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Monday, September 15, 2014

[Revised tax claim expected today, Aspire raising funds, MNT halts 2-week losing streak, and first Russia-Mongolia-China meeting held]

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Monday, September 15, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original

 

Overseas Market

Mongolia Said to Cut Tax Claim in Bid Revive Rio Mine

By Michael Kohn and Christopher Donville

September 12 (Bloomberg) Mongolia has cut the amount of tax it's claiming from Rio Tinto Group in a bid to revive the $4 billion expansion of the Oyu Tolgoi copper and gold mine, people familiar with the situation said.

The National Tax Dispute Settlement Council has slashed the tax claim on the project to about $30 million from around $130 million, said two people who asked not to be named because the revised amount hasn't been made public. Mongolia is waiting for a formal response from London-based Rio, the people said.

Disagreement over tax has been a key sticking point between the world's second-biggest mining company and Mongolia. Most recently, the dispute delayed the release of a feasibility study for the mine's underground expansion, a step needed to obtain financing for the project.

Tony Shaffer, a Vancouver-based spokesman for Turquoise Hill Resources Ltd. (TRQ), the Rio unit that controls the mine, said his company wouldn't comment on speculation. Illtud Harri, a Rio spokesman, declined to comment on the dispute. A Mongolian government spokesman wasn't immediately available to comment.

In June, Mongolia's Tax Authority claimed Oyu Tolgoi LLC, the mine's operating company, had unpaid taxes, penalties and disallowed entitlements. Turquoise Hill said it paid all taxes and charges as required under its accord with the government.

Turquoise Hill jumped 7.7 percent to $3.80 in New York yesterday, taking its gain for the year to 15 percent.

Link to article

 

TRQ +19% in last 3 days

TheStreet: Turquoise Hill Resources (TRQ) Upgraded From Sell to Hold

NEW YORK, September 12 (TheStreet) -- Turquoise Hill Resources (TRQ) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-.  TheStreet Ratings Team has this to say about their recommendation:

"We rate TURQUOISE HILL RESOURCES LTD (TRQ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

·         TRQ's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 7123.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

·         TURQUOISE HILL RESOURCES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, TURQUOISE HILL RESOURCES LTD continued to lose money by earning -$0.05 versus -$0.37 in the prior year.

·         TRQ's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.

·         In its most recent trading session, TRQ has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

·         The gross profit margin for TURQUOISE HILL RESOURCES LTD is currently lower than what is desirable, coming in at 33.82%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TRQ's net profit margin of 2.15% is significantly lower than the industry average.

·         You can view the full analysis from the report here: TRQ Ratings Report

Link to article

 

Aspire Mining looks to raise $2.2M for drilling at Nuurstei Coal Project

September 15 (Proactive Investors) Aspire Mining (ASX:AKM) is raising about $2.2 million for drilling at the Nuurstei Coal Project in northern Mongolia that started last week that could ultimately lead to a Pre-Feasibility Study for a mining operation.

This consisted of a placement to sophisticated investors and a commitment by non-executive director Neil Lithgow to an early exercise of 5 million options at $0.05 each.

This is the same price as the issue price of the placement shares. The capital raising was lead managed by Argonaut.

Aspire owns an interest in the Nuurstei Project through its 50% ownership in the Ekhgoviin Chuluu Joint Venture (ECJV) with Noble Group.

ECJV currently holds a 60% interest in Nuurstei and can increase this to 90%.

Nuurstei Project

The Nuurstei Project is located about 10 kilometres to the southwest of Moron, the capital of the Khuvsgul province in northern Mongolia.

A paved road is currently being constructed between Moron and the town of Erdenet, where existing rail infrastructure terminates. Sealing of this road commenced in 2012 and is due to be completed at the end of 2015.

Coal produced at the Nuurstei Project could be transported along this road to Erdenet where product could then be loaded onto trains and delivered to customers. 

Land purchased at Erdenet by Aspire in 2012 could be used as a coal stockpile and train load-out area.

The current drilling program will build on the 2011 drilling program conducted by Xanadu Mines (ASX:XAM).

This will consist of geographically reclogging of 2011 drill holes, reverse circulation and diamond drill holes completed at an average 100 metre depth. 

These holes are focused mostly in the southern part of the main tenement and the programme has been designed to confirm resource continuity.

Drilling is expected to be completed by the end of October 2014, with laboratory analysis expected to be received in the December quarter.

Link to article

Link to AKM release

 

YAK closed +1.38%, MNGGF +7.54% on Friday

Mongolia Growth Group Ltd. July 2014 Monthly Letter to Shareholders

Toronto, Ontario, September 12 (FSCwire) - Mongolia Growth Group Ltd. (YAK – TSXV and MNGGF –  USA), a real estate investment and development company pursuing the dynamic growth of the Mongolian economy via ownership of institutional-quality commercial property assets in the capital city of Ulaanbaatar, Mongolia is pleased to announce the release of its July 2014 Shareholder Letter. 

July 2014 Shareholder Letter 

To the Shareholders of Mongolia Growth Group Ltd., 

In July 2014, MGG's core commercial property portfolio* experienced a same-store rental increase of 22.3% relative to July 2013 on properties owned 12 months or longer, as measured in local currency (Mongolian Togrog). Total billed revenue for July 2014 was 222.7 million Mongolian Togrog, as compared to 219.3 million Mongolian Togrog in July of 2013 or a 1.6% increase.** The occupancy rate for the core portfolio in July of 2014 was 94.7% including an occupancy rate of 94.0% for core retail properties and an occupancy rate of 95.2% for core office properties. 

Second Quarter Financial Presentation 

Second Quarter Financial Presentation 

On August 28, we filed our interim financial statements and Management Discussion & Analysis for the second quarter of 2014. In addition, we have published a financial presentation with the highlights of our business on our website. You can view the presentation at this link. http://mongoliagrowthgroup.com/wp/wp-content/uploads/Q2-2014-presentation-final.pdf

Mongolian Economic Update 

During the first half of 2014, Mongolia's GDP grew 5.3% in real terms 

Since our previous update to you: 

·         Mr. Xi Jinping, President of the People's Republic of China visited Mongolia on August 21st and 22nd. This is the first visit by a Chinese President in 11 years. Among the 26 cooperation agreements signed on the first day of the state visit, 17 cover trade, infrastructure, energy and financial cooperation.  (China Daily)

·         Mongolia has signed a total of four memorandums giving it access to eight China seaports along with transit transportation of Mongolian products to the sea through Chinese territory. (Montsame)

·         The Development Bank of People's Republic of China has agreed to a USD $162 million commercial loan agreement with the Development Bank of Mongolia (Businesss-Mongolia.com)

·         Mr. Putin, President of Russia, visited Mongolia and signed 15 agreements, protocols and MoU's at a ceremony on September 3rd. (News.MN)

·         President of Mongolia Tsakhia Elbegdorj said on Wednesday that his country proposed Russia to consider a possibility of stretching a natural gas pipeline across the Mongolian territory. "I have described the advantages of stretching a pipeline across the territory of Mongolia," Elbegdorj said following his talks with Russian President Vladimir Putin. (Itar-Tass)

·         Development Bank of Russia is to provide USD $74 million of investment for the extension of Thermal Power Station-4 (Montsame)

·         Mongolia's exports of copper concentrate rose to 703,900t worth USD $1.2 billion in the first 7 months of 2014, compared to 332,200t worth USD $470.4 million in 2013. (Bloomberg) 

We look forward to updating you again on our progress and new developments in the Mongolian economy next month.

Link to release

 

Haranga: Half-Year Financial Report

September 15, Haranga Resources Ltd. (ASX:HAR) --

Link to report

 

Mogi: a Manila-listed stock, that's a first I've heard

Apex Mining to buy Razon's Monte Oro

September 12 (BusinessMirror.com.ph) APEX Mining Co. on Friday said it is buying all of Monte Oro Resources and Energy Inc., a company controlled by billionaire Enrique Razon.

The company said in its disclosure to the Philippine Stock Exchange that it is buying in cash Monte Oro's shares consisting of 5.12-billion shares with a par value of P1 per share.

Monte Oro's selling shareholders include Prime Metroline Holdings Inc., Lakeland Village Holdings Inc., Devoncourt Estates Inc., A. Brown Co. Inc. and Wealth Securities Inc.,

"This acquisition will be funded from the cash to be raised in the issuance of new shares from the increase in capital stock of the corporation at the issue price of the par value of P1.00 per share," Apex said.

The company, however, said that those people who will sell shares in Monte Oro, all of whom are directors of Apex, are allowed to participate in the subscription to new shares of Apex at P1 per share. These include Walter Brown, Ramon Sy and Silverio Benny Tan.

Brown is the chairman of the board of directors of A. Brown and is also the president and chief executive of Apex, while Sy is the company's chairman, and COO and Tan is the company's assistant corporate secretary.

Monte Oro controls 30-percent interest in Service Contract 72, a service contract for gas in the offshore area off Palawan. It also owns 52 percent in International Cleanvironment Systems Inc., formerly Jancom Environmental Corp. The company has a build-operate-transfer contract with the Philippine government for solid-waste management in Metro Manila. Monte Oro also owns the entire Paracale Gold Ltd. which owns Coral Resources Philippines Inc., owner of a mineral processing plant in Jose Panganiban, in Camarines Norte, and 40 percent of Bulawan Mineral Resources Corp. with and an option to acquire the other 60-percent shareholdings.

Bulawan has nine applications for production-sharing agreements covering 10,884.55 hectares, 13 exploration permits pending renewal and exploration permit applications covering 85,247.28 hectares, and two mining lease contracts covering 652.28 hectares.

Other assets of Monte Oro include 100-percent shareholdings in Mongolian firm Minas de Oro Mongol Llc., which owns 51-percent shareholdings in Erdenejas Llc., a joint-venture company which holds a mining license in Khar At Uul in Mongolia; 90-percent shareholdings in Monte Oro Mining Company Ltd., engaged in mining exploration in Sierra Leone, and in MORE Minerals Sl., which engages in artisanal mining and gold trading in Sierra Leone; 4-percent participation in National Prosperity Gold Production Group Ltd., which holds the mining claims and license from Myanmar to develop and operate the gold mine located at Moe di-Moe mi Region, Yemethin Township, Mandalay Division, known as the Maudi Taung Gold Mine; 33.34-percent ownership in Apex Mining consisting of 623.3 million shares.

As of end-August, Monte Oro has cash and receivables of P900 million. "The acquisition will expand the business of the corporation [Apex], allow it to have another mineral processing plant and expand its operations in Jose Panganiban, in Camarines Norte, and allow it to have a healthier balance sheet with an increase in its asset base and equity," Apex said.

Apex said it will release Monte Oro's financial statements by November 10.

Link to article

 

Mogi: the noteholders are the two major shareholders of MEC, Simon Lo & Chow Tai Fook's Cheng Yu Tung

MEC: FURTHER EXTENSION OF MORATORIUM ON REPAYMENT OF CONVERTIBLE NOTES

The holders of the SF Convertible Note, 3.5% GI Convertible Note, and 3% CTF Convertible Note have agreed to further extend the moratorium on repayment of their respective convertible notes due and payable by the Company to 19 September 2014.

September 12 -- This announcement is made by Mongolia Energy Corporation Limited (the ''Company,'' HKEx:276) pursuant to the provisions of inside information under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong) and Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules'').

The Company refers to its announcements on 12 August 2014 and 4 September 2014 (the "Announcements") respectively. Capitalized terms used in this announcement have the same meanings as those defined in the Announcements, unless otherwise stated.

The Company applied for a trading halt of its shares on 4 September 2014 pending the release of the announcement relating to, among others, the proposed issue of new convertible notes by the Company. The proposed subscribers are the existing convertible noteholders of the Company, namely, Golden Infinity Co., Ltd., Chow Tai Fook Nominee Limited, Sculptor Finance (AS) Ireland Limited, Sculptor Finance (MD) Ireland Limited and Sculptor Finance (SI) Ireland Limited.

While all the principal terms of the proposed subscription of the new convertible notes have been agreed by all these parties, there is a technical issue on the public float requirement under the Listing Rules required to be solved by the Company upon conversion of the proposed new convertible notes. In this connection, all of these existing convertible noteholders have agreed to grant the Company a further moratorium extension to 19 September 2014.

In the meantime, trading in the shares of the Company will remain suspended and the Company will publish further announcement as and when appropriate.

Link to release

 

Peace Map: Interim Report 2014

September 11, Peace Map Holding Ltd. (HKEx:402) --

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

Geographic Information System Business

Mining Business in Mongolia

The Group currently holds four coal mining licences covering a total mining area of 1,114 hectares at Tugrug Valley (the "TNE Mine"). Based on a report prepared by an independent technical advisor in 2010, the TNE Mine has approximately 64.0 million tonnes of measured and inferred resources and an additional 27.9 million tonnes of inferred resources. During the Period under Review, there was no material change in the amount of the resources in the TNE Mine, compared with that in the six months ended 30 September 2013. Besides, the Group also holds three exploration licences in respect of coal deposits in DundGobi (with an area of 14,087 hectares) located in Mongolia.

Pursuant to the announcement issued by the Company on 4 November 2013, the Group considered a report prepared by an independent mining expert. It recommended in the report that a further review should be conducted within the licensed area in order to prepare a plan for improving the production of the TNE Mine. After discussion, the Group resolved to engage an independent mining expert to conduct a further review as set out in the report, therefore further postponing the production schedule by one year.

Taking into account the market selling price and the additional risks arising from the Mongolian laws and regulations relating to the mining industry, the Group provided an impairment loss of approximately HK$48.0 million in respect of the mining licences for the Period under Review.

PROSPECTS

In the meantime, the Group will further develop its mining business in Mongolia which, with a devoted team, is expected to generate satisfactory return to the Company and its shareholders.

Link to full report

Back to top

Local Market

MSE News for September 12: Top 20 +0.58% to 15,748.49, Turnover 5.8 Million

Ulaanbaatar, September 12 (MONTSAME) At the Stock Exchange trades on Friday, a total of 14 thousand and 797 shares of 20 JSCs were traded costing MNT five million 755 thousand and 625.60.

"Genco tour bureau" /12 thousand and 636 units/, "Arig gal" /508 units/, "Merex" /487/, "E-trans logistics" /410 units/ and "State Department Store" /240 units/ were the most actively traded in terms of trading volume, in terms of trading value were "Material impex" (MNT two million 257 thousand and 600), "Arig gal" (MNT one million 168 thousand and 630), "Genco tour bureau" (MNT one million 036 thousand and 452), "Talkh chikher" (MNT 331 thousand) and "Mon-it buligaar" (MNT 240 thousand).

The total market capitalization was set at MNT one trillion 611 billion 073 million 501 thousand and 268. The Index of Top-20 JSCs was 15,748.49, increasing 90.86 units or 0.58% against the previous day.

Link to article

 

MSE Weekly Report, September 8-12: Top 20 +0.11%, Turnover 63.5 Million

Link to report

Back to top

Economy

Early morning rates: Khan (Non-Cash Buy 1,830 Sell 1,846), TDB (Non-Cash Buy 1,835 Sell 1,849), Golomt (Non-Cash Buy 1,831 Sell 1,847), XacBank (Non-Cash Buy 1,835 Sell 1,849), State Bank (Non-Cash Buy 1,829 Sell 1,847) FX rates

BoM MNT Rates: Friday, September 12 Close

 

9/12

9/11

9/10

9/9

9/8

9/5

9/4

USD

1,844.22

1,844.59

1,842.63

1,841.35

1,836.72

1,834.51

1,832.41

EUR

2,384.21

2,385.98

2,382.70

2,371.01

2,377.45

2,373.31

2,408.34

CNY

300.61

300.90

300.68

300.12

299.12

298.78

298.64

GBP

2,997.96

2,996.17

2,972.07

2,964.85

2,971.54

2,994.29

3,015.51

RUB

48.99

49.30

49.47

49.71

49.52

49.66

49.52

September MNT vs USD, CNY Chart:

 

Link to rates

 

UB Housing Price Index, August 2014: +1.45% MoM, 4.78% YTD, +12.57% YoY, +23.99% from Jan. 2013

September 12 (Cover Mongolia) The Bank of Mongolia in collaboration with Tenkhleg Zuuch, Aktiv Zuuch and Mongolian Properties real estate agencies is releasing monthly price movements of new and old apartments put up for sale. January 2013 is the base month.

Link to release (in Mongolian)

 

Regaining Credibility: Recommendations by INS

September 15 (Institute for National Strategy of Mongolia) --

Problem statement by INS

Mongolia's ability to attract third neighbor investors and financiers to support funding of it's huge development agenda has deteriorated. Providers of capital are seeking answers to 2 basic questions while considering lending or investing into Mongolia.

1.    Is the Government of Mongolia supportive of an empowered private sector and is it proactively resolving business disputes?

2.    What is the winning strategy that will turbocharge the economy?

Opinion by Cameron McRae

"In the Democratic Transition, Mongolia committed to three fundamental reforms: respect for human rights; open, democratic government; and an economy led by the private sector, not dominated by domestic or foreign state-owned companies. Mongolia's support for human rights and political participation is beyond question. Where Mongolia has struggled is in the third reform:  developing an independent, private-sector economy. Our Six-Point Plan will advance Mongolia rapidly to this goal of developing competitive industries that create jobs. With government's focused leadership, we are confident that business will create the growth and employment that Mongolia needs". 

This is the closing paragraph from a paper written by six Mongolian business leaders, myself and an international bank, aided by McKinsey and the Economic Policy and Competitiveness Research Centre (EPCRC), Mongolia, that was presented to President Elbedorj in August 2012. The report was titled "A six-point action plan for Mongolia: Enabling business to create employment and growth". 

The six pillars of this action plan were:

1.    Stabilize the economy;

2.    Create policy and regulatory stability;

3.    Reduce government's role in business and streamline bureaucracy;

4.    Develop a prioritized and fundable infrastructure plan;

5.    Stabilize and strengthen the mining sector; and

6.    Deliver critical infrastructure projects. 

The six-point action plan (6PAP) thesis was that with government creating an enabling environment and proactively supporting private sector businesses, both domestic and international, then business would attract international finance and investors-partners for high quality projects which would fuel sustainable growth. The 6PAP did not only look at mining and infrastructure but recognised that these projects types were huge, that new infrastructure and infrastructure upgrades were essential for a modern Mongolia and provided the foundation for fast and sustainable economic growth. 

From a strategic perspective the 6PAP recognized the continuing importance of agriculture, the upside from tourism, some potential viable areas of downstream processing, the potential for exporting power and the prospects for a mining service sector. This was not meant to preclude strategic consideration of other areas of economic endeavor but rather to focus attention on where Mongolia may build a competitive position relatively quickly. 

So let's attempt to answer the international investors 2 questions – firstly by looking at economic and political events since August 2012 and then referencing the current situation to the 6PAP (of 2012). 

From August 2012 to today…. Some background information 

The 2012 general election had just been held and the constitution of the government, the Cabinet, and senior positions in every ministry remained unclear. When the dust settled in late 2012 we saw a government made up of 4 political parties, a brand new, and inexperienced, cabinet and a complete change-out of senior public servants in every Ministry. This came on top of SEFIL (the Strategic Enterprises Foreign Investment Law)  – passed in Q2 2012 – which was an overly nationalistic response to a takeover offer by a Chinese state owned enterprise (SOE) of a small Mongolian coal miner located in the Gobi Desert. 

The 2013 Presidential election was also a close race and was played out on a background of populist and nationalistic policies and the Oyu Tolgoi (OT) dispute between Rio Tinto and the Government of Mongolia (GoM). This dispute was a public affair until Q3 of 2013 when the parties moved discussions behind closed doors. The mothballing of the US$ 5 billion OT underground development in Q3 was an unavoidable consequence of the protracted dispute around critical "value issues" which had been running for two years. The US$ 6 billion project finance package, the largest ever in the mining industry, remains approved by the large banking syndicate, but is unable to be consummated. 

The success of the US$ 1.5 billion Chinggis bond raising in late 2012 was a surprise to some, but the subsequent blowout in bond yield and devaluation of the Tugrik was not met with surprise by economists. They point to the shortfall in 2013 GoM budgetary revenues and the actions to prop up the economy and manage inflation with Quantitative Easing (QE) programs such as the Price Stabilization Program and other "off balance sheet" measures. 

In 2013 other "business related" disputes and slowness in declaring policy positions on key pieces of essential legislation also added to the consternation of international financiers and investors and local businessmen alike. Investor confidence remained low and new international financial inflows scarce, despite the PR message that the GoM was repositioning the Mongolian investment environment for an economic resurgence driven by the private sector. 

This low confidence occurred against an international backdrop of widespread economic problems. Economic slowdowns in the US and Europe, and a change of economic policy in China, have all contributed to a more austere outlook on the minerals industry – which is essential to Mongolia. International capital that was available to the mining industry has gravitated to big projects with many smaller mining focused companies finding fundraising for exploration and "early stage" marginal projects extremely difficult. The mining giants, such as BHPB and Rio Tinto, have driven massive capital expenditure programs over the past 3-4 years but are now in cost cutting and capital rationing mode, and little capital is being apportioned to projects in the so-called riskier "emerging and frontier markets". 

Since late 2013 we have seen significant symbolic movements, including the President's launch of the "From big government to smart government" initiative, more advice taken from international advisors which has been at a higher level than at previous times, and the Cabinet commissioning the World Economic Forum to develop economic scenarios for Mongolia. 

The GoM has also announced a raft of policy changes, with the introduction of new legislation and modifications to existing legislation. This program of change is being pursued in a fast manner, and not always with high levels of consultation or the ability to lobby for change until late in the piece. 

Now, let's review the six pillars of the 6PAP. 

Pillar 1.           Stabilizing the economy

For the longer term, stabilization mechanisms to manage highly variable commodity revenues are seriously being considered as is a sovereign wealth fund for investing surplus wealth generation. 

However the last two years is characterized by a reduction in capital spending at OT, and a lack of progress at Tavan Tolgoi and other mega projects. The Mongolian economy has relied on the deployment of the Chinggis Bond, the PSP (price stabilization program), and the 8% mortgage scheme to keep road works and housing activity in play. 

The reality is that government debt continues to rise quickly, credit lines are shrinking and becoming much more expensive. Balance of Payments deficits continue and FX cover has dwindled to 3 months. Given the state of the national finances it is difficult for the GoM to continue stimulating the economy with large QE measures alone. Encouraging stimulatory programs driven and funded by the private sector, to build a stronger Mongolian economy takes the pressure of the GoM balance sheet. 

Pillar 2.           Create policy and regulatory stability 

Mongolia has had a history of political populism and unpredictability towards international investors, and in particular towards the flagship OT project. While the OT dispute remains unresolved it is salutary that the GoM's PR engine is now much less populist and more balanced in how it deals with the issues of supporting investment, both international and domestic. Resolution of the OT dispute in a way that is seen to honor the existing agreements will be very well received by the major banking institutions and international investors. 

Tax stabilization, a key and controversial feature of the OT Investment Agreement, has now become a feature of the proposed Investment Law and is available to both domestic and international investors. The removal of SEFIL reinforces this positive initiative. 

While Mongolia has a strong need to expand and grow its tax base, it is showing discipline in the use of the tax rates, thus recognising that this is a lever that improve Mongolia's competitiveness as a destination for international capital. Mineral royalty arrangements however are being partly used in a way to minimize "transfer pricing", by placing the onus of achieving bench-mark prices or mine owners. I believe this creates problems for new investors as they do not know how royalty payments will be calculated over time. 

Generally improving the consultative process and proposed minimum periods for consultation on proposed legislation will generate better outcomes, as will improving the linkages between the GoM and business associations. The onus to improve is on both business and GoM. 

Regardless of the logic and competitiveness of laws, the true test of legislation is how it plays out with the bureaucracy; is it easy and quick to start, implement, and commission a project or business initiative? The 6PAP highlighted that the current decision making and approval processes within Ministries and between the national, aimag, and soum levels of government were far too slow, complex, and opaque. This is reinforced by WEF and IMD benchmarking studies and is recognized by GOM as needing improvement. 

The move from "big to smart" will not be easy and will require strong leadership at the cabinet level and excellent change management at the critical ministries. The rationalization of powers at the soum and aimag levels is a political issue, but one that must be urgently addressed. 

Image is important and the most consistent message back from investors is for the GoM to rebuild its "credibility" brand – by proactively resolving the significant unresolved legal disputes. Putting resolution of these issues into a single point of accountability should be considered. 

Pillar 3.               Reduce GoM's role in business and streamline bureaucracy

The parliament is debating the concept of not owning and over-managing the economy, which is understandable since Mongolia was once part of a strict communist regime. The reality today is that the GoM cannot afford to adequately fund government companies, or buy into new ventures (such as the strategic mining deposits), and the track record in running SOE's without political interference and  to international standards is poor. 

Putting in place an SOE privatization program will bring about two benefits – realization of cash which can be used for debt reduction or strategically placed programs, and the transformation of these SOEs into more profitable and internationally competitive entities. 

Government agencies that interface with complex infrastructure and mining projects still need to be organized along "delivery unit" lines, and hopefully the GoM is working through this as part of the "smart government" initiative. The current arrangements have significant room for improvement. Blowouts in project costs are inevitable of due to long-winded permitting and approval processes are tolerated. 

Pillars 4 and 6. Develop a prioritized and fundable infrastructure plan PLUS deliver critical infrastructure projects 

Mongolia has ambitious plans to develop it's infrastructure, but has been hampered by available and reasonably priced finance, and tedious approval processes. The 6PAP recommended a) a short list of priority projects be developed and intensively supported through all stages of development, and b)  that projects pass a "market needs test" and can be commercially funded. 

Prioritising the GoM's strategic projects list and rectifying the issues raised in pillars 1 to 3 is required and is not an easy political task. It is also vital that other viable projects brought to the table by private sector sponsors, with their own funding are also well supported. 

The 6PAP targeted 5 critical development areas, which would provide a significant economic stimulus over a 3-4 year period, and also improve Mongolia's competitiveness and international credibility. Progress and issues are highlighted. 

1.    Power and heat generation: Little committed progress has been made on this front and resolution is critical from an urban and industrial perspective. This remains a key investment opportunity. However realistic tariffs for investors need to be mandated by the GoM, which has enjoyed low priced power from Russia and Mongolia's obsolete fleet of UB power and heat plants.

2.    Power and heat transmission: The growth and upgrade of the grid remains a strategic challenge.

3.    South Gobi to China rail links: A rail project between Tavan Tolgoi and the Chinese border has started, however this project appears to have stalled. More rail links are planned and needed but, again, funding and politics remains a

4.    Urban roads and airport: The UB international airport has been committed, with Japanese funding, and the paved national road network has been extended during

5.    Water sector: Progress in this area is not clear. Tariff and licensing issues remain an impediment to investment. 

Pillar 5.           Stabilize and strengthen the mining sector

Identifying and utilizing Mongolia's mineral heritage is the most strategic of issues. Mining projects bring the transfer of technology and business practices, infrastructure development, national business development, and employment and training, in addition to foreign exchange earnings. 

Finalization of a competitive and world-class mining policy and the ensuring legal changes is critical and long overdue. This is work in progress and it is imperative that the GoM gets this 100% right. Mongolia is seen as a frontier mining economy and it needs to be extremely competitive in all stages of the mining process to ensure that international companies and financiers support "high standard" junior, mid and large scale exploration and mining. 

Importantly, Mongolia can demonstrate the huge world-class copper mining operation in the Gobi Desert that was built ahead of schedule in an area devoid of infrastructure, power, and water. It is an achievement of international standing and thousands of Mongolians and hundreds of Mongolian companies have participated and learnt from their involvement in the OT project and operating business. 

Resolution of the outstanding "106 licences dispute" – in favor of the original licence holders is essential. The Mining Ministry must be perceived as fairly supporting a market in exploration permits and mining permits – which is critical for attracting qualified exploration and mining investors. Credible Mongolian mining houses that partner with international firms are also going to deliver larger mines with easier financing, more efficiently run projects, and a better chance of achieving international terms for the "export products". 

And finally, the GoM's failed experiment in state ownership of mining enterprises should be wound up. This would send a huge message to investors, that Mongolia will not require you to give up to a 34% interest in anything you may find! 

Author's summary

Mongolia's needs are huge and real, and re-positioning to attract serious international finance requires more than public relations and quick legislative changes. There is hard but essential work to be done – for both GoM and the business associations. 

INS Commentary

Senior leaders are thinking deeply about the Mongolian situation. They know that advancing Mongolia's economy requires access to international capital, best technologies, and to the right business partners. 

To attract these essential components to Mongolia is no simple job, especially when the developed world is working through its own economic challenges and the developing and frontier economies are all fighting to attract any available capital and investors. Remember, the world is made up of over 200 countries – all fighting for credibility and access to the limited global capital pool. 

Changing a country's destiny is not an overnight or one-year task; it requires a clear vision, unfaltering dedication, and the strength of conviction to see the execution of that vision. Fortunately, some significant steps have been taken but show stoppers also remain in place. Now it is critical that the government, business associations and international experts consult, collaborate, and execute strategies and policies that position Mongolia as a competitive and reliable frontier investment destination. 

More importantly, a new populism needs to take hold in Mongolia; whereby Mongolia is promoted as a country preparing to be a world-class economy, comprising highly competitive businesses and a business enabling government sector. 

Winning the confidence of banks, investors and world class companies should be the highest priority for the political parties of Mongolia.

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Politics

De Facto: Necessary steps and deficiency in governance

By Jargalsaikhan Dambadarjaa

September 14 (UB Post) Mongolia recently hosted high-level visits from our two neighboring countries. In terms of significance and timing, there was a lot to swallow and digest as the presidents of Mongolia's eternal neighbors visited us with a short window of time between the two visits.

President Xi Jinping's visit and the speech he gave will be important in addressing the lack of trust that has defined Sino-Mongolian relations. Transit transport access and the use of China's seaports were made available to Mongolia. The agreements on power and infrastructure can potentially bring a huge boost to economic cooperation between the two countries. Please refer to the article "Seeing the moonlight from a waterfront pavilion" to read about what Mongolia should bear in mind after this historic visit.

President Putin's half-day visit and the speech he gave will be important in removing the lack of understanding that has defined Russian-Mongolian relations. Resolving long-awaited issues such as restoring visa-free travel, adding another track to the railway, and introducing a railway electrification system will supposedly bring quality improvements to both economies and trade turnover between Mongolia and Russia. Please refer to the article titled "Mr Putin, tear down the glass wall" to read about where the lack of understanding comes from.

The major challenge after the two high-level visits is whether our government can implement everything that what was discussed and agreed upon. The governments of our two neighbors are steady, high-performing institutions with strong, focused leadership. The institution of our government can be described as low-performing and less efficient because the institutional structure is completely changed and entire government staff is almost fully replaced every four years after parliamentary elections.

As the structure of our government and management system are changed for the interests of political parties rather than national interests, it has become nearly impossible to devise Mongolia's long-term development policy and implement the mid- and short-term actions that have been planned. It can be seen from the speech Prime Minister Altankhuyag gave two days ago. He said, "Today I would like to announce that I am planning a reshuffling of the cabinet and will propose it to the parliament in the fall session, in order to make the 'reform' government more efficient, diligent, responsible, and energetic. The reshuffle will include some ministers and a change to the structure of the government." There really is a deficiency of governance in Mongolia. The recurrent economic declines in Mongolia have political roots and are caused by faults in policy.

Considering the current situation of the executive branch, it is clear that the Prime Minister has no other choice. It looks like he is proposing the reshuffle before the parliament did. However, when "making the government more efficient, diligent, and responsible", it will not be enough to make slight changes to the structure of the cabinet. The root cause of Mongolia's deficiency of governance is political party funding and campaign finance being unknown, not only to the public but also to the regular members of political parties. It is no secret that the individuals and companies that provide political parties with their funding are the ones who order what policy should come from Mongolia's government, while purchasing state seats and positions. Listing political parties by the weighted number of votes they've received and using the public budget to finance political parties that have seats in the parliament will actually have fewer costs for Mongolians and be less expensive compared to the funds that are currently being lost to corruption. This is the first step. If the first step is made, it will be easier to truly separate the legislative and executive branches (which has been talked about for many years without any action) and ensure the transition from "double deel" to "single deel" policy in government. If they start wearing single deels, the current corruption, the biggest roadblock in our way forward, will be considerably reduced. Another step is to prioritize private companies in the selection of companies working on many big projects that have been agreed upon with Russia and China. If a state-owned company is to be involved, it should be explicitly stated that they should be made share-holding companies beforehand.

The biggest weakness of Mongolia's public governance is that government institutions are not capable of strengthening as an institution and producing efficient performance results. The shortcut to making those institutions stronger and more professional is to seek assistance from our "third neighbors". Our ministries and agencies should strongly establish their structure using international standards, while laws should be made so that the structure cannot be changed so frequently. Also, it ought to be ensured that ministries and agencies align their operations in the most efficient way. Otherwise, we will never overcome this governance deficiency. Countries such as Indonesia, Malaysia, South Korea, and Singapore have significantly increased the efficiency of their governance using the same approach. Mongolia needs laws that define the scope of work for the role of a minister. The ministers need to be technocrats who have foreign language skills, proper education and knowledge. If the huge projects agreed upon with our two neighbors start before these measures are taken, the current conflicts of interest will only deepen and it will become more difficult to resolve them. Ultimately, it will negatively affect our relations with China and Russia.

Trans. by B.AMAR

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Business

Nikken Sekkei to showcase $12 billion worth of projects at Cityscape Dubai

September 14 (Nikken Sekkei) Japanese architect to design projects in Dubai and Saudi Arabia; creative boundaries pushed with innovative, culturally aesthetic building developments
Leading Japanese architect Nikken Sekkei, will showcase projects from, amongst others, United Arab Emirates, Saudi Arabia, Russia, and Mongolia at this year's Cityscape Global exhibition, taking place 21-23 September 2014 at the Dubai International Convention & Exhibition Centre (DICEC).

Ulaanbaatar, capital city of Mongolia, will be transformed when designs created by Nikken are completed. The Mongol Tower and WOO City developments, both to be unveiled during the exhibition, will symbolise a modern day Mongolia and reflect the burgeoning economic prosperity.

Located in the downtown area of the city, the design of the tower has been created to give the impression of rising from the ground and melting into the sky because of the ratio of glass to concrete on the exterior; which increases gradually on higher floors. WOO City will mark Mongolia's first world-class resort benefiting the country's tourism industry and overall economy.

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China, Mongolia and Russia jointly strengthen cross-border animal disease control

5 September 2014 (FAO) - As Transboundary Animal Diseases (TADs) increasingly threaten global public and animal health, coordination between countries and regions has become essential. China, Mongolia and the Russian Federation have been cooperating to control TADs since FAO implemented the project 'Cross Border Trade and TADs Risk Reduction with a special focus on foot-and-mouth disease (FMD)' in 2011. The aim of the project is to strengthen relationships and trust among the three countries by sharing information on cross-border animal movement, TADs and emerging infectious diseases via annual international workshops.

In 2011, 2012 and 2013, these meetings were held respectively in Beijing (China), Ulaan Baator (Mongolia) and Vladimir (Russian Federation). In August 2014, the fourth tripartite workshop took place in Erguna, Inner Mongolia, China. Hosted by the Chinese Ministry of Agriculture , organized in conjunction with the Food and Agriculture Organization of the United Nations (FAO) and sponsored by the Asian Development Bank (ADB), the meeting brought together representatives from the governments and veterinary departments of China, Mongolia and the Russian Federation as well as participants from international organizations such as the Swiss Development Cooperation Agency and the World Organisation for Animal Health (OIE) to exchange views on technologies and measures for the prevention and control of infectious animal diseases.

During the meeting, delegates from the three countries discussed the developments of avian influenza (AI), FMD, brucellosis, African Swine fever (ASF) and other TADs and zoonotic diseases. On a field trip to the Erguna wetlands and to an area where China, Mongolia and the Russian Federation intersect, participants visited local animal monitoring points, veterinary stations and ports of entry and exit in Liangxi and Heishantou. They also met local veterinary staff responsible for vaccination, disease investigation and periodic conduct of national surveillance activities. The trip enabled participants from all three countries to become familiar with local production systems and aware of the processes at border posts and in livestock production sites.

On their return, the delegates drafted recommendations for the future, including the need to formalize arrangements and the management structure amongst collaborating partners. They agreed to collaborate on two joint epidemiological projects and recommended establishing information-sharing mechanisms for protocols, diagnostic materials, virus isolates, molecular characterization, vaccine efficacy and effectiveness of prevention and control measures for all target diseases. Participants also proposed a more direct exchange of information in project areas as well as joint training, study tours and technical exchange among laboratory and field staff. The potential for bilateral regional cooperation between the Russian Federation and China would also facilitate joint surveillance in border areas and mutual recognition of specified disease-free zones.

Overall, this fourth tripartite meeting enabled China, Mongolia and the Russian Federation to plan enhanced joint prevention and control mechanisms. Pending funding, the three countries agreed to collaborate on two joint project proposals to further develop surveillance in the area over the next two years. FAO stresses the need to continue these meetings which encourage communication and collaboration in the region. By promoting regional networking, FAO, the international community and the countries concerned will be able to strengthen the prevention and control of TADs in the region together and safeguard public and animal health security effectively.

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UASI: Inspectors will be periodically reshuffled

September 14 (UB Post) The following is an interview with the Head of the Ulaanbaatar Specialized Inspection Agency (USIA) L.Erdenechuluun about the USIA's operations and other important matters.

You've been working as the Head of the USIA for some time. During this time, what sorts of changes have you made?

I was appointed to this position four months ago. I've accomplished many things during this period. Our agency carries high responsibilities and is a big family, consisting of over 570 staff, officials and 16 district branches. We not only work to provide healthy and safe environment with good quality products and services for the public but also prioritize on becoming an ethical role model.

For starters, we made some small changes in the structure and management and established a Monitoring and Evaluation Department in accordance with the Mongolian Government Resolution No.311. The USIA demands entities and organizations to establish internal audits but the USIA didn't have its own unit for managing and monitoring operations. We established this department. I made several reforms for management issues.

Seeing that staff members and officials are civil servants, I ensured that everyone wore formal wear and identification cards around their neck, documented their names and addresses, and placed state official's oaths and nine values, as well as the USIA's logo at each office and room.

The main brain of an organization is the office. It has to have adequate management and regulation. Therefore, I reformed board meetings, council and meeting procedures, and issued some organizational alterations.

Newly appointed directors recruit new staff and replace or dismiss old members to build their own team. What sorts of arrangements did you make?

Team building is forming a responsible, reliable, competitive and competent team, and operating based on team management.  Instead of forming a team with external non-staff members, I prefer utilizing internal resources. Government work depends greatly on individuals. Reengineering system needs to be introduced [to Mongolia] for developing human resource policy and requirements even further. We're making plans for this.

What was the USIA's condition when you first received your job?

It's important to resolve working conditions and social issues prior to demanding work results from staff and officials. The agency didn't have sufficient amount of computers, technical equipment and workplaces. Some 170 employees out of 570 employees didn't have their own computer or desk. When an inspector went out for an inspection, another would use their computer.

Firstly, every room in the office was refurnished. An organization's work achievement is defined by individual development approaches. Unless you provide adequate working conditions, people will not work. Lashing out at employees and demanding results is not be productive. I'm not a person who only speaks about money to develop an organization. Some directors say that work doesn't progress without money. More than money, if there's will and motivation, we can accomplish any work together. Before getting funds, a competent management and team should be formulated. I think that our agency was able to make a good start in this area.

There are many suspicions about the USIA inspectors, regarding bribery and corruption. Have you witnessed such occurrences?

Truthfully, I don't have any firsthand information or evidence of these suspicions. I can't completely deny the existence of these actions. We receive many complaints from the public, entities and organizations that the USIA only inspects at their own convenience, views and orders. This type of discussion is spread widely within society.

In the sense that some organizations such as the Independent Authority Against Corruption operate independently from the USIA, these organizations extend their powers and set high salaries. Similarly, I think that the USIA should increase its powers and increase employee wages. Along with this, accountability system will become stricter.

Although organizations claim to be open to the public about their work, some actually aren't transparent at all. How does the USIA focus on this area?

For ensuring transparency and open system about our operations to the public, we report about issues discussed at board meetings and irregular meeting, and its procedures via the press. We disclose information about inspections, detected violations and measures taken every week through press conferences. We also renewed our website and made all of our decisions and orders open to the public. Since especially money related issues arise many suspicions, we keep our financial documents and daily works open and accessible. Inspection outcomes used to be discussed privately but now the board meeting minutes are disclosed to the media. We started exchanging practices by holding online meetings.

Additionally, district inspection agencies are working efficiently. At the moment, heads of district inspection agencies have the same authority as department heads. I'm planning to give them more power and authority starting early 2015. People will get the capacity to work efficiently if they have authority and power. I assume work quality of both the district branches and the USIA will improve if salary and financial operations of branches in nine districts are transferred to their respective branch.

Recently, we evaluated our first half year work and encouraged branch heads. The Specialized Inspection Agency (SIA) is generous with its rewards. If one can do their work, they must receive what they deserve. This also affects people's productivity. From the first half work assessment, while some people detected violations and sent recommendations, some people didn't conduct a single inspection or issue a decree and still received salary. I made this information transparent and currently discussing accountability. If someone is getting paid by the state, they should do consistent amount of work.

Lately, there've been many accidents at construction sites. People are criticizing the SIA for not inspecting this issue. What is the USIA doing to resolve this?

Many construction related issues are coming up during this time of development and infrastructure construction. Rather than after [accident] measures, the USIA is taking precautionary, consultation and assistance measures at the construction sector. For example, since my appointment, I had the General Agency for Specialized Inspection sort out school bus issues, organized onsite training for construction workers under the subject "As a worker, you have the right to be provided with favorable working conditions", and gave professional and technical advices. Currently, 1,635 workers of 82 entities of the construction sector received training.

The USIA doesn't work for 24 hours a day, like emergency services and the police. When an accident happens at night, we have to work immediately after getting a notice. For this, we recently established an emergency team.  This team will work for 24 to 48 hours. We organized and scheduled state inspectors into this team. Everything, including who and how things will be handled when a notice is given, is determined and clear. Inspectors will provide services on call.

I made some reforms in the auto car park of the agency. Every car of the USIA was repaired, given license plates and included in the license restriction. Especially since we started receiving more complaints and inspection work, the agency is low on cars. I submitted requests and proposals to associate organization about this matter.

How are operations progressing in general?

The USIA does scheduled and non-scheduled inspection at 28 areas within the capital city. Inspections must be truthful, practical and efficient. State inspectors have to stimulate inspection work, take measures to eliminate conflicts and give warnings, precautions and information about inspections to the public. The USIA reshuffled its employees just recently. Employees of the SIA should be reshuffled every three years. We completed the reshuffling of inspectors working in one place or a district for a long time. This will not hinder inspection works and resolve the issues of inspecting an acquaintance's entity.

The USIA aims to conduct inspections truthfully and efficiently, and provide residents with quick, efficient and transparent services. We're keeping stable cooperation with the media about these issues.

Source: http://mongolnews.mn/1aml

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Ulaanbaatar

'Street' project replaces congested traffic circle with 4-way intersection

By M. Zoljargal

September 14 (UB Post) New intersection doubles number of drivers passing per hour

The traffic circle at Akhui Uilchiglee intersection in the 3rd microdistrict reopened as a four-way intersection on Thursday to reduce constant traffic congestion. The intersection was built for 4.5 billion MNT.

Drivers had to drive around the traffic circle without being able to directly cross the intersection before. Bus and trolleybus drivers found it particularly problematic.

"The previous circle was congested all the time and saw many traffic accidents. I am sure that the intersection's congestion will decline remarkably now, especially in the morning and evening, when business hours start and end," said a driver who was waiting for a light to change at the new intersection.

Two heating pipes under the intersection were relocated and replaced, while a 220 meter water pipe was given a protective layer. A 1,200 meter water drainage system was built at the intersection, and overhead trolleybus wires and streetlights were replaced.

In total, 28,318 square meters were hard-paved, and greenery was planted along 5,547 square meters. Sidewalks and pedestrian spaces now cover 7,565 square meters.

The intersection wasn't entirely closed during its construction, as work took place mostly at night to avoid inconveniences for drivers and residents.

"Now, more than 500 cars pass through the intersection per hour, while the number was 200 per hour when the traffic circle was not upgraded," says Colonel B.Batbold, Chief of the Bayangol District Traffic Police Division.

One last project left for the intersection is to relocate the memorial to the late L.Enebish, a prominent state and social figure, which was located inside the traffic circle.

"We are grateful to L.Enebish's grandson E.Munkh-Ochir who approved the demolition of the park for the upgrade project. The memorial park will reopen in another location very soon," explained Naranbulag Khan's administrators.

New modern kiosk introduced

The "Street" project launched a new model of Eco TUT street kiosks at "Love Garden" at the Western Central Intersection on Thursday.

The kiosk has a bio-toilet for its salespeople, electric heating and a modern design to contribute to upgrading of the city's image.

Street kiosks located in the city center will all be replaced with the new Eco TUT model. Vendors and kiosk owners can have professional companies build the kiosks or build it themselves, as long as they meet all safety and design standards.

The Ministry of Economic Development is coordinating the "Street" project with financing from Development Bank.

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Diplomacy

Mongolian President Addresses Russian and Chinese Heads

By B. Khuder/B. Amarsaikhan

Ulaanbaatar, September 12 (MONTSAME) The meeting has run in Dushanbe, Tajikistan, between the President of Mongolia Ts.Elbegdorj, the President of Russia V.Putin and the Chairman of China Xi Jinping.

This unique in terms of content and format meeting took place during the 14th Summit of the Council of Heads of the Shanghai Cooperation Organization (SCO) Member States which kicked off Thursday in Dushanbe.

Mr Elbegdorj thanked his counterparts for meeting with him and for their recent visits to Mongolia. He underlined that these visits were well-timed and fruitful actions having a great historical importance.

"Our trilateral meeting is taking place to discuss the high level Ulaanbaatar Dialogue that aims to expand the trilateral win-win cooperation," the leader of Mongolia said and presented reasons why this Dialogue should be run in our capital. "Firstly, Mongolia considers a development of friendly relations with its two neighbours as a priority of its foreign policy. There are some vital issues that can be tackled by the three countries, infrastructure and transit transportation including. Secondly, Mongolia is the only country in the world to border China and Russia in terms of geography, which means that it can reach seaports through territories of its neighbours only. Thirdly, Mongolia considers itself as the most reliable and shortest transit and infrastructure junction through which Russia can access Asia from Europe and China can access Europe from Asia," he said.

Based on these factors, he went on, principles of the trilateral Dialogue come: It would be hosted every three years in the capital of Mongolia; It would be open for public and would  satisfy common principles of the trilateral cooperation, it would consider and decide the trilateral matters, especially regarding transit transportation, infrastructure and the regional issues.

He noted that had delivered these proposal to Mr Xi Jinping and Mr Putin during their recent visits to our country, and said that at this meeting he would like to consider and to reach decisions on three matters: to discuss the above principles and to reach a united position on them; to intensify a process of "General intergovernmental agreement between Mongolia, Russia and China on Railroad Transit Transport", which was discussed to be settled in the near future, and to organize three working groups' meeting within 2014 in Ulaanbaatar, the same meeting can be held on research into building "Western Pipeline of Gas" through Mongolian territory; to get supports from China and Russia in Mongolia's seeking a membership in APEC during its upcoming Summit to be held in Beijing this November. As for the UB Dialogue, a meeting of three vice-ministers of foreign affairs may be organized annually, firstly in Ulaanbaatar within 2014, he said.

He ended his speech believing that "our beneficial cooperation will contribute significantly to not only the three countries' but also to the regional development".

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Related:

Speech by President Ts.Elbegdorj at First Formal Trilateral Meeting between Heads of State of Mongolia, Russia and China – InfoMongolia, September 12

First Mongolia-Russia-China trilateral meeting held during SCO SummitUB Post, September 14

 

Speech by President Vladimir Putin at First Formal Trilateral Meeting between Heads of Mongolia, Russia and China

September 12 (infomongolia.com) On September 11, 2014, following the President of the People's Republic of China Xi Jinping's statement, the President of the Russian Federation Vladimir Vladimirovich Putin has also delivered a speech on Mongolia's proposal on hosting "Ulaanbaatar Meeting" during the first trilateral meeting between Mongolia, Russia and China held in Dushanbe, Tajikistan.

In his speech President V.V.Putin said, "Mr. President, we are grateful for your initiative to meet in this format, and I am sure the President of the People's Republic of China will confirm this.

We have recently visited Mongolia with great success. My visit was timed to the 75th anniversary of the Battle of Khalkhiin Gol. I would like to note in this connection that Russia and China bore the brunt of the attack from both Nazi Germany and militarist Japan. The events of those years are close to our hearts, despite the fact that they occurred over 70 years ago. Mongolia actively helped the Soviet Union during the Great Patriotic War and we will always remember that.

Next year we will be marking 70 years of Victory in the Great Patriotic War. I already had the pleasure of inviting the Presidents of the People's Republic of China and Mongolia to visit Moscow during these gala events. I would like to confirm my invitation.

Naturally, the geographic proximity of Mongolia, Russia and China help us implement beneficial long-term projects in infrastructure, energy and mining. We have things to discuss and we find it important, feasible and useful to establish a regular dialogue.

I would also like to thank Tajikistan for giving us the opportunity to meet in this format today.

First of all, let me speak a few words about the international situation. We all strive to strengthen stability in Central and Northeast Asia. We should consider the form of the three-party meeting. Also, Mr. President Xi Jinping suggested some solutions and in this regard the meeting between the heads of state of the three countries can be organized during the SCO Summit, which is regularly hosted in one of the SCO member-states' cities. The next Summit is scheduled in Ufa city of the Russian Federation in July 2015.

I think it is a quite feasible solution to co-organize three-party meeting at Deputy Foreign Minister-level proposed by President of Mongolia. The implementation of this initiative also raises the tripartite meeting's value and we need to develop the organizational issue at Foreign Ministries-level.

Also, our future perspective of joint cooperation is considered on organizing joint works based on modernization of the UBTZ (Ulaanbaatar Railways JSC) and its parts stretched on Russian and Chinese territories. We are also acknowledged about Silk Road Project and it can be tied up with other Russian projects. Moreover, the Steppe Road exists.

It is possible to transmit power lines through the territory of Mongolia, if the Chinese and Mongolian sides are interested. We can collaborate in the projects of environment protection, health care, agricultural and environmental spheres and our affiliated ministries and organs are suggesting to conduct a narrow studies on these matters, after which, it might be decided based on economic benefits and other calculations.

Our three-party meeting is a symbol of auspicious being organized during the SCO Summit. We, all member-states of the SCO, believe that our Mongolian friends would make its decision to become a full member of the Shanghai Cooperation Organization.

Thank you".

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President of China Proposes China-Mongolia-Russia Economic Corridor

By B. Khuder

Ulaanbaatar, September 12 (MONTSAME) At the meeting with Mongolian and Russian Presidents, the Chairman of People's Republic of China Mr Xi Jinping has proposed to construct an economic corridor linking China, Mongolia and Russia.

Mr Xi put forward the proposal on Thursday during the 14th Summit of the Shanghai Cooperation Organization (SCO). Highlighting that the development strategies of the three neighboring countries are highly compatible, Mr Xi noted that both Russia and Mongolia have positively responded to China's vision on building an economic belt along the Silk Road.

The Silk Road Economic Belt initiative, proposed by Xi during his visit to Central Asia last year, eyes a revival of the ancient trade route linking China with Central Asia and Europe.

The three countries, Mr Xi pointed out, can dovetail the Silk Road Economic Belt initiative with Russia's transcontinental rail plan and Mongolia's Prairie Road program, and jointly build a China-Mongolia-Russia economic corridor.

On building the corridor, Mr Xi called on the three sides to strengthen traffic interconnectivity, facilitate cargo clearance and transportation, and study the feasibility of building a transnational power grid.

As part of the initiative, Mr Xi also suggested that the three countries beef up cooperation in such areas as tourism, think tank, media, environmental protection, and disaster prevention and relief.

The three countries should deepen cooperation within the framework of the SCO, jointly safeguard regional security, and achieve common development, said the Chinese leader.

On international cooperation, Xi noted that the three countries need to jointly safeguard the basic norms governing international relations, advocate the new security concept of mutual trust, mutual benefit, equality and collaboration, and jointly promote the political resolution of international disputes and hot issues.

China supports Mongolia's participation in regional affairs, said Xi, inviting Mongolia to participate in the activities China and Russia plan to hold next year to commemorate the 70th anniversary of the victories of the World Anti-Fascist War and the Chinese People's War of Resistance against Japanese Aggression, as well as the 70th anniversary of the founding of the United Nations.

Noting that the three countries are good neighbors and partners, Mr Xi said the trilateral summit is of great significance to deepening mutual trust, promoting win-win cooperation among the three parties, and pushing forward regional cooperation in Northeast Asia.

He also voiced the belief that the trilateral summit will lay a firm foundation for the development of a closer trilateral relationship.

For his part, Putin said the three countries should enhance exchanges, dialogue and coordination.

China's Silk Road Economic Belt initiative offers important opportunities for trilateral cooperation, the Russian president said, calling on the three sides to combine their development plans and establish a long-term and stable cooperative relationship in the areas of energy, mining and transportation infrastructure construction.

He also called on the three nations, all champions of multipolarization, to make joint efforts in safeguarding regional security and stability.

Meanwhile, the Mongolian president said his country attaches strategic importance to developing closer good-neighborly friendship and cooperation with China and Russia.

Noting that Mr Xi's and Putin's recent visits to Mongolia have advanced Mongolia's ties with China and Russia, Mr Elbegdorj said his country is willing to enhance cooperation with the two countries, especially in the fields of transportation infrastructure interconnectivity and cross-border transportation.

Mongolia is keen on strengthening cooperation with such mechanisms as the Asia-Pacific Economic Cooperation, and participating in regional affairs, said Mr Elbegdorj.

During the meeting, the three leaders also decided to establish a consultation mechanism at the vice foreign ministerial level to coordinate and promote trilateral cooperation.

They also agreed to hold more trilateral summits in the future if need be.

Link to article

Related:

Video: Xi proposes to build China-Mongolia-Russia economic corridor – CCTV, September

Speech by President Xi Jinping at First Formal Trilateral Meeting between Heads of State of Mongolia, Russia and China – InfoMongolia, September 12

 

Russia and China express support for Mongolia to join APEC

September 12 (news.mn) The first meeting between Mongolia, Russia and China's current leaders was held in Dushanbe, Tajikistan, on September 11th.

This is the first-ever meeting between the current leaders of the three neighboring countries.

President of Mongolia Ts.Elbegdorj proposed holding the three-party meeting between Mongolia, Russia and China, in May.

This year is described as a pleasant year for relations between three neighboring countries. In the last six months, foreign relations between the three countries have been given a new, specific outlook. President Ts.Elbegdorj opened the meeting saying, "Today, we have arrived here to talk about holding a high level Ulaanbaatar Dialogue between Mongolia, Russia and China, with aims to expand mutually beneficial three-party cooperation." President Ts.Elbegdorj explained the factors of his proposal to initiate the Ulaanbaatar Dialogue.

President Ts.Elbegdorj proposed the principles for Ulaanbaatar Dialogue: to hold it in Ulaanbaatar every three years; make the dialogue open to public; be consistent with the common principles of bilateral relations between the three countries; discuss and resolve questions raised by all sides, in particular, transit transport running through the territory of the three countries; and regional and infrastructure issues.

President Ts.Elbegdorj also suggested an agreement on the following issues with his two counterparts in Dushanbe.

The suggested proposals are a move to reach a decision on Mongolia's proposal for the Ulaanbaatar Dialogue to intensify progress in the implementation of an  intergovernmental agreement on railway transit transport between Mongolia, China and Russia, which was signed during recent visits to Mongolia by China's President Xi Jingping and Russian President Vladimir Putin, and to hold a task force meeting between the three parties to study opportunities to lay natural gas pipelines through Mongolia's territory, in Ulaanbaatar this year.

President Ts.Elbegdorj also asked for support from the two neighbors for Mongolia to join APEC, during a summit in Beijing in November, and proposed conducting a ministerial meeting for foreign affairs ministers every two years in preparation for the Ulaanbaatar Dialogue.

China's President Xi Jinping and Russian President Putin expressed gratitude for the initiation of the three-party meeting. China's President Xi Jinping emphasized that bilateral cooperation between the three countries has convened and said, "a good start is half of success."  Russian President Vladimir Putin appreciated Mongolia's proposal. Mongolia, Russia and China's leaders agreed to move from bilateral economic relations towards trilateral cooperation. Russia and China also expressed support for Mongolia to join APEC.

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Why Russia, China, & Mongolia Are Boosting Trilateral Ties

Vladimir Putin invited Xi Jinping and Tsakhiagiin Elbegdorj to Russia for their first trilateral meeting next year.

By Ankit Panda

September 13 (The Diplomat) On Thursday, Russian President Vladimir Putin called for Russia, China and Mongolia to increase trilateral contacts and cooperate on joint projects in infrastructure, mining, and energy. According to a report by ITAR-TASS, Russia's state news agency, Putin said that trilateral cooperation between these countries made sense given their geographic closeness.

The remarks were made at a meeting on the sidelines of the Shanghai Cooperation Organization's (SCO) summit in Dushanbe. Both Chinese President Xi Jinping and Mongolian President Tsakhiagiin Elbegdorj were in attendance.

Specifically, Putin said: "The natural geographic proximity of Mongolia, Russia and China makes it possible for us to implement good long-term projects in infrastructure, the power sector and the mining industry. We have what to discuss with each other. Naturally, we deem it important, expedient and useful to start a permanent dialogue."

Additionally, the report notes that Putin acknowledged Mongolia's historical friendship towards both the People's Republic of China and the Soviet Union. Putin noted that while China and Russia suffered at the hands of "German fascism and militaristic Japan," Mongolia was an active partner during the Second World War. "Russia remembers it," Putin noted, adding that "Even though the events of those days took place 70 years ago, they are very close to us today."

The origin of the idea for a Russia-China-Mongolia trilateral can be traced back to an August 2014 bilateral meeting between Xi and Elbegdorj in Mongolia when the Mongolian leader made the proposal. Beijing wasted no time in voicing support for the Mongolian initiative. The two countries eventually included the idea for a trilateral with Russia in a joint declaration signed during Xi's visit to Mongolia.

Now, with Putin's acquiescence, there should be little standing in the way of trilateral cooperation between these three countries. Putin has invited Xi and Elbegdorj to visit Russia for the 70th anniversary of Russia's victory in the Second World War next year.

For Mongolia, this trilateral initiative meshes well with Elbegdorj's focus on becoming an activist country in global diplomacy. Until now, Mongolia has failed to deepen its cooperation with Russia despite making major inroads elsewhere in the world. In 2013 alone, it signed 63 bilateral agreements, including with the United States, European Union, China, and Japan. It did not manage to sign any new agreements with Russia, its neighbor to the north.

Increasing cooperation with China and Russia, particularly in the areas of infrastructure, mining, and energy, can only help Mongolia and help it continue to become a more visible player in Asian diplomacy.

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Head of Constitutional Court of Mongolia to visit Russia

By N. Khaliun

Ulaanbaatar, September 12 (MONTSAME) At invitation of the Chairman of the Constitutional Court of Russian Federation V.Zorkin, a delegation led by Mr.J.Amarsanaa, the Head of the Constitutional Court of Mongolia, will pay an official visit to Moscow September 15-20.

The delegation will hold official meeting with Mr Zorkin to exchange views on expanding of the cooperation and relations between the Constitutional Courts, meet with members of the Constitutional Court in order to share views on the judicial activity, a contribution and experience in a formation of the constitutional rights, on tendencies and development of national and international laws. They also plan a business meeting with the chairman of the Russian Supreme Court Vyacheslav Lebedev.  

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Memorial dedicated to victory of Khalkh Gol battles erected in Moscow

September 12 (news.mn) A tank memorial built on the 75th anniversary of the victory of the Battles at Khalkh Gol was erected in Moscow, on September 10th, with special support from Konstantin Kuksin, director of the Museum of Nomadic Culture in Eastern Moscow and Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation Sh.Altangerel, as well as other officials and well-wishers.

The event kicked off with opening remarks from Konstantin Kuksin and Sh.Altangerel, member of the State Duma of the Russian Federation Sergei Mironov, and other Russian government officials.
After the ribbon cutting, Mongolian and Russian national flags were raised and their anthems were played.

At the event, Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation Sh.Altangerel presented a memorial medal for the 75th anniversary of the victory of the Battles at Khalkh Gol to Sergei Mironov and a member of the Federal Assembly of the Russian Federation, Bayar Jamsuev.

The Т-26 tank memorial is the first monument for the victory of the Khalkh gol battles in Moscow, and one of the largest projects launched in the scope of the 75th anniversary of the historical victory by Mongolian and Soviet soldiers.

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Monument Built in Memory of Khalkh River Battles VictoryMontsame, September 12

 

MONTSAME and KCNA to Exchange News and Information

September 12 (infomongolia.com) On September 12, 2014, Chief of Staff of the Office of the President of Mongolia P.Tsagaan received a delegation of the Korean Central News Agency of the Democratic People's Republic of Korea (DPRK) led by Director General Kim Chang Gwang.

Mr. Kim Chang Gwang is visiting Mongolia at the invitation of the MONTSAME news agency. Ambassador Extraordinary and Plenipotentiary of the DPRK to Mongolia Hong Gyu, Director of MONTSAME news agency A.Baatarkhuyag and other officials were present at the meeting.

At the meeting Mr. Kim Chang Gwang noted with satisfaction the successful development of bilateral diplomatic relations between the two countries and emphasized that the visit of President of Mongolia Ts.Elbegdorj to the DPRK in 2013 played an important role in bringing the mutual relations to a new stage of development. Mr. Kim Chang Gwang underlined the importance of the role of mass media organizations in enhancing mutual relations and informed that the Korean Central News Agency and MONTSAME signed agreement on sharing news and information.

Then delegation led by Mr. Kim Chang Gwang visited the Citizen's Chamber (Citizen Hall) at the Government Palace, initiated by President Ts.Elbegdorj. Guests got acquainted with the activities of the Citizen's Chamber, which is established in 2009, to receive, consider and incorporate citizens' suggestions and concerns with respect to the policies and decisions of the President of Mongolia and State institutions, and when necessary, to help facilitate the consensus building among the social  groups, factions, and political forces.

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MONTSAME to Intensify Ties with N.Korean News AgencyMontsame, September 12

 

Mongolian Peace-Promoting Training Center Joins NATO Network

By B. Amarsaikhan

Ulaanbaatar, September 12 (MONTSAME) The Peace Promoting Training Center (PPTC) at the 311ty unit of Mongolian Armed Forces has joined the NATO network of Education and Training Centers.

This happened in accordance with a decision of the organization's Wales Summit on this August 21, reported the Politics and Security Committee of the organization on Thursday. Mongolia has become the 23rd country to join the PPTC. 

These training centers hold various types of military and professional trainings, seminars and conferences, as well as field and command-staff exercises for military officers to attend NATO based the UN actions. This year's candidates for the network besides the PPTC included School of Special Operations of the USA and Language Course in Marshall Center, and PPTC of Mongolia won the membership to the network. A total of 39 military officials have participated in the trainings from NATO as of this August. 

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Social, Environmental and Other

Digital science library opens at National University of Mongolia

September 12 (news.mn) A foundation stone laying ceremony for a digital science library at National University of Mongolia was held today. Minister for Education and Science L.Gamtumur and President of National University of Mongolia A.Galtbayar were present at the ceremony.

Building the e-library will provide opportunities for students to display exhibitions, new book release events, scientific study events, and conduct research projects with partnerships with a variety of academic disciplines.

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Mogi: King Epic Palace?

Minister underlines importance of preserving folk storytelling at King Epic Palace opening

September 14 (UB Post) Minister of Culture Ts.Oyungerel underlined the importance of traditional story telling at the launch ceremony of King Epic Palace, which took place in Bogdkhaan Palace Museum on Thursday.

"King Epic Palace will help to preserve the traditions and promote folklores. The opening of this palace is a big contribution to the implementation of the government action plan on the development of Mongolian epics' Arts," said Minister Ts.Oyungerel, during the opening.

"I asked from storytellers what I need to do to establish an epics palace, during a meeting in provinces. They said, 'We need a Mongolian ger. From an ancient time, traditional storytellers told stories in gers. An apartment doesn't suit storytelling.' The blueprint was made a year ago. Bogdkhaan Palace Museum took responsible for musical instruments."

The opening event of the palace was co-organized by the Department of Cultural Heritage at the Ministry of Culture, Sports and Tourism, the Center for Cultural Heritage and administration of Bogdkhaan Palace Museum.

The officials said that more than 50 million MNT was spent on King Epic Palace's decorations and to purchase musical instruments.

Minister Ts.Oyungerel, head of the Department of Cultural Heritage at the Ministry of Culture, Sports and Tourism Ts.Tsendsuren, director of the Center for Cultural Heritage G.Enkhbat, and traditional storytellers, throat singers and administrators of art organizations took part in the event.

State morinkhuur player Ts.Tserendorj recited a traditional blessing poem at the opening ceremony and played morinkhuur.

"Preparation work to establish King Epic Palace started a year ago. Folk storytellers and tsuur (Mongolian traditional instrumental) players have prepared for six years… Mongolian epics is a tradition of tale telling about protecting the mother earth, the ways of living in harmony with nature, patriotism, families and nation's historic pride, and of better upbringing of the younger generations," said Minister Ts.Oyungerel.

Officials noted that audio and video records and manuscripts related to Mongolian epics will be collected at the palace.

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No money left for Mongolia's poor

Despite an economic boom, lack of forward planning means many of the country's most vulnerable families are struggling.

By Philippa H Stewart

Ulaanbaatar, Mongolia, September 10 (Al Jazeera) - Inside her home on the outskirts of Mongolia's capital, Altanzul Tsend-Atush (Mogi: Tsend-Ayush I'm sure) sits surrounded by her children and other children from neighbouring gers.

Of Ulaanbaatar's 1.3 million residents, about 800,000 of them live in ger districts scattered throughout the capital. The mix of the traditional nomadic structures, also known as yurts in Russian, and more permanent dwellings give the areas a disjointed feeling. None of the structures, no matter how permanent, have running water and many of the residents are living in poverty.

It is a far cry from the gers' cultural beginnings as mobile homes used by herdsmen as they roamed through Mongolia's steppes with their animals. In recent years, the landlocked nation has become less associated with a nomadic lifestyle and more with mineral-rich mines and a booming economy.

But Altanzul does not think much of the often-touted headlines on Mongolia having, up until recently, one of the fastest growing economies in the world.

"We didn't see any of that money," the mother of six told Al Jazeera. "We see a big gap with the way the poor live and the way the rich live - I worry that the children will not have enough food and clothes for the winter."

Altanzul's husband died of cirrhosis - a not uncommon illness in a country notorious for its alcohol consumption. He had been too sick to work for some time, and with no palliative care available, he had been staying at home in the ger along with his wife and six children who are aged 3-17.

"All our hopes are now on our eldest daughter to get a job," said Altanzul. "She wanted to go to college after school and I think she is embarrassed about having to work - but this is the only way, her brothers and sisters need to eat."

Families in Mongolia receive around $11 a month from the government for each child - not enough to cover food bills in a country suffering from rising prices and currency depreciation. It means families like Altanzul's are living a hand-to-mouth existence, unable to save or make any provision for the future. 

This is symptomatic of a wider problem with Mongolia's attitude towards its sudden prosperity, economist Batsuuri Haltar told Al Jazeera.

"We don't have confidence in ourselves, we don't have any vision," Haltar said.

"Because we don't have confidence in our future, we want to sell everything off and run away. It's like if you believe there is no tomorrow then what are you going to do with all the things you have? It doesn't matter what kind of debt we are going to accumulate. As long as we can live today, there is no tomorrow."

Digging hole for the economy

Mongolia's economy, which suffered heavy losses following the disintegration of the Soviet Union in the early 1990s, has had to deal with many blows in the past decades, including natural disasters that killed large amounts of livestock in 2000 and 2009.

In 2011, however, Mongolia was heralded as having the fastest growing economy in the world with a GDP increase of 17.3 percent (Mogi: 17.5%), or about $13.38bn, due to the mining of its mineral-rich land - primarily coal, copper and gold.

According to the World Bank, this figure fell to 11.7 percent in 2012 (Mogi: 12.4%) and again in 2013 to 10 percent (Mogi: 11.7%). The mining industry makes up about 30 percent of the country's GDP.

"Industrial manufacturing is only 5-8 percent [of GDP] when it used to be 35 percent," Haltar said. "The economy is structured in a very fragile way and it is easy to collapse. We depend on mining and we abandoned the traditional ways of life and the traditional economy."

"No one is really thinking about [the mineral wealth running out]. They think that we are sitting on unlimited resources. With such an industry there is no such thing as an unlimited resource. We have to start investing in other sectors of the economy, especially those areas with increasing returns.

"There were talks about establishing a mining fund. They should do it now otherwise it is going to be too late."

Government's mea culpa

The government is among the first to admit fault when it comes to how the influx of mineral wealth was handled.

The vice minister of economic development, Chuluunbat Ochirbat, told Al Jazeera that mistakes had been made following the financial boom.

"[These are] true comments and remarks," Ochirbat said when asked about a World Bank report criticising the government's financial policy.

"We have learnt a good lesson. We didn't spend the money in a positive way or properly. Before 2012 we collected money into a human development fund that was designed as a welfare fund, but just prior to the election we spent all the money in the fund."

As the welfare fund ran dry, and families began to struggle to survive, Mongolia's government looked to foreign investment to try to boost the economy once more. Ochirbat told Al Jazeera that approval of a new law would make foreign investment easier. The government also plans to approve oil and gas exploration in the country as a way of making financial gains.

Ochirbat said the welfare fund had been spent too quickly because the country's rich were given as much as the poor.

"If only the poor part of society had benefitted from the fund, that could have been good, but everybody - even the very wealthy got the money. We should now introduce fund management guidelines and a special law to ensure fair distribution of GDP."

The impact of this mismanagement on Mongolia's poorest communities is plain to see.

Often parents must choose between looking after their children and earning enough to make sure they can provide them with a future.

Chantasaldulam Vaanjil, who lives at one of the highest points in an eastern ger district, overlooking the towers and smoke of Ulaanbaatar, works 12- or 14-hour days as a cleaner in a private hospital for $191 a month.

It means her two daughters, aged 5 and 6, are often left to their own devices, or in the care of relatives who live in a nearby ger.

"I worry about them all the time," Chantasaldulam told Al Jazeera. "They are only at school for three hours a day and I come home very late - they are by themselves too much, but I don't want them to have the life I had.

"I have to work so I can send them to college and so they can make life better for themselves. We do feel jealous sometimes when we see the richer people but we just have to work and hope it will be better for our children."

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Snapshot of Higher Education Market: Mongolia

August 28 (ICEF Monitor) Bordered by Russia to the north, and China everywhere else, Mongolia is a landlocked country nearly twice the size of Eastern Europe. With a population estimated at just over three million (Mogi: just less than 3 million), Mongolia is the least populous nation in the world. About half of its people (Mogi: a bit less than half), however, are based in the capital of Ulaanbaatar.

Mongolia is increasingly on the radar for international recruiters as an emerging market in the region, fueled both by strong economic growth and by the aspirations of its people. Today ICEF Monitor takes a closer look at Mongolia, its history, its future, and its education market.

Mongolia 101

The country came under Soviet influence and was effectively established as a Soviet satellite state in 1924. Following the collapse of the Soviet Union, Mongolia reconstituted itself under a democratic, multi-party system in the early 1990s and began a transition to a market economy.

And what a transition it has been: Mongolia has possessed one of the fastest-growing economies in the world in recent years, thanks mainly to its burgeoning mining sector. But earlier forecasts that the country's GDP growth would reach 15% in 2014 have not materialised. First-half growth for the year is way off that earlier projection, and growth has unquestionably slowed in 2014.

"Mongolia's economy expanded 5.3% in the first-half of 2014, the weakest pace since 2010," reports Bloomberg. "As recently as 2011, Mongolia grew at a world-beating 17.5%, before slowing to 12.4% in 2012 and further to 11.7% last year. The currency, the tugrik, slumped 16% in the past year to a record low of 1,897.73 on August 14 and inflation jumped to 14.9% as of the end of July."

However, even the previous years of high growth and an estimated mineral wealth of up to US$1.3 trillion never translated into economic gains for the entire population. The World Bank estimates that about 25% of Mongolians live under the poverty line. Thanks to government investment, access to education has improved in the last two decades, and policymakers hope wider access will eventually relieve poverty.

High demand for education but low levels of spending

During its years under Soviet influence, the schooling from primary level through university was free for all students in Mongolia. The dissolution of the Soviet Union meant financial support for education disappeared, sending education systems into a steep decline that bottomed out in the early 1990s.

In 1994, the average length of time spent in school by Mongolian students was 7.7 years, but by 2010 that span had increased to 14.3 years. During roughly the same period, the number of students going on to tertiary education increased by six times. Development Progress, a UK-based research group, reports, "Almost three in five Mongolian youths now enroll in university – a rate comparable to the average for high-income countries." These shifts saw Mongolia improve from the lowest school life expectancy in Central Asia to second, just behind Kazakhstan.

School life expectancy, Mongolia and Central Asia transition economies, 1989-2011. Source: UNESCO Institute for Statistics

Disparities in access to secondary education between urban areas and less prosperous rural areas have diminished over the past decade, and tertiary enrolment rates for women reached a level almost 10% higher than those for men. In fact, female participation in tertiary education is now greater than the average for OECD countries.

Mongolians value education highly and demand for secondary and post-secondary education in the country is strong. But while overall school enrolment rates are high, per-student public expenditure on tertiary education is about US$339, in contrast to an average of US$11,512 per student in OECD countries. Low levels of public spending on education has led to an expansion of private-sector higher education institutions and, the World Bank reports, the "mass admission of fee-paying students for financial sustainability."

These low levels of spending are reflected in staff qualifications and corresponding levels of research activity, as well as a lack of resources to attract highly qualified instructors or to upgrade teaching and learning facilities. "Only 23% of faculty members in public institutions and 15% in private institutions have PhDs, reflecting the non-research nature of higher education," says the World Bank. A full professor in a public university may make as little as US$300 a month. Instructors at private institutions often make more, but not substantially so.

Despite these challenges, the Mongolian government says it is committed to achieving the UN Millennium Development Goals (MDGs) by 2015. One ongoing programme designed to help this happen is the Rural Education and Development (READ) Project, launched in 2006. The project's goal is to improve learning conditions for rural students by increasing the amount of books, computers, and qualified teachers.

The country's communication systems are expanding too. The government has tackled problems caused by inadequate infrastructure, with the result that by 2013, mobile services were reaching 2.5 million subscribers at a 92% penetration rate. These days most Mongolian youth use social media websites such as Facebook and Twitter, and mobile phone usage is growing, even in rural areas.

The education system today

The 2013/14 Global Competitiveness Index offers a set of figures concerning Mongolian higher education. Ranked alongside 148 other countries, Mongolia scores:

·         43rd in gross tertiary enrolment;

·         68th in quality of math and science education;

·         73rd in extent of staff training;

·         83rd in Internet access in schools;

·         136th in quality of management of schools;

·         137th in overall quality of the education system.

Students entering the Mongolian tertiary sector have a choice of 178 colleges, universities, and teacher training colleges, of which 42 are public. These schools are administered by the Ministry of Education, Culture, and Science (Mogi: Ministry of Education and Science since 2012), which sets policy and oversees standards.

As of 2013/14, Mongolian colleges and universities enrolled a total of 174,075 students, the vast majority of which were studying in the capital city of Ulaanbaatar. In total, 18,063 of those students were in Masters programmes, while 3,304 were working toward PhDs. Technical and vocational schools, conversely, have seen student numbers decline recently with a combined enrolment of 42,800 in 2013/14, down from 45,200 during 2010/11.

Education-employment mismatch

While university enrolments are high, the country's higher education graduates are not sufficiently competitive in international markets. The number of graduates surpasses the available employment opportunities, and because demand for skills in the mining-dominated economy is not matched by supply, graduates of Mongolian universities face difficulties finding employment. A World Bank study from 2010 showed that only a third of university graduates found jobs, compared with two thirds of technical and vocational graduates.

A 2011 UNESCO analysis seems to confirm the World Bank's conclusions, suggesting that Mongolian curriculum is not well aligned with modern education standards. In addition, concerns abound regarding whether degrees bestowed by Mongolian higher education institutions meet global standards.

The Mongolian government is aware of such problems, though, and has announced plans to realign its education system toward the country's market economy. Minister of Education and Science Luvsannyam Gantumur told the European Times earlier this year that the government wishes to "partner with local and international companies concerning creating internships for our students to allow them to gain practical experience in different fields."

The Minister added, "We want to foster a new generation of Mongolian youth who make the most of their individual talents and get involved in research, business and other activities which will support the country's on-going development. We believe that foreign companies in Mongolia can play an important role in this effort."

There are indeed indications that foreign influence on Mongolian education has increased during Minister Gantumur's watch. In October 2013, for example, a model classroom incorporating Japanese-style technical education opened at the Institute of Engineering and Technology in Ulaanbaatar, using curriculum from Tomakomai National College of Technology in Hokkaido, and hosting two Japanese professors from the Tokyo Metropolitan College of Industrial Technology.

Another example of Mongolia's international outreach is the Mongolia-Germany Institute of Technology, established in 2012 through a memorandum of understanding with the German Agency for International Cooperation (GIZ).

Such agreements may increase, as Minister Gantumur has said that the government seeks international partnerships in the education sector, but at the moment only about 500 Mongolians study in foreign-affiliated universities or colleges.

International mobility trends

English language proficiency among Mongolian students is growing, and the number of students who are both financially and academically capable of studying abroad is projected to increase in coming years. As in the higher education sector, there has been an expansion of private-sector language schools in Mongolia in recent years. However, the level of training available does not match up well with industry requirements.

The major subject areas in demand within Mongolia, as estimated by the Economic Research Institute (ERI) and the National University of Mongolia, are:

·         Business administration (22.7%);

·         Marketing management (15.6%);

·         Accounting (12.1%);

·         Finance and economics (11.9%);

·         Computer science (7.2%).

In other words, the vast majority of Mongolian higher education students are interested in studying business.

Interestingly, Education USA reports that in terms of Mongolian students in the US, "Top fields of study include engineering, technology, natural sciences, teaching and agriculture. The Mongolian government has indicated an interest in providing financial support for study in these areas."

UNESCO estimates that there were just under 10,000 Mongolian students enrolled in higher education abroad in 2012. Leading destinations include South Korea, Russia, the US, Japan, and Turkey.

Leading study abroad destinations for Mongolian students, 2012. Source: UNESCO Institute for Statistics

The Mongolian government offers two scholarship programmes for studies abroad, both of which rely heavily on the Times Higher Education (THE) University Ranking. The Presidential Scholarship programme for undergraduate students provides for full tuition and living expenses for students accepted to top 20 ranked institutions in the THE tables, regardless of specialisation. Students accepted to the top 21-100 THE-ranked institutions, meanwhile, may also receive financial support under the programme for studies in areas identified as priorities by the Mongolian government. Education USA indicates that current priority areas include environmental sciences, physics, mathematics and chemistry.

The government also offers a State Education Fund to support graduate studies abroad. It provides full tuition and living expenses for students accepted to study in priority areas at the top 100 THE-ranked institutions. Students accepted to all other THE-ranked institutions may receive loans up to a maximum of US$16,000 towards eligible expenses.

Looking ahead

With 21% of the population aged 15 to 24 years, almost universal literacy, high enrolment in tertiary education, and growing access to communication technology, Mongolia's international education market appears poised for growth in the years ahead. But government policy and national economics will have to continue to combine in a positive way for that growth to be sustained.

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Interactive Species Map of Mongolia

(National Red List)

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NSW women knit for Mongolia

September 10, Forster, NSW, Australia (Great Lakes Advocate) THE sounds of knitting needles click clacking came from Great Lakes Library recently as just over 30 women gathered for the Wrap with Love initiative. 

The project was held at Great Lakes Library by the Forster Library Knit and Knatter group and aims to provide warmth for people in other countries battling the harsh elements of the cold. 

The project relies purely on the generosity of people who are willing to knit woollen squares for those most in need.  Organiser Pauline Howes said existing group members and about 10 new ladies joined in on the day.

"The ladies knit the squares and then they are put together to create a blanket. It just works really well," she said. 

"We've taken 80 blankets down to Sydney this year to be sent off which is about 8,000 volunteer hours and 34,000 blankets have been sent from NSW this year." 

The handmade creations will be sent to villages in Mongolia this year, Ms Howes said.  

Local resident Meryln Bolin knows firsthand just how much the blankets benefit people in other countries. 

"My cousin has been teaching in Mongolia for about six months now and he recently sent me an email to say how thrilled the children were with the blankets," she said. 

"I think it's lovely. It's nice for the ladies here to know that the blankets are getting there and are being utilised." 

Two dedicated customers who have asked for anonymity have been very busily knitting children's book character tea cosies which were auctioned off on the day to raise funds to support the library. 

The Knit and Knatter group meets on the last Friday of every month at the library. Anyone is welcome to come along and join in. For more information phone the library on 6591 7256. 

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UNICEF Mongolia: Fathers' cooking healthy meals for their kids

September 10 (UNICEF Mongolia Blog) Erdenebat, 26 years old, is bent over a stove, carefully stirring the micronutrient enriched thickened rice soup that he has cooked from scratch. After he finishes cooking, Erdenebat turns to the five other fathers in the room and tells them about the nutritional value of the dish. 

Erdenebat is attending a child feeding training session at Tarialan Village Health Center in rural Khuvsgul, northern Mongolia, to learn how to better feed his seven month old daughter.  Erdenebat's wife is a math teacher at the local high school, so he is the primary carer of their daughter. 

"I have learnt to cook good, nutritious food for my child.  It also tastes good," Erdenebat says. "At the training we do not just listen to the trainer, but actually get to cook the meals ourselves. It makes it easier to cook at home later." 

"It is good because my daughter will eat food that has been cooked especially for her.  It is better for her than eating what the rest of the family eats," he adds. 

Lkhagvadorj, 33, is also the primary carer for his three children aged 10 years, six years and seven months.  He has participated in the training.  "I mostly cook for my youngest child," says Lkhagvadorj.  "She is eating solid foods two to three times a day.  She really likes the meals I cook for her – potato stew, liver stew and thickened rice soup. She is healthy, happy and a normal weight."

Why target fathers

The UNICEF supported nutrition training began in late November 2013.  Initially the program focused on training mothers, but staff noticed that a lot of fathers were visiting the health clinic with their children. 

"We conducted a survey and found out that almost 20 percent of children we were targeting were being cared for by their fathers," says Doctor Dr Gerelmaa, who runs the clinic.  "So we started training the fathers as well". 

So far, five training sessions, targeting fathers have been run, reaching over 50 fathers and some grandfathers.

At the training fathers are shown how to cook food appropriate for children over six months.  They then learn to cook the food themselves and how to enrich it with extra nutrients.  Once they have mastered a dish, they explain it to the others in the training, and start learning another one.

"Nutrition for toddlers is very important," says UNICEF Mongolia Nutrition Officer Munkhjargal Luvsanjamba. "It is important for children under two to receive a number and variety of nutritious meals every day for their physical and mental development. Training sessions like these are helping Mongolian children grow and develop to their full potential," she says.

The program continues

The program is such a success that the local government is providing funding for it to continue.  This is largely thanks to the fathers. They convinced local authorities to fund the project by sharing their stories and the impact it has had on their families. 

And the news of the training is spreading.  Already health center staff from Tarialan have travelled throughout Khuvgsul demonstrating the trainings and sharing the results.

"We have a plan to expand this training to parents in remote areas," says Tarialan health center worker Erdenechimeg. 

The author

Byambaragchaa Magvandorj, Senior Programme Assistant and Knowledge Management at UNICEF Mongolia. 

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Mongolia welcomes back newly crowned world wrestling champion

By M. Zoljargal

September 14 (UB Post) The Mongolian national team of female freestyle wrestlers arrived at Chinggis Khaan International Airport on Saturday night after competing at the World Wrestling Championships in Tashkent, Uzbekistan.

O.Amartuvshin, vice president of the Mongolian Wrestling Federation (MWF), G.Usukhbayar, vice president of Aldar Sports Committee and Ts.Khosbayar, State Honored Athlete, as well as families and friends of the team welcomed the athletes.

Upon arrival, the newly crowned world champion, S.Tserenchimed, said, "I'm happy that I won the world championship title with four victories, but at the same time, I feel like I have a lot more responsibilities now. My intensive training in Japan prior to the World Championships helped me adapt to managing overloads and trained me for showing everything I have. I will keep trying my best in the future."

Both women's and men's national teams of Mongolia ranked sixth in the championships. It was the men's team's first time making the top six out of 60 countries in the past 27 years, while the women's team ranked sixth out of 46 countries.

"Our team of female wrestlers showed promising achievements in the World Championships this year. A Mongolian wrestler was crowned champion for the first time in four years and State Honored Athlete O.Burmaa won her third World Championships medal," said a MWF spokesperson.

The athletes brought two medals from the championships for the first time since 1985.

The Japanese women's team topped the rank with 55 points, while the Russian team ranked second with 48 points, followed by the United States team with 41 points.

Both teams of Mongolia qualified to the 2015 World Wrestling Championships.

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Around the World: I rode on horseback from Mongolia to Hungary

September 11 (ABC Melbourne Radio) The seed for adventure was planted in Tim Cope when, as a boy, he would go exploring in the snow in Gippsland. 

Remote and isolated locations around the world, travels by bicycle, foot and horse would follow and turn Tim's passion for adventure and discovery into a career. 

On Around the World Tim Cope opens up about his adventuring life; it's beginnings, it's challenges and it's life changing impact.

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CENTRAL MONGOLIA IN PHOTOS: ANCIENT CAPITALS AND THUNDERING WATERFALLS

By Tiffany Wüest

This post is also available in: German

September 11 (World Meets Girl, Blog by Tiffany Wüest) After spending a few days attending the Naadam Festival and going on a tour into the silence of the Gobi Desert, my next adventure in Mongolia took me to the last truly wild horses in the world, to Karakorum, the ancient capital of the Mongol Empire and the incredible Orkhon Valley.

Hustai National Park

Hustai National Park, which gets its name from the birch trees in the surrounding forests, was once the hunting ground for Mongolia's last ruler, Bogd Khaan, and later politicians came to the area for the same purpose. But since the park has never been used for farming, nor has it ever been settled, it was the perfect place for the creation of a national park in 1998. While all across Asia these landscapes are being destroyed for agriculture and housing, the Mongolians have always put a lot of effort into environmental protection and therefore, visitors can find a truly undisturbed steppe ecosystem only 100 kilometers outside of Ulaanbaatar in Hustai National Park.

It is also the place, where the almost extinct Takhi have been reintroduced to their native habitat. The Takhi are also known as Przewalski Horses and were named after the Russian colonel and explorer, who first described them after an expedition to Mongolia during the 1800s. Contrary to some other horses living in the wild, for example the American Mustangs, the Przewalski Horses aren't the descendants of domesticated and then escaped animals, but remain the only truly wild horses in the world.

Over 300 Takhi now roam the Hustai National Park and the Mongolian scientists have high hopes of expanding their population into other parts of Central Asia. It was amazing to see these stocky horses with the short tails and manes and the trip to this park was actually one of the highlights of my several weeks in Mongolia.

Karakorum and Erdene Zuu

During the rule of Genghis Khan and his successor Ögedei Khan in the 13th century, Karakorum was the capital of the Mongol Empire, the largest land empire in history. Once nothing more than an a small ger camp in the Orkhon Valley, the city soon started serving as a base for invasions and subsequently became one of the most important sites in the world. Apparently, a gigantic tree made of silver rose from the middle of the courtyard and expanded its branches into all directions and on the very top sat a trumpet, with which the Khan would call for more drinks. Today, almost nothing is left of the once glorious city. The decline was fast to come and Karakorum was soon after its rise to glory destroyed by the Ming Dynasty's troops.

After its decay, it was debated for quite a while, where the long lost capital was actually supposed to be located and after excavations started in the 1930s, a lot of what was once part of the city had disappeared long ago. Stones from the ancient capital were used in the construction of the Erdene Zuu Monastery, the oldest surviving Buddhist monastery in Mongolia, which is located right next to the excavation site and has come to represent the ancient glory of Mongolia. Apart from several impressive buildings, the monastery is also surrounded by a wall of over a hundred stupas. Inside the monastery's courtyard, you can find big stone turtles, that are believed to have been ancient Karakorum's most famous emblems. There is also a museum detailing the Mongol Empire's conquests and the history of Karakorum right next door - not only can you learn a lot, but the museum also has great WIFI (an absolute rarity in Mongolia's countryside)

And the Rest of the Orkhon Valley

The Orkhon Valley wasn't only the seat of power in the Mongolian steppes and a center of trade and religion, but apart from housing Khans and capitals, has always had great significance for Mongolians as a lifeline in an otherwise dry area. The grasslands along the Orkhon River offer great conditions for settlement and the nomads here hold on to their traditional lifestyle to this day, grazing and watering their livestock in the valley. One of the most impressive natural wonders to see in Orkhon Valley is Ulaan Tsutgala – the Orkhon Waterfall. Created long ago by a volcanic eruption, the water of the Orkhon River now thunders down the 20 meter high waterfall into an almost perfectly circular basin and the adjoining gorge. The waterfall is by far the most impressive thing I have seen in all of Mongolia – truly beautiful.

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Other by Tiffany Wüest:

SOUTHERN MONGOLIA. OR: KEEP FOLLOWING THE SILENCE AND DON'T FORGET TO CIRCLE THE OVOO, September 7

10 INCREDIBLE NAADAM MOMENTS THAT MADE ME FALL IN LOVE WITH MONGOLIA ALL OVER AGAIN, September 5

A GLIMPSE INTO THE LIFE OF MONGOLIA'S NOMADS, September 4

WHAT TO EXPECT (AND HOW NOT TO DIE) WHEN ATTENDING THE MONGOLIAN NAADAM FESTIVAL, August 27

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