Wednesday, August 20, 2014

Mongolia Brief August 19, 2014 Part II

Mongolia Takes 9th Place at World Tank Biathlon 2014
August 19 ( On August 16, 2014, the first ever World Tank Biathlon was successfully concluded at the firing range in Alabino near Moscow, where 36 tank crews from 12 countries have participated in this newly introduced global military sporting event.

At the closing ceremony, authorities of participated Defense Ministries and Armed Forces were present and during the meeting with Mongolia’s Defense Minister D.Bat-Erdene, Russia’s Defense Minister Sergey Shoigu (Shoygu) expressed his gratitude to Mongolian representatives and noted the collaboration in defense sector has been broadening between our two countries.
The 2014 Tank Biathlon brought 12 countries including Angola, Armenia, Belarus, China, India, Kazakhstan, Kuwait, Kyrgyzstan, Mongolia, Russia, Serbia and Venezuela, and following the final stage Mongolia stood at the 9th place participating for the first time with its three crews from General Staff of Mongolian Armed Forces, Defense University and Military Unit No. 011, 016 and 327 commanded by Colonel J.Gankhuu.
All international crews were provided with Russia’s T-72B tanks, apart from China which used its own Type-96A model and the championship title went to the Team of Russia followed by Armenia and China crews.
Chief of the Department of Combat Training, Russian Armed Forces, General Ivan Buvaltsev said before the competition in June 2014, Russia provided six-week training for foreign tank crews intending to compete on Russian combat vehicles “just for equal opportunities to all the competitors".
According to the rules of tank biathlon, crews must navigate a distance of up to 20 km evading various obstacles, crossing rivers and bridges and shoot at a set of targets. Tanks that miss a target get a penalty lap. Moreover, observers from over 20 countries watched the event.

Oyu Tolgoi and Mongolia to Tackle Power Issues in South Gobi
By B. Khash-Erdene
August 19 (UB Post) Oyu Tolgoi LLC signed a power sector cooperation agreement (PSCA) with the government for energy supply in the southern region of the country last week.
The agreement lays out a framework for long-term strategic cooperation between the Mongolian government and Oyu Tolgoi to deliver a comprehensive energy plan for the South Gobi region. The main objective of the agreement is an international tender process to identify and select an independent power provider to privately fund, construct, own, and operate a power plant to supply electricity, with Oyu Tolgoi as the primary consumer.
Minister M.Sonompil said, “Successful implementation of the PSCA will add significant domestic power capacity, strengthening Mongolia’s energy supply network. It will also encourage investment and jobs – both during construction and in operation.”
The government said on its website that Oyu Tolgoi will provide support in finding financial backers for the southern region energy project from international banks and financial organizations.
Prime Minister N.Altankhuyag participated in the official signing ceremony at the State House, where Minister of Energy M.Sonompil and Head of the Energy Regulatory Commission S.Otgonbayar, on behalf of the government, and Chairman of the Oyu Tolgoi board G.Batsukh and President and CEO Craig Kinnell, on behalf of Oyu Tolgoi LLC, signed the PSCA.
The agreement was signed amid a tax dispute between the government and Oyu Tolgoi. The Tax Authority of Mongolia made a claim for 130 million USD in unpaid taxes earlier this year, which put a stop to Oyu Tolgoi’s four billion USD underground development phase, which was set to start this year. The parties said that they are still in discussions regarding the issues and hope to reach a solution before the deadline for commitments from underground development financiers.
“The PSCA is a positive development for Oyu Tolgoi. It demonstrates how we and the government can work together to achieve shared objectives-in this case, developing a long-term, economically competitive, and reliable power supply in the South Gobi,” said Jean-Sebastien Jacques, chief executive of Rio Tinto Copper, which owns 66 percent of Oyu Tolgoi through its unit, Turquoise Hill Resources.
Full evaluation of the independent power producer option is expected to take nine to 12 months.

Chinese Ambassador Focuses on Bilateral Relations for President Xi Jinping’s Visit
By Ch. Khaliun
August 19 (UB Post) Udriin Sonin newspaper spoke with Chi-nese Ambassador Extraordinary and Plenipotentiary to Mongolia Wang Xiaolong ahead of the state visit of Chinese President Xi Jinping. Has the date of President Xi Jinping’s visit been officially announced? What will be the duration of the visit?
Though the official date hasn’t been announced, it is tentatively scheduled for the 21st and 22nd of this month. Both sides are discussing it now. The visit of a Chinese President after 11 years has historical importance. Mongolia strongly believes that it will positively influence bilateral trade and economic relations. What expectations does China have about the visit? This visit is important because President Xi Jinping is visiting again after 11 years. This is a climax of significant years of bilateral relations. Sixty-five years have passed since Mongolia and China established diplomatic relations. At the beginning, friendly bilateral relations was the major principle, but in the 21st century, the development of common interests became the drive for bilateral relations. Our countries should develop and our people live happily. Cooperation in trade and economy is important, concurrent with implementing people’s aspirations. Mongolia has rich resources for mining and energy. Mongolia needs China’s huge market, sufficient finances and leading technologies. Both countries are bordering in land, so there are advantages to making logistics and road transportation. China is Mongolia’s major trade partner and investor. Last year the trade cycle reached 6 billion USD and China invested 2.6 billion USD in Mongolia. If we can fully utilize our cooperation, we can multiply the numbers mentioned above in a short period.
Can you give us more details?
Firstly, we should strictly follow the principles of cooperation in mining, energy, infrastructure and finance. Secondly, create a pleasant environment for collaboration and make big progress. The Chinese side will support bilateral cooperation in finance, policy, human resources, and especially on policy for the production of value-added products. We need support from the Mongolian side on the legal environment, policy and social points of view. Thirdly, we need to choose a few projects and implement them in reality. We need the results of economic benefits in a short period and contribute to improving the quality of life for Mongolian people. For instance, build a new railway and decrease the export price of Mongolian mining products. Therefore, we will implement a project on gas and the proper use of Mongolian coal.
Regarding this project, we will firstly provide coal gas to UB, and we hope that we can con-tribute to the quality of life for UB residents and decrease air pollution. What is the major goal of the visit? Both sides declared 2014 to be a friendly exchange year, so it’s a historical year for our countries. During the President’s visit we will organize Chinese cultural days. Chinese-Mongolian relations are developing.
Both heads met twice in international arenas last year. The main goal of President Xi Jinping’s visit is to increase mutual understanding and develop bilateral cooperation. What kind of agreements are expected to be approved during the visit?
In 2011, Mongolia and China established strategic partnership relations. Therefore, during his visit to China, PM N.Altankhuyag approved a plan on long and mid-term strategic partnership to develop bilateral relations. President Xi Jinping will verify certain documents in bilateral cooperation fields. Particularly, there are projects in the education, land, infrastructure, road and trans-port sectors. We hope, that as a result of the visit, we will progress in the banking and financial sector. Mongolia is preparing though for the Chinese President’s visit. How about your preparations? Thanks to the bilateral effort, preparations are successful. We have done around 80 percent of the work. We appreciate that the Mongolian side is organizing things well to meet the security of President Xi Jinping’s visit.

Mongolian Aviation Sector Adapts to International Standards
By D. Sergelen
August 19 (UB Post) Flight distances between airplanes flying across Mongolia are switching to international standards, from 90 km to 30 km, on September 18.
The Civil Aviation Authority of Mongolia spoke with journalists about the upgrade and equipment. In order to implement this change, they have installed new facilities and trained staff, and they are about to install two radio locators soon.
The radio locator is a device that reports the direction and height of airplanes flying over Mongolia.
Before 2013, Mongolian aviation officials supervised airplanes manually by connecting with the flight team and noting their location and altitude. At that time, the distance between airplanes was 150 km.
By installing radio locators, airplanes flying over Mongolia will be counted, one by one. There will be advantages including increased income from flights, 80 to 100 USD per 100 km, and increased airplane travel.
The International Air Transportation Association applauds the change.
Czech Airlines, FedEX global courier delivery services, Philippine Airlines and Israir Airlines now have permission to conduct flights over Mongolia, and two of the companies have started the new flight paths.
Kh.Enkhbaatar, chief of Flight Service at the Civil Aviation Authority of Mongolia stated, “Mongolian airspace is divided into five sectors. Maintaining a distance of 90 km was hard for foreign pilots, because they have to minimize and change their speed. But now they will conduct flights at the same speed.”
Nearly 230 airplanes fly over Mongolia every 24 hours. The longest flight path is from China to Russia, at an altitude of over 1,500 km. There are 15 foreign airspaces in Mongolia including nine belonging to Russia and six belonging to China.

Development Stuck in the Mud: Cause and Solution
By D. Jargalsaikhan
August 19 (UB Post) Every responsible Mongolian today is concerned about the current outlook for the socio-economic development of Mongolia, economic decline, the growing gap between the rich and poor, and increased politicization in our society, and is looking for ways to make changes and fix these problems. The Democratic Party was once given a lot of faith and chosen to clean up politics and deliver the benefits of economic development to every house-hold. However, despite acquiring governing power and holding most senior positions, they have been having dis-agreements internally, which has eventually turned our law enforcement agencies against each other. It is time for us to engage in a broader discussion on exactly what the root causes of these problems are and what steps should be taken by Mongolia to become a democratic, highly developed country.
Development is dependent on political and economic institutions. When the structure of political institutions supports the people in acquiring private property, allows them to take part in the market allocation of resources, and makes sure that they have a say in making laws, development is achieved three times faster and twice as efficiently as development in countries that lack such political institutions (Scully, 1983). It was explained by Australian development specialist Jim Scully, who used data that was collected for 20 years. However, economic institutions function better in developed countries and they promote economic growth more in the long term than political institutions do, as cited in “Why Nations Fail: The origin of power, prosperity, and poverty” by Daron Acemoglu and James Robinson.
The Economic Research Institute (ERI) compared the national development policy and planning of Mongolia to those of countries with similar pro-files (Chile and Botswana), and produced a study that cross-examined the findings of the above-mentioned scholars. ERI defined institution as “a concept that leverages interaction between all social agents while acting as a norm that regulates those interactions.” Political institutions provide representation for the public by making and implementing laws, developing policies for the socio-economic system, and using other channels. For example, political institutions can include political parties, labor unions, and judicial organizations. In other words, these institutions are in the form of an acknowledged structure that is based on rules and principles of the right to choose, government responsibility, and account-ability.
In Mongolia’s case, political parties, which are the only institutions that can obtain ruling power by winning an election, still have not been able to develop and grow stronger as an institution. This is the most important knot in the tangled rope of our economic development. In-stead of planning the socio-economic development of Mongolia for the mid and long term, our political parties are instead working only short-term during election cycles.
Based on the experiences of countries that have successfully developed their economies, the ERI research suggests that one of the basic conditions for development is the consistency and stability of political and socio-economic policies regardless of the change in political parties. Those countries successfully established independent units (economic institutions) to develop mid and long-term socio-economic policies, and monitor and assess their implementation. They made sure that the economic institutions functioned well and were managed fairly in a democratic manner.
The secret to the political parties that have ruled those countries one after another being able to unite their people under patriotism, is that those political parties had a strong sense of ethical responsibilities and produced true leaders. One political party has mostly had ruling power and another has had it on two occasions for the 20 years since Mongolia’s democratic revolution. Mongolia has been upholding the new constitution and held several elections in those 20 years. However, neither of these two political parties has been able to develop and grow stronger as an institution, which is why Mongolia’s economic development is stuck in the mud today. It has also become hard to talk about the ethics of our two large political parties. Despite having worked in the most senior positions in the government, the former leader of one of those political parties was sent to jail in a corruption case.
The leader of the other political party, which currently has the ruling power, also finds his family members and loyal executives being investigated due to allegations of similar offences. Political party leaders have the responsibility to build and strengthen the capacity of political institutions. However, the main reason why these leaders are lacking true leadership is that political parties keep their sources of funding secret and have deviated from their primary responsibilities. Instead of acting as a bridge connecting ordinary citizens to the government, political parties are following orders from those who have made donations, making laws that favor the donors, exempting them from taxes, and protecting the business interests of certain people. Political party leaders today are trying to retain their power at all costs, while putting aside the interests of their party members as well as the rest of society. The Democratic Party, which currently has ruling power, stated in their charter that their National Consultative Committee meeting will be held no less than twice every year. However, it has been two years since they “completely forgot” about their commitment. Currently, there is a struggle going on in the upper echelon of the Democratic Party about the “fair allocation of power” to those factions that have made different “donations” from varying sources. In order to maintain their power, they established new ministries, created dozens of new positions, and added thou-sands of new employees. It increased the expenditures of the government, expanded the amount of debt, weakened the tugrug, increased the inflation rate, and created the next economic shock.
The Democratic Party is trying to avoid producing their financial reports and refuses to reveal their sources of funding to ordinary citizens. But their leaders are declaring that they will make the financing of the government trans-parent and “make their wallets glass”. It is a play that is not only ludicrous, but also deceptive. The solution that will unlock the development of Mongolia is to bring about transparency and reveal political party financing. Unless every political party produces their financial reports truth-fully and have the reports reviewed by an independent auditing firm, the chain of corruption will never be broken. Political parties must at least make their activities transparent to their members and become an institution that does what it says. This way, we can establish capable economic institutions that can function efficiently. When that happens, Mongolia’s socio-economic development will be freed from the mud and shift to the next stage.

Stock exchange news for August 19
By B. Khuder
Ulaanbaatar, August 19 (MONTSAME) At the Stock Exchange trades held Tuesday, a total of 28 thousand and 511 shares of 17 JSCs were traded costing MNT 22 million 307 thousand and 486.00.
"Olloo” /10 thousand units/, "Genco tour bureau” /6,860 units/, "Silikat” /5,000 units/, "Hermes center” /1,520 units/ and "Mongolia Development” /1,000 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Mon-it buligaar” (MNT six million and 965 thousand), "Tavantolgoi” (MNT two million and 803 thousand), "APU” (MNT two million 748 thousand and 010), "Material impex” (MNT two million and 310 thousand) and "Olloo” (MNT one million and 200 thousand).
The total market capitalization was set at MNT one trillion 599 billion 445 million 455 thousand and 847. The Index of Top-20 JSCs was 15,932.25, decreasing by MNT 118.08 or 0.74% against the previous day.

FISU Steering Committee to meet in Ulaanbaatar
By B. Khuder
Ulaanbaatar, August 19 (MONTSAME) A regular meeting of the International University Sports Federation’s (FISU) Steering Committee will run on August 26-28 in Ulaanbaatar.
This meeting is expected to attract Claude-Louis Gallien, the FISU president; O.Matytsin, the first deputy president of the FISU; S.Berg and L.Kabral, the FISU deputy presidents; and other high-level officials.
The FISU is responsible for the organization and governance of worldwide competitions for student-athletes between the ages of 17 and 28. It was founded in 1949 as the world governing body of national university sports organizations and currently has 167 member associations (national federations) from five continents.
Mongolia is represented at the FISU by Mongolia’s University Sports Federation (MUSF). A Mongolian D.Bayasgalan was elected the member of the FISU Executive Committee in 2003, and was also elected the member of the FISU Steering Committee or the FISU’s General Financer in 2007.
Mongolian students have been competing in every Universiade since 1965, and have taken part in 18 Summer and 11 Winter Universiades and other university world championships in 5-10 sport events.
The national university team of Mongolia has nine gold, three silver and 23 bronze medals from the Universiades, and 21 gold, 10 silver and 59 bronze medals from world championships.

D.Boldbaatar IMS wins Rally Mongolia
By B. Khuder
Ulaanbaatar, August 19 (MONTSAME) An international master of sports D.Boldbaatar has won a gold medal in the motorcycle race of the Rally Mongolia international off-road race which took place August 10-17 here. 
With main categories of motorcycles and vehicles, the 4,000 km races ran in a route Ulaanbaatar, Dundgobi, Gobisumber, Tsogt-Ovoo, Elsen tasarkhai, Khongor, Ondor shireet and Erdenesant.
It was also participated by women racers such as Kh.Otgontuya, Ch.Battsetseg and G.Battsetseg from a club of Mongolian female motorcyclists, and by   Undral from “Eco motor sport” club.
The winner D.Boldbaatar is one of the experienced racers of Mongolia, he has competed in the Dakar Rally twice, representing his country. Apart from him, Yu.Erdenetomor won in the vehicle race, a Japanese Sugawara Teruhito became first in the truck race, and U.Vanchinkhuu--in 4x4 car race.
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