State's highest awards presented
December 24 (news.mn) President Ts.Elbegdorj issued a decree and presented public figures who have achieved success in politics, culture, sports, education and agriculture with state awards today, December 24th.
At the ceremony, President Ts.Elbegdorj also awarded Mongolian leaders with the Order of Sukhbaatar, Order of the Red Banner Of Labor Valor, Order of the Red Banner of Military Valor, and the Order of the Polar Star.
President Ts.Elbegdorj congratulated award recipients and addressed the audience:
“Celebrating the 103rd anniversary of the Restoration of National Liberty and Independence Day, these leading figures in their fields, who have exhibited leadership, achievements, and endeavors, have been awarded state awards and titles in the great ceremonial hall with the State's Nine White Banners, the symbol of Mongolian independence and sovereignty.
"These days, Mongolians mark 25 years of historic opportunities to enjoy the values of the freedom to think, create, to be the owner of our own fate, and to unite.
"I am delighted to pay respect to representatives of the thousands of hardworking people who make efforts for the country's development, prosperity and freedom.
"Among these public figures who have been rewarded are veteran dendrologist at the Capital City Governor's Office B.Chimid (State Environmental Merit Figure); 2014 World Judo Champion G.Boldbaatar, 2014 United World Freestyle Wresting World Championship gold medalist S.Tserenchimed, bronze medalist of the 2012 London Olympics S.Nyam-Ochir, and GM of chess B.Munguntuul (State Merit Athlete award recipients); political and social figure, economist Ts.Loohuuz (State Merit Economist); publisher of Open Door Newspaper, journalist B.Ganchimeg, singer Ts.Siilegmaa, freelancer Ai.Tumur-Ochir and head of the Union of Mongolian Artists, singer of Sound of Bell N.Enkhbayr, Gamma Agency photographer S.Tsatsralt, and Editor of Montsame Ts.Surenjav (State Merit Figure recipients); artist of the Mongolian Military Song and Dance Academic Ensemble Ch.Bayarmaa (State Merit Artist); artist of the State Academic Theatre of Opera and Ballet Ts.Munkhbold, khuumii teacher of Mongolian State University of Arts and Culture B.Odsuren, and artist Sh.Choijil (State Cultural Merit Figure recipients); director and doctor of Songdo Hospital B.Boldsaikhan (State Merit Doctor); and obstetrician of the State First Hospital B.Oyungerel (State Merit Health Guardian Doctor).
Mongolia’s Nuclear Energy Agency Closed-Down
December 24 (infomongolia.com) On December 23, 2014, the Ministry of Mining hosted a "Transparent Mining" press conference and during the meeting the following report was presented.
- According to structural changes made in the Ministry of Mining, the Legal Department was dissolved and due to recently issued ordinance to reduce the total number of Government Agencies and its affiliated employees by 15 percent, the existing 74 employees were cut by 15% and now the Ministry of Mining operates with a staff of 66 personnel.
- The Nuclear Energy Agency is closed-down and thus, 8 officers in charge of radioactive minerals were moved to another affiliated organ.
- As of November 2014, Mongolia’s production of copper concentrate compare to November of 2013 increased by 35.7% or 254.5 thousand tons, molybdenum production by 5.6% or 191.3 tons, gold by 25.1% or 2.1 tons, iron ore by 32.8% or 1.8 million tons, fluorspar by 60.8% or 126.0 thousand tons, and crude oil production by 49.1% or 2.3 million barrels respectively.
- As of November 2014, coal export increased by 5.1% or 822.6 thousand tons, gold by 14.1% or 1.0 ton, crude oil by 39.7% or 1.8 barrels and copper concentrate by two-fold or 667.1 thousand tons.
- In the first 11 months of 2014, a total 1 trillion and 75.4 billion MNT (Tugrug) was budgeted into state account from mining industry alone.
- In the first 11 months of 2014, Mongolia imported a total of 1.1 million tons of petroleum, of which 90.8% from Russia, whereas Rosneft supplied 63%. The retail prices for all grades in Mongolia were constant in the past two years and authorities are studying and negotiating to keep stabilized further.
Mongolia banks under pressure
December 24 (oxfordbusinessgroup.com) Banks in Mongolia are facing weaker profits this year as one of Asia's fastest growing economies cools, triggering a downpour of higher borrowing costs and an increase in non-performing loans, while credit rating agencies are watching the banks' vulnerability to China's continued economic slowdown.
Recent downgrades in Mongolia's credit rating following falls in commodity prices have piled more pressure on the banks by increasing their cost of borrowing in overseas markets. The devaluation of the tugrik, which has lost about a quarter of its value against the US dollar since the start of 2013, has also pushed up the price of new foreign currency loans as well as the cost of servicing existing loans.
Despite the gloomy outlook, banks in this mineral-rich country are working to regain some momentum by beefing up their retail operations. The newly appointed prime minister Ch. Saikhanbileg has promised to clear the way for the delayed second stage Oyu Tolgoi mining project, a $5bn investment that would help reinvigorate the economy.
Credit downgrades hit banks
The spate of ratings cuts on Mongolia are cooling the appetite for lending to private-sector banks. Standard and Poor’s (S&P) cut its long term sovereign credit rating from B+ to BB- in April amidst concerns over the health of the economy and dwindling foreign reserves. Moody’s has also flagged its concerns, cutting its assessment of Mongolia’s sovereign standing in mid-July to B2, a ranking which denotes high credit risk and maintained its outlook as negative.
Like S&P, Moody’s cited Mongolia’s strained external liquidity position as well as the government’s expansionary monetary and fiscal policies, including providing liquidity injections to the banking system. It also warned that Mongolia is vulnerable to any further slow down in the Chinese economy and a reduction in raw materials exports, which would add pressure to domestic growth and liquidity.
A third agency, Fitch Ratings, set a negative outlook for Mongolia’s banks, though it noted domestic lenders have a limited direct exposure to the mining sector because their capital levels are not strong enough to advance big loans. However, any prolonged downturn in the mining industry will impact the overall economy and the banks' loan portfolios.
Positive revision to Mongolia's credit outlook is unlikely for now with prices of key commodities coal and copper still weak. Economic growth stood at 7% in the first nine months of the year after the economy expanded by 12.3% in 2013, according to a National Statistical Office (NSO). In October, the World Bank lowered its growth forecast for Mongolia this year to 6.3%, down from the 9.5% it had predicted in July.
As a result of the contracting economy, banks are likely to see the performance of their loan books deteriorate further. Data issued by the NSO in November showed that outstanding loans stood at MNT12.8trn ($6.8bn) at the end of October, up 1.8% or MNT222bn ($118.2m) from the previous month and up 22.4% or MNT2.3trn ($1.2bn), year-on-year, noting that the pace of non-performing loans (NPL) – up 2.7% to MNT606.3bn ($322.8m) month-on month – being added to the banks’ ledgers was quickening.
At the start of the year, Moody’s placed three Mongolian banks, Khan Bank, Trade, Development Bank of Mongolia and XacBank, on negative outlooks, citing risks from rising bad loans, slower economic growth and a deteriorating operating environment.
There is also concern about the cooling of the local property market. House sales in Mongolia are significantly down on last year with apartment sales down to a level five times lower than in 2013 according to some estimates. With banks having extended credit to construction firms and developers, an increase in unsold real estate could drive NPL rates further.
G. Ganbold, CEO of Golomt Bank, said the property slowdown may require banks to adjust their risk exposures in certain areas. “One potential problem area is construction and real estate,” Ganbold told OBG. “We faced a big boom in 2011 and 2012, and now there are many unfinished projects or finished developments that cannot find buyers.”
Hope from Oyu Tolgoi, retail banking
Despite the weakening outlook, Mongolian banks still see potential for expansion in some areas. Khan Bank CEO, Norihiko Kato, sees growth in retail banking, particularly card and ATM services. “On the whole, there are opportunities to be had and while the banking sector may not grow as quickly as it has in the past few years, its expansion will continue to outpace that of the overall economy going forward,” Kato told OBG.
There are also hopes the government will clear some of the logjams that have held up major foreign investment projects, in particular the Rio Tinto project in Oyu Tolgoi, which has the potential to account for a third of GDP when fully up and running. Ch. Saikhanbileg said on being appointed, in mid-November, his main priority in office would be to invigorate the economy.
Onlooker agree it is the most pressing issue that needs to be solved. “If Saikhanbileg does not move quickly to resolve the Oyu Tolgoi impasse and stem the decline in economic growth, investors may choose to stay on the sidelines until after the 2016 elections,” said Marius Toime, a projects partner at international law firm Berwin Leighton Paisner in a Financial Times column.
Best Countries for Business 2014: Mongolia
December 24 (infomongolia.com) American business magazine “Forbes” for the consecutive 9th year released the Best Countries for Business by grading 146 nations of the world.
The 2014 ranking of these states were determined on 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance, where each category was equally weighted.
The data came from published reports from the following organizations: Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, World Bank and World Economic Forum.
The best country for business this year is Denmark, which ranked No. 1 three straight years between 2008 and 2010.
Europe dominates the top 25 with more than 70% of the entries. These countries score well almost across board on trade and personal freedom, as well as innovation and corruption.
The Asia-Pacific region landed five locales on the list with the U.S. and Canada making up the final components of the top 25.
The U.S. ranks No. 18 this year, down four spots from 2013. It is the fifth straight year of declines for the world’s largest economy.
African nations make up 60% of the bottom 10 with high levels of corruption, red tape and taxes registering as major issues.
Guinea, which is at the center of the Ebola breakout, brings up the rear at No. 146.
Mongolia is ranked at the 63rd place for Business with its GDP Growth - 11.8%, GDP/Capita - 5,900 USD, Trade Balance as -32.7% of GDP and with total population of 3.0 million people.Link to article