Saturday, February 7, 2015

Mongolia Brief February 3, 2015 Part I



Energy Minister receives US Ambassador
By B. Amarsaikhan
Ulaanbaatar, February 3 (MONTSAME) The Minister of Energy D.Zorigt received Tuesday the Ambassador Extraordinary and Plenipotentiary of the USA to Mongolia Ms Piper Campbell.

Mr Zorigt mentioned that the consultants of the US Agency for International Development has served in the development of Mongolia’s general legal document on Energy, the Law on Energy which was adopted in 2001, and cooperated actively in introducing to Mongolia’s energy sector the model of one purchaser and in establishing the Energy Adjustment Bureau. He said that the USA has made enormous contribution in settling the contemporary tariff system.
The wind turbines of the General Electric have been operating normally since the commissioning of the Salkhit Wind Park, located in Sergelen soum of Tov aimag, added the Minister.
“In regard of the upcoming implementation of the Second Millennium Challenge Account program, the Ministry intends to include its intention to establish Thermal Power Stations in ten aimag centers in the financial plan of the program” he said and requested the Ambassador’s support on this matter.
He also asked the Ambassador to study the possibilities for the USA to share its practices with Mongolia on promoting energy sector with legal provisions, and to invite again the experts who co-developed the tariff system in Mongolia.
Ms Campbell thanked the Minister for receiving her and expressed her satisfaction with the expansion of Mongolia-US relations in energy sectors. She also promised to pursue the requests of the Minister and put efforts to mobilize them.

Standing committee head meets US Ambassador
By B. Khuder
Ulaanbaatar, February 3 (MONTSAME) Head of the parliamentary Standing committee on environment, food and agriculture S.Batbold Monday received Ms Piper Anne Wind Campbell, the Ambassador Extraordinary and Plenipotentiary of the USA to Mongolia.
Expressing the satisfaction with meeting the US Ambassador, the Standing committee head underlined the Mongolia-USA relations and cooperation have been developing in many spheres. He thanked the Board of the Millennium Challenge Account (MCA) for making a decision to involve Mongolia in the second Compact Contract, and then said the previous project has been implemented successfully.
Mr Batbold emphasized Mongolia is working to make the agriculture and food priorities of the national economy although the mining sphere plays a crucial role in it, so the country intends to augment the meat production and to export it to foreign countries.
Thanking the Standing committee head for an audience, the US Ambassador pointed out the MCA’s next project is about to be realized in Mongolia. So, Ms Campbell recommended that Mongolia now should analyze factors causing difficulties to the national economy because the project will be implemented at a high level in terms of time and development range.
The Ambassador said she is confident the US side will deepen the ties and collaboration with Mongolia in it. 

16 MPs submit survey answers to Minister of Mongolia
February 3 (news.mn) Sixteen Members of Parliament have delivered questionnaire answers to Minster of Mongolia M.Enkhsaikhan regarding issues of the development of the Tavan Tolgoi deposit and the nation's economy. 
The issues addressed in the questionnaire include:  clarification of whether or not Mongolia can hold 51 percent of the Tavan Tolgoi investment, whether the 267 kilometer Tavan Tolgoi-Gashuunsukhait railway will be owned by Mongolia, and how the 1,072 shares disseminated to the Mongolian people will be handled following the selection of an investor. The questionnaire covered more than 20 questions and was submitted in the parliamentary session. 
M.Enkhsaikhan posted on Facebook, “I have received the questionnaire signed by the Members of Parliament this morning. The questionnaire contains important questions to create integrated ideas. I will give a written answer to it."
The Minster of Mongolia gave information regarding Tavan Tolgoi at a recent meeting of the Democratic Party and presented a discussion of the project.  

Book club calls for books as gifts on Tsagaan Sar
February 3 (news.mn) Members of the club Let’s Be Friends with Books appealed to the public to give books as presents during the celebration of the traditional Mongolian holiday Tsagaan Sar, in a press conference held on February 2.  
The press conference was led by Head of Let’s Be Friends with Books N.Khulgen, Executive Director of the Liberal Women’s Intellectual Fund Ts. Bujidmaa, Head of the Young Politician club  B.Turbold, and Director of Grace of God N.Munkhbyar.
"It has been many years since Mongolians began to encourage the Chinese economy instead of supporting domestic production.  Moreover, the currency exchange rate is increasing every day and we are still continuing to buy socks, tights, and shampoos as Tsagaan Sar presents. Instead of this, we should give books as presents," stressed N.Khulgen.
This appeal from Let’s Be Friends with Books started three years ago. The club is going to announce a sale of discounted books at the Sovereignty Palace of Mongolia.

President Ts.Elbegdorj receives Ambassador Christopher Stuart
February 3 (news.mn) The President of Mongolia, Ts.Elbegdorj, has met with Ambassador Extraordinary and Plenipotentiary of the United Kingdom to Mongolia, Christopher Stuart. Ambassador Stuart is going to return to the UK after the end of his appointment in Mongolia.     
At the beginning of the meeting, Ambassador Stuart expressed his gratitude to the President of Mongolia.
President Ts.Elbegdorj said, “We would like to express gratitude for your considerable contributions to the development of cooperation between our two countries during these three years of work as an ambassador.” 
The United Kingdom is one of the first countries to acknowledge Mongolia as an independent country. The diplomatic relationship between Mongolia and the UK was established in 1963, and since that time, the relationship between the two countries has been developing continuously.
The President mentioned that Mongolia has future plans for cooperation with the United Kingdom in the mining sector and the stock exchange market.
President Ts.Elbegdorj noted that cooperation in the economic sector has been developing more rapidly in the last few years. He expressed his hope for success in the future work of Ambassador Christopher Stuart and wished him good health.

Thank you for NOT littering!
By B. Nyamdari
February 3 (gogo.mn) "Thank you for NOT littering" campaign has organized flash mobs with the public. 
People tend to think that flash mob is normal activity which gathers group of people in some area and performs only dancing or singing. However, it means a group of people perform well organized and unusual activity, which is to mobilize public to volunteer work.  
Thus, we are delivering such unusual flash mob videos that were organized in Ulaanbaatar city.
Let`s join in "Thank you for NOT littering" campaign by putting garbage in litter bins. 

Maternity hospital with 150 beds is planned for construction
By R. Adiyasuren
February 3 (gogo.mn) Children hospital with 100 bed is to be constructed in Chingeltei, Khan-Uul and Bayangol districts with financing from the city budget in scope of conditions such as lack of hospitals and votes of residents.
Moreover, the following tasks will be done in accordance with the implementation plan of City Governor`s 2013-2016 Action Program, social and economic goals for 2015: 
·         New building of "Amgalan" maternity hospital (3rd maternity hospital) with 150 beds is to be constructed
·         Medical Center building with 300 beds is to be built by concession agreement in 2nd khoroo of Nalaikh district
·         Buildings of Medical Center and Drug Clinic in Tuul village is to be constructed by concession agreement
·         New building of medical center in Khonkhor village is to start operation.

Was Economic Transparency Law REQUESTED?
By B. Erdenechimeg
February 3 (gogo.mn) It has been long since we have started talking about economic transparency. Words like transparency, open and accessible have been circulating extensively in our vocabulary so that Economic Transparency law started to convey positive notion. This law has been in discussion for very long time.
Mongolian Business Summit June20, 2014. Ch.Saikhanbileg, Head of Cabinet Office, representing Government of Mongolia.
“We need to make the economy transparent. Our tax system is not perfect yet. There are many unresolved and unchanged issues in the past 20 years. This law will give the businesses one time chance. After that there will be no shadow economy. We have initiated this law in order to reveal the hidden cash.”
From the above it can be understood that with the law Mongolian tax system will be strengthened and put an end to the shadow economy.
December 10, 2014, B.Lkhagvajav, President of Mongolian National Chamber of Commerce and Industry.
“We are working to have the Economic Transparency law to be approved within next one month’s period.  We will cooperate with Speaker Z.Enkhbold on this matter. Mongolia needs Financial Reforms in order to move from its current position. This law should have been discussed back in May, but was postponed. If it was approved then we could have started the financial reforms starting the July 1st. The law enables the individuals, businesses to increase their profits with right financial tools. Businesses and entities could have started their operations anew. With tax return system enforced entities, businesses and individuals will pay their taxes.“
From above statement it can be understood that Economic Transparency law will enable the individuals, businesses and entities to start from the same start line with financial reforms. But it lacks to explain why entities and businesses that have been having their operations for 25 years need to start anew at the same starting point.
January 30, 2014, Interview of T.Ganbold, CEO of Altan Dornod Mongol LLC to Udriin Sonin newspaper
“If we had approved this law earlier, we could have started having the benefits earlier as well. I have doubt that even the economic downturn could have had different turn. It has been 25 years since Mongolia transitioned to market economy. First five years has been like wild capitalism. No one had proper business skills and every one was avoiding taxes. Most of the politicians have come up this way. Companies and businesses have been having double reporting. ”
His conclusion was not to blame the individuals and businesses, but more sudden transition of the economy and the systematic anomaly.
January 12, 2015, O.Orkhon, President of Mongolian Bankers Association
“As of the Economic Pardon Law we tried this once before. I don’t think hidden cash that has already been transferred overseas will come back. There is no such thing. Entities and individuals at Narantuul market never expose their income, it is wired through private accounts, and most of them are avoiding taxes. Everyone in Mongolia knows this. We cannot continue and we in desperate need of regulating this state. I support the idea. But on the other hand for those who were paying their taxes it is somehow unfair. Why the state should pardon so frequently? Many will think that if the state pardons from time to time it would have been beneficial to avoid taxes.
The law should clearly state the benefits and fines of paying and not paying the taxes. But the government is not giving solutions for this procedure. Taxes have been raised. But now they are talking about giving tax returns. Taxes should be imposed in similar manner and give the businesses same conditions.”
January 6, 2015, MP U.Enkhtuvshin at the Legal Standing Committee discussion
“Economic Transparency Law should be approved immediately. Politicians should be left from this process. Probably there will be some cases raised for some politicians who have put their hands on Chinggis Bond money. The law should regulate businesses only.” The same view was expressed by MP J.Batzandan as well.
January 7, 2014, B.Lkhagvajav, President of Mongolian National Chamber of Commerce and Industry.
“There are two reasons why the law wasn’t approved. Two provisions of the law have become the obstacles; first is the provision, which states that the individual under investigation does not fall under this law and the second provision, which states that anyone who comes open with their income statements to fall under the law. Businesses now struggling to raise funds from the capital markets as their income statements have been having double standards. The law helps to improve the tax system as a whole and will assist in overcoming the economic downturn.”
Experts and officials have been discussing the Economic Transparency law from different angles. Other MPs who defend the Economic Transparency law are B.Garamgaibaatar, Head of Economic Standing Committee, R.Gonchigdorj, S.Bayartsogt, Kh.Temuujin and B.Narankhuu.
While the Cabinet Office have given the following information:
During 2007-2008 entities have been pardoned from some taxes and social welfare fees. This time on top of social welfare fees and taxes immovable property and legal registration, accounting and income statements are to be included. For instance:
·         Social welfare fees and taxes
·         Immovable property and legal registration
·         Lack of income statement and devalued income statement
·         One time pardon to entities and individuals with correct income statements
The duration of voluntary income statement reports will be 6 months starting from the date that law enforces.
Outcomes
Implementation of law will ensure the economic transparency and fairness and strengthen the tax structure. The most important outcome will be the correct reporting information, which will enable to determine the economy with realistic numbers.
The law provisions to pardon from the legal and criminal outcomes related with double booking, but also provisions the cases that won’t fall under this law.
Although this law seems very right to be approved and implemented immediately it still lacks the research in several fields:
·         National Statistics Office (lack of studies on shadow economy and whether the shadow economy will come open with the implementation of the law)
·         General Taxation Authority (how many entities, businesses and individuals to be pardoned?)
·         Ministry of Finance (which entities have been pardoned during the 2007-2008 and what positive outcomes this had on economy?)
·         Ministry of Justice (who or which experts participated in the drafting of the law, has the working group involved independent economy experts and professional associations?).
If the officials at government and drafter have come up with open information on the above-unanswered questions many would not have doubted this law.
As long as the state institutions haven’t done their homework on that civil institutions are criticizing the law as the Economic Pardoning Law emerged together with Economic transparency law, which provisions that information of the pardoned entities should be hold, leading to the conclusion that this law was pretty much drafted by REQUEST.
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