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Friday, August 29, 2014

[MNT continues rise, GoM bond auction attracts 0 bidders, Russia accounts for 0.11% of FDI, and Mongolia invests in Hollywood]

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Friday, August 29, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original

 

Moving Mongolia forward – and why INS?

The Institute for National Strategy Series: Article 1, 2014

A group of men were enjoying the midday sunshine and each other's company. They were rivals and friends – who drank and played together. This day, they were enjoying their vodka and telling stories, and planning the future for themselves and their families. A sheep was tethered to the pole 20 meters away, it looked forlorn and aggravated as it knew it was soon to be their dinner. The hours passed, the noise grew, the plans grew grander, and eventually, the men fell into a drunken sleep.

Several hours later, the men started waking up. They were hung-over, but still cheerful as they remembered all the plans they had made for themselves. Somebody said, "Let's eat." And they all looked to the table, where there was no food. One looked back in the direction of the sheep, and laughed.

Another sleepily said, "The sheep is still a sheep."

Last October, business leaders met at a business association summit in Ulaanbaatar, where there was discussion about why Mongolia was languishing at that point in time, and what should be done. The business leaders knew that the poor economic conditions in Mongolia were partially a result of a global downturn, but also acknowledged that Mongolia's situation was also of its own making. They all wanted Mongolia to find a "winning formula".

Since October 2013, the economic conditions of the country have further deteriorated. Capital investment and foreign direct investment have fallen sharply, domestic inflation is on the rise, and reports of dwindling federal exchange reserves are supported by a steadily devaluing tugrug.

It is important to create the conditions to get the business associations, Mongolian intellectuals, the parliament, and the arms of government to generate outcomes for Mongolia that speed up the rate of development and deliver great outcomes for Mongolians and the institutions that work and invest in Mongolia's future.

Mongolia has critical challenges and fixing these requires honest evaluation of the reality that we find ourselves in. This evaluation demands penetrating questions and frank exchanges of view. These can focus the mind and place attention where it is needed.

Today there is significant disillusionment with many media opinions being expressed in a negative manner. There are many different opinions as to the causes of our collective problems and it is the aim of the Institute of National Strategy to add to the debate, but hopefully in a way that brings people together to discuss the issues, and ultimately, to put meaningful solutions into place.

The following situations focus us on just five issues that will be addressed in the early articles of the INS article series.

Situation 1: A good measure of a country's wealth is its physical and social infrastructure. The condition of Mongolia's roads, railways, airports, power stations, hospitals, clinics, schools, sporting, cultural and other facilities are a poor reflection of Mongolia's natural beauty.

Situation 2: The government sets the conditions for Mongolia to generate the funding needed to tackle these physical and social infrastructure challenges. Importantly, these challenges present business opportunities and economic benefits. Jobs and taxes will be generated as these projects turn from pipedreams into construction projects and into operating realities.

Situation 3: Mongolia has experienced high and semi-high rates of economic growth since 2010, however, we now have significant devaluation of the national currency and steadily growing inflation rates. We still see real estate developments progressing in UB and several other cities,  but on the other hand, it is harder to understand the economic costs of the government's quantitative easing programs and the impact on the government's long term debt levels.

Situation 4: Countries with high GDP and globally successful companies "benchmark" their performance and strategies against the best in their field. They know that getting into the "top league" is hard work. The Economic Policy and Competitiveness Research Center (EPCRC) was established to work with the Institute for Management Development (IMD) to benchmark Mongolia against a basket of competitive countries.

The 2013 EPCRC report highlights the four key competitiveness factors and gives a breakdown of those critical subelements. Mongolia continues to rate poorly for its fourth year, but the report does give an understanding of what needs to change. The EPCRC view is reinforced by the World Economic Forum's recent Global Competitiveness report, whereby Mongolia's figures are in the bottom 20 percent of many critical measures.

Situation 5: In Mongolia, democracy is strong, evidenced by the number of newspapers, TV channels and internet platforms available to Mongolians. Indeed, the channels per head of population is unusually high. Mongolia is technically well positioned to support broad and insightful discussions on how to deal with its problems and turn adversity into opportunity.

This debate will no doubt be controversial at times. A recent article, written by a Mongolian, was posted on the website "Mongolia Focus", where it raised the issues of foreign investors and their appetite for Mongolia. But what the article really addressed was how the writer saw business and government working in practice. This is obviously not a flattering view and we are sure some will object to the assessment and some will say it is not helpful for this type of discussion to occur. (http://blogs.ubc.ca/mongolia/2014/why-are-american-investors-struggling-in-mongolia/)

Summary: In this first article, INS has highlighted five situations which raise five issues for our leaders in government, business and society to debate.

      The pace of critical infrastructure development

      The slow pace in getting projects off the drawing board and into execution

      Mongolia's international competitiveness

      The quality of critical analysis of economic performance

      Using public policy debate to tackle the really critical issues 

About INS 

The Institute of National Strategy was formed because the leadership of Mongolia's business associations know there is a huge gap in public policy debate. They feel this debate should be vibrant and focused on Mongolia's strategic development choices and economic management. Importantly, these debates should be based on unbiased research and through working with leading edge Mongolians and international thinkers.

A key focus of INS is to see the private sector radically stimulated and for Mongolia to reap the benefits of a market driven economy. We believe that a great development strategy should be focused on Mongolia's natural and locational competitive advantages, and seek to bridge the gaps where weaknesses stand in the way of essential objectives.

Specifically, INS aims to provide regular commentary via an article series on critical issues facing Mongolia and to provide input into long term strategic development planning.

INS will commission senior leaders and experts from within Mongolia and abroad to write these articles. They will be the opinions of the writers and INS will write a short piece at the end of each article to highlight how the issues may play out in the political arena. The purpose here is not to take sides politically but rather to highlight the policy positions that may exist within the political parties, the government or broader society.

INS acknowledges the good work of many organizations who seek to provide meaningful input into Mongolia's public policy thinking. We will be seeking to formalize relationships and to provide pointers to where that good work can be found and further leveraged.

Next article in the INS Series: "Regaining credibility"

A website is being created that will provide useful links to reputable organizations doing similar work to INS, and as a repository for INS articles and key reports on Mongolia.

Link to article

 

Overseas Market

Mogi: Kincora's two licenses are not in the initial 14.

Mongolia Announces Tendering of 14 Revoked Exploration Licenses

By Michael Kohn

Aug. 28 (Bloomberg) -- Mongolia's Ministry of Mining has announced the tendering of 14 mine exploration licenses that were part of a group of 106 licenses earlier revoked by court order, Otgochuluu Chuluuntseren, director general of the department of strategic policy and planning at the ministry confirmed in an e-mail today.

* Bids for the 14 licenses open until Sept. 22, according to a document e-mailed by Otgochuluu.

* A total of 88 exploration licenses are eligible for tender. Remaining 18 have been canceled due to various violations, according to a press release yesterday by the Ministry of Mining.

* One of the 14 licenses tendered had been held by Sydney-based Xanadu Mines Ltd., George Lloyd, Managing Director of Xanadu, confirmed in an e-mail today.

(BFW)

 

Tendering of 14 revoked exploration licenses announced

August 28 (UB Post) Last year, 106 mineral exploration licenses were found to be granted without tendering and were revoked following a court decision. On July 4, in order to compensate losses that former license holders faced, the Government approved Resolution No. 216 and a tendering regulation for granting licenses for the areas revoked. Under the resolution, former license holders and other third parties will be able to submit tender bids for the previously revoked licenses on a competitive tender basis, where an initial re-tendering price will be effectively determined by costs incurred by the former license holders.

On August 22, the Minerals Authority of Mongolia launched tendering for 14 areas, the initial tendering prices of which were confirmed, out of the 106 revoked license areas. Proposals for tender will be received through September 22.

The 14 areas cover 163.5 hectares in six aimags and Ulaanbaatar. There are six areas in Bayankhongor aimag, three in Dornogobi, one stretching through Dundgobi and Umnugobi, and areas in Dundgobi, Umnugobi, Khovd and Ulaanbaatar. Regarding size, the smallest area is 94.4 hectares and the largest is 56,000 hectares. Below is the list of the 14 areas.

Specialists of the Minerals Authority studied the revoked 106 licenses and confirmed that 88 were eligible for tendering. The eliminated licenses either violate the "Long Named Law" or were revoked prior to the court decision due to other violations, such as overdue payments, payment delays and returns.

Former license holders will have a greater advantage in the tender process. More specifically, they won't have to place any collateral in an account, but they will need to have the funds they previously invested in the area confirmed through receipts and financial documents. Other parties will have to place 30 percent of the initial tendering price in an account to compete.

Financial capacity and experience will affect selection

In addition to paying the initial tendering price, previous experience with geological exploration and the financial capacity to conduct further exploration and obtain the equipment and facilities necessary for exploration work are crucial for bidders. The evaluation commission will evaluate the proposals and rank them. The company with the highest score will be selected and will propose a price for the selected area. If the company fails to place 70 or more percent of its proposed price in an account within 10 days, the opportunity will be transferred to the next company in the ranking.

If a former license holder is not selected, compensation for the funds the company previously invested will be paid. The compensation will not come from the state budget but from the initial tendering price the newly selected license holder paid.

Exploration project costs invested in the 106 areas by former license holders range from 20 million MNT to 400 million MNT per company. These costs will be the initial tendering prices for the areas. Based on former license holders' financial reports, the Ministry of Mining estimated a total cost of 28 billion MNT. Re-tendering for the remaining 74 areas will be announced after their initial tendering prices are confirmed.

Specialists of the relevant ministry expect considerable improvement in foreign investment due to the granting of minerals licenses. They estimate annual foreign investment of 1 to 1.6 billion USD from granting minerals licenses, including the 106 licenses.

Link to article

 

Geology, mining and petroleum activities updates

August 28 (UB Post) The Ministry of Mining held the monthly Transparent Mining press conference on August 27, and provided updates on the nation's large scale geology, mining and petroleum activities. Below are some highlights from the conference.

Oyu Tolgoi's unresolved issues

Oyu Tolgoi LLC's mining and marketing activities are advancing normally, but there are two technical issues left unresolved between shareholders. The first is Oyu Tolgoi's underground mine funding issue. In order to start underground development work, Oyu Tolgoi has been asked to clarify its feasibility study of the underground mine and have it approved by the Minerals Council. Oyu Tolgoi has delivered its resource statement and specialists are reviewing on it. The second issue is the unpaid tax dispute. This dispute is between the General Department of Taxation and Oyu Tolgoi and will be regulated by specific laws. The parties are working actively to reach an agreement and appealed for a dispute settlement council.

The parties are actively cooperating to resolve funding for Oyu Tolgoi's underground mine construction by September 30.

110 million USD in debt to Chalco remains

Last spring, Erdenes Tavan Tolgoi JSC stated its plan to resolve its remaining 140 million USD debt of 350 million USD it borrowed from Chalco, a Chinese state-owned company, by the end of May. But the deadline was further extended due to coal price decreases. During the Transparent Mining conference, CEO of Erdenes Tavan Tolgoi JSC Ya.Batsuuri said, "Approximately 110 million USD in debt remains to be paid to Chalco. Last year, we established a temporary contract with Chalco and had been selling our coal at a relatively reasonable price. But the contract expired on July 1, and we started to work under a basic contract. We can't keep trading our coal at about ten dollars per ton. So we are negotiating to either expand the temporary contract or to sell our coal to other southern neighbor's companies at a higher price and pay our debt from the income."

Mining sector statistics

As of the first seven months of 2014, exploitation of copper concentrate reached 565,700 tons, coal 12.6 million tons, gold 4.3 tons, fluorite 222.9 tons, iron ore 3.7 million tons, zinc concentrate 56,400 tons and petroleum exploration was four million barrels. Compared to the same period of 2013, exploitation of copper concentrate increased by 45.4 percent, iron ore 18 percent, fluorite concentrate 51.9 percent and oil 53.9 percent. As of the first seven months of 2014, Mongolia exported 10.4 million tons of coal, 703,900 tons of copper concentrate, 1,800 tons of molybdenum concentrate, 176,600 tons of feldspar, 3.1 million tons of iron ore, 53,200 tons of zinc and 3.8 million barrels of petroleum.

Compared to export figures from the same period of 2013, the export of coal increased by 25.8 percent, petroleum by 45.7 percent, and copper concentrate doubled. A total of 624.7 billion MNT was added to the State Budget from mining sector tax income.
32 days of petroleum reserves

As of August 27, 2014, Mongolia has an approximately 32-day supply of petroleum reserves, and a 36-day supply of A-80 gasoline reserves, 30-day reserve of AI-92 gasoline reserves, a 35–day reserve of diesel fuel, and 26-day supply of TC-1.

Nearly 2,800 mining licenses active

As of August 22, there are a total of 2,782 licences active at the national level, 1,351 of them are exploitation licences and 1,431 are exploration licences. These licences account for 7.6 percent of Mongolia's total territory.

During the conference, Minister of Mining D.Gankhuyag said, "Companies which had been waiting for Petroleum Law amendment approval sent 21 proposals to establish exploration contracts. Seventeen of the proposals are non-conventional oil and coal-bed methane projects."

In order to increase transparency in the gold trade, improve gold exploitation and increase foreign exchange reserves, a soft loan of 200 billion MNT was granted to gold miners through Golomt Bank and Trade and Development Bank. As of the first half of this year, 3.8 tons of gold was traded to the Central Bank of Mongolia, up by 61 percent.

Link to article

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Local Market

MSE News for August 28: Top 20 +0.07% to 15,778.17, Turnover 6.3 Million

By B. Khuder

Ulaanbaatar, August 28 (MONTSAME) At the Stock Exchange trades on Thursday, a total of 8,310 shares of 14 JSCs were traded costing six million 257 thousand and 771.00 togrog.

"E-trans logistics" /5,249 units/, "Hermes center" /1,000 units/, "Avto impex" /560/, "Tavantolgoi" /450/ and "State Department Store" /447 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Tavantolgoi" (MNT two million 292 thousand and 530), "Avto impex" (MNT two million and 072 thousand), "Baganuur" (MNT 554 thousand and 900), "E-trans logistics" (MNT 519 thousand and 651) and "Mongolia Telecom" (MNT 290 thousand and 020).

The total market capitalization was set at MNT one trillion 616 billion 389 million 821 thousand and 818. The Index of Top-20 JSCs was 15,778.17, increasing 10.87 units or 0.07% against the previous day.

Link to article

 

Mogi: MSE is getting closer to having gov't securities traded, with the working group (MoF, MSE, FRC) having submitted the proposal for Minister for Finance approval

Why Mongolia Needs A Bond Market 

Posted by Red Hero on Aug 20 16:21 (FT Long Room) Recent news that TDB Bank failed to attract buyers for its international bonds and news that the Government failed in its 3 year debt auction is a stark reminder of how important it is for a country to develop its own domestic fixed income markets. 

If everything is going well like 3 years ago, the government and regulator might think it is a luxury to spend time and effort on capacity building and thinking about developing a bond market but similar to life insurance the idea is to buy and get life insurance in place "before" you get run over by a car. 

When you think about entrepreneurs, most would think of stocks and successful initial public offering (IPO). However when building and growing companies, access to debt finance is even more important.

Historically, most frontier market economies have relied on bank financing, and to a lesser extent, on the equity market, to fund investments. Local MNT corporate bonds are very rare. But bonds and bond markets are as important, if not more so, than stock markets for the efficient allocation of a nation's resources. In major economies, it is not uncommon for bond markets to be substantially larger than equity markets. Mongolia had it credit rating cut and put on negative watch due to the continued dispute with Rio Tinto. For mining companies and other businesses trying to issue bonds this is a problem because a government bond market is such that it sets interest rate benchmarks for corporate bonds. This is why some countries issue sovereign bonds to replace maturing ones – even when the funds aren't needed – to maintain benchmarks across the yield curve. For a country with a high demand for capital and very high interest rates it is especially important to develop a local currency yield curve and extend the maturities to encourage longer-term investment needed for project finance. 

Yet, to have a corporate bond market, companies need to issue bonds. In Mongolia, companies have traditionally relied on bank loan financing; international financing and increasingly financing from the Chinese. It will take some persuasion to change that and some strategic vision to make local MNT currency bond markets a reality. It is telling that in Mongolia it is still called the Mongolian Stock Exchange. In many other frontier markets like Kenya for example that have successfully developed and listed many local currency bond issues like the NSE, (Nairobi Securities Exchange) the "S" was changed form "Stock" to "Securities" to signal this bigger vision and mandate to issuers and investors. Hence we might want to think about calling the MSE, the Mongolian Securities Exchange in future as it should aim to become more than just a stock exchange if Mongolia truly wishes to unleash its unique and compelling potential. 

A newly invigorated Mongolian Securities Exchange should seek to develop a local currency fixed income market. Firstly it would enable companies to raise funds even if they are not favored customers of the banks. Developing the local MNT fixed income market would allow for fewer systemic risks. Typically, bank loans are of short to medium-term, and therefore need to be rolled over to cover the life of the project funded. This lends an air of uncertainty to business planning. Worse still, loans can be called in before schedule, leaving companies in dire financial predicaments. Recourse to bond financing would eliminate any mismatch between the lifetime of assets and the duration of liabilities. 

As pension funds, social security funds proliferate, bond markets are key to ensuring that these funds can match their future payment obligations with assured future income. Without a long-term bond market, such funds, increasingly important to Mongolia's future, will be at risk. 

A well regulated corporate bond market open to private companies can fund the jobs Mongolia needs for social stability. Together, government and corporate bond markets can stabilize Mongolia's financial landscape by properly matching assets to liabilities and at the same time provide risk capital to entrepreneurs who build businesses, employ people and create sustainable economic growth. 

Developing Mongolia's local currency bond market will unlock the country's huge medium-term growth potential. A journey of one thousand miles start with the first step and by renaming the Mongolian Stock Exchange to embrace a larger future vision by calling it as it deserves to be the Mongolian Securities Exchange.

Link to article

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Economy

Early morning rates: Khan (Non-Cash Buy 1,805 Sell 1,826), TDB (Non-Cash Buy 1,800 Sell 1,820), Golomt (Non-Cash Buy 1,802 Sell 1,822), XacBank (Non-Cash Buy 1,806 Sell 1,826), State Bank (Non-Cash Buy 1,800 Sell 1,824) FX rates

BoM MNT Rates: Thursday, August 28 Close

 

8/28

8/27

8/26

8/25

8/22

8/21

8/20

USD

1,817.66

1,826.34

1,829.01

1,835.86

1,847.70

1,855.58

1,858.68

EUR

2,399.58

2,408.21

2,413.01

2,421.41

2,455.13

2,463.19

2,470.84

CNY

295.90

297.15

297.26

298.45

300.25

301.63

302.58

GBP

3,015.32

3,026.70

3,032.50

3,041.74

3,065.61

3,078.69

3,089.87

RUB

49.82

50.53

50.59

50.73

51.22

51.11

51.27

August MNT vs USD, CNY Chart:

 

Link to rates

 

BoM issues 87.2 billion 1-week bills, total outstanding +18% to 432 billion

August 27 (Bank of Mongolia) BoM issues 1 week bills worth MNT 87.2 billion at a weighted interest rate of 12.0 percent per annum /For previous auctions click here/

Link to release

 

10 Billion GoM 5-Year Bond Auction Receives No Bids

August 28 (MoF/BoM) Auction for 5-year-Government Bond was announced at face value of 10 billion MNT and each unit was worth 1 million MNT. Government Bond was not sold due to absence of both competitive and non-competitive bids.

Link to release

 

27.02 Billion 28-Week GoM Treasury Bills Sold at Discount 15.352% from Announced 50 Billion

August 28 (MoF/BoM) Auction for 28 weeks maturity Government Treasury bill was announced at face value of 50.0 billion MNT. Face value of 27.02 billion MNT /out of 27.02 billion MNT bid/ Government Treasury bill was sold at discounted price and with weighted average yield of 15.352%.

Please find expanded information from Table.

Announced amount /by MNT/

50,000,000,000

Received bid amount /by MNT

27,020,000,000

Sold amount /by MNT/

27,020,000,000

Weighted average yield

15.352%

Maximum yield of fulfilled bids

16.000%

Minimum yield of fulfilled bids

14.980%

Link to release

 

Mongolia doubles mining output

August 28 (Mongolian Economy) Mining output doubled over the past year, the Ministry of Mining reports. The sector contributed MNT 624.7 billion as income tax to the State Budget, while the Mineral Resource Authority added an additional MNT 23.3 billion.

The state-owned Petroleum Authority of Mongolia also generated MNT 125.9 billion, of which petroleum income accounted for MNT 125.1 billion, with MNT 800.1 million from other income sources. The total sum of the sector's income contributed MNT 773.9 billion to the State Budget. 

According to Mineral Resource Authority officials, there are 2,782 special licenses nationwide. Of these, 1,351 are exploitation licenses and 1,431 are exploration licenses, in total encompassing 7.6 percent of Mongolian territory. 

Link to article

 

N.Algaa: Government is discussing transit railway when domestic railway issues aren't resolved

August 28 (UB Post) Below is an interview with Executive Director of the Mongolia National Mining Association (MNMA) N.Algaa about the current Mongolian mining situations coal prices and other timely issues.

As of July 2014, mining product exports increased significantly but the price of coal, the primary export product of the mining sector, continues to drop. What's the price of a ton of coal produced by Mongolian domestic companies?

Companies aren't able to sell a ton of coal for 35 USD. The media reported that coal is being supplied at 35 USD, but in reality, it's sold for lower prices.

A ton of coking coal is being sold for 100 USD at global markets. Is this correct?

In the Chinese market, a ton of coking coal is barely able to reach the price of 100 USD. Generally, Mongolians refer to Chinese coal prices as the world market price. Only two places, near the Pacific and Atlantic coasts, define coal prices in the global coal market.

Specifically, countries supplying coal to Europe are mostly located around the Atlantic coast, and Japan, Korea and China focuses on the Pacific coast.

Prices are defined at ports as the main supply is conducted at these two ports. Price negotiation at the ports is considered as the international and world market standard. Mongolia will draw upon the world standard price if our coal can access the Pacific coast.

Our southern neighbor, China, is purchasing coal with consideration of the transportation costs from Mongolia to the Pacific coast. China explains that they buy coal from mining sites and borders at market prices while taking transportation costs into account. Although it's possible, it's wrong to compare prices of Chinese companies purchasing coal from Mongolia with prices at the Pacific coast.

Above all, Mongolia needs to be capable of transporting coal to the Pacific coast. Mongolia-China and Mongolia-Russia border coal prices were established because Mongolia couldn't resolve logistics issues for transporting coal through China. This is defined as border price internationally.

Mongolia is a land-locked country so it doesn't have port prices and supplies products at border prices. After improving competitiveness of coal quality, coal should be shipped to seaports.

Aren't Mongolian coal standard prices the same as international port prices? In the state budget, a ton of coal is valued at 120 USD, but coals aren't supplied at adequate prices. Can you comment on this?

Yes, actually, a resolution was issued stating that coal prices will remain consistent with contract prices until December, meaning that Chinese companies will negotiate on the prices set from Mongolia.

Both sides of the negotiators have to establish price agreements, register it at the General Customs Office, and then taxes will be imposed based on the contract. Depending on where the coal is being supplied from, whether at the mining site or border points, contract prices will differ.

If coal is supplied near the border, the price will be the same as border prices, which is 10 USD more than that of mining site prices.

It's impossible to compare prices to world market prices as companies are selling at different prices. Taxes will be paid depending on the distance and the purchaser.

Are you indicting that even if the transit railway through China is resolved, there's no insurance that the market will recover?

It means that a part of the necessary environment will be consistent. Apart from the transit railway, domestic transportation is important. If Mongolia doesn't construct a railway, we will never create a stable environment for supplying products.

Mongolia's competitiveness will not enhance as long as railway gauge issues are unsettled. Mongolians keep on discussing transit railways when there isn't even a railway that links the mines to the Chinese railway.

Some people are surprised that people are talking about transporting goods to China with railway despite undetermined domestic railway issues. It's no wonder they're surprised. Mongolia doesn't have a railway from coal mines to border points. This is the most important issue to be debated domestically.

Currently, how many companies are mining and exporting coal and how many companies have ceased operations?

Local companies exporting coal are Tavan Tolgoi, Erdenes Tavan Tolgoi, SouthGobi Sand, Xinhua Mak, MAK, and Energy Resource companies. Khushuut mine was included in the strategic mines' list and their operations, as well as investment were halted for six months. Their operation may revive in the coming fall.

Ulaan Ovoo mine, located in Selenge Province, is ready to export coal. Terry Energy LLC is also ready to export coal but is observing and waiting for favorable market conditions.

Several companies led by Khunnu Coal LLC stopped mining coal and are doing explorations for other minerals. [Mongolian companies] are waiting for policies to stabilize and coal prices to rise.

Marketing strategies must be very good at places where companies trade. Partnership agreements with China on every economic level should be established in the future or we can't deny that China will set taxes for Mongolian value-added products. If that happens, Mongolia's competitiveness will no longer exist.

Copper exportation is rapidly increasing this year. Will this have positive effects?

Indeed. Copper concentrate exports of Oyu Tolgoi accelerated. Erdenet company exported concentrates that exceeded volume, price and cost value. Iron ore and spar prices dropped and income centralization became insufficient.

In the last few years, the government has been discussing standard prices for mining products. How should this standard price issue be resolved?

The government has been talking about standard prices for the last five years. They've been holding meetings on standard prices on top of determining the specific amount of state revenue that will be collect per year. Other than state budget revenue, issues on how to make up the long-term taxation foundation and how to make the mining business stable in the future are connected to standard prices.

Taxation has two purposes. One is to obviously construct the state budget revenue and the other is to be used for expanding and developing businesses. This isn't implemented in Mongolia and taxation is seen as only budget revenue.

After establishing a Minerals Exchange, mining products are to be exported under a unified policy. Will the concept of standard price disappear then?

A unified standard policy will never function as long as there's a standard price. If the government sets standard prices for minerals, there will not be a need for a Minerals Exchange. Only after eliminating standard prices, the government can start talking about the issue to establish a Minerals Exchange. However, Mongolia cannot hope to compete with the London Metal Exchange.

I think it's better to create the price stabilizing mechanism through an integrated price policy, which exporters always discuss, even though it doesn't function like an actual exchange.

Domestic companies are facing some difficulties this year as coal prices fell despite the increase in the export volume. Will the coal market recover in the future?

It's definite that Mongolia will cooperate with China in the mining and infrastructure sectors. China proposed a joint railway project. Many issues, including the transit transportation and changing trade tax to liberal, are being discussed. Transit railway through China is of utmost importance.

There are many issues that need to be resolved within the country to enhance coal competitiveness in the market.

Firstly, coal quality needs to be adequate. Secondly, operating costs must be inexpensive. Thirdly, an environment for constant and regular coal supply must be created. Simply, to have reliable purchasers. Only when these three conditions are ensured, Mongolian coal will be able to compete with other markets.

It's said that Australia is Mongolia's competitor. Actually, Mongolia's strongest rival is China. A lot of coal companies were established in many Chinese regions such as Ordos and Inner Mongolia and started to supply their domestic needs. Multiple companies started to process and supply coal.

In other words, China started to pay a great deal of attention on developing its northern region. Some provinces of Inner Mongolia now have rights to determine taxes and fees for the coal sector.

This will have negative impact on Mongolian coal competitiveness. China's approach is to mix good quality coals of Mongolia with their own coal to increase quality and expand businesses. This, itself, will force Mongolia to downgrade as a competitor.

In this time of economic difficulty, how do you see the future of the mining sector?

Companies working in the mining sector are working to keep the number of employees and overcome the economic crisis during this difficult time.

As for the state and the government, they seem to have become a hindrance, instead of help. Taxes are still very high. While other countries zeroed taxes for using mineral resources to increase mineral exports, Mongolia is doing the opposite and setting standard prices.

Source: http://vip76.mn/content/26443

Link to interview

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Politics

Bat's defamation charges spark exchange of accusations among ministers

By B. Khash-Erdene

August 28 (UB Post) Transport Minister A.Gansukh broke his public silence on the defamation charge against aviation engineer and blogger Ts.Bat with bold accusations of his sister, Minister of Culture Ts.Oyungerel, on Mongol TV this week.

Minister Gansukh denied all the allegations made about him in 5,760 tweets by Bat, who was sentenced to 100 days in a penitentiary on defamation charges on August 19, and claimed that Minister Oyungerel attempted to secure a position for her brother shortly after her appointment as minister.

"Oyungerel told me to come to her office and asked me to appoint her brother as the head of Civil Aviation. I told them, 'Appointing a state position is not a matter for you and I to decide on our own. Your brother is always accusing and insulting me.' She told me, 'I know, I told him off,' and he said he would apologize," Minister Gansukh told Mongol TV. "A few days later, I met [Minister Oyungerel] at her office along with her brother. She told him off and he apologized and asked to become the head of the Civil Aviation. Again, I told them that state positions shouldn't be decided through a discussion among a few."

In response, Minister Oyugerel told the UB Post that she only ever met Gansukh once and not to secure a government position for her brother.

"I remember having one meeting, when Bat came to the Government House to meet with the minister. Because I have an office in the Government House, my brother was waiting for [Gansukh] in my office. I invited the minister to meet in my office," she explained. "So actually, the request to be considered for the position of leadership at the Civil Aviation Authority was made directly by Bat."

"It was not my intent to secure any position for Bat, I just provided a room," she added, "I don't remember my brother apologizing to him. I don't remember [Gansukh] asking for an apology. I do, however, recall asking my brother to respect the minister because Gansukh seem to be offended because Bat didn't refer to him as minister."

Minister Oyungerel expressed her shock when Gansukh turned the conversation into a "business negotiation" offering a condition for the job, that Bat stop criticizing what was happening in the aviation sector on Twitter.

"Gansukh immediately responded by telling Bat to stop tweeting about a deal concerning a Hong Kong based company and a Mongolian company named Liberty Partner that was taking place at the time," she recalled. "I never knew what kind of a person Gansukh was before that. I didn't know they had an argument and that it was that serious. I just knew him as a fellow cabinet member."

"Since then, I've distanced myself from Gansukh. I never talked to him later because I thought he's a person who makes deals on information; hiding information or acquiring information," she added.

Gansukh told Mongol TV that Bat was denied a promotion at MIAT Mongolian Airlines because of "unethical behavior".

"Bat took 50 million MNT from MIAT by illegal means, as salary. On top of this, his family didn't pay for services worth 4,000 USD to MIAT," he pointed out.

Oyungerel rejected the claim and said that the denial of Bat's promotion was punishment for outspoken rebellion and criticism of the aviation sector.

"First he was denied promotion, then his salary was decreased, he was removed from his position, and then he was marginalized from decision making and he was fired," she defended, adding that a thorough investigation looking into the matter should take place.

The Minister of Roads and Transportation said that he is not afraid of being investigated and Bat's allegations were false and that was why he was convicted.

"I responded to him only once [on Twitter]. I told him he has the right to be suspicious, but have me investigated by the Independent Authority Against Corruption. I gave him permission. Why didn't he have me investigated," he told Mongol TV.

"I have a right to be offended. I believe that my personal and professional reputation was threatened… So I went to the police to get the matter resolved. I was having myself investigated as well, because there were many things written about me. If I really did commit what was claimed, I would have been a criminal. The police investigated me for eight months," Gansukh argued.

Minister Oyungerel pointed out that Gansukh's brother works at the Independent Agency Against Corruption and is in charge of the income and asset declarations of politicians.

"Gansukh shouldn't be declaring income assets to his brother, and this is another point that will prove Bat's credibility," Oyungerel noted. "Gansukh has so much money. He has a budget higher than any other ministry because so many transportation and roads projects are going on. Meanwhile, the public does not have confidence about whether or not his asset information is accurate, because his brother is the person who receives and checks whether there is any illegal income. So Gansukh and his allies will always be under public scrutiny. Actually, by trying to expose Bat, he very successfully exposed his brother."

Oyungerel expressed concern that her brother's case highlights the need for protection for whistleblowers in Mongolia and is a threat to democracy and free expression.

"In his interview, Gansukh said that he was perfecting state immunity, but actually, he was weakening our democratic rights. I'm totally outraged by his actions… When my brother was arrested, I thought it was a little over the top. This is beyond any democratic principle. That's why I spoke up."

OSCE REPRESENTATIVE CALLS BAT'S LIBEL CASE 'UNACCEPTABLE'

The Organization for Security and Co-operation in Europe (OSCE) representative on freedom of the media, Dunja Mijatovic made a statement on Bat's defamation sentence on Tuesday.

"Punishing libel with imprisonment is a disproportionate and unacceptable measure," Mijatovic said. "For years my office has been advocating the decriminalization of libel in OSCE participating states as a precondition for media freedom to develop."

Mongolia is one of the 57 members of the OSCE, which observes media freedom in its member states.
Minister Oyungerel said the chilling effect has already taken hold of Mongolia's critical sectors such as aviation and transportation.

"I agree with the OSCE. The aviation sector already is experiencing the chilling effect. For example, nobody from the business sector spoke about how they were pressured by the government. It was very surprising that nobody spoke out. But later, when my brother was jailed, I begun to understand why nobody spoke from businesses," she said.

Bat's defamation charges were seen as a criminal act in court. Minister Gansukh said that it was a criminal punishment because the allegation's Bat made about him were about criminal activities.
Mijatovic provided early warning on violations of freedom of expression and media freedom and promoted full compliance with OSCE media freedom commitments.

"Mongolia is a model country in the region in developing media freedom," Mijatovic said. "I am particularly worried about the chilling effect this might have on freedom of expression in the country."

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President to give annual televised lesson on September 1 for start of school

August 28 (news.mn) President Ts.Elbegdorj will give his annual TV class on September 1st with a new program to start the academic year.

The President hosts the TV class on September 1st each year on Mongolian National Public Radio and television (MNB) to begin each academic year.

For this new academic year, President Ts.Elbegdorj will give a class on  "Civic Education – Ethics" to secondary school students nationwide. 

President Ts.Elbegdorj has previously given TV lesson on "Global Warming and Mongolia",  "National Pride of Mongolia", "Beautiful Mongolia", and "Good Beginning Makes a Good Ending", sharing his thoughts with children on respecting the culture, history and heritage of their country, loving their motherland and nature, and being a good citizen.

Starting this year, primary education will be provided nationwide under a new program.

President Ts.Elbegdorj chose a subject that is tied up with the reforms for primary education to open the new 2014-2015 school year.

The core of the new primary education program is designed to support each student, encourage each student's involvement, and aims to provide students with life skills and knowledge.

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Mongolia gov't to train staffers at IMF, World Bank

By B. Khuder

Ulaanbaatar, August 28 (MONTSAME) A programme will be implemented to have governmental staffers study experiences in the International Monetary Fund (IMF) and the World Bank (WB) with aims to augment Mongolia's representation in international banking and financial organizations and to strengthen the skills of staffers.

It was decided as such at the cabinet regular meeting on Thursday. The cabinet also backed an issue of appointing a consultant to represent Mongolia's government in the Board of Directors of the IFM and WB. The government believes that this will help Mongolia fortify its participation in these organizations by reflecting its position in decisions of the Board of Directors, intensifying cooperation with them and implementing its interests.

-       The 20th governmental resolution was annulled in conjunction with altering an order of border checkpoint inspections in accordance with the law on border checkpoint.

-       The Minister of Finance Ch.Ulaan spoke about a process and outcome of the procurement actions of 2014 by budget general managers in the first half of this year. Obligations were given to all the managers to take measures for intensifying the procurement.

-       The cabinet annulled special licenses of three beverage plants.

-       Mr S.Baatarjav was appointed the head of the General Police Department.

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Business

Mongolia trading up

August 19 (Oxford Business Group) In a bid to lower trade barriers and eliminate Customs duties, Mongolia has struck its first major trade deal with Japan, which could pave the way for a broader network of free trade agreements (FTAs) while also boosting its chances of becoming a trade and logistics hub in the years to come.

At the end of July, Mongolia and Japan signed an economic partnership agreement (EPA), which will lift almost all tariffs on goods and services traded between the two countries, according to a joint statement. When the agreement comes into force next year, all Mongolian exports to Japan will be exempt from duties, while Customs will be levied on just 4% of Japanese products coming into the country.

The EPA is Mongolia's first FTA and should prompt an expansion in mutual imports and exports. Last year, Japan imported just $21m worth of products from Mongolia while exporting $288m, but this is expected to change in the coming years.

"The Economic Partnership Agreement will create a favourable business and investment environment and establish a stable legal framework. I do believe that our two parties can sign and ratify the agreement in the first quarter of 2015," said Mongolian President Ts. Elbegdorj.  

Pole position

One key element of the agreement is the development of an investor-state dispute settlement (ISDS) framework, which sets out mechanisms for foreign firms operating in Mongolia to seek redress if they believe their business has been unfairly impacted by state policies. In establishing the ISDS scheme, Mongolia hopes that Japanese firms will feel more secure in investing in the country.

There have been concerns in the past that shifts in state policy can leave overseas companies exposed, with changes in the terms governing mining leases being an example often cited. Recent amendments to licensing laws reinforcing the rights of lease holders, along with the ISDS clause in Mongolia's EPA, suggest it is working to strengthen the country's appeal as a stable investment destination.

Having been the first to formally reach out to Mongolia with an EPA, the agreement could also propel Japan towards favoured partner status, at least in some fields. With disposable incomes set to grow over the coming years as Mongolia continues to develop its mineral resources, demand for consumer goods, electronics, vehicles and other products should rise sharply.

The EPA could place Japan in pole position to take advantage of any increase in personal spending, while domestically retailers and franchise operators dealing in Japanese goods should also benefit from the lowering of the tax barriers. The advantage gained by Japan could well prompt other countries to step up efforts to open trade ties with Mongolia.  

More FTAs?

While the agreement with Japan has been sealed, more such deals could be in the pipeline. In late May, Mongolian and Russian officials held talks in Moscow to discuss trade ties, according to an online statement by Russian's Economic Development Ministry.

The focus of discussions was the possibility of Mongolia joining the Russian-led Customs Union that has brought down trade barriers between Russia, Kazakhstan and Belarus, with Armenia and Kyrgyzstan also expected to join the fledgling bloc.

According to Alexei Ulyukayev, Russia's minister for economic development, increased investments by his country in the Mongolian economy, in particular in transport infrastructure, would help facilitate the creation of a free trade zone amongst the countries.

The union, which came into being in 2010 and is seen as a rival to the European Union, has also seen interest from other countries. Ulyukayev said he discussed possible forms of cooperation with the Turkish Economy Minister, Nihat Zeybekci, at the G20 trade ministers meeting in Sydney, in July, with talks focusing on the formation of a free trade zone.  

Corridors of trade

The move towards freeing up trade relations with Russia has been seen as part of Ulaanbaatar's ongoing strategy to diversify its export markets and maximise trade and business opportunities.

By strengthening ties with Russia, Mongolia would be able to open up a new export corridor to the north as well as boost access to other countries within Moscow's orbit. This corridor would allow Mongolia to access markets in the booming Asia region and beyond more directly via Russia's Pacific ports.

Such a corridor could also facilitate imports needed to sustain Mongolia's development, including the technology and heavy equipment needed to underpin the mining sector, as well as to support the diversification of the economy.

In addition, by reinforcing its own domestic rail network, Mongolia will position itself to be a conduit for trade between Russia and China. This would allow it to benefit from the increasingly close links between the two countries, while also strengthening Mongolia's own access to expanding markets.

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Energy Minister Meets Chinese Inner Mongolian Energy Company Delegation

By B. Khuder

Ulaanbaatar, August 28 (MONTSAME) The Minister of Energy M.Sonompil Wednesday received a delegation headed by Mr Wang Yuching, a director of energy company of Chinese Inner Mongolia.

The Minister noted that "this meeting is held after the state visit of China's President Xi Jinping to Mongolia", during which the leaders of the two states exchanged views on the cooperation in the energy field and concurred to focus attention on establishing a long-term contract for this sector. "It definitely will contribute to our cooperation," Mr Sonompil underlined.

After this the sides shared views on expanding the collaboration between our Ministry of Energy and the Chinese Inner Mongolian energy company, and consolidated their positions over several issues.

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USAID to Assist in Modernizing Mongolia's General Customs Authority

By B. Khuder

Ulaanbaatar, August 28 (MONTSAME) The General Customs Authority (GCA) will cooperate with the United States Agency for International Development (USAID) in modernizing activities for easing the external trade of Mongolia.

A related to it memorandum of understanding was signed Thursday by O.Ganbat, the head of the GCA, and by Mr Richard Chen, the acting USAID Representative to Mongolia.

A realization of the document is to allow the GCA to reduce a pressure over businessmen, to carry out the audit after customs formalities, to implement the risk management and to utilize information technology.

In addition, the USAID will refine an automatic information system of customs, provide the GCA with an opportunity to use a module of customs tariff, give technical assistance to the GCA's after-formalities audit inspection department, to section of risk management and the IT center. Staffers of the authority will be involved in mid-career training as well. 

With an aim to facilitate the external trade through this document, the USAID will also back the private sector's participation in all reform activities being run in order to make the customs bodies and actions more effective and transparent, to augment the revenue of state budget, and to save  businessmen' time in performing the customs formalities.

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Mongolia-China-Russia economic, trade forum held in Erenhot

August 28 (news.mn) The Mongolia-China-Russia Economy and Trade Partnership Forum and Exhibition was held in Erenhot, Inner Mongolia Autonomous Region, from August 19-24, 2014.

The event was carried out to expand economic and trade cooperation and create new markets and partnerships between the neighboring countries.

The Forum and Exhibition was held with theme of "Broad Trust, Innovation Development and Cooperation", with a focus on national manufacturing, an import goods exhibition, project promotion, and a trade fair.

Senior expert from the Infrastructure and Improvement division of the Khan-Uul District Governor's Office D.Baasangarav, Economy and Planning Division expert U.Namuun and expert from the Small and Medium Enterprise Support Center N.Odontungalag attended the forum and exhibition.

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First Int'l Exhibition of Medical Facilities Opens in Mongolia

By B. Khuder

Ulaanbaatar, August 28 (MONTSAME) Very first international exhibition of medical equipment and apparatus opened Wednesday in the "Misheel Expo" center.

The Minister of Health N.Udval addressed the exhibition's opening, saying that technological reforms are being run in the health sector, for example, Mongolia has gained some achievements in organ transplantation, treatment of sterility and perinatological aid thanks to technological renovation. She hopes that medical experts and doctors will see the latest progress and achievements from this exhibition.

Co-organized by the Ministry of Health, the "Misheel Expo" Group, the "Monolab" LLC, China's SCIS LLC, the three-day exhibition is displaying the medical progress of health. The participants are the world leading producers such as the GE Healtcare, Metdronic, Covidien, Pentax, Nihon Kohden, Belimed AG, ERBE, Kangda, Boxun and Siling.

Present at the opening were also E.Dolgoon, an advisor to the PM; Wu Chang Li, a president of the Shanghai Medical Equipment Society; delegates of international organizations for health.

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Potato starch and chips factory to open next year

August 28 (UB Post) Domestic production to meet half of Mongolia's potato starch demand

Tuv Province's Jargalant soum is set to launch potato starch and chips factories next year to reduce waste and increase profit in the region.

Small potatoes, which are disposed of without use, will be used for both productions, while the factories will also decrease financial risks at times when potato prices plummet.

The Office of the Tuv Province Governor issued 150 million MNT for the pre-feasibility studies and the factories are planned to launch operation before harvesting season, next fall.

Mongolia imports approximately 4,000 tons of potato starch, mainly used in tailoring factories, per year according to an unofficial customs report. The new factories are expected to produce approximately 2,000 tons of starch, which will meet half of the nation's domestic demand.

Ts.Tuvaan, Deputy Minister of Industry and Agriculture, also highlighted possibilities to export potato starch to China during his visit to the province.

The factories will not only use waste small potatoes from Jargalant soum, but also those from Sumber, Bornuur and Ugtaaltsaidam soums in Tuv Province.

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Sumo champ bringing Japanese rice farming experience to Mongolia

August 28 (UB Post) Two Mongolian crop farming experts are currently studying in a six-month training in Japan on rice plantation, as part of a project to grow Japanese rice in Mongolia.

The experts are permanently based in Ugtaaltsaidam soum in Tuv Province and will launch the preparation for rice planting once they return to Mongolia in October this year.

The Office of the Tuv Province Governor and Yokozuna Hakuho M.Davaajargal are working together on the trial project to plant rice in Ugtaaltsaidam and Jargalant soums next year.

The organizers will grow rice at a 0.5 hectare greenhouse in the first stage as rice requires extensive amount of water and heat to grow, says L.Davaasuren, Chief of Tuv Province Industry and Agriculture Authority.

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Mongolia looks to honey for exports

August 28 (UB Post) During his visit to Selenge Province last week, Deputy Minister of Industry and Agriculture Ts.Tuvaan met local beekeeper D.Erdenechimeg.

The area along Khalkha River is home to honey plants enough for about two million hives of bees to collect nectar, according to the beekeeper. "Mongolian honey is very reasonably priced, but has incomparable high quality than other honey producing countries," claimed D.Erdenechimeg.

Mongolia has a potential to meet its domestic honey demand and even export quality honey, according to the beekeeper of 34 years.

Honey made by Tentorium Api company, Russian manufacturer of wellness products, costs 35,000 to 40,000 MNT per kilogram in Mongolia, while Mongolian honey is sold at 20,000 MNT per kg without any artificial substance content inclusion.

"Working bees in Mongolia collect nectar from 16 to 20 different honey plants which makes Mongolian honey flavor and quality outshine others," explained D.Erdenechimeg.

D.Erdenechimeg gave brief interview about honey production in Mongolia.

Selenge Province-made honey are sold in Ulaanbaatar for a very short period of time, only in the fall. Is it impossible to sell Selenge-made honey throughout a whole year?

Beekeepers have problem selling their honey even though they produce extensive amount of natural honey every year. We have nowhere else to offer our honey but at "Green Days of Fall" annual event, where fresh vegetables and other natural food products are sold in Ulaanbaatar. Few vendors come to Selenge and offer to buy our honey with too low a price, so that we are left without a choice but to sell them ourselves. Our beekeeping farms are left without keepers if we constantly visit Ulaanbaatar to retail our product. This summer, Shaamar soum beekeepers couldn't sell a single jar of honey while our soum has about 40 tons of honey stored ready for use.

I wonder whether the government could issue a complex policy that enables favorable condition for beekeepers.

How much honey do beekeepers collect per year?

It depends on honey plant yields of the year. We have collected almost a ton of honey from our hives this summer, which is more than average amount compared to previous years.

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Mongolian producers invest $1.5 million in movie starring Gary Oldman, Harvey Keitel, Christopher Walken

August 28 (UB Post) A Mongolian production team of around ten members is collaborating with Hollywood producers for the film, "Precious", and will be investing 1.5 million USD.

The members of the production team wished to remain anonymous.

Many famous Hollywood actors, including Gary Oldman, Harvey Keitel, and Christopher Walken are to star in the film, and auditions are currently being held. The audition for Mongolian actors and actresses haven't started yet.

It can be said that Mongolian artists mostly get foreign investments. In that sense, Mongolian production lifespan is considerably short as it's only screened in Mongolian cinemas. This time, Mongolians are investing in a Hollywood production, which will enable many more opportunities. Not only will the production go into world markets and return sufficient amount of profit to Mongolia, but also open Hollywood's doors to Mongolian artists.

Film researchers and enthusiasts are making uproar on the rapid development of the South Korean film industry. Korea's secret for a rapid development was that they attained global recognition by investing in Hollywood films and featuring their own actors and actresses in feature films. Their latest products were "Lucy" and "Walking Dead".

"Precious" is giving Mongolia the chance to compete head-to-head against other Hollywood producers. By investing in foreign film industries, Mongolians are promoting Mongolia through Hollywood film productions.

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Ulaanbaatar

Foundation laid for construction of new National Library

By B. Amarsaikhan

Ulaanbaatar, August 28 (MONTSAME) A ceremony took place Thursday to lay the foundation stone of a new national library.

Pursuant to a decree of the President, a land of 0.3 hectares given to the new building of National Library in 2008 in the Sukhbaatar district, and the construction works started six years after.

The director of the National Library A.Nansalmaa said that money of MNT 12 billion has been budgeted from the government to build the library, and this amount money will cover the all construction expenses if the construction works are completed in two years. A design of the library building was developed by the "Egel" LLC, and the construction works will be performed by the AKMI holding company.

The new 11 story building of the National Library will have the latest science and technological achievements in terms of service, database and will offer comfortable conditions for the readers. In the 1-3rd stories, it will have multi-selection reading rooms, and cabinets for the disabled.

The National Library is a state protected object to keep the treasuries such as written heritage of Mongolia and Central Asian culture, scientific studies manuscripts, typolithographic sources, and precious books and chronicles created in gold and silver and other precious stones.

The old building of the National Library was built in 1951 with 500 thousand books. Now the number of book increased to some three million books, nine funds and five reading sections.

The construction of new National Library is expected to be completed by 2016.

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Ulaanbaatar Installs 1,000 Benches in City Streets for 375th Anniversary

By B. Khuder

Ulaanbaatar, August 28 (MONTSAME) The city administration Thursday reported that 1,000 benches costing MNT 350 million have been installed in streets of the capital city.

"This will improve the city's appearance and will create a comfort for people, all this work is dedicated to the 375th anniversary of Ulaanbaatar," the city officials say.

Out of these 1,000 benches, differently-styled 400 ones were bought from the domestic producers to support their business and have been located together with garbage bins in the streets such as the Tourists', the Great circle, the Square of Chingis Khaan and the Ard Ayush street. 

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First phase of construction begins for central Auto Trade Complex

August 28 (news.mn) The foundation stone laying ceremony of the first phase construction of the Auto Trade Complex in the 32ndkhoroo in Songinokhairkhan district was held on August 27th.

Sales centers for used cars, parts, and equipment in 34 locations in Ulaanbaatar will be moved out of the city when the parking lot is finished in the first phase of construction. The Auto Trade Complex is part of the Ulaanbaatar Master Plan through 2020 and urban-redevelopment.  Officials believe such a move will be effective for the reduction of air and soil contamination and traffic congestion in the city.

The Auto Trade Complex will feature sales of vehicles, spare parts, tires, oil and lubrication, car insurance services, vehicle diagnostics, license plate number services, tax payment services, leasing services, auto repair, car wash facilities, and advanced driving courses, a driving safety center and a vehicle testing range.

The residential "New City Center" being built for a population of 10,000 will be built near the Auto Trade Complex to encourage residency in the area.

As project operator of the parking and road construction, Eko Togtol LLC, Anandiin Zam LLC, Bat Cubic LLC, and Tegsh Plant LLC were selected and have begun the first phase of the construction. According to the contract, the project operators will complete the first phase of construction by October 1, 2014.

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Related:

Centralized auto trade complex ready for constructionUB Post, August 28

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Diplomacy

What will be discussed during Putin's visit?

August 28 (UB Post) The Russian President will pay an official state visit to Mongolia on September 3. During the visit, the sides are expected to discuss transforming relations to a comprehensive strategic relationship.

Negotiations have already begun on issues like infrastructure, transit transportation, bilateral investment problem solving, intensifying foreign trade, and bilateral visa-free travel of both nations' citizens.

The sides will discuss improving the economic capacity and legal environment of Erdenet, Mongol Rostsvetment and Ulaanbaatar Railway JSCs. Mongolia will have the opportunity to talk about cooperation expansion in agriculture and increasing meat exports.

Bilateral trade turnover reached more than 1.6 million USD in 2013. Mongolian import surged to 1.56 million USD and export to 61,800 USD, which influenced Mongolia's 2013 trade deficit of 1.5 million USD. Mongolia imports almost 90 percent of oil products from Russia, the reason for the high trade deficit.

In the past 24 years, Russia has invested 1.2 million USD in Mongolia (Mogi: Russia does nothing for Mongolia, while taking a lot), which is equal to 0.11 percent of Mongolia's total foreign investment. However, 830 Russian companies represent 6.6 percent of foreign companies registered for direct investment in Mongolia. Economists conclude that establishing agreements to increase export products and on drawing investment will be beneficial in the future.

However, former Prime Minister S.Batbold discussed these issues during his visit to Russia in 2010, but with no results. This time, finalizing these issues will create a big opportunity for Mongolia to increase its exports.

In response, the Russian side might want to cooperate in the Asgat silver deposit and uranium exploration. Russian Presidents and PM's have discussed this issue during every visit. In other words, we can say that Russia is interested in Mongolia's uranium.

In November 2000, Vladimir Putin visited Mongolia and determined the aims of bilateral relations and cooperation and signed the Ulaanbaatariin Tunkhaglal (Ulaanbaatar Declaration). Mongolian President Ts.Elbegdorj paid an official visit to Russia in 2006, during which both state heads signed the Moscow Declaration and announced that Mongolian-Russian relations would be transformed to a strategic relationship. Mongolia became the first country with a strategic relationship with Russia, and established a strategic relationship with China in 2011, and with Japan in 2013.

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Ch.Ulaan: It wasn't easy saving up to repay the Great Debt to Russia

August 28 (UB Post) Russian President V.Putin will be visiting Mongolia in a few days. During his last visit in 2000, Mongolia had a huge debt to Russia. In 2003, when N.Enkhbayar served as Prime Minister (PM), the "Great debt" was annulled.

The following is an interview with MP and Finance Minister Ch.Ulaan, who worked as the Finance and Economic Minister in 2003, covering important aspects of the Great debt and upcoming state visit of President Putin to Mongolia.

You worked as the Minister of Finance when the Great debt to Russia was annulled. Now, you're serving the same duty in the "new government for changes". What do you think about the agreements and negotiations that annulled the Great debt, and its value and significance?

The huge debt made during the previous government was completely repaid and that's what we refer to as annulling the Great debt. People are well-informed about only the negotiations and how the debt was repaid but two fundamental issues were resolved by repaying the debt. Firstly, we got to mutually understand principles at conference levels, starting from political conditions.

During President Putin's visit in 2000, the Mongolian government discussed the Great debt. Former PM N.Enkhbayar negotiated the mechanisms for settling convertible RUB debt between the two countries during his official visit from June 26 to July 2, 2003. This became a historically significant decision. Mongolian and Russian ministries did detailed estimations on evaluations, mechanisms through which to settle the debt, and ensured strict adherence to international standards to settle the debt, which was unsettled for many years, by relieving 95 percent of the total amount.

After the PM's visit, the commission to coordinate and resolve the great debt issue, supervised by the Finance and Economy Minister, continued to work in association with Russian bodies and the debt discount was settled through negotiation methods.

What was the method?

The use of accurate methodologies established in international markets and ensure that Mongolian economy and financing condition doesn't face difficulties was our main principle. We needed to make decisions by combining these two principles. The debt was relieved by a sufficient amount and the remaining balance needed to be paid off on the spot.

At the time, Mongolia didn't have the capacity to pay 250 million USD on the spot. The issue couldn't be resolved without creating that capacity. The issue was concluded after going through several stages and by using debt sale method from internationally developed practices.

Mongolia resolved the debt via intermediary and international markets that were recognized and approved by the people that can actually accept payments.

What was the method that was chosen?

There were several choices. Government gave trust deeds to PIT Company. The company was able to discount approximately 98 percent of the Great debt by intermediating between creditors and borrowers. Previously, political agreements specified principles to relieve the debt by up to 95 percent and have associated ministries manage and decide detailed calculations as well as rationale. By working according to these principles, 98 percent of the debt was discounted. This is a major negotiation between the two countries, which continued for six months.

The last stage for resolving the Great Debt was to make the transaction. Paying on time was very important. Mongolia needed to make the last two transactions from December 21 and 25, 2003. Building up that money source wasn't easy. The Mongolian economy didn't have that amount of savings at the time and the government approached Parliament to get support from the national exchange reserves.

The government also saved up money using its own opportunities and managed to reserve some 20 percent of the total payment. Erdenet industry got taxation down-payment with some agreements and the government acquired short-term loans from mining companies by signing rigid agreements. This way, Mongolia was able to completely repay its debt to Russia. This was a huge financial operation as well as a unique transaction which Mongolia had never done before. Mongolia doing transaction of 250 million USD was a huge event.

All three sides, associated banks, financing companies, and the government, approved and validated the repayment and the debt was annulled on December 25, 2003.

What were the risks of this repayment process?

Mongolia made a huge sum of transaction by using some of its exchange reserves and by getting short-term loans. The risk was losing the economic stability. Some newspapers and the media warned that Mongolia would lose its economic stability, the USD exchange rates would rise up to 3,000 MNT, and that it'll become the destruction of the economy. However, the Mongolian economy and financial conditions didn't encounter any amortization. That huge operation was successful thanks to the correct and accurate management of the government, the Ministry of Finance, and the Mongol Bank.

Later, sources notified that the Great debt wasn't completely repaid and there was a remaining balance of the Great debt. The media was considerably chaotic. What's the reason for this rumor?

There was a certain amount of loan issues in the collective fund rules with Mongolrostsvetmet LLC. That issue was cleared after a bilateral meeting. The Mongolian side managed to end all problems officially. The Russian side now has to discuss and approve it in their highest legislative body, Duma. This work still hasn't been completed.

Why isn't the Russian State Assembly discussing this issue?

A certain political force and politicians repeatedly refused to finalize and close the Great debt nullification as they viewed it as unbeneficial to Russia. However, associated bodies of both countries completed all financial procedures. All that's left is the political approval.

During the forthcoming Russian President Putin's state visit, will the Mongolian side inquire about this matter?

Obviously, the government will focus on finalizing and determining cooperation matters that haven't been resolved. This was acknowledged and both sides know exactly where the issues are. I'm anticipating the finalization process to hasten with the state visit.

The upcoming visit of Russian President Putin will become a major contribution for [state] principles. Especially in market conditions, relations and cooperation in current global conditions should draw closer and intensify in mutually beneficial terms.

Mongolia has two big neighbors. Trilateral cooperation activities have been approached and it's progressing well. We're expecting to cover and set foundations for major comprehensive and regional issues.

Chinese President Xi Jinping's two-day state visit is over. As the Minister of Finance, what is your evaluation and assessment for its economic value?

I see President Xi Jinping's state visit to Mongolia as fundamentally contributive. With the visit, all bilateral cooperation, mutual trust, and perspective cooperation principles, issues and topics were agreed upon and specified. The Chinese President Xi proposed four cooperation principles. Mongolia was able to create favorable conditions for future bilateral cooperation focused on developing Mongolia.

Several economic and finance issues were also determined. The two countries established a mutual understanding on some unclear, unresolved and problematic issues in the bilateral cooperation. Most importantly, China and Mongolia was able to freely share information at the highest level. The two countries established mutual understanding and trust, and advanced Mongolia-China relations.

From my perspectives as the Minister of Finance, several major issues for principles were covered. Particularly, cooperation between the two countries' state banks and swap volume were enhanced. This is significant and supportive for providing assistance in the business sector as well as implementing major programs and projects for intensifying Mongolia's economy.

China promised extreme amounts of grant aids which it never granted before. Grant aids are focused on implementing specific development priority measures. In other words, China will focus on development, while advancing together with its neighboring countries.

China is issuing a loan worth billions of USD with huge discounts to Mongolia. This discount will become a huge leverage for intensifying Mongolian economy. The loan should be used as efficiently as possible for the state financial and economic condition, without coercion. We have a loan, which was used this way before, which is giving off results.

At the moment, there is a caution that Mongolian debt may increase. Can you comment on this?

It seems that there are these sorts of cautions but the government has developed a financial mechanism that utilizes the loan, without turning it into debt, and has accumulated practical experience. The loan and aid should be used efficiently and used for economically beneficial projects. The project itself should function to repay the loan.

Mongolians are very concerned but there's no need as it is possible to resolve the inadequate investment for development in the economy. Everyone is anticipating a similar level of new cooperation ideas and initiations to be made and implemented within the framework of the upcoming state visit of the Russian President to Mongolia. Mongolia is working actively in this area.

Source: Zuunii Medee (issue No.195)

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Japan Donates Natural Science Labs Worth 700 Million to Schools

By B. Amarsaikhan

Ulaanbaatar, August 28 (MONTSAME) A 700 million togrog worth equipment of laboratories used for natural studies subjects in secondary schools presented to the Ministry of Education and Science by the Government of Japan in a scope of non-refundable aid.

In a scope of our government's last year programme "Innovation policy for improving quality of primary and secondary education", such labs were given to 100 schools. In future, all schools will receive the latest laboratories, as the Ministry of Education claims.

As known, the Japanese government had decided to grant JPY 200 million (over two million US dollars) of non-project non-refundable aid to our government, and then the parties signed an official note, by which the Mongolians aimed to purchase medical and educational equipment.

This aid promotes developing countries' structural reform policies, reduces a deficit of payment balance, and lets import substantially important products. Since 1991, Mongolia received this aid ten times, which eased our transition to market economy, improved economic structure and decreased foreign trade deficit.

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Niigata Signs Cooperation Memorandum with Khuvsgul Province

By B. Amarsaikhan

Ulaanbaatar, August 27 (MONTSAME) Delegates led by the Mayor of Niigata prefecture of Japan made a working visit in Khuvsgul August 27.

During the visit, the two parties signed a memorandum of cooperation. The delegates also visited a local museum and an archeological site–Deer stones of Uushig in Tuya baga, Burentogtokh soum, and were introduced to the life of a Mongolian herdsman household.

Khuvsgul aims to cooperate and to share experiences with Niigata of Japan in foreign relations, tourism, health, and education spheres.

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Social, Environmental and Other

Details of former Soviet positions in Mongolia unveiled

August 28 (The Asahi Shimbun) Years ahead of the Soviet Union's last-minute entry into war against Japan towards the end of World War II, the country massively fortified its position along the border area between Mongolia and Manchuria.

The finding is based on expeditions by a joint team of Japanese and Mongolian researchers to the former battle site of what is known as the 1939 Nomonhan Incident in Japan. Russia today calls it the Battle of Khalkhin Gol. (Mogi: Mongolia too)

"Our study showed that the Soviet Union was covertly preparing for a massive assault on Japan even years before it entered war against Japan (in August 1945)," said Hisaya Okazaki, who led the research team.

The recent expedition in Mongolia was carried out in June to mark the 75th anniversary of the Nomonhan Incident.

Mongolia was under the Soviet sphere of influence at that time. As a puppet state of Japan, Manchukuo in Manchuria, in northeastern China, was controlled by the Kwantung Army, a division of the Imperial Japanese Army.

A skirmish between Mongolian and Manchurian troops that broke out on May 11, 1939, escalated into a full-scale battle between Soviet troops and the Kwantung Army. After the Soviet forces' massive assault on Aug. 20, the Japanese army was wiped out. By the time a cease-fire was reached on Sept. 16, Japanese casualties totaled 20,000 and 26,000 for the Soviet side.

In the recent expedition, the researchers confirmed two former positions built by the Soviet forces--Matad and Sanbeis, which is known as Choibalsan today.

Tamsagbulag, another Soviet position, was confirmed five years ago on the researcher's previous trip. While the existence of these former Soviet bases had been speculated, their exact locations and details of the facilities had yet to be confirmed until the latest discovery.

Tamsagbulag and Matad are 13 kilometers east to west and 10 km north to south. Sunbeis is 26 km by 29 km. The size of each is larger than the space inside Tokyo's Yamanote Line, which encircles the city's central area.

The geography of the locations, which are tucked away in rolling hills, attests to the fact that the Soviet forces picked the sites to elude their adversary.

Remains of rail tracks, barracks for high-ranking officers, batteries, pillboxes, firing ranges, cemeteries with nameless graves, warehouses made of tents and trenches that were used to relay instructions among troops were documented by the researchers.

Among the articles they found on the latest expedition were Soviet soldiers' iron helmets first used in 1940, fragments of the 1943 jeeps that the United States provided to the former Soviet Union, and cartridge cases with engraved marks showing they were made in the early 1940s.

According to archives in Japan, Japanese aircraft did not observe any military facilities, such as a control tower, a hangar or a building, in Tamsagbulag during a flight over the area in June 1939.

As a result, the research team concluded that the positions were constructed in the 1940s.

Accounts by a local support the team's conclusion.

"Soviet troops built the positions while my grandfather was still alive," said Gombosuren Bold, 39, a sole nomad living in Matad. "I was told that it was the site for fielding troops and soldiers, from where the Soviet forces made a sortie on the Japanese troops."

The researchers also believe that the main force of the Soviet Zabaikal theater army was stationed in the area when the Soviet Union declared war against Japan on Aug. 8, 1945.

While the Nomonhan Incident is relatively unknown, it had significant ramifications on Japan's future.

After the Kwantung Army's defeat, factions pushing for Japan to advance southward were able to gain momentum. This culminated in the nation entering the Pacific War against the United States in 1941.

Although the Japanese officers defied Tokyo headquarters' orders by escalating the Nomonhan Incident, no one was ever held accountable.

Those officers went on to play an important role in charting out disastrous campaigns, including the Battle of Imphal in India and Guadalcanal Campaign in Solomon Islands in the South Pacific. With little or no supplies, most of their troops died of starvation or disease in both battles.

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Photo News: Hospital for Children with Blood Disease and Cancer Opens Its Doors

August 28 (infomongolia.com) The August 28, 2014 is the third day of the first autumn month according to lunar calendar which coincides with Baljinnyam marks and on this day a Hospital for Children with Blood Disease and Cancer in Ulaanbaatar is made its opening.

The Hospital was first initiated to found by Arjia Rinpoche, Head of Tibetan Mongolian Buddhist Cultural Center in the United States, while construction works were started in 2012. However, the hospital was due to be operational at the end of 2013 with estimated budget of 4.1 billion MNT (Tugrug), but due to financial and other issues had to delay and is completed today with total cost of approximately 6 billion MNT under the fundraising campaign with help of foreign and local citizens, public servants, politicians, government and non-government organizations.

The 6-storey Hospital for Children with Blood Disease and Cancer is fully equipped with modern apparatus for Neonatal intensive care unit (25 beds), Blood disease - Oncology (50 beds), Natal and cancer surgery, Diagnostic and treatment units (angiography, CT), Facilitation treatment unit, Rest room after medication and Training room, where at the opening ceremony Khamba Lama of Gandantegchinlen Monastery D.Choijamts, Speaker of Parliament Z.Enkhbold, Minister of Health N.Udval, MP M.Enkhbold, Ambassador of the United States to Mongolia Piper Anne Wind Campbell and other officials, doctors and attendees were present.

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Speaker Addresses Opening of Hospital for ChildrenMontsame, August 28

 

New hospital to address Mongolia's cancer crisis

By C L Murphy

August 28 (UB Post) According to the World Health Organization (WHO), Mongolians are investing more money in their health and consequently, living longer, healthier lives.

According to WHO, the probability of an individual living in Mongolia dying under the age of five, as of 2012, is 28 out of 1,000 births. This is down from 42 out of 1,000 births in 2006. The infant mortality rate has decreased from 44.6 to 19.4 deaths out of 1,000 live births between 1995 and 2010, just as the maternal mortality rate has dropped dramatically from 186.9 to 45.5 deaths out of 1000 in 1995 and 2010 respectively. Similarly, in 2006 the total expenditure on health per capita was 149 USD, but as of 2012 had more than doubled to 345 USD. The total expenditure on health was 5.1 percent of the gross domestic product in 2006, but has risen to 6.3 percent in 2012.

However, the increase in life expectancy and decrease in infant and maternal mortality should not overshadow more pressing concerns in Mongolian health and healthcare. Current research investigating the leading causes of mortality in Mongolia shows that Mongolians are now at a greater risk for lifestyle- and behavior-dependent diseases. WHO states, "The changes in Mongolian [health statistics] are reflected in the burden of diseases moving from communicable to non-communicable diseases. Leading causes of mortality are now circulatory system disorders and cancers."

The result of a successful, national program of high immunization coverage and public awareness education has meant that infectious diseases have not been among the leading five causes of death in Mongolia since 1990. Instead, circulatory system diseases, cancer, and injuries have taken their place. Despite being the primary cause of death in 1990, respiratory system diseases have now fallen to fifth place. This is in contrast to a sharp increase in numbers of deaths from injury and cancer.

Mongolia's rate of cancer is particularly worrying. According to WHO, cancer is a leading cause of death worldwide- accounting for 8.2 million deaths (approximately 13 percent of all deaths) in 2012. The most frequent cancers are lung, liver, stomach, colon, and breast cancer. In Mongolia, cancer accounted for eight percent of deaths in 1989, but was listed as responsible for 21 percent in 2010. This means that the rate of cancer in Mongolia is eight percent higher than the global average.
In addition, according to the World Cancer Research Fund, Mongolia has the highest rate of liver cancer in the world, 33 times greater than the rate in Russia. According to the National Cancer Registry of Mongolia, between 2003 and 2007, 17,271 new cases of invasive cancer were recorded (52.2 percent in males, 47.7 percent in females). Liver cancer was noted as the most common cause of death by cancer for both genders, with a rate that is approximately four times the global average.
Research suggests that this high rate of cancer is largely a result of life style. According to the second WHO STEPwise surveillance survey, conducted in 2009, 27.6 percent of the Mongolian population smoke, and 42.9 percent of the population was exposed to second-hand smoking at home. 38.6 percent of respondents reported consuming alcohol in the 30 days previous to taking the survey, and binge drinking (more than five drinks on one occasion for men, or more than four drinks for women) was 39.7 percent in men and 15.1 percent in women. The survey also noted that almost half (39.8 percent) of the Mongolian population is overweight, and 12.5percent are obese. Between 2005 and 2009, the prevalence of overweight and obese individuals has increased by 8.3 percent and 2.7 percent respectively. Manifold studies from various institutions all over the globe have linked the consumption of tobacco, alcohol, and excess body weight with increases in various cancers, thus providing a direct link between lifestyle choice and health.

To address the problem of cancer growth in adult Mongolians, opportunities are being pursued to prevent liver cancer through education of the dangers of excessive alcohol consumption, and the promotion of hepatitis B vaccinations. In addition, other forms of cancer common in adults, such as lung and cervical cancer, are being addressed through education of the dangers of tobacco usage and through increased access and affordability of pap-smears and other preventative, diagnostic gynecological care.

The risk of cancer and disease among children, however, is less the result of lifestyle and behavioral choices, and more frequently a consequence of insufficient access to adequate healthcare. According to a 2007 review of pediatric health in Mongolia, child deaths due to acute respiratory infection and diarrhea have decreased, whereas deaths due to neonatal causes and injuries have increased. Neonatal deaths, as of 2010, represent almost two thirds of all infant deaths in Mongolia, with 80 percent occurring within the first week of life. This is largely a result of insufficient medical treatment that is necessary in the crucial first weeks after birth.

Arjia Rinpoche, well-known to the public as the 20th Arjia Danpei Gyaltsen, a high Tibetan lama of Mongolian descent, has noted on his website (www.tmbcc.org) that 86 percent of Mongolians who are diagnosed with cancer have terminal cases. Of these, most survive less than a year. Cancer is the second leading cause of death in Mongolia, and a large number of patients are children, in whom the incidences of leukemia, brain tumors, and osteocarcinoma (bone cancer) are higher on average than in other countries. Additionally, the cost of health care is rising in Mongolia, largely a result of the post-Communist shift towards a market-driven economy. Cancer treatment is particularly expensive, due to the cost and inaccessibility of the necessary machinery and medicine, as well as the long-term nature of most chemotherapies and other cancer treatments.

In response to this need, Arjia Rinpoche and his colleagues have developed The Cancer Care Treatment Center for Mongolian Children. Rinpoche, who is also the director of The Tibetan Mongolian Buddhist Cultural Center in Bloomington, Indiana, USA, the founder of The Buddhist Center for Compassion and Wisdom in Mill Valley, California, and the founder of The Center for Compassion and Wisdom, a non-profit and non-government organization, has undertaken extensive efforts to raise funds and public awareness for the development of a new pediatric oncological hospital to serve the children of Mongolia.

Having investigated multiple pediatric cancer units in hospitals across the US, Rinpoche and his team convened with medical and government officials of Mongolia, and decided upon the current structure: a six-story building within the grounds of the Mother's and Children's Medical Center in Ulaanbaatar. Previously, this hospital had a pediatric oncology section; however, its small size prevented the dissemination of adequate medical treatment. In 2010, there were only 16 children being treated, and in 2012 the number was no more than 26.

The new pediatric hospital is comprised of the following: the basement and first floor contain advanced medical equipment, including an angiography machine, to diagnose and treat congenital heart disease, with plans to acquire a CT scanner and an MRI. The second floor is reserved for neonatal and cancer surgeries. The third floor is the neonatal intensive treatment unit with 25 incubators for premature newborns. The fourth through sixth floors contain the blood disease and cancer unit, containing 50 beds, and will provide all necessary conditions for children with cancer and other debilitating diseases.
The goal of the hospital is to address the key obstacles in child healthcare in Mongolia, namely: the care of prematurely born children, providing necessary surgical care and machinery for all cancers (in particular leukemia), providing bone marrow transplants, and encouraging international collaboration between hospitals in order to share developments, technologies, new strategies and resources. In addition, each room in the hospital is equipped with purified oxygen, a vacuum system, an air compressor unit, and an intercom installed into the walls. This allows for easier access to necessary medical equipment, without the need to transport these items between rooms.

Rinpoche also noted the importance of creating resources for palliative care, similar to the popular Ronald McDonald House in the Unites States. Long-term cancer treatment for children, Rinpoche remarked, is particularly difficult for families who do not live in the capital city. The financial and practical challenges of transporting a sick child between the city and the countryside in order to stay with the family between treatments impede the healing process. To address this, Rinpoche is planning the development of a second building, adjacent to the newly opened hospital, to accommodate families of patients. This building will have seven accommodation rooms and a conference room for visiting physicians and researchers to facilitate the exchange of information, and to allow easier access to doctors who come to educate and instruct the hospital's staff.

The hospital, while independently funded, will be a government run organization. Rinpoche notes that many of the problems apparent in Mongolian government hospitals, in particular corruption and the lack of access to necessary and sufficient medication, will likely also be a problem here. He is working with his colleagues to address these issues, and thinking of importing medicine directly to the hospital from India. Similarly, the question of corruption looms large, and as such Rinpoche plans to hire staff specifically to monitor the importation of the medicine and the maintenance of the machinery, to make sure that nothing is stolen and sold on the black market.

The cost of this hospital is currently at 2.8 million USD, of which almost 2.6 million USD has already been raised. The funds have come from donations, predominantly from Taiwan, Hong Kong, Singapore, and the US, as well as from the European Mongolian Society and the Mongolian Society of London. In addition, all money from Arjia Rinpoche's memoir, "Surviving the Dragon- A Tibetan Lama's Account of 40 Years of Chinese Rule" has been directed towards the project. Rinpoche notes that the Mongolian government has promised 230,000 USD towards the project, but so far has only contributed half of that amount.

When asked about the opening of the hospital, the grand ceremony of which took place this Thursday, Rinpoche said, "It's very exciting. It's a very, very good thing. I'm very, very happy."

After the completion of this project, Rinpoche plans to maintain his organization to oversee the functioning and development of the hospital, and then take a much deserved break.

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Maternity hospitals struggling to keep pace with population growth

August 28 (UB Post) Today we are glad that the Mongolian population is growing. But in reality, maternity hospitals can't handle today's overcrowding.

Mongolian President Ts.Elbegdorj appealed for an increase in the population, and the health sector and special inspections officials appreciated his speech. But it is unclear if the officials promoted the President's idea at that time. Regardless, statistics show an increase in infant mortality from previous years.

Let's have a look at health statistics for the first seven months of this year: 47,279 mothers gave birth and 47,587 new citizens were born in the last seven months nationwide. The number of mothers who gave birth increased by 1,464, or 3.2 percent, from the previous year, and the number of children who were born rose by 1,544, or 3.4 percent.

In July alone, 7,170 babies were born alive, 64 more babies born alive than the previous year.

With good things, bad news always follows. Let's give consideration to some numbers.

Over the last seven months, 728 infants lost their lives (an increase of 10 percent, or 66 more deaths than last year). As soon as I saw this statistic, I wondered how we are going to increase our population if we lose our babies like this.

This fact proves that the Ministry of Health is not doing their job and the Inspection Authority, which has to inspect the Ministry's work, can't work enough. How did they all allow infant mortality to increase by 10 percent?

In 1990, the World Health Organization set a Millennium Development Goal to decrease mortality rates in children aged 0 to 5 by 30 percent in 1,000 live births. Mongolia has the duty to implement this goal and we have the larger goal of reducing mortality to 21 percent in 1,000 live births by 2015. Four months are left in the fixed period to meet this goal.

Already, 884 children from the ages of 0 to 5 years old have died in the last seven months and child mortality has increased by 8.9 percent from previous years. Can we lower this rate?

Three years ago, 30 infants in 1,000 died and the next year it declined to 18.7. But this year it

eached 17 infants, three more children from the previous year. Fifty-five to 60 percent of babies who can't live past age five are infants. Nearly 88 percent of them leave this world when they are only one week old. Doctors say their deaths are the result of illnesses in the womb.

This means that maternal health influences a child's life.

Children are also losing their lives in traffic and household accidents, when they start walking and crawling. The relevant organizations know the reasons for child mortality, but why can't they do anything to stop, or at least reduce the nation's losses?

The one millionth Mongolian citizen was born in 1960 and the two millionth citizen was born in 1988. The National Statistics Office of Mongolia reported that the three millionth citizen may be born in the beginning of 2015, and if net population growth reaches 71,000 in 2014, Mongolia might welcome its three millionth citizen at the end of 2014.

But with the problems we are facing, are we ready to receive our three millionth citizen?

Source: http://www.mongolnews.mn/p/54213

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UB's Shortage of Kindergartens Violate Children's Rights

August 28 (UB Post) A small war often rises up between UB parents at this time of year. When registration for kindergartens begins, quarrels, arguments and lines outside of popular kindergartens become an ordinary occurrence, but residents and the press don't pay much attention to it.

The kindergartens in Ulaanbaatar started registering previous year enrollees two days ago and they will register new children from August 28 to 29.

Unuudur interviewed kindergartens 19, 33 and 39 in Chingeltei District to investigate the issue.

Children of the 3rd khoroo grow up at 19th kindergarten and over 150 children are enrolled from over 700 applicants. The manager of 19th kindergarten said, "I could not bring my first son to kindergarten last year. There was no advantage from working in the khoroo. But this year, my second son is able to attend the kindergarten because I stood in line for four nights and days. We don't have enough kindergartens, since many khoroolols and apartments have been built."

One father noted, "My son could not enroll because he was not old enough to go to kindergarten and he stayed at home for a year. He turned two years old on September 15, 2013. But this year, my son is about to enroll in a class for three-year-olds, unfortunately there was no room. Children cannot choose their date of birth. It is wrong to violate children's rights for a year."

Over 150 little city residents live in the 3rd khoroo, but only 30 children were able to enroll in kindergarten this year. Managers of the 19th kindergarten explain that age difference is an issue because of space limitations.

The revised Law on Education calls for the enrollment of children who are two, three and four years-old. If even a single day is left for a child to turn two years old, enrollment is not permitted. Due to this issue, arguments start between kindergarten managers and parents.

The 33rd kindergarten welcomed us differently. Over 288 children attended the kindergarten last year. Three, four and five year-old children cannot be registered because capacity has already been met this year. Luckily, 15 children in the junior group and 20 children in the senior group can be registered this year. It was not crowded and people were registering children without any argument at kindergarten 33.

"For the last two years, we did not receive any complaints and arguments about enrolling children from other khoroos. Parents once stood in line and took bribes. We gave specific information to households, promoted the law and made parents understand. We conducted a survey, and based on its results we have started working on a new system. We gave invitations to two children who will turn two years old this year. We are solving problems by sending invitations. This system is followed only by our kindergarten," noted the manager of the 33rd kindergarten, D.Munkh-Amgalan.

The fifth kindergarten of Chingeltei District was demolished and is being built, and the second khoroo (where 285 children live) did not have a suitable facility. The 33rd kindergarten was charged with receiving these kindergarten's children and now they are working in shifts.

Downtown residents are capable of enrolling their children in private kindergartens, unlike many ger district families. Kindergarten 33 has focused its enrollment on children whose families need assistance.

Over 75,600 children attend 178 state-run and 250 private kindergartens. Seventy-nine percent of these children are attending state-owned kindergartens.

Source: Unuudur

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Prominent German Mongolist Arrives in Mongolia

By B. Amarsaikhan

Ulaanbaatar, August 28 (MONTSAME) Mongol studies scholar and an administrator of a website, which provides the German with reliable information about Mongolia, Eike Andreas Seidel is here to make some tours and run talks. 

He studies here an impact of globalization, mainly writes about how an exploitation of minerals and uranium affects Mongolia's population and animals. He has visited Mongolia eight times since 1989, in 2008 started collaborating with Mongolian civil society involved in environment protection.

The scholar had once donated 1,500 euros, collected on the occasion of his 65th birthday, to an NGO of "Medical doctors against nuclear weapon". In the UB city he intends to discuss nuclear issues with related people. 

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M.Batbayar becomes powerlifting champion of the world

International Sports Master M.Batbayar seized a gold medal at the World Powerlifting Championship AWPC, which took place from August 20 to 24 in Moscow, Russia.

In the men's 100 kg category, he lifted 200 kg on the bench press and squatted 275 kg, earning himself a hefty gold medal. He also won a bronze medal in the deadlift category.

M.Batbayar has been powerlifting for nine years. He works at the General Authority for Implementing Court Decisions and has previously won a gold medal from the World Cup tournament in July, and a silver medal from the Asian Powerlifting Championship last year.

Some 1,800 athletes from 18 countries participated in this year's championship. A total of 27 athletes competed in the championship from Mongolia.

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G.Boldbaatar conquers World Judo Championship

August 28 (UB Post) Paris Grand Slam winner G.Boldbaatar made history for Mongolia as he won Mongolia's first men's 60kg world championship title, against European champion Beslan Mudranov of Russia.

The World Judo Championships is taking place in Chelyabinsk, Russia, from August 25 to 31, in the Traktor Ice Arena.

Having a bye in the first round, G.Boldbaatar defeated opponents from Turkey, Taiwan and Kazakhstan. In the semi-final, G.Boldbaatar beat Georgian judoka Amiran Papinashvili, with shido penalties.

In the finals, G.Boldbaatar defeated a two-time European champion Beslan Mudranov, with shido penalties.

A total of 751 judokas from 120 countries are fighting in the championships.
On the first day of the championships on August 25, men's -60 kg and women's -48 kg contests were held.

Silver medalist of the 2013 World Judo Championships and International Sports Master D.Amartuvshin and International Sports Master G.Boldbaatar fought in the men's event. Mongolian State Honored Athlete M.Urantsetseg and International Sports Master G.Otgontsetseg fought in the women's event.

The following is a brief interview of World Champion G.Boldbaatar with gogo.mn.

Congratulations on your victory. How do you feel?

I am extremely happy because I won. I have to express my gratitude for my family, relatives, parents, the Mongolian Judo Association, Khangarid sports committee and Erdenet Mining Corporation.

How long have you been training for today's victory?

I started my judo training at Khangarid sports committee in 2001. After 13 years, I became a world champion.

What was going through your mind before the final round? What advice did your trainers give you?

My instructors said that I might lose through shido penalties so be careful. I only thought about what my coaches told me. So I defeated my opponents with shido penalties.

Olympic Champion N.Tuvshinbayar gave you advice and helped you before the final round.

Yes. He did. He said, "You are stronger than them. Use your hidden skills, you can defeat them."

You fought with top world ranking judokas Naohisa Takato of Japan and Beslan Mudranov of Russia at the semi-final. Did you expect to face off against world's top judokas?

I expected the Japanese judoka.

Have you fought against Beslan Mudronav before?

Yes. I fought against him at Qingdao Grand Prix in 2009 and won. We haven't fought again since 2009.

You were taking a nap in the training hall after you qualified for the semi-final. You were very calm in every fight. Were you mentally well prepared?

My expectation was low. That's why I fell asleep without a problem.

Your brother and childhood friends came to root for you. You did not fail their expectations. The Mongolian audience were more supportive than a hall full of Russian audiences.

Of course. All Mongolians shouted "Boldbaatar" and "Mongolia". It was nice to see our state flag. Mongolians were so strong.

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B.Munguntuul seizes silver at 13th World University Chess Championship

August 28 (UB Post) The 13th World University Chess Championship took place in Katowice, Poland from August 17 to 24.

The Mongolian team included member of Aldar sports committee and Grandmaster Ts.Batchuluun, International Master G.Munkhgal, Sports Master B.Galmandakh, Grandmaster B.Mungultuul, and Grandmaster A.Enkhtuul.

Grandmaster B.Mungultuulwon a silver medal, with six points, in the World Chess Championship.

Polish chess master Klaudia Kulon won the women's competition, followed by B.Munguntuul and Chinese player Ding Yixin.

B.Munguntuul previously won a gold medal in 2010, a bronze medal in 2008 from the World Student Championships.

Grandmaster A.Enkhtuul placed 22th in the women's category, with 3.5 points.

In the men's competition, Grandmaster Ts.Batchuluun placed fifth, with six points, International Master G.Munkhgal stood at 18th, with five points, and Sports Master B.Galmandakh took 30th place with four points.

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