Thursday, August 14, 2014

Mongolia Brief August 13, 2014 Part II

Average Household Income Rose 9.9%
August 13 (Mongolian Economy) According to the National Statistics Office’s study of the second quarter of 2014, the average household income currently rests at MNT 924.1 thousand.
This represents a growth of 9.9 percent, or an increase of MNT 82.9 thousand. The main reasons contributing to this rise is due to an increase of MNT 70 thousand from wages. The rest comes from an increase in agricultural production.
It is also important to consider expenditure levels. The average household’s spending reached MNT 920.3 thousand. This is an increase of MNT 148.1 thousand, or a 19.2 percent increase. Expenditure levels rose due to a rise in the prices of non-food products, services and other spending areas. This contributes to 25.2 percent of the total. 

Citizens Demanding 14 Times More Land Than Available
By Norma
August 13 (Mongolian Economy) Since August 1st of this year, the government is starting to distribute land from 52 areas for citizens to own. Some of these areas belong to Bayanzurkh district Khoroo #20, Songino Khairkhan district Khoroo #21, Khan-Uul district Khoroo #12 and #13 and Baganuur Khoroo #4. The government plans to have 14,954 new land owners and is taking requests from citizens through online registration at The deadline is August 15th , 2014 at 12:00. So far, the government has received 214,752 requests, representing a demand 14 times higher than land available. 

Ulaanbaatar to Host Northeast Asian Mayors' Forum Themed "Sustainable and Inclusive Cities"
August 13 ( Welcoming the 375th anniversary of the capital city of Mongolia and in the frameworks of “Friendly Ulaanbaatar” program, the Capital City Administration is organizing the Northeast Asian Mayors' Forum themed "Sustainable and Inclusive Cities" in Ulaanbaatar on August 18-19, 2014.
This is the first ever to be organized Forum in Ulaanbaatar upon the initiation of Capital City Mayor E.Bat-Uul, where over 20 Mayors and representatives from municipalities and international organizations will be attending and in the list of participants Deputy Mayor of Beijing, representatives from Tianjin, Hailar, Shenyang and Hohhot cities of China; Vladivostok, Yakutsk, Novosibirsk and Irkutsk cities of Russia; Pyeongchang city of South Korea; Niigata of Japan; Pyongyang, Wonsan, Hamhung and Rason cities of North Korea; as well as officials representing Ulaanbaatar, Darkhan, Erdenet, Chinggis, Baruun-Urt and Choibalsan cities of Mongolia are included.
The Forum will be taking place in “Consensus” Hall of the Ministry of Foreign Affairs and President of Mongolia Ts.Elbegdorj, Foreign Minister L.Bold and Governor of the Capital City and Mayor of Ulaanbaatar E.Bat-Uul will be delivering opening remarks.
The Conference will consist of five parts and will be discussing "Sustainable Development of Cities – Achievement Experiences", Presentation of Summary of the 7th Global Forum on Urban Development themed “Sustainable Development of the Cities", “Urban Management and Service Supply-Technology, Innovation Practice", “Economic Development of Northeast Asian Cities”, and “Urban Environmental Management and Green Development”.
Following the Forum, Northeast Asian Cities’ Mayors will be issuing a joint statement and discussing to organize such event every two years.
Northeastern Asian City Mayors to Visit MongoliaMongolian Economy, August 13

Global Innovation Index 2014: Mongolia
August 13 ( On July 18, 2014, the 7th edition of Global Innovation Index (GII) was launched in Sydney, Australia, which is co-published by Cornell University, INSEAD and the World Intellectual Property Organization.
The core of the GII Report consists of a ranking of world economies’ innovation capabilities and results. Over the last seven years, the GII has established itself as a leading reference on innovation. Understanding in more detail the human aspects behind innovation is essential for the design of policies that help promote economic development and richer innovation-prone environments locally. Recognizing the key role of innovation as a driver of economic growth and prosperity, and the need for a broad horizontal vision of innovation applicable to developed and emerging economies, the GII includes indicators that go beyond the traditional measures of innovation such as the level of research and development.
The Global Innovation Index 2014 covers 143 economies around the world and uses 81 indicators across a range of themes.
As of Mongolia, in the 2014 Report was ranked at 56th place out 143 countries with a score of 37.5 accordingly.
Key indicators for Mongolia
Population - 2.8 millions
GDP - 11.5 USD billions
GDP per capita - PPP$ 5,885.2
Income group - Lower-middle income
Region - South East Asia and Oceania
Global Innovation Index (out of 143) - 37.5 (Score); 56 (Rank)
Institutions - 62.5; 63
Human capital & research - 26.9; 79
Infrastructure - 42.0; 48
Market sophistication - 57.2; 33
Business sophistication - 35.2; 51
Knowledge & technology outputs - 24.2; 89
Creative outputs - 36.4; 54

Parliament demands report on 100-day economic plan
By B. Dulguun
August 13 (UB Post) The official working group of the MPP in the parliament sent an official letter to the Ministry of Economic Development and Mongol Bank regarding the 100-day plan for economic growth implemented by the government. In the letter, five main issues were raised.
The MPP called for information on budget expenditure reports for the implementation of the 100 Day Plan, organizational and regulatory measures implemented within its framework to support businesses, and its outcome. The letter also demanded a list of businesses that took out loans from the state budget without repayment, the remaining debt balance, reasons for payment delays, and countermeasures being taken, as well as data on foreign direct investment inflow and a report on national debt.
The government implementation of the 100 day plan to intensify the economy will end next Monday, August 18. The program was approved on May 9.

International Youth Day stresses mental health
B. Khash-Erdene
August 13 (UB Post) International Youth Day was observed on August 2, with the underlining theme of “Youth and Mental Health”.
“Mongolia has a very young population. Nearly 50 percent of the population is under the age of 25. Then it becomes critical that young people’s issues are freely addressed in government programs, programs that NGOs have, private sector programs and so forth. Mental health is one of those issues that has not yet received good attention, in those respected programs,” Naomi Kitahara, representative for the UN Population Fund, told the UB Post.
International Youth Day was endorsed by the U.N. General Assembly in December 1999, through a recommendation made by the World Conference of Ministers Responsible for Youth in August 1998.
This year’s International Youth Day seeks to raise awareness of negative labels, stigma and discrimination that are often experienced as a result of mental health conditions.
Naomi Kitahara noted that the U.N. will continue to provide support to the Government of Mongolia to address issues faced by young people in Mongolia, and to include a full package of services for youth in government programs, including mental health, reproductive health and gender related issues.

First Korean-Mongolian Economic Forum takes place
By Ch. Khaliun
August 13 (UB Post) The first Mongolia-Korea Economic Forum was organized by the Mongolia-Korea Economic Forum NGO, and the Mongolian side called for creating a stable legal environment for expanding economic ties between the nations. The organizers believe that there is a need to combine Mongolian natural resources with Korean technology, finance and human resources and create cooperation for the future.
Mongolia established diplomatic relations with South Korea 24 years ago, and it has since been one of the nation’s most important third neighbors.  During this time, the two sides have expanded bilateral relations in all sectors. Korea is Mongolia’s fourth main trade partner. The biggest Korean companies are contributing in national development projects. For example, Samsung Group is a contractor in building a new airport and a railway between Tavan Tolgoi and Gashuunsukhait, and Tosko Group is working on building UB’s 5th power station. During the economic forum, both sides agreed that it’s time for Korea to not only be a contractor, but a major investor.
The initiator of the NGO, MP G.Batkhuu said, “We will celebrate the 25th anniversary of diplomatic relations with Korea in 2015. We organized this forum in order to define beneficial bilateral economic relations, exchange the experiences of our entrepreneurs, connect them and draw in investment. In the framework of the official visit by the Chairman of the Parliament and Minister of Foreign Affairs, we organized two major events, one of which was easing visa criteria.”
Minister of Economic Development O.Chuluunbat, Secretary of the Ministry of Foreign Affairs B.Boldbaatar, Executive Director of the National Council of PSD Ch.Khashchuluun, and Head of the Business Group B.Byambasaikhan gave talks on bilateral relations, travel conditions for citizens, the economy and business environment, and expressed their thoughts and proposals.
During the forum a cooperative memorandum was signed between Erdenes Tavan Tolgoi and Delim Corporation. The companies will set an agreement on coal transport. Delim will be responsible for coal transport from Tavan Tolgoi to Tsagaan Khad with Korean double-trailer trucks.
The Executive Director of Delim Corporation, Sang Kee Lee, said, “Last winter we established a cooperative memorandum with the major coal deposit owner Erdenes Tavan Tolgoi, and today we signed a bilateral cooperation agreement. Our company is ranked fifth in marine and land transportation in Korea. Our trucks are equipped with GPS, which means that we are able to control all processes of transportation. We will develop the logistic transport sector in Mongolia. Therefore, we are looking for an opportunity for transportation to China through Mongolia.” He didn’t hide his anxiety about payments from Erdenes Tavan Tolgoi. Delim Corporation was established in 1939, and has over 20 subsidiary companies. According to the agreement on coal transportation with Mongolia, they will pay close attention to human resources, health and education.
Executive Director of Erdenes Tavan Tolgoi Ya.Batsuuri stated, “This forum is aimed to develop minerals and other sectors, provide economic growth, create a pleasant business environment, support investment, find new solutions, and connect entrepreneurs. In our collaboration we are ready to increase the export products of Erdenes Tavan Tolgoi, and simultaneously create projects that can positively influence the environment.
A project using coal methane gas with Korea Gas Corporation was also commissioned during the days of the economic forum. The official opening of gas wells at the Erdenet mine was held yesterday.
Korean investors didn’t hide their fear of unstable conditions in the Mongolian legal environment. The Mongolian side tried to reassure them, stating, “The laws and decisions approved by the parliament and government created pleasant and stable conditions for investors, and according to the current laws, if the case is invested, a stable legal environment will be valid until the deadline of the agreement.”

Nurse Stabbed in Neck on Health Worker Day
By D. Sergelen
August 13 (UB Post) The second Saturday of every August is celebrated as Mongolia’s Health Worker Day, but on Saturday August 9, a nurse of the State Central Third Hospital was stabbed in the neck at the hospital.
The attacker is reportedly criticize G (names redacted), 29, who resides in Songinokhairkhan District. The man was reportedly angry that his mother was not admitted to the hospital on the previous day, August 8, as there weren’t enough room at the hospital.
The Police Department of Bayangol District reported that G stabbed two people at 07:30 on Saturday morning and that he is currently being detained.
On August 8, G allegedly had a loud argument with doctors and nurses, and the police were called to resolve the conflict. The man was shortly released as there were no charges.
On the following day, G stabbed a nurse, E, 24, who worked in the Lung Department, in the neck and another person who attempted to help her.
G attempted to assault another nurse, but was subdued as she was trained in self defense, and shortly after, the police arrived to arrest the attacker.
A patient at the ward who witnessed the attack said that he didn’t expect him to stab the nurse but he saw G walk up the stairs in anger.
The health condition of nurse was unstable as of press time. She was being treated at the National Trauma Orthopedic Research Center.
“This incident shows that there needs to be a reform in the health sector to protect and ensure the safety of medical staff,” commented a patient at the hospital.
Doctors and officials of the hospital did not want to comment on this issue.

NSO Reports on Social and Economic Conditions for First 7 Months of 2014
By B. Mendbayar
August 13 (UB Post) The National Statistical Office of Mongolia released its Social and Economic Report for the first seven months of 2014.
According to its macroeconomic indicators, GDP by production reached 9,856.9 billion MNT at current price and 6,634.8 billion MNT at 2010 constant price in the first half of 2014, up 14.6 percent at current price and 5.3 percent at constant price compared with the same period of the previous year. GDP by expenditure reached 9,429.7 billion MNT at current price and 6,730.7 billion MNT at 2010 constant price in the first half of 2014, up 11.1 percent at current price and 5.1 percent at constant price compared with the same period of the previous year.
According to a report from the Bank of Mongolia, money supply at the end of July 2014 reached 10,081 billion MNT, down by 26 billion MNT or 0.3 percent from the previous month, up 1,992.3 billion MNT, or 24.6 percent, compared with the same period of the previous year.
In the first seven months of 2014, total equilibrated revenue and grants of the General Government Budget amounted to 3,305.2 billion MNT, and total expenditure and net lending of the budget reached 3,466.1 billion MNT, representing a deficit of 160.9 billion MNT in the equilibrated balance of the General Government Budget.
Compared with the same period of the previous year, tax revenue increased 184.3 billion MNT, or 7.0 percent. This increase was mainly due to increases of 59.8 billion MNT (12.8 percent) in social security contributions, of 37.3 billion MNT (3.6 percent) in taxes on goods and services, and 19.5 billion MNT (10.1 percent) in revenue from taxes on foreign trade, although there were decreases of 10.3 billion MNT (1.7 percent) in income taxes, of which 25.9 billion MNT (7.3 percent) came from corporate income tax.
In the first seven months of 2014, total expenditure and net lending of the state budget reached 3,466.1 billion MNT and increased by 280.4 billion MNT, or 8.8 percent, compared with the same period in 2013. This increase was mainly due to increases of 140.3 billion MNT, or 10.9 percent, in expenditure on goods and service, 139.1 billion MNT (12.5 percent) in subsidies and transfers expenditure, and 111.2 billion MNT (89.9 percent) in interest payments, although there were decreases of 61.3 billion MNT (89 percent) in net lending and 48.8 billion MNT (8.3 percent) in capital expenditure.
The national consumer price index in July 2014 rose 0.4 percent from the previous month, 7.2 percent compared with the beginning of the year, and 14.9 percent over the same period of the previous year. The 0.4 percent rise in the national index was mainly due to increases of 2.5 percent in costs for housing, water, electricity and fuels, a 2.0 percent increase in transport, and a 0.4 percent in clothing, footwear and cloth.
The mining of products such as 47 percent molybdenum concentrate, iron ore, 35 percent copper concentrate, fluorspar concentrate, and crude oil increased 2.7 to 53.9 percent in the mining and quarrying sectors.
At the end of July 2014, currency issued in circulation reached 859.6 billion MNT, down by 0.5 billion MNT (0.1 percent) from the previous month and up 27.4 billion MNT (3.3 percent) over the same period of the previous year.
Loans outstanding at the end of July 2014 amounted to 12,225.4 billion MNT, up 76.6 billion MNT (0.6 percent) from the previous month and 3,107.7 billion MNT (34.1 percent) from the same period of the previous year.
Principals in arrears at the end of July 2014 reached 550.1 billion MNT, up 111.9 billion MNT, or 25.5 percent, from the previous month and 388.8 billion MNT, or 3.4 times, from the same period of the previous year.
At the end of July 2014, the non-performing loans over the bank system reached 599.7 billion MNT, up 32.7 billion MNT, or 5.8 percent, from the previous month and 146.8 billion MNT, or 32.4 percent, from the same period of the previous year.
In the first seven months of 2014, 32.9 million shares were traded, valued at 134.7 billion MNT in the stock market.
In the first seven months of 2014, Mongolia traded with 122 countries from all over the world and total external trade turnover reached 6,088.6 million USD, of which 2940.5 million USD was made up by exports and 3,148.1 million USD by imports.
Imports were down by 536.9 million USD, or 14.6 percent, and exports were up 586.8 million USD, or 24.9 percent, compared with the same period of the previous year.
External trade balance showed a deficit of 1.3 billion USD in the first seven months of 2013, while it was in a deficit of 207.6 million USD in the first seven months of 2014, were down by 1.1 billion USD from the same period of the previous year.
The industrial production index in the first seven months of 2014 increased 16.9 percent from the end of the last year, 3.7 percent over the previous month, and decreased 4.1 percent compared with the same period of the previous year.
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