Mongolia Brief December 31, 2014
Ministries'
Operational Strategies Adopted
By B.
Amarsaikhan
Ulaanbaatar,
December 31 (MONTSAME) The Cabinet at its meeting on December 30 adopted
programs on function' strategies and structure changes of every of 14
Ministries.
This has been
done due to recent changes in structures and compositions of Ministries. The
programs determine their priorities, goals, operational strategies and main
objectives, outline their departments' general responsibilities, directions,
activities and operations, and highlight ways of coordinating ties between the
Ministries and with localities' administrations.
The adoption of
the documents provides the Ministries with a regularity in activities, adequate
definition of responsibilities and accountability mechanism.
Website
for Glass Account reporting to be launched
December 31
(news.mn) The "Glass Account" law on financial transparency within
the government will take effect on January 1st, 2015, and Minister of Mongolia
and Head of the Cabinet Secretariat S.Bayartsogt gave a briefing on what the
law will entail.
A website is
now ready to be launched for glass account law operations. The website,
shilendans.gov.mn, will be hosted at the Mongolia National Data Center.
The website
will provide links to access budget, investment, tender, stock, and spending
information about 6,088 offices, including the Office of the President, the
State Great Khural, the Cabinet, state agencies, local budget funded
organizations, and state owned companies.
The website is
designed to allow the public and civil servants to directly access state
financial information with ease.
The site is
seen as the first version of an online governance web portal, which will
include a wide range of information about state agency activities. S.Bayartsogt
commented that the website will be improved further.
The Finance
Minister will run the website according to the Glass Account law.
Related:
Website
of "Glass" Account to Become Available Soon – Montsame, December 31
Border
Port Administrations Dismissed
By B.
Amarsaikhan
Ulaanbaatar,
December 31 (MONTSAME) The Cabinet decided on December 30 to dismiss all
administrations of border ports and to assign their responsibilities to the
related authorities of customs.
This has been done
due to the duplications of general and subsidiary roles with other border
control authorities, and in accordance with the parliamentary resolution No.70,
which obligates the cabinet to present within the first quarter of 2015 the
proposal on refining the structures and vacancies of the state bodies and on
dismissing/integrating certain agencies, offices, units and state-run
institutions along with the budget clarifications.
A total of 128
posts, their payroll funds and operational costs of the dismissed
administrations have been transferred to the subsidiary organizations of the
General Authority of Customs.
Cabinet
Meeting in Brief
By B. Khuder
Ulaanbaatar,
December 31 (MONTSAME) At the cabinet meeting on Monday, the Ambassador
Extraordinary and Plenipotentiary of Mongolia to Austria Mr G.Batjargal was
authorized to sign an export credit contract for a project on improving
firefighting techniques and facilities of the emergency services of Mongolia.
This project
will be implemented in frames of a Mongolia-Austria intergovernmental agreement
on the financial cooperation. With a soft-loan from the Austrian government,
firefighting facilities will be given to Mongolia’s emergency services. At a
national level, our emergency service has currently 198 firefighting vehicles,
a half of them are made in 1967-1990 and their utilization time has expired.
- The cabinet
discussed a matter on giving a right to adopt a draft new wording of the rule
for selection of granting special licenses. Then it decided to authorize a
state body in charge of geology and mining affairs to approve the rule in
accordance with the law on minerals, after reflecting some proposals from
Ministers.
- The cabinet
approved a rule of administrating and utilizing the general data of families,
which gives information on families livelihood nationwide. This data is used
when the government implements various policies, porgrammes and activities to
deliver social welfare and state allowances to people.
- From January
1 of 2015, the rule on giving one year non-refundable assistance to state
servants will come into force.
- The cabinet
backed governmental principle and directions for establishing a trilateral
agreement on labour and social agreement for 2015-2016.
Amendments
to State Budget of 2015 to Be Presented
By B.
Amarsaikhan
Ulaanbaatar,
December 31 (MONTSAME) The Cabinet at its meeting on December 30 settled to
present draft amendments to the State Budget and related to it laws.
This has been
necessitated by a decline in prices of our main export products, caused by the
changes in the world market, and in Oyu tolgoi production. These amendments
will change the assumptions, reflected in the budget framework presented, to
ease a possible in 2015 shortfall of estimated GDP. The documents to be
presented include drafts of amendments to the State Budget framework for 2015,
the Budget Assumptions for 2016-2017 and Law on Sustainability of the Budget,
to the Law on Ulaanbaatar Taxation, to the General Law on Taxation, and draft
annihilation of the Law on Arms’ Taxation, of the Law on Taxation of Transport
and Vehicles and of the Law on Taxation of Immovable Properties, and draft
amendments to the Income Tax Law and a draft on Taxation of Properties.
The cabinet
considers these changes will help mobilize appropriate estimations of
macroeconomic indicators and of mining sector income to be collected for the
State Budget and adequate planning and distribution of the State Budget.
Draft
Amendments to 2015 Budget Laws Submitted
By B. Khuder
Ulaanbaatar,
December 31 (MONTSAME) Drafts amendments to the laws on 2015 budget were
submitted Tuesday to the Speaker Z.Enkhbold.
The current
economic difficulties cause a performance of general budget revenue to decline
by some MNT 1 trillion by a pending performance of 2014, and even the national
economic situation does not seem to rise in 2015 against 2014. The amendments
have been drawn up with necessities to scrutinize the budget revenue of 2015 and
to reduce the size approved.
In accordance
with the law on governmental structure, the Minister of Finance J.Erdenebat MP
submitted to the Speaker draft amendments to the laws on 2015 budget, on budget
for social insurance fund, and on budget for the Human Development Fund for
2015.
President
issues decree to create National Council
December 31
(news.mn) Mongolia has won the bid to host the 11th Asia-Europe Meeting (ASEM)
Summit in 2016. President Ts.Elbegdorj issued a decree to create a National
Council in charge of organizing and providing guidance for the event.
President
Ts.Elbegdorj appointed PM Ch.Saikhanbileg as chair, Foreign Affairs Minister
L.Purevsuren and Chief of Staff of the Office of the President of Mongolia
P.Tsagaan as vice chairs, and Finance Minister, Road and Transport Minister,
Minister of Mongolia and head of Cabinet Secretariat, the Mayor of Ulaanbaatar,
National Security and Foreign Policy Advisor to the President of Mongolia,
Advisor to the President of Mongolia for International Public Affairs, Senior
Advisor to Speaker, Senior Advisor to the PM, and head of the working group of
the National Security Council of Mongolia as members of the National Council.
State Secretary
of the Foreign Affairs Ministry of Mongolia was made Secretary of the National
Council with an appendix to the decree.
Shake
Ups in Construction
By S. Batzaya
December 31
(Mongolian Economy) For many, the development of a country can at some level be
determined by the appearance of its streets and buildings as well as the
life-style of the people and the living standards of its citizens. If true, how
does Mongolia measure?
The
construction work underway throughout Ulaanbaatar is readily apparent, but this
extensive urbanisation does not retain much space for playgrounds or quiet,
secluded spots for the elderly to sit and relax. And the growing number of new
buildings does little to reduce the number of ger district residents. In fact,
the number of ger district residents is on the rise. Currently, 189,000
households reside in ger districts.
Between 2010
and 2012, around 30,000 new apartments were commissioned each year.
Professional organisations in construction said this was not enough, however.
The crux is a
lack of foreign investment for construction – but it is not for a lack of
trying. For example, the sector comprises 10 percent of total foreign direct
investment in Mongolia last year. Yet, only a mere USD 150 million of
investment out of a potential USD 700 million made it to companies.
These figures
are low for an emerging market such as Mongolia. Foreign investors interested
in Mongolia see the economic growth, opportunities for investment, and the
development of financial structure, but, despite the need for foreign
investment, Mongolia’s mistreatment of foreign investors has chased them away.
Mongolian-made materials
Meanwhile
housing construction is on the rise. A research team established by a
partnership between the Ministry of Construction and Urban Development and the
Construction Development Center found that 20,000 apartments received
registration certificates last year compared with 35,000 to 36,000 this year.
Construction
output increased 70 percent last year from the commissioning of 20,000
apartments in Ulaanbaatar and 7,000 outside the city. Some 17,105 citizens have
transitioned to a new mortgage programme thanks to the 8 percent a year loan
interest program backed by the central bank. That program opened the door to
home ownership to 14,685 new citizens, lending MNT 430 billion to 97
construction companies to help finance the completion of unfinished
construction projects.
One of six
mechanisms brought out by the Price Stabilization Programme is still running
today. This year the Ministry of Construction and Urban Development is more
focused on contributing to the production of building materials rather than
whether or not their prices remain consistent. Mongolia is set to rid itself of
its dependence on imported building materials, including cement and steel
reinforcement.
The government
recently announced that it would provide funding of MNT 1 billion to projects
that would help domestic production replace imported goods. The government has
so far approved 50 out of 1,151 projects submitted.
“A Khutul
cement and chalk factory, for example, has been established in Khutul. Darkhan
and Nalaikh factories and are to produce 700,000 tonnes of cement a year,” said
Construction and Urban Development minister Tsevelmaagiin Bayarsaikhan. “There
will be some stone crushing plants with the capacity of crushing more than
300,000 tonnes of stone a year.
“In this case,
land and infrastructure issues to install these plants need to be tackled by
the government so that the price of apartments could be decreased,” he said.
Two amendments
for the current mortgage programme have been written. They would, for example,
create the opportunity for mortgages to apartments of more than 80 square
metres. There is also a resolution for the state to lead the way for the
construction of up to 200 houses. Infrastructure will be built for new
apartment blocks at what are currently ger districts. MNT 5 million to MNT 7
billion is expected to be spent from the proceeds of the Chinggis bond for the
engineering of a pipeline network to connect with 1,000 new apartments.
Infrastructure
issues are also being tackled in the provinces of Dornogobi, Umnugobi,
Uvurkhangai, Khentii, Selenge, Tuv, Bayankhongor, Orkhon, Darkhan-Uul, Bulgan
and Arkhangai.
Additionally,
production for building and insulation materials is being developed. Last year
more than 150 new factories and plants opened, according to the Mongolian
Association of Building Material Producers. Some 260 types of equipment were
exempt from customs tax totalling MNT 2.9 billion and value-added tax worth MNT
6.2 billion.
Investment vs. Management
Construction
and real estate are seen by many investors and analysts as far less risky than
mining. Still, legal uncertainties triggered a mass exodus of foreign
investors, which was detrimental to the economy as a whole rather than any one
sector.
When investors
employ their due diligence to measure market potential in Mongolia they often
find that yields fall short of inflation and decide to save their money
instead. A common mistake made by Mongolian companies is they completely forego
the need to develop a strategy for management.
“Mongolian companies do nothing with management after they’ve attained foreign investment,” said B. Naranjargal, chief executive at UMC Alpha.
“Mongolian companies do nothing with management after they’ve attained foreign investment,” said B. Naranjargal, chief executive at UMC Alpha.
“Typically, if
a company can satisfy its investors with initial project goals, the next
investors become more willing to invest in those companies. But this does not
happen in Mongolia, mainly due to the lack of management among these
companies,” she said.
For government,
special attention will be needed in the tax environment to protect investors’
interests. The role of companies will be to ensure that projects start without
too many problems. And although guarantees can ease some investor anxieties for
project financing, Mongolian firms are rarely able to provide it.
Freeing up the
market and providing additional players in finance – such as a sovereign funds,
pension funds, and insurance agencies – would provide more routes to lead
investment towards real estate. If the government could get the ball rolling
inside the country, perhaps the foreign investors would take notice.
Mongolia
to Practice German Agricultural Technologies
By B.
Amarsaikhan
Ulaanbaatar,
December 31 (MONTSAME) The Minister of Food and Agriculture R.Burmaa received
on December 30 the Ambassador of Germany to Mongolia Mr Gerhard Thiedemann, to
discuss the "Mongolia-Germany Sustainable Agricultural Development"
project being implemented here by the Federal Ministry of Food and Agriculture
of Germany.
In frames of
the project, leading technologies are being introduced to Mongolia in colza and
potato plantings. An agreement on Cooperation between the Ministries, signed in
2011, is being realized successfully in plantings of colza and potato on fields
of "Agrocomplex" LLC in Tov aimag and of "Elite Seed" LLC
in Selenge aimag.
The Minister
requested Mr Thiedemann’s support for the second phase of the implementation of
the above project and of the further projects to be realized in establishing a
model dairy farm and in developing cooperatives of herders.
The Ambassador
agreed to show support and to appoint for her meetings with the Federal
Minister of Food and Agriculture of Germany and with other related officials
during the "Green Week" international expo expected in Berlin next
month and the Summit of Ministries of Food and Agriculture.
Minister
D.Oyunkhorol Meets Ambassador of Germany
By B. Khuder
Ulaanbaatar,
December 31 (MONTSAME) The Minister of Environment, Green Development and
Tourism D.Oyunkhorol MP Monday received Mr Gerhard Thiedemann, the Ambassador
Extraordinary and Plenipotentiary of the Federal Republic of Germany to
Mongolia. The latter congratulated Ms Oyunkhorol on being appointed the
Minister.
Then the sides
exchanged views on several issues such as upcoming participation of Mongolia in
the ITB Berlin 2015 international exhibition.The ITB Berlin, considered the
largest international exhibition of tourism, will definitely give to Mongolia a
big opportunity to gain big experiences, Mr Thiedemann emphasized. He expressed
a satisfaction with Mongolia's attaching a great importance to the exhibition,
and with a plan on having Mongolian President to deliver a speech at the
exhibition.
Mongolia is
ensuring a preparation for the ITB Berlin exhibition, Ms Oyunkhorol said and
added that all related issues will be tackled at the governmental level.
Mongolia and
Germany have the experience in implementing specific projects and programmes on
environmental matter. The government of Mongolia is maintaining a policy on
continue these projects and abolishing some difficulties and obstacles, the
Minister said.
The Ambassador
said that outcomes of some of these projects were good, but partly, for
example, the programme "Adaptation of forest rivers and eco-systems to the
changes of biological diversities and climate" is being implemented
successfully with a support from Germany, but a EUR 11.5 million worth project
on reserving biological diversities and their adaptation to the climate change
has faced problems.
Mr Thiedemann
also underlined that Mongolia should reserve its protected natural areas in
order to develop the tourism sector, adding that these programmes will help Mongolia
fulfill these goals. He said he intends to collaborate with the Minister in
developing the responsible mining and in introducing good technologies for
environmental rehabilitation.
Ms Oyunkhorol
supported the Ambassador’s initiatives.
Preliminary
Balance of Payments for First 11 Months of 2014
By B.
Amarsaikhan
Ulaanbaatar,
December 31 (MONTSAME) The Bank of Mongolia (BoM) reports on December 31 that
the current account deficit stands at USD 1,001.0 million which shows decrease
of 66 percent from the previous year. This is due to USD 2,062.5 million or 161
percent decrease in deficit of trade in goods, thus showed surplus of USD 779.0
million.
Capital and
financial accounts showed surplus of USD 525.4 million which is decrease of 59
percent or USD 769.6 million from 2013. The main trigger to this reduction is
71 percent decline of foreign direct investment to Mongolia which equals to USD
1,382.7 million.
Stock
Exchange News for December 31
By B. Khuder
Ulaanbaatar,
December 31 (MONTSAME) At the Stock Exchange trades on Wednesday, a total of
530 thousand and 794 units of 18 JSCs were traded costing MNT one billion 128
million 588 thousand and 676.
"E-trans
logistics” /4,550 units/, “Khokh gan” /3,486 units/, “State Department Store”
/673 units/, “Sharyn gol” /457 units/ and "Shivee ovoo” /218 units/ were
the most actively traded in terms of trading volume, in terms of trading value
were "Sharyn gol” (MNT two million 758 thousand and 400), "Material
impex” (MNT two million and 555 thousand), “Talkh chikher” (MNT two million 257
thousand and 900), “Shivee ovoo” (MNT one million and 090 thousand) and
"Darkhan nekhii” (MNT 455 thousand and 300).
The total
market capitalization was set at MNT one trillion 442 billion 655 million 414
thousand and 438. The Index of Top-20 JSCs was 14,854.24, increasing 30.73
units or 0.21% against the previous day.
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