Sunday, December 21, 2014

Mongolia Brief November 17, 2014

President Meets Participants of “New Leader in Politics”
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) The President Ts.Elbegdorj met with the participants of the target project “New Leader in Politics” on November 14 to answer their questions in the UBS TV's live show.

During the show which lasted 100 minutes, he highlighted his view on the principles of a politician, essence of the democracy, Mongolian current social situation, issues of new Prime Minister, cabinet members, anti-corruption actions and many other topics. 
The President said:"You must bring new culture to the Mongolian politics. Mongolia is facing a new problem called politics. It is important to choose the right path. We do not help young people choose their path to get into politics. You do not need to be a leader only in politics. You can be the best leader in your family and/or work", reports press and communications division of the presidential office.

US Lawyer Pays Visit
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) A US lawyer for the Rights of the Disabled Mr John Wodatch paid a visit to Mongolia on November 12-14 to give consultations on a development of a draft law concerning the rights of the people with disabilities.
He came here at invitation of the Minister of Population Development and Social Welfare S.Erdene and the US Ambassador Ms Campbell. Mr Wodatch met with members and legal consultants of a working group that is developing the draft new version of the law on social care for the people with disabilities to give recommendations, to discuss an associated law of the USA, and to exchange opinions. After this, he met with the Vice minister of Population Development and Social Welfare and representatives of NGOs that work for  protecting interests of the disabled.

Two companies approved for Mongolian meat export to Russia
November 16 ( Mongolia and Russia reached an agreement to export 10,000 tons of meat to Russia during Russian President Vladimir Putin's visit to Mongolia in September.
Following a preliminary agreement on meat export, specialists from Russia's veterinary control agency arrived in Mongolia and visited 12 meat processing factories in Mongolia.
The Ministry of Industry and Agriculture Mongolia reported that two companies, Erdmiit and Prekom, were granted permission to export meat to Russia from their meat processing factories in Mongolia. There were 10 companies that were considered for meat exports.
Russia believes that Mongolian beef could replace meat exports from Latin America with more convenient logistic terms, and Mongolian producers will aim to achieve exports of 100,000-110,000 tons.
Two Companies to Export Meat to RussiaMontsame, November 16

Stock Exchange Weekly
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) Five stock trades were held at Mongolia's Stock Exchange on November 10-14 of 2014. In overall, 262 thousand 466 shares were sold of 35 joint-stock companies totaling 351 million 917 thousand 786.50 Togog.
"Khongon Beton” /77 thousand 148 units/, "HBOil” /74 thousand 140 units/, "Hermes Center” /30 thousand 877 units/, "Genco Tour Bureau” /27 thousand 280 units/ and "Khokh Gan” /11 thousand 170 units/ were the most actively traded in terms of trading volume.
In terms of trading value were "HBOil” (MNT 29 million 823 thousand 210), "APU” (MNT 16 million 385 thousand 345), "Khongon Beton” /MNT 15 million 429 thousand 600/, "Mongolia Nekhmel” /MNT 13 million 182 thousand 701/ and "Gobi” /MNT five million 630 thousand 800/.

Women Wrestlers Grab Medals at Russia Cup
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) Mongolian women athlete of freestyle wrestling and international master of sports S.Byambatseren won a gold medal in 58kg category at the Russia Women’s Wrestling Cup on November 15. The same day, international master of sports A.Battsetseg grabbed bronze medal in 53kg category.
The Russia Cup ran November 14-15 in Novocheboksarsk of Russian Chuvash Republic. The action was organized by Ministry of Sports of the Russian Federation and the Chuvash Republic together with the Federation of Olympic Wrestling of Russia. Mongolia was represented there by a team of three.

Bestsellers of Last Week
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) The list of best sold books in Internom bookstores on November 10-16 was led by a “Lean In: Women, Work and Will to Lead” by Sheryl Sandberg. This book topped the Bestseller’s list of the New York Times magazine for 12 weeks after its publication in 2013. It has been named as the Best Business Book and has been translated to 30 other languages.
The second on the list was “Putin” by Chris Hutchins and Alexander Korobko, which is about the Russian president Vladimir Putin’s private and political life. It was followed by “The Girl Who Kicked the Hornet’s Nest” by Stieg Larsson, “Let’s Develop the Right Brain of a Six-Year-Old”, Oxford English-Mongolian dictionary, “Dori’s advices for younger generation” by B.Batbayar, Oxford Mongolia-English dictionary, “1Q84 - I” by Murakami Haruki, “Sorkhugtani” by B.Sarantuya and “The Girl With the Dragon Tattoo” by Stieg Larsson.

Efforts to push Ch.Saikhanbileg for PM to be made
November 17 ( Last week's political and parliamentary highlights were the ousting of the government, the government budget 2015 accepted without the Finance Minister, the nomination of a candidate for PM at the meeting of the National Consultative Committee of the Democratic Party (DP), and DP leader N.Altankhuyag handing over party leadership to Speaker of Mongolian Parliament Z.Enkhbold.
The DP caucus in parliament agreed to nominate MP R.Amarjargal for prime minister, who won 100 percent of the caucus vote, but was defeated by the nominee of the National Consultative Committee of Democratic Party (DP), Head of the Cabinet Secretariat for Government Ch.Saikhanbileg.
The National Consultative Committee of the Democratic Party (DP) considered the two candidates and voted for Ch.Saikhanbileg with 53.6 percent of the votes in closed vote. As result of the meeting of the National Consultative Committee of Democratic Party, Head of the Cabinet Secretariat for Government Ch.Saikhanbileg was selected for the DP candidate for the 28th PM of Mongolia.
Speaker of the Mongolian Parliament and the new leader of the DP, Z.Enkhbold said during Saturday's caucus meeting, "The DP is not a majority but the party with the most seats in parliament, thus the party will make efforts to have the nomination of Ch.Saikhanbileg approved by political caucuses this week for PM."
The party caucuses will decide whether or not to accept the nomination of Ch.Saikhanbileg for PM today. If the party caucuses come to an agreement, the nomination will be submitted to the plenary session meeting of parliament on Tuesday, November 18th. Ch.Saikhanbileg's nomination was not discussed by the DP caucus, and there is speculation that he may not win support from the DP.
Z.Enkhbold said, "The DP caucus should respect the decision of the National Consultative Committee of the Democratic Party (DP), as it is the highest ranking official authority of the ruling party."
The structure of the new government will be discussed after the nomination of Ch.Saikanbileg for PM is accepted by parliament.

Speaker of Parliament of Mongolia, Z.Enkhbold Elected as Head of Democratic Party Succeeding N.Altankhuyag
November 17 ( On November 14, 2014, the Democratic Party National Consultative Committee, the highest decision-making organ of the Party held its irregular 44th meeting until late night resolving urgent issues regarding the Party affairs as well as chairmanships of current resigned Cabinet.
At the beginning of meeting the Head of DP N.Altankhuyag announced to abdicate, accordingly, the Committee members had to elect its new Head of the Party, where the only one candidate - incumbent Speaker of the State Great Khural (Parliament) Z.Enkhbold - was elected with unanimous votes, after which, MP N.Altankhuyag handed over the DP stamp accrediting newly elected Head of the Democratic Party Z.Enkhbold.
Afterwards, the DP Committee members revised the issue of promoting new Prime Minister of Mongolia with two candidacies as the Head of the Cabinet Secretariat Ch.Saikhanbileg and MP R.Amarjargal, where the latter candidature was proposed by the DP Group at the Parliament and Ch.Saikhanbileg by “Altan Gadas” faction chaired by former Premier N.Altankhuyag.
Due to regulations, the two candidates introduced their Action Plans to implement until 2016 and following the question-answer procedure, the Committee members voted under secret ballot, where Ch.Saikhanbileg won over R.Amarjargal by 53.6% of votes to become the next 28th Premier of Mongolia.
This is a promotion-level decision, because winning-candidature Ch.Saikhanbileg's issue will be consulted with other Parties having seats in the Parliament as well as submitted for an approval to the President of Mongolia and finally to be ratified by the Parliament. If the second majority Party (MPP) in the Parliament or President Ts.Elbegdorj rejects Ch.Saikhanbileg’s candidacy or disagreed at the final-level of Parliament plenary session, so the second candidature R.Amarjargal will be forwarded for the Premier’s post.
Moreover, newly elected Head of DP Zandaakhuu ENKHBOLD will be approved at the Party Assembly Meeting scheduled on December 08, 2014.

Mongolia to Host Parliamentary Assembly of Organization for Security and Co-Operation in Europe in September 2015
November 17 ( It was resolved Mongolia to host the Parliamentary Assembly of the Organization for Security and Co-operation in Europe (OSCE PA) in Ulaanbaatar in September 2015 and in the frameworks, the OSCE Parliamentary Assembly representatives visited Mongolia to acquaint with current preparations on November 11-15, 2014.
Following the working visit, the OSCE PA Deputy Secretary General Gustavo Pallares and Chairman of the Secretariat of the State Great Khural (Parliament) B.Boldbaatar called a press conference on November 14, 2014.
Opening the press conference, Chairman of Mongolian Parliamentary Office B.Boldbaatar noted, “The OSCE has 57 participating states from Europe, Central Asia and North America including Mongolia joined two years ago as well as recognized 11 partner states for co-operation. Under the Parliamentary Assembly cooperation, Mongolia requested to host the Parliamentary Assembly of the OSCE that aims to strengthen its external position under multi-pillar foreign policy and stimulate relationship and partnership with other countries of the world. Moreover, Mongolia is involved in international policy in order to implement the country’s third-neighbor policy.
Therefore, to fulfill these tasks and to strengthen the democratic institutions, Mongolia is willing to organize the session in its capital city”.
The Deputy Secretary General Gustavo Pallares added, “The Headquarter of the OSCE PA welcomed Mongolia’s initiation and agreed to organize the next Autumn Assembly Session in Ulaanbaatar. Although, the theme of the meeting is under consideration and the current working team here arrived is to get familiarized with preparation procedures”.

8th China-Mongolia Defense and Security Consultation Meeting Runs in Beijing
November 17 ( The Ministry of National Defense of the People’s Republic of China reports that the 8th China-Mongolia Defense and Security Consultation Meeting was held in Beijing on November 13, 2014.
The Consultation was co-chaired by Deputy Chief of General Staff of the Chinese People's Liberation Army (PLA), Lieutenant General Wang Guanzhong and the State Secretary at Defense Ministry of Mongolia, Major General Z.Boldbaatar.
Wang Guanzhong noted that Chinese President Xi Jinping and Mongolian President Tsakhia Elbegdorj reached an important consensus in August this year on developing the comprehensive strategic partnership between the two countries, ushering in a new phase for the China-Mongolia relations. Wang stressed that China is willing to make joint efforts with Mongolia to resolutely implement the consensus reached by the two heads of state. The two sides shall make good use of the China-Mongolia Defense and Security Consultation Mechanism, keep up mutual visits of delegations, carry out joint military exercises and training, and strengthen exchange and cooperation in such areas as personnel training and anti-terror campaign. Both sides shall also deepen border defense contacts, safeguard mutual security interests, and promote the friendly cooperation between the two militaries to a higher level, Wang added.
Major General Z.Boldbaatar expressed that the development of the military-to-military relations between Mongolia and China is of the utmost importance for the bilateral comprehensive strategic partnership. Mongolia is willing to work with China to push the pragmatic defense cooperation between the two countries to a new high.

Deputy Foreign Minister of Vietnam Pays Official Visit to Mongolia
November 17 ( Upon the invitation of Deputy Minister for Foreign Affairs and Economic Cooperation of Mongolia, Mr. D.Gankhuyag, the Deputy Minister for Foreign Affairs of the Socialist Republic of Vietvam, Mr. Dang Minh Khoi is paying an official visit to Mongolia on November 16-19, 2014.
The visit is being conducted within the framework of the 60th anniversary of the establishment of diplomatic relations between Mongolia and Viet Nam.
During his visit, Deputy Minister Dang Minh Khoi will pay a courtesy call on Deputy Prime Minister of Mongolia D.Terbishdagva, will have bilateral talks with his Mongolian counterpart D.Gankhuyag, to meet the Deputy Minister of Industry and Agriculture Ts.Tuvaan as well as to participate in the banquet dedicated to the 60th anniversary of diplomatic ties and to visit the Secondary School No.14 in Ulaanbaatar named after Ho Chi Minh, who was the first Prime Minister (1945-1955) and the first President (1945-1969) of the Democratic Republic of Vietnam (North Vietnam).
Mongolia and Viet Nam have established the diplomatic relations on November 17, 1954 and maintain long traditional friendly ties in all spheres and support each other on the international and regional areas. Viet Nam supports Mongolia’s aspiration to join regional integration process, particularly, to become a member of APEC and a partner of ASEAN, and join East Asia Summit.
Vice FM of Vietnam VisitsMontsame, November 17

Mongolbank Reviews Foreign Trade
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) The Bank of Mongolia released the Foreign Trade Review of Mongolia as of October 2014 on November 17. The total cumulative trade turnover increased 2.9% (USD 258.9 million) from that of the previous year and reached USD 9,080.0 million.
The increase in the trade turnover was due to the increase in exports by USD 1,125.5 millions. The structure of the trade flows with the neighboring trade partners is as follows: trade with China: 61.0% or USD 5,543.1 million and trade with Russia: 15.1% or USD 1,373.2 million. The trade volume between Mongolia and China increased by 23.2%, and the trade volume between Mongolia and Russia increased by 3.2%. 
The cumulative balance decreased 107.1 percent or USD 1,992 million from that of the previous year and reached USD 131.4 million. By the reporting period, the total exports increased 32.3 percent against the same period of 2013, imports decreased 16.2 percent, resulting thus in the improvement of trade balance.
The state of the trade balance of paid trade flows is one of the main variables that determines the pressure on the domestic foreign exchange market. By the end of this October, the trade balance of paid trade flows reached USD 393.8 million. Paid imports decreased by 16.2 percent and paid exports increased by 30.8 from that of the previous year.
As of October, terms of trade index (base year 2012) increased 14.8 percent against the same period of the previous year, reaching 1585. This increase is mainly attributed to the decrease in import prices of durable consumer goods, fuels, machinery and equipment.
The share of mineral exports in total export decreased by 0.2 points against the same period of 2013. Exports of coal, copper concentrate, iron ore and concentrate and crude oil have a weight of nearly 77 percent of total exports and 87 percent of mining exports.
In addition, these four products’ share in the mining exports increased by 3.6 points, and share in the total export increased by 2.9 points.
As of October, 25 percent of total imports were consumer goods, 42 percent were capital goods and 22 percent were fuels. Share of the capital goods in total imports decreased by five percent against the same period of 2013, while the share of fuels and consumer goods stood at the same level.
Mongolian imports decreased by 16.2 percent compared to October of the previous year. Main contributors of this decrease were goods decrease, which equals to 11 percent of it, and oil imports which equals to its three percent.
Capital goods and fuels imports decreased by 25 percent (USD 614 million) and 14 percent (USD 157 million).

Ch.Saikhanbileg under state security protection
November 17 ( The Democratic Party's candidate for PM, Ch.Saikhanbileg, has been under the protection of state security since Friday.
The President, Prime Minister, Speaker of the State Great Khural and candidates for these post are receive special security as stated in the Mongolian Law on Special State Protection.
On October 2, 1998, Mongolian parliamentarian S.Zorig was assassinated following his nomination for PM.
Although the candidate Ch.Saikhanbileg has not yet been accepted as PM by Parliament, the DP candidate is still under special security measures to reduce the risk of any threats against him.

Intelligence Agency uncovers suspect in case of hacked SMS texts
November 16 ( Following the hacking incident involving the sending of dozens of anonymous, politically charged SMS messages sent on behalf of Members of Parliament in October, Speaker of the Mongolian Parliament and the Standing Committee on Security and Foreign Policy directed the Intelligence Agency to conduct an investigation.
A reliable source says that the Intelligence Agency has reported the results of their investigation to a Parliamentary Sub-Committee in a special report.
The investigation uncovered that the sender of the anonymous SMS messages may be linked to an MP.
Mobile phone operators MobiCom Corporation and Unitel's networking experts found that the anonymous SMS messages were sent from Romanian mobile phone network operator Vodafone and users in Malta. At least 20 customers' phone numbers were used, but the total number of messages sent is still unknown.
The case remains under investigation and the possible abuse of power by an MP will be reviewed under consideration of existing laws and regulations.

Mongolian beauty queen first in online Miss World 2014 ranking
November 17 ( Battsetseg Turbat, Mongolia's representative for the Miss World 2014 pageant kicking off on in London on November 20th, is now ranked first place among contestants on the website
Battsetseg Turbat has received strong support online from Buryatians and Inner Mongolians.
The competitor is 23-years-old, 178 cm, and 54 kg, measuring 88-63-90. The Mongolian beauty has been a winner at the Asian Top Model, Miss Manchuria, and Miss Mongolia competitions.
The grand final for the Miss World 2014 competition will take place on Sunday 14th December.

2015 State Budget of Mongolia Approved
November 17 ( At the plenary session of the State Great Khural (Parliament) held on November 14, 2014, the 91.2% of attendees (52 out of participated 57 Parliamentarians) ratified the 2015 State Budget of Mongolia.
According to outlook for 2015 State Budget, the Parliament approved the total balanced budget revenue of 4 trillion, 708 billion and 510.1 million MNT (Tugrug), where the total balanced budget expenditure is set at 5 trillion, 603 billion and 277.4 million MNT.
Also, the budget expenditure in 2015 as capital investments in projects, measures and construction works is set at 655 billion and 417.5 million MNT, and additional 195 billion and 556.8 MNT is also approved as capital investment on terms of repayment financed by Development Bank and the Budget Stability Fund collection is set at 34 billion and 385.8 million MNT.
In order to finance the budget deficit through year-to-year, the Government will issue securities equivalent of 1 trillion, 815 billion MNT and 740.1 million MNT, and the Government’s new foreign project loans of 277 billion and 460.6 million MNT.
Moreover, the Parliament has reflected in the 2015 State Budget the income as estimated but reduced the expenditure by 118.8 billion MNT, thus subscribing the budget deficit as 439.2 billion or 1.8 percent of the country’s GDP as was reduced from 489.9 billion MNT.

Mongolia and Hungary Extend Cooperation in Sciences
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) Mongolia's delegation led by a president of the Academy of Sciences of Mongolia academician B.Enkhtuvshin paid a working visit to Hungary November 11-13 at invitation of a president of Hungarian Academy of Sciences.
The two presidents discussed matters on renewing the Memorandum of Cooperation between the two Academies and on establishing a Protocol for Cooperation in 2015-2017 and inked the latter.
Mr Enkhtuvshin also attended an opening ceremony of the Centre for Mongol Studies at the Eotvos Lorand University, gave lecture about his academy and Mongol Studies to the scholars, professors and students gathered.
The Institute of History of the Mongolian Academy of Sciences and the National Museum of Hungary established an Agreements of Cooperation in researches, publications, exchange of scholars and organizing joint field expeditions.
The delegates visited Research Centers of Natural Sciences and Humanities at the Hungarian Academy of Sciences, the National and Ethnic Museums of Hungary, getting acquainted with academic works and researches and rare findings and exhibits, and exchanged opinions on direct cooperation between the two Academies of Sciences.
Mr Enkhtuvshin was accompanied by the director the Institute of History Dr D.Chuluun and chief of sector at the Institute of Archeology Dr Ya.Tserendagva.

Government Liquidates Bonds Payable
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) Government of Mongolia has fulfilled its duties to repay the bonds payable to the investors Ivanhoe Mines Mongolia and Turquoise Hill Resources within the deadline.
In a scope of the Government resolution No.22 of 2009 on Overcoming the Financial and Economic Pressure, the Government had decided to issue bonds with equal value of USD 287.5 million required for the confirmation of the advance payments to the investment agreements between the Government and Rio Tinto International Holding Limited, Ivanhoe Mines Limited, and Ivanhoe Mines Mongolia Inc. Regarding the operation of Oyu Tolgoi deposits, the Government established investment agreement with the above three corporations on October 6 of 2009, in accordance of which an agreement on Purchasing Government Bond was created. Pursuant to such agreement, discount securities by the Government with face value of USD 115 million (accumulating USD 100 million in cash), with five-year term and interest rate of three percent, were traded on October 19 of 2009. The ownership of the discount securities has been assigned to Turquoise Hill Resources Limited which is registered at the Canadian Stock Exchange, since the company thereupon owned 66 percent of Oyu Tolgoi LLC.
The Government of Mongolia has transferred the bonds payable with interests to the investing party of the agreement Turquoise Hill Resources within the deadline--October 17 this year, thus reassuring the credibility of observing duties before its international investment agreements.
The Government has neither exceeded deadlines nor violated duties before the agreements.

PM candidate Saikhanbileg promises a way out of economic recession
By B. Khash-Erdene
November 17 (UB Post) Ch.Saikhanbileg has been elected by the Democratic Party to take up the mantle of Prime Minister after the recent ousting of N.Altankhuyag. Saikhanbileg, who was Cabinet Minister in Altankhuyag’s government, said he will work towards addressing the economic recession.
“One general issue is the economic crisis we are currently facing. How to get out of this situation will be the goal of the next government. Hence, all the people with seats in Parliament will leave behind their personal endeavors and focus on the nation’s development. This will be our main principle,” he said.
Saikhanbileg said that there will not be many structural changes in his new government, so as to make everything “stable and in accordance with policies.”
As was speculated, Saikhanbileg confirmed that he will continue the Altankhuyag government’s action plan through 2016 and “work to implement all large scale projects.”
Speaker of Parliament Z.Enkhbold showed full support for his party’s election, sealing the deal for Saikhanbileg. Enkhbold is to lead the Democratic Party since N.Altankhuyag has voluntarily stepped down from his position as the head of the party.
Enkhbold said that Parliament will discuss the candidates for Prime Minister on Tuesday.
“On Monday, we will discuss candidates with other parties. In accordance with the Constitutional Law of Mongolia, since no party has the majority of seats in Parliament, the Democratic Party – which has most seats – will discuss its candidate with other parties. After this, Parliament will approve the Prime Minister on Tuesday,” he said, during a press conference.
When asked about division inside the Democratic Party on Saikhanbileg’s nomination, the Speaker of Parliament said that the National Consultative Committee, which nominated Saikhanbileg, is a “higher representative organization within the party,” and members should respect the committee.
Enkhbold denied the public’s concern that there was a conspiracy behind Altankhuyag’s removal from within Democratic Party, especially by the Shonkhor faction, which played a vital role in the collapse of Altankhuyag’s government.
“Such conflicts were not there. There might have been some groups that made it seem like there were such conflicts. Factions can [have different views] but they must be within their party limits… Having lots of factions means a party is healthy,” maintained the Speaker of Parliament.
President Ts.Elbegdorj has been outspokenly against Altankhuyag’s cabinet members who had “double deels”, positions both in Parliament and government.
Enkhbold said that Saikhanbileg will have full authority to bring in experts to lead his cabinet if he is approved for the role of Prime Minister. He also said that political party heads will not be included in Saikhbileg’s cabinet, as he believes it would interfere with government decisions based on party interests.

Tourist Street closed for cobblestone surfacing
By M. Zoljargal
November 17 (UB Post) Tourist Street, with a road stretching 0.24 kilometers, was closed on Saturday for cobblestone surfacing.
The street, also known as Urt Tsagaan, links Tumurchin Street to Baruun Selbe Street in Chinggeltei District, and it will be closed until Thursday, when the surfacing will be complete.
Ulaanbaatar City Auto Road Authority is expecting no delay in its reopening, as cobblestone surfacing is able to be done regardless of cold weather.
The authority has paved a total of 1.83 kilometers of cobblestone road at nine locations in the city as of November this year.

Stock Exchange news for November 17
By B. Amarsaikhan
Ulaanbaatar, November 17 (MONTSAME) At the Stock Exchange trades on Monday, a total of 17,575 shares of 14 JSCs were traded costing MNT eight million 812 thousand and 180.00.
"Remicon” /7,451 units/, “Hermes Center” /5,000 units/, “HBOil” /2,144 units/, “Mereks” /1,500 units/ and "Arig Gal” /510 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Bayangol Hotel” (MNT one million and 740 thousand), "Arig Gal” (MNT one million 198 thousand and 500), “Baganuur” (MNT one million and 95 thousand), “HBOil” (MNT one million two thousand and 230) and "Hermes Center” (MNT 895 thousand).
The total market capitalization was set at MNT one trillion 530 billion 828 million 651 thousand and 664. The Index of Top-20 JSCs was 15,249.30, decreasing 8.39 units or 0.05% against the previous day.

About forum of physicists
By N. Khaliun
Ulaanbaatar, November 17 (MONTSAME) The second national forum of physicists ran at Mongolian State University on November 15.
It was organized by a Mongolian Physicists Association together with an Institute of Physics Technology of Mongolian Academy of Sciences.
Reports were given on themes "State policy in sciences", "An education in physics", “Theoretical physics and high energy physics”, “Solid-state physics”, “Astronomy and Geophysics”, “Electronics and renewable energy", "Nuclear physics and technologies”, “Biophysics” and “Study of optical spectra".
The forum ended with issuing of some recommendations. 

T.Ganbold: Gold companies are shedding their reputation as ‘destructive to the environment’
November 17 (UB Post) Below is an interview with the Director of the Mongolian Gold Producers’ Association (MGPA) and Chairman of Altan Dornod Mongol LLC, T.Ganbold, about timely issues related to the gold sector.
The MGPA is a NGO for resolving issues and difficulties in the gold sector. How many companies have joined the MGPA?
In 2007, Parliament passed the Windfall Profits Tax Law on copper and gold concentrates. The tax rate was 68 percent. Companies working in the gold sector received a heavy blow from the approval of this law. The situation worsened when Parliament adopted the “law with the long-name” prohibiting mineral explorations and exploitations on protected zones with a river source, water reservoir and forestry. The government’s resolution cancelled 218 gold mining licenses. Essentially, a difficult time for the gold sector started in 2007. At the time, price of an ounce of gold reached 1,900 USD, the highest price in the global market. Many companies liquidated because the tax increased and mining fields became limited. Currently, some 70 gold companies with mines, technological and economic basis are operational.
In January 2013, over ten companies, the first President of Mongolia P.Ochirbat and the Mongolian National Mining Association partnered and founded the MGPA with the aim to provide a clear understanding about gold production to populist politicians who aren’t specialized or have any understanding about the gold sector, as well as correct confusions and cooperate with them. Another objective of the MGPA is to further the level of this sector’s social and economic significance. Initially, less than ten companies joined but now, major corporations in the gold sector have become members. Our association doesn’t consist of large companies such as Boroo Gold LTD and Oyu Tolgoi LLC. They don’t even care about us.
The Windfall Profits Tax was abolished and gold royalties were halved, dropping to 2.5 percent. The drop in tax was initiated by the MGPA. Did you get your desired and anticipated results?
We proposed and legalized our idea to reduce royalty, fee for using minerals, to 2.5 percent to boost the economic benefit of gold production. Our association treated this issue very seriously. When the law to reduce tax was approved, political and public organizations criticized. It’s a given that there are people with various views in society so issues will be speculated from different angles.
This law has been valid for ten months. By decreasing tax, gold black market, which has been growing since 2007, has become smaller. Companies began reserving gold at the State Treasury.  In 2012, 3.3 tons of gold were drawn in and six tons in 2013. In 2014, this index rose to 10.7 tons. Gold saving rate of 2013 almost doubled with the abolition of the 68 percent windfall profit tax. Estimates show that this year’s mineral reserves will become four times that of 2012’s owing to cut back on royalty.
At the beginning of the year, gold mining companies promised to submit 11 tons of gold to Mongolbank and the Ministry of Finance. Gold submitted this year to Mongolbank is equivalent to 400 million USD. This practically means we’ve printed 400 million USD for the country during this time of currency supply shortage. Time has proved that reducing tax was the correct regulation as well as beneficial.
Social and economic benefits must’ve increased gold miners’ revenue, right?
Companies will boost profit, investments and job positions by saving 2.5 percent on royalty, meaning that the state budget will consist of other taxes. Decreasing tax doesn’t specifically mean loss in savings for the state budget. Revenue of companies is little but will escalate and with it, many urgent issues, including technological upgrade and improvement for restoration procedures, will be resolved.
What issues did the “law with the long-name” bring about?
The long-named law is actually a resolution for protecting the environment by restricting mining operations near river basins, water reservoirs and forestry. In reality, it served the exact opposite. Many gold companies with loans had to liquidate. The resolution caused massive loss to the economy.
The government issued to give refunds to companies that were operating in restricted and protected zones but didn’t give any. Companies that purchased technology for mining gold wouldn’t be willing to suffer again by executing restoration. So fields were left unrestored. Groups of unauthorized gold miners, commonly referred to as “ninjas”, are currently situated in these fields that don’t have owners or responsible authority. These people are causing extreme damage to the environment. Overall, this law didn’t serve its purpose. Making changes in this long-named law will be highly beneficial to the nation’s strategy.
Conditions for mining 130 tons of gold [a year] as well as restoring the environment will become a reality if the annulled 218 gold mining licenses are reissued. We must utilize such huge amounts of resources for positive impact to the society, economy and environment. Exports of other minerals, except gold, have basically halted.
Around 600 individuals submitted gold at Mongolbank this year. Does this data suggest that more and more individuals are mining gold privately?
There are people who negotiate with companies, establish agreements, and mine gold according to regulations. This is a form of business relation. We can’t stamp people as “ninjas” if they aren’t a corporation. Decreasing tax has helped reduce “ninjas”, reintegrating them into the society, and increased employment opportunities. Currently gold producers have opened 10,000 workplaces.
How is the current restoration work progressing?
The society used to have adverse understanding about environmental restoration. Now companies are setting environmental restoration as top priority. This year, many companies, including Altan Dornod Mongol LLC, Monpolymet Group, Mon Dulaan Trade LLC and ILT GOLD, are exercising restoration work very well. Associated bodies and local authorities reviewed restored fields and complimented the work. Monpolymet Group began a new special program for reviewing their restored fields. Gold companies are completely getting rid of their reputation as environment destroyers.
How much money do gold producers spend on restoration? How much land is being restored?
In 2013, companies spent a total of 24 billion MNT on environmental restoration. This year’s spending hasn’t been integrated yet but the field size can be determined. As of October 2014, Monpolymet Group restored 110 hectares, Mon Dulaan Trade LLC 30 hectares, and the MGPA restored 120 hectares.
Is it true that Altan Dornod Mongol LLC has also restored quite a large field?
When the company was purchased, it had 1,200 hectares of unrestored fields, dug 50 to 60 meters deep. It’s a massive field. Eight billion MNT was spent on restoring 600 hectares. In 2012 and 2013, the company was certified as the state’s best restoration company. Altan Dornod Mongol LLC has a bad reputation and large savings. It was reported that our company conducted a crime against the environment. We presented the works we completed and showed our certificates. I can’t believe the company that contributed most to the environment was reported for a criminal offence. Altan Dornod Mongol LLC is always surrounded by low, unreasonable, and greedy intentions.
The public is aware that you purchased Altan Dornod Mongol LLC when it was under massive debt and the former owner had fled. When will its debt be completely repaid?
Debts are being repaid quite rapidly. I’m hoping it to finish soon. So far, approximately 80 percent has been repaid.
Seeing the quick debt repayment, Altan Dornod Mongol LLC must have sufficient resources and minerals. How many years will the company’s reserve last?
Altan Dornod Mongol LLC has a large field that was founded in 1997. Since its establishment, the company has submitted over 30 tons of gold. Mining resources can’t be mentioned freely because of potential high risks. Even if there is gold, mining could be unprofitable. Many factors are necessary for the company, namely teams and colleagues, correct work management, favorable business environment, political stability, positive view from politicians and the public, and reputation. This isn’t required for only the gold sector but for all businesses. Resources and opportunities consist of the above factors. Nowadays there isn’t any effective business that operates independently from politics and public attitude.
Mongolbank announced that it will market 30 tons of gold next year. Do companies have adequate supply and opportunities for gold mining and supply?
Mongolbank probably predicted after, estimating Gatsuurt gold mine of Boroo Gold LTD will begin mining gold. The MGPA member companies are preparing to enhance gold mining to 20 tons. Gold reserve could reach some 30 tons if mined gold from Boroo and Oyu Tolgoi LLC are included.
What’s the gold price forecast?
Gold price has reached 1,177 USD, 40 percent decrease from its peak. Compared to other minerals, gold price is falling gradually. Gold is always in demand so cease all worry about not selling. It doesn’t get logistical difficulties like railways. It’s a mineral with abundant advantages. According to Bloomberg and CNBC, experts review that a week-long gold price drop reaches 1,000 USD and it’ll increase to 1,300 USD when it begins rising. It’s common for experts and researchers to be imprecise and time shows that. I will not blindly guess gold prices of the future while major international economists are conflicting over it.

State Hair and Beauty Festival takes place
By B. Tungalag
November 17 (UB Post) The 22nd Hair and Beauty Mongolian Festival to select the state champion for heardressing and nail art was held at Misheel Expo on November 14 and 15. The Office of the Ulaanbaatar City, Association of Hairdressers and Beauticians, and Misheel Group LLC jointly organized this year’s state championship.
Over 170 hairdressers and beauticians from six districts of Ulaanbaatar and 13 provinces participated in this year’s event, 70 percent of whom were young people.
Hairdresser T.Bayarbayasgalan of Grease Salon won the Grand Prix prize of the festival by scoring 90 points and was awarded with 1,500,000 MNT cash prize.
Hairdresser of Evergood Salon G.Saikhanbayar and M.Uuganbayar took the Grand Prix award in the team category.
Participants who won Grand Prix awards will partake in the Asian Championship in 2015.
For the first time this year, the festival had eight foreign contestants from Irkutsk, Russia. The Russian team won a gold medal in the nail and body art category.
During the festival, Head of the Mongolian Association of Hairdressers and Beauticians Ts.Tsogzolmaa underlined, “I am very happy that hairdressers and beauticians from provinces participted in the festival. Skills of hairdresser of Khovd Province Byambatseren, Selenge from Govi-Altai Province, Tserenbaljid from Arkhangai Province and Tserenbaljid from Uvs Province were spectacular. Hairdressers and beautician of provinces must participate in future festivals and exchange experiences with fellow young people.”
A beauty exhibition fair took place adjacent to the state championship. Some 85 beauty organizations displayed their products and introduced their services.

Mongolian basketball teams lose first games at Asian Beach Games
By M. Zoljargal
November 17 (UB Post) Mongolian women’s basketball team lost its first match against China on Saturday. The men’s team played against Thai team and the game ended with Thai’s victory.
The women’s team is playing in the same division as China, the Philippines and India, while the men’s team is up against Thailand, Butan, China, India and Laos in its division.
The beach basketball competitions launched on Friday and the medal winners will be awarded on November 21.
The Asian Beach Games is challenging athletes from 45 countries across the world in 17 sports. The Mongolian team includes 34 athletes who will are vying for medals in eight sports, including sambo, jiu-jitsu and beach basketball.
Currently Mongolia is ranked second, after the host country, Thailand, with eight medals in total.
S.Batgal won a gold medal in the men’s 60 kg, B.Buyandelger in the women’s 60 kg, while O.Bold-Erdene won a bronze medal in the men’s 90 kg weight division of jiu-jitsu.
In Sambo competitions, D.Tumurkhuleg seized a gold medal in the men’s 68 kg, G.Tuvshinjargal in the men’s 82 kg, T.Battugs in the women’s 64 kg, and B.Sainbuyan in the women’s 72 kg. Mongolia’s mixed team secured a bronze medal on Saturday.

Flexible monetary policy relies on a sound state budget
November 17 (UB Post) Monetary policy for 2015 was recently approved before the state budget was supported in Parliament.
Next year’s monetary policy aims to meet macroeconomic equilibrium and fix a steady rate of inflation. For example, inflation will be recorded at seven percent, a decrease from the current rate of 12.1 percent.
The Director of the Central Bank, N.Zoljargal, was interviewed to learn more about the policy changes. 
Last month, inflation was recorded at 12.1 percent.  In order to decrease the rate to seven percent, what effective measures will be taken besides tightening up policy for the macroeconomic?
Inflation, which was at 15 percent, fell to 12 percent.  Inflation tends to decline at the end of the year. If our expectations and estimates are accurate, a seven percent inflation rate is truly possible.
We estimated the seven percent based on the connection between the increase in people’s real income, or production price, and a potential inflation decrease.
As a result of cooperation with the government on monetary policy for the last two years, increasing inflation related to supply has declined.
Before, the rate of inflation was too reliant on supply (40 to 50 percent) and now it occupies only five percent.
The Central Bank’s foreign currency reserves have decreased dramatically and the USD exchange rate is growing stronger. Did you consider these factors in rising inflation?
Of course, we calculated these factors. The foreign currency exchange rate engages over 40 percent of inflation structure formation.  The currency exchange rate starts influencing inflation after six months at most.  In accordance with this estimation, the influence of the currency exchange rate has a tendency to drop.
The import production price rate is relatively high at present, but if the currency exchange rate stays steady, it will not rise.  Seeing the real situation, inflation is inclined to be at nine percent and along with it, correct and effective policy will lead to a seven percent inflation rate.
Many people say that the budget and monetary policy have to be tied together. How well is monetary policy associated with the budget?
The biggest influene on administering policy is the state budget. Depending on how the budget was approved, and in order to fix the inflation at seven percent, whether or not monetary policy will be solid or flexible and how much responsibility should be carried by the private sector will be estimated.
We delivered guidance with eight clauses to improve the 2015 state budget. If parliament fixes them correctly, the budget will be in line with monetary policy and the economy will see a long term boost.
What measures will be taken to intensify the foreign currency inflow?
Government Resolution No.34 included measures to overcome this situation. So executing projects in the resolution and establishing correct policy is very essential.
The government directed the Central Bank to abandon the program to stabilize the price of consumer goods, step by step, and to transfer to a free market system. How will you transfer to a free market system?
The price stabilizing program launched in 2012 and was intended to be implemented for a short period. We planned to transfer it to a free market economy system in 2015. For example, over 40 percent of the meat price stabilizing program was transferred to a free market system.  Moreover, the gas price stabilizing program is searching for foreign investment. So the transfer will be conducted like this. 
Source: Undesnii Shuudan

Discriminatory tax
By D. Jargalsaikhan
November 17 (UB Post) The economy of an entire county is measured by its GDP, or the final selling price of all the goods and services produced during that year. It can also be calculated by adding together all the products and services purchased, all investments, government spending, and net exports. Government spending is measured by the entire fiscal budget expenditure, and for countries like ours with a deficit, it is evened out with domestic and foreign loans. In Mongolia, government spending is equal to half of its economy.
If so, then where does the government get all of this capital? Tax revenues make up 80 percent of the Mongolian government’s income, with the remaining 20 percent coming from non-tax revenue streams. Value added tax (VAT) makes up 33 percent of tax revenues, income taxes make up another 20 percent (with a ratio of 1:3 of personal to corporate tax), and the remainder is composed of other taxes, fees, and payments. Something else unique about Mongolia is that the mining sector generates one third of all tax revenues.
Due to the fact that VAT is a steady income stream that makes of one third of all tax revenues, the Mongolian government doesn’t like to decrease this tax even in times of economic difficulty. From the start, this tax was consumption based and has deviated from the goal of monitoring, making it an unclear and frustrating tax for businesses. It has been a unique vehicle for most government corruption for quite a while now.
Our country adopted sales tax through a change to the VAT law on January 6, 1998, and it came into practice on July 1st of the same year. In a country like Mongolia, where most of the economy was hidden, cash transactions were the norm and sales taxes weren’t paid in full. The introduction of a consumption tax such as VAT led to many disputes and the law was revised multiple times. VAT was at 10 percent when first introduced, then raised to 13 percent that same year, 15 percent in 2000, and returned to 10 percent in 2006. Until now, not only has the VAT has been revised 31 times, but there have been 26 separate laws approved regarding exemption from this tax. Companies with an annual income of over 10 million USD are required to pay this tax.
This tax has various names, depending on the country, including value added tax, consumption tax, as well as goods and services tax. VAT represents the value added to a product at each stage of production, and it is a control mechanism to be paid by the seller on behalf of the buyer. Thus, the final consumer pays the tax in full. If coordinated properly, VAT can show who produced what, and through tax returns, is seen as reducing the tax layers and is considered more fair than sales tax. However, in our country, a large majority does not pay this tax, which leads to tax data being distorted. The media has reported for years on the embezzlement of public funds through the use of fraudulent tax vouchers, because the system has not been made electronic.
According to reports from the National Registry Department of the 54,335 companies operating in our country, only one fifth (10,838) have submitted their third quarter reports. Not every company pays VAT and the fact that it is calculated for all imported equipment is a point of contention for the private sector. Thus, a proposal to raise the minimum revenue levels for VAT payment to 50 to 250 million MNT and include articles regarding investment has been submitted to Parliament and periodic revisions are going to be implemented.
In developed countries with an established tax system, the income tax revenues from individuals and companies are usually two or three times more than that of VAT. These countries have no minimum revenue levels, so everyone pays VAT and only social welfare goods and services are eligible for exemptions. Some countries even pay taxes in brackets.
However, in developing countries like Mongolia, individual income taxes don’t make up even 10 percent of tax revenue, while VAT makes up about one third. Developing countries such as ours, where the tax system is not set and we cannot collect taxes from each individual, tend to set up a minimum revenue level. But even then, with a large percentage of people not paying these taxes, the monitoring system doesn’t work properly, and as such, this tax has become a way to avoid taxes.
VAT is designed to allow for the monitoring of who is adding value to a product. In a country like ours, in order to encourage everyone to pay this tax, the minimum revenue levels should be removed and VAT levels should be drastically reduced (down to 3 percent). This way, individuals and businesses will start paying this tax and the size of the shadow economy will decrease. If we can successfully do this, then the tax revenue base will increase in size and the economic cycle will expand. However, maintaining a comparatively high VAT level for domestic and foreign companies is an important tool in promoting competition in the private sector, as well as strengthening market relationships.
The tax has to be decreased so that every citizen in Mongolia contributes.

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