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Wednesday, June 25, 2014

[OT slapped with $130m unpaid tax bill, court sets SouthGobi trial date, Winsway founder looking to sell, and MSE appoints new CEO, directors]

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Wednesday, June 25, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original

 

Overseas Market

TRQ closed further 1.9% to US$3.62 Tuesday on top of 4.16% drop on Monday

Rio Disputes Mongolia Claim Over Unpaid Taxes

By Jesse Riseborough and Michael Kohn

June 24 (Bloomberg) Mongolia's Tax Authority claims a Rio Tinto Group unit operating in the country has unpaid taxes, penalties and disallowed entitlements associated with the $6.6 billion Oyu Tolgoi copper mine development.

Rio's Turquoise Hill Resources Ltd. (TRQ) says it has paid all taxes and charges required under its accord with the government and has complied with the country's laws, the Vancouver-based unit said yesterday in a statement. The disputed amount is about $130 million, Ganbold Davaadorj, a director of the mine's operating unit Oyu Tolgoi LLC, said yesterday in an interview.

"We strongly disagree with the claims in the audit report and are currently reviewing all options to resolve this matter," Kay Priestly, Turquoise Hill's chief executive officer, said in the statement. The company may need to seek resolution through international arbitration, it said.

The fresh dispute is evidence of further strains on London-based Rio's relationship with Mongolia. Recent discord has centered on funding for a second-stage expansion of the mine, delaying the $5.1 billion proposed development.

A feasibility study into the underground expansion is likely to be delayed if the tax dispute isn't resolved by June 30, Turquoise said yesterday. Missing the study's deadline would heap pressure on negotiations between Mongolia and Rio to finalize a $4 billion financing package. Commitments from the participating banks are set to expire on Sept. 30.

As of May, Rio, the world's second-largest mining company, had paid Mongolia more than $1.2 billion in taxes, fees and other obligations, according to the Oyu Tolgoi website. The government's audit covers 2010, 2011 and 2012, Ganbold said.

Reducing Costs

Rio last month fired about 300 workers from Oyu Tolgoi following a review aimed at reducing costs, according to two people familiar with the job cuts. Oyu Tolgoi, 80 kilometers (50 miles) north of the Chinese border, employed more than 7,000 Mongolian workers as of Dec. 31.

The mine is forecast to contribute about a third of Mongolia's economy when in full operation and is the largest single investment in the Asian country's history, according to the project's website. After expansion it will be the world's third-biggest copper mine, according to the website.

Rio controls the project through its 51 percent stake in Turquoise Hill Resources, which owns 66 percent of Oyu Tolgoi LLC. The Mongolian government holds the remaining 34 percent.

Turquoise Hill fell 4.2 percent to C$3.69 yesterday in Toronto. Rio rose 1.6 percent to 3,127 pence in London.

Link to article

Link to TRQ release

Link to OT release

 

Announcement made after Tuesday TSX close. 1878 closed -2.28% to HK$4.99, SGQ closed -6.06% to C$0.62

Court of Justice in Mongolia Has Set June 30, 2014 as the Trial Date for the Tax Investigation Case Against SouthGobi Sands and Three of Its Former Employees

HONG KONG, CHINA--(Marketwired - June 24, 2014) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) (the "Company") previously announced on May 13, 2014 that the charges for alleged violation of Mongolian tax law had been officially filed against the Company's three (3) former employees and against the Company's Mongolian subsidiary SouthGobi Sands LLC ("SGS") as "civil defendant". The case was transferred to the First Instance 2nd District Court for review by a judge in April 2014. The Company was advised on May 12, 2014 the appointed judge concluded that the investigation on the case was incomplete and ordered the case to return to the Prosecutor General for additional investigation.

The Company has been informed that the additional investigation has been completed and the case transferred back to the First Instance 2nd District Court which has set the trial date for June 30, 2014.

The Company, including its Mongolian subsidiary SGS, has prepared its financial statements in compliance with International Financial Reporting Standards, and lodged all tax returns as required under Mongolian tax law. During the investigative period, which has been ongoing since May 2012, the Company has been fully cooperating with the relevant authorities of Mongolia and devoted considerable internal resources in reviewing and responding to the allegations raised through the investigations by those authorities. The Company disputes these accusations and the procedures and conclusions of the investigations that led to these accusations and will vigorously defend itself and its former three (3) employees against these charges.

Link to release

 

GUF closed +3.33% to A$0.07 Tuesday

Baruun Noyon Uul (BNU) JORC (2012) Compliant Resource Statement 

HIGHLIGHTS 

·         JORC Code (2012) resource classification update of the Baruun Noyon Uul (BNU) Mongolian project by Independent mining consultants HDR|Salva   

·         JORC Code (2012) resource of 27.07Mt 

·         JORC Code (2012) resource confidence increase with 15.26Mt Measured, 8.77Mt Indicated and 3.04 Mt Inferred resource (previously there was no Measured resource at BNU)  

·         Coal quality model completed with ongoing analysis at BNU indicating a prime coking coal product is achievable   

·         Comprehensive broad scale ground geophysics completed in 2013 and 2014  

·         Four new target  areas  in  close proximity to BNU have been  interpreted from  ground  geophysics independently by  GRS Services Pty Ltd   

June 25 -- Guildford  Coal  Limited  (ASX:GUF)  (the  Company)  announced  today  the release  of  a  JORC  Code  (2012) compliant resource  estimate for the  Baruun Noyon Uul (BNU) Mongolian  project  by  Independent mining consultants  HDR|Salva.  Refer  to  the  attached  BNU  Resource  Estimate  Update  (Appendix  A)  for  further mandatory reporting information.

Further to the announcement on 13 May 2014, the Company provides the following clarifications:

      The Company's Corporate model for the Baruun Noyon Uul (BNU) Mine is based on an initial mine plan at a conservative rate of 1Mtpa for 10 years (10Mt)

      Revenue forecasts  are based on pricing received from our marketing  agent for a Wuhai  Fat Coal specification. A premium for low ash, low sulphur HCC has not been included

      Mine cost assumptions are based on actual mining costs data that have been incurred over the last 6 months of operation at the BNU mine 

      Mining technique utilised at the BNU Mine is a Truck Shovel open cut operation. 

      Washing of the coal has been considered in the models 

      Recent small scale washability tests of the existing first coal stockpiles conducted by Bureau Veritas revealed yields of circa 60-90% and ash ranges of 5-8% and Sulphur of 0.4-0.7%

      Bureau Veritas also conducted test on the clean coal for Coking properties including Coke Oven (CSR,CRI), Gieseler Fluidity, Dilatometer and Gray King Coke Test.  The sample returned a CSR of 68.7, CRI of 22.3 and Max Fluidity of 12000dpm

      Margin at minegate remains at US$10 - $15/tonne 

      The  BNU  operations  model  assumptions  have  been  utilised  and  applied  on  three  other  key exploration areas identified within the two mining licences  currently held, for which one location appears to be twice as large as the existing BNU deposit

      These assumptions form the basis of the corporate model from which the value range of $300-$400M was derived  

Link to release

 

1733 closed +9.33% to HK$0.41 Tuesday on the announcement

Winsway's controlling holder in talks to pledge 29.9% stake to China SOE

[ET Net News Agency, 24 June 2014] Winsway Coking Coal (01733) said it has been notified by controlling shareholder and chairman Wang Xingchun that he is currently engaged in negotiations with an independent third party which is a state-owned enterprise of the People's Republic of China in relation to a possible pledge and/or sale of shares in Winsway indirectly owned by him through his wholly owned companies in favour of such enterprise. 

It is currently expected that any such pledge or sale would involve 29.9% of the issued shares of Winsway. Wang currently holds about 49.1% interest in Winsway.

Winsway has applied for the resumption of trading in shares this morning.

Link to article

Link to Winsway release

 

Centerra Gold 2014 Second Quarter Results Conference Call and Webcast on July 30

TORONTO, ONTARIO--(Marketwired - June 24, 2014) - Centerra Gold Inc. (TSX:CG) will host a conference call and webcast of its 2014 second quarter financial and operating results at 11:00AM Eastern time on Wednesday, July 30, 2014. The results are scheduled to be released after the market closes on Tuesday, July 29, 2014.

§  North American participants should dial the toll-free number (800) 269-0310. 

§  International participants may access the call at +1 (416) 981-9073. 

§  The conference call will also be broadcast live by Thomson Reuters and can be accessed at Centerra Gold's website atwww.centerragold.com.

An audio recording of the call will be available approximately two hours after the call via telephone until midnight Eastern Time on Wednesday, August 6, 2014. The recording can be accessed by calling (416) 626-4100 or (800) 558-5253 and using the passcode 21720499. In addition the webcast will be archived on Centerra Gold's website www.centerragold.com.

Link to release

 

Mogi: SouthGobi among them I'm sure

China Auditor Blames CIC Mismanagement for Investment Losses

June 18 (Bloomberg) Mismanagement at China Investment Corp., the nation's $575 billion sovereign wealth fund, led to overseas investment losses that could widen, according to the National Audit Office.

A dereliction of duty by managers, and inadequate due diligence and post-investment management were identified in 12 investments made abroad by the fund between 2008 and 2013, according to results of an audit conducted last year, that didn't identify the individual cases. Six of the deals were unprofitable, four of them had unrealized losses, and two may potentially lose money, according to the report released today on the auditor's website, which didn't name the investments or disclose their size.

CIC, the world's fourth-largest sovereign wealth fund, reported a 10.6 percent return on its overseas portfolio in 2012 as global equities rallied, reversing a 4.3 percent loss in 2011, according to company statements. Returns exceeded 8 percent last year, Vice President Liang Xiang said in March. Founding Chairman and Chief Executive Officer Lou Jiwei, replaced last year by Ding Xuedong, is China's finance minister.

"It seems like problems were found at every step in the process, which could be because of something wrong in their system design rather than just some human errors," said Li Jie, head of the foreign-exchange-reserve research center at the Central University of Finance and Economics in Beijing. "That sends a relatively negative message to everyone."

CIC's Beijing-based press office didn't immediately respond to an e-mail seeking comment.

Domestic Units

The company's financial and information management is weak, accounting policies for overseas investments "not prudent enough," and the fund was not strict in enforcing its personnel management and accountability measures, according to the report.

CIC's overseas portfolio includes Wall Street firms, such as Morgan Stanley, and GCL-Poly Energy Holdings Ltd., the world's biggest polysilicon maker, and Sunshine Oilsands Ltd., a Canadian energy producer. The fund hasn't announced any deal itself since 2012.

Auditors also found irregularities at CIC's domestic units. Among them, Central Huijin Investment Ltd. lost 1.26 billion yuan ($202 million) in potential investment gains in 2011 by selling a stake in a local securities company at the cost price and not conducting an asset appraisal as required, according to the report.

A domestic subsidiary invested 8.3 billion yuan in property development as of March 31 last year even though the mandate was to just develop land, while another unit bought almost 300 million shares in Bank of Shanghai Co. in 2011, without a required asset evaluation, the audit office said.

Auditors also said CIC's selection of external managers for some other overseas investments was "not very standard," according to the report, which didn't elaborate.

CIC was set up in 2007 to manage part of China's foreign reserves. It is the world's fourth-largest state wealth fund, according to the Las Vegas-based Sovereign Wealth Fund Institute.

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Local Market

MSE News for June 23: Top 20 -0.57% to 15,333.37, Turnover 62.7 Million

Ulaanbaatar, June 23 (MONTSAME) At the Stock Exchange trades held Monday, a total of 249 thousand and 356 shares of 14 JSCs were traded costing MNT 62 million 689 thousand and 760.00.

"Silikat" /246 thousand and 121 units/, "Hermes center" /1,467 units/, "Genco tour bureau" /772 units/, "E-trans logistics" /345 units/ and "Aduunchuluun" /250 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Silikat" (MNT 55 million 377 thousand and 225), "Suu" (MNT four million and 116 thousand), "Talkh chikher" (MNT one million 306 thousand and 230), "Darkhan nekhii" (MNT 722 thousand and 200) and "Aduunchuluun" (MNT 443 thousand and 645).

The total market capitalization was set at MNT one trillion 550 billion 157 million 875 thousand and 488. The Index of Top-20 JSCs was 15,333.37, decreasing by MNT 87.58 or 0.57% against the previous day.

Link to article

 

MSE News for June 24: Top 20 -0.59% to 15,243.17, Turnover 6.7 Million

Ulaanbaatar, June 24 (MONTSAME) At the Stock Exchange trades held Tuesday, a total of 12 thousand and 457 shares of 12 JSCs were traded costing MNT six million 679 thousand and 066.00.

"Merex" /4,980 units/, "Hermes center" /4,022 units/, "Remikon" /2,000 units/, "E-trans logistics" /1,000 units/ and "Tavantolgoi" /201 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Suu" (MNT two million and 450 thousand), "Darkhan nekhii" (MNT one million 265 thousand and 600), "Tavan Tolgoi" (MNT 966 thousand and 149), "Hermes center" (MNT 623 thousand and 457) and "Merex" (MNT 528 thousand and 100).

The total market capitalization was set at MNT one trillion 540 billion 774 million 950 thousand and 319. The Index of Top-20 JSCs was 15,243.17, decreasing by MNT 90.20 or 0.59% against the previous day.

Link to article

 

Mongolian Stock Exchange Appoints New CEO With Ties to U.K.

By Michael Kohn

June 25 (Bloomberg) A former counselor at the Mongolian Embassy in the U.K. was named acting chief executive officer of the Mongolian Stock Exchange.

The MSE's board of directed appointed Angar Davaasuren, 36, to take over from acting CEO Bolormaa Damdin immediately, according to a statement posted yesterday on the exchange's website. Bolormaa had served since the departure of Altai Khangai in January.

Angar was a financial counselor at the Mongolian Embassy in London from 2011 to 2014 after working for the nation's ministry of finance from 2002 and 2009. He has degrees in international finance and accounting from the Central University of Arkansas and the University of Liverpool.

Angar takes over a bourse that has struggled to attract investment even after a three-year, $14.2 million restructuring conducted by London Stock Exchange Group Plc. (LSE) The benchmark MSE Top 20 Index has slid 38 percent since it signed the agreement with the LSE on April 7, 2011. Since Jan. 1 the MSE has operated under a new securities law that allows local listings by overseas companies.

The MSE has 248 listed companies, 48 employees and a 1.56 trillion tugrik ($859 million) market capitalization. Trading volume in the first five months of the 2014 was 8.9 billion tugriks, according to Ulziibat Dagvaa of the MSE's public relations department.

Link to article

 

Ministry of Finance Appoints New Acting CEO, Board Directors to Mongolian Stock Exchange

June 24 (infomongolia.com) Following the Government Resolution No.152 dated from May 10, 2014, the Mongolian Stock Exchange (MSE) JSC's rights of shareholder and duties were transferred to the Ministry of Finance of Mongolia.

Accordingly, Mongolian Stock Exchange announced new members of the MSE Board of Directors following a shareholding meeting decision made on June 23, 2014.

Newly appointed Members of the Board of Directors are:

Chairman of the Board of Directors

Mr. Buyantogtokh NYAMAA, Director of Fiscal Policy and Debt Management Department at the Ministry of Finance of Mongolia

Board of Directors

- Mr. Bazarkhuu DAAJAMBA, Vice Chairman of Financial Regulatory Commission of Mongolia

- Mr. Batsukh SUKH-OCHIR, Director of Internal Audit, Monitoring and Evaluation Division at the Budget Control and Risk Management Department, Ministry of Finance of Mongolia

- Mr. Nanjid MUNKHBAT, Executive Director of Development Bank of Mongolia

- Mr. Nemekhbayar ENKHBAYAR, Director of Economics, Finance and Investment Policy Division at the Strategic Policy and Planning Department, Ministry of Mining of Mongolia

- Mr. Myagmarsuren BATGEREL, Director of Restructuring and Policy Implementation Department at the State Property Committee

On the same day, Mongolian Stock Exchange JSC's Board of Directors held its meeting and issued a Resolution No.04 to exempt from duty an incumbent Acting CEO of MSE Mrs. Damdin BOLORMAA and to appoint Mr. Davaasuren ANGARAG as an Acting CEO of MSE.

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Economy

BoM MNT Rates: Tuesday, June 24 Close

 

6/24

6/23

6/20

6/19

6/18

USD

1,825.13

1,824.65

1,824.10

1,824.94

1,823.20

EUR

2,483.27

2,479.88

2,482.69

2,484.66

2,469.98

CNY

292.96

293.13

293.00

292.73

292.55

GBP

3,107.56

3,107.74

3,110.82

3,103.49

3,093.42

RUB

53.68

53.23

53.10

53.24

52.42

June MNT vs USD, CNY Chart:

 

Link to rates

 

BoM issues 354.8 billion 1-week bills, total outstanding +6.46% to 810.1 billion

June 23 (Bank of Mongolia) BoM issues 1 week bills worth MNT 354.8 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release

 

BoM FX auction: US$9 million sold at 1826.21, CNY26 million at 293.55, accepts $52.85 million, CNY20 million swap bids

June 24 (Bank of Mongolia) On the Foreign Exchange Auction held on June 24th, 2014 the BOM has received bid offer of USD and CNY from local commercial banks. The BOM has sold 9.0 million USD as closing rate of MNT 1826.21 and 26.0 million CNY as closing rate of MNT 293.55.

On June 24th, 2014, The BOM has received MNT Swap agreement bid offer in equivalent to 52.85 million USD and to extend the time period of CNY Swap agreement bid offer of 20.0 million CNY from local commercial banks and accepted all offer.

See also:

·         FX Auction Statistics

Link to article

 

BoM: Deposit Rates & Fees Report for May 2014

June 23 (Bank of Mongolia) --

Link to report (in Mongolian)

 

BoM: Loan Interests & Fees Report, May 2014

June 23 (Bank of Mongolia) --

Link to report (in Mongolian)

 

Moody's: Exchange rate regime key for exporting sovereigns' resilience to commodity price shocks

New York, June 23, 2014 (Moody's Investors Service) The strength of a country's fiscal institutions and practices, as well as its exchange rate regime, will determine how easily a sovereign heavily dependent on commodity exports can withstand shocks in commodity prices, says Moody's Investors Service in a new report. Overall, Moody's finds that a flexible exchange-rate regime generally mitigates the effects of price shocks on a government's fiscal balances.

"The high commodity prices recorded from 2000 to mid-2011 led to an improvement in the fiscal metrics of a majority of commodity-exporting economies," says Lúcio Vinhas de Souza, Moody's Managing Director and Sovereign Chief Economist in the report "Commodity-Exporting Sovereigns: Fiscal Practices and Exchange-Rate Regime Determine Resilience to Price Shocks." "The commodity dependency of many resource-abundant countries, however, has also increased, thereby heightening their economic and fiscal vulnerability to adverse commodity price shocks."

As measured by the ratio of commodity exports to total exports, Moody's finds that the dependency on commodities rose in 55 out of the 75 countries it studied in the period 2001-12 as compared to the period 1991 - 2000.

A Moody's regression analysis shows that increases in commodity prices overall have a negative effect on the debt ratios for exporters of agricultural raw materials and metals, but a positive effect on the debt ratios for fuel exporters.

Overall, Moody's finds that flexible exchange-rate regimes mitigate the effects of commodity export price shocks on governments' fiscal balances, even though the debt-to-GDP ratios of countries with flexible exchange rates show more sensitivity to commodity price changes than do those with fixed-rate regimes.

Moody's also finds that countries that have fiscal rules or sovereign wealth funds (SWFs) are more resilient to an adverse commodity price shock than those that do not.

Link to release

 

Week 6 of 100 Day Economic Push

June 24 (Mongolian Economy) A press briefing of the current status of the 100 Day Stimulus Plan took place yesterday, during which representatives discussed the Business Summit of 2014 – an event whose main purpose was to attract foreign investors and introduce the current situation of Mongolia's investment climate. During this summit, 18 projects were introduced, adding to a grand total of USD 15 billion, operating in a variety of sectors ranging from energy, railway and infrastructure. 

This Business Summit of 2014 was a special event due to the presence of the President of Mongolia, Ts. Elbegdorj, and five ministers. The event marked the first time during which government members participated in important business talks, which represented governmental promotion of the private sector. The President stated that it is time to separate government and business. The Prime Minister also said, "We are reflecting our every decision on how to promote business."

The energy sector was also discussed as members agreed that it will be reformed. Power Plant #3 will receive an extension with a capacity of 50 mWt. It will obtain its financing of USD 35 million from the Chinggis Bond and the project will be able to meet the energy demand equivalent to the size of Erdenet. Mongolia is planning to start more power plant projects with South Korea, Japan, and France. 

The Director of Energy and Infrastructure at Newcom LLC, D. Gankhuyag, said that these projects will be developed over the next 25 years through public-private partnerships, amounting to USD 1.3 billion. The projects will have the ability to supple the central Mongolian energy demand, especially Ulaanbaatar, in the long-term. 

Success in these projects will set a good base for following infrastructural projects implemented under the concession agreement. Members are currently ready to discuss the Tavan Tolgoi power plant as the legal environment of the energy sector is renewed. 

Link to article

 

De Facto: Selective measure to strengthen the tugrug

By Jargalsaikhan Dambadarjaa

June 24 (UB Post) According to the National Statistical Office of Mongolia, money supply in our economy (including cash, balances held in checking and savings accounts, and foreign currency) reached 10.2 trillion MNT by the end of May 2014. It was 30 percent higher compared to the money supply from the same period last year. Due to loans provided by commercial banks with money generated by government bonds and the eight percent mortgage program implemented by the government, total outstanding loans have increased by 46.5 percent compared to the previous year.

The tugrug rate against the U.S. dollar declined by 26 percent, while our foreign-exchange reserves fell to 2.2 billion USD, decreasing by 38 percent. The rates of inflation and unemployment have reached 13.7 percent and 10 percent respectively. The increased inflation and tugrug decline have negatively impacted both the economy and the livelihood of people.

The government says the economic crisis has solely been caused by reduced foreign investment in the mining sector and that it has started taking action to bring foreign capital back into the country by offering softer regulations regarding taxation and fees. However, the main cause of the economic crisis is not that we lacked capital, but that we suddenly had excessive capital that was used to fulfill election promises by handing out cash instead of utilizing mining income to create value. Also, huge foreign loans were acquired by wagering our future income.

In economic terms, such uncalculated, irresponsible actions by the government can be explained by the loss of budgetary discipline, implementation of loose monetary policy, printing of paper money without backing, and losing the trust of investors by failing to have transparency in public governance and establishing fair competition.

It is highly doubtful that the investors will come back when there is no guarantee that past mistakes are fixed and not to be repeated. The biggest mistake is the loss of macroeconomic discipline, because of which budget expenditure has always been greater than revenue, inflation has increased, and the national currency has suddenly declined. A selective measure to fix this mistake altogether is to establish a currency board. Currency boards were first introduced in the 19th century and used by about 70 countries by the 1980s. Today, many more countries have a currency board as well.

Taking this measure that suits Mongolia's current conditions very well, we can peg tugrug to dollar exchange rates and establish a currency board. The establishment of such a board will allow us to have tugrug rates fixed against dollar rates, ensure free convertibility, reduce budget deficit, and control the balance of trade.

ENSURING THE CONVERTIBILITY OF MNT TO USD

If the rate of our national currency is fixed against the most commonly used foreign currency in the country, it greatly contributes to expanding foreign trade, accelerating turnover, and boosting the confidence of investors. This means that the value of the national currency would be rigidly pegged to the value of another single currency, or to a basket of other currencies, and reserves of the foreign currency would be created to ensure free convertibility. A currency board is established to ensure that national currency in circulation is equal to and sufficient for converting to foreign currency reserves.

Some former socialist countries such as Estonia, Lithuania, and Bulgaria, have successfully established such currency boards and enabled themselves to implement many important reforms and build a more capable and sustainable economy.

We should fix the tugrug against the dollar at 1,800 or 2,000, which makes it easier to calculate, stabilizes the exchange rates, and ensures convertibility between the two. In order to do so, we would need to create and maintain dollar reserves that were equal to the total money in circulation, with the eventual goal of setting the reserves as 110 percent of the base money. The base money, which includes required reserves, commercial banks, and the total cash in circulation, was 1.8 trillion MNT by the end of May 2014. This means that the foreign currency reserves should be around one billion USD.

In other words, there should be a separate law developed and passed in order to transfer the required reserves of commercial banks held by Mongolbank into an account of the currency board. Besides the account holding those reserves, the responsibility to manage monetary policy would also be transferred to the currency board. This means that Mongolbank would only retain their right to provide oversight of the operations of commercial banks. Also, Mongolbank would no longer be authorized to provide soft loans to banks, as they do now, and print and inject money freely into the market. The experiences of some countries show that a central bank can fulfill the same role as a currency board.

STRENGTHENING MACROECONOMIC DISCIPLINE

When Mongolbank is no longer authorized to be involved in the development and implementation of monetary policy, it would no longer be able to purchase domestic capital. As a result, Mongolbank would not be able to buy tugrug bonds that the government issues to make up for their deficit in operating costs. Such conditions would prompt the government to balance their revenue and expenditure. When countries had a currency board that had greater authority than budget management and ensured good budgetary discipline, great success was achieved in a short amount of time. In the absence of a currency board, the central bank prints and injects money freely into circulation and causes inflation levels to go up. When there is a currency board, whether or not the national currency in circulation is in balance with foreign currency reserves is checked before injecting more money into the economy. Therefore, printing money is not easily done, which strengthens macroeconomic discipline.

REGULATORY MECHANISM FOR BALANCE OF PAYMENTS

If there is a balance of payments deficit, the money supply gradually decreases and interest rates go up after some time, which increases incoming capital flow. Higher interest rates increase the value of national currency and causes deflation. Ultimately, it weakens absorptive capacity and reduces the balance of payments deficit.

In 1998, the government led by M.Enkhsaikhan attempted to establish a currency board and fix tugrug rates against the dollar at 1,000 MNT for one USD. However, the idea was not supported by the parliament. While there is an expansionary policy in place without being able to control inflation rates and currency decline, it would be a wise step from the government led by N.Altankhuyag to make a bold move and change policy to establish a currency board. If they recognize and fix their past mistakes, the government has time to revive the economy before the next election. It would be better to make a decisive step rather than implementing the same measures from the past, while labeling them differently as "100 days to invigorate the economy".

If we manage to establish a currency board, the interest rates of commercial banks would be one-digit numbers, and investors would have more faith in the tugrug. Also, the value of the tugrug would be fixed, thus, people would no longer be worried about losing the value of half of their savings.

The Baltic States that established currency boards 20 years ago achieved rapid development. It proves that currency boards are very suitable to small countries that practice free trade. Mongolia needs to discover this opportunity to revive trade and investment, restore economic growth, and achieve sustainable development.

Translated by B.AMAR

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Politics

Minister for Environment and Green Development of Mongolia, S.Oyun Elected President of 2014 UN Environmental Assembly

June 24 (infomongolia.com) On June 23, 2014, the first-ever and considered historic UN Environment Assembly has been commenced in Nairobi, the Republic of Kenya, where over 1,200 participants, UN 162 member-states and 90 Ministers are attending the Assembly with 40 events.

The event, to continue until June 27, is aimed to discuss governance of environmental law, green economy financial mechanisms, illegal trade in wildlife, environmental sustainable development goals (SDGs) as well as the Post-2015 Development Agenda, including sustainable consumption and production.

In the scope of the United Nations implementation towards environmental issues, the Governing Council of United Nations Environment Programme (UNEP) decided to enlarge the UN Environment Conference into UN Environment Assembly at its first universal session held in February 2013, where all UN member-states are accredited to be member of the Assembly.

Moreover, Assembly members unanimously agreed promoting Minister for Nature, Environment and Green Development of Mongolia, Mrs. Sanjaasuren OYUN to chair the Assembly.

Mongolian delegates attending the UN Environment Assembly introduced the country's environment and green development policies carried out by the Government of Mongolia and participated in relevant meetings, moreover sharing its experience in the "Partnership for Green Economic Activity".

Link to article

Related:

MP S.Oyun elected as President of UNEAnews.mn, June 24

 

Cabinet Meeting Resolutions in Brief: June 21, 2014

June 23 (infomongolia.com) At the Cabinet meeting held on Saturday, June 21, it was discussed over 20 issues and the following resolutions were released:

-       The summary of the Second Intergovernmental Commission Meeting between Mongolia and the Kyrgyz Republic on Trade, Economy, Science, Technical and Cultural Cooperation held last May in Ulaanbaatar was sanctioned and the Minister of Culture, Sports and Tourism Mrs. Ts.Oyungerel, who is a Chairperson of the Commission representing Mongolian Government, is entrusted to monitor the follow-up meeting implementation for the Plan of Action.

-       Minister of the Cabinet Office of the Government of Mongolia Ch.Saikhanbileg conducted evaluation in the Ministries' activities in 2013 and introduced the conclusion to members of the Cabinet.

-       Minister of Education and Science Mr. Luvsannyam GANTUMUR is paying a working to the Russian Federation on June 22-26, 2014, and the visit's guidelines was agreed to submit to the Prime Minister of Mongolia.

-       Mongolia to participate in the Universal Exposition "Expo Milan 2015" to take place in Italy between May 01 and October 31, 2015, and Minister of Economic Development N.Batbayar in collaboration with Mongolian National Chamber of Commerce and Industry are entrusted to supervise Mongolian delegation.

-       Due to ratification of the Law on Exemption from Customs and Value Added Tax approved by the Parliament on June 06, 2014, a renewed list of equipment and supplies was approved at the Cabinet meeting, where only equipment and supplies for the basic production are included in the list and spare parts, finished products, hand tools and some parts ready to assemble for sale are excluded.

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Cabinet Meeting in BriefMontsame, June 22

 

We want a 'Glass Purse'

June 24 (UB Post) Arguably the most powerful anti-corruption bill was once again put forth to Parliament last Thursday. The Glass Account bill, which was drafted by President Ts.Elbegdorj to increase the transparence of state budget spending, was previously turned down due to a "naming and terms" issue.

If passed, the Glass Account bill would prompt all state and provincial government financed businesses, ministries and agencies to report their spending on their website immediately.

According to J.Tumurbaatar, Deputy Head of the National Property Committee (which will be in charge of implementing the bill if passed) the bill will ensure timely action against improper spending of the state budget and give access to the public on what taxpayer money is being spent on.

"In short, by introducing [the Glass Account] bill, corruption, the abuse of power, and wrongful spending of the budget can be monitored by the public, and timely action can be taken to prevent or create accountability for such actions… According to today's laws, the state budget is approved on December 1 of each year, and budget holders report their spending within the first month of the year.

The results of the National Audit of the previous state budget spending is announced while the next year's budget is being discussed. This means that the public has no way of monitoring spending while it is taking place. But if passed, the law will allow the people to monitor starting from September this year," he told news.mn.

The Glass Account bill was previously denied by Parliament in late April, after many petty and unproductive debates about its name, and not about its content.

During the Parliament session of April 20, MP and former Justice Minister Ts.Nyamdorj said while discussing the Glass Account bill, "What is a 'Glass Account' law? Can a law with such a name exist?

To my understanding, it seems like a law will be stated on glass. What kind of an account is that? I understand that the budget account needs to be more open, but state the names of the countries that have a law with this name."

During the discussion, it was clear that MPs were determined to touch on all other aspects of the law, expect the most important ones, its implication and necessity. Other MPs echoed Ts.Nyamdorj's comment about the name of the law.

When asked about why the bill wasn't approved, P.Tsagaan, the President's Chief of Staff said, "It is possible that we might have been careless [about formulating the bill], thinking that the law would be passed. This is a law that created a lot of anticipation among the public. But MPs have dropped the law after much criticism of the word 'glass'. This is a simple concept for everyone. Glass is a transparent material. The word was chosen to symbolize transparent state operations, state budget spending and its public monitoring. But members chose to focus on how it will translate into the languages of the UN. 'Glass Account' can be translated in all languages."

P.Tsagaan also remarked that the interests of some politicians might have influenced the decision, as 90 percent of the public approved of the law in a poll conducted by the Office of the President.

And so, at last, the bill was resubmitted to the parliament, and discussed last Thursday.

The issue of changing the name was once again raised by MP Su.Batbold, who stated, "This law was rejected once before. Members wanted the name changed. Poetically named laws are not necessarily good laws. This ought to be looked into."

MP D.Demberel complained that the law requires all establishments with state and provincial funding to report their spending online and pointed out that not all settlements in Mongolia have access to the internet, therefore it cannot be accessed by them. He added that it's the "implementation of the law" that he is most concerned about.

The final decision on the law was postponed and the issue was left at that in Thursday's meeting.

To me, and to the majority of voters and taxpayers, this law is essential for eliminating corruption, one of Mongolia's biggest concerns. Mongolia is listed 83 out of 177 in the Global Corruption Perception Index by Transparency International, with only 33 points out of 100.

The social stigma and challenges corruption presents for the people of Mongolia everyday are broad and unavoidable. The Glass Account bill will allow the public to see and judge for themselves whether their tax money, government bonds and loans that taxpayers must pay off, is being spent productively or on ventures that are fruitless, as is so often the case.

MPs are currently concerned about menial, if not irrelevant, aspects of the law, such as its name. In this day and age, when mobile phone services and internet connections can be set up easily pretty much anywhere around the globe, MPs don't have an excuse in saying that a critical law that will protect the interest of millions cannot be passed because some villages have no internet access.

The fact is that Mongolia needs to eliminate corruption if it is to benefit from its mineral riches, and taxpayers have the right to know how the government is spending their money. The state budget is not the property of ministers or governors, it is the public's. The state is merely entrusted by the public to act and spend on their behalf for the public good. If state spending reports are made available to the public, the public can judge whether or not their money is being spent wisely.

If businesspeople invest in a company, they have the right to know how the company will spend their investment, and how they will be paid back. The same goes for taxpayers and voters. If a company doesn't reveal how they spend their money to its investors, nobody will invest. But taxpayers don't have the luxury of choosing not to pay taxes, we are forced to pay, but we can choose who sets the taxes.

We – the public – need to know how our money is being spent, it is our right.

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PM briefs media on land law, MIAT, railway policy at weekly meeting

June 24 (UB Post) The "30 Minutes with the Prime Minister" meeting took place yesterday, and the leader of the government spoke about the latest topics with journalists. Earlier, he participated remotely in the celebration of the "Renewing National Communications Network Expansion" project connecting 150 soums to high speed fiber-optic networks.

The Information Technology, Post and Telecommunications Agency oversaw the project and ZTE executed it. Delegates from the 150 soums connected with the Prime Minister online and cut a ribbon to celebrate the "opening" of the network. "Ninety percent of 332 soums are now connected to the internet. Only 30 soums are left. They will be connected to the internet by the end of this government's term," said N.Altankhuyag in his opening speech. Within the terms of the project, 9,000 km of high speed network cables and transfer areas were laid for remote soums.

Currently, 129 of the 150 soums are connected to the integrated control network, the other 21 soums will be connected by August 15. Only 37 soums are left without internet because of their location and technical challenges.

The following are responses by the Prime Minister to journalists' questions.

People signed up for apartments in the Buyant Ukhaa-1 district couldn't get loans with eight percent annual interest. Did the government change the loan system?

Citizens participating in the Buyant Ukhaa-1 housing program can't sell their apartments for 15 years. But under offers from commercial banks, we approved their requests and made apartments available for mortgage. People should understand that apartment loans with eight percent annual interest are available.

The public is against the government's decision allowing rich people to purchase land for investment purposes.  And some say that the duration of possession is too long?

A negative outlook has appeared on social networks to distribute a lie.  The content being talked about on Twitter and Facebook is not present in this law. If you tell them that, it will become an argument.

Today I asked Minister Ts.Bayarsaikhan, and he said there is no such content. Yesterday, Member of Parliament B.Garamgaibaatar gave answers to these questions while he was working at the 11-11 center. After that, I received an SMS. People spread rumors and it prevents work. It's sensation that is caused by just a few people who divided the land. Actually, within the limits of this law, we would open up considerable opportunities for citizens to own land. We aren't about to do anything wrong, but we decided to cancel this project. It's so complicated to argue through social media. So, this fall, when people understand us properly, we are going to submit our project once again. People should trust that government won't sell land to foreigners.

The government has confirmed policy in the field of aviation. This policy says that MIAT won't be privatized in coming years. Why has this now changed?

I'm not the one who knows everything. We decided to privatize 49 percent and hold 51 percent for the state. But the company works with losses. I think that it is necessary to privatize most of the company and keep less for the state.

A resolution about new railway line construction was presented to the parliament. How did you decide on the problem of railway gauges?

This question was decided when Member of Parliament Kh.Battulga was a minister. Yesterday we presented this project again. It's not about building the whole railway with narrow gauge rails. The general system is based on wide gauge rails. In due course, the government should decide what type of railway we should use for export rails. After many conversations, the government has decided to build a narrow gauge railway from Tavantolgoi to the east.  If we build a wide gauge railway from Tavantolgoi the expenditure of transporting coal will be expensive. And the price of coal will increase.

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Chief of President's Office P.Tsagaan meets IRI delegation

Ulaanbaatar, June 24 (MONTSAME) Head of the Presidential Office P.Tsagaan Monday received a delegation of the International Republican Institute (IRI).

The delegation included Ms Gretchen A.Kunze, a country representative of the IRI to Mongolia, and Ms Ashleigh Whelan, a senior advisor/deputy director of the Democratic Governance at IRI.

Recently appointed the IRI country director for Mongolia, Ms Kunze expressed a satisfaction with the cooperation between Mongolia and the IRI in democracy, and focused on actions and activities of Mongolia to combat corruption, deepen the democratic reforms, share democratic experiences with other countries.

Mr Tsagaan wished the IRI country director successes and said Mongolia always thanks the IRI and the Konrad Adenauer Foundation for helping Mongolia in transferring to the democratic and market-economy system.

Ms Kunze said great changes happened in Mongolia in the last 24 years and appreciated Mongolia's success in realizing its own democracy and becoming a good example in its region.

The Presidential Office head noted that the action of transmitting into the smart government from big government launched at an initiative of the President Ts.Elbegdorj, in addition, works have started to transfer into the direct democracy from the electoral democracy and to ensure civil participation as well as the direct democracy nationwide, he emphasized.

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Mongolian Throat Singers at an Anti-Nuclear Protest in Sukhbaatar Square

June 9 (David Greenberg) A Mongolian Throat Singer performs at a peaceful anti-nuclear power protest in Sukhbaatar Square, Ulaanbaatar, Mongolia.

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Business

Mongolia approves internationally adhered coal classification standards

June 24 (UB Post) "Coal Classification MNS 6456:2014" and "Coal, Coal Product Classification MNS 6457:2014" standards were added to the national registry on June 12, 2014, and will now be adhered to.

The new standards were developed in conformity with international standards, and valuation standards adhered to in the United States, Australia, China and Russia, and incorporate the suggestions of specialists and scholars in the coal sector, geologists, engineers, associations in the field and professional coal quality researchers.

Full texts of "Coal Classification MNS 6456:2014" and "Coal, Coal Product Classification MNS 6457:2014" are available at www.estandard.mn.

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Cabinet Approves List of Equipment, Facilities Exempt from Customs, VAT

Ulaanbaatar, June 23 (MONTSAME) At its regular meeting on Saturday, the cabinet approved an altered list of facilities and equipment that will be freed from the customs tax and VAT.

It applies to small- and middle-sized productions. This list is approved after the State Great Khural (parliament) had passed the relevant law this June 6.

In accordance with the law on SME, the industries for tobacco, alcoholic beverages, gambling, lottery, banking and non-banking business, insurance services, mineral exploration and exploitation are not considered as the SME, therefore their facilities and tools are not included in the list. It involves the facilities and equipment to be utilized by national productions only.  

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G.Jamsrandorj: It's essential to make official estimates of mineral resources

June 24 (UB Post) Mongolian miners and geologists met up last month to established a nongovernmental organization named Mongolian Institution of Geology and Mining (MIGM). G.Jamsrandorj, Ph.D. of geological science, engineer and board member of the NGO, clarified some important function and purpose of MIGM.

Why was it necessary to establish this institution?

We can say that presently all countries of the world are included in a unified economic network. Mongolia is also included in this network. Seeing that countries may face difficulties and misunderstandings without developing the mining sector with integrated standards, criterion and investments, countries united to establish an international template for reporting exploration results, mineral resources and mineral reserves. The standard code for reporting mineral reserves is convertible and adaptable to each member country, and authorized people who estimate reserves are acknowledged in every country.

A branch of this international template should be established in countries that exploresand mine minerals. Mongolia didn't have a branch. For the last ten years, Mongolian geologists and miners debated and exchanged ideas to make resources internationally accepted, and finally, we came to an agreement. Miners and geologists were divided into three groups: those who wanted to translate, copy and implement the international standard code in Mongolia straight away, those who thought it wasn't the time yet, and those who wanted to create the standard themselves. By establishing MIGM, we established the foundation for a national branch of the international template.

What sort of NGO is MIGM?

MIGM is different from the ten thousand NGOs already established in Mongolia. More than protecting the interests of the people, it gives more importance to the nation's interests, respects ethics and professional skills of Mongolian geologists and miners, and takes responsibilities both domestically and internationally.

Since it's only the beginning for the national branch, does this mean that Mongolia hasn't joined the international template?

Mongolia hasn't joined yet. The abbreviated name for the international template for reporting mineral reserves is CRIRSCO. The USA, Canada, Australia, Russia, South Africa and European Union have joined it. Mongolia is pre-negotiating and doing preparation work to join CRIRSCO in October. MIGM is one proof of how active Mongolia is.

What does Mongolia have to do to join? Is there any terms and conditions?

Of course, there is. First of all, we established an NGO for it. It's required to have official mineral reserves and resource classification, which are commensurate with the international classification, and have a regulation and standard for reporting mineral reserves. We're now developing both of these requirements. All of these regulations and changes were included in the draft law to make amends to the Mineral Law.

You said Mongolia is to join CRIRSCO in October, can you clarify that?

The work to join CRIRSCO started in 2012. Relevant government agencies mutually agreed and according to the conclusion of agreements, a meeting of CRIRSCO will be held in Mongolia in October.  CRIRSCO experts used to frequently visit Mongolia to overview our work, give professional advice and introduce international standards, criterion and experience. This is a form of cooperation and agreement.

What are the requirements set for Mongolian specialists for this sector?

For qualifications and experience, specialists of this sector must reach and be acceptable at international levels. Mongolia has many people who meet this qualification. There are several geologists in Mongolia with certificates from internationally approved agencies for reporting mineral reserves of other countries. For instance, the Managing Director of MIGM B.Oyungerel. Identifying and training people of these capabilities is one of our institution's objectives. The most important aspect is ethics issues of specialists.

When determining resources, what could be the reasons for professional mistakes? Do they lack skills and capacity or do they deliberately make mistakes?

It's common for license holders of deposits to exaggerate the amount of a deposit in order to sell and profit. This is to raise deposit prices higher. Sometimes, it may be the opposite. They may try to understate the amount of resources. For example, in Mongolia, the government deems coal deposits of more than 100 million tons of strategic importance. When deposits are classified like so, license holders have to give up 34 percent of their revenue to the government. Therefore, license holders try to set the amount of resource lesser than it actually is. Due to these sorts of issues, investors bring authorized experts from abroad and get them to determine resource amounts. Furthermore, Mongolia doesn't have a national standard code for reporting mineral reserves. If Mongolia joins CRIRSCO and stock exchanges are able to trust national specialists to make reserve estimates at international level, the above issue will gradually be eliminated.

What exactly are reserve estimates?

After being estimated through surveys, minerals and mineral concentrations of sufficient amount and acceptable mineral quality for mining can be explored. If reserves are beneficial for mining, it's considered as deposit. For example, if phosphorus and sulfur content in iron ores exceed relevant requirements (thresholds set by factories) the deposit isn't appropriate to use because its iron resources content isn't sufficient.

Then what is resource classification?

Resource classification is basically a complex set of requirements set for doing mineral explorations. Overall, it's a general requirement or a standard to resolve all issues related to future mining, including determining distance between drillings depending on mineral types, which mineral should take up how much percentage of total resource, how a certain percentage of a mineral should be extracted in order to mine and such. Reserves are assessed and drilled to some decree, whereas, resources are minerals that haven't been completely assessed and are at estimation stage. Since it's only being estimated, it may not necessarily be there.

In order to get specialists that reach international levels and to increase their number, what does Mongolia need to do?

I'm sure MIGM will eventually give trainings and advices to geologists and miners to increase their professionalism. It'll be better if the training is not done for academic purposes like it is now, but to increase their professionalism through practical work and by giving them work experience. We have every necessary condition to do this in Mongolia. We can exchange experience and ideas with foreign specialists. We can organize practical work at mines in the country or in foreign countries, and then, give out special certificates. We'll consider both their professional capacity and ethics. These people will determine mineral reserves and resources and their decision will contribute in deciding whether to mine that deposit. This means that investments will be possible as soon as they estimate resources and say it's ready to mine, without any external interference. Currently, the Minerals Council of Mongolia (MCM) is carrying out duties to approve and register mineral resources. If we train specialists in this profession, the MCM will no longer need to participate in estimating reserves.

Will the MCM become unemployed in a few years?

I assume that this work will start in two to three years. During this period, our NGO will cooperate with the Mongolia Stock Exchange, Ministry of Mining, Mineral Resources Authority and banks to establish a committee for reporting mineral reserves. This organization will become a member of the international organization, CRIRSCO, and work with them. A member of MIGM and an authorized person will be responsible for determining mineral reserves. The MCM will probably have nothing to do. Their obligation to discuss and register mineral reserves will be transferred to others and they'll be left with only accepting geological works that are financed through the state budget.

Who will pay specialist to determine mineral reserves?

According to current practices, companies doing mineral explorations contribute a certain amount for giving salaries to experts who review estimates and write up reports as well as for having reserves discussed by the MCM, have it registered in the registry, and to conduct technical and economic feasibility studies. If international regulations are adopted, I assume a specialized person can do all of these works just once and get the same amount of salary.  However, it's not certain at the moment.

Many procedures and bureaucracy will decrease by having one person do all of these works. With the current practice, there are many procedures related to mineral reserves. Just to do feasibility study for reserves, one or more years are required and after transferring the issue to many different organizations and people, a special mining license is approved. These procedures waste much time and effort of many people. However, by making a specific group responsible for this work, these procedures will be simplified and the amount will be reduced drastically.

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Altanbulag Free Trade Zone, finally, from talks to implementation

June 24 (Mongolian Economy) The opening ceremony of the Altanbulag Free Trade Zone took place on June 22nd. Before the establishment of this free trade zone, the land was an empty steppe. With abundant planning lasting approximately ten years, the area is now filled with road construction and infrastructural work with a pavilion – available for rent at MNT 100,000 per day – selling a wide range of products. The zone also boasts a long line of cars, trucks and retailers. The free trade zone connects Mongolia with Russia and China, providing a shortcut for the passage of goods and services between the three nations. This establishment marks an important step in the development of Mongolia.

Russia and China previously created a strategic partnership of 2015 that will amount to approximately 100 billion USD in trade. 20% of the profits already pass through the Free Trade Zone of Manjuur, and officials hope to see another 10% run through Altanbulag in the near future. This project can help Mongolia earn up to 100 million USD in profits. With this and tax free pressure for the next five years, the project is expected to help the economy grow while improving relations between both Russia and China. 

The Altanbulag Free Trade Zone is a non-taxable zone, providing a huge advantage to those who wish to use the pathway. However, the main challenge remains – creating financial and capital flow in and out of the free trade zone. Although the opening ceremony began on June 22nd, many foreign investors did not show, possibly due to the idea of the free trade zone being discussed for a long period of time rather than implementing action. Hopefully more people will come by as it gains momentum. 

Parliament member, Ts. Tsolmon, stated that right now, the Altanbulag Free Trade Zone is a transit zone, however, in the long-run the free trade zone can be industrialized and evolve into a manufacturing zone. Currently, buyers do not have enough information about this area, thus more public relations and advertising is needed in order for it to reach its maximum potential.

Foreigners recently registered in order to gain the ability to thoroughly use this free trade zone, while Mongolians carry the advantage of passing through with a customs form. Those who wish to live in the area need to be granted permission of residency. For Chinese, South Korean and other East Asian countries who wish to have its citizens take up residency must do so from the Mongolian Embassy of the local government and obtain a transit visa. 

The Buriad people, those who live on the Russian border, earn 70-80% of its GDP through the supply of Chinese goods. The routine trip between China, Manjuur and Russia covers a distance of nearly 1000 km, but with the help of the Altanbulag Free Trade Zone, the trip can be reduced to 300 km. With this opening, the Altanbulg and Khiagt border can operate for 24 hours a day. 

Construction is also constantly creating trade centers. There stands an Auto Trade Center and in the following two months, more trade centers will be built, bringing in more investment to the trade zone. A new trade center consisting of two stories will go under construction, providing an area of 24-72 square meters for 80 retailers. This opening ceremony exhibition will last until June 29th, whereas trade and business operations will continue until September 22nd. If enough investment is attracted as time goes by, operations will extend to 24 hours a day. This free trade zone is also expected to expand the Seleng Province and will allow retailers to operate without paying custom taxes and value-added taxes.

Before the establishment of this trade zone, companies used to have the ability to own as much land as they desired. Now, companies are restricted to a space of 200 square meters. Foreign investors have the capability of requesting to own land in Altanbulag to further its trade as well. In addition to land ownership, Russia requested that the free trade zone should operate for 24 hours a day, hoping that trade will increase rapidly. This will allow the Chinggis Road Project to take place, providing more roads in the area.  

The State Secretary of the Economic Development Ministry, Ts. Shinebaatar, said, "We need to clarify the legal environment of Mongolia to develop the Altanbulag Free Trade Zone. We recently submitted a Free Trade Law to parliament and we will see the negative and positive impacts from the operation of the free trade zone in order to see what changes we need to make." 

There is also another opportunity to establish a free trade zone in Tsagaan Nuur. If the development of the Altanbulag Free Trade Zone heads in the right direction, policy from government can share the same path and improve investment in the area. 

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The Second Phase of Tax Reform

June 24 (Mongolian Economy) The first phase of tax reform took place between 2007 and 2012. Its Four 10s Tax Policy (value-added tax, corporate income tax, personal income tax and social insurance tax) helps make Mongolia one of the least taxed nations, not only in Asia but in the world. The government is launching the second phase of tax reform this year through to 2017.

Two discussions were held on May 30 and June 10 this year, involving representatives from the State Great Khural, government and private sector. The former took place at the Citizens' Hall in the Government Palace under the theme of "Value-added Tax and Commercial Tax." That event was moderated by S. Bayartsogt, a member of parliament and the head of the working group for tax reform. The latter was themed "Let Us Decide Through Reform" and was organised by the government. 

The bill on raising the value-added tax threshold to MNT 50 million is now in active discussion. But it is not clear if the bill is going to be passed by the Khural before the spring session is wrapped up.

According to the government's main action plan, the current tax reform aims to create a stable tax setting in which tax would meet the principles that are expected to be simple, clear, equal and fair while contributing to the economy and meeting international standards.

Under the 100 Day Action Plan, initiated by the government on May 10 this year, the second phase of tax reform follows laws that have been approved by the State Great Khural on June 6 this year. For example: 

The Law on Exempting Imported Equipment from Customs and Value-Added Taxes aims to support SMEs,

The Law on Delaying Customs and Value-Added Taxes for two years aims to reduce costs during the period of increasing investment, supporting infrastructure work and removing hindrances caused by delays in equipment supply

These laws took immediate effect.

As a part of the tax reform, the following legislations have been submitted to the Khural for approval: 

Legislation on Refunding 90 percent of Corporate Income Tax paid by companies with revenue of up to MNT 1.5 billion a year, according to the main action plan by the government. 

An updated version of the Value-Added Tax Law that is expected to be consistent with international standards. The updated version includes raising the VAT threshold to MNT 50 million, clear definitions of some ambiguous legal terms in the current law, and refunding 20 percent of VAT paid by end users.

Based on request by the Mongolian Bankers Association, the Corporate Income Tax Law is to be amended in terms of imposing 10 percent tax on tax payers who are not based in Mongolia and who have purchased bonds from Mongolia's commercial banks. By approving this legislation, the commercial banks' loan rates are expected to decrease. 

An updated version of the Accounting Law and Auditing Law aims to reduce operational hindrances for the submission of financial statements by companies. If approved, SMEs and companies would be able to submit their financial statements online once a year and the companies would not necessarily receive audits on their financial statements.

There is also urgent need to reform tax enforcement and the services provided by tax departments. That is why Mongolia's tax policy is being directed towards simplified tax reporting and tax payment with online tax filing. All tax payers can now submit their tax reports and make tax payments from anywhere and whenever rather than submit paper documents in person at the tax office. 

A brand new agency called the "Tax Debt Prevention Centre" is expected to launch to provide tax payers with information on tax debt and remind them about possible debt-related risks in the future.
The government is adhering to its tax policy not to implement tax hikes or introduce new taxes. Tax laws are to be clear and easy to understand, while the law enforcement is to be simplified. 

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Erdenet Mining Corporation reduces operational costs and increases income

June 24 (UB Post) Speaker of Mongolian Parliament Z.Enkhbold became acquainted with the operations of Erdenet Mining Corporation's ore processing factory last Saturday.

Erdenet Mining Corporation (EMC) is one of the biggest copper ore mining and processing factories in Asia. EMC was established in accordance with an agreement between the governments of Mongolia and the former Soviet Union in 1978.

EMC processes 26 million tons of ore per year, and produces around 530 thousand tons of copper concentrate and around 4.5 thousand tons of molybdenum concentrate annually. Since 2012, EMC has been manufacturing import substitution products for its facilities, such as spare parts, metal and rubber structures, and molded plastic products in its machinery repair plant.

Factory authorities reported that though EMC has been operating profitably since 2000, the change in market prices of non-ferrous metals due to the global economic and financial crisis has caused a decline in the company's profit in recent years.

EMC introduced the Speaker of Parliament to projects worth 1.4 billion MNT being implemented in accordance with a five-year contract established in 2013 between EMC and Orkhon aimag. EMC is planning to transplant young birch and larch trees being destroyed by the factory's operations to Bayan-Ondor sum, reopen Erdenet's airport, repair and decorate the city's children's palace and summer camp, and implement the "Erdenet Factory – Apartment" project. Speaker of Parliament Z.Enkhbold reminded EMC of the importance of implementing projects that will support the future economic growth and development of Orkhon aimag.

The Speaker of Parliament also visited the molybdenum processing plant of Shim Technology Ltd. Established in 2005, the plant employs 250 workers, processes 3,600 tons of molybdenum concentrate, and produces 2,500 tons of molybdenum technical oxide and 800 kg of products containing rhenium annually. In order to increase its efficiency, the plant invested 407,000 USD in maintenance. During his visit, the Speaker of Parliament spoke with plant authorities and workers.

Minister of Mining D.Gankhuyag and Advisor to the Speaker of Parliament Ts.Buyantsogt accompanied Z.Enkhbold on his visit.

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Ulaanbaatar

69 new bus stops being opened by August in Ulaanbaatar

June 24 (UB Post) Ulaanbaatar authorities have started building new bus stops made of rustproof steel.

They will be clearly identified and feature posted route information and power-saving LED lights.

The bus stops will have audio devices for information announcements, with information also made available for the hearing impaired. The devices will run on solar power and are capable of heard within a five meter radius. Passengers waiting for buses will also have 20-minute access to a free wi-fi connection.

A total of 69 bus stops will be built this year and 31 will open before Naadam Festival. The rest will be in operation by August, according to the Office of the Ulaanbaatar City Governor (OUCG).

The administrations cooperating on the bus stop construction and 200 other public transportation projects are the OUCG, Ulaanbaatar City Public Transportation Authority, Ulaanbaatar City Road Authority, and the Trade and Development Bank of Mongolia. They have all signed a cooperation contract, and the executor companies are reciving technical consultation from the JCDecaux Group in France.

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Tuul River residents warned of rising water levels

June 24 (UB Post) The water levels of the Terelj, Uliastai, Sugnugur, Barkh, Eg and Onon rivers rose 10 to 40 cm than levels recorded on June 20. Flood stage development along Sugnugur- Sugnugur, Taats-Nariinteel and Buyant-Khovd rose by five to 15cm.

The water level of the Tuul River and rivers running through Ulaanbaatar increased by 40 cm on June 21. Households and herders living in river areas are instructed to be aware of flood conditions.

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Spontaneous Abortions in Mongolia Linked to High Air Pollutant Levels

By M. J. Friedrich

June 18 (The Journal of the American Medical Association) Exposure to high levels of air pollutants during the coldest months of the year in Ulaanbaatar, Mongolia, is associated with a high incidence of spontaneous abortion during those months, according to a report by researchers from Mongolia and the United States (Enkhmaa D et al. BMC Pregnancy Childbirth. doi:10.1186/1471-2393-14-146 [published online April 23, 2014]).

The coldest capital city in the world (and one of the most polluted), Ulaanbaatar experiences great fluctuations in air pollution throughout the year. The use of coal-burning stoves to heat homes causes high levels of air pollutants during winter, in contrast to much better air quality in summer. Air pollution has been strongly associated with adverse effects on reproductive health, and several recent studies have reported an increase in fetal loss early in pregnancy with exposure to high levels of air pollutants.

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Diplomacy

Chinese Foreign Minister on official visit to Mongolia, June 24-26

June 24 (UB Post) The Minister of Foreign Affairs of the People's Republic of China, Wang Yi, will pay an official visit to Mongolia by the invitation of the Minister for Foreign Affairs of Mongolia L.Bold on June 24 to 26.

Officials say that this visit will help to expand strategic cooperation between Mongolia and China in all sectors, strengthen mutual understanding, and develop international and regional cooperation.

During the visit, the Ministers of Foreign Affairs of the two countries will negotiate and Foreign Minister Yi will meet with Mongolian President Ts.Elbegdorj, Prime Minister N.Altankhuyag, Deputy Prime Minister and Director of the Mongolia-China Intergovernmental Joint Commission D.Terbishdagva.

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Russian Federal Council Chairwoman on visit to Mongolia

June 24 (UB Post) Chairwoman of the Federation Council of Federal Assembly of the Russian Federation Valentina Ivanovna Matviyenko is on an official visit to Mongolia from June 22 and 23, at the invitation of Chairman of the Parliament Z.Enkhbold.

During the visit, Matviyenko will hold meetings with Chairman Z.Enkhbold and sign a memorandum of understanding. Matviyenko will also meet with Mongolian President Ts.Elbegdorj. Prime Minister of Mongolia N.Altankhuyag and Vice Chairman of the Parliament M.Enkhbold will meet with the Chairwoman as well. Parliament member and Vice Chairman of the Mongolia-Russia Inter-Parliamentary Group, G.Batkhuu and others will meet the group's members accompanying Chairwoman Matviyenko on her visit.

The Russian delegates include ten officials, Deputy Chairman of the Federation Council of Federation, Russian Head of the Inter-Parliamentary Group in the Mongolian Parliament Ilya Magomed-Salamovich, First Deputy Head of the Committee on Foreign Affairs of the Federation Council Vladimir Mikhailovich Dzhabarov, and others.

Chairman of the Parliament Z.Enkhbold is welcoming the guests on Monday at 9:05 a.m. at Chingis Khaan Square, reported the Media and Public relations Department of the Parliament.

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Mongolia hopes to lift visa regime with Russia in August

June 23 (Voice of Russia) Speaker of the State Great Khural, Mongolia's parliament, Zandaakhuu Enkhbold, hopes to sign an agreement on visa-free regime with Russia in August.

The agreement abolishing visa regime between Russia and Mongolia might be signed as early as this August, Chairman of the State Great Hural, the Mongolian Parliament, Zandaakhuu Enkhbold said Monday.

"In August we expect President Putin to visit Mongolia for the celebrations of the 70th anniversary of the victory in the Battle of Khalkhin Gol. So I think it [the agreement] will be signed during his visit," Enkhbold said. Visa regime between Russia and Mongolia was introduced in 1995 on the Mongolian initiative. Cancellation of the visa regime has been discussed by the heads of states for a few years. According to Enkhbold, visa free regime will attract more investors and tourists to Mongolia.

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Ambassador Presents on Mongolia's Foreign Policy to Australian MPs

Ulaanbaatar, June 24 (MONTSAME) The Ambassador Extraordinary and Plenipotentiary of Mongolia to Australia Mr R.Bold last week gave a report to MPs of Australia, by joint invitation of the Standing committees on foreign policy and defense and on trade.

His report focused on the foreign policy of Mongolia and on the Mongolia-Australia relations. The Ambassador gave details about key principles of Mongolia's foreign policy, touched upon problems, and spoke about an essence of the "Third neighbor" policy and the latest situation in the bilateral relations.

The Australian parliamentarians asked the Ambassador about the bilateral ties, regional security and a current situation in Mongolia for investors. Some of them expressed a worry about Mongolian authorities' decision to ban some Australians from leaving Mongolian territory.

The report has become a significant event in terms of giving the latest information about Mongolia, the MPs said. 

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Speaker of Grand National Assembly of Republic of Turkey Visits Mongolia

June 24 (infomongolia.com) At the invitation of Speaker of the State Great Khural (Parliament) Mr. Zandaakhuu ENKHBOLD, the Speaker of the Grand National Assembly of Turkey (Parliament) Mr. Cemil Cicek and other accompanying delegates are conducting an official visit to Mongolia on June 23-26, 2014.

On June 24, 2014, the distinguished guests were welcomed at Chinggis Square by Parliament Speaker Z.Enkhbold and after paying tribute to the Monument of Chinggis Khaan, Speaker C.Cicek left a note on the Guest Book in the Government House.

Afterwards, Speakers C.Cicek and Z.Enkhbold held an official talk, where representing Mongolia Minister of Foreign Affairs L.Bold, Chairman of Mongolia-Turkey Inter-Parliamentary Group at the State Great Khural, MP A.Bakei, Secretary General of Parliament Secretariat B.Boldbaatar were present and the other part was represented by Ambassador Extraordinary and Plenipotentiary of the Republic of Turkey to Mongolia Mr. Murat Karagoz, Chairman of Turkey-Mongolia Inter-Parliamentary Group at the Grand National Assembly, MP Fehmi Kupcu as well as other officials from both sides.

Following the talks, a Protocol on cooperation between the State Great Khural and the Grand National Assembly was inked and Speakers Z.Enkhbold and C.Cicek made a statement to reporters regarding issues discussed and further collaboration not only in legal sphere, but also Turkish investments in education, housing, infrastructure, energy and tourism sectors.

The visit of the Speaker of the Grand National Assembly is being conducted in the scope of celebration of the 45th anniversary of the establishment of diplomatic relations between Mongolia and the Republic of Turkey enacted on June 24, 1969.

Today on June 24, Turkish delegates attended opening ceremonies of "E-Library" and "Publishing House Renovation" projects at the State Great Khural, both implemented under a funding of the Turkish International Cooperation and Development Agency.

Mr. C.Cicek will also visit the Erdenezuu Monastery in Uvurkhangai Aimag and an ancient Turkic findings museum in the Orkhon valley nearby. During his official visit, Speaker C.Cicek will be received by the President of Mongolia Ts.Elbegdorj and meet the Prime Minister N.Altankhuyag and other officials.

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Related:

Turkish Parliament Speaker Arrives in UlaanbaatarMontsame, June 24

Speaker of Grand National Assembly of Turkey begins visitnews.mn, June 24

 

Turkish Speaker attends opening of TIKA-funded online parliament library of Mongolia

Ulaanbaatar, June 24 (MONTSAME) The Parliament Speakers of Mongolia and Turkey attended Tuesday an opening ceremony of a cyber-library in the State House.

In the project implemented by the Turkish International Cooperation and Development Agency (TIKA), the old library of the parliament office has been shifted into an electronic form. Under a funding of USD 692 thousand, the library has been decorated with up-to-date publishing and paper-work technologies (bookbinding, printing and cutting), lining up with complex equipment to transfer hard copies of documents into electronic form.

Attending the opening ceremony, the parliament Speaker of Turkey Mr Cemil Cicek praised Mongolia's high achievements in setting the democratic governance and respect for the law, human rights and freedom, and noted that reciprocal visits between the two countries are still unsatisfactory in view of the visa-waiver between Mongolia and Turkey, as Turkish Airlines, the only direct carrier between Mongolia and Turkey, carries up to 500 passengers in one flight, with three flights a week scheduled.

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Runway show weaves relationship between Mongolia and Turkey

June 24 (UB Post) Eighteen models from the Mongolian National Designers Association boasted colorful hand-woven Turkish kutnu and silk chiffon, aptly fusing the traditional and the modern, and the national and the international.

On Friday, June 20, Serap Pollard, the first Turkish designer in London, displayed her AW14 collection at the Embassy of Turkey in Ulaanbaatar in a runway show as part of a week of cultural events to celebrate the 45th anniversary of the establishment of diplomatic relations between Mongolia and Turkey.

Pollard's collection, displayed in front of the crowd of roughly 100, comprised of the international business and fashion community, also embraced a polycentric philosophy.

Pollard used a vibrant, hand-woven fabric called kutnu, traditionally used to make gifts in Turkey. Pollard is an ecological designer as she creates zero-waste fashion, which means little or no textile waste was generated during production. This pays homage to traditional Turkish fashion, which reflects the wearer's social and ethical values.

Turkish Ambassador in Mongolia, Murat Karkagoz, who co-hosted the event, commented on fashion as a means of bridging cultures.

"Fashion is an important instrument to build a bridge between two countries… I am presenting you the fashion diplomacy. Strong ties between countries, people and organizations tonight… She gets inspired from not only culture, but also the colors and scope of the city," said Karkagoz. "She is ready for anything to promote and introduce Turkish culture."

This collection, blending modern fashion trends with traditional styles, was a unique display of sustainable and organic fashion, usually bland.

On bringing sustainable fashion abroad, Pollard, whose company is based in London, noted, "I live in London and the fashion there is very fast paced and people use one garment, throws it away and then use another. The clothes they use are mostly not eco-friendly materials and fibers. But Mongolia is not aware of it and does not actually need because the clothes here are organic. Food is organic, clothes are organic, and everything is organic. It's heaven here! British people need Mongolia. Mongolian clothes are heaven, there is cashmere, leather, wool and food is delicious because it is organic and natural," said Pollard, going on to comment on the importance of displaying her work in Mongolia during this week.

Despite geographic distance, Mongolia and Turkey share a longstanding economic and trade relationship. In Mongolia's "Third Neighbour Policy" (TNP), a feature of Mongolia's foreign policy that intends to balance relations with its direct neighbors, China and Russia, Mongolia refers to Turkey as one of its third neighbors. According to the Turkish Ministry of Foreign Affairs, Turkey views this mention as indicative of the "importance of friendship" with Mongolia and considers it as "a strategically important country with its huge landmass and vast resources," citing 40 million USD in trade volume between the two countries.

This implies that landlocked Mongolia seeks to strengthen its relations with third parties such as Turkey, as the country is heavily dependent on China and Russia as trading partners, with 54.9 percent and 17.7 percent of its total trade occurring between these countries, respectively, according to the European Union.

Cultural events celebrating the anniversary were held from June 17- 22.

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Vice Speaker M.Enkhbold Meets Abu Dhabi state-owned firm Aabar Investments PJSC

Ulaanbaatar, June 24 (MONTSAME) Parliament Deputy chairman M.Enkhbold met Tuesday with representatives of Aabar Investments PJSC, a private joint stock company registered and incorporated in Abu Dhabi, UAE.

Mr Enkhbold thanked the delegation for visiting Mongolia and shared opinions with them on investments cooperation with Mongolia. During the meeting, the delegation emphasized a need of 'certain' support in enhancing cooperation here.

Aabar Investments PJSC has been investing into mining and finance sectors of Mongolia, and is interested in increasing the amount of its investments. The company is engaged in investing activities in various industries including infrastructure, aviation, real estate, automotive, commodities, energy and financial services. The company's parent is the International Petroleum Investment Company (IPIC), which is wholly owned by the Government of Abu Dhabi. As per IPIC's semi-annual financial statements, IPIC's ownership in Aabar stood at 95.52% as of 30 June 2012.

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North Korean Delegates Visit Mongolia to Exchange Experiences in Tourism Sector

June 24 (infomongolia.com) On June 20-25, 2014, North Korean delegates led by Deputy Director-General of the National Tourism Administration of the DPRK Mr. Mun Tae-gil are conducting a working visit to Mongolia and during their stay in Ulaanbaatar, delegates attended a workshop "Mongolia's Tourism Sector's Development Prospects and Further Policy to Adhere".

The visit is being implemented following up a state visit of the President of Mongolia Ts.Elbegdorj to the DPRK conducted last year that aims to introduce Mongolia's tourism sector's policy being carried out, to broaden bilateral collaboration and exchange experiences in the relevant sphere.

On June 23, 2014, the North Korean delegation was received by Minister of Culture, Sports and Tourism Ts.Oyungerel, where parties shared views on broadening cooperation in tourism sector and on the same day, Deputy Minister of Foreign Affairs D.Gankhuyag also held a meeting with delegates.

In the frameworks of the visit, North Korean delegates intend to visit the main tourist destinations of Mongolia, besides to visit the Institute of Finance and Economics in Ulaanbaatar meeting Mongolian private entities to introduce DPRK investment policy in their tourism sector and discuss an issue on training professional personnel.

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15th World Korean Forum Held in Ulaanbaatar to Discuss Stability and Unification of Two Koreas

June 24 (infomongolia.com) Korea Global Foundation is organizing the 15th World Korean Forum themed "Toward New Era of Inter-Oriented Unified Korea" being held at the "Round" Hall of Mongolian National University in Ulaanbaatar on June 23-24, 2014.

The objectives of the 15th World Korean Forum is to discuss about stability and unification of Korean Peninsula, where experts, scholars and government officials gathering in Mongolia are to exchange their ideas on unification of the two Koreas and the Cold War-like relationships among the key powers - namely the United States, China and Japan - on the Korean Peninsula, and possible cooperation with countries in the Eurasian region.

At the 15th Forum, President of Korean Global Foundation and Distinguished Professor of School of International Relations at St. Petersburg State University, Dr. Rhee Tshang-chu made opening remarks, also welcoming address was presented by Chairperson of Mongolia-ROK Parliamentary Group at the State Great Khural, MP M.Batchimeg, moreover, opening address was delivered by President of Mongolian National University, Prof. A.Galtbayar, and keynote speech by former member of National Assembly, former Minister for Environment of the Republic of Korea, Yoon Yeo-jun, and an overall remark themed "South Korea: Dilemma Between U.S. Security and China's Economy Tripartite Alliance" Military and Economic Crises on the Korean Peninsula Likely to Ensue" was presented by Chief Advisor for New Politics Alliance for Democracy, Advisor for Peace Asia, Lee Bu-young respectively.

The Korea Global Foundation established on January 01, 1999, organized the first World Korean Forum in New York in 2000 and since then being held annually as customary in major cities around the world and the latter gathering with participation of leading scholars, expert, opinion leaders, politician and business people was held in Vancouver in 2013.

According to organizers, there is saying that the background of Koreans root is Mongolia as from Central Asia to Northeast direction reaches the end to Korean Peninsula and it has an evidence of Mongolian's great challenges and wild nature. In this meaningful location, organizers prospect the unified era and discuss about future directions.

President of Korean Global Foundation Dr. Rhee Tshang-chu noted that holding the forum in Mongolia is meaningful in that the two ethnic groups share a lot in common and have maintained close relationships over the past 1,000 years.

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Related:

1st KINU Dialogue with Mongolia on Korean Unification, Friday, November 2, 2012 – Korea Institute for National Unification

 

Khaan Quest 2014: a small exercise with big implications

by Mendee Jargalsaikhan (mendeej@gmail.com), Visiting Fellow at the East-West Center in Washington and a PhD student at the University of British Columbia. He was a former Defense Attache to the US and Senior National Representative to the US Central Command.

June 19 (PacNet #45, Center for Strategic & International Studies) Despite humble beginnings – ambivalent responses from the US Marines in Okinawa and the Pentagon – Khaan Quest, a small bilateral exercise, has survived for more than a decade to become the brainchild of the US and Mongolian militaries, a forum for Mongolia's diplomacy, and a unique peacekeeping training event in a complicated neighborhood.

After persistent Mongolian requests for bilateral training to help its military contribute to international peacekeeping efforts and facilitate the transformation of a Soviet-style training base into a regional peacekeeping training center, the Pentagon allowed US Marines to conduct a small training exercise with the Mongolian military while seeking ways to provide US military assistance to the Five Hills Training Center. This effort was further justified by Mongolia's contribution to US-led coalition operations in Iraq and Afghanistan and UN peacekeeping missions in Sierra Leone, Chad, and South Sudan. After a decade, Mongolia is now able to share its expertise and is the largest contributor from northeast and central Asia given the size of its population, economy, and military. This makes Khaan Quest and the state-of-the art Five Hills Training Center exemplars of US- Mongolia military cooperation.

Both of Mongolia's neighbors view Khaan Quest suspiciously, however. PLA leaders and researchers have complained about Mongolia's increasing military interactions with the US and India, in particular, their annual military exercises in Mongolia. The PLA has increased its observers from the resident Defense Attaché to eight observers last year.

Russia also maintains observer status at the Defense Attaché level while committing more resources to a large-scale annual bilateral exercise with purposes ranging from the maintenance of Mongolian military equipment to improving interoperability in counter-terrorism operations.

After a stream of invitations from Ulaanbaatar through bilateral and multilateral defense diplomacy, the South Korean and Japanese militaries are gradually increasing their participation, although Tokyo appears to be more cautious (due to bureaucratic and legal hurdles in Tokyo). South Korea became the first East Asian state to dispatch staff officers and a small military contingent for the exercise. Mongolia's partnership with NATO, deployments with Germany in Afghanistan, and renewed ties with post-communist Central European states, has meant that a number of NATO members, including Germany, the Czech Republic, and Hungary also participate at different levels. Khaan Quest has also received the attendance of experienced peacekeepers from India, Nepal, and Bangladesh, as well as newcomers such as Cambodia, Indonesia, Vietnam, and even Tajikistan. As the exercise evolves, it provides different types of forums such as staff- planning and field-training exercises, engineering projects like renovating schools and medical facilities, and providing medical aid to local communities. With inclusion of PLA troops, the exercise will be the only constructive tactical forum for militaries of NATO members and China.

Since the end of the Cold War, Mongolia, a state sandwiched between Russia and China, has employed ambitious foreign policy objectives to reach beyond Central Asia to the wider Asia Pacific, North America, and Europe.

While Mongolia has turned down the invitation to join the Shanghai Cooperation Organization (SCO), it became an OSCE member, a partner state with the EU and NATO, and applied to join the Asia Pacific Economic Cooperation forum (APEC). Increased collaboration with the US, through the US Pacific Command and exercises like Khaan Quest, helped Mongolia become a well-known contributor to international peacekeeping operations and brought its military closer to those of the Asia Pacific and NATO members. Surprisingly, this small exercise brings high-ranking Pentagon officials (e.g., the secretaries of the Navy and Army in 2012) and leaders of the US Pacific Command and services as well as military dignitaries from all participating states during the opening and closing ceremonies.

Beyond the exercise, Mongolian political and military leaders will have opportunities to explain national policies, introduce Mongolian culture, and exchange views. This helps Mongolia identify itself as a neutral forum for dialogues and cooperation because it is the only state with no territorial disputes with neighbors and maintains amicable relations with all East Asian states. Leveraging this neutrality, Mongolia hosts rounds of North Korea-Japan dialogues and is now advancing the newly announced Ulaanbaatar Dialogue.

However, Khaan Quest presents more visible contributions mostly because of US military training assistance and Mongolia's defense diplomacy.

If China's tactical participation in this year's Khaan Quest were implemented as agreed at the planning conferences, it might have eased Japanese and Korean concern about provoking China by attending US military engagements in the heart of inner Asia. But, in bottom, Khaan Quest has important training value for all participating military personnel, military engineer, and doctors, while serving as a vital instrument of Mongolia's foreign policy and defense diplomacy.

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Related:

Khaan Quest 2014 opening ceremony demonstrates continued strength of multinational relationships in the Pacific-RegionDVIDS, June 23

Alaska National Guard continues partnership with Mongolian armed forcesDVIDS, June 23

U.S. Marines renovate Mongolian kindergarten for Exercise Khaan Quest 2014DVIDS, June 23

Cooperative Health Engagement opens to community during Khaan Quest 2014DVIDS, June 24

 

Interview with Markus Waldvogel, Consul General of Switzerland on 50 Years of Mongolia Ties

June 19 (mongolnews.mn) Mongolia and Switzerland are celebrating 50 years of diplomatic relations and 10 years of Swiss Development Cooperation in Mongolia. To commemorate the dual anniversaries, the Swiss Cooperation Office in Ulaanbaatar has planned a series of cultural programmes throughout 2014. "Today" has invited SDC Director of Cooperation and Swiss Consul General Markus Waldvogel for an interview.

What events and measures are being organised to mark the double anniversaries?

I think the 50th anniversary of diplomatic relations between Mongolia and Switzerland is an important event to be widely celebrated. It has also been 10 years since the Swiss Agency for Development and Cooperation (SDC) officially opened its Cooperation Office in Mongolia.

To celebrate these anniversaries, SDC is holding a number of cultural events. To start with, we organised a reception for high-level delegates from the two countries on 21 May in Ulaanbaatar.

The next event was a photographic exhibition held on 23 May illustrating the similarities in nature, landscapes and the lifestyles of the people of Mongolia and Switzerland. The exhibition remained open for the public in Chinggis Square for three days. The exhibition then travelled to western aimags, where our main activities are concentrated.

I heard that a significant cultural programme is to be presented in cooperation with the Arts Council of Mongolia. 

Yes. Among all the planned activities, we give high priority to the "Agula" music event, organised in partnership with the Arts Council of Mongolia. As part of the event, Switzerland's Heiri Kaenzig Quintet and Mongolian ethno-jazz band Arga bileg held a joint performance on 29-30 May at the Opera and Ballet Theatre in Ulaanbaatar. We were keen to see how Swiss and Mongolian artists performed new compositions featuring a fusion of modern and traditional music. The groups will also perform in Switzerland in September and October.

I heard that a joint album will be produced. 

The Swiss and Mongolian groups will record an album at the "White Arch" studio in Ulaanbaatar, which will be produced in Switzerland. It will consist of six musical compositions by the Heiri Kaenzig Quintet and T. Purevsukh from Arga bileg, as well as four newly arranged compositions of their best musical works.

Does the Swiss quintet also perform this style of music? Is it a famous group in Switzerland? 

The band also performs ethno-jazz music. In western countries, Mongolian art is generally known for its traditional style. But this time, Arga bileg is performing with these Swiss artists and will have a unique opportunity to show the western world that Mongolians are developing both their traditional and modern arts.

It's great that this cultural programme has opened a gateway to connect Mongolians with the people of Switzerland through culture and the arts. What other activities are planned?

As you said, one of the objectives of our cultural programmes is to connect the people of our two countries through cultural exchanges. In order to do this, we look for opportunities to support the development of Mongolia's art and culture sector, supporting artists with more opportunities.

Have you seen traditional Mongolian artistic performances? What is the Swiss-Mongolian joint performance like?

The performance is unique, interesting and innovative, and generates good feelings between people from both countries.

Mongolians are familiar with SDC's work in Mongolia. I personally knew of a number of projects on combating desertification, supporting sustainable artisanal mining and agricultural projects, all aimed at solving critical problems in Mongolia. I hope this art and culture project will also generate tangible results. 

SDC allocates one percent of its total budget to support the cultural sector in its partner countries. This means we are open to financing projects that contribute to the development of art and culture in Mongolia. This year, we are financing the joint Swiss-Mongolian musical event to mark the 50th anniversary of diplomatic relations between the two countries. In June, we will also announce a call for project proposals in the art and culture sector.

Does that mean that artists who want to undertake artistic works but who face financial difficulties will be able to approach your organisation?

Yes. If people have proposals and projects, they can approach us. We will review the projects via an open selection process and then finance selected projects that have the potential to represent Mongolia to the world.

How do you see the development of SDC's activities in the future? Are you moving into other priority sectors? 

As of now, our programmes are planned until 2020. We are currently working on three main domains. We focus on food security and agriculture, and providing support for the effective and sustainable use of pastureland through herders' self-governing bodies. We also have a very successful project in the potato sector, implemented in partnership with the Government of Mongolia. As a result of the project, Mongolians are now self-sufficient in domestic potato production.

We also implement projects targeting vocational education and training, focusing on the training of unskilled workers to match labour market demands. The third area is supporting good governance and decentralisation reform in Mongolia.

Mongolia's economy has grown rapidly in recent years. This means that there might not be a need for international development and cooperation in the future. At that time, Switzerland might cooperate with Mongolia in the fields of science, trade, commerce and industry.

Thank you. Happy anniversary to SDC!

L. GANCHIMEG

Source: http://mongolnews.mn/i/52275

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SDC's Eco-Schools Project receives Energy Globe Award 2014

Ulaanbaatar, Mongolia. 16 June 2014 (SDC) The SDC funded Eco-schools Project, implemented by the Mongolian Nature and Environment Consortium (MNEC), was awarded the prestigious "Energy Globe" environmental award from Austria's Energy Globe Foundation on May 24.

In attendance at the Ulaanbaatar awards ceremony were high-ranking Austrian and Mongolian dignatories, including the Vice-President of the Austrian Chamber of Commerce and Industry, Richard Schenz; Austrian Ambassador to Mongolia residing in Beijing, Irene Giner-Reichl; and the Mongolian Minister for Culture, Sport and Tourism, Ts. Oyungerel.

Mr Schenz presented the award to MNEC director M. Badarch and L.Shinetsetseg, Project Officer at MNEC.

"It is a great recognition of our efforts to create greener schools and communities in Mongolia, working with children," M. Badarch said. "We take great pride in being awarded the Energy Globe – the most prestigious environmental prize worldwide – and in being chosen from more than 160 participating countries and 1000 project submissions annually.

The award is given each year to projects that conserve such resources as energy or which utilise renewable or emission-free forms of energy. The aim of the Energy Globe is to raise public awareness about sustainable environmental solutions and to motivate people to become active in this sphere.

Mongolia's Eco-schools Development Project was selected on the basis of its success in mobilising 166 schools and in teaching young children about the importance of environmental issues and possible solutions to the challenges being faced. The project aims to improve the environmental education and knowledge of youth, and develop a national network focused on creating a better and healthier living environment.

"We are living in a world that requires new thinking about the responsible use of our natural resources. However, change will only happen if awareness about current issues and alternative solutions is raised with as many people as possible" said the the Energy Globe Foundation on its web regarding the work of the Eco school project.

"This is especially true for our young generation, who are the decision-makers of tomorrow. This year's National Winner of the Energy Globe Award in Mongolia is paving the road to creating greener communities in Mongolia. Congratulations on this initiative."

SDC has been supporting this movement of eco-schools since 2007. 

Project highlights:

§  166 eco-schools in 18 aimags (18.3 percent of all secondary schools)

§  Dust reduction: 23 eco-schools could reduce dust sediments by 50 percent by greening the area

§  Energy saving initiative by an eco-school in Bayankhongor aimag: Replacing red bulbs with fluorescent ones and by installing electric meter in carpenter classes saved MNT 5.6 million on electricity cost.

§  Water saving initiative in Bayankhongor aimag's Nomgon school: repairing water sink and plumber pipes saved MNT 3 million.

§  'Family Garden' initiative involved 340 families who have planted more than 4500 seedlings in their gardens.

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Social, Environmental and Other

Mongolia Joins Global Green Growth Institute

June 23 (infomongolia.com) On June 20, 2014, Ambassador Extraordinary and Plenipotentiary of Mongolia to the Republic of Korea Mr. Baasanjav GANBOLD handed over a note on endorsement of an agreement on joining Mongolia the Global Green Growth Institute (GGGI) to Director-General of the Institute, Mr. Yvo De Boer.

Following the ceremony, GGGI Director-General noted that Mongolia has been actively cooperating with the Institute since 2011 and wished Mongolia to make its contribution towards implementation of the organization's mission and solution of environmental issues such as global climate change the world is facing and asked Mongolia to cooperate in relevant fields.

Ambassador B.Ganbold added that the State Great Khural (Parliament) of Mongolia has adopted a concept and mid-term program on green development and expressed Mongolia's interest to cooperate with the GGGI in implementing joint projects and researches in the areas of nature-friendly transport, energy and construction sectors.

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Related:

Mongolia Joins GGGIMontsame, June 23

 

Six dead, 43 injured in bus accident

June 24 (UB Post) A long-distance bus traveling from Baruun-Urt to Ulaanbaatar reportedly skidded off the road while trying to pass another vehicle and flipped over four to five times, leaving six people dead and 43 people with either severe or minor injuries, at around 7:30 a.m. on Saturday.

Five passengers died at the scene, and one passenger died en route to the hospital. The deceased were three men and three women.

The incident occurred three kilometers from Tsonjin Boldog in Erdene soum of Tuv Province. There were 48 passengers on board and 14 out of the 48 were children from seven months to 18-years-old.

Social media reported that a pregnant woman on the bus suffered a miscarriage due to the crash, however the National Trauma and Orthopedic Research Center (NTORC) doctors confirmed that there were two pregnant women on board and neither of them had miscarriages. They received minor spinal and cerebral injuries and are receiving treatment. Both of them are in stable condition.

All of the injured were immediately transported to the NTORC and 19 people are still hospitalized. Two of them are unconscious in the intensive care unit, eight are in the spinal treatment ward, and nine more are receiving treatment for cerebral injuries.

The bus is owned by local bus operator Daichin Sukh LLC. A working group involving Deputy Minister of Roads and Transportation Kh.Yerjan, delegates of the National Auto Transportation Center, the Sukhbaatar Province Auto Transportation Authority, and Daichin Suikh LLC is working at the scene.

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Mongolian Woman Becomes Asian Fitness Champion

Ulaanbaatar, June 24 (MONTSAME) Mongolian S.Sugarsuren became Asia champion in the women body-fitness category competition of the 48th Asian Bodybuilding and Fitness Championship in Colombo, Sri Lanka.

Thus, she has become the fifth Mongolian to win the Asian championship title in this sport. Her teammates Ch.Tsogtbaatar and D.Baasandorj won silver and bronze medals at the men fitness category event.

The main event of the Asian Federation for Bodybuilding and Fitness (AFBF) ran on June 19-22 with participation of athletes from Asian countries such as Kazakhstan, Japan, S.Korea, China, Bahrain, the United Arab Emirate, Oman, Yemen, Kuwait and India.

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Golden Reel International Underground Film Festival names winners

June 24 (news.mn) The Golden Reel International Film Festival organized by "Golden Reel" art film NGO took place at the Student Theatre of the Mongolian State University of Culture and Arts on June 21st.

In the line-up for the Golden Reel International Film Festival, 33 short films were entered into the competitive stage, five films by foreign directors in the official stage and four films in noncompetitive stages were shown.

Five short films from the 33 films were awarded with the Grand Prix Prizes. The judges panel of the Golden Reel International Film Festival included the Judge President, Film Director S.Byamba, artist Yo. Dalkh-Ochir, a renowned poet G.Ayurzana, editor-in-chief of GOODALI magazine A.Amarmend, filmmaker and co-founder of Golden Reel art film NGO Sh.Ikhbayar and the founder of the No Wave Cinema movement online, Amos Poe.

The winners of the Golden Reel International Film Festival are as follows:

The best animated film: "Metronom" by S.Margad

The Judges Prize film: "0" by E.Gamtumur

The best narrative film: "Endless" by B.Tuvshintugs

The best non-narrative film:  "Globalization" by G.Erdenejargal

The Golden Reel Grand Prix: "Window" by B.Bat-Erdene

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Related:

Best Underground Films AnnouncedMontsame, June 24

 

Mongolian Fighter to Face Chinese Shaolin Kung Fu Master

Ulaanbaatar, June 24 (MONTSAME) Mongolia martial art fighter M.Nandin-Erdene will compete against Chinese Shaolin kung fu master Yi Long at a tournament in Yanzhou city, China on June 27.

The Mongolian has thus far come victorious in nine out of ten professional fights in his career, while his Chinese opponent has been regarded as number one in Shaolin martial arts by many. Yi Long defeated another Mongolian E.Batbayar at a tournament in Hangzhou city of China this March.

This time, M.Nandin-Erdene is planning to take revenge of his country man, moving to the next stage of the tournament.
M.Nandin-Erdene is an international master of sport and a silver medalist of the Asian Amateur Boxing Championship. He has been on the professional fighting arena since 2012.

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Mongolian martial artist to fight Chinese Shaolin kung fu masterUB Post, June 24

 

Wrestling coach A.Baskhuu nominated to FILA Hall of Fame

June 24 (UB Post) The International Federation of Associated Wrestling Styles (FILA) decided during its Bureau meeting on June 14, to induct State Honored Coach of Mongolia A.Baskhuu in their International Wrestling Hall of Fame this year.

FILA announced that it will finance all required expenses for the induction ceremony for A.Baskhuu , who will be the ninth referee to join the Hall of Fame. The exact date of the ceremony has not been announced yet.

A.Baskhuu is the chief coach of all national wrestling teams of the Sports Training Center of the Ministry of Culture, Sport and Tourism, and is the only Mongolian to serve as a referee in six Olympics, 30 world championships, four world cups and 45 European and Asian championships.

He was awarded the "Golden Whistle" at the 1988 Seoul Olympics, and has also received the prestigious FILA Gold Star, the highest honor awarded by the International Wrestling Federation in recognition of brilliant referee skills and contributions to the sport.

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U.S., Mongolia research team that finds equine influenza virus in camels, humans could be next

GAINESVILLE, Fla., June 24 (University of Florida) — University of Florida researchers have found evidence that an influenza A virus can jump from horses to camels – and humans could be next.

The One Health Center of Excellence for Research and Training in UF's Emerging Pathogens Institute, in collaboration with U.S. and Mongolian institutions, has identified the first known case of an equine influenza virus in camels. Their findings will be published in the December issue of Emerging Infectious Diseases, but an ahead of print version of the report is available here: http://wwwnc.cdc.gov/eid/article/20/12/14-0435_article

"Over the last 10 years, we've been amazed at all the cross-species jumps of influenza. Now we're finding yet another," said Gregory C. Gray, center director and environmental and global health professor in UF's College of Public Health and Health Professions.

Although there is no immediate risk, the inter-mammalian transmission of the virus is a major concern for public health researchers interested in controlling the threat of pandemic influenza, he said.

Camels have recently been implicated in the transfer of the deadly Middle East respiratory syndrome virus to man. This new discovery further demonstrates the potential role of camels in the ecology of zoonotic diseases, which are passed from animals to humans. Other examples include SARS virus, Ebola virus, and some harmful strains of E. coli.

"Similar influenza viruses can move from horses to humans," Gray said. "If a camel has it, why couldn't they share it with humans?"

The study took place in 2012 in three Mongolian aimags, or provinces, where free-range camels and horses intermingle.

Hundreds of camel and horse nasal samples were collected, and one camel specimen was confirmed to have influenza A. Tests found it matched viruses in Mongolian horses.

This also illustrates the importance of improved surveillance for zoonotic diseases in camels to better understand the potential risk to humans, he said.

"It adds another potential exposure to man where a novel virus could hide out, if you will, in camels and later surprise us and infect humans," Gray said.

This could affect animal caretakers, especially in places where people have close contact with camels such as the Middle East, Africa, and Australia.

More research is necessary to fully understand the virus – for example, how it's transmitted – but Gray said the discovery "adds another dimension to what we do."

"Knowing that influenza virus can jump between horses and camels will reshape how we understand the ecology of novel influenza viruses which may affect man," he said.

The project was funded by the U.S. National Institutes of Health and involved the Institute of Veterinary Medicine in Mongolia as well as the J. Craig Venter Institute and St. Jude Children's Research Hospital.

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