Thursday, April 24, 2014

[Auminco takeover progressing, MNT falling despite interventions, and study finds "alarming" correlation between air pollution & miscarriages in UB]

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Thursday, April 24, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original


Overseas Market

Viking Ashanti's takeover offer of Auminco Mines reaches 75.72% acceptances

April 24 (Proactive Investors) Viking Ashanti (ASX:VKA) is well on its way to securing a package of advanced thermal and coking coal assets in Mongolia after receiving 75.72% acceptances for its off-market takeover of unlisted Auminco Mines.

It also intends to extend the takeover offer period by 14 days to Friday, 23 May 2014.

This includes the Berkh Uul project that is located in northern Mongolia next to a rail link that connects with Russian markets, and provides quick access to domestic power plants and industrial users at Darkhan and Ulaanbaatar.

It has JORC resources of 38.3 million tonnes of high quality, open pittable unwashed bituminous coal.

Successful production at Berkh Uul would provide significant cash flows to develop the remainder of the combined group's portfolio as well seek out further production and near term production opportunities

Takeover Offer

Under the terms of the offer, which was launched earlier this year, accepting Auminco shareholders will receive 60.6 Viking Shares and 20.2 Viking Options for every 100 Auminco Shares held.

Auminco shareholders will emerge with a 47% stake in Viking, and play a major role in the evolution of Viking as a participant in the Mongolian thermal and coking coal markets.

Link to article

Link to VKA release


Cash at end of Q A$20.6 million.

FeOre March 2014 Quarterly Report

April 23, FeOre Ltd. (ASX:FEO) --


      Special General Meeting concerning the Transaction and the Buy-back scheduled to take place on 25 April 2014;

      Conditional waiver and consent obtained from the holders of Convertible Bonds regarding the execution and performance of the Agreement;

      Additional living-use power substations installed for the Ereeny Project:

      Water usage agreement entered into between Taisheng and the relevant authority;

      Outbreak of Hand, Fool and Mouth disease in soums near where the Company's projects are located.

Link to report

Link to quarterly cashflow report


Investors Checking Out of 'Hotel Mongolia' Found in Limbo

By Michael Kohn and Yuriy Humber

April 23 (Bloomberg) Welcome to the 'Hotel Mongolia.' It's a lovely place. But you might not be able to leave.

For about 50 foreigners -- miners, accountants, bankers and charity workers mostly drawn here by the country's resource boom -- the lyrics of the Eagles song turned into reality when Mongolia prevented them from leaving the country.

Some of those under the travel ban say the cases involve probes of their employers that have dragged on months or even years. "My career has been destroyed and I don't know when I will be able to leave," said Philippines citizen Hilarion Cajucom, who was an accountant at SouthGobi Resources (SGQ) Ltd. when the Canadian company was accused of tax fraud by the government.

Cajucom and former SouthGobi colleague Cristobal David have been prevented from leaving Mongolia since 2012.

Many foreigners interviewed for this story asked not to be named for fear of reprisals from the authorities. All denied allegations against them. Some described their situation as a strange limbo in which they retain their passports, haven't been charged with any crime, yet they have been told by the police they will not be allowed to leave the country.

Court Hostages

James Liotta, a partner at Mahoney Liotta LLC in Ulaanbaatar, said that as a signatory to the International Covenant on Civil and Political Rights, Mongolia should not be using commercial disputes to deprive people of their freedom of travel.

Spokesmen at Mongolia's Independent Authority Against Corruption and the Prosecutor's office said by phone that they would not comment on travel bans on foreigners to the media. They declined to answer e-mailed questions or be named.

Puntsag Tsagaan, the chief of staff at the office of the President Elbegdorj Tsakhia, said it was not appropriate for the presidential office to comment on the issue.

The detentions stem from deep-seated cultural issues, said Jack Weatherford, author of ''Genghis Khan and the Making of the Modern World.'' In the Mongolian view, expatriates are accountable for the actions of their employers.

"For centuries, foreign rulers sent their sons and brothers as hostages to the court of steppe leaders," Weatherford said. "The hostage took the blame and punishment for any misdeeds. Foreigners working in Mongolia are often in a precarious position without realizing it."

Nomad Land

The stranded started off with a common dream -- wanting to experience Mongolian nomad culture and its vast deserts and steppes while cashing in on an energy and commodities boom that created what was until recently the world's hottest economy.

The GDP of the landlocked country squeezed between Russia and China soared 17.5 percent in 2011 as its huge coal, copper and gold deposits were excavated and shipped across the border to feed China's economy. Then came a downturn in commodity prices and a dispute between Mongolia's government and the country's biggest investor, mining giant Rio Tinto Group, over financing costs -- a rift now in its second year.

As foreign direct investment fell 54 percent last year, Mongolia sent officials on tours to Singapore to New York in the last six months to revive their country's appeal. Those already invested say Mongolia should first fix its domestic policies.

"The travel bans add to the uncertainty and the already negative mood," said Michael Preiss, co-founder of Mongolia Asset Management Ltd., an investment advisory group based in the capital Ulaanbaatar. "For some it's the nail in the coffin that this place is just not worth it."

Windowless Cells

Some called in by Mongolia's anti-corruption police describe day-long interrogations in windowless cells and bolted-down chairs. This can be repeated over months, again with no charges filed.

Banker Chris Bradley said his six-week experience at the end of last year erased the happy memory of a decade of working in Mongolia.

Bradley had come back to Ulaanbaatar to recover debt on a loan gone sour for South Africa's Standard Bank and was told he could not leave because the Mongolian borrower was being investigated for corruption. The bank confirmed at the time that Bradley was being held and said it was "cooperating" in the investigation.

Skype Life

"Before I would have said to everyone that Mongolia out of all these frontier markets is unique because it's quite safe. But, you run afoul of the machinery there and I've learned that your freedoms can be taken," Bradley said.

While Bradley was freed and left for Australia in late December, Cajucom, the Philippine accountant, maintains his family life -- birthdays, graduations and funerals -- through Skype. Cajucom said he was denied permission to attend the funerals of his mother-in-law and father-in-law in the last 6 months.

The family of Cajucom's ex-colleague David lost their home in the Philippines in a storm last year and had to be evacuated, all while both men are trapped in Mongolia on allegations their former employer evaded taxes between 2007 and 2011.

"Deep inside there is a struggle of why, why, why? And what is going to happen next," said Cajucom in an interview in Ulaanbaatar. "It's a personal struggle but I have to think on the bright side, that this is the bottom and there is only one way, and that is up."

Ulaanbaatar Jail

Cajucom and David's former boss is Minnesota native Justin Kapla. He was president of the local SouthGobi unit for just six months of the period during which Mongolian police say the company committed a $50 million tax fraud and now owes a further $30 million in penalties and interest, according to Kapla. He contends that less that $1 million is owed.

"SouthGobi disputes and will vigorously defend itself against these allegations," spokesman Altanbagana Bayarsaikhan said by e-mail.

Kapla has been in Mongolia for 11 years, is married to a local and has two children. Being on a travel ban the last two years, he says Ulaanbaatar is his prison.

"When you can't leave and you can't travel, it doesn't matter if your jail cell is six-by-nine or Ulaanbaatar city."

Kapla enlisted the help of three U.S. congressmen and senators to plead his case. Almost two years on, he says he hasn't been charged with a crime. He can't visit an ailing stepfather or let his three-year-old daughter and 13-year-old stepson meet their U.S. family.

Hollywood Arrest

The list of people on a travel ban includes a number of Korean and Chinese nationals, according to Kapla, and is not limited to executives.

Didi Kalika, an Australian, is head of the Lotus Children's Centre, a local orphanage. A former employee accused Kalika of embezzlement and the probe into that has stopped her from leaving Mongolia since January. Her request to travel for the birth of her first grandchild was rejected. She denies the allegation.

Australian Sarah Armstrong, formerly a lawyer for SouthGobi, says she learned that she was banned from travel in a scene straight out of a Hollywood thriller. Armstrong was waiting for a flight to Hong Kong in the VIP lounge at Chinggis Khaan airport in October 2012, when familiar faces emerged from the crowd.

Plain-clothed police officers who had spent hours in SouthGobi offices interrogating staff approached her, pushing an intervening female airport staff member to the ground. Armstrong was whisked back to the city in a squad car.

"I was obviously scared," said Armstrong. "It was surreal. I couldn't believe they could hold me there on no grounds."

Jail Bag

Weeks of interrogations over SouthGobi finances followed, in which Armstrong said she spent most of the time explaining to policemen how a western company works.

"They didn't know what a board of directors was," she said.

For the months she was detained, Armstrong said she lived with a bag packed just in case she was jailed.

After considerable media attention, Armstrong left on Christmas Eve 2012. She says she is free to go back to Mongolia, but it's not on her list of destinations.

The biggest loser is Mongolia's economy, say Armstrong and Bradley. Bradley is looking at opportunities in Myanmar, Colombia and Africa. "I'm going where I'd like to do business."

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Local Market

BDSec Daily Update, April 22: Top 20 +0.64%, Turnover 17.4 Million

April 22 (BDSec) MSE Top 20 recovered +0.64% after declining for two days, as 3 stocks advanced for every 2 stocks that fell today. Makh Impex (MMX) surged +6.67% to settle at MNT 3,200, wiping out its yesterday's loss of -6.22%. The 52 week range of the stock is at MNT 1,600 – MNT 3,400, while its day's lowest price was MNT 2,912 and it hit its day's highest price at MNT 3,450.

Berkh Uul (BEU) advanced +2.32% to close at MNT 3,700. On the other hand, Sor (SOR) recorded a fall of -14.89% to sit at MNT 2,000. Turnover for the day was light at MNT 17.4 million.


Trading Value Leaders

Close (MNT)

Value (MNT)

Tavantolgoi (TTL)



Ulaansan (UNS)



Gobi (GOV)






Top Gainers

Close (MNT)

% Change

Makh Impex (MMX)



Berkh Uul (BEU)



Remicon (RMC)






Top Losers

Close (MNT)

% Change

Sor (SOR)



Ulaansan (UNS)



E-Trans Logistics (ETR)



Link to update


BDSec Daily Update, April 23: Top 20 -0.39%, Turnover 24.2 Million

April 23 (BDSec) MSE stocks closed lower on Wednesday. The benchmark index fell -0.39% to sit at 15,695.38 points. The largest companies by market value dragged the index down today. APU (APU) and Tavantolgoi (TTL) both dropped -1%. Ulaanbaatar BUK (BUK) led the gainers with +14.9%, followed by Material Impex (+11.57%).

Annual General Meeting of Material Impex (MIE) was held last Thursday. The company's sales doubled to US$ 25 million in 2013, but earnings came down -20.7% to US$ 1.1 million, due mainly to exchange rate related losses as the company's main operation is engaged in importing goods. To support its subsidiary Material Impex Construction LLC, MIE started a concrete plant with a capacity of 120m3/h in 2013. MIE imported US$ 19.1 million worth of goods in 2013, of which 66% were reinforcing bars. The company is planning to increase sales revenue to MNT 61.7 billion or ~US$ 36 million from MNT 42.1 billion  (+47%) this year and double its earnings to MNT 3.6 billion or US$ 2.2 million in 2014 from MNT 1.8 billion in 2013. The AGM approved a dividend of MNT 80 per share, resulting in a payout ratio of 5.9%. The company is currently trading at 10 times earnings.

Turnover for the day was MNT 24.2 million.


Trading Value Leaders

Close (MNT)

Value (MNT)

Darkhan Nekhii (NEH)



Ulaansan (UNS)



Sharyn Gol (SHG)






Top Gainers

Close (MNT)

% Change

Ulaanbaatar BUK (BUK)



Material Impex (MIE)



Aduunchuluun (ADL)






Top Losers

Close (MNT)

% Change

Makh Impex (MMX)



Moninjbar (MIB)



Mongol Savkhi (UYN)



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MNT historic low v. USD: 1,787.59, February 27, 2014

BoM MNT Rates: April 23 Close











































April MNT Chart:


Link to rates


BoM FX auction: US$11.9 million sold at 1,784.1, CNY33.5 million at 286.15, US$94 million MNT swap offers accepted

April 22 (Bank of Mongolia) On the Foreign Exchange Auction held on April 22nd, 2014 the BOM has received from local commercial banks bid offer of USD and CNY. The BOM has sold 11.9 million USD as closing rate of MNT 1784.10 and 33.5 million CNY as closing rate of 286.15.

On April 22nd, 2014, The BOM has received MNT Swap agreement offer in equivalent to 94.0 million USD from local commercial banks and accepted the offer.

See also:

·         FX Auction Statistics

Link to release


BoM issues 503.7 billion 1-week bills, total outstanding +3.46% to 1.32 trillion

BoM issues 1 week bills worth MNT 503.7 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


Mongolia March copper exports up 53 pct on rising Oyu Tolgoi sales

April 23 (Reuters) - Mongolia's copper concentrate export volumes leapt 53 percent year-on-year in March, with rising output from the $6.5 billion Oyu Tolgoi project run by Anglo-Australian miner Rio Tinto driving up sales, official data showed.

According to figures released on Wednesday by Mongolia's National Statistical Office, copper concentrate accounted for 35 percent of the country's total mineral export earnings in March, with sales totaling $349 million, a 67 percent rise compared with $209 million a year earlier.

Exports of Mongolian coal grew 8.4 percent over the period, but its value fell 1 percent because of a drop in coal prices, the report said.

Copper concentrate sales continue to climb with deliveries to Chinese smelters by the Oyu Tolgoi project, the biggest foreign investment in Mongolia, rising to match current production capacity.

"Concentrate sales continue to accelerate and are matching current production," said Turquoise Hill Resources, the 66 percent stakeholder in the project. Turquoise Hill is majority owned by Rio Tinto.

Crude oil and gold exports also saw spikes in sales volumes, growing 68 percent and 110 percent, respectively.

Gold exports have grown as a result of legislation passed by Mongolia's parliament to reduce royalties to a flat 2.5 percent from 5-10 percent.

Mongolia surrendered the tax income in the hopes of building up its gold reserves to bolster the local currency, the tugrik, and squash black market trade in the precious metal.

China was involved in 56 percent of Mongolia's foreign trade over the month, with Russia accounting for 16 percent.

The total trade turnover in March fell 1.6 percent from the year before, reaching $1.98 billion. Trade with China grew 9 percent in March from the same period of 2013 while trade with Russia fell 2 percent.

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Mogi: not sure how the parliament system works here, but since he was voted directly and not from the party list, he's aiming to go independent it seems

MP D.Battsogt Forwards Letter of Resignation from Justice Coalition Faction

April 22 ( On April 22, 2014, Chairman of the Social Policy, Education, Culture and Science's Standing Committee, Parliamentarian Dogsom BATTSOGT has delivered a Letter of Resignation to the Head of "Justice" Coalition (MPRP - MNDP) in the Parliament N.Battsereg.

In his explanation, D.Battsogt says, "It was not a decision made emotionally. There many dissatisfactory issues are exists. I believe, voters elected me to stand integrity on any issues to face. Hereafter, I will be expressing my opinions on my own will and working on draft proposals under own consideration."

Parliamentarian D.Battsogt was elected from the 16th Electoral District or Khovd Aimag promoted by "Justice" Coalition (MPRP - MNDP) during the 2012 Parliament Elections.

According to Parliament Law, the Letter will be introduced to the Speaker of the State Great Khural (Parliament) and after revised at the Parliament session whether to submit or not.

Link to article


President Elbegdorj Returns Home from Japan After Successful Spine Surgery

Ulaanbaatar, April 22 (MONTSAME) The President of Mongolia Ts.Elbegdorj arrived in Ulaanbaatar on Monday, after undergoing a successful spine surgery at Tokyo University in Japan.

While being in Japan, President Ts.Elbegdorj had a meeting with Japan's Prime Minister Shinzo Abe, at which the latter promised implementing major-scale projects in Mongolia to support economic development of the nation, as well as granting a soft loan of 7.5 billion yen in engineering training of Mongolian youth. At the meeting, the parties also reached an agreement to establish a 200-bed hospital equipped with up-to-date equipment in Mongolia under an irrevocable aid of the Japanese Government.

Link to article


Income and asset statements of Parliamentarians released

April 22 (UB Post) All state servants including the President, governmental and parliamentary officials annually declare their income and asset statements. The Independent Authority Against Corruption (IAAC) has recently united the income and asset declaration of a total of 239 state servants and released the information publicly.

The following article highlights who in the Parliament, Government and National Security Council had more income in 2013.

President of Mongolia Ts.Elbegdorj:

The total 2013 income of the President was 59,516,890 MNT and the income of his family was 6 million MNT. The President owns one apartment, 23 horses, 5 cows, 30 sheep and 15 goats. He has valuables worth 635 million MNT and keeps 75, 744,000 MNT in his account. According to his declaration he does not own any vehicles, but he has invested in several companies including Mushtaag LLC, Ankh-Erdene LLC, Liberty Institute, Asu LLC, Jenco tour bureau Co. LTD., etc.

Speaker of the Parliament Z.Enkhbold:

Speaker Z.Enkhbold earned 86 million MNT last year, while the members of his family earned 20, 499,000 MNT. He declared that he owns two apartments one horse and has no vehicles in his name.

Prime Minister N.Altankhuyag:

Total income of the Prime Minister in 2013 was 318 million MNT, while his family members earned in total 160 million MNT. According to his declaration he owns two apartments, as well as two cars including a Lexus-470 and a Lexus-570. He saves 114 million MNT in his savings account.

Vice-Speaker of the Parliament, Member of Parliament R.Gonchigdorj:

Last year his income was 50 million MNT. His family earned 8.5 billion MNT. According to the IAAC report he owns 3 apartments and has a savings account with 165 million MNT.

Vice-Speaker of the Parliament, Member of Parliament L.Tsog:

His annual income was 20 million MNT, while his family's was 25 million MNT. He has two apartments, worth altogether 310 million MNT. Also he owns two vehicles including Toyota Mark – II and Toyota FJ Cruiser.

Vice-Speaker of the Parliament, Member of Parliament M.Enkhbold:

M.Enkhbold declared in his income statement that he earned 43 million MNT a year and his family earned 22, 964,000 MNT. He owns two apartments, a Toyota Land Cruiser – 200, a Mercedes Benz S – 320. Also he has 350 horses and 50 of them are racing breed horses. M.Enkhbold has valuables worth 190 million MNT and saves 276 million and 228 thousand MNT in his account.


The following members of Parliament had the most individual and family income in 2013.

Member of Parliament and Minister for Foreign Affairs of Mongolia L.Bold:

Minister L.Bold is the MP with highest income in 2013. Last year he earned in total 33 billion 139 million and 788 thousand 640 tugriks individually and declared that he has no family income. His income has notably increased in 2013, while in 2012's statement he declared that he earned 208 million MNT. In terms of assets, he owns three apartments, four horses and has 31 billion 527 million MNT in his account.

Member of Parliament J.Enkhbayar:

He is the MP with the second highest income with 3 billion and 72 million MNT. According to his statement, his income in 2013 decreased by a billion compared with 2012. His family income in 2013 is estimated at 24 million 870 thousand MNT. However, he declared that he has no apartment. He owns valuables worth 100 million MNT and has 3 billion MNT in his savings account.

Member of Parliament D.Zorigt:

 D.Zorigt has been listed in third place with 2013 annual income of 2 billion 47 million MNT, while in 2012 he declared that he earned 459 million MNT. His family's income is estimated at 140 million MNT. In terms of the real estate, he owns three apartments and keeps valuables worth 750 million MNT. In his savings account he keeps 93.5 million MNT. Also he has declared that he has 10 billion MNT debts to be collected from Odod LLC, Erdenejas and ASU LLC. D.Zorigt has loaned 4 billion MNT from the Trade Development Bank, invested in 15 companies and holds shares worth over 5 billion MNT.

Member of Parliament, Energy Minister M.Sonompil:

Minister M.Sonompil's income has not increased that significantly in 2013. In 2012's income statement he declared that he earned one billion 107 million MNT, while in 2013 he earned one billion 120 million MNT. This time the minister declared that he has no household or family income. He owns one apartment, a Lexus-470, Hummer-H2 and breeds 50 sheep and 20 horses. Also he has valuables worth 100 million MNT and saves 15 million MNT in his account. He owes 5 billion MNT to Khaan Bank.

Member of Parliament B.Garamgaibaatar:

He earned 1 billion 27 million MNT in 2013, which is double the amount of his 2012 income. His family income of last year was 1 million 740 thousand MNT. B.Garamgaibaatar has two apartments, saves 30 million MNT in his accounts and invested in four companies, according to the IAAC report.


Member of Parliament, Minister for Education and Science L.Gantumur:

Minister L.Gantumur was the MP with lowest income in 2013. Last year he earned 18 million MNT while in 2012's statement he declared that he earned 244 million MNT. His family income in 2013 was 57 million 920 thousand MNT. Although, he is the minister with lowest income he has the most apartments. He has more apartments than the richest MP L.Bold. In total he owns four apartments and cars including Nissan Teana, Hyundai Sonata – 5. Also he has 110 horses and saves 11 million MNT in his account, according to his income and asset declaration statement.

Member of Parliament M.Zorigt:

MP M.Zorig earned over 3 billion MNT in 2012, while his income of 2013 was 19 million 776 thousand MNT. He has one apartment, one car and 23 horses. According to his statement he owns 9 million MNT in his account.

Member of Parliament N.Nomtoibayar:

N.Nomtoibayar's income decreased in 2013. In 2012 he had an income of 820 million MNT, while in 2013 he earned only 19 million 776 thousand MNT. He owns two apartments and holds 13 million MNT in his account. However, he has six cars, including four Mercedes, a Lexus – 570 and a Land Cruiser, which altogether cost 950 million MNT.

Member of Parliament Ya.Sodbaatar:

He passed 2013 with an income of 19 million 776 thousand MNT. His income increased by 3 million MNT in 2013 in comparison with the previous year. Even though he earned low individually, his family income is estimated at 494 million 480 thousand MNT. He has two apartments and holds shares in six companies.

Member of Parliament L.Enkhamgalan:

L.Enkhamgalan earned the same income as N.Nomtoibayar and M.Zorigt. This MP, who runs his own business, declared he has no household income. He owns three apartments and two service places and drives a Land Rover and Range Rover. Also he owns valuables worth 1.6 billion and 540 million MNT. Inter International Group company owes him 2.7 billion MNT. 


The family of MP O.Sodbileg was the family with the highest income – 990 million MNT. In 2012 his family income was estimated at only 9 million MNT. O.Sodbileg individually earned 28 million 600 thousand MNT. He has one apartment and two Mercedes.

Family of Parliamentarian S.Bayartsogt had an income of 975 million MNT in 2013. Also Parliamentarian S.Sarangerel's family earned 491 million MNT. One of the families whose income was notably increased in comparison with 2012, is D.Battsogt's family. His family had 80 million 789 thousand MNT income in 2012, while last year it became 487 million 700 thousand MNT. 


There are nine female members in the Parliament. L.Erdenechimeg is leading them with an annual income of 500 million MNT. After her, the parliamentarian D.Oyunkhorol was listed second with an individual income of 260 million 878 thousand MNT and a family income of 252 million 777 thousand MNT. Third place goes to Minister of Culture, Sports and Tourism Ts.Oyungerel. She and her household income are estimated at 353 million MNT altogether. Female parliamentarians with the lowest incomes are D.Arvin and S.Oyun. 


Most of MPs declared that they have livestock. The member of the Parliament with the most cattle is D.Bat-Erdene. He breeds 400 goats, 450 horses, 70 cows and 3100 sheep. While, MP D.Battulga declared that he has only one horse.

Meanwhile, MP Sh.Tuvdendorj has the most pigs. He has five horses and 356 pigs.

Link to article


The gains of higher taxes

By D.SERGELEN, April 22 (UB Post) Parliament has submitted a draft amendment for the Excise Tax and Mineral Resources Law. The amendment states that any taxation in foreign currency must be made in Mongolian currency. An amendment was made according to the law of 2009 where it states that all tax and payments must be in Mongolian currency. However this law has not been followed in previous years. With the USD rate reaching 1771 MNT, why the sudden decision to implement the law at this time? The interesting fact about this draft is that the rate of USD against MNT to be used is the rate of January 2012 – 1450 MNT – which is lower by 300 MNT than the current rate. The excise tax is imposed on alcoholic drinks, tobacco, fuel, diesel and vehicles.

If Parliament passes the amendment as a draft, producers and importer will pay a lower tax than the current one. I have a suspicion that behind this there are Parliament members who will benefit from these kinds of tax cuts.

MPs in the business sector

For a while, H.Battulga, the Minister of Industry and Agriculture, initiated the idea to prohibit promoting candidates to Parliament who run alcohol businesses. Unfortunately, he has been overwhelmed by members who have a conflict of interest. There are many MPs who produce, import, run services and sell tobacco and vodka. For instance, everyone knows MP G.Batkhuu is the owner of APU and Ulaanbaatar Spirits. Moreover MP L.Enkh-Amgalan owns a specific share of the Spirit Bal Buram, subsidiary of MCS, and Tiger. Ts. Dashdorj, Member of the Mongolian People's Party, has Mongol So Tobacco. D.Ganhuyag, the Minister of Mining, sells vodka and alcoholic drink through the chain stores of Everyday and his Sansar Bridge imports vodka from Japan. M.Sonompil, the Minister of Energy, runs Chinggis chain restaurants and beer business.

There are more than two ministers in Parliament that run such kinds of business. It is obvious that they made an amendment according to their own interests. There will be an even longer list if we add MPs who own bars, pubs, restaurants and commercial centers.

Working with the rate difference

When Parliament passed the state budget for this year, they considered USD rate at 1380 MNT. But in reality, it has increased to almost 1800 MNT. The deficit from the difference is uncertain. In addition, to transfer USD into MNT, they considered an optimistic budget. Draft makers said "When USD rate increases, the entities' tax load increases too, conversely, when it declines it impacts negatively on the budget income." Although, when they consider the tax amount, they estimated it very low. This will be a golden opportunity for businessmen who want to work on rate differences and enhance their businesses.

Last year, Parliament passed the Law on Tobacco Supervision, after which the number of small shops decreased and people smoked less in public places such as pubs and restaurants. In order to decrease the usage of vodka and tobacco, the excise tax must be higher. However the current situation is shameful because MPs are using economic levers and giving votes in favor of their own personal interests. Honestly, at this time, the opposing party mustn't sit quietly. Maybe there are MPs who have such businesses among the opposing party as well, which is why they don't speak out. Our only hope is that there will be many honest MPs who can stand up and reject this draft amendment.

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DBM has given loans of MNT 2.56 trillion since establishment

Ulaanbaatar, April 22 (MONTSAME) Having a responsibility for being apart from commercial banks, the Development Bank of Mongolia (DBM) has granted loans to 2.56 trillion togrog since its establishment in 2011, said an executive director of the DBM Mr N.Monkhbat at a tie-free meeting held on Monday.

The DBM is considered is one of the some 500 developmental banks around the world, and the DBM held very first time its open meeting after a long-time silence in difficult time of the country's economy. Some people said it was a social order.

Until today, the DBM has made financing for 22 projects, and some of these projects have started to repay the loans, Mr Monkhbat noted. With a key purpose to back the national economic growth and finance the development, the DBM is successfully developing through its "classic" standards, he said, adding that the bank's authorized capital has doubled, reaching MNT billion.

By the previous year, the DBM's pre-tax profit reached MNT 35 billion therefore the bank has become able to carry out its activities without taking subsidy from the state, Mr Monkhbat said. As of today, the bank has a financial resource of MNT 1.83 trillion, and loans of MNT one trillion will be given through commercial banks to projects focusing on the import substitution industries and augmenting the export, he said.

The DBM's basic capital is MNT 169.3 billion, and any violations were not determined in the bank after conducting an audit examination last year.

Link to article


Mineral Licenses Cover 8.3% of Mongolian Territory with 1,309 Mining, 1,577 Exploration Permits

Ulaanbaatar, April 22 (MONTSAME) According to statistics issued by the Minerals Authority, there are a total of 2,886 mineral licenses effective in Mongolia, with 1,309 of them have been issued for mineral exploitation, and the remaining 1,577 are for exploration.

Mineral exploitation and exploration have been allowed in 13 million ha or 8.3% of all territories. Mineral licenses have been granted for gold (29.1%), building materials (17.3%), coal (14.5%), fluor spar (10.1%) and iron ore (3.5%). The biggest territories are allowed for gold and coal mining. There are 130 joint ventures and 291 foreign-invested companies that hold mineral licenses effective in Mongolia.

Link to article


Five Concession Agreements Established

Ulaanbaatar, April 23 (MONTSAME) Five concession agreements have been established to be realized under a principle of public-private partnership, informed S.Bekhbat, a chief of Innovation, Public-Private Partnership Department of Economic Development Ministry amid an interview at '11 11' Center of the Government on Wednesday.

During the interview, S.Bekhbat highlighted a need to develop public-private partnership in Mongolia, citing experiences of developed countries to have the private sector to implement jobs a Government is unable to realize. Five concession agreement have been concluded in the nation, he went on, mentioning names of projects to be implemented under these agreements – Nariin Sukhiat-Shivee Shuren paved road project with RDCC LLC under funding of MNT 88 billion; Telmen thermal plant project with New Asia Group LLC under financing of USD 183 million; Altanbulag-Ulaanbaatar-Zamyn Uud highroad project with Chinggis Land Development group-New Development Road LLC; Mining and Metallurgical Complex project with QSC LLC; and Tuul Songino Water Reserves Complex project with 'Ulaanbaatar water charge power plant' LLC.

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Health Expo 2014 to Be Organized by MNCCI on April 25-27, 2014

April 22 ( The Health Council at the Mongolian National Chamber of Commerce and Industry (MNCCI) is organizing "Health Expo 2014" in collaboration with "Mongol Em Impex Concern" LLC at the MNCCI exhibition hall on April 25-27, 2014.

During the event, well-known private hospitals, medical equipment importers, manufacturers and suppliers of medicines and drugs, beauty salons, fitness centers and other relevant organizations running its activities in Mongolia will be participating and introducing its products and services.

Moreover, many other events will be also organized such as free consultations by specialized doctors, diagnosis, drugs fair and discussions on health sector.

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Mongolia's New Tax E-Payment System Launching in May 2014

April 22 ( The General Department of Taxation and the Asia Foundation are partnering in support of select activities from the Department's Anti-Corruption Action Plan to implement several activities between March 07 and June 30, 2014.

The Foundation through the USAID-funded Strengthening Transparency and Governance in Mongolia (STAGE) project is collaborating with various governmental agencies in their bid to reduce corruption and promote transparency. The partnership will advance the capacity within the taxation authority to provide more efficient and timely tax services and reduce bureaucracy.

The General Department of Taxation introduced the e-tax filing system in early 2014 and, as a result, all Mongolian tax payers are now able to submit tax reports, access tax history, and pay taxes online. This new e-tax system has the potential to increase efficiency and transparency within the taxation department, by reducing face-to-face interactions and bureaucratic red tape. Capacity-building is central to the success of this new system and focusing on the tax department staff will enhance effectiveness and increase the user base of this new system. The Department of Taxation and the Foundation will train 700 tax officials across the country to familiarize them with the new system and enable them to encourage citizens to start using the system.

The partnership will also include organizing sessions with the public to demonstrate and explain the new e-tax system to taxpayers. USAID has also provided on-going support to the General Department of Taxation through its Business Plus Initiative (BPI) project implemented by Chemonics International.

The BPI project assists the Government of Mongolia through the Paying Taxes Reform Working Group. Currently, BPI is implementing a new e-payment system that will allow taxpayers to make electronic tax payments directly from online banking services. The new e-payment system, scheduled to launch next month, will make paying taxes easier, cheaper, and faster.

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Pollutants from Coal-Burning Stoves Strongly Associated with Miscarriages in Mongolia

LOS ANGELES, April 23, 2014 (Children's Hospital LA) -- Burning coal for domestic heating may contribute to early fetal death according to a new study by experts from The Saban Research Institute of Children's Hospital Los Angeles and Ulaanbaatar, Mongolia – the coldest capital city in the world.

In a paper published today in the journal BMC Pregnancy and Childbirth, researchers report "alarmingly strong statistical correlations" between seasonal ambient air pollutants and pregnancy loss in Ulaanbaatar (UB), Mongolia.

UB has one of the highest levels of air pollution of all world capitals, with sulfide dioxide and particulate matter levels during winter months, which are up to 23 times World Health Organization standards.  Air pollution in winter is largely caused by coal burning in Ger stoves (Ger refers to the traditional round, felt tent used as a portable residence by nomadic Mongolian people, but such stoves are also used in wooden houses within the Ger district.)

The scientists, led by David Warburton, OBE, DSc, MD, MMM, FRCP, FRCS, FRCPCH, professor of Pediatrics and Surgery at The Saban Research Institute of Children's Hospital Los Angeles and Keck School of Medicine at the University of Southern California, examined the association between spontaneous abortion (miscarriages) and seasonal variation of air pollutants.  The measurements were gathered near the National Center for Maternal and Child Health (NCMCH)—which provides the majority of obstetric and gynecological services in UB—and compared to the medical records of 1,219 women in the region who had been admitted to the hospital between 2009 and 2011 due to fetal death prior to 20 weeks gestational age.

"We found that the incidence of miscarriage revealed a striking seasonal pattern of variation," said Warburton.

While the overall rate of miscarriages (occurring in approximately 15 to 20 percent of pregnancies) reported in UB is similar to that of Western countries, including the United States, the study showed that spontaneous abortion incidence per calendar month increased from 23 per 1,000 live births in May to 73 per 1,000 live births in December 2011.

Monthly average ambient levels of air pollutants showed increases in relation to the duration of hours of darkness, as well as the coldest temperatures—when Ger heating stoves are used most.

"We and our colleagues in government and academia in Mongolia are expending concerted efforts to improve stove efficiency and to educate the public about correct and more efficient lighting and heating methods," Warburton said, adding that a similar, strong correlation between air pollutants and miscarriages may also occur elsewhere in the world where similar levels of air pollution exist.

"The disturbingly strong correlation between air pollution indices and fetal death that we found suggests that much more needs to be done to further ameliorate the toxic effects of air pollution on the human unborn," Warburton concluded.

Additional contributors to the study include Davaasambuu Enkhmaa, Badrakh Javzandulam, Jadambajav Uyanga, Yarinpil Khishigsuren and Shonkuuz Enkhtur, National Center for Maternal and Child Health, Ulaanbaatar, Mongolia; Nicole Warburton, Mills College and The Saban Research Institute, Children's Hospital Los Angeles; and Sereeter Lodoysamba, The National University of Mongolia, Ulaanbaatar. 

The study was funded in part by the National Institutes of Health Fogarty International Center/ National Institutes of Environmental Health Award.

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Japanese officials handling N. Korean abductions visit Mongolia

April 23 (Kyodo) Two Japanese officials handling the issue of North Korean abductions of Japanese nationals are visiting Mongolia to seek cooperation from the country in resolving the matter, a Japanese government source said Wednesday.

Hideshi Mitani, former head of the secretariat of the government's headquarters on the abduction issue and now a special adviser to the Cabinet Office, and Shoichiro Ishikawa, Mitani's successor at the secretariat, have been in Ulan Bator since Tuesday and are expected to meet with Mongolian government officials, according to the source.

Mongolia has played a key role in liaising between Japan and North Korea, which have no diplomatic ties due to a host of outstanding issues, the abductions in the 1970s and 1980s being chief among them.

In March, Mongolia provided a venue for the first-ever meeting between the parents of one of the abductees, Megumi Yokota, and her daughter, who lives in North Korea.

The two officials are scheduled to return to Japan on Friday.

Ishikawa became the head of the secretariat this month. As a special adviser, Mitani has been assisting the families of those abducted by North Korea.

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Belarus senators okay military, technical cooperation agreements with Mongolia, Sri Lanka

MINSK, 22 April (BelTA) – The Council of the Republic of the National Assembly of Belarus passed the bills on ratifying the intergovernmental agreements on military and technical cooperation with Mongolia and Sri Lanka on 22 April, BelTA has learned.

Apart from that, the upper chamber of the Belarus parliament voted in favor of the ratification of the Belarusian-Mongolian agreement on mutual aid in customs affairs and visa-free travels, agreements with Bolivia and Sri Lanka on trade and economic cooperation and visa-free travels for holders of diplomatic passports and service ones.

The Council of the Republic of the National Assembly also approved the ratification of the agreement on multilateral interstate specialization in the production and supplies of seeds of agricultural crops, saplings of fruit and berry crops and the bill on Belarus' withdrawal from the agreement on establishing an international R&D center.

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Foreign Minister L.Bold to Conduct Official Visit to Sweden and Attend Mongolia-Sweden Business Meeting

April 22 ( Mongolia and the Kingdom of Sweden are celebrating the 50th anniversary of the establishment of diplomatic relations that marks on June 30, 2014.

In the frameworks, Foreign Minister of Mongolia Luvsanvandan BOLD is to conduct an official visit to Sweden on May 24-31, 2014. In the scope of this official visit, Mongolian National Chamber of Commerce and Industry is organizing a business travel to Stockholm, Helsinki and Berlin cities, moreover to host Mongolia-Sweden business meeting on May 26, 2014.

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Ulaanbaatar Railway to Renovate Zaisan Memorial for Soviet Soldiers Killed in WWII

Ulaanbaatar, April 22 (MONTSAME) Ahead of the 75thanniversary of victory in the Khalkh River battles, Ulaanbaatar Railway joint venture is planning to renovate the Zaisan memorial that honors Soviet soldiers killed in the World War II.

According to a work schedule of Ulaanbaatar Railway, the renovation will begin in near time to be completed by May 6, before the Victory Day or May 9 that marks the capitulation of Nazi Germany to the Soviet Union in the Second World War. Wreaths will be laid at the repaired memorial that day.

Ulaanbaatar Railway joint venture is also planning to promote joint military field exercises of Mongolian and Russian armed forces, as well as to support film making about Khalkh River battles, said I.A.Dombrovskiy, first deputy chair of Ulaanbaatar Railway.

The Zaisan Memorial is a memorial south of the Mongolian capital of Ulaanbaatar that honors Soviet soldiers killed in World War II. Located on a hill south of the city, the memorial features a circular memorial painting that depicts scenes of friendship between the peoples of the USSR and Mongolia. The mural depicts scenes such as Soviet support for Mongolia's independence declaration in 1921, the defeat of the Japanese Kwantung Army by the Soviets at Khalhkin Gol on the Mongolian border in 1939, victory over Nazi Germany and peacetime achievements such as Soviet space flights.

Zaisan is a popular meeting point for school outings and graduation festivities.

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Foreign Policy Implications of Mongolian Crony Democracy

By Mendee Jargalsaikhan

March 12 (The Jamestown Foundation) Though considered a healthy—albeit developing—democracy (;, Mongolia has in recent years become dominated by the competing interests of its political and business factions, whose collective actions undermine the country's democratization trends as well as complicate Ulaanbaatar's foreign policy. For now, Mongolia resides in a stable and largely friendly neighborhood, its democratic system is peaceful, and it boasts valuable natural resources. But the intense competition among its domestic political and business factions welcomes assertive Russian interests, increases Chinese dominance, and discourages Western investors. 

Recently, powerful businesses and wealthy entrepreneurs have come to dominate Mongolia's major political parties—the ruling Democratic Party (DP) and the opposition Mongolian People's Party (MPP)—as well as the parliament and the executive branch. This business sector dominance encourages profit-maximizing competition among party-affiliated businesses and discourages any legislative or judicial efforts to constrain their influence in politics. Such competition appears to slow down under coalition governments (e.g., 2004–2008 and 2008–2012), but expands unchecked when one party establishes a majority government (e.g., 1996–2000, 2000–2004, 2012–2016). Under a majority government in Mongolia, the ruling party routinely cancels the previous government's projects, names party-affiliated politicians or businessmen to key posts in the government bureaucracy and state-owned enterprises, and influences judiciary and law enforcement organizations. For instance, today, 74 members of parliament (out of 76) hold wealth equal to 7.6 percent of GDP, and only 4 members of parliament account for 64 percent of this net wealth (

Given the inherent economic uncertainties in Mongolia's commodities markets and rates of foreign investment, profit-maximization strategies appear overtake all other political issues that divide the country's political and business factions. Consequently, the ideological lines between Mongolian political parties have become blurred, and these parties remain vulnerable to ever-changing short-term coalitions or dissolutions based on convenient business deals. Since 2005, the natural resource boom has intensified this competition by creating expectations of business opportunities (e.g., the growing market need for supply and support businesses) and the influx of funds (e.g., investment, fees, royalties). And this domestic phenomenon, in turn, affects Mongolia's foreign relations with Russia, China and the Western democracies.

Mongolia's historical sensitivity to China provides a favorable climate for Russian business groups. Although Russia's geo-strategic interests in Mongolia have declined somewhat since the fall of Communism, Russian business groups have been influential in reviving interest in Mongolia. A recent interview by Russian goldmine owner Sergei Paushok, who contested Mongolia's imposition of a windfall profit tax, triggered quick debates among the country's politicians regarding policies to attract Russian business (Zuunii Medee October 26, 2013;, October 28, 2013). 

Another example of Russia's powerful impact on Mongolian internal politics has been the railway debate—whether to use the Chinese standard gauge domestically to link Mongolia's mining sites to the Chinese rail network, or the Russian standard gauge to link to the Trans-Siberian Railroad (Asia Pacific Memo, February 12, 2013). While the parliament decided on the Russian standard gauge in June 2010, Mongolia's various business factions are still debating and attempting to cancel each other's projects to overturn this decision. Of course, the Russian side has been supportive of those Mongolian factions advocating the Russian standard gauge. But as a result of this increased Russian interest and influence, Mongolia lost $188 million in assistance from the US Millennium Challenge Account, which in turn discouraged some Western mining companies (e.g., Khan Resources in uranium mining) from investing in the country and complicated the bidding process of the Tavan Tolgoi coking coal mine (; Finally, the Mongolian economy is still vulnerable to Russian petroleum exports (see EDM, November 21, 2012). Therefore, growing Russian business interests will certainly reduce Ulaanbaatar's ability to make independent decisions on major mining and infrastructure projects if Mongolian political parties and their business backers continue to allow themselves to be coopted in this way.

China, with its vast manufacturing base, remains the primary outlet for Mongolian natural resources, as well as a transit corridor for Mongolia's entry into other East Asian markets. However, Mongolia's ability to benefit from the growing Chinese economy is being constrained by two major factors. One is the prevailing, although changing, anti-Chinese sentiment among Mongolians. The exclusion of Chinese bidders in major mining investment projects and the foreign investment law excluding foreign state-owned enterprises were mostly driven by Mongolia's traditional anti-Chinese sentiments (see EDM, January 17, 2013). The other factor is factional fighting within domestic politics to advance party-affiliated business interests while cancelling previous deals with Chinese enterprises made by opposing political groups. Because China is not dependent on Mongolia's resource exports (esp., coal), Mongolia's short-term political populism and factional competition endangers the country's economic and trade relations with China, which, in turn, hardens China's position in subsequent economic negotiations. To assuage Chinese concerns over economic uncertainty, succeeding governments in Ulaanbaatar will likely need to commit to strategic partnership agreements and to promise more opportunities for Chinese state-owned enterprises. For instance, long-term coal export quotas and investment opportunities for Chinese energy companies were agreed during the Prime Minister Norovyn Altankhuyag's recent visit to Beijing (Press Release of the Government of Mongolia, October 25, 2013). But these deals will likely again become vulnerable as the balance of political power in Ulaanbaatar changes or if Mongolian populist politicians again start to invoke anti-Chinese rhetoric. 

The turbulent competition among Mongolian political and business factions, the success of populist politicians, and the growth of domestic civil society activists and environmental movements, as well as growing interests of Russian and Chinese state-owned enterprises in Mongolia are increasingly turning away Western investors. In particular, government agreements with Anglo-Australian Rio Tinto and Canadian Ivanhoe Mines in 2010 are still under pressure from the Mongolian side and becoming the hostage to its domestic politics ( Indeed, meetings between Mongolian political leaders and high-level dignitaries from member countries of the Organization for Economic Cooperation and Development (OECD) frequently revolve around Mongolia's mining investment environment. However, the damaging conflicts between its various political-business factions, as well as public discontent over corruption and domestic social-economic challenges—especially related to the mining sector—are almost certain to continue to complicate Mongolia's foreign policy decisions.

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Social, Environmental and Other

Preserving the world's last wild horses

April 22 (Deutsche Welle) Half a century ago, a zoo ensured the survival of the Przewalski's horses, native to Mongolia, by breeding them in captivity. But reintroducing them into the wild remains a huge challenge.

The world's only truly wild horse, know as the Przewalski's horse, was once on the brink of extinction. The species only survived because a few animals were brought to a zoo. Targeted breeding and coordinated efforts with other zoos resulted in their numbers growing. Now, the animals have been reintroduced into their orginal habitats after nearly 50 years since they first disappeared from the wild. During that time, researchers managed to study the horse thoroughly and are familiar with its biorhythm and its eating habits. Scientists now also know which factors are crucial to the former zoo animal's survival in the wild.

A film by Maria Lesser

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A Conversation with Mongolian NGO Leader Badruun Gardi

April 23 (The Asia Foundation) --

Just back from an intensive, nine-day leadership training workshop in Singapore and the Philippines, which kicked off The Asia Foundation's Development Fellows programIn Asia editor Alma Freeman interviewed one of the 10 inaugural Fellows from Mongolia, Badruun Gardi, executive director of the Zorig Foundation in Ulaanbaatar.

Mongolia is one of the fastest growing economies in the world, and the resource boom has brought about rapid change. What do you think have been the most impactful changes in the last few years?

Unfortunately, I feel that the rapid transformation over the past few years has been more negative than positive as a whole. While the country's economy has grown tremendously, wealth management has not been a strong point for Mongolia. As a result, there's more concentration of wealth in the hands of few while levels of poverty and unemployment remain high. Many of the poorest households have not benefited much from the economic growth. Instead, many have gotten even poorer due to the constant double-digit rate of inflation over the past few years. It is important for Mongolia to learn from the experiences of other resource-rich countries so that we may avoid the resource curse. Mongolia certainly has potential to become a highly developed country but we need to take bold steps that may be unpopular for now but may lay the foundation for a bright future in the long run.

Founded in 1998 in memory of the late Zorig Sanjaasuren, a leader of Mongolia's democratic revolution, the Zorig Foundation has played an important role in promoting good governance and engaging youth in decision-making. As its executive director, what are the most critical areas that the Zorig Foundation is focusing on today?

Our Foundation focuses its activities broadly in three main areas: good governance, community development, and youth and education. We are proud of the fact that we stay flexible and are able to adapt to the changing times as we are always re-evaluating our activities and how they align with gaps currently present in our society. Over the past three years, we have placed heavy emphasis on expanding our youth and education programs as well as developing a new policy research institute. We believe that the most important determinant for a highly developed Mongolia will be its level of informed, analytical citizens. Through our various projects for youth ranging from high schoolers to recent college graduates, we hope to develop critical thinking skills while presenting various perspectives on the most pressing issues facing our country. We are also in the process of developing a policy research institute. In such a complex political, economic, and social environment, it is crucial for policy decisions to be guided by high-quality research. There is currently a lot of space for improvement in this arena and we are working hard to establish an institute that will produce high-quality research in previously overlooked yet important areas.

Given Mongolia's history under Soviet rule, legislation that supports citizens' participation in policy-making and access to justice is still considered relatively nascent. What have been some of the advances in this area, and what challenges remain?

Mongolia has taken some strides in citizen participation and justice sector reform has been a key topic of the president and the government for the past few years. One great example for improving and ensuring citizen participation was the establishment of the Citizens' Hall under the President of Mongolia. The number of Citizens' Halls has increased since then with presence in some rural areas as well. The Citizens' Hall provides a venue for citizen input through public hearings on proposed legislation. Since 2012, the Ministry of Justice has paid special attention to improving access to justice. Witness protection has been a concern in the past and a Marshals Service was established last year. This shows that our justice system is showing a trend of maturation as more specialized services are established to deal with the increasing intricacies of issues related to the access to justice. However, while Mongolia is good at having up-to-date, international standard laws and regulations, the problems usually stem from a lack of institutional capacity and clarity in implementation. There needs to be more focus placed on implementation if the legal changes are to truly bring about positive changes.

You said in an interview on the occasion of The Asia Foundation's 20th anniversary in Mongolia that, "if you believe in democracy, you should be rooting for Mongolia." Why is this the case, and can you talk about what this means for the region and the world?

Mongolia is a very unlikely democracy in many ways. When we became a democracy in 1990, we did not possess many of the prerequisites many scholars believed were necessary for democracy to exist. We did not have democratic neighbors or a history of democracy, and we were one of the poorest countries in the world. Yet after 24 years, although flawed, we stand as a beacon of democracy for the entire region. As Mongolia goes through tremendous changes, I believe we are at an important crossroads in our development. For Mongolia to maintain its democratic momentum, we must ensure our commitment to good governance practices. While internal actors must take charge, we need support and guidance from other democracies globally as we work to improve governance. Therefore, I would like to urge all those who believe in democracy to not only root for Mongolia as a spectator, but to also take an active role in working to support strengthening democracy through collaboration with on-the-ground actors. A vibrant democracy in Mongolia can bring stability and become a counterbalance in a region that is becoming increasingly powerful yet unstable.

Twenty years after the revolution, Mongolia now has a generation of youth that grew up in a changing democracy. What are your thoughts on today's youth? Are they engaged in issues such as good governance, environment, and human rights?

Mongolia is a very young country – 70 percent of the population is under 35. A high number of leaders within the civil society, private, and government sectors are quite young. Mongolia also enjoys a 98 percent literacy rate and a very technologically savvy population. All of these factors point to the ability, or at least the potential, of the youth to influence Mongolia's development path. The youth of today seem to understand the unique opportunities provided to them by the rapid economic growth and are actively engaged and integrated with the economic system. However, I see a general sense of apathy when it comes to governance, environment, and human rights issues. It is crucial for youth to be actively engaged and feel empowered to affect change in these areas. The Zorig Foundation devotes a lot of energy to increase youth engagement with these issues. We believe that the best way to empower youth to take action is to support the creation of strong social ties amongst youth and to facilitate open, safe, and thoughtful discussion on these important topics. This creates actively engaged and empowered youth willing to work together to have a positive impact on the development of Mongolia.

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The Student Becomes the Teacher

What MIT learned from a Mongolian teenager who aced a MOOC.

This article is part of Future Tense, which is a partnership of Slate, the New America Foundation, and Arizona State University. On Wednesday, April 30, Future Tense will host an event in Washington, D.C., on technology and the future of higher education. For more information and to RSVP, visit the New America website.

CAMBRIDGE, Mass., April 23 (—Over the past year, a boy genius from Mongolia has been schooling MIT on how to improve the elite institution's free online courses.

When he was just 15, the Mongolian wunderkind Battushig Myanganbayar earned a perfect score in MIT's first massive open online course, or MOOC. Designers of the course touted him as a poster boy for the power of free courses to spread high-quality education to the farthest reaches of the globe, and the New York Times hailed his story. But leaders of edX, the consortium started by MIT and Harvard University to develop free online courses, also did something else: They offered the star student a job, hoping he could make their MOOCs work better for other high schoolers.

As it turns out, edX needed the help. Despite the hope that courses from name-brand universities would draw students from high schools and less-selective colleges, some 70 percent of people taking edX courses already hold a college degree. MOOCs today are primarily serving the education haves, not disadvantaged learners.

"That certainly surprised me," said Anant Agarwal, the CEO of edX and the instructor of the course Myanganbayar aced. "I expected more people who were in college [and high school]," he added. "We're looking to change a few things to increase that number." (Other MOOC providers have seen similar demographic trends, he notes.)

Bringing Myanganbayar in as an employee, though, raised tricky visa issues. But his high school principal in Mongolia, himself an MIT grad, suggested a hack: apply to MIT as a student, then work on MOOCs as a student job.

And that's exactly what Myanganbayar did. Today, at age 17, he is finishing up his freshman year at MIT, where he has shared his critique of existing MOOCs.

Agarwal remembers a meeting where Myanganbayar gave a presentation to his staff as part of a series of meetings with MOOC students. "More than half of edX was in the room listening to him, glued to his every word," he said. Their biggest question: How did Myanganbayar master the material in the MOOC, based on a sophomore-level MIT course on circuits and electronics, without having taken the prerequisites that cover concepts such as differential equations? There was nothing dumbed-down about the circuits course, known in MIT's cryptic course catalog as 6002x, but Myanganbayar was one of only 340 to ace it out of about 150,000 registered students.

The edX staff learned that Myanganbayar spent about a quarter of the time he invested in the class scouring the Web for supplementary material, essentially using free websites to teach himself the high-level math he needed.

"We certainly took that lesson from him and others to heart," said Agarwal. "We began to create tutorials for some key concepts that students might not know."

It turns out the lesson fit a pattern. Though edX aimed to reach the world, its initial courses were designed for the people professors at MIT and Ivy-caliber partners know best—the ultraqualified students they're accustomed to teaching in their hallowed halls.

Myanganbayar isn't your typical online student, as I learned when I sat down with him in his dormitory common room earlier this year. He avoids activities that he considers wastes of time. "I don't like to read literature books because they seem useless," he says, explaining why he has avoided Harry Potter and other distractions. Wearing shorts and an "I [heart] MIT" T-shirt, he said that he took the MIT MOOC not because it was from a famous college, but because the intro video for it promised that it would teach him to understand how iPhones work. He was fascinated.

He also had some old-fashioned help. His principal had invited Tony Kim, a graduate of Stanford University, to lead daily help sessions at Myanganbayar's high school to supplement the online course. So essentially, Myanganbayar's MOOC had a really good teaching assistant—not a perk offered to the other 149,990-some people in the class

Myanganbayar breezed through the MOOC without doing any of the readings. He skipped them in part because he was too busy, but also because the material was in English, and he describes his language skills then as "terrible." And to save time, he says he watched two video lectures at the same time, simultaneously reading the subtitles on one of them while listening to the audio from the other. He admits that "sounds pretty strange," which is tough to contest, though many other MOOC students admit to watching lectures at double-speed.

He also did something else that few MOOC students take on: He produced his own lecture videos, in Mongolian, to help his classmates. "I developed my own technique to do mini-lectures by myself," he explains. He propped his iPhone on a bookshelf and used its camera to film overhead video of his pen on the page as he completed homework problems and explained his work aloud.

Myanganbayar's personal interest in online teaching led him to apply for a job as a research assistant to help develop MOOCs at MIT, working with the Scheller Teacher Education Program on three courses it is building for release through edX. He reported to work at the program's offices in the MIT Media Lab, in the Lego-looking building designed by I.M. Pei. One of his missions was to produce a report on what he thought worked and didn't work in current MOOCs, after investigating various MOOC platforms, including competitors Udacity and Coursera.

"He had plenty of suggestions," says Ilana Schoenfeld, an education content manager at the program. One point he stressed was the need for better ways for students to teach one another, like he did with his homemade lecture videos, and discuss course content. "He was very into the community piece of it," she added.

Sanjay Sarma, who leads MIT's MOOC efforts, does not know Myanganbayar, but he says that one thing the institute has learned from the experiences of online students is the need for "modularity"—the ability to take courses in manageable pieces. "Many students drop a MOOC not because of a lack of grit, but because of the logistics of life," he said. "If you're a 27-year-old student and your kid falls sick, you're likely to drop out of the course. It's clear that modularity will help there." MIT recently tried a few half-semester courses through edX and plans to offer more. "We're considering a one-week class," he added.

Myanganbayar is a true believer that MOOCs can improve access to college, but he is clearly enjoying his time as an in-person student. He has joined a few student groups, and he likes that people casually discuss math in the dining hall. But he is much farther from home than he ever expected to be before taking the electronics course online. "The hard part about being a college student," he said, "is you miss your family."

Jeffrey R. Young is the technology editor for the Chronicle of Higher Education and author of the e-book Beyond the MOOC Hype: A Guide to Higher Education's High-Tech Disruption.

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