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Wednesday, February 19, 2014
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Turquoise Hill Resources Price Target Cut to C$4.25 by Analysts at TD Securities
February 18 (WKRB) Equities research analysts at TD Securities lowered their price target on shares of Turquoise Hill Resources (TSE:TRQ) from C$4.50 to C$4.25 in a research note issued to investors on Tuesday, StockRatingsNetwork reports. The firm currently has a "hold" rating on the stock. TD Securities' price target would suggest a potential upside of 19.38% from the stock's previous close.
Turquoise Hill Resources (TSE:TRQ) traded up 1.12% during mid-day trading on Tuesday, hitting $3.60. The stock had a trading volume of 1,247,357 shares. Turquoise Hill Resources has a 1-year low of $3.20 and a 1-year high of $7.82. The stock's 50-day moving average is $3.75 and its 200-day moving average is $4.43.
A number of other firms have also recently commented on TRQ. Analysts at BMO Capital Markets upgraded shares of Turquoise Hill Resources from a "market perform" rating to an "outperform" rating in a research note on Tuesday, December 17th. They now have a C$4.50 price target on the stock, down previously from C$5.50. Analysts at CIBC cut their price target on shares of Turquoise Hill Resources from C$5.50 to C$4.85 in a research note on Wednesday, November 27th. They now have an "underperform" rating on the stock. One analyst has rated the stock with a sell rating, three have issued a hold rating and one has assigned a buy rating to the company. Turquoise Hill Resources presently has an average rating of "Hold" and an average target price of C$5.12.
MSE News for February 18: Top 20 -1.55%, Turnover ₮19.4 Million
Ulaanbaatar, February 18 (MONTSAME) At the Stock Exchange trades held Tuesday, a total of 37 thousand and 082 shares of 28 JSCs were traded costing MNT 19 million 393 thousand and 483.00.
"Remikon" /10 thousand and 200 units/, "Moninjbar" /10 thousand units/, "Genco tour bureau" /4,575 units/, "Khokh gan" /4,223 units/ and "Hermes center" /3,755 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Baganuur" (MNT three million 837 thousand and 250), "Moninjbar" (MNT three million and 400 thousand), "Remikon" (MNT one million 555 thousand and 580), "Tavantolgoi" (MNT one million 532 thousand and 600) and "Talkh chikher" (MNT one million 431 thousand and 320).
The total market capitalization was set at MNT one trillion 696 billion 010 million 782 thousand and 087. The Index of Top-20 JSCs was 16,888.43, decreasing by MNT 265.37 or 1.55% against the previous day.
BoM MNT Rates: February 18 Close
January MNT Chart:
Mongolia Forex Reserves Rise 8.8% M/m to $2.446b at End-Jan.
Feb. 19 (Bloomberg) -- Mongolia's y/y forex reserves fell 40.1%, Bank of Mongolia says on its website.
* CPI rose 1.7 percent in Jan. from pvs month and 12.3% y/y: statement
(Bloomberg First Word)
BoM FX Auction: Refuses USD, CNY Bids, Accepts All $39.2 Million MNT Swap Offers
February 18 (Bank of Mongolia) On the Foreign Exchange Auction held on February 18th, 2014 the BOM has received from local commercial banks bid offer of USD and CNY. The BOM has not accepted the offer.
On February 18th, 2014, The BOM has received MNT Swap agreement offer in equivalent to 39.2 million USD from local commercial banks and accepted the offer.
BoM Monthly Statistical Bulletin, January 2014
February 18, --
BoM Consolidated Balance Sheet of Banks, January 2014: Assets -4.1% MoM, +63.9% YoY
February 18 --
Government plans to convert State Property Committee into a fund
February 18 (news.mn) The Government of Mongolia has started the process to close the State Property Committee. The State Property Committee will instead function as a fund. The head of the Cabinet Secretariat for Government Ch.Saikhanbileg will be in charge of running the fund.
The State Property Committee owns over 100 companies and entities of which most are owned or dominated by the State. There is much public criticism on the deficit created by state owned companies and Government`s policy failure, and that public property becomes a lucrative source of money laundering for high ranking state officials.
Therefore the Government reached the decision to amend the activities of the State Property Committee into a fund with the intention to separate it from political influence. Shares of the state owned companies that belong to the fund will be sold.
New Agency to Fight Organized Crimes
Ulaanbaatar, February 18 (MONTSAME) A new authority responsible for fighting against organized crimes is planned to be founded in near time.
The new authority will employ 125 officers in its five units of criminal police, investigations, financial crime, environmental crime and organized crime.
The authority will be responsible for fighting against serious crimes such as drug-related crimes, human trafficking, illegal gun transactions, money laundering as well as organized crimes.
A head of the Criminal Investigation Authority, Colonel Ts.Batsukh has been appointed the chief of the new authority.
Mineral Licenses Cover 9.2% of Mongolia, Down From 44.5% in 2005
Ulaanbaatar, February 18 (MONTSAME) The Government last years has been making efforts to restrain a number of mining licenses granted in its territories.
A total of three thousand licenses have been awarded to conduct mining-related activities in the country. More than a half of these licenses give rights to minerals exploitation, the remaining 1,302 licenses have been issued for minerals exploration.
Mineral exploitation and exploration have been allowed in 9.2% of all territories. In 2005, miners were allowed to produce minerals in mere 0.1% of all territories, and to explore minerals in 44.4%. In 2014, the percentage changed into 0.6% for production and 8.8% for exploration.
Mineral licenses have been granted for gold (35.3%), building materials (21%), coal (17.3%), fluor spar (12.7%), iron ore (4.2%), wolfram (2.1%) and other minerals (8.0%).
Home-invested enterprises (Mogi: domestic-invested) compose overwhelming 74% of all mineral license-owners, while foreign-invested or joint ventures make 17.8% and 8.1%, respectively.
Mogi: his InterGroup, now the largest shareholder in the newly formed Ard Financial Group, formerly EIT, a large shareholder in TenGer Financial Group, the parent company of XacBank
L.Enkh-Amgalan: My business started from publishing
February 18 (UB Post) The following is an interview with MP L.Enkh-Amgalan, highlighting his new gallery, career and Blue Pearl project.
-Congratulations on opening a gallery with your own art collection.
-I first exhibited my collection in the Museum of Fine Arts in 2008 and didn't exhibit for a long time. Later, I opened a gallery named "Q." This gallery is not only mine; my collected works and other artist's works will always be displayed. With this, I'm aiming to make it a heritage foundation of pieces by Mongolian artists of all time. It's also possible to open an exhibition with compositions containing the Mongolian culture and traditions, of photographers, and snuff-boxes and stamp collectors.
Mongolia has many great artists and is exhibiting more and more galleries. However, most Mongolian artists are not able to make their work global. This is connected to the lack of arts management and promotion in the country. Therefore, by utilizing the gallery, I want to create opportunities for Mongolian artists' to be displayed on international exhibitions and make albums and series with their artworks. Artworks of notable Mongolian artists, such as Do.Bold, Sh.Chimed, Ts.Narangerel and Ts.Enkhjargal, and late R.Dunnkherjav and Yo.Ulziikhutag that are not publicly available, and are stored in few collectors' homes.
-When did you start collecting arts?
-I've been collecting for about ten years.
-In total, how many artworks do you have in your collection?
-I displayed some 80 pieces in the gallery. In total, I have eight hundred artworks. Every artwork will be displayed in a series.
-Only those who actively collect things knows how and from where to enrich their collection. Where do your artworks come from?
-I like visiting artists' workshops during the weekends. I'm stay in touch with family members of renowned artists. I'm currently in touch with family members of the late D.Amgalan, S.Dondog, S.Tsevegjav and R.Suinherjab. They trust me and give some of their artworks. I dislike saying that they sold it to me or that I bought it. Instead I think of it as something that is giving to me for safe keeping. This is not a bargain.
Many Mongolian artworks were exported. Ts.Ekhtuvshin brought back many artworks exported to Korea. In my view, collectors are people who keep and protect cultural heritages.
-Have you ever sought to bring back artworks that were sold to foreign collectors, or even purchased them for a much higher price?
-I brought back "Goviin Ih Nuudel"(Great Gobi Movement) by N.Tsultem from Korea. There are some pieces I want to bring back from Korea and America.
-You are also writing a book about fine arts?
-With an American publishing company, I'm writing a book named "Fine Arts of Mongolia." Through this book, I will show how Mongolia affected arts and cultures of other countries during the Mongolian Empire with cultural and historic monuments and cave drawings in Mongolia. I will also illustrate the impacts of Mongolia to Persia during Il Khaad (13-14th century).
In general, Mongolian history is recorded by wars and military. There are many documents about how fine arts and culture flourished during Yuan Empire in museums in Taiwan. I'm also including Mongolian arts in museums in Taiwan, Turkey, London, and New-York and in the State Library of Berlin. In fact, if we want to develop tourism, we need to take care of our culture and traditions.
We need more museums. Just as we established dinosaur museums, why can't we establish a museum with artefacts from the Khunnu era?
Thousands of tourist queue to see museums featuring the works of Leonardo Da Vinci, in Louvre, Hermitage and Amsterdam. Similar to this, Mongolian tourism sector has a huge potential if we build museums of artefacts that has been kept until now.
-Do you paint? Are you good with brushes and inks?
-I don't draw. I was very close with famous painters Do.Bold and L.Ganbold when I was studying at the Saint Petersburg University in Russia. This might have influenced my interest in arts. From another perspective, my profession, journalism bonded me with arts.
There are many art collectors in Mongolia, including President Ts.Elbegdorj, the Secretary of National Security Council of Mongolia Ts.Ekhtuvshin, MP B.Batbayar, Minister of Economic Development N.Batbayar and CEO of MCS group J.Od.
-Was your family of artistic background?
-No. My father is from Ikh-Uul soum of Khuvsgul Province. I'm the tenth child of eleven siblings in my family. My father had 15 siblings. My father was a truck driver and my mother was a nurse.
-Can you share some of your good memories of your student days, studying journalism at the Saint Petersburg University?
-In 1989, I was one of the representative students to study in Russia in accordance with the first meeting of the Democratic Union. I went there without informing my family. My father said that he first heard of the news on the radio. It might be because my father recognized social changes, but he didn't have any hard feelings about it. My brother who was in Erdenet Province was very worried.
-Do you miss your profession of journalism?
-I'm a lucky man. As soon as I came back after graduating, I worked as an assistant of G.Akim for four to five years. I used to show my articles to G.Akim, Batbayar and L.Khurelbaatar of the theater. From 1992 to 1995, I worked as the general secretary of Il Tovchoo newspaper and Montsame Agency.
Great people like Erdene Senge and Dashbalbar Ochirbat used to come to our agency and give interviews. This was an amazing fate for me. At the time, I used to transport rare books from Russia as it was a time of change and restoration. Our newspaper tried to introduce investigative journalism to Mongolia and was called several times to the police.
When I became the general secretary, our newspaper published 17 thousand copies of each issue, sometimes even 25 thousand. With the help of Nepco Company, I translated a book titled "Lectures of Nobel Prize." Additionally, with MP S.Byambatsog, we co-founded Khogjliin Garts (Gateway of Development) club and published a book about development secrets of world leading countries. This might be one indication of my longing for my profession.
-Why didn't you work as a journalist?
-In 1994, I was given the opportunity to study investigative journalism with a financial support from the Freedom Forum of America for eight months. I learnt that I needed to live like Americans and start a business to shape my life. I found the American dream, where everyone can live prosperously and I needed to work for it to come true. I travelled on a train with the founder of the company Allen Newhart for five days.
He established a huge publishing company despite having not a single dime. He gifted his own biography and I read it enthusiastically. After returning from America, I remembered G.Akim's words that we should form daily, weekly and holiday newspapers and magazines because newspaper is a huge enterprise. In 1995, I entered the business world and founded MCS.
After founding Unitel, MCS Electronics, IT Zone, MCS Com and Univision companies, I worked as the chairman. Like this, I worked in the IT sector and I don't think far from my original profession.
-When you first entered the business world, was it interesting?
-Newspaper was the first step of business. After founding Infopress, I first met with the president of MCS Group J.Odjargal in 1995 and co-founded Interpress. At the time, I started with 30 thousand USD and after five months, the investments were paid back. I started working not just in publishing but also in the IT sector.
Obviously, it was thanks to meeting good partners that my business flourished. Fate probably made me enter the world of business. The people who influenced my life the most are G.Akim, Gurdava Renbuchi and the founders of MCS Group J.Od and J.Odjargal.
-Can you talk about your family?
-I have a son and a daughter. My wife is a lawyer and my daughter is in high school. We lived with another family in Sansar after we got married. Our eldest son was born in 1993. He was named Khasbilegt by novelist J.Bold-Erdene.
-Finally, can you tell us about the "Khukh Suvd" (Blue Pearl) project?
-Khuvsgul Lake is not just for the people of Khuvsgul Province. It's both Mongolian and world resource. It makes up two percentage of the world and 98 percent of Mongolia's clean water reservoir. Khuvsgul Council in Ulaanbaatar, Baldorj Foundation, Unuudur Newspaper, Channel MN-25 Television and non-government organization Khuvsgul Dalain Ezed (Owners of Khuvsgul Ocean) are working together to implement this project.
There are around 40 vehicles at the bottom of Khuvsgul Lake. There are two vehicles that were transporting fuel. The vehicles fell into the lake while driving over it in winter. With the aim to clean Mother Lake these vehicles were located by Japanese scientists last summer. In order to complete the project, it is being approached by the Asian Development Bank. The Asian Development Bank informed that it's ready to finance only if the Ministries of Environment and Green Development of Mongolia, Economic Developments and Culture, Sports and Tourism supports the project. We are asking ministries to support the project. If the project is approved, we can start taking out the vehicles from Khuvsgul Lake this summer.
Mogi: not a very accurate summary and translation
Owner of Golomt Bank, D.Bayasgalan: John Finnigan was replaced due to his carelessness
February 18 (business-mongolia.com) This is a summary of interview that appeared on Daily News on 18th of February, 2014. D.Bayasgalan is 100% owner of Bodi International Group which is the 85% shareholder of Golomt Bank. (Mogi: what about Zorigt Munkhchuluun, the other shareholder?)
D.Bayasgalan shed some light on what has been going in the bank and made clarification on many issues:
Abu Dhabi Investment Council
- Abu Dhabi Investment Council invested USD25 million which is 14% of the bank as of 2009 (Mogi: $25 million loans were convertible to 14% of equity). Golomt Bank management decided that it would not go public before 2015 until the investment environment in the country and global financial situation stabilizes. Last year's strife between the shareholders also, influenced their decision on pulling their investment early. However, it demanded to pull it back as 36% of the bank share value. However, it also requires a consent from Bank of Mongolia. They can sell the 14% of the convertible instrument to anyone who is willing to purchase. No one has to lose. In addition, it made us revise the foreign investment participation to out bank which started in 2007. Some foreign investors do not care about the long-term condition, strategy and future of the bank and aim to make highest profit in the shortest period of time.
- Loan from Credit Suisse Bank was paid in full. Swiss-Mo Investment AG owns 10%, and Trafigura Beheer BV owns around 5%, and lent USD8.7 million to Bodi International. Everything is in the balance sheet. I see nothing wrong in this. This is a usual business operation. However, I do not know where they came up with the figure USD90 million. Maybe they misunderstood.
- Due to foreign investment interest in the country back in 2007, our bank wanted to hire an experienced CEO and learn things we do not know. Therefore, we hired John Finnigan in that year. I don't deny that he worked hard to understand the situation and improve the bank's operations. However, as time passed, he started being careless on his daily job and he was where there was an international conference or diplomatic gathering. He started advertising himself as one of few experts who knows the country, and adjunct advisor to the country's President, then started losing focus on the job. Also, he didn't perform some of his duties. Then, we found out that he planned to stay in the position for 3-4 years more, and saw the bank as his last resort to make himself wealthy. I never imagined he try to stay in the position by any means necessary and use or partner with our former-shareholder and MP L.Bold. The last year's strife started from here.
I had no choice but to replace him to protect the bank's common interest. There is no single bank in the world that serves to support someone's luxury life and facilitate his desired trips abroad any time he wants. Mongolian banks are here for to serve its customers, not to be used as a easy instrument to earn money for foreign investors. To save his position, John Finngian deliberately misrepresented that Golomt Bank is to make a loss from Itochu's L/C. I would like to reiterate that we do not have any pending payment issues with Itochu. However, L.Bold paid USD1.6 million to clarify the situation to an audit. The audit re-audited the bank which required time. Then, the bank failed to release the final report due to the additional auditing process. In relation to the official report, the rating was also delayed. It doesn't mean that we have totally lost our rating. Since we resolved issues last November, the bank formed its board of directors, completed the auditing, and started re-developing our bank. Soon, we the audit will release the 2013 report, and ratings will be re-established. Also, we started the negotiation with foreign investors interested in buying bank shares.
Official reports indicate 11-12% growth which implies growth. However, business sector representatives say things are getting tougher. Politicians want to believe what they like. Therefore, people surrounding the government agencies are giving what they want to hear. Personally, I think our economy is not doing well. The authoritarian nature of economic management is the main obstacle in the country. We have to focus on the basics. We have to sell what we can and buy what we don't have. But, now we are trying to do everything on our won. The idea is correct however the timing is wrong. What is a product that Mongolia can sell? It is the minerals. Unfortunately, we have only one buyer. Mongolia is a developing country, but still very poor. There is no need to put high bets trying to predict the future. Therefore, we need to sell what have and accumulate capital very fast. It seems like we are trying to maximize our profit, preserve our nature to the best, and decrease the shares for the foreign investors. These things are in a different plate of a single scale. Everything is on hold for now. In addition, China's growth is slowing. In order to get out of the current situation, we need to make some business sacrifices. Business needs a sacrifice to succeed. Also, in order to complement the monetary policy with the economic growth the central bank and the government need to work very closely. Real growth is when inflation and exchange rates are stable, not when there is a high inflation and local currency is in a fall.
Overcoming the crisis
We had many elections recently. Politically motivated promises and populist statements' harm directly impacts business sector. We jammed everything by over politicizing on everything. We are to pay very high amount to correct the mistake. We need to make corrections as soon as possible. The Foreign Investment Law was approved, however, we need to work hard to attract the investors. Foreign investors closely monitor where it could make returns. If Mongolia closes its' doors today, they will go somewhere else. I think we need decisive and determined economic policies. Policy makers tend to be liked by everyone. Life is not like that. There will be losers. Instead of talking about smokeless coal we need to build apartment complexes very fast by hiring Turkish and Chinese workers and send them back. Privatization has to happen quickly in order to develop our financial markets. I think that Arab-model is suitable for a country like us that have vast resources and small population.
Telecom Mongolia needs USD1.9bn for LTE rollout
February 18 (TeleGeography) Fixed line incumbent Telecom Mongolia is looking into entering the domestic wireless market by deploying a 4G Long Term Evolution (LTE) network in the country. Local news agency Montsame reports that in order to implement the project, the company needs total investment of around USD1.9 billion, of which around USD500million will be provided by South Korean co-owner KT Corp. The telco hopes to offer LTE access in capital city Ulaanbaatar by mid-2015, with all 21 Mongolian provinces to be covered by 2018.
As previously reported by TeleGeography's CommsUpdate, in September 2013 the Mongolian government signed a cooperation agreement with KT Corp to introduce 4G LTE technology in the country. KT Corp has held a 40% stake in Mongolia Telecom since the company was part-privatised in August 1995.
Construction sector composes 5% of economy, up 2% from 2012
Ulaanbaatar, February 18 (MONTSAME) Last year, Mongolia witnessed building and installation projects with total cost of 1.4 trillion togrog.
Almost half, or 44%, of these projects were engineering or infrastructure ones, and along with road paving, this kind of building (engineering) took a larger part than apartment projects in all construction jobs done in the sector.
In 2013, the construction sphere composed over 5% of the economy, increasing 2% from that of 2012.
Mongolia business delegation to visit Moscow this March
Ulaanbaatar, February 18 (MONTSAME) A business delegation of Mongolia will visit the Russian Federation (RF) this March.
This news and other related issues were discussed at a meeting Monday between diplomats of Mongolia's Embassy in Russia and the Moscow Chamber of Commerce and Industry (MCCI).
The parties also focused on Mongolia-Russia cooperation in energy, mining, coal, oil refining, metallurgy, construction, tourism, urban development, banking, insurance and culture.
Present at the meeting were S.Banzragch, the Minister-Counsellor of Mongolia's Embassy; O.Ochirmaa, the Advisor to the Mongolian Ambassador to the RF; S.Vardanyan, a vice president of the MCCI; S.Gorbatykh, a director of the MCCI Committee for foreign economic cooperation with partners in Mongolia; and representatives of Russian enterprisers.
Our business delegation will be headed by D.Erdenebat, a president of the Business Council for Cooperation with Russia, and by S.Demberel MP, the president of the Mongolian National Chamber of Commerce and Industry.
Mongolia attends Asia Festival and Fair in Belgium
Ulaanbaatar, February 18 (MONTSAME) The Embassy of Mongolia in Belgium attended the 21st "Asia Festival and Fair-2014" to promote our country in Wemmel town February 15-16.
Mongolia was also represented by the Honorary Consuls in this country and Netherlands Paul Wan Woov and Eddy Shiphorst, Mongolia and Belgium Association, "Gana Cashmere" company, "Mirage" band of Belgium-based Mongolians, supported by the Ministry of Culture, Sport and Tourism of Mongolia and MIAT company.
The Ambassador of Mongolia to Belgium Kh.Davaadorj spoke about present political and economic situation of our country, its investment law. The Honorary Consul Mr Woov displayed photo exhibition about Mongolia.
Many promotion activities ran including exhibition of national handcraft products, art performances, tourism advertisement and traditional cuisines.
The measure brought together delegates of aviation companies, tourism and non-government organizations /NGOs/, also embassies of Bangladesh, Laos, Nepal, Sri Lanka, Philippines, Indonesia, China, Thailand.
BELASIA is a Belgian not-for-profit organization founded in 1992. Aim of the association is to promote the social, cultural and economic relations with Asian countries.
Sod Gazar: Young company, new discoveries, big ideas
February 2014 (Worldfolio) Having discovered Mongolia's first fluorite mines for over 20 years, the country's young mining company Sod Gazar LLC (with just an average employee age of 23 years old) is growing up quickly. As the business expands and another new investment law is approved, CEO Sukhbayar Batsaikhan says that he and his team of ambitious and talented staff hope to attract fresh new investment on the way to achieving their goal of becoming one the world's mining big boys in years to come
Since the new investment law passed in May last year, the mining sector has experienced a sharp drop in investment and revenues. How do you see the situation of the sector nowadays that a new law is coming in and do you think it will get back to the state it was in 18 months ago?
Due to the ratification of the investment law in May 2012, the whole mining sector fell down to the bottom. In addition, the world economy and its finance system itself were in a recession and prices for precious metals were also very low. As many others, our company has suffered under this law. At that exact time when the law was ratified, we were negotiating with 2 or 3 foreign companies about our potential collaboration on fluorite mines which had been recently discovered in the Dornod province, but due to the investment law we had to postpone it.
After the ratification of the new law in autumn of this year there are some tendencies for positive changes in this field. However, the situation also depends directly on the downfall of mineral prices on the world market and therefore, in my opinion, the investment sector will not be able to recover fully in 2014.
What do you think is the main issue the Government should work on for Mongolia to gain appeal to foreign investment?
The political stability is the most important and essential issue in Mongolia, because the political structure of the country is based on diversity of political parties.
Since the election in 2008, small and medium sized companies like us have suffered under this political situation. Because two political parties or coalitions are switching their dominating position almost every 4 years, consequently all related laws and regulations change as well, including the above mentioned investment law which drives away foreign investors.
Today all investors are focusing their views only on the stability of Mongolian laws. Nobody knows how stable today's laws and regulations will be and what the election in 2016 will bring.
Sod Gazar LLC is a young company, established in 2005. Could you give us a quick recap, pointing out the significant events occurred in its history?
In the period of 2005-2008 our company was a small, newly established company. Our staff was also very young – in my case, for example, it was only the 3rd year since my graduation. In general, this was a very hard period for all of us. However, if I should recapitulate that within those 3 years, we had managed to purchase 10 exploration licenses and already provided business activities on 2 mines. Moreover, from today's point of view, the company development has proceeded quite well.
Since 2008 the business environment of the mining sector began to profit from positive changes and foreign investors started to come copiously to our country. Therefore, we consider 2008 as the year of our business resurrection. After the accomplishment of our activities on iron ore mines in the Gobi-Altai province in 2008, we expanded our business, starting with exploration of fluorite mines in 2009.
Since 2011 we have also been working on our molybdenum and wolfram mines. Nowadays, the company owns 32 special licenses for geological survey works, encompassing nearly 4,685,000 hectares in total. Without a shadow of a doubt, we can consider the past 5 years as very successful for Sod Gazar LLC.
What are today the key projects of the company?
Within 2 years between 2008 and 2010 we have discovered fluorite mines, which have not been discovered in Mongolia for 20 years. In 2011, we started implementing related exploration works on rare metals, such as molybdenum and wolfram. According to our working schedule these works should be accomplished soon.
Currently we are negotiating about the investment for these mines - as I've mentioned before, the previous negotiations in 2012 had to be stopped due the investment law.
There is a saying by geologists: "You must dig and seek in a thousand different places to find one appropriate mine. And this will be a big rarity as well." Sod Gazar LLC has achieved to work on two big mines within the past 5 years. We are very proud and excited about this, as for a 100% Mongolian company free of any foreign investments this represents quite a big fortune and opportunity.
What is Mongolia doing to attract American investors and how best firms from overseas can find opportunities and collaborate with local companies like Sod Gazar LLC?
The law on investment, recently approved, removes the distinction between foreign and domestic private investors. By doing so, the Government has shown its determination to encourage foreign investment, particularly in the mining sector. The new law also provides investors with tax stability by freezing VAT, corporation tax, customs duties and mining royalties. Investors from the USA and from all over the world are welcome. In addition, the mining law will be soon ratified. All this means possibilities of profitable investment for both local and foreign entities.
In this particular moment, I believe it is necessary that Mongolia becomes capable to manufacture completed and VAT-included products for the end user. As a matter of fact, this has been our company's long-term policy for the last 8 years. As per opportunities of collaboration, Sod Gazar LLC will be glad to cooperate with American investors for the production and manufacturing of finished products.
This company employs young professionals. What is the recruitment philosophy of Sod Gazar LLC and how does the company encourage growth and career development of its employees?
Middle-sized companies like us, are often facing employment-related issues. In Sod Gazar LLC, we are aware of the importance of our human resources.
This is why we are deeply committed with our employees' professional growth and we always strive to increase our human capital development. We regularly involve our staff in related training courses and seminars organized by the Mining Association and the Ministry of Mining of Mongolia. Furthermore, we believe in the potential of young people. They are talented and passionate. The average age of our staff is approximately 22 to 23 years old. We pride ourselves of our professional staff, which includes some of the best experts in the country.
In less than 10 years since its establishment, this company experienced a vibrant growth and now it ranks itself among the major players within the Mongolian market. What did allow this company to achieve such an impressive result and where do you see your company in 10 years time?
Although I'm acting currently as Sod Gazar's director, the company was established initially with three friends of mine. We all graduated from the School of Geology. In the early stage of our company, we hadn't even imagined that we would achieve such results. Now, after 8 years, we are working on two big mining projects. One of them seems to be turning into a rare mineral project with quite a large scope and volume in the future.
Because the legal environment of the mining sector is improving constantly, I can see the future of our company in a bright light. It is without a doubt that we will continue our business activities in the mining sector for at least 20 years. If I am to speak about the future of our company, I must say that we will face hard, but at the same time, exciting challenges. The company's plan for the near future, meaning 10 years time from today, makes us proud and enthusiastic. Our aim is to build, within 3-4 years, our own facility to manufacture completely finished products made of rare metals. Currently, we are in the middle of important negotiations and we feel quite confident that the decision will be positive for us.
Our mid-term ambition is to bring the shares of our company on the domestic stock exchange in order to strengthen the competitiveness of the company among the local competitors. I hope that, within 5-10 years, our company will be comparable with all the most prestigious foreign mining companies.
We are on the right path and we are strongly committed to contribute to the economical development of our country through specific actions like exploration of big-sized mines, execution of their exploitation by ourselves, manufacturing of finished products within the country and the creation of new jobs.
If you had to launch a message to our audience in the United States, what would you say to invite them to visit Mongolia and to invest in this country?
To all tourists who are planning to come and visit Mongolia I can say: "Welcome to our beautiful country and enjoy the bright and endless steppes". Although Mongolia is well-known as a land with a great deal of natural resources and big mines, our country has a very long and glorious history, which flourished in the 13th and 14th centuries. In these terms, Mongolia has plenty of beautiful things for visitors to learn and to discover.
To the foreign investors, I invite them to analyse our country's recent changes: the new Mining Law will come out in 2014, the modified Investment Law is about to be ratified and the Law on Natural Resources is also being amended. This all means that our Government is implementing a totally new and open policy, intentionally focused to increase the appeal of the country. Mongolia is turning itself into the perfect business partner for those who seek profitable investment opportunities.
Five Major Development Projects in Ulaanbaatar for 2014
February 16 (UB Post) --
1. New building for the City Authority
Estimated Budget: 37.1 billion MNT
The Office of the Ulaanbaatar City Government, Office of the Ulaanbaatar City Mayor, and other related ministers and agencies will be located at the back of the 20 story building and the Ulaanbaatar City Council and offices will be located at the front of the new building according to preliminary designs.
2. Amgalan Power Plant
Amgalan Power Plant's construction has begun and operation will start this year. When the power plant is in operation, over 170 people will be employed and 50,000 households will be supplied with safe electricity.
The executor of the construction project is the Chinese company Chinese Machine and Engineering Corporation and is under contract with the condition of repayment and providing a key.
This power plant will be fully equipped with a combined cycle combustion engine based on modern technology, a fully automated computer control system, and environmental pollution controls.
The capacity of the power plant will be 300 MW. The grounds will include coal wagon reception, a closed container for coal storage, a coal transferring device, clean water storage, and a network water pump.
3. High school and kindergarten complexes
Estimated budget: 1.5 billion MNT per building
This building project will provide children with schools within 500 meters of their residence. In Ulaanbaatar, 83 high school locations have been determined. The Bayanzurkh, Songinokhairkhan, Sukhbaatar, Khan-Uul and Bayangol district school and kindergarten complexes will be constructed under the city budget. The complex construction will follow one design and 120 kindergartens and 180 high schools will be built. The design insures that all classroom and recreation areas will have access to sunlight and construction quality standards will be high.
4. 12 ger district redevelopment projects will start again
Estimated budget: 8.5 billion MNT per location
This project will be implemented in cooperation with the Asian Development Bank over the course of three years and with three working phases.
5. Suburb development project
Estimated budget: 500 million USD
Bayankhoshuu is one of the ger districts planning for the redevelopment of 162 square hectares and including over 200,000 residents. According to the general plan for developing Ulaanbaatar through 2020, focused on a capital city with eight suburbs, City Mayor E. Bat-Uul envisions a capital city that is multi-centered in his 2012-2016 action plan. Asian Development Bank will invest 500 million USD in the project. This year's city budget includes some development projects that will be under discussion. The locations under discussion will cover 970.2 square hectares and affect 50 thousand people.
Each Ulaanbaatar district to nominate one khoroo for "Model Khoroo" project
Ulaanbaatar, February 18 (MONTSAME) The first discussion on model khoroo /the smallest administrative unit in the city/ to improve solid waste management in ger /national dwelling/ areas ran at the Citizens' Hall of the UB city Monday.
The action was attended by B.Badral, a general manager of the city, specialists of Landscaping and Trash management department of the City Mayor Office, governors and their deputies for urban planning and infrastructure.
An agreement on cooperation in realizing the "Model khoroo" project was inked by related officials, and a working group was set up to implement this project at districts and khoroos' levels.
Firstly, each of six central districts will nominate one khoroo to have it involved in the project. The inhabitants will get more information on the trash-related matters.
Ulaanbaatar Approves ₮1 Billion Pilot Program to Fit Apartment Buildings with Renewable Energy
Ulaanbaatar, February 18 (MONTSAME) Many apartment buildings of 11 khoroos / khoroo-the smallest administrative unit in the city/ will use renewable energy.
A resolution about it has been issued by E.Bat-Uul, the City Mayor. One billion togrog has been allotted to this work from the city budget. The Mayor obliged City Procurement Office, Finance Department of City Mayor's Office, departments of state fund and of investment and Property Relations Agency to focus on this work.
Ulaanbaatar: Ger Districts Use Less, But May More for Water
By E. Zorigt
February 17 (Mongolian Economy) Water is the most valuable part of life – but it also happens to be cheapest product in Mongolia, costing less than one tugrug per litre. Today, apartment owners pay 32 mungu (0.32 tugrug) per litre whereas ger districts pay 1 tugrug per litre.
According to a study from the Water Supply and Sewerage Authority (WSSA) of UB, a resident living in the ger district consumes 8–10 litres of water per day, while a resident living in urban areas consumes 230–250 litres of water daily. People who pay less actually consume a lot more water than the ones who pay about twice as much.
To raise awareness of this situation and to promote efficient use of water, Mongolian Economy and several of its partners initiated the "Value of Water" campaign. The WSSA and NGOs Green Economic Growth, Mongolian Water Partnership and the Water Services Regulatory Commission are involved in the campaign. These partners held a press conference on February 12 at the Mongol News press agency, marking the start of the campaign which will continue until the World Water Day on March 22.
The press conference encouraged media outlets to contribute toraising public awareness on efficient water use.The partners also suggested to the media that they support the government on better understanding the issue of water mismanagement.
D.Baasandorj, CEO of Mongolian Water Partnership says "Water is a vital part of our economy, ecology and society. We must conserve water as much as we can. The reason we consume water inefficiently is because of its price. So right now it is essential to increase the value of water."
Government officials are cautious that increasing the price of water may be violating the residents' right to access water.
"This dire proposal to increase water prices has been made by over 100 water supply organizations. It is also the answer to many studies that were made on inefficient water consumption."
"But this increase in price should apply where necessary – ger district residents pay more but use less water, but residents in urban areas use much more water at cheaper price per unit. As a result of this unfair water distribution system we cannot ask to increase the price of water inger districts. So we are discussing the possibilities of increasing its price per unitfor residents and businesses in urban areas. Our request to increase them to both 50 munguper litrewas denied by the Authority for Fair Competition and Consumer Protection (AFCCP)," Director of Water Services Regulatory Commission Ch.Erdenechimeg explains.
UB's water supply system faces other problems. For instance, the tap water used today is pumped out of the ground withwater pumps that are 40 to 50 years in service.
"The studies on price are not made because we want money. Behind all this waste of water, there is a growing issue of running out of underground water." S. Unen, the Director of WSSA explains that they always have negative operating balance due to inefficient use of water."Since our operating costs are always higher than what we are paid for, we cannot upgrade our equipment to guarantee supplying pure water. Last year, our budget was negative 10.7 billion tugrugs. Our financial forecast for this year indicatesa loss of around 16 billion tugrugs. If this continues any longer, we cannot guarantee a constant supply of safe drinking water. It is essential for everyone to understand that when we talk about water prices, we are talking about water supply."
They noted in the press conference that even if the price of water is set higher, it won't completely cover the financial losses.
Christian Ferrier, Country Director at ACF Action Contre la Faim operating in Mongolia, has emphasisedthe need to change water usage habits, and an awareness campaign is the first step in doing so.
Mongolian Economy magazine is collaborating on this campaign, among other works, by encouraging other media outlets to help improve the public's habit on inefficient water use.
Taiwan, Mongolia ink renewable energy pact
February 18 (Taiwan Today) Taiwan and Mongolia signed a memorandum of understanding on renewable energy development Feb. 17 in Taipei City, paving the way toward greater cooperation between the two nations.
Under the memorandum, both sides will establish joint strategic partnerships on renewable energy in the Asia-Pacific and forge institutionalized collaboration spanning energy audit and efficiency management, as well as solar and wind power.
The pact was concluded by Wang Yunn-ming, director-general of the Energy Bureau under the ROC Ministry of Economic Affairs, and Mundur Erdene-Ochir, deputy director of the Energy Development Center under the Ministry of Energy of Mongolia. Also attending the signing ceremony was MOEA Deputy Minister Duh Tyzz-jiun.
Duh said Mongolia is a much bigger market than Taiwan and has vast renewable energy resources. The memorandum will help Taiwan's renewable energy businesses reach sufficient operating scale as required by international standards to expand in overseas markets, he added.
The deputy minister also highlighted the enormous potential of renewable energy development in Taiwan and Mongolia. Since the Renewable Energy Development Act was passed in 2009, the installed capacity of solar power facilities in Taiwan increased twenty-threefold, and the government expects to see its wind power development efforts produce results in 2015.
Echoing Duh's remarks, Wang said Mongolia has implemented a number of incentive schemes to boost the appeal of its renewable energy sector to foreign investors. The Central Asian country plans to have 20 to 25 percent of its electricity supply come from renewable sources by 2020, he added.
The director-general said another important aspect of the memorandum encompasses management practices and technology employed at coal-fired power stations in Mongolia.
Taiwan is set to export related know-how, assisting in the establishment and operation of such facilities, as well as power grids and equipment purchases, he said, adding that the Mongolian government will send energy officials to Taiwan for training.
FM talks about opening embassy in Mongolia with Australia's Assistant Secretary of Foreign Affairs
Ulaanbaatar, February 18 (MONTSAME) On Tuesday, the Minister of Foreign Affairs L.Bold met with Mr John Langtry, the Assistant Secretary of Australia's Department of Foreign Affairs and Trade.
The sides shared views on Australia's governmental scholarships for foreign students, visas for workers, opportunity to open Australian Embassy in Mongolia.
Our country opened its Embassy in Canberra in 2008. Mongolia's current Ambassador Mr R.Bold presented his diplomatic credentials to the Governor-General of Australia on June 27 of 2012.
In 2012, Australia opened its Consulate-General in Ulaanbaatar to serve Australian business community in Mongolia. Australia covers Mongolia from Seoul and its current Ambassador to Mongolia (resident in Seoul), Mr Sam Gerovich presented the credentials to Mongolian President on August 17 of 2009.
Japanese Government 'Grassroots' Program to Implement Five More Public School Renovation Projects
Ulaanbaatar, February 18 (MONTSAME) The Ambassador of Japan to Mongolia Mr Takenori Shimizu Tuesday approved five more projects to take place here under the Japanese financing.
These projects will be added to the existing 18 ones that have been implemented under "Grassroots– Human Security Grant Aid" program by the Government of Japan in the fiscal year of 2013.
Thus, the Japanese humanity program will be responsible for capital repairs of five public buildings (a school, a dormitory, a health center and two kindergartens), including a kindergarten in western Bayan-Olgii province. The new capital repair projects will be carried out under a funding of USD 490 thousand (MNT 850 million) from the Japanese Government.
The Japanese Government offers a financial assistance program for development projects designed to meet the diverse needs of developing countries. Known as "Grant Assistance for Grassroots Projects (GGP)", this scheme supports projects proposed by various bodies such as non-governmental organizations and local government authorities. The GGP program has acquired an excellent reputation because it provides flexible and timely support to development projects at the grassroots level.
The GGP program provides non-refundable financial assistance to non-governmental organizations, hospitals, primary schools, research institutes and other non-profit associations, to help implement their development projects.
The availability of GGP funding in each eligible country provides Japanese Official Development Assistance with a new means of cooperation that has a direct impact on the well-being of grassroots communities.
Second Group of 89 Children Leave for Japan under Abe's Jenesys Homestay Project
February 18 (infomongolia.com) At the Second East Asia Summit (EAS) held in January 2007, the Prime Minister of Japan Shinzo Abe announced a five-year program to implement under Japan-East Asia Network of Exchange for Students and Youths (JENESYS), inviting about 6,000 young people to Japan mainly from the EAS member-states (ASEAN, Australia, China, India, New Zealand, and the Republic of Korea).
In the scope of continuous of the Program, the Government of Japan is now implementing the JENESYS 2.0 Project that aims to bring 30,000 children and youths from the Asian-Oceanian region to further promote people-to-people exchange and build closer relations between Japan and the other parts, where Mongolia is also included.
In the frameworks, the second group comprised of 89 children from Mongolia left for Japan on February 16, 2014. These youths majored in Japanese language, culture and natural sciences are divided in 3 groups and will tour not only Tokyo, but also Okayama, Tottori and Yamaguchi Prefectures to get familiarized with local educational institutions, culture, customs and famous sites as well. According to program, children will stay in Japan 10 days.
Sumo Champion Hakuho to Bridge Toyota and Mongolia
February 18 (UB Post) Mongolian sumo champion, Yokozuna Hakuho M.Davaajargal is currently visiting Mongolia. Upon arrival, the sumo champion told reporters that he will bridge Japan's prominent auto maker, Toyota with Mongolia.
"I came on a business visit. I have good relations with Toyota and I plan to collaborate with them on importing Toyota products to Mongolia," said M.Davaajargal.
During his stay in Mongolia, the yokozuna will host a reception of Japanese delegates.
Hakuho M.Davaajargal said that Toyota has always been supportive of Mongolian sumo wrestlers in Japan, and offered a helping hand in times of economic hardship.
Toyota brand cars are extremely popular in Mongolia due to their affordable price and ability to withstand Mongolia's irregular and extreme temperatures. According to a study in 2011, around 45 percent of all cars in Ulaanbaatar were Toyota models. Analysts believe that this number has increased drastically in recent years as car sales, especially Japanese car imports, rose substantially.
Toyota was the largest automobile manufacturer in 2012 (by production). In July of that year, the company reported the production of its 200-millionth vehicle. Toyota is the world's first automobile manufacturer to produce more than 10 million vehicles per year. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company, Toyota Industries, to create automobiles. Toyota Motor Corporation (TMC) produces vehicles under five brands, including the Toyota brand, Hino, Lexus, Ranz, and Scion. It also holds a 51.2 percent stake in Daihatsu, a 16.66 percent stake in Fuji Heavy Industries, a 5.9 percent stake in Isuzu, and a 0.27 percent stake in Tesla, as well as joint-ventures, with two in China (GAC Toyota and Sichuan FAW Toyota Motor), one in India (Toyota Kirloskar), one in the Czech Republic (TPCA), along with several "nonautomotive" companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world.
Over 1,200 livestock destroyed to control foot and mouth disease outbreak
February 18 (UB Post) Foot and mouth disease broke out in Naran soum in Sukhbaatar Province in early February and has already spread to nine soums in three neighboring provinces. As of Monday, 1,218 out of 1,309 infected livestock have been slaughtered.
Remote districts of Ulaanbaatar including Baganuur, Bagakhangai, Nalaikh, Bayanzurkh, Khan-Uul and Songinokhairkhan are being monitored to prevent foot and mouth disease spreading to Ulaanbaatar.
Livestock and livestock derivative raw materials such as hide, leather, wool and cashmere shipments from provinces were prohibited from entering Ulaanbaatar. No livestock product based events such as exhibitions, fairs or competitions will be held in the city until the disease has been completely eliminated, according to a new decree by the Ulaanbaatar Mayor.
Livestock in the city will be vaccinated once vaccine reserve is enough, reported the Ulaanbaatar City Special Commission.
The following is an interview with T.Baatar, physician of Veterinary and Animal Breeding Agency in Ulaanbaatar, about vaccine reserve, how far the disease has spread and compensation for slaughtered livestock.
-How much compensation will be provided to herders per livestock slaughtered due to foot and mouth disease? When do you think the compensations will be given?
-The Elimination Commission is registering age and sex of livestock before eliminating. According to concerning laws, soum governors will evaluate the total financial loss of each herder and the state will compensate 90 percent of the evaluated loss amount. Quarantine will stop 21 days after the slaughter of the last infected livestock and the state will compensate within 30 days after the quarantine is stopped.
-Local news agencies have been reporting shortage of vaccine against foot and mouth disease. Has Mongolia purchased more vaccines from abroad yet? What is the situation with the current vaccine reserve?
-We are using vaccines made in Russia. We have vaccines for 1,500,000 livestock right now.
-Is it not possible to domestically produce vaccines against foot and mouth disease?
-Bio-Combination state agency does not produce vaccines against the disease. Manufacturing this vaccine is very risky. Mongolia is not yet able to produce the vaccine against foot and mouth disease as it requires advanced technologies. Storing the foot and mouth disease virus and experimenting after the production must be done in fully prepared condition with the highest level of safety.
-Why do you think that the eastern region provinces were infected with the disease? Did foot and mouth disease virus, which were eliminated a few years ago in Mongolia, recur? What are the possible causes of the disease outbreak?
-We haven't yet confirmed the origin of the diseases, outbreak date and genetic similarity of the virus compared to other viruses. Therefore, we have sent a virus sample to the World Influenza Center in England and another laboratory in Russia. The results will be available in a month. We believe that the main carrier of the disease could be antelopes. Where the disease came from and its origin will become certain once the results are ready.
-Is it likely that the disease will spread further to other provinces?
-We are sure that the vaccines will prevent further spreading. However, it is too early to dub as foot and mouth disease virus become more active during cold seasons. We are doing everything we can to prevent further spreading.
Estimated losses caused by foot and mouth disease outbreak increase
The government issued a resolution to prevent the spread of the current foot and mouth disease outbreak in two eastern provinces and one province in the Gobi.
Officials initially reported that the estimated budget to stop and control the infectious disease in Sukhbaatar Province would be over 900 million MNT. But so far, four billion MNT from the state budget has already been spent only on vaccines and cleanings.
Six neighboring high-risk provinces have 4.9 million livestock requiring vaccination. At least twice the originally estimated number of livestock vaccines, cleaning substances, needles, test tubes and syringes will be required. Since January 27, when the foot and mouth disease was first reported, 846 emergency workers have been working on control and management. Additional funding for the provinces dedicated to inspecting livestock, maintaining the quarantines and culling infected livestock are required. The financial impact also includes the salaries of emergency workers and damages to herders.
This kind of foot and mouth disease can spread within a very short time across vast territory and from country to country. Domestic pets and wild animals are also susceptible to infection.
Sainshand-Zamyn Uud bus service launch postponed due to foot and mouth disease
A bus service between Sainshand and Zamyn-Uud in Dornogovi Province was scheduled to launch on Monday but was postponed due to foot and mouth disease outbreak in Sainshand soum.
The soum is currently under quarantine and vehicles are prohibited in the area. The rescheduling hasn't been announced yet.
The bus service will expand its route and operate between Ulaanbaatar and Sainshand in the future. Preparation work is currently underway.
Mongolia: Space Technologies for drought and dzud monitoring and early warning
February 18 (UN-SPIDER) Recognizing the socioeconomic and humanitarian effects of drought in the Asia-Pacific region, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) initiated the Regional Cooperative Mechanism for Drought Monitoring and Early Warning, under its Regional Space Applications Programme (RESAP). The Mechanism is active in five countries: Mongolia, Sri Lanka, Cambodia, Nepal and Myanmar. It provides space-base data, products and services to address gaps in monitoring and early warning for drought.
In Mongolia a large number of people is affected by drought, because of the big amount of people depending on land as a source of their livelihood. It is especially important to strengthen the region's preparedness, monitoring and early warning systems. Mongolia therefore requested additional support for Disaster preparedness from ESCAP. The Mongolian National remote sensing Center (NRSC) and the ESCAP Information and Communications Technology and Disaster Risk Reduction Division (IDD), in cooperation with the East and North –East Asia Office developed a project to support the Mongolian state. First expert meetings were held in 2013 to discuss the implementation and applicability of remote sensing and Geographic Information Systems (GIS) in the case of Mongolia.
In early 2014, a series of activities will be conducted in Mongolia to address the gaps and needs for space-based information implementation. The Mongolian project will be used as a pilot for all the other countries.
Degree carrying 'ghosts': Mongolia's untapped human resource
February 18 (UB Post) A famous teacher who makes 50 USD for an hour of teaching, and an advisor for business investment projects, Ch. Odonbileg says, "Ghosts with bachelor's degrees walk everywhere on the Ulaanbaatar streets." The ghosts are students who have graduated university but haven't obtained professional skills or experience. They want to work in their chosen professional fields, but they can't.
Everybody says we need to develop our tourism sector but there are insufficient human resources in the tourism sector. What is the reason? Many can't speak the English language. The problem isn't only in the tourism sector. Everybody knows that the nation's education system needs to change. Our ghosts with bachelor's degrees are working as salespeople without shame or pride, and people who only have high school certificates can't find jobs as desirable as sales.
One salesman who graduated from university specializing in travel and hotel management, Batbayar says, "Twenty-five students graduated from the National University of Mongolia in travel and hotel management four years ago, but only three students work in their profession. The other 15 to 20 students work as salesmen. I know it sounds crazy, but that is true." His current job is with Smart Electronics LLC, selling equipment and home appliances such as televisions set and vacuum cleaners by the hundreds, without time to take a lunch break. Ten guys and two women work as lead salespeople or shift salesmen. Five of them graduated with degrees to work in hotel and travel management or as tour guides.
Recently, these coworkers celebrated their one year anniversary of working at Smart Electronics. The majority of them can't speak English. That's why four hotel and tourism managers work here. They passed tourism company interviews, but when they went to actual job interviews, they were mute in front of hiring managers. According to them, their English teachers did not teach them spoken English well enough and they did not spend enough time trying to learn. Some of these guys say that the two sides are equally wrong, and that they did not know how to learn, because most of the students who studied tourism and hotel management spent their time traveling out of town and drinking vodka. Only four or five of the students in their class already knew English, and they were just improving their historical and geographical knowledge. Those were the few who succeeded in job interviews.
According to the National Statistical Office's data from January of this year, 42 thousand people registered as unemployed with the Labor Exchange. As for the educational backgrounds of those on the unemployed list, 30 percent hold diplomas or a bachelor's degree.
One of Batbayar's female coworkers, Bolor says, "I graduated from university in tour and hotel management, but I interviewed ten times and failed because I can't speak English. One year ago, I bought a newspaper and read about a job vacancy that offered a high salary to work as a home appliance salesperson with a bachelor's degree. When my classmates, friends or teachers come here and buy some appliances, I hide behind the curtains. I haven't told them I'm working as a salesperson. It is shameful, because when I was at university I was awarded top student of the year."
The human resource manager of the company, Ariunaa says, "I think tourism and hotel managers have a hard time finding a job, because it is seasonal work. When I put a job vacancy in the newspaper, the first ten people are from this sector."
The National University of Mongolia was established in 1942 as the nation's first modern institution of higher education. Today, there are over 200 colleges, universities and teacher training colleges, 42 of which are public. When people hear about the number of universities in Mongolia, their eyes get bigger.
Currently, 98 thousand students are enrolled at Mongolian higher education institutions. Of these, 32 thousand students study at private institutions.
During the 2002-2003 academic year, 67 thousand students earned their diplomas and degrees from public higher education institutions, while over 31 thousand students earned qualifications from private institutions.
The background of these ghosts
It took relatively little time to develop the Mongolian higher education system, which was modeled on the education systems of the former Soviet Union and other Eastern European countries. Before the communist revolution in the early 1920s, Mongolia had no universities or other institutions for higher education.
L. Baasanjav is the director of the Tourism and Hotel Management Department. When asked about high numbers of unemployment he said, "I don't know exactly. Their employment depends on their training and personal character. I've never heard this before. Four or five tour managers work at a store?"
Practical training is an important part of the higher education curriculum. Mongolian institutions of higher education offer several types of practical training. On-campus practical training includes seminars, supervised study projects, laboratory projects and learning practice. Off-campus practical training (under supervision in a workplace environment) includes technological training, observatory survey and pre-diploma independent practice.
There are fewer men compared to women with access to higher education, contributing to unrealized labor productivity. Conversely, women have lower labor force participation at the national and decision-making level. The current labor market in Mongolia is plagued with untapped human capital, low-productivity jobs, and a lack of skilled workers. Harsh winters and summer droughts have contributed to the growing rural–urban migration patterns. About 60 percent of young workers are employed informally and data from the Labor Force Survey from last year reveal that 27 percent of non-agricultural employment is in informal activities. Also, none of the unemployed in the informal sector have access to unemployment insurance benefits.
The labor market in Mongolia is currently faced with three-fold challenges: unemployment, lack of job security, and skills mismatch in labor market demands. One thing is plain to see, as more bachelor's degree graduates are working as salespeople in home appliance stores or at the malls, something needs to change. When that change will come, nobody knows. But officials say they are working on it.
Munkhdul Badral Bontoi
Founder & CEO
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