaker functions and goals of the friendship group.
He also said France plans to mount an exhibition about Mongolia in 2016 in Paris to show developmental tendencies of Mongolian ancient and contemporary arts. The 50th anniversary of the Mongolia-France diplomatic relations will be celebrated next year, Mr Chartier noted and said he would like the President of Mongolia to visit France during this jubilee, "France is ready to do all to run this visit".
After this, the leader of Mongolia awarded Mr Chartier the "Polar Star" state Order for his significant contribution to the bilateral social-economic relations.
Present at the meeting were also N.Battsereg, a head of the “Justice” coalition’s faction at parliament and chairman of the Mongolia-France inter-parliamentary group; S.Byambatsogt, a head of the Mongolian People’s Party’s (MPP) faction; Ts.Oyungerel MP, the Minister of Culture, Sport and Tourism; D.Ganbat, a head of the Standing committee on justice; B.Boldbaatar, the secretary of the Parliamentary Office.
Mongolia and France established the diplomatic relations on April 27 of 1965. France opened its Embassy in Mongolia in 1966, whereas Mongolia opened the Embassy in 1969.

Ulaanbaatar to host East Asian Volleyball championship
Ulaanbaatar, July 9 (MONTSAME) Our capital city will host the Asian Eastern Zonal Men’s Volleyball Championship late May in 2015.
The above decision was made during the annual meeting of the Asian Volleyball Federation Eastern Zone Volleyball Association in Hong Kong, China on July 6. Representing Mongolia, the Secretary-General of Mongolia's Volleyball Association Ts.Bat-Enkh attended the meeting after the Asian Eastern Zonal Women's Volleyball championship of 2014. At these events, Japan became first, followed by China. 

Consulate General of Mongolia to be opened in Bishkek
July 9 ( Today the Prime Minister of Kyrgyzstan Dzhoomart Otorbayev participated in an official meeting with his counterpart, Mongolian Prime Minister N.Altankhuyag, in Ulaanbaatar.
During the meeting it was agreed that a Consulate General of Mongolia will be opened in Bishkek.
The Prime Minister of Kyrgyzstan stressed that "the Kyrgyz side enthusiastically accepted the proposal and supported the decision of the Mongolian side about opening of the Consulate General of Mongolia in Bishkek."
Prime Minister Dzhoomart Otorbayev announced that in 2015 Kyrgyzstan scheduled parliamentary elections in the country, and stressed the importance of sharing experience with Mongolia in the reform of the electoral system.
During the discussions, special attention was paid to the issues of trade and economic cooperation between the two countries. In particular, the development of a newly created Business Council between the countries was discussed. Agreements were made in the field of agriculture, animal husbandry, trade and investment, business, industry, mining, transport, construction, tourism, health care, culture and science.
Prime Minister Dzhoomart Otorbayev also noticed that in both Kyrgyzstan and Mongolia the mining industry has an important role in the economy, and expressed his interest in learning from the Mongolian experience.

A Dark Life in Tsagaan Khad
July 9 (Mongolian Economy) In Tsagaan Khad of Khanbogd, Umnugobi are small buildings with their walls built from two-rows of thin metal. Mongolians call this kind of structure a sandwich-building. There are many awkward-looking, thin corridors between these small buildings.
Most are shops or grocery stores. One’s door reads “Chinese Yuan exchange, meat sale and information bureau” – written in both Mongolian and Chinese. On the counters of these grocery stores are packs of Chinese fruits and other goods.
Cars drive through dirt roads littered with trash between buildings, and Chinese people hang around the streets. It was common to see Chinese saleswomen working behind counters. This is the norm for Tsagaan Khad.
There are more than 200 families who reside nearby the mines owned by Energy Resource and Erdenes Tavan Tolgoi. The gers people live in are covered with thick layers of dust. Many signs stand outside of these gers advertising that they sell work gear.
The area has grown rapidly as more people move to Tsagaan Khad. Khanbogd’s governor has renamed the area Khairkhan district. Unfortunately, the district has become very disorganized, with gers haphazardly set down by families moving in.
When asked about the disorganized look of the town, residents said that nobody from Khan Bogd came to help them plan. They were only informed about the waste collection and loading services provided each week, although none of those services had arrived yet. A landfill was established, but it there is still plenty of trash found throughout town.
Tsagan Khad is about 25 kilometres from China’s Gants Mod customs border. The close proximity allows Chinese merchants to buy bones from locals. An unpleasant smell emanates from several homes where old bones are found.
The Lost People
The soil at Tsagaan Khad has been damaged by the heavy coal trucks driving over dirt roads and the livestock pasture has been destroyed.
The dirt roads used by cars and trucks contribute to the degradation of the environment.
According to a study last year by the National Human Rights Commission in Mongolia, 35,250 hectares land on both sides of the 230 kilometre road that links the Tavan Tolgoi mine and Tsagaan Khad have been damaged or destroyed. Another study carried out by the Special Inspection Centre, the National Agency for Meteorology and Environmental Monitoring, and the Central Laboratory of Environmental Monitoring found that the air quality in Tsagaan Khad was 45 times worse than recommendations and that particulate matter was 35 times higher than suggested.
These studies were confirmed by locals who said that their clothes would become filthy within a day and that respiratory disease was spreading among locals due to the high concentration of dust in the air.
Residents said that once a year they go to the provincial capital seeking medical care. Not everyone can afford the trip however, and many said they wished a doctor was available in town.
According to a study by the Ministry of Environment and Green Development in 2012, coal trucks driving through town has had a toll of MNT 5.4 billion in damages on land throughout the province, MNT 20 billion in damages to the soil, MNT 11.1 billion to the flora, MNT 18.7 billion to the fauna, and MNT 2.5 billion to the air – for a grand total of MNT 58.1 billion.
Sh. Delgerbat has been running a small business selling spare parts and building materials in Tsagaan Khad since 1992, when the Gashuun Sukhait customs depot was first established.
“The soil here was good before the beginning of the coal transportation, but now large trucks are coming and going day and night,” he said. “Our business is suffering from the exchange rate because our goods are imported from Gashuun Sukhait customs or the Chinese city of Erlian,”
His goods are more expensive than what’s available in Ulaanbaatar. He said the town’s population can grow to 1,000 people when the mines are operating, but the permanent population is only about 200.
Resource Scarcity
Tsagaan Khad is not connected to the national electricity grid, which is the biggest issue for both temporary and permanent residents of Tsagaan Khad. Some families use a power generator while others use solar panels and small wind turbines imported from China. There are a lot of families who forgo electricity all together. Some people have even opened small businesses to allow people to charge their phones for MNT 1,500 for a full charge.
Some families in Tsagaan Khad sell electricity to their neighbours for MNT 5,000 a day, but not everyone can afford electricity at MNT 150,000 a month.
Over 10,000 people come to Tsagaan Khad each year, but development is still stalled there. There is a huge difference between Mongolia’s Gashuun Sukhait customs port and Tsagaan Khad compared with China’s Gants Mod – where there is almost no air pollution.
Water is also a crucial issue in Tsagaan Khad. The price of water is MNT 30 to MNT 45 per litre compared with MNT 1 a litre in Ulaanbaatar. Most springs nearby lack water and only a few hand-dug wells located 15 to 20 kilometres away are used. Water trucks carry up to five tonnes of water travel between the wells and Tsagaan Khad.
Water is very scarce in Umnugobi, and many believe the mining activity is exacerbating the issue. The groundwater in Tsagaan Khad is brackish – too dirty for drinking straight away. But locals say that they have no other choice but to drink it. Water consumption in the Gobi ranges between 50 and 60 litres a day for one family.
There is a family in Tsagaan Khad who is able to transports six to seven tonnes of water each day. They sell water at MNT 30 a litre compared with others that sell water for up to MNT 45 a litre.
“We transport water from our well, located not far from here. When water demand increases, it requires us to make two to three deliveries a day,” said the truck’s owner D. Nergui.
Although Nergui charges less than his competitors, he can still earn up to MNT 100,000 a day, and even more on weekends.
Tsagaan Khad is an example of how life can really be thrown off the rails by mining activities. With time maybe some of the struggles in living there can be wiped away, but equally as important will be preventing other communities from facing a similar fate.

City Government Bond Issuance is One Step Forward
July 9 (Mongolian Economy) The City Government of Ulaanbaatar has never issued a bond before, despite implementing three bond issue procedures in 2002 and 2003. Yesterday, the Economic Development Department of the City Government renewed a bond issue procedure during the City Council Meeting. According to this law, no more than 15 percent of the city’s budget can be issued into a bond. They created a preliminary projection of MNT 300 billion. 
With the hopeful implementation of this bond, the City Government anticipates to boost the economic growth of Ulaanbaatar. The money from this bond would be given to projects that have the ability to pay back within a short timeframe as well as provide high benefits for the government. Such projects include the Emeelt Complex, Nalaikh and Bagnuur industrial parks, city planning infrastructure, and old apartment renovations. 
Given the current economic situation of Mongolia, the City Government predicts that they will be able to issue the bond early next year. They are presently conducting analysis on the spending of the Chinggis Bond to learn about its successes and failures to better create an effective bond issue procedure.
The procedures are set in place by the Ministry of Finance, the Ministry of Economic Development, Mongol Bank and the Financial Regulatory Commission. These organizations partnered with the World Bank project team to help establish procedures that will meet international standards since the Chinggis Bond and the Samurai Bond face many criticisms. 
The World Bank says that within the money supply program, loans have increased intensively this year and reached the debt limit of Mongolia. This is turn creates a pressing problem for Ulaanbaatar because by reaching the debt limit, the City Government will not be able to issue any bonds in the future. 
According to international standards, the continuation of loan conditions and the duty of local loans and payments can be independent from the government. This is because at the end of the day, the local government can take loans and pay them back with their own income sources. 
In order for the City Government to meet its financial needs, it is important to build up financing in its capital markets in addition to establish its own credit rating settlement. The World Bank says that Mongolia will need to improve its legal environment setting, create a transparent and responsible system of debt management, define its loan capacity and grade the needs of absolute loans. 

Mongolia’s Combating Money Laundering and Terrorist Financing
July 9 (Mongolian Economy) Last month, the Financial Action Task Force (FATF) held its meeting in Paris between June 25 and June 27. This was the third and final Plenary meeting under the presidency of Vladimir Nechaev of the Russian Federation. This group sets the status of countries based on each nation’s legal, regulatory and operational measures for combating terrorist financing and money laundering. 
Mongolia has been seen as a country that has the capability of smoothing out its deficit mistakes as well as being able to effectively combat money laundering issues and terrorist financing issues. The FATF moved Mongolia to a different category as the country’s jurisdictions are no longer subject to the FATF’s on-going global AML/CFT compliance process. Other countries that moved out of the jurisdiction range include Kyrgyzstan, Kenya, Tanzania, and Nepal. 
Since 2011, Mongolia has been under the jurisdiction of the FATF. With its move out of their compliance process, Mongolia is seen as a nation that is improving their reputation in the world stage. These results contribute to the success of Mongolia as other nations can now view Mongolia as a place that is more reliable as well as a country that can be dependable in terms of cooperation. 
Now that Mongolia is taking steps to fight terrorist financing strategies and money laundering strategies, it has now found a place within the Asia/Pacific Group on Money Laundering (APG). 

Here Comes Metropolitan Show
Ulaanbaatar, July 9 (MONTSAME) On the second day of the Naadam festival on July 12, the "Silence White" show will be staged in the National Recreation Park.
It will be organized within the "Friendly Ulaanbaatar" program to become the biggest open air show in Ulaanbaatar with 15 thousand people under a motto of "Peace, Freedom and Unity".
For perfection of sound and light effects, the German engineers have been invited to Mongolia. The program includes musical performances and fashion shows to entertain the audience, mainly the city youth and foreign tourists.
The "Silence White" will be organized under collaboration of the City Culture and Art Authority, National Recreation Park and "Mongol Mix Project" LLC.

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