Sunday, December 21, 2014

Mongolia Brief November 18, 2014

Acting PM Receives Vice FM of Vietnam
By B. Amarsaikhan
Ulaanbaatar, November 18 (MONTSAME) Acting Prime Minister and Deputy PM D.Terbishdagva received Monday a delegation led by the Vice Minister of Foreign Affairs of Vietnam Mr Dong Minh Hoi.

D.Terbishdagva noted that this year is the 60th anniversary of the establishment of diplomatic relations between Mongolia and the Socialist Republic of Vietnam, and said that the traditional friendly relations have been intensifying in recent years, "for example, a last year's visit of the Mongolian President to Vietnam has become an impetus for the ties".
In response, Mr Dong Minh Hoi conveyed to him greetings of Vietnamese First Deputy PM and expressed his high recognition of our President’s visit to Vietnam. To enhance the ties, more high level interactions are needed, he noted and invited the Chairman of the State Great Khural Z.Enkhbold to the Global Inter-parliamentary Conference which will run in Hanoi in March of 2015.
The sides agreed that the main obstacle in the cooperation between the two countries is transportation matters and that trade, economy and investments collaboration has not yet reached the desirable level despite many-year discussions.
Mr Terbishdagva said Mongolia is working to develop friendly relations with the South-East Asian nations, to access APEC and the South-East Asia Summit and to become a dialogue partner to the ASEAN, and expressed a gratitude to the Vietnamese side for its support and collaboration.
The 16th meeting of Mongolia-Vietnam intergovernmental committee will run in Ulaanbaatar next year.

Women Basketball Players to Compete for Silver at ABG
By B. Amarsaikhan
Ulaanbaatar, November 18 (MONTSAME) In the Asian Beach Games which are taking place in Phuket of Thailand, the  Mongolian national female basketball team is amongst the leading four out of eight teams, the male team is among the leading eight out of 12.
The men team, who won matches against Bhutan and Laos in "B" section, will play with Qatar on November 18. The same day, the women players will be challenged for the silver medal against the Taiwanese team having defeated Philippines and India in "A" section and having lost to the Chinese.  Mongolian female team’s rival on Tuesday–the Taiwanese--is leading its section having defeated Thailand, Turkmenistan and Nepal.

Number of city's energy customers grows by 30,000 each year
November 18 ( State owned companies in charge of Ulaanbaatar Electricity Distribution Network (UBEDN), Ulaanbaatar's heating network, and Power Plant III, say they are 100 percent ready for a potentially harsh winter in parts of the country this year.
As a result of measures carried out in 2013 and 2014, connections to the public electricity grid were improved for 43,474 households. But there is still great demand for building a substation in the center of the city, due to an annual increase of 30,000 energy customers in the city.
UBEDN now offers its customers online payment options to make it easy to pay bills, review payments, make service requests, access information regarding electricity readers, review service agreements, and to send complaints and suggestions by logging in with a customer code to the website
The network also offers, sharing information about technical conditions of the network, and the website for information about fixed price service, electricity tariffs, to schedule repairs, and to send complaints and suggestions.
Power Plant III has completed preparation plans to provide parts of the city with energy, having resources of 861 tons of oil fuel, and 87,763 tons of coal.
Officials of UBEDN, Ulaanbaatar heating network, and Power Plant III say that improved relations between the city roads, fulfillment and power grid engineering are still required.

UNESCO inscribes Mongolian religious text in Memory of the World
November 18 ( The Mongolian cultural heritage "Sutra Great Deity Tara" was inscribed in UNESCO's Asia-Pacific Register of the Memory of the World in May 2014. A validation ceremony with awards and a certificate for the inscription of the Tara sutra will be held at Mongolian National Library at 2:00 p.m., on Wednesday, November 19th.
Opening the ceremony, Minister of Culture, Sport and Tourism Ts.Oyungerel and Secretary-General of the Mongolian National Commission for UNESCO G.Jargalsaikhan will address attendees.
The sutra dedicated to Tara is considered one of the smallest books in the world.

Immigration Office to Provide Legal Info to Inner Mongolian Citizens
November 18 ( The Citizenship and Migration General Authority of Mongolia (Immigration Office) to host a meeting with some residents of Inner Mongolia, China at the IT Park in Ulaanbaatar at 02:00 pm on November 19, 2014.
The meeting is aimed to provide comprehensive understandings on Mongolia’s laws and regulations regarding the visa and residence permit cards as well as rules to obey on the territory of Mongolia.
The Immigration Office reports that three nationals of Inner Mongolia, D.Dalaibaatar, V.Tuvshinzaya and N.Tulguur, were deported from the territory of Mongolia last month on the ground that these citizens breached some acts of Mongolian law that inconsistent with the national interests and were proved that they tried to conduct actions of political manner and therefore they were warned repeatedly to stop immediately obliged by the General Intelligence Agency of Mongolia and Immigration Office.
Therefore, the Immigration Office warns nationals of foreign states residing in Mongolia might be involved in such cases of not well understanding the relevant laws.

Mongolian Judo Team Heads for 2014 Qingdao Judo Grand Prix
November 18 ( The IJF World Judo Tour is legging in Shandong Province of the PR of China with the Judo Grand Prix to take place Qingdao city on November 19-21, 2014.
The 2014 Qingdao Judo Grand Prix will bring 270 judokas from 36 countries of which 145 athletes to compete in the Men’s 7 and 125 wrestlers in the Women’s 7 weight divisions as customary.
As of Mongolian Judo Team, who conducted a joint training with Russian Team in Ulaanbaatar on November 01-15, will be represented with 28 judokas, two athletes in each weight category.
Mongolian Judo Team in the 2014 Qingdao Judo Grand Prix
Men’s Team
60 kg - G.Boldbaatar, G.Kherlen
66 kg - B.Purevdagva, D.Altansukh
73 kg - B.Khishigbayar, N.Khadbaatar
81 kg - O.Uuganbaatar, N.Dagvasuren
90 kg - G.Altanbagana, B.Syerik
-100 kg - N.Tuvshinbayar, E.Tulga
+100 kg - B.Temuulen, U.Duurenbayar
Women’s Team
48 kg - G.Otgontsetseg, M.Urantsetseg
52 kg - A.Tsolmon, Ch.Azzaya
57 kg - B.Gankhaich, D.Sumiya
63 kg - Ts.Tserennadmid, Ts.Munkhzaya
70 kg - Ts.Naranjargal, B.Khulan
-78 kg - M.Uuganjargal, B.Munkhtuya
+78 kg - G.Gantogos, N.Nyamtuya

Tevshiin Gobi Power Plant Project to Invest over One Billion USD into Mongolia
November 18 ( On November 17, 2014, Mongolian "Mogul Power" LLC and China's state-owned "SEPCO III" Electric Power Construction Corporation have established a Memorandum of Understanding to cooperate on Tevshiin Gobi Power Plant Project.
The signing ceremony was held at the Embassy of Mongolia in Beijing, PR of China, where parties agreed to collaborate closely at all spheres in order to successfully implement the one billion USD Project.
In the scope of the Project, over one billion USD is estimated to be invested into Mongolia to construct 600 MW Power Plant relied on Tevshiin Gobi brown coal mine owned by Mogul Power LLC located in Saintsagaan Sum of Dundgovi Aimag.
The Project Feasibility Studies were developed by American “Burns and Roe Enterprises” Inc. and were approved by Mongolian Ministry of Energy in 2013, where the project site construction permits were also issued by the Ministry of Environment and Green Development of Mongolia.
The SEPCO III Electric Power Construction Corporation was founded in 1985 in Shandong Province, China. As an EPCO and EPC international constructor, SEPCO III has extensive experience in the construction of coal-fired power, oil-fired power, gasfired power, nuclear power, hydro power, wind power, transformer substation, photovoltaic power, and biomass power.
Moreover, the Power Construction Corporation of China (“Power China”) is 100% directly parent company of the SEPCO III.
The 600 MW Tevshiin Gobi Power Plant is a Type of Concession Project under Build-Own-Operate to provide reliable supply of electricity to the strategically important mining areas in the south eastern region, as well as for the industrial complexes and other users.
IPP to Be Built in Gobi of TevshMontsame, November 18

Ceremony Runs for Anniversary of Diplomatic Relations with Vietnam
By B. Amarsaikhan
Ulaanbaatar, November 18 (MONTSAME) A ceremonial reception on November 17 for celebration the 60th anniversary of the establishment of diplomatic relations between Mongolia and Vietnam took place at the Ministry of Foreign Affairs and Economic Cooperation of Mongolia.
Opening speeches were given by the Vice FMs of the two countries D.Gankhuyag and Dong Minh Hoi. Mr Gankhuyag said the relations of Mongolia and Vietnam have been boosting in all spheres, and have strong roots formed during many years of people-to-people mutual support in hardship times. He also emphasized the efforts and commitments of leaders of Mongolia and Vietnam, state servants, diplomats and as well of members of community and friendship organizations and their supporters in building such strong roots.
Several dignitaries were awarded orders in recognition of their contributions to the Mongolia-Vietnam relationship such as the Ambassador Extraordinary and Plenipotentiary of Mongolia to Vietnam D.Enkhbat, the head of the Friendship Community of Mongolia and Vietnam Dr S.Dashtsevel, and a veteran D.Almaas--with the “Friendship” medal of Vietnam; the Vietnamese senior diplomat and an interpreter at the Mongolian Ambassador to Vietnam Le Dinh To, and a former head of the Vietnam-Mongolia Friendship Community Hoang Minh Thang –with "Polar Star" order of Mongolia; a former ambassador of Vietnam to Mongolia Chan Nguyen Chyk–with "Friendship" medal of Mongolia.

Chief of President’s Office Opens G7 Fast Track Partnership Conference
By B. Amarsaikhan
Ulaanbaatar, November 18 (MONTSAME) Such a conference took place on November 18 at the Best Western Tuushin hotel bringing together representatives of Mongolia, Germany, Vietnam, Laos, Myanmar and Cambodia. A chief of the Presidential office P.Tsagaan delivered opening remarks at the conference.
He greeted the gathered noting that the G7 Fast Track Partnership Conference has been co-organized by the Government of Mongolia, Extractive Industries Transparency Initiative and German Agency for International Cooperation (GIZ). "Germany is one of the countries that extended its support to Mongolia during the transition to democracy and a market economy in 1990s, and I express my appreciation to Germany for choosing Mongolia as a regional partner to share experience and support countries in the South East Asia," he said.  
"Mongolia’s private sector produces some 80 percent of the country’s GDP. Private property and private production was illegal 25 years ago. As part of the economic reforms the Government started privatizing the state-owned enterprises and we have no doubt that we made the right decision", he said. 

Mongolia Projects & Investment Summit Commences in Hong Kong
November 18 ( On November 18-19, 2014, the Mongolia Projects & Investment Summit annual meeting that aims to build new relationships and close deals with Mongolia is being hosted at Sheraton Hotel in Hong Kong.
The Mongolia Projects & Investment Summit Hong Kong has strongly cemented its position, over the last five years, as the world’s largest Mongolian investment event.
This fifth annual Mongolia Projects and Investment Summit is a forum which will assess the current and future investment environment.
For the first time the Mongolian Projects and Investment Summit is truly diversifying outside of the mining sector. Sectors which have real opportunities for investors such as real estate, agriculture, construction, energy and infrastructure will be examined in detail.
At this Summit, Deputy Minister for Economic Development of Mongolia O.Chuluunbat, Governor of Mongol Bank N.Zoljargal, Ambassador Extraordinary and Plenipotentiary of Mongolia to the PR of China Ts.Sukhbaatar, Director General of Invest Mongolia Agency S.Javkhlanbaatar as well as many other representatives from Mongolian leading industries and foreign invested firms are attending to discuss Mongolia’s macroeconomic and financial sector, and to analyze the state of the investment climate, and to restore the confidence of investors.

Children to Partake in World Chess Championship
By B. Amarsaikhan
Ulaanbaatar, November 18 (MONTSAME) Six Mongolian chess players will compete in the World Schools Chess Championships.
The events will run in Juiz de Fora of Brazil from November 26 to December 4. Our players--B.Enkhsaran (girls – age 7), L.Ochirbat (boys – age 7), B.Odgerel (boys – age 7), G.Maralgua (girls – age 8-9), B.Altantuya (girls 8-9), and D.Batsuren (boys – age 10-11)--are heading to Brazil this Saturday. The team is led by Ts.Batbold and is trained by a FIDE Master N.Tovsanaa and a master of sports Ch.Battuvshin.

R.Amarjargal votes in support of Ch.Saikhanbileg for PM
November 18 ( MP R.Amarjargal was nominated for PM with a majority vote from the DP caucus, but he was defeated by Head of the Cabinet Secretariat for Government Ch.Saikhanbileg with 12 votes in the meeting of the National Consultative Committee of Democratic Party.
MP R.Amarjargal, who had been the favorite to win in the poll, said that he will support the DP candidate for PM. Ch.Saikhanbileg pledged to form a professional government to revive the flagging economy in an appearance on the television program “Talks without Censorship”, on Tuesday evening.
When a reporter asked R.Amarjargal if he would work with the new government, he replied,  "I will not work with N.Altankhuyag's government."

Moscow and Ulaanbaatar Sign Memorandum of Understanding to Develop Cooperation
November 18 ( The Ulaanbaatar City Citizens’ Representatives Khural (City Council) delegation headed by City Council Chairman D.Battulga is conducting a working visit to Moscow these days.
On November 17, 2014, welcoming the guests from the City Council, the Chairman of the Moscow City Duma A.Shaposhnikov noted that the history of relations between Russia and Mongolia, Moscow and Ulaanbaatar has been lasting for many years.
At the beginning of meeting, Chairman D.Battulga stressed that our two countries have long lasting traditional friendly ties and relations, which is considered as a priority in the foreign policy of Mongolia. The partnreship is continuing at high-level and increasing, for example, the Presidents of the two states meet annually and from November 14 of this year, the Russian Federation and Mongolia shifted to a visa-free regime.
He further added that Moscow and Ulaanbaatar became sister cities in 1957 and since then parties collaborated in areas such as culture, economics and urban planning. In October 2014, a meeting of Mayors of the two capitals was held during which it was agreed on the organization of the Days of Moscow in Ulaanbaatar and the Days of Ulaanbaatar in Moscow. These activities have a positive impact on the relations between the two capitals.
City Council Chairman noted that the contribution made by Russian builders in the development of the capital of Mongolia, and cited the latest example of the "Moscow" micro district in UB built in 2004-2007. Experts from Russia developed Master Plans for Ulaanbaatar and conduct engineering-geological survey of water sources of the city with population of 1.3 million citizens.
Moreover, City Council Chairman also raised the question about the installation of the monument in Moscow, symbolizing the contribution of the Mongolian people to the victory in the Great Patriotic War, and offered to build together the Moscow Street in UB. In Ulaanbaatar, there are streets of Istanbul, Beijing and Seoul, but the Moscow Street still does not exist.
In responses, Aleksey Shaposhnikov said that Moscow is the largest scientific and methodical center, having a lot of new developments not only in the construction and land use, but also in information technology and expressed his readiness to share these developments.
Afterwards, Alexei Shaposhnikov and Dashjamts BATTULGA signed a Memorandum of Understanding on the development of cooperation between the Moscow City Duma and the Citizens’ Representatives Khural of Ulaanbaatar City.

Stock Exchange News for November 18
By B. Amarsaikhan
Ulaanbaatar, November 18 (MONTSAME) At the Stock Exchange trades on Tuesday, a total of 136,813 shares of 16 JSCs were traded costing MNT five billion 362 million 286 thousand and 190.00.
"Hermes Center” /77,506 units/, “HBOil” /1,050 units/, “Genco Tour Bureau” /859 units/, “APU” /628 units/ and "Arig Gal” /507 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Hermes Center” (MNT 13 million 873 thousand and 574), "APU” (MNT two million 325 thousand and 850), “Darkhan Nekhii” (MNT one million and 750 thousand), “Bayangol Hotel” (MNT one million and 740 thousand) and "Gobi” (MNT one million and 611 thousand).
The total market capitalization was set at MNT one trillion 519 billion 791 million 186 thousand and 355. The Index of Top-20 JSCs was 15,067.64, decreasing 181.66 units or 1.19% against the previous day.

News Agency celebrates its 10th anniversary
November 18 ( News Agency is to mark its 10th anniversary on December 1st.
The Mongolian Journalists' Union once declared it the first private news agency in Mongolia. News Agency started writing its history when it launched the daily newspaper Ардын Эрх one decade ago. Ардын Эрх was the fifth daily newspaper to be published in the city.
News website launched through the resources and potential of a strong copy desk at Ардын Эрх, defining the future roles of journalists based on recent trends and changes in journalism in 2007. It is now one of the leading and most trusted news website, visited by thousands of readers in Mongolia.
The company formerly known as Монгол масс медиа changed its name to News Agency in 2010.  The copy desk team of the agency has published the free weekly newspaper Newsweek nationwide since 2012.
In one decade, the agency has created two brands in Mongolian media, Ардын Эрх newspaper and the website. Media is a steady writer of history, and News Agency is sure that it will write history for many more decades.

Independent MPs threaten opposition if MANAN is created
By Ch. Khaliun
November 18 (UB Post) Even though it’s not been officially announced, there are rumors spreading that a “government of national unity” will be established and all parties will unite to form it. Independent MPs expressed their opposition to this proposal and other issues to be discussed this week during Parliament’s meetings of the standing committees and plenary session.
MP Kh.Bolorchulun said, “We heard that the Democratic Party (DP) discussed uniting all parties during its National Consultative Committee’s meeting. If MANAN (a coalition of the MPP and DP) is created, the independent members will be in opposition. We will control them. There is no parliament without opposition.”
MP Ts.Davaasuren added that the independent members will refuse to accept any promises from MANAN.
They said that approving the state budget on time has shown the Parliament’s “responsibility” regarding state work. MP and Chairman of the Standing Committee on Budget Ts.Davaasuren emphasized that this was first time that the Parliament has approved the state budget without the Minister of Finance and during a government collapse.
MP Ts.Davaasuren said that the independent MPs will support restructuring the government, but underlined that it’s wrong to solve problems “mechanically”. He noted that during discussions of the state budget, there was a suggestion to reduce the number of state employees by ten percent.
“We shouldn’t increase the number of unemployed automatically. Today, private companies can’t hire new employees and it’s wrong to believe that the ministries have extra officials. It’s important to define unnecessary agencies and positions and take measures,” said Ts.Davaasuren.

Who supports Ch.Saikhanbileg’s nomination for PM?
By Ch. Khaliun
November 18 (UB Post) On Sunday, the Democratic Party (DP) National Consultative Committee met to discuss the nominee for the next prime minister, Ch.Saikhanbileg. A total of 19 members supported Saikhanbileg, while ten opposed his nomination. Below is detailed information about how the MPs voted by party faction.
Votes in support of the nomination:
Shonkhor: Z.Enkhbold, D.Gankhuyag, S.Odontuya, S.Erdene, and D.Battsogt.
MoAkh (Democratic Alliance): M.Zorigt, Sh.Tuvdendorj, Kh.Battulga, Ts.Oyungerel, L.Erdenechimeg, and J.Batzandan.
Altangadas: S.Bayartsogt, Ch.Saikhanbileg, A.Bakei, G.Batkhuu, Ya.Sanjmyatav, and R.Gonchigdorj.
One Democracy: Kh.Temuujin
MUDN (originating from the National Progressive Party): D.Erdenbat
Votes against the nomination:
Shonkhor: G.Bayarsaikhan and D.Arvin
MoAkh (Democratic Alliance): R.Burmaa
MUDN: R.Amarjargal, B.Bolor, D.Zorigt and N.Batbayar
One Democracy: M.Batchimeg
MPs B.Narankhuu and B.Garamgaibaatar
Members who did not participate in the vote:
Shonkhor: D.Ganbat
MoAkh: L.Bold
Altangadas: N.Altankhuyag
One Democracy: L.Gantumur
MUDN: Ts.Bayarsaikhan
MP D.Bat-Erdene.

Students protest for changes
By M. Zoljargal
November 18 (UB Post) Delegates of student unions united their voices against a number of issues facing university students at the former Student Square, which is now a parking lot, on Monday, as part of International Students’ Day.
On behalf of all students, the delegates held a peaceful demonstration and demanded the halt of parking lot operation at Student Square, opposite the National University of Mongolia’s building no.2, while they also demanded the government to take back the decision to start charging students in public transports from January 2015.
“Our tuition fees have been continuously increasing every year. Yet, we don’t see any improvements in our study environment and skills of teachers. We are protesting to make university administrators start considering students’ opinions and requests on all the university related matters, including tuition fee raise,” said some of the protesters.
They also highlighted how higher education system quality in Mongolia has to be elevated, and the need for increased dormitory buildings.
The students have sent their demand to the Ministry of Education and Science and pledged to hold other activities in opposition to the issues unless they receive a reply within a week.

Abandoned schools of Ulaanbaatar
November 18 (UB Post) Ulaanbaatar schools are overcrowded and outdated but city authorities seem content to demolish most of them with no tangible plan for reconstruction.
Some 16 schools in the capital city were closed due to poor infrastructure but reconstructions haven’t even been planned. The city administrations claim that there is no available land for more schools so the only option is to rebuild larger facilities in place of the old ones.
Mayor of Ulaanbaatar E.Bat-Uul promised to rebuild six schools and kindergartens and has planned 906.6 million MNT for the demolition work.
Schools No.3 and No.11 were closed in 2012. The city intended to rebuild the schools after demolition. What’s funny about the situations is that the City Council has included the funding for reconstruction work in the state budget but neglected to include the demolition costs. As a result of this confusion, the demolition of the schools took place on September of this year, two years after closure and at the start of a new academic year no less. Students and teachers alike wait eagerly for the prelaunch of their school as they have to work and study at other schools that are overcrowded.
Authorities stated that the renovation work of School No.3 will be completed by the next academic year. In contrast, School No.11 is facing some troubles. The tender was unsuccessful twice and now its agreement is on its way to be processed for approval.
School No.73 is one of the six above mentioned schools for reconstruction and yet no demolition work has been done even to this day. Authorities explain that there are conflicts in the agreement. The school construction financing must be resolved through a concession agreement, and not the state budget, officials claim. School No.38 and Kindergarten No.146 have to be built through a concession agreement as well, meaning that their funding was cut from the state budget altogether.
The ceilings and walls of School No.73 collapsed in 2008. The State Professional Inspection Agency inspected the school several times and made statements about the poor condition of the building. The latest statement was made on July 2012.
For the renovation work of School No.73, China is helping through a non refundable subsidy of 3.5 billion MNT. But the money was lost amidst the mess caused by the change in government structure. Since the school condition was worsening from day to day, the Ministry of Education and Science closed it down.
At the moment, the school’s students are studying in three different places. Primary school children of School No.73 are studying in the dormitory of Tumur Zam School. Around 20 to 30 children study in a very small room of 3.7×5.5 meters.
The school officials say that it is troubling to fit many children in one classroom. Teacher D.Tuvshinjargal of the primary school expressed her worry about her students as she said, “There is no proper condition to implement programs like ‘Book’ and ‘Talent’ that the Ministry of Education and Science is organizing. Students pay attention very well until the third class. When the room gets hot or too cold, kids can’t concentrate very well.”
Students from grades one to four study in three shifts at School No.20. The first class starts at 8:30 a.m. and the last class starts at 16:15 p.m.
Senior students study at School No.51. Students are not able to use the library, gym and arts hall and can’t develop themselves in various extracurricular activities. The head of School No.73 said, “Since our classes start late, lessons can’t take place properly according to standards. Students study only for four hours a day. Only the fifth grade study for the proper length of time. At this point children can’t enjoy their certain rights in the field of study.”
When the Ministry of Economic Development closed due to government reshuffle, School No.73’s concession agreement progress stopped for 23 days.
“The government must form an agreement. Since no approval was made, the demolition work of the school can’t be started,” said the Head of the Concession Department of the Ministry of Economic Development, Ts.Batbayar.
The student of School No.73 decreased from 933 to 780. Many parents were disappointed with the lack of progress at the school and transferred their children.
With the current state of the government, the instability and neglect of these schools are likely to go on longer. The favorite words of politicians in the education sector are “Children are the future” but their action, or inaction in this case, demonstrate their lack of regard for the future of Mongolia.
Source: Unuudur sonin

Achieving Macro-economic stability part II
By Cameron McRae,
Founding President of INS
The strength of an organization is often measured in how it responds to harsh conditions. Great organizations thrive in the good times and survive well during the hard times. Often these organizations save during the good times to ensure they have resources in place to borrow against for the tough times. Great organizations also take remedial actions quickly when it becomes clear that existing strategies are not working.
Recent global events have conspired against Mongolia – the end of the commodity “super-cycle” has seen huge contractions in new investments, reduced volumes sold and reduced selling prices. All three factors have hit Mongolia hard. But Mongolia has also made its own life more difficult by creating an uncertain investment regime for both international investors and lenders which has led to many projects being stuck on the drawing board.
An immediate improvement in the global mining cycle will provide some relief from the existing operating mines. However it will not alter the structural issues that Mongolia now faces. The ability to ramp up new production and earn extra revenues and taxes – through greenfield projects and brownfield expansions – takes years to occur.
Despite recent improvements to some investment related laws and regulations, international investors remain cautious about Mongolian business opportunities. Certainly resolution of the Oyu Tolgoi dispute with Rio Tinto will be a good sign but there is more to be done given the number of other sore points that are not yet fixed.
Unfortunately the Mongolian government now has a significantly reduced ability to pursue macro-economic policies that serve the following:
•   Pay for future infrastructure with cheap government raised debt.
•   Pay for investments in strategic industries such as mining.
•   Subsidize poorly performing state owned companies.
•   Subsidize normal citizens through price controls.
•   Subsidize certain industries through cheap loans.
Mongolia has rightly increased its focus on leveraging into the growing trade between Russia and China. It is also presenting itself in a less antagonistic manner to China in terms of improving its ability to trade on internationally fair terms. This is smart and building a long-term mutually beneficial relationship is imperative work. Achieving internationally benchmarked prices for commodity exports is also a strategic imperative.
But Mongolia knows well that it cannot afford to put all its eggs into a single basket – so working with competent and significant non-Sino trading partners should remain a strategic imperative.
The Mongolian government is also pursuing government to government support for various large projects – and especially from neighbors within the Asian region. Again this is important work, and the government needs to ensure these projects are gained on economically fair terms and do not restrict future flexibility.
So what can be done about the macro-economic situation? Telling the electorate that things will be OK can be politically justified. However fooling yourself into thinking that you can borrow and spend your way out of trouble is not wise.
Examples of this occurred in Europe and other countries in 2009-10 following the global financial crisis – where already heavily indebted governments increased their spending as the private sector shrunk. These countries are effectively bankrupt and are now undergoing radical restructuring to many areas of their economy and society.
Action 1:  Publicly benchmark Mongolia against a number of international measures, including the Matrich Treaty
By acknowledging the severity of the situation that Mongolia faces, through publicly released metrics and future well thought targets, should make it easier for citizens to understand the need for modifications to macro-economic policy.
Measuring foreign direct investment with and without Oyu Tolgoi is important because we need to understand how the rest of the economy is performing and to ensure that the Oyu Tolgoi business is running at full steam.
Tracking the balance of payments and absolute levels of imports and exports highlights the importance of the performance of the export focused sectors of the economy. A high level of exports allows imports to be purchased without negative impacts on currency reserves, exchange rates and interest rates.
Some key measures are:

Matrich Target
Mongolian performance
3 percent
3 percent in 2011,  to a high 17 percent in 2012 and then 14 percent in 2013
Budget deficit (percent of GDP)
3 percent max
10 percent in 2013 when counting off-balance sheet lending
Currency fluctuation
2.5 percent pa
Moved from 1300 in 2011 to a low of 1880 in 2014 – a 44 percent devaluation in 3 years
Action 2: Create a clear view of Mongolia’s total debt and put back discipline 
This is critical. Yes, borrowing and debt repayment is a fact of life – organizations needs to borrow money to pay for capital goods. This is true whether one is a family, a business, or a government. However two critical rules are:
• Do not borrow to meet current expenditure needs.
• Only borrow to levels that are sensible and that you can service and repay on schedule.
Action 3: Address the critical realities that will not self-correct and ensure that government policy takes these factors into account. The critical realities are:
A. Mongolia’s economy runs on several tracks
• Existing mining businesses and projects under development.
• Future natural resource mega-projects that require huge capital investment and international technology and finance to get them started.
• Future infrastructure projects to support mining, energy and agricultural projects as well as modernizing Mongolia’s transportation and energy transmission.
• Real estate development and the rest of the economy.
B. The Government of Mongolia now has very high levels of debt and does not have its own money to invest in mining ventures, large infrastructure ventures and energy projects
C. Mongolia does not have a successful record of bringing on a steady stream of privately funded large projects in mining, energy and infrastructure.
D. Mongolia may gain revenues from new mining projects in the next 10 years, if it creates an attractive and safe investment environment today. However, significant “new” construction starts are unlikely in the next year and significant operational revenues will not flow for more than five years.
E. The Mongolian government is heavily subsidizing Mongolian companies and individuals through different subsidy schemes. This continues to increase government debt, with no repayment of the subsidies ever likely to occur. Worse still, it does not increase productivity or international competitiveness.
Action 4: Focus government policy measures under two banners – growth and service delivery
Banner 1 is about growing a bigger economic pie and giving the job to those organizations who are best suited to delivering it – cost effectively and with their own sources of capital.
Banner 2 is about supporting Banner 1 and then public service delivery – focusing on government budget deficits, inflation, interest rates, housing affordability and improving government services.
Key macro-economic measures to be acted on include:
• Stop wasting scarce Mongolian government revenues on subsidies to state owned companies, consumers and private companies.
• Phasing out subsidies should be done quickly with investment incentives being linked to productivity improvements in agriculture and new fields of endeavor.
• Get all users to pay fair prices for fuel, electricity, and et al. This will have a once-time hit on inflation but then it will not be reflected going forward.
• Privatize and then sell state owned companies that are making losses– this will provide immediate relief to the budget.
• Open up the banking sector for fresh injections of capital, which should lower interest rates to commercial borrowers.
• Create incentives for people to save – and create saving pools to be borrowed against for accommodation mortgages.
• Ensure that future government borrowing is only undertaken where it:
• Replaces higher cost debt with lower cost debt.
• Is invested in sectors whereby economic activity is sustainably increased.
• Is invested in projects that have been transparently tendered and where net economic benefits are obvious and near term.
Action 5: Radically alter the approach to attracting foreign investment and finance
The government is already addressing the investment climate through regulation and publicity events. It now recognizes the absolute importance of investor confidence in a country’s leadership and each country’s ability to honor existing agreements and provide a reliable legal system to arbitrate over legal disputes. Tax stabilization agreements are now being offered but other measures also need to be considered to win international finance for Mongolian based investments.
Provide tax incentives that entice new activity to occur, such as incentives that do not exist and ensure that cabinet and government agencies are set-up to genuinely facilitate the establishment of successful proposals requiring international finance, and that they absolutely fast-track development once all approvals to commence are given.

S.Ganbaatar: Z.Enkhbold and N.Altankhuyag defamed Democratic Party
November 18 (UB Post) Below is an interview with independent member of Parliament S.Ganbaatar, covering timely issues surrounding the Mongolian political world.
Why didn’t you attend the session for discussing the dismissal of the Prime Minister?
I notified in advance that I will not be attending parliamentary sessions during discussions about dismissing the Prime Minister. Besides, the public didn’t vote for us so that we discuss seats and position issues. They chose us because they wanted us to conference the nation’s prospect issues and resolve them.
Not attending the meeting was my expression of refusal to discuss seating and position arrangements while prolonging urgent matters.
I conducted a survey among residents of Darkhan city in regards to the Prime Minister’s dismissal. The results showed that 50 percent of residents supported his dismissal while the remaining half was against it. I decided it was better to not participate in the voting when everyone is having controversial opinions.
The Democratic Party (DP) is facing an internal dispute. As a person who’s been skeptical towards most MPs, can you comment on this?
The ruling party of Parliament having disunity shows the instability of the state. People who believed and trusted the DP are losing their trust. DP members conferencing day and night about official positions, without listening to public interests or requests is truly tragic.
Proof of this tragedy is the fact that they’ve raised issues on deciding who would become the next Prime Minister in the past week. Instead of this, the public desires for more workplaces, more pension and benefits, keeping Oyu Tolgoi as well as mining goods in Mongolia, and establishing more industries. The public interests are as simple as this. When DP members are ignoring these interests despite being aware of it, would the public believe in the DP again?
The DP stated that the party would overcome internal dispute if all 35 Parliament members for their party unite. Was the party trying to show how extreme factional conflicts are within the DP?
The DP is a party formed from uniting many factions so factions fight persistently when determining issues to make it beneficial to their own interests. The DP has been functioning in this manner in the past.
This statement [about overcoming internal dispute] is a clear indication of how they see their party. It’s not a secret that the public is suffering because of all this conflict. The DP is clashing with itself and has weakened. The head of the government will have to assign minister’s positions to every [DP] member to calm the dispute. Political instability is arising as the ruling party of the government clashes internally.
Currently, being a minister is a race of signing on monetary checks and the DP will not back down on this race. To survive, former Prime Minister N.Altankhuyag has spent the last two years functioning as a broker between factions and trying to provide shares to every side. I guess all the things he did and provided weren’t sufficient to all factions.
Many issues were turned aside at the DP’s National Consultative Committee meeting. How do you see this?
To survive in the National Consultative Committee, DP heads keep several subordinates in the committee under them and occasionally invite them for drinks. The National Consultative Committees have to do as faction leaders say as they serve the faction’s interests. Doing as what the leaders say will help subordinates set food on their table.
According to this principle, N.Altankhuyag negotiated with Altangadas Faction and Speaker of Parliament Z.Enkhbold with Shonkhor Faction. One of them was able to preserve his Prime Minister’s position while the other bargained his party head position. I see these two people as defamers of their party. The same applies to the Mongolian People’s Party (MPP). Thousands of voters for the DP and MPP are observing this situation patiently.
The Speaker of Parliament said a new government will be established after a nominee for Prime Minister is approved by Parliament. A working group for building a new government was created after meeting with parties and committees in Parliament. If independent members are proposed to be included in the government, what would happen?
The council for independent candidates in Parliament has notified about its refusal to be involved with the government. Personally, I believe double deel, being both minister and MP, is something that should never happen. The most fundamental issue is the stability of the state and government.
Works need to be executed besides ensuring stability. I’ve never said I wanted to work in the government. I’ve only said the government isn’t carrying out their work.
Your council members have mentioned that works aren’t progressing because there is only criticism. Doesn’t this show their interest in cooperating with the government?
We discussed to stand firm in our position as we’ve concluded it’s best to refrain from involving in every issue. The DP seems to want to create a great coalition government. The MPP isn’t opposing. After considering who would act as opposition force in Parliament if this new government were to be established, we made our decision to stand firm in our position.
It’s said that from the council for independent candidates, you do politics with Oyu Tolgoi LLC and Ts.Davaasuren with Mongolbank. Can you comment on this?
We’re living in conditions where we have to talk about Oyu Tolgoi and Mongolbank. We are committed to major issues that have a potential of giving off results. In return for doing so, many people criticize us as trying to extort money from Oyu Tolgoi and Mongolbank.
We’ll continue to fight for justice. Us not supporting or opposing the government will prove this. We will criticize the things we need to criticize without having anyone tell us that.
Lately, there have been ample criticisms about authorities of agencies and major industries getting their representatives assigned at state posts. For instance, people are still connecting you to Darkhan Metallurgical Plant. Can you clarify on this?
Independent candidates are absolutely clean. Rumors say I have connection with Darkhan Metallurgical Plant. There is a company that has established a major fraud contract with this plant. The plant’s concession agreement approves of only steel production. However, in the agreement as well as some attachments, two large mountains containing iron one were included. Those mountains are being crushed and all the rocks and dirt is being transported.
Recently, an audit inspection for Darkhan Metallurgical Plant was finally carried out after constant demand. Many swindles were revealed through the inspection. For example, a truck tire was bought for three billion MNT but has been kept idly outside for over two years. That tire isn’t used at all. It’s a business done by swindlers who extorted three billion MNT during the process.
I don’t own even a tiny bit of the Darkhan Metallurgical Plant’s stock or share. In fact, I’m preparing to sue them. I’ll move to this issue when Oyu Tolgoi LLC and Mongolbank issues are resolved. In relation to Oyu Tolgoi LLC, if we say we will not get 130 million USD in tax from them, we’ll be accepting that Mongolia will not get tax from the company for several years.  Freely voicing our opinions against powerful politicians with money who are ready to put people into jail shows that independent candidates are 100 percent clean.
MP G.Uyanga disclosed highly classified audit inspection results on Oyu Tolgoi to the public. It revealed many issues. Why haven’t you said anything about them?
I’ve read the classified report. I’ve proposed the General Intelligence Agency of Mongolia and the Independent Agency Against Corruption to review and check noted issues.
I thought it best for law enforcement authorities to first check and retaliate against those issues. As stated by MP G.Uyanga, the public does have the right to know the truth. However, all of this has to be reviewed by legal enforcement authorities.

Mongolian female wrestlers seize medals from Open Cup Russia
By B. Tungalag
November 18 (UB Post) Mongolian freestyle wrestler International Sports Master S.Byambatseren won a gold medal in the 58 kg category at Open Cup Russia international women’s freestyle wrestling tournament, which took place in Novocheboksarsk, Russia on November 14 and 15.
International Sports Master A.Battsetseg won a bronze medal in the 53 kg category.
Five wrestlers represented Mongolia in 48, 53, 55 and 58 kg categories.
The tournament was organized by the Ministry of Sports of the Russian Federation and the Chuvash Republic, and Federation of Olympic Wrestling of Russia.
Female athletes from Austria, the US, Kazakhstan, Mongolia and Moldavia competed in 48, 53, 55, 58, 60, 63, 69 and 75 kg categories.

Should we keep importing electricity?
November 18 (UB Post) Supplying electricity to a country where only three million people live is not a hard job, but it would be tough if there were only a few power plants in operation or if electricity was being imported from neighboring countries.
The Ministry of Energy has calculated that Mongolian energy demand has increased by 50 to 55 MW in the past three years.
As soon as new buildings under construction are finished and the economy resumes growth, will the country be able to meet its energy demands and survive this winter without any blackouts? The Ministry of Energy says yes, because power plants are prepared for winter.
A 50 MW upgrade was made to Thermal Power Plant No. 3 in June and a 120 MW extension at Thermal Power Plant No. 4 is about to be finished and connected to the central system by December 20. We have 60 MW resources this winter and the central power system plans to produce energy of 4.8 billion KW this year.
It is clear that a new power plant will not be built in the next three to four years, but our brother Russia is expected to raise the price of electricity that they provide us with to 195 MNT per KW, which was previously 120 MNT and later raised to 165 MNT.
How is winter preparation in rural areas?
The power consumption in western provinces is increasing rapidly. To clarify, energy use increased by 27 MW last year but reached 30 MW this year. The recently popular use of floor heaters and the opening of power plants in Uvs and Khovd provinces led to this increase. Over 70 percent of electricity in western provinces is imported electricity. Electricity is at risk of becoming scarce when the price of imported electricity increases and the state stops giving subsidies to the provinces for electricity consumption.
The Durgun hydroelectric plant, which supplies power to over 30 percent of western provinces, exceeded last year’s projected production, but this year its efficiency might decline due to low water flow and rates.
In eastern provinces, the power plant of Dornod Province is almost ready for winter preparation.
But the Ministry of Energy is worried about Erdenetsagaan soum in Sukhbaatar Province, which buys expensive electricity from China. The installation of 35 KW high-voltage power transmission lines will finish next year. If the state stops subsidizing this installation, China might enforce restrictions in electricity distribution.
In the Gobi region, Dalanzadgad Province will face winter quite well because Oyu Tolgoi provides low priced electricity to the province. The electricity distribution is normal in sub regions.
Amgalan Thermal Power Plant remains unavailable
Officials claimed that the power plant in Amgalan, with a 348 MW capacity, would begin operations this month. This plant has the potential to supply heat to the eastern part of the city. Unfortunately, it won’t be ready for use this year.
Even though it is possible to operate some equipment in the plant, it will be minus 15 degrees Celsius outside and the plant can’t be operated properly. In other words, over 3,000 tons of water is at risk of freezing even if it is ready to heat. Besides, the plant has not been connected to the sewage system and they face challenges in dealing with wastewater.
As officials have noted, the project’s land acquisition faced delays before construction, even though Chinese workers performed most of the work within 10 months.
The power plant is expected to be finished next spring. The head of the Policy Implementation Regulatory Department, Ts.Bayarbaatar, underlined that there will not be any scarcity of electricity due to the Amgalan Thermal Power Plants unavailability.
Should we face 13 billion MNT in losses?
During winter’s peak time, we will definitely import electricity from Russia, even if the capacity of our central power supply has been raised to 890 MW.
We mentioned before that Russia is threatening to raise prices per KW to up to 195 MNT. Because of this increase, we will probably face 13 billion MNT in losses if we plan to import over 280 million KW of electricity.
We don’t have any other choice but to lower our electricity consumption.
We saved 125 MW of power per day last year, but we could drop this figure to 105 MW. The Ministry of Energy plans to decrease daily consumption to 80 MW.
Russia says the increase in prices is a result of lower energy production at Lake Baikal.
They said that the hydroelectric plants in the Angar River (supplied by Lake Baikal Lake) have limited their production and electricity prices in Russia are also high.
During the international “Energy Mongolia 2014” forum, Russia announced that they supplied 140 to 150 million KW of electricity to Mongolia, which is a significant amount of energy export.
Khalkh Gol soum of Dornod Province buys one KW of power for 262 MNT and Erdenetsagaan soum of Sukhbaatar Province buys electricity for 280 MNT per KW from China. Bulgan soum of Khovd Province buys power for 175 MNT per KW and Oyu Tolgoi buys one KW for more than 180 MNT from Inner Mongolia.
Thermal Power Plant No.5 faces delays
Estimates show that the price of imported electricity rises by 30 percent per year, and over 130 million USD was spent on buying electricity from abroad. But almost 12 years have passed since plans for the construction of Thermal Power Plant No.5 began. Newcom Group established a contract with Parliament to build a plant with a capacity of 450 MW. In addition, five more contracts – including selling and purchasing electricity and heat, supplying coal and a land agreement – need to be established as quickly as possible.
The contract between the Head of the Energy and Infrastructure at Newcom Group D.Gankhuyag and the joint working group of the Ministry of Economy Development and the previous Ministry of Energy is still valid. D. Gankhuyag stated, “If one of these contracts is established in January, the construction will begin the following fall.”
A plant with such a capacity can be built within three to four years according to international standards. But for Mongolia, it is doubtful that it can be to built in three years, because the construction season in Mongolia is quite short.
Mongolia has used the equipment of its power plants for a long time. According to experts, Mongolia’s electricity demand could reach 2,357 MW by 2025. It is clear that we will overcome this winter, but when will we start preparing for the future?

Germany through the eyes of Mongolian artists
By B. Narantuya
November 18 (UB Post) 976 Art Gallery is hosting “germandiaries” a joint exhibition, from November 17 to December 7. The exhibition features over 30 paintings presenting the real and imagined landscapes of Germany.
The exhibition is supported and sponsored by Goethe Institute in Mongolia and dedicated to the 40th anniversary of diplomatic relations between Mongolia and Germany.
Artist Ts.Gan-erdene is the curator of “germandiaries”. He lives and works in Germany.
“When I first meet Gan-Erdene Tsend, I asked him about his experiences while living and working in Germany, quite far away from his homeland. He told me that Mongolia is always present, in his mind and his work. He then discovered places in Germany that reminded him of his childhood in Mongolia. The paintings are calm, serene and – to me – comforting paintings. I see my home country and Mongolia as well in them,” said Sebastian Woitsch, the director of Goethe Institute in Ulaanbaatar.
Ts.Gan-Erdene and his professor Ts.Narangerel travelled for two weeks, spanning 3,500 km across Germany, stopping in Hamburg, Albersdorf, Seebull, Neukirchen, Sankt Peter-Ording, Busum, Husum, Eckernforde, Budelsdorf, Flensburg and Heide. All of the paintings were done on location and painted in watercolor or oil paint.
I think that everyone who resides far from their homeland has a little space in their heart that forever misses their home country. I am familiar with this feeling. When I was only 16 years old, I went abroad to study for one year. Even though one year can seem like a short time for people who live in foreign countries for many years, I still missed my family and Mongolia very much. I remember I felt very calm and got warm feelings when I used to spend time near a lake not very far from my apartment. That lake reminded me of home somehow.
This exhibition gives us the opportunity to experience traveling through Germany from unique perspectives. In accordance with the anniversary, both countries are exchanging information, exploring new places and sharing experiences to strengthen relations.

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