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Bataar
Mogi: not actually a Tyrannosaurus Rex, but Tyrannosaurus Bataar, the smaller Asian "cousin" of it. But this is a nice account of how it went down from a legal perspective from a law journal.
T. Rex suit takes Texas lawyer to NYC and Mongolia
May 22 (ABA Journal) A victory in civil and criminal litigation over the New York City auction of a smuggled Tyrannosaurus Rex skeleton last year hasn't just earned legal fees for Texas attorney Robert Painter.
It's taken him to Mongolia, where evidence was collected in the Gobi desert, and from his Houston law office to a Dallas judge's home, on a Saturday morning, where Painter filed an emergency civil suit and obtained an ex parte temporary restraining order, he tells the ABA Journal. The company conducting the auction was based there, so the Texas court had jurisdiction.
"To me, that was the hardest part of the whole case, getting a judge on the weekend," said Painter, explaining that he'd been put in touch by friends of the judge after he reached out to contacts in Dallas.
Texas law provides for judges to accept filings and permits ex parte TROs, Painter said. But a bond requirement had to be finessed, because the court clerk's office wouldn't be open to accept it until Monday. The judge went ahead and issued the order banning the auction, based on Painter's promise to put up the bond on the next business day.
The TRO still had to be served on the auction company, on Sunday, in the few hours remaining before the sale was conducted, which would not have been allowed in Texas. But New York law permitted Sunday service, so Painter transmitted a copy to a process server there and had him serve the TRO on auction company officials in the Big Apple.
Although the auction company initially went ahead and sold the smuggled Mongolian fossil for a little over $1 million, in spite of the TRO, the tide soon began to turn. Painter had also gone to New York himself and attended the May 2012 auction with a professional photographer, publicly objected to the sale and then videotaped it as it proceeded.
This helped spark extensive news coverage, which resulted in two phone calls as Painter was returning to Texas, expecting to seek a contempt order, he recounts. The first was from the buyer, who said he no longer wanted any part of the transaction and would cooperate fully. The second was from the U.S. Attorney's office in Manhattan, which offered its help in seeking the forfeiture of the Tyrannosaurus skeleton.
Gladly allowing the feds to take the lead, Painter continued in the case from that point forward as a coordinator working to provide the laws, evidence and experts needed by the prosecutors on behalf of his client, the Mongolian government.
At one point, when it turned out that an individual suspected of smuggling the skeleton to the U.S. was staying in the same hotel as a team of experts brought in to inspect it, during the forfeiture proceeding, someone snapped a photo of the suspect. When the photo was taken to Mongolia, someone there recognized him and provided additional photos of the suspect digging for dinosaurs in the Gobi desert, Painter says.
There was a ceremony in New York earlier this month, at which his client thanked the U.S. Attorney's office for its work, as a U.S. Immigration and Customs Enforcement press release details.
Meanwhile, Painter was awarded Mongolia's top civilian honor, the Order of the Polar Star, for his help getting the massive, 70-million-year-old fossil returned to its home country, reports the Houston Chronicle.
In an email to the newspaper, Painter said it was a great honor to receive the award from Mongolia's president for his work on a fascinating case.
"Just a year ago, we started out to stop the sale of one smuggled Tyrannosaurus skeleton," he wrote. "We ended up uncovering the largest dinosaur smuggling ring ever discovered, and have helped to return over 30 significant dinosaur fossils to the people of Mongolia."
The skeleton is being returned to Mongolia, where it will soon be displayed in a museum--along with legal documents in the case, including the TRO, Painter tells the ABA Journal.
"As a lawyer, it's gratifying not only to help a wonderful group of people, the Mongolians, but also to see that we could do a little bit to spread the word about our wonderful judicial system:"
Exhibits from Lenin Museum stolen
May 22 (news.mn) The State Investigation Department is investigating the theft of a case of exhibitions and a registration book from the Lenin Museum.
Suspects have been called in for questioning, including 26 people who were working for the museum during the time the incident occurred. It was revealed that a manuscript, a 10x4 applique by prominent artist Urjin, a bust and numerous rare exhibitions were stolen.
The State Investigation Department requested the missing exhibitions and registration book from the Office of the Mongolian People's Party (MPP) but the Office failed to give a reply and did not produce the required documents nor give a comment.
The Government made the decision to transform the Lenin Museum into a centre housing prehistoric fossils in order to showcase the country"s rich fossil heritage.
But the ownership of the Lenin Museum is the subject of a controversial debate. The museum was built on the Ministry of Culture`s orders with the state budget in 1974-1980.
MPP, which has owned the museum for decades, claims that it is the official owner of the museum but the Ministry of Culture, Sport and Tourism insists the museum be transferred back to the ownership of the State and original owner.
The trial for the controversial debate on the ownership of the museum has been postponed several times and is currently scheduled to happen on June 20th.
Modun Resources sees significant upgrade in Nuurst coal quality in Mongolia
May 23 (Proactive Investors) Modun Resources (ASX:MOU) has found that coal briquettes created from coal from its Nuurst coal in Mongolia could be upgraded to the benchmark Newcastle thermal coal energy level.
The testwork saw an increase in calorific value achieved to 5,648 kcal/kg from a 4,178 kcal/kg for the raw coal sample.
The improvements in coal quality were achieved via a cost effective beneficiation process, the improvements ensure a far more efficient burning coal.
Mongolian government
Modun is also in discussions with the Mongolian Government to develop a low cost, high energy and low emission coal to help improve the air quality in Ulaanbaatar.
Modun has also had several discussions with the Mineral Resources Authority of Mongolia over the last few weeks as part of the approval process for the mining licence which Modun expects to receive afer the completion of the administrative process.
The Nuurst thermal coal Project is located in central Mongolia on a 34.5 square kilometre licence area. In November 2012, Modun announced a 478 million tonne JORC reported Coal Resource at Nuurst. It is located 120 kilometres south of Mongolia's capital Ulaanbaatar and just six kilometres from existing rail infrastructure which links directly into China.
Kincora Copper's Mongolian assets appeal to broker ResCap, rates Speculative Buy
May 23 (Proactive Investors) Kincora Copper's (CVE:KCC) prospects in the world class Oyu Tolgoi copper belt in south east Mongolia make in it an appealing exploration play, according to broker ResCap.
Kincora is the sole owner of the Bronze Fox, Northern Fox and Tourmaline Hill copper-gold licences in Oyu Tolgoi.
The licences cover a total area of 60,000 hectares, of which the flagship Bronze Fox's licence area covers over 22,000 hectares and has approximately 100 drill holes completed to date.
Exploration work is ongoing and the company screens well on the basis of relative valuation, strategy to add value at the project level while remaining funded into 2014, and the recently adopted remuneration policy for directors, said ResCap.
Investment in copper exploration and development into Mongolia from both major mining companies and investors has continued despite changes of government and recent mining legislation.
Four separate financings have been completed in the junior copper exploration space over the past six months underlining that the country remains a high priority global copper destination, said the broker.
Turquoise Hill, the separately listed Rio Tinto subsidiary that is developing the huge Oyu Tolgoi mine, is the barometer for Mongolian copper equities and has rallied 50% since its recent lows of mid-April.
On Kincora, ResCap said: "With a significant mineralised system confirmed, prospective for an economic copper porphyry ore body(s) and smaller scale oxide development potential, Kincora is an appealing advanced exploration play offering an attractive risk reward scenario skewed to the upside in our opinion."
At a current market capitalisation of C$8m, ResCap rates Kincora as a speculative buy.
Mogi: younger sister of MP Ganbaatar
Oyu Tolgoi loses its appeal against Gantuya
May 23 (news.mn) S.Gantuya has won a court battle against Oyu Tolgoi LLC with a claim of unfair dismissal for the second time on May 22nd.
The Capital City Court determined the dismissal of the staff as being reasonless and ordered the company to pay the unfairly dismissed staff compensation for the time since she was fired and to her hire back to her previous position.
S.Gantuya commented that "when I take my position back I will fight the Trade Union of Oyu Tolgoi LLC which works only for the Administrative Board and make them work for ordinary workers.
I shall be paid compensation for the period since I was dismissed according to the Court decision. I will donate 100 percent of the money to build a kindergarten in my hometown to help children develop personally and academically."
Mogi: waited 2 days for this to be reported in English to no avail, so apologies for the shortness
Final Reading of New Securities Market Law Postponed for a Week
May 23 (Cover Mongolia) A State Great Khural press release dating May 22, states that the final reading of the new Securities Market and accompanying laws was postponed in Standing Committee on Economy upon the request of Finance Minister Ulaan, stating that such an important needs further research.
Majority committee members supported the postponement. Originally it was scheduled/expected that the final passing was expected today or Thursday.
Link to press release (in Mongolian)
NatSec Daily MSE Update: Top 20 +0.79%, Turnover ₮45.9 Million
May 22 (National Securities) Mongolian TOP20 index ended higher on today. Out of 30 companies traded at cost of MNT 45.9 million, share prices of 14 were increased and that of 8 were low.
Shares of Shivee Ovoo (SHV), Mongoliin Hugjil Undesnii Negdel (HAM), and Khot Development (SDT) were the top advancers, gaining 15.00%, 15.00%, and 14.99%, respectively. Stocks of Mongol Shevro (MVO) and Berkh Uul (BEU) were other B board stock movers, rising more than 13%. On the other hand, Zoos Goyol (ZOO), Mongol Savkhi (UYN) and Baganuur (BAN) were the top decliners on MSE, ending down 2.26%-10.35%.
Please click here to see the detailed news
De Facto: Limping Economy, the Need to Develop Capital Markets
May 22 (Jargalsaikhan Dambadarjaa via UB Post) --
Q: – When will loan rates of Mongolian banks get reduced from double digit to a single digit?
A: – When our economy stands on both of its legs rather than just one of them.
The engine of economy is fueled by money. To be more specific, it is the free flow of money that feeds the economy. However, due to a missing fuel tank, our economy has constantly been running out of fuel and failing to operate normally.
Due its hiking price, we have been having shortages of money for years, which means not having enough fuel for the economy. Annual interest rates of loans provided by our commercial banks are not going below 24 percent.
The two fuel tanks of economy are capital and money markets. Combined, they are called 'financial market'. The capital market tank provides fuel for long term use while the money market tank offers money to be used only in short term (up to a year). Mongolia only has one of the two tanks – the money market. That is why our economy limps and is forced to be supported by a cane. The cane, in our case, is the foreign loans we acquire to contribute to the public budget.
In a healthy economy, surplus capital in one part is collected, split into packages and lent with certain conditions to the other part that needs the money. This intermediary role is fulfilled by the financial market.
Why cannot we create and utilize the tank that provides Mongolia with long-term capital? How can we develop the financial market and inject long-term capital into our economy?
The part where there is a lack of capital
Mongolia needs an enormous amount of capital for its development. Almost 50-60 billion USD is required to transform ger districts in Ulaanbaatar into apartment blocks, construct water pipelines allowing the supply of running cold and hot water, supply electricity, improve city lighting and connect the new buildings that are being constructed to the existing infrastructure.
The past years showed us that our banks cannot fund long-term investments because their source is short-term. Furthermore, those banks provide loans only when there is enough collateral. It makes it impossible for the hundreds of thousands of people who do not own enough property for loan collateral to start a new business. Therefore, those people are now supporting their livelihood by their daily income from buying and selling common goods only.
For example, the airlines industry cannot develop if there are no planes. The Mongolian Airlines (MIAT) has recently welcomed a brand new plane, which is the first one in its history. They made it happen by borrowing money that had been raised by selling the bonds issued by the Development Bank. This move has added more loan pressure on the MIAT, especially during this time where the so-called national company MIAT is not privatized and those who claim to represent the public properties have been stealing quite a lot from this company that it has almost led to bankruptcy.
If MIAT had been a shareholding company, the representatives of the true shareholders in its Board of Representatives would have never allowed anyone to have an opportunity to steal. On the contrary, they would have raised the money for the new plane from international capital markets instead of acquiring a loan.
Since the government is reliable and responsible for the payback of large projects that need long-term capital such as road and power plant, a public-private partnership (PPP) can be carried out and the first round funding can be provided by investment funds.
Mongolian private companies need to attract investment in order to expand their businesses. Also, there are many transparent, socially responsible and professionally managed companies that wish to raise money for funding from the domestic capital market.
The part where there is a surplus of capital
The biggest accumulation of capital in our society is social insurance and pension funds that altogether deduct almost 10 percent of everyone's salary. Certain parts of these funds are used for long-term investments to develop infrastructure.
However, we can no longer see any report that tells us how much capital the Mongolian pension fund has and where it is today. Mongolians now do not know how much money they have in their accounts. A total of 800 billion MNT is collected by the pension fund a year, but they spend it all on the provision of pension. Therefore, capital accumulation is currently out of the question.
Many international experiences show that a large amount of capital can be accumulated and grown further through the capital market by establishing private pension funds and employers raising a good volume of capital in accordance with the capital contributed by their employees. Despite not being a legal entity, XacBank, Golomt Bank and Wagner Asia Company are running a pension accumulation account in Mongolia.
Although the Government of Mongolia established more than 30 specialized funds at its ministries and they claim that the total accumulated capital has been put into a special account of the state fund, no reports on revenue and expenditure are available to the public.
It is said that the most savings in commercial banks are owned by only a handful of people. If this kind of money has more income than commercial bank rates, it goes to the capital market very quickly.
Connecting bridge
There is a surplus of capital on one side of the river and a lack of capital on the other side. However, the financial soft infrastructure that can connect the two has not been formed in Mongolia yet. Therefore, our financial market development is not progressing from its initial stage.
Many governments have believed in managing commercial banks through the central bank, developing the money market and implementing the budget policy in good alignment with them. However, this attempt of theirs to go on the heavy gear is not helping the loan rates to be reduced or the shortage of money to cease.
Is the government not aware of the existence of a great amount of capital if utilized correctly? Or, are they not paying enough attention to it? We need to collect this capital, reallocate into the parts of economy that need it, establish the necessary institutions, create the relevant soft infrastructure and, particularly, pass the new securities law.
Mongolian laws are passed in order to control, restrict or wipe out anyone who came up with an initiative rather than focusing on developing specific industries or sectors. The new securities serves a similar purpose. The investment fund law must be passed along with the securities law.
Mogi: yesterday Foreign Minister Bold, one of the founding shareholders of Bodi Group and Golomt Bank, took it to social media to voice his concern over Golomt Bank management and published a letter he sent to BoM Governor Zoljargal. Here's his letter in Mongolian. Golomt Bank followed suit with 2 press releases. First being from shareholder employees stating its disappointment in Bold, and the other below:
Golomt Bank: Bank Activities are Sound, Bank Management & Bodi Group Shareholder Dispute Are Separate Issues
May 24 (Cover Mongolia) Golomt Bank statement released yesterday stated it denies the accusations filed by Foreign Minister Bold, one of the founding shareholders of the bank, accusing him of taking Bodi International, parent company of Golomt, shareholder dispute to attack the management of Golomt Bank.
The statement always claims Bank of Mongolia conducted 1 regular and 3 unscheduled inspections on Golomt Bank this year so far and found the bank to be of sound evaluation.
ORIX Announces Capital Participation in Major Mongolian Financial Group
- First Participation in Financial Services Business in Mongolia -
TOKYO, Japan - May 23, 2013 - ORIX Corporation (TSE: 8591; NYSE: IX), a leading integrated financial services group, today announced that it has reached basic agreement on capital participation via the purchase of approximately 16% of shares in the major Mongolian financial group TenGer Financial Group (hereinafter, "TFG"). Moving forward, ORIX will proceed to obtain the necessary permits in view of investment in June this year.
Established in 2001, TFG is a major financial services holding company offering banking, leasing, insurance and investment banking services mainly in Mongolia. Its main subsidiary Xac Bank is Mongolia's fourth largest commercial bank in terms of assets and has a robust customer base comprised mainly of small and medium sized mining and construction related businesses and individuals. In addition, as further development is expected in the Mongolian financial services market, TFG is expanding its business into an integrated financial group while strengthening its already existing leasing and insurance businesses.
Through this capital participation, ORIX intends to expand into the Mongolian financial services business with TFG as a strategic partner. ORIX will consider expanding into new areas of business such as card loans and Internet banking and use the financial services business knowhow it has cultivated over the years to expand and strengthen TFG's existing businesses. In addition, ORIX will capitalize on TFG's business platform to obtain new investment opportunities and expand its assets within Mongolia.
Growth of Mongolia's mining and agriculture industry is fast pace and with a forecasted average yearly economic growth rate of 20% over the next 5 years, Mongolia boasts one of the world's highest economic growth rates*1.
As one of the few countries in the world with large natural mining resources, the Mongolian government is laying out a policy to use private capital including foreign capital. Moving forward, rapid expansion of mainly primary industry markets is expected as a result of infrastructure development for the transportation of natural resources from mining and agriculture.
Looking ahead, ORIX will continue to promote active investment in Asian markets with the potential for growth.
■Overview of TenGer Finance Group
Company Name
Established Location Representative Business Website |
： TenGer Financial Group： October 2001： Ulaanbaatar City, Mongolia： Bold Magvan, CEO： Diversified financial services： http://tengerfinancialgroup.com/
|
About ORIXORIX Corporation (TSE: 8591; NYSE: IX) is an integrated financial services group based in Tokyo, Japan, providing innovative value-added products and services to both corporate and retail customers. With operations in 28 countries and regions worldwide, ORIX's activities include corporate financial services, such as leases and loans, as well as automobile operations, rental operations, real estate, life insurance, banking and loan servicing. For more details, please visit our website at: http://www.orix.co.jp/grp/en/
Link to original article (in Japanese)
Treasury Bill Auction Held
May 22 (Bank of Mongolia) Regular auction for 12 weeks maturity Government Treasury bill was announced at face value of 30 billion MNT and each unit was worth 1 million MNT. Face value of 30 billion /out of 58.0 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 10.35%.
BoM issues 1-week bills
May 22 (Bank of Mongolia) BoM issues 1 week bills worth MNT 147.6 billion at a weighted interest rate of 11.50 percent per annum /For previous auctions click here/
BoM holds FX auction
May 23 (Bank of Mongolia) On the Foreign Exchange Auction held on May 21st, 2013 the BOM received from local commercial banks bid offers of 35.1 million USD and 102 million CNY and ask offers of 2.4 million USD. BOM has sold 25 million USD as closing rate of 1439.50 and 102 million CNY as closing rate of 233.70.
On May 21st, 2013, The BOM received MNT Swap agreement bid offer of 76 million USD from domestic commercial banks and BOM has accepted all the offers for swap agreement.
EPCRC: MONTHLY MACROECONOMIC OVERVIEW, April 2013
May (Economic Policy and Competitiveness Research Center) --
MAIN INDICATORS: GDP, STATE BUDGET, FOREIGN TRADE, EXCHANGE RATE, INFLATION
Economic growth slowed in the first three-months of 2013. Real GDP grew by 7.2 per cent in year-on-year terms, its lowest rate since the December qtr 2010, driven by a drop in coal prices and moderating Chinese demand for exports in the quarter.
The result compares with a 14.6 per cent expansion for the same period last year and a 12.3 percent annual rate of growth for 2012. In current prices, GDP amounted to MNT 2,894 billion for the
first three months of 2013 and grew by 16.3 per cent in the year to March 2013.
The Mongolian Government's finances have continued to improve, with the budget surplus amounting to MNT 136 billion for the first four months of 2013. Compared to the same period last year revenue increased by 8.4%, whereas expenditure decreased by 4.0%. In the first four months up to April, the total state budget revenue and expenditure amounted to MNT 1,589.4 and MNT 1,453.4 billion, resulting in a budget surplus of MNT 136 billion (USD 59.5 million). Compared to the previous month, the revenue increased by 20.2% whle expenditure increased by 7.2%; this resulted in a monthly budget surplus of MNT 52.4 million.
The foreign trade deficit has reached USD 0.5 billion for the first four months of 2013. The total turnover of foreign trade reached USD 2,953.3 million, showing a decrease of 12.4% compared to the same period last year.
Both exports and imports are down compared to the same period last year, with exports down by 6.2% and imports falling 16.3%. Imports are still much higher than exports, leading to a deficit of USD 528.3 million. However, compared to the previous month exports and imports increased by 33% and 36% respectively. In April there are slightly positive changes in exports of bituminous coal, since it's decrease in revenue was only 39% compared to the same period last year, while in Ìàãñh it was 51%.
The Mongolian Tugrik depreciated against the USD in April. The monthly average MNT exchange rate against the USD is 1,417 showing a slight decline in value. It depreciated against the USD in nominal terms by 0.9% compared to last month and by 7.9% compared to the same period last year. The low level of foreign currency supply due to export drops and the foreign direct investment as well leads to the depreciation of the national currency.
The inflation rate increased slightly to 10.4% in the year to April, back to double-digit figures. Inflation for the month of April was 1.1%, an increase from the 0.8% increase recorded in March. The result was driven by increases in food prices, particularly in meat and meat products (up 6% in the month). The year to date inflation rate was 4.8% which was caused by the increase in food and non-alcoholic beverages (12.6%) and restaurants and hotels (up 6.7%). Inflation in the year to April has also been mostly driven by jumps in rental prices(up 35%), alcoholic beverages and tobacco (up 51%).
FINANCIAL SECTOR: MONEY SUPPLY, DEPOSITS, LOANS
The money supply (M2) decreased by 1.6% in April 2013, to reach MNT 7.2 trillion or USD 5.0 billion. But M2 remains 12.8% higher compared to the same period last year. Currency issued in circulation increased by 10.5% from last month and 7.2% compared to the same period last year reaching MNT 759 billion. Currency issued in circulation amounts to 10.6% of the M2. This ratio has been falling in recent years, down from 14.1% in April 2010.
Monthly deposits fell to MNT 4.7 trillion in April (USD 3.3 billion), down by 3.8% from last month but still 17.9% higher compared to the same period last year. Compared to the previous month deposits in MNT decreased by 0.8%, while deposits in foreign currency fell by 13.3% - this was the biggest decline in foreign currency deposits in two years. Compared to the same period last year, deposits in MNT and foreign currency increased by 23% and 3% respectively.
Non-performing loans increased in value in April, but decreased as a share of total loans. Loans outstanding reached MNT 7,764 billion or USD 5.4 billion. It increased by 5.2% compared to last month and by 31% compared to the same period last year. Non-performing loans increased by 0.6% from last month and decreased by 1.9% from last year. Non-performing loans amount to 4% of the total amount of loans outstanding. The annual interest rate (weighted average) increased by 0.7 percentage points for loans in MNT and 0.8 percentage points for loans in foreign currency from last year reaching 19.1% and 13.2% respectively.
Monthly highlights
<![if !supportLists]>Ø <![endif]>The Bank of Mongolia reduced the policy rate from 12.5 percent by 1.0 percentage point to 11.5 percent.
<![if !supportLists]>Ø <![endif]>"Erdenes Tavan Tolgoi" LLC starts it operations from 22th of April again after it stopped shipments for three months.
<![if !supportLists]>Ø <![endif]>The agricultural exchange began operations on April 5th 2013. In April there were sold 1920 tonnes of cashmere sold, with a value of MNT 123 billion.
<![if !supportLists]>Ø <![endif]>The minimum rate of wages was increased to 36.7% to MNT 192000 which will be implemented from the 1st of September.
Summary
In the first quarter of 2013 real GDP grew by 7.2 per cent in year-on-year terms, its lowest rate since the December quarter 2010. This slower rate of growth was caused by a drop in coal prices and moderating Chinese demand for exports. The central bank has responded to the recent slowing by cutting its policy interest rate by 1.0 percentage points to 11.5 per cent in April. The budget balance remained positive in the first 4 months, but the trade balance remained in deficit driven by a decline in export revenues from coal. However, there was a significant increase in the value of iron ore driven by a relatively high price in the beginning of 2013 after its extreme fall in late 2012. This helped keep export revenues higher than they otherwise would have been. There was a drop in the supply of foreign currency inflows due to the decrease in exports and foreign direct investment, and exacerbated by the depreciation of the national currency. However, the inflationary effect of the depreciation in the exchange rate has been modest because the level of imports remains low.
Looking ahead, the government's successful issue of USD $1.5 billion in "Chinggis bonds" on the international capital market is expected to begin benefiting the Mongolian economy through the issue of short-term loans. These sovereign bond backed loans will be directed towards infrastructure projects and developing emerging export industries such as cashmere. However, these loans risk the emergence of a two-speed economy, whereby infrastructure and some strategic industries are favoured through subsidized loans, while other industries are forced to rely on the standard bank loan rate, currently around 19 per cent. To counter this, the Bank of Mongolia has made MNT 850 billion available for domestic commercial banks to use in helping address the current liquidity problem in the domestic financial market. Commercial banks are expected to allocate the money to all sectors of the economy providing businesses with cheap resources. The banks must repay these loans to the central bank at a rate of 7% a year. These policies are expected to have a stimulatory affect on the Mongolian economy, but it remains to be seen how good the government is at managing the projects and how good the Bank of Mongolia is at investing.
MONGOLIA'S FOREIGN TRADE REVIEW, APRIL 2013
May 23 (Bank of Mongolia) --
Total trade turnover: $2,953 millions
As of April 2013 the total cumulative trade turnover from the beginning of the year fell by 12% (USD 409.0 millions) from that of the previous year and reached USD 2,953.3 millions. The decrease in the trade turnover was due to the decrease in imports by USD 339.8 millions and in exports by USD 69.2 millions.
The annual growth rate declined by 38 percentage points from that of the previous year as a result of the decrease in the growth rate of imports by 50 percentage points and that of exports by 22 percentage points.
The structure of the trade flows with the neighboring trade partners is as following: (i) trade with PRC: 50% or USD 1,464.3 millions and (ii) trade with Russia: 16% or USD 460.3 millions. The trade volume between Mongolia and China decreased by 12% and the trade volume between Mongolia and Russia declined by 28%.
Trade balance: -$528 million
As of April 2013, the cumulative trade balance decreased by 34% (USD 270.6 millions) from that of the previous year and reached USD –528.3 millions. Although during the reporting period the total exports decreased by 5% from that of the previous year the trade balance improved due to the decline in imports by 16% from that of the previous year.
The value of the three-month moving average of the difference of annual growth rates of exports and imports has been decreasing since September 2012 and as of April 2013 it is –10%. Picture 1 shows that the annual growth rates of exports and imports have been declining since October 2011.
Trade balance of paid trade flows: -$368 million
The state of the trade balance of paid trade flows is one of the main variables that determines the pressure on the domestic foreign exchange market.
As of April 2013, the trade balance of paid trade flows decreased by 17% from that of the previous year and reached USD –368 millions. Paid imports during the reporting period declined by 10.4% which means that the rate of the decrease in paid imports is by 4.2 percentage points higher than that of exports.
Terms of trade: 1.491
As of April 2013, terms of trade index (2000 base year) decreased by 7.5% from that of the previous year and reached 1.491. This decrease in the terms of trade is mainly attributed to the increase in import prices of oil products and to the fall in export prices of exporting commodities.
EXPORT
Composition: 91%+ 9%
The share of mineral exports in total exports was 91% of the total export and decreased by 2 points from that of the previous year.
Coal, copper concentrate, iron ore and concentrate and crude oil have a weight of nearly 88% of total export and 80% of mining export.
In addition, these 4 products share in the mining exports decreased by 3.3 points from that of the previous year, share in the total exports decreased by 4.3 points.
Growth: -5.4%
Mongolian export decreased by 5.4% from that of the previous year, which was mainly affected by 7% decrease in mineral exports. Exports of iron ore, concentrate and crude oil increased by 58% and 31%, respectively, which crude oil increased by 31% accounting for almost 7% and 3% in growth of mining export. On the other hand, coal export decreased by nearly 41% and because of this mining export decreased by 19% from the first 4 months of 2012.
Changes
In first 4 months of 2013, Mongolian export decreased by 69.2 million USD from that of the previous year. The decrease in export commodities' prices (USD 127.3 millions) offsets increase of export commodities' quantities (USD 58.1 millions).
Because of the increase in crude oil and non monetary gold quantities total export would've increased by 76 millions USD. However, coal, crude oil, monetary gold's prices, coal, iron ore and spar, leucince, nepheline' quantities decreased in reporting period, so total mining export decreased by 82 millions USD.
Cashmere and cashmere product exports increase in prices equal to decrease in quantities. For other exports, prices and quantities both increased, so total of other export increased by almost 13 millions USD.
World market prices for primary commodities
As of April 30 2013, gold price reached 1,476.7 USD, decreased by 11.3% from that of the previous year and decreased 7.5% from that of the last month.
As of April 30 2013, copper and zinc prices reached 7,021.2 and 1,834.2 USD, decreased by 6.5%, 1.6% from that of the last month, 17.7% and 10.7% from that of the previous year, respectively.
IMPORT
Composition: 29% + 24%
As of first 4 months of 2013, 53% of total imports were oil products and industrial inputs' imports, 15% were consumer goods and food imports, rest 32% were other products' import.
Share of oil products and industrial inputs' imports in total imports increased by 3% from the first 4 months of 2012. This increase affected by oil products' import, which increased by 2 points, and industrial inputs' imports, which increased by 1 points.
Growth: -16%
Mongolian imports decreased by 16% from that of the previous year. Main contributors of this decrease were industrial inputs' decrease, which equal to 3% of the total decrease, and decrease of other products' import, which equal to 8% of the total decrease.
Other products' and industrial inputs' imports decreased by 22% (157 millions USD) and 11% (65 millions USD) respectively, thus total import decreased from that of the previous year.
Changes
Prices and quantities of import goods both decreased by 55.5 and 284.3 millions USD respectively, thus total imports decreased by 339.8 millions USD from that of the previous year.
The primary reason behind the decrease in imports of oil products was a decrease of quantities by 58.0 millions USD, although oil price on the border increased by 4.2 millions USD. The oil price on the border decreased in begin 2012 but in august 2012 increased back again. Since then, the oil price increased slightly, but in 2013, it decreased again. (Figure 6).
69% of decrease in consumer products' import were quantity related causes, 31% were price related causes. At the same time, industrial inputs' imports price increased and quantity decreased, thus industrial inputs' import declined by almost 65.2 millions USD.
Import of the primary consumer products*
As of first 4 months of 2013, growth of primary consumer products' import, which calculated by 3 month moving average method, decreased to –25%. Main reason of this was a decrease in electronics import / Figure 7/.
Annual growth of electronics import has been increased since 2011 but since then it has been dropped and reached –32% in the reporting period.
*In this calculation, among the all consumer products' import, main 48 goods is chosen and used.
BATBAYAR: GOM AIMING TO BRING INFLATION DOWN TO 6 PERCENTILE BY 2014
Ulaanbaatar, May 23 /MONTSAME/ At its meeting, the parliamentary Standing committee on economics discussed a decision on adopting a draft resolution on the 2014 basic guidelines of socio-economic development.
It was introduced by N.Batbayar, the Minister of Economic Development. According to him, the project reflects an aim to keep the inflation rate in six percent by 2014 by ensuring the economic stability. In a scope of this, a policy will be maintained to reduce and then to stabilize this rate. Measures will be also taken to support the products supply, to reduce the import of construction materials and to back the domestic productions.
A majority of the Standing committee considered as necessity to discuss the 2014' basic guidelines at the parliamentary session.
Tax avoidance: Mongolia takes on multinationals
May 23 (BBC Radio) Developing countries are taking action to try to combat tax avoidance by multinational companies.
Zambia and Mongolia have told the BBC they want to stop mining companies shifting profits out of their countries before they can be taxed.
Both are major producers of minerals and say they lose billions of dollars a year in much-needed tax revenue.
However, the Organisation for Economic Co-operation and Development (OECD) has warned this could be dangerous.
The Paris-based developed nations' club thinks unilateral action by individual countries could lead to a confused, fragmented set of rules with no clear standards.
The speaker of the Mongolian Parliament, Mr Z. Enkhbold, told the BBC that Mongolia is cancelling international tax treaties which mining companies had intended to use to take profits from their Mongolian operations tax free.
"Tax must be paid where the real business is located," Mr Enkhbold told the BBC, "not in offshore countries".
Real impact
A new law in Zambia, which comes into force this month, requires mining companies to bring the proceeds of export sales back to Zambia. Once in Zambia, the country's tax authorities will scrutinise dividends and other payments to see if they are justified before they leave the country.
Guy Scott, Zambia's Vice-President, told the BBC that his government is losing roughly $2bn a year through corporate tax avoidance.
"We are talking a staggering amount of money," he said. That is more than Zambia spends every year on health and education combined.
"You're talking about pregnant women who haven't got a clinic they can go to for antenatal care or child health education," Mr Scott said.
"You're looking at people who won't be educated beyond primary school level."
Zambia's new law is designed to increase the transparency of mine companies' finances.
"We don't even know where the accounts are," Mr Scott explained. "It'll at least criminalise a certain amount of avoidance. It obliges people to be transparent. At the moment they're only transparent if they volunteer to be transparent."
'Unimaginable' losses
Mongolian officials say they are acting in an attempt to stem large future tax losses in their rapidly growing mining sector.
The former director of Mongolia's Ministry of Finance, Mr B Batjargal, said Mongolia stands to lose around $5.5bn in tax revenue over the lifetime of the country's single biggest project, the giant Oyu Tolgoi copper mine.
"Mongolia's GDP is now $8-9bn," Mr Batjargal said, "so it's almost the same as the GDP of the country".
As future mining projects come on stream, the potential tax losses to Mongolia are "tremendous, unimaginable", Mr Batjargal said.
The greatest threat to Mongolia's tax revenues is posed by its bilateral double taxation treaty with the Netherlands, signed by the two countries in 2002.
Under this treaty, if a Dutch company invests in Mongolia it is entitled to pay dividends back to the Netherlands free of any Mongolian tax.
Turquoise Hill Resources, the company which developed the Oyu Tolgoi mine, is Canadian. But for tax purposes its investment qualifies as Dutch because it was routed through a Dutch company set up for the purpose: Oyu Tolgoi Netherlands BV.
As a result, Turquoise Hill is entitled to receive dividends through its Dutch company, free of Mongolian tax.
Records for Oyu Tolgoi Netherlands BV show it has no employees. It is one of over 1,000 similar companies at a company formation service located in a single building in Prins Bernhardplein in Amsterdam.
Treaty cancelled
It is not just Turquoise Hill Resources that is using the Dutch tax treaty route, Mr Batjargal said.
"Almost 70% of all major foreign direct investments are coming through the Netherlands, as a tax shield," Mr Batjargal said.
Mongolia is not only cancelling its treaty with the Netherlands, it is terminating three other treaties with Luxembourg, Kuwait and the UAE. They also provide for dividends to leave Mongolia tax-free.
After 1 January 2014, the cancellation date of the Dutch treaty, the tax position of the Oyu Tolgoi project is unclear.
The London-based mining giant Rio Tinto has bought a controlling stake in Turquoise Hill resources, so Rio Tinto will have to negotiate new ways to get future dividends from the Oyu Tolgio mine out of Mongolia.
There are numerous other double taxation treaties between Mongolia and other countries. But these all allow Mongolia to levy at least 5% tax on dividends.
'Dangerous'
The actions taken by Mongolia and Zambia have caused concern beyond their borders.
The OECD is now preparing an action plan to tackle corporate tax avoidance to present to world leaders this summer.
Pascal Saint-Amans, who oversees tax treaties and international tax negotiations for the organisation, said he regards unilateral actions such as the Mongolian treaty cancellations as "dangerous".
It is a further reason, he says, why the leaders of the countries in the G8 and G20 need to reach agreement on how to deal with corporate tax avoidance when they meet this summer.
"If there is no agreement," Mr Saint-Amans said, "then we'll have a number of countries walking away from consensus saying 'I'm not bound by these rules, I will decide on my own'.
"And then the risk you face is that we will end up with double taxation, triple taxation which is also detrimental to investment and growth and employment."
Meanwhile, the Speaker of Mongolia's parliament, Mr Z Enkhbold, advised other developing countries to review what agreements they have and decide which to leave and which to cancel.
"We need to close this loophole in the world economy," he said.
Mogi: wait, didn't this government previously decide it was to be built near Baganuur mine? This must be like the 10th time the location is changed.
CHP5 to be built in valley of Khulyn Gol, Bayanzurkh District
May 23 (news.mn) The V Power Plant is expected to be built in the valley of the Khulyn gol river near Urgakh Naran town in 11th khoroo, Bayanzurkh district, according to a decree made by Ulaanbaatar City Mayor in April and the Government`s order in December in 2012.
The Ministry of Energy was granted the right of possession of 43 hectares of land for 15 years to build Ulaanbaatar Power Plant V.
The tender bid for the concession right with terms of developing blueprints, raising finances, construction, maintenance of day-to-day activities and delivering the project of Power Plant V was announced in 2012.
Ulaanbaatar is considered the coldest capital city in the world and its electricity usage increases by 5-6% annually due to the migration from the countryside to the city. Therefore, Power Plant V with a capacity of 450 megawatt production is required to be built through a private and public partnership.
Out of 34 international bidders for the tender the "Samsung С&Т Corp, Korea Southern Power Co.,Ltd, Ochir tuv Co.,Ltd" consortium and the Great Britain-Japan-Korea- Mongolia joint "International Power Pic, Sojitz Corporation, Posco Energy, Newcom LLC" consortium were finally selected.
Mongolia seeks feasibility study plan for 300MW Shuren hydro project
May 23 (HydroWorld) The government of Mongolia invites expressions of interest from consultants to prepare specifications for a feasibility study of the 300-MW Shuren hydroelectric development project. Responses are due June 4.
Mongolia received funding from the World Bank's International Development Association for technical assistance to the Mining Infrastructure Investment Support Project (MINIS), which includes the proposed study of the Shuren project on Mongolia's Selenge River. Under the same program, the government recruited consultants in May to prepare specifications for a feasibility study of dam construction on Mongolia's Orkhon River including hydropower.
The World Bank's International Finance Corp. recruited consultants in January to perform hydro-economic analyses to ensure sustainable water resource management by client countries including Mongolia. In 2008, consultants were recruited to help Mongolia develop an internationally consistent renewable energy development framework.
MINIS now seeks consultants to prepare detailed terms of reference for a feasibility study of the Shuren project to clarify timing, sequencing, and coordination of studies in the project implementation plan. The work, which is to require eight months, also includes helping the World Bank adjust the MINIS environmental and social management framework to specify and implement sufficient safeguard policies for the Shuren project.
Terms of reference for this assignment may be obtained from the MINIS Internet site, www.minis.mn. Expressions of interest are due by 3 p.m. June 4, by delivery, mail, fax, or e-mail to the address below.
For information, contact Project Implementation Unit, Mining Infrastructure Investment Support Project (MINIS), Attn.: B. Gerelbat, Procurement Specialist, Arig Center Building, Suite 401, Jamyan Gun Street-10, Khoroo 1, Sukhbaatar District, Ulaanbaatar, Mongolia; Tel/Fax: (976) 70112689; E-mail: gerelbat@minis.mn; Internet: www.minis.mn.
Mongolia Signs Tianjin Port 50 Year Lease Agreement with China
May 22 (InfoMongolia) Mongolian delegation led by the Deputy Prime Minister D.Terbishdagva is attending the 13th intergovernmental commission meeting between Mongolia and China being organized in Beijing on May 20-24, 2013.
During the meeting, the use of 10 ha of land for 50 years in the territory of Dongjiang Port Zone, north-east of Tianjin Free Trade Zone was discussed, after which Deputy Premier D.Terbishdagva has worked in Tianjin city on May 20, 2013.
Mongolia had established the Memorandum of Cooperation with China part to lease a land in Tianjin Free Trade Zone in 2009, but due to financial problems the issue was postponed to date, hence following the Cabinet meeting resolution issued last April, the acceleration works now being implemented.
As part of the meeting results, authorities from Mongolian Government and Tianjin Municipal Administration have announced that Mongolia to have 10 ha of land for 50 years in the territory of Dongjiang Port Zone and the authorization issue will be completed within this year.
If Mongolia to have its own land in the port, the circulation of freight transportation would be increased obviously, moreover Mongolia would have an opportunity on tax ease on export of its products. Currently, "Mongolian Railway" JSC is responsible for construction works at the planned 10 ha territory.
SPEAKER RECEIVES GENIE OIL & GAS REPRESENTATIVE
Ulaanbaatar, May 23 /MONTSAME/ The Chairman of the State Great Khural, Z.Enkhbold received Michael Jonas, the Executive Vice President of Genie Oil & Gas company; D.Ganbold the ambassador at-large; Ts.Gantsog, the professor of School of Physics and Electronics of Mongolia's National University on May 23.
D.Ganbold said that a large resource of oil shale Mongolia has is of high quality similar to the Arabian petroleum as a research and probe have proven. He informed the Speaker that the U.S. "Genie oil" company is a pioneer in producing clean and affordable transportation fuels from the world's abundant kerogen-based oil shale and other oil and gas resources. "They are not drilling will heat shale strata at the depth of earth."
Mike Jones said that it is possible to produce 90 percent produced petroleum, diesel, gas and natural gas from our oil shale. He also added that the Mongolian petroleum legal environment is similar to the U.S. legal environment and said that he is interested in manufacturing these products here.
Mr Enkhbold said that will try to update the petroleum-related law and that it would be proper to meet with relative officials to consider the matter.
World Bank: A New Strategy to Support Mongolia
May 22 (World Bank) The World Bank Group's new Country Partnership Strategy (CPS) for Mongolia covers a 5 year period that will see the country experience record growth.
This strategy comes at a pivotal point in Mongolia's development history. The economy is growing at one of the fastest rates in the world, and the huge copper, gold and coal deposits in the country can catapult it to the ranks of high middle-income countries in record time.
Yet there are also considerable risks on the development path ahead, and ensuring macroeconomic stability and strategic use of natural resource revenues is pivotal in this regard. Exploitation and prosperity today must be sustainable for future generations.
The World Bank Group's CPS is aligned with Mongolia's Comprehensive National Development Strategy.
Click the image to learn about the strategy:
…
Innovation in Mongolia—Many Small Steps Make a Big Leap
May 22 (Mongolian Economy) It is common place that the only constant thing in life is the permanence of change - and change harbours opportunities. And what could be better proof of this than this very country? The transformation Mongolia has undergone since the signing of the Oyu Tolgoi investment agreement in October 2009 is truly breathtaking. But not everybody is excited about it. No doubt, with the potential of its mineral resource sector Mongolia has the opportunity to enter into a bright economic future, as the development of this sector can lead to prosperity for all Mongolian citizens.
But success will require structured macro-economic policies and a coherent policy framework supporting broad-based economic development. Pursuing such a combination of policies would leave Mongolia well positioned to ensure that its mineral wealth translates into strong, sustained, and equitable growth. Or to say it in more graspable terms, the mineral wealth translates into jobs for young graduates, improved roads, social security for the elderly, and universities with more funding for research and education.
Macroeconomic challenges and sustainability implications of mining economies have long been discussed and studied by numerous economists. Concepts such as the "resource curse" or "Dutch disease" have emerged in efforts to explain negative socio-economic impacts that hamper resource-based growth; concepts that seem to apply to Mongolia as well. Over the past three years large amounts of money have been invested in the mining sector in Mongolia, driven by both local and multinational corporations. Looking at some of the macro-economic indicators such as the inflation rate, debt ratios or government spending, one may fear that Mongolia may have already contracted the Dutch virus.
Given the current state of the Mongolian economy, it seems that one of the key remedies will be the development of productive capacities. According to UNCTAD, the UN Center for Trade and Development, productive capacities are "productive resources, entrepreneurial capabilities and production linkages which together determine the capacity of a country to produce goods and services and enable it to grow and develop".
Capital accumulation—the process of investment in which capital stocks of various kinds (physical, human and natural) are maintained and expanded—is a central element of the development of productive capacities. But equally important is technological progress, which occurs when new products and processes are introduced in a country through technological learning and innovation.
While there are many definitions and concepts of innovation, I would like to suggest the simplest one: "Innovation is all activities that successfully do things better than before". It is this broader understanding that is for example reflected in GIZ IMRI's trainings and consulting services for Mongolian small-medium enterprises (SMEs). Innovative products and processes are crucial for increasing the competitiveness, growth and employment generation of individual enterprises and the development of the economy as a whole.
Whether a Mongolian entrepreneur will engage in innovation depends partly on the incentives provided by the size and functioning of the market. Unfortunately, in Mongolia markets are mostly small, fragmented and imperfect due to a lack of infrastructure, low per capita income, as well as insufficiently developed regulatory frameworks and institutional constraints, which provide little incentive for innovative activity. Other major constraints to innovation include limited access to finance, a lack of market information, and skill shortages among entrepreneurs. Among smaller businesses in particular there is only little awareness about the long-term benefits of innovation.
No doubt, innovation is always a little bit like venturing into unchartered waters, meaning that there is no reliable way to know in advance about technological feasibility, cost benefits or market acceptance. Also, often the results of the innovation activities cannot be fully appropriated by the innovator as other competitors can also make use of new ideas, new knowledge and new technologies without having to pay the original innovator for his or her effort. But again, we are not talking about reinventing the wheel. We should rather recognize that innovation occurs at any given time and at any stage; that is whenever enterprises introduce products and processes which are new to them or to the country. This is not only a matter of hi-tech production. It involves rather the incremental introduction of new ways of doing things by firms and organisations, as well as introducing new products and targeting new markets. It is this myriad of small and large innovative acts which make the very fabric of improved productivity, more local, value-added, more competitive, better quality products and the introduction of new activities into an economy. It is through these innovative acts that economically developing countries such as Mongolia can move away from an overly strong dependence on its mineral resources. It is also through these innovative acts that substantial income growth for a wider part of the society will occur.
This leaves us with the question of which strategic orientation a country such as Mongolia should adopt in developing a specific technology and innovation policy.
In general terms, successful developing countries adopted an approach of catching-up rather than leap-frogging to the technological frontier. International experience suggests adopting an evolutionary approach. This recognises that there are phases in the development of technological capabilities at the corporate-and country-level—going from basic management competencies needed to run production facilities to design and engineering capabilities needed to expand and improve such facilities. The same is true for the development of individual industries, which go from their initial introduction within a country to their wider diffusion and upgrading, as well as phases in the inter-sectoral development of industries, associated with supply-side and demand-side linkages.
The technological divide between highly industrialised countries such as Germany and Mongolia might be significant. But technological catching-up is a feasible option for this country. Today a huge stock of technology-related information can be easily accessed and merged with local efforts to improve products and processes. Multinational corporations have either started to implant knowledge-intensive activities, which could be further exploited for the local economy. Global research and knowledge networks are emerging that allow Mongolia to integrate into a global exchange of infor mation. Just recently the National University of Mongolia signed an agreement to become a member of the SAP University Alliance Program, a global network of more than 1,300 universities and educational institutions. SAP, the world's largest company for business software, will provide The School of Economic Studies and its students with free access and use of its top-class, state-of-the-art enterprise management software.
With growing the innovative capabilities of businesses, the transfer and diffusion of new technologies from larger (often multinational) to smaller companies also becomes an important aspect of innovation policy. Given the fact that Mongolia requires foreign investment and expertise for the intended development of its mining sector, many opportunities for skill transfer exist. Common ways to promote linkages between firms are value chains and cluster approaches. Supplier and subcontracting relationships can be instrumental in helping smaller firms access markets and the technology of larger enterprises. In addition, being part of a cluster can help small firms to specialise, absorb new technologies and procure their inputs.
There are multiple sources of innovation which depend on a wide variety of institutions, knowledge-related, financial and regulatory (such as a national policy for cluster development). Mongolia should seek to increase the absorptive capabilities of domestic knowledge systems, including further investment in education. The capacities of local institutions to search, acquire and use knowledge from the rest of the world must be improved and linkages between traditional and modern knowledge systems must be strengthened. In this context, efforts to build sectoral and local innovation systems may be particularly relevant. Therefore, important strategic priorities for Mongolian policy development at this point in time could be:
<![if !supportLists]>· <![endif]>Promoting the formation and growth of domestic business firms, particularly from the SME segment. For very small enterprises, support may focus on basic business advisory and support services, finance and skills development, and providing access to information and communication technologies. It may also include awareness-building about the benefits of innovation or information on the adoption and application of new technologies.
<![if !supportLists]>· <![endif]>Leveraging more education from international foreign direct investment by integrating vocational training and higher technical education with private sector activities.
<![if !supportLists]>· <![endif]>Fostering the formation of an upstream mining cluster; including agriculture.
<![if !supportLists]>· <![endif]>Upgrading export services and manufacturing; including agriculture and the downstream processing of mining products
Innovation—technical, organisational as well as social—will be crucial for further development of this country in order to broaden and strengthen the basis of sustained economic growth. Traditional sectors such as agriculture could be upgraded through the enhanced formation of value chains, and new development paths; for example in the field of software development and business process, outsourcing can be opened up. In this way, employment can be secured, expanded and the quality of work improved.
All this will require active participation from the state and its institutions. It should be explained what kind of financing opportunities for innovating firms could be established and how private innovation activities could be co-financed through subsidies, tax incentives, loans and public venture capital. Last but not least, it will be the responsibility of the government to offer a favourable environment for innovation.
Mogi: very disappointing article. Cherry-picks events to put a one-sided negative image on Mongolia
Mongolia: Succumbing to the Resource Curse?
May 23 (The Diplomat) Mongolia, rich with coal, gold, and copper has been riding high on the global natural resource boom. The country's proximity to China makes its resources even more attractive. Over the past decade, mining sector development has led to significant foreign investment and growth in government spending, provided a boost to household incomes, and has moved much of the country beyond its nomadic herding past. In 2012, Mongolia was one of the world's hottest economies, clocking GDP growth of 12.3 percent. However, political risks emerging over the past year put this positive frontier market story at risk.
Short-Term Risks: The Mining Sector
Amidst the hustle and bustle of the capital, Ulan Bator, trouble is brewing. In June of 2012, the Democratic Party of Mongolia came to power as part of a coalition after years of rule by the Mongolian People's Party. The new government has taken a more aggressive stance regarding FDI and is ratcheting up criticism of the country's largest investor, Rio Tinto and its management of the $13 billion Oyu Tolgoi copper and gold mine (commonly abbreviated OT), which has been in development for close to two decades.
The government is refusing to support Rio Tinto's efforts to raise an additional $4.5 billion to finance the second stage of OT (Mogi: not true) that is seen as key to the long-term economic viability of the ore body. Lawmakers in Mongolia's parliament are seeking to secure a greater share of the wealth extracted by quadrupling royalties from the current 5% to 20% (Mogi: again, not true). Meanwhile, the country's president has accused Rio Tinto of mismanagement and wants to secure a greater say in the mine's operations (Mogi: hmmm, this just sounds too easy of an interpretation of what he said). The government's moves come as gold and copper prices have been tumbling on global markets, adding to the pressure on OT.
Thus far Rio Tinto has refused to renegotiate its agreement with the government (Mogi: Mongolia is NOT demanding renegotiation of the agreement), but support is seen as essential to raising stage two funding and for successful operation of the mine (Mogi: isn't recent big money pledges to the financing a sign of Mongolian support?). Rio Tinto and the government made an initial effort to resolve the dispute in February, but failed (Mogi: failed? I'd label it rather as the initial stage of dispute resolution). Following those conversations, Rio Tinto CEO Sam Walsh went so far as to state he had serious concerns regarding "recent political signals within Mongolia calling into question some aspects of the investment agreement" between the company and the government.
Meanwhile there are problems elsewhere at Tavan Tolgoi (TT), a massive coking coal deposit near the Chinese border and the most important mining operation in the country besides OT. Development has been delayed several times for financial reasons, as the government-owned operator, Erdenes Tavan Tolgoi, is reported to have presold coal to the Aluminum Corp of China at a price below the cost of production (Mogi: not reported, but actually did later when coal prices went down, ended up having to sell at below cost). It is also rumored that that deal was rushed in order to underwrite pre-election cash handouts to the population by the previous government (Mogi: not rumored but actually true), which according to Batsuur Yaichil, the head of Erdenes, cost the firm $669 million in 2012 (Mogi: this number looks outrageously not true). Erdenes has since asked the government for a $500 million dollar bailout. An IPO expected to raise cash for the firm in 2012 has been put off until at least 2014.
Longer-Term Risks: Fiscal Sustainability
The situations at OT and TT point to larger, long-term risks associated with the populist ruling coalition's questionable fiscal management. Since coming to power, the government has issued $1.5 billion dollars in sovereign bonds, introduced a draft mining law that would dramatically change the regulatory environment (Mogi: but subsequently withdrawn after public debate) and raise royalty rates, fired TT's previous top executive (Mogi: well basically because it had no money to pay them), and halted coal shipments to China (Mogi: again, had no choice but to).
The parliament also voted in a 2013 budget heavy on spending and backed by poor revenue assumptions. The budget increases expenditures and net lending by 18% bringing it to a projected to 42% of GDP. This comes after spending almost tripled between 2009 and 2012.
Making matters worse, current policies have lead to double-digit inflation (Mogi: actually it helped bring it down to 9.8% in Q1 2013, but back to 10+ as of April). Thus far, inflation has not reached the record high levels of 2008, when it peaked at 33.7%, but inflation in 2012 was approximately 15%, driven by skyrocketing food prices, which according to the World Bank are undermining the real income and spending power of the population, a third of which still lives below the poverty line.
Several issues complicate Mongolia's future further. The first is $1.5 billion in sovereign debt issued in 2012, representing almost 12% of GDP. During the lending roadshow the government suggested that the proceeds would be used to finance infrastructure projects, which are sorely needed to sustain growth and lift the population out of poverty, but the recent handouts to the population suggest short-term priorities have intervened (Mogi: huh? What handouts?!?!?!? Well, I didn't get any).
A second complicating factor is the revenue assumptions made by the government. The government currently projects corporate income taxes to swell by $320 million, approximately half of which is expected to come from a renegotiated investment agreement with Rio Tinto. The source of the other half of new corporate income taxes is not explained.
Perhaps more worrisome are poor assumptions regarding the major trends in global commodity prices and volumes. The copper price assumptions made in late 2012, during the budget drafting process, were approximately 5% above the forecasted averages for 2013. Making matters worse the price of copper, along with gold and coal, has continued to fall in 2013 as demand in China has eased. To mitigate exposure to commodity price volatility, the government established a stabilization fund but it is woefully underfunded, amounting to only 2% of GDP for one year.
If ongoing negotiations with Rio Tinto are not resolved equitably the smooth start of operations at OT, slated for this summer, appears in peril. Additionally, should Rio Tinto and the Government fail to settle their dispute further fresh foreign investment will likely dry up. (Mogi: hmmm, looks like they intentionally decided not to mention the government's decision to expedite necessary permits to start export on time, or actually before schedule).
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Asashoryu becomes Democratic party member
May 22 (news.mn) The 68th Grand Champion of professional sumo wrestling, Asashoryu D.Dagvadorj, announced that he will become a member of the Democratic party (DP) by receiving a membership certificate today on May 22nd.
MP and Minister of Industry and Agriculture, Kh.Battulga, handed the certificate to him in the Democratic Party building.
Former sumo wrestler D.Dagvadorj commented on his choice to journalists saying; "I have been in favour of Democracy since a very young age. I have personally supported democratic efforts and DP policy since 2000. So now I am glad to be joining DP today."
D.Dagvadorj has taken chances in business after retiring from wrestling. D.Dagvadorj`s brother, D.Sumiyabazar, was elected as the MPP candidate in Uvurkhangai Electoral District in the June Parliamentary Election, but was sworn in after 11 months due to a controversial debate.
Mogi: not a bad overview overall, but makes a critical error by mixing up the 3rd candidate with MNDP
MMJ: Presidential Election Roundup
May 22 (Mongolian Mining Journal) The presidential election marathon has begun. We will see politics unfold until the 26th of June, the day the ballots are taken in, and maybe, even all summer long.
Compared to previous elections, the 2013 presidential elections are taking place amid contradiction and struggle. The following are the conditions of the rival parties:
<![if !supportLists]>- <![endif]>The traditional positions of the authorities and the opposition have exchanged places. The democratic party now occupies the 3 main seats in the Mongolian government.
<![if !supportLists]>- <![endif]>Last year, the democratic party was elected by the people in the parliamentary elections. Over the course of the approximately one year they were in power, their reputation has been tarnished considerably in the business sector.
<![if !supportLists]>- <![endif]>The Mongolian People's Party gradually adjusted to being the opposition and now have enough reason to impeach the prime minister.
<![if !supportLists]>- <![endif]>The "Justice Coalition" that is working in the cabinet of the government has reached a position in which it can influence the government's stability.
<![if !supportLists]>- <![endif]>The conflicts within the Democratic party and the struggle for personal gain have begun to take center stage and become apparent to the public.
<![if !supportLists]>- <![endif]>The logic of "balancing" that says that the president of the Mongolian People's Party can correct and smooth out the mistakes of the Democratic Party is growing among the public.
That sums up the situation for the parties. Let's take a look at the personal ratings of the candidates:
<![if !supportLists]>- <![endif]>According to the latest survey conducted by the Sant Maral Foundation, the ratings of the current president Ts. Elbegdorj are the highest. However, we should note that he could not pass the 20 percent threshold in both rural and city areas. These results could be an indication of the possibility of a second election (Mogi: run-off election). We can assess even from this point that Ts. Elbegdorj, who is the candidate from the Democratic Party for the second time, will not be able to gain an absolute majority of votes from the electorate.
<![if !supportLists]>- <![endif]>The Mongolian People's Party candidate, B. Bat-Erdene, currently has a better reputation than Ts. Elbegdorj in rural areas. According to the MPP and the Sant Maral Foundation survey, B. Bat-Erdene emerged with the highest ratings within his party. Although the majority of people from the capital and other large cities support the Democratic Party, over the last few years, opponents of its strict policies in the business sector have increased. Therefore, those "offended" might automatically vote for the opposition party candidate, B. Bat-Erdene, or they may not even vote at all.
<![if !supportLists]>- <![endif]>The third party, the Mongolian National Democratic Party leader M. Enkhsaikhan will receive very few votes from the electorate (Mogi: huh? Come on MMJ! Enkhsaikhan is supporting Elbegdorj. MPRP is the third candidate with its Health Minister and first female candidate ever N. Udval). However few, these results will adversely affect both the votes of the Democratic Party's Ts. Elbegdorj and the Mongolian People's party's B. Bat-Erdene. (Mogi: MPRP will likely hurt MPP more than DP)
<![if !supportLists]>- <![endif]>The position of the third party opposition, the MPRP will directly and noticeably influence the 2013 presidential elections. Today this party has reached such a level of influence that it may determine whether the government is stabilized or falls. If the request of MPRP leader N. Enkhbayar to not serve a prison term for 2.6 years had been granted and he had been released, it could have been very advantageous for the Democratic Party candidate Ts. Elbegdorj. In other words, if they had produced a "fake candidate," it would have stolen votes from the MPP candidate, B. Bat-Erdene. The MPRP, which received 20% of the people's votes in last year's parliamentary elections, still has high ratings among rural area voters. The current president, Ts. Elbegdorj, is ready to accept whatever consequences may fall on him for being being strict and not releasing the MPRP leader, N. Enkhbayar, from his sentence. The MPRP is definitely a big risk for Ts. Elbegdorj.
What difference will the new president's policies bring to the mining sector?
<![if !supportLists]>- <![endif]>If the current president, President Ts. Elbegdorj, is reelected the government will make policies in the mining sector for the first time. These policies will make amendments to the mineral law and the many other laws that are connected to it . This means that the legal environment of the sector will be renewed and the rules and regulations will be made clear. Seeing our present President's ambitious behavior, it could be understood that he might take the matter of creating new options in using the Tavan Tolgoi deposit into his own hands. Prime Minister N. Altanhuyag, the leader of the Democratic party, is the type of leader who will listen and follow along with whatever Ts. Elbegdorj says.
<![if !supportLists]>- <![endif]>If the MPP candidate, B. Bat-Erdene, is elected as president, the nationalistic views related to the Mongolian mining sector will become more active. Civil activists are his main supporters and his main campaign issue, or tactic will be the "environment and protecting the natural wealth". It is obvious that he will try to better implement the "long-named" law, since he is the one who drafted it. At a time when the mining sector has already been negatively impacted by the results of the price crisis and wrong policies, it does not need another sportsman giving it yet another "knock out".
<![if !supportLists]>- <![endif]>Even if the other candidates can pass the 5% threshold, their position will not hold much influence.
This is the pre-election situation. None of the candidates will take the position of supporting the mining industry during the election campaign. Quite the opposite, it is clear that the candidate who initiates a stricter policy that demands more responsibility from the mining companies will gain the public's favor. The saying applies in the mining sector that half a loaf is better than none. In this situation, it means that Ts. Elbegdorj is better than the others.
WDN Member Burmaa Radnaa Selected as IRI Democracy's Hero
Ulaanbaatar, Mongolia, May (Women's Democracy Network) – Burmaa Radnaa has shown determined leadership, passion and dedication to promote democratic change in Mongolia. For more than 20 years, she has worked to increase women's participation in politics, educate voters and promote transparency within the Mongolian government. As the founder and former director of Women for Social Progress (WSP), Radnaa led some of WSP's most successful projects including its voter education project and the strengthening participatory democracy project, which educated thousands of citizens throughout Mongolia's rural provinces.
In 2011, WSP and Radnaa implemented a WDN program to increase the number of women candidates to run for the 2012 local and national parliamentary elections. Through this program, she trained 300 women in four provinces to run effective campaigns, which led to a historic number of women running for elected office that year thus tripling the number of women elected to parliament. As a result of the program's widespread success, Radnaa was also nominated by her political party as the first woman candidate on its candidate list and was subsequently elected to parliament.
Radnaa currently serves as a member of the Mongolian State Great Hural representing the Democratic Party of Mongolia. As one of her first initiatives in office, she chaired the drafting committee for a new local election law mandating that 30 percent of candidates on political parties' electoral lists were women. The legislation was adopted into law in September 2012. (Mogi: wait, I thought this law was enacted before the 2012 Elections, thus ultimately resulting in more women in parliament than previous. The law was only for candidates so ultimately much less than 30% were actually elected)
Additionally, out of the eight parliamentary committees, Radnaa is one of only two women committee chairs, chairing the Parliamentary Committee on Petition. She also serves on the Advisory Committee for Development of a National Program on Human Rights, the Local Governance Unit of the Standing Committee of Parliament, the board of Transparency International Mongolia and as a public committee member of the Anti-Corruption Agency of Mongolia.
As chair of the working committee to draft elections laws, Radnaa is currently working to combine Mongolia's elections laws into one. In discussing the effort, Radnaa says, "We are also drafting new procedures that will make it easier to vote for people who are in the rural areas, living abroad or those with disabilities and cannot get to polling stations."
In addition to her work on Mongolia's election laws, Radnaa also plans to introduce legislation that will encourage citizen engagement in parliament through public hearings. "For years I have advocated for transparency in parliament and pushed for public hearings, now that I am an elected member of parliament, I have the power to initiate laws and organize these hearings," said Radnaa. "I have the power to do what I dreamed."
Before beginning her political path, Radnaa served as a member of the Mongolian government's General Election Committee and held the position of director at the Voter's Education Center for more than a decade. In this role she developed and implemented awareness campaigns that educated young voters on their role in the electoral process.
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FIRST EVER FLEXIBLE WIRELESS CHARGING SYSTEM INVENTED BY MONGOLIANS AND SEEKING INVESTMENT
May On May 20, 2013, after spending almost two years on numerous trials and setbacks, two Mongolian guys residing in the United States have introduced the first ever flexible wireless charging system.
Inventors are Nyamjav DORJDEREM, who is an assistant Professor of Physics at the University of Sciences, Philadelphia, PA, and Dashdorj TULGABAATAR, co-founder at Ametros Solutions and COO at Onom Foundation.
An official campaign on launching Ametros wireless charging system is started on Kickstarter.com that aims to fund most creative projects.
The charging system is based on inductive charging principle. It is composed of two parts: power transmitter and power receiver. They utilized Qi compliant power managing chips. Average charging times, from 0%-100%, are 2-2.5 hours for iPhone 5, and 2.5-3.5 hours for Galaxy S3 phones. Moreover, the charging systems will not overcharge the phone since they stop charging when the battery is fully charged.
In the systems, electronic circuits are incorporated onto flexible materials and embedded within the case. The wireless charging case is made from flexible rubber that is soft to the touch. The cases can be twisted or bent and fit seamlessly into their respective models.
In addition, the wireless charging pads come in two different models: stationary and on the go charging pads.
The stationary charging pad is designed to be used with any standard wall outlets and does not require the phone to be placed in a certain position or orientation.
The second solution - on the go charging pad enables to wirelessly charge the phone in the car. It is mountable either on windshield of the dashboard and the driver has the full view of the phone screen.
After having discussions with several manufacturers in China, Hong Kong and Taiwan, they have chosen three companies as potential manufacturers. One specializes in manufacturing of electronic components and circuits. The others specialize in aluminum, rubber, and stainless steel manufacturing and precision machining, including fabricating molds.
ADFIAP ANNUAL CONFERENCE CONVENES IN MONGOLIA
Ulaanbaatar, May 23 /MONTSAME/ The 36th Annual Conference of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) kicked off Wednesday in Ulaanbaatar.
The Prime Minister N.Altankhuyag made the opening remarks, expressing satisfaction with the conference which brought together regional development policy makers and financial experts to share experience and opinions.
The Premier underlined that Mongolia has gained big achievements in business environment and in reducing the corruption index and that is in the center of international investors because of launching the biggest projects. He also noted that Mongolia's policy on expanding mutually beneficial economic ties is a priority.
The conference gathered some 100 delegates from 34 member states of the ADFIAP. Within the three-day measure, the participants will discuss small and medium enterprises promotion and development, micro- finance and financial inclusion, innovative and sustainable business practices, governance and CSR, and green investments in infrastructure and energy.
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MONGOLIA SEEKS TO COLLABORATE WITH AUSTRIA IN ENERGY SECTOR
Ulaanbaatar, May 23 /MONTSAME/ On a working visit to the Republic of Austria, the Ministry of Energy M.Sonompil held Wednesday a meeting with Mr Reinhold Mitterlehner, the Minister for Economy, Family and Youth.
The two Ministers discussed a cooperation in the economic and energy sectors, especially in the renewable energy sector.
Speaking about economic situation in his country, Mr Mitterlehner expressed a readiness to expand the bilateral friendly relations with economics and to co-implement joint projects and programmes.
The Mongolian Minister noted that he is a head of the Mongolia-Austria intergovernmental joint commission, and said Mongolia wants to realize a decision made by the Austrian government on granting a soft loan of EUR 40 million to Mongolia at the fourth intergovernmental commission meeting held in 2010.
"By the memorandum on the soft loan, it has been planned to finance projects and measures on health, energy and infrastructure," Mr Sonompil said. Then he proposed to implement a project on erecting an electricity power station which processes garbage, to exploit progressive technologies of Austria.
The Austrian Minister supported this proposals and emphasized that the sides should focus on beneficial exploitation of the soft loan. The Austrian companies are interested in a project on constructing a hydro power station, he added.
After the meeting the Ministers signed a memorandum on developing the bilateral cooperation in energy sector, namely in augmenting resources of renewable energy and raising profit of the energy. The memorandum also reflects a matter on attracting scientific institutions of the two countries to works in environment protection, sustainable development and new technologies introduction.
The Minister's working visit is continuing. Mr Sonompil plans to meet with Mr Wolfgang Katzian, a member of Austrian parliament in charge of energy affairs, and to get acquainted with environmentally-friendly energy station and a hydro power station.
The 50th anniversary of the Mongolia-Austria diplomatic relations is celebrated this year, and the fifth meeting of the bilateral intergovernmental commission meeting will run July 8-9 in Ulaanbaatar.
Chinese state councilor meets Mongolian deputy prime minister
BEIJING, May 22 (Xinhua) -- State Councilor Yang Jiechi met with Mongolian deputy prime minister Dendev Terbishdagva on Wednesday, pledging to promote bilateral ties.
Yang said during the meeting that China and Mongolia have achieved continuous progress in their pragmatic cooperation since the two countries established a strategic partnership.
He said China will implement mutually advantageous projects with Mongolia to benefit the two countries as well as their peoples with a principle of achieving win-win results.
Terbishdagva said Mongolia attaches great importance to developing the strategic partnership with China and will further strengthen cooperation in various fields so as to improve bilateral relations.
Vice President of German Bundestag to visit Mongolia, May 24-30
May 23 (news.mn) Eduard Oswald, one of the Vice Presidents of the Bundestag of the Federal Republic of Germany will visit Mongolia accompanied by German delegates on May 24th to 30th.
Delegates from the Federal Republic of Germany lead by Oswald will be received by the Speaker of the Mongolian Parliament, Z.Enkhbold, on May 24th on the first day of the visit to Mongolia.
During the meeting the head of the Mongolia-Germany Parliamentary Group, the Chief of the Standing Committee on Complaint Resolution, R.Burmaa, will meet the guests.
Oswald, the Vice President of the Bundestag of the Federal Republic of Germany will see the Deputy Prime Minister D.Terbishdagva as well as conduct a visit to the Power Plant in Darkhan-Uul aimag. Oswald is also expected to be introduced to a project on cooperation on economic development policy.
A celebration of Canadian/Mongolian relations
May 20 (Northern News Service) Friends, this is the 40th anniversary of Canadian/Mongolian relations, believe it or not!
The reason I know this is that I am actually here in the Asian country's capital of Ulaanbaatar, in my efforts to further my research for my masters program out of York University in Toronto.
As most of my faithful readers here at News/North know, I have become a bit of a globetrotter over the years.
This part of it started 10 years ago, when I was first invited to act as cultural ambassador for Canada and our North, to Siberian Russia.
I attended two of the Siberfest festivals in Novosibirsk there, first in 2003 and again three years later.
Since then, this trip makes it a total of five times I have been bitten by that ol' Asian bug.
There are so many similarities which cannot be ignored, between the Mongolian and our Dene peoples.
We are both soft-spoken and kind.
In fact, there was one place on the way here across the country where I simply did not to leave! One time or another, everyone comes to a place of soul which just feels like the right place to be.
And it would certainly seem as if my own destined roads were paved here.
Russia and Mongolia are in fact two of a handful of places in the world where it is very difficult to get visas to visit at all, the latter being even more so.
But as it turned out, just when I was about to apply for my official permit to come here, I also received a note from an old-time friend from Toronto, where I was at the time just finishing up my last term of studies before summer research work.
Right out of the blue, Sharon Foltz-Goldhawk, who was an art student way back in my first years in Toronto, now more than 30 years ago, told me about a woman's film festival happening here in Ulaanbaatar.
When I mentioned that I needed a visa, she sent a fax to the Mongolian embassy in Ottawa. Her husband Greg is now the Canadian ambassador here.
One thing led to another and my adopted son Sergey offered to drive us here to Ulaanbaatar for his holidays from work.
Over the time we have been here, we've been talking with Sharon about this year being the 40th anniversary of Canadian/Mongolian relations.
She also said since there really has not been many events to celebrate this, maybe we should try to organize something.
Again, as people who need no other reason than to do something, we are presently in the middle of putting a proposal to the Canada Arts Council to have me come on back here in a few months to do a number of murals with the Mongolian people, highlighting cultural similarities between our countries.
Sharon Foltz-Goldhawk also mentioned that she and Greg informally call their home here The Ambassador's Inn, in preparation for their opening up a bed and breakfast in Ottawa.
So if all works out I will be back to look further into the original homeland of our American First Nations peoples. Mahsi. Thank You.
One of three suspected Pakistani terrorists forced to leave Mongolia
May 22 (news.mn) One of the three arrested terrorist suspects was forced to leave Mongolia.
General Intelligence Agency and State Investigation Department agents arrested three Pakistani citizens, who are possibly linked to terrorism and homicide, in late April in Ulaanbaatar. The agents found that two of the suspects, from the three Ramzan Hafiz Mohammed, Mohammed Ramzan Mohammed Bakhsh and Hayat Hizar Mohammed Ramzan, who were wanted by INTERPOL entered Mongolia on a tourist visa in the middle of April.
But according to an official source one of the three suspects was forced to leave Mongolia. The two remaining suspects are still being questioned.
Official sources hesitated to give more details about the case because it is still under investigation.
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Tuul River too polluted according to study
May 23 (news.mn) The flow of the main water source of Ulaanbaatar City, the Tuul River, is narrowing year by year and becoming too polluted. The pollution of the Tuul River has become a headache for officials in charge.
A survey was conducted on samples and analysis of the chemical pollutants found in the Tuul River last month. The survey was carried out in a number of places along the Tuul River across the City to Tuul Songino upper, Tuul Songino lower, Tuul Cliff and the Central Drainage Area.
The surface water quality of the Tuul River water that mixes with waste water from the Central Drainage outside of the City from Songino to Tuul Cliff was very poor compared to the MNS 4586-98 standard. Including beneficial biological content the levels were 1.41 - 64.1 times higher than standard, meaning it is too contaminated.
It was determined that the levels of acidize of permanganate were 9.8-17.0, ammonium nitrate 2.8-3.2, nitrate nitrogen 4.5-43.5 and phosphorus 1.4 times higher than standard.
But the water treatment quality of the Central Drainage water was 51.3 percent as a result of sample and chemical analysis surveys.
The treated water from the Central Drainage contains 282.3 ml biochemical oxygen, ammonium nitrate 32.9 ml, nitrate nitrogen 0.056 ml and phosphorus 2.417 ml.
This means that the biochemical oxygen, ammonium nitrate and phosphorus are times 14.1, 5.4 and 1.6 higher respectively than the approved MNS4943:2011 standard of treated wastewater to be released into nature.
International Religious Freedom Report 2012: Mongolia
May 22, 2013 (U.S. Embassy in Mongolia) --
Executive Summary
The national constitution, laws, and official policies specifically provide for the protection of religious freedom, but, in practice, the government imposed numerous restrictions that affected members of minority religious groups. The government selectively enforced legal and policy protections of religious freedom. Respect for and protection of religious freedom continued to vary among the provinces. The law limits proselytizing. Some religious groups, particularly foreign-run religious groups, faced bureaucratic harassment from local governments or were denied registration. The trend in the government's respect for religious freedom did not change significantly during the year.
There were reports of societal discrimination based on religious affiliation, belief, or practice, including pressure on persons who converted to Christianity. A number of observers reported that the growing influence of Christian groups worried some citizens, who considered Christianity to be a "foreign" religion that could erode respect for the country's culture. In some cases, this fear led to harassment of Christians. Muslim institutions generally fared better as a result of their deeper historical roots in society.
U.S. embassy officials discussed religious freedom with government officials at the local, provincial, and national levels, including meetings with high-level officials in the Ministry of Justice, parliamentarians, and provincial political leaders. Embassy officials also met frequently with religious leaders across the country and invited Buddhist, Christian, and Muslim leaders to embassy events.
Section I. Religious Demography
According to the 2011 Mongolian Statistical Yearbook, the population is slightly more than 2.8 million. Buddhism remains closely linked with the country's cultural traditions, with 53 percent of citizens self-identifying as Buddhist according to government statistics. Local scholars estimate that more than 90 percent of the population subscribes to Buddhism, although practice varies widely. Lamaist Buddhism of the Tibetan variety is the traditional and dominant religion.
Muslims constitute approximately 5 percent of the population nationwide and 80 percent of the population of the primarily ethnic Kazakh western province of Bayan-Olgiy. According to the Mongolian Muslim Association, in addition to approximately 120,000 Kazakh Muslims (mostly in Bayan-Olgiy), there are 30,000 Khoton Muslims residing primarily in the province of Uvs. There are more than 40 mosques and ten Islamic student centers, where an estimated 3,000 students study Islam.
There is a small but growing population of Christians. According to the 2010 National Census, approximately 2 percent of the population is Christian. A 2011 government nationwide study indicates that 4.7 percent of the 2,500 individuals surveyed are Christian.
According to estimates by various Christian groups, approximately 90 percent of Christians are Protestant, while 9 percent belong to The Church of Jesus Christ of Latter-day Saints (Mormons). Roman Catholics and members of the Russian Orthodox Church together account for the remaining 1 percent.
Some citizens practice shamanism, often in tandem with another religion. The 2010 National Census estimates that 2.9 percent of the population practices shamanism, widely viewed as a traditional form of healing. According to the 2011 government survey of 2,500 people, 6 percent of those surveyed self-identified as shamanists and 8.6 percent responded that they practiced shamanism alongside Buddhism.
According to 2011 records from the State General Registration Office, which are the most recent records available, there are 630 registered places of worship, of which 272 are Buddhist, 293 Christian, and 65 belonging to various other religious groups. According to estimates by the Evangelical Alliance, a confederation of evangelical Christian churches throughout the country, there are 400 to 600 evangelical churches, approximately 250 to 300 of which are registered.
Section II. Status of Government Respect for Religious Freedom
Legal/Policy Framework
The constitution and other laws and policies protect religious freedom, and the constitution explicitly recognizes the separation of church and state. Although there is no state religion, the law asserts the government shall grant proper respect to Buddhism as the predominant religion of the country for the sake of national unity and the maintenance of cultural and historic traditions.
Religious groups and nongovernmental organizations (NGOs) must register with local and provincial authorities, as well as the General Authority of State Registration (General Authority), to function legally. Registrations are valid for 12 months, and religious groups must renew their registrations annually with up to six different government institutions across local and national levels. A religious group must provide the following documentation to the General Authority when applying to register: a letter requesting registration; a letter from the city council or other local authority granting approval to conduct religious services; a brief description of the group, its charter, documentation of its founding, a list of leaders, financial information, documentation of ownership of a building, and brief biographic information of the person wishing to conduct religious services; and the expected number of worshippers.
Religious groups are required to pay property taxes and social security. NGOs, including religious groups, are not required to pay income tax. By law all foreign organizations must hire a certain number of nationals for every foreign employee. The mandatory percentage of national employees varies from 60 percent to 95 percent, depending on the industry. The law applies to both religious and secular groups. Foreigners who enter on work visas are not allowed to undertake religious activities during their work hours.
National law limits proselytizing. The law forbids spreading religious views by "force, pressure, material incentives, deception, or means which harm health or morals or are psychologically damaging." Groups involved in providing child care, welfare, or child protection services may not promote religion or religious customs counter to the child's "national traditional religion." The law also prohibits the use of gifts for religious recruitment.
All private religious schools are entitled to state funding for their secular curricula. The government is prohibited by law from giving state funds to religious schools for religious education. This policy applies equally to all religious groups.
A Ministry of Education directive bans religious instruction in public schools. The government may deny the request for an extension of registration of a religious group if the group violates the ban by teaching religion in a public school. The ministry may also recommend that employers fire teachers who teach religion in the classroom.
The government does not observe any religious holidays as national holidays.
Government Practices
There were no reports of abuse of religious freedom, although the government imposed numerous restrictions that affected members of minority religious groups. Moreover, the government selectively enforced legal and policy protections of religious freedom. Some religious groups seeking registration faced burdensome bureaucratic requirements and significant delays.
Christian groups and lawyers protecting religious freedom reported that local government authorities threatened those engaging in private religious services with unspecified "legal action." These groups reported that government authorities had not prosecuted such activities in court, but preferred to use intimidation.
Problems with registration and operation varied significantly across the country, largely dependent upon the policies and practices of local government officials. Registration requirements changed frequently and without public announcement; religious groups reported these practices routinely caused confusion.
The government used the registration and renewal process to assess the applications of religious groups, as well as to supervise and limit the number of places of worship and the number and type of clergy admitted to the country. It also allowed the government to monitor the ratio of foreigners to Mongolian nationals conducting religious activities. Although the General Authority possessed the ultimate authority to approve a group's application, according to observers, approval was often made difficult by local officials who refused to cooperate with some applicants.
Foreign-run churches in some regions reported that authorities permitted Mongolian-run Christian churches to register every three years rather than every year, depending upon a religious leader's personal connections with the local government. Nevertheless, both foreign-based and local Christian groups complained that the process for obtaining registration and extensions was arbitrary and that there was no appeal mechanism for denials.
In December the government reportedly began conducting an audit of all religious groups for transparency and compliance with laws. Certain religious groups reported receiving requests for lists of all their employees (including their national registration numbers), congregation meeting information, and bank statements. According to observers, the criminal police claimed to be gathering such information in response to a possible increase in money laundering and human trafficking within certain religious groups, as well as a perceived increase in the threat of terrorism and the possibility that religious groups could be used to assist such an attack. Observers stated that the police did not indicate from whom or what this threat of terrorism came.
The Ulaanbaatar City Council granted eight of 51 registration requests from religious groups (five Christian, one Buddhist, and two shamanist) and extended permits for 114 of 134 religious groups requesting renewal in Ulaanbaatar between January 1 and November 26. As of November, there were 81 Buddhist, 146 Christian, 15 shamanist, two Muslim, one Bahai, and one Shinto groups registered.
Local legislative bodies administered a separate local registration process. Officials in Ulaanbaatar reportedly employed an arbitrary means of registering places of worship. The Ulaanbaatar City Council also refused to recognize branch churches as being affiliated with one religion; instead it required each individual church to register as a separate entity. This caused particular problems for Christian denominations seeking to operate multiple churches within Ulaanbaatar, as each branch was obliged to register as a separate religious group. Church groups with multiple branches alleged the Ulaanbaatar authorities preferred this system because it allowed the government to collect greater tax revenue.
Unregistered religious groups were often able to function, although at times the groups encountered opposition from authorities. In certain regions, leaders of unregistered Christian churches reported they did not experience obstacles in conducting religious activities despite their status, but said they were frequently denied permits to meet in public places. Unregistered churches allegedly experienced harassment in the form of frequent visits by local tax officers, police, and other agencies. Registered churches also reported harassment by local authorities who demanded, at times without clear legal justification, that the churches present official documentation and rosters of church members, and, in some cases, pay bribes. Attorneys representing Christian groups reported a significant drop in such harassment during the year. Because secular businesses and other nonreligious groups reported similar treatment, it was not possible to determine whether this treatment was due to the religious affiliation of a given group.
Approximately 60 percent of the approximately 400 churches belonging to the Evangelical Alliance were registered. Unregistered churches were unable to obtain registration from local authorities. The Evangelical Alliance and lawyers representing Christian groups reported that most unregistered churches were in rural areas. According to Christian leaders, this was due to a combination of outdated bureaucracy and discrimination against Christians.
The length of the application process, varying from two weeks to several years, may have deterred some religious groups wishing to register. Some Christian groups alleged one of the main reasons for government officials' refusal to register a church was that the officials believed there were "too many" churches, or that there should at least be parity in the registration of Buddhist temples and Christian churches. Registration problems were particularly serious in Tuv province, which had no registered churches. Numerous religious leaders reported that the chief of the Tuv provincial legislature explicitly stated his opposition to registering any churches. According to evangelical leaders, more than 30 unregistered evangelical churches operated in the province and were reportedly subject to close monitoring and scrutiny from the authorities.
Evangelical leaders also reported government opposition to Christian activities in Bayan-Olgiy province, which was predominantly Kazakh Muslim. Other regions reported fewer issues regarding registration for minority religious groups.
A Protestant church with more than 100 members in the city of Erdenet, Orkhon province, in contrast to previous years, reported being permitted to register for three years, rather than just one. Nevertheless, foreign religious leaders in Erdenet also reported that only five out of 20 churches were registered, adding that unregistered churches frequently had difficulties with the authorities in conducting religious activities. Mongolian-run churches reportedly experienced fewer problems.
The government granted religious visas for individuals intending to stay in the country more than 90 days, but the application process was lengthy. Only officially registered religious groups could sponsor religious visas. Christian groups reported that missionaries seeking to enter the country were usually given other types of visas (such as student or business), thereby restricting the scope of religious activities in which they could participate and making them more vulnerable to deportation due to inconsistent policies regarding what was permitted for foreign visitors . Christian groups also said certain immigration officials categorically denied visas if they believed the visitor was a Christian coming for religious purposes.
According to religious leaders and lawyers representing religious groups, some immigration officials reportedly called and threatened groups sponsoring work visas for Christian volunteers (there was no separate visa category for volunteers); the officials objected to the volunteers' extracurricular religious activities. Observers reported that foreigners carrying out missionary activities without a religious visa were sometimes deported on the basis of visa violation technicalities often unconnected with religious activities. Local lawyers representing Christian groups reported that the immigration agency was more tolerant than in previous years of foreigners volunteering their time for religious activities.
Due to the sensitivity of these visa issues, individual religious groups were reluctant to criticize local authorities publicly.
Some government officials criticized Christian charitable efforts, alleging the charity workers used material incentives to attract potential converts.
The government contributed financially to the restoration of several Buddhist sites that were important religious, historical, and cultural centers. The government did not otherwise subsidize Buddhism or any other religious groups.
The Muslim community reported no problems securing government permits for ongoing construction of a new Islamic cultural center and mosque in Ulaanbaatar. However, construction stopped due to decreases in funding from sponsoring Arab countries in the wake of economic problems. Previously, mosques and Islamic centers received financial assistance from religious groups in Kazakhstan, Turkey, Saudi Arabia, and the other Gulf States.
Parliament internally observed a number of official Buddhist and shamanist ceremonies.
Section III. Status of Societal Respect for Religious Freedom
There were reports of societal abuses and discrimination based on religious affiliation, belief, or practice.
Christian leaders reported that the growing influence of Christianity worried some Buddhist leaders in the country and in certain cases led to harassment of Christians. The country's political leaders continued to support Buddhism overtly, and there was fear that foreigners and foreign influence could lead to a steady erosion of respect for the country's culture. Despite this, the first openly Christian member of parliament was elected in June.
Government institutions, as well as informal hiring quota policies dating back to the Soviet era, strongly supported the Muslim community (which is overwhelmingly ethnically Kazakh). Kazakh Muslims served in virtually every government institution, including two members of parliament.
Practitioners of shamanism reported some harassment by Buddhists, primarily by officials and community leaders who used their authority to deny the shamanists equal access to public resources such as public television.
Section IV. U.S. Government Policy
The ambassador and other U.S. embassy officials frequently discussed religious freedom with government officials at the local, provincial, and national levels, including in meetings with high-level officials in the Ministry of Justice, key parliamentarians, and provincial political leaders. Embassy officials engaged in regular dialogue with government representatives and shared the U.S. government's concerns, particularly about the uneven application of visa laws and the registration difficulties Christian groups and others experienced. Embassy officials encouraged the Ministry of Justice and the Ministry of Foreign Affairs to enhance their efforts to protect religious freedom. Embassy officials also met frequently with religious leaders across the country to discuss ways to combat religious discrimination and promote greater religious freedom. In addition, the embassy invited Buddhist, Christian, and Muslim leaders to embassy events in order to promote respect for religious freedom and tolerance.
Mogi: cool vid of Is Tropical's visit
Is Tropical in Mongolia Part 1
May 20 (Noisey) --
Mongolian military band to participate in Edinburgh Festival
May 20 (UB Post) The Exemplary Wind Symphony Orchestra at the General Military Staff of Mongolia in cooperation with the Military Song and Dance Academic Ensemble are set to participate in the Edinburgh Festival, an annual international cultural festival in Edinburgh, Scotland this August. The team has already started their rehearsals and planning to leave for Scotland on July 25.
The journalists interviewed Ch.Tumurbaatar, the director of the Exemplary Wind Symphony Orchestra about it.
-How did you get to participate in the Edinburgh Festival?
-This year marks the 50th anniversary of diplomatic relations between the United Kingdom and Mongolia, and the 92nd Anniversary of the Mongolian Military Force. As part of these celebrations, the Exemplary Wind Symphony Orchestra at the General Military Staff of Mongolia sent a request to take part in the Royal Edinburgh Tattoo in the UK last August. The producer of the festival, David Allfrey, visited Mongolia in January this year and watched our performance. He was very pleased with it. Hence, our orchestra and the Military Song and Dance Academic Ensemble are to represent our country in this festival that takes place annually in Edinburgh, Scotland.
-What performances are you preparing for in the festival?
-Mongolians are known in the world through Chinggis Khaan. We are rehearsing a special show of military dance and music to depict the history of how he conquered the world once and how the Mongolian state was reinforced.
-Has the orchestra experienced participating in international festivals before?
-Of course. We have previously performed in North and South Korea and performed in seven cities in Germany in 2002, 2006, and 2007.
-Will the orchestra perform every day during the Edinburgh Festival?
-The festival lasts for about three weeks. But the participants will perform only three days a week. The participant countries are given a time of six minutes for each performance. We are planning to hold concert tours in different cities in the UK to promote our military music during our free days.
-I heard that the Minister of Culture, Sports, and Tourism, Ts.Oyungerel, met you last Friday?
-Yes, she received us and met us with David Allfrey. The minister wished us to present our country well in the festival. She also promised to help us with the travel expenses to go to Scotland. The Mongolian cultural days are organized not only by the Ministry of Culture, Sports, and Tourism; but also by the Ministry of Foreign Affairs and the Ministry of Defense.
-How many people does the participating team of Mongolia consist of?
-There are about 80 people; over 30 artists from the Military Song and Dance Academic Ensemble and over 40 from the Exemplary Wind Symphony Orchestra at the General Military Staff. We will be participating in this event until August 20.
Documenting a Mongolian Winter Olympics dream
May 22 (Screen Africa) To shoot the documentary Steppenlauf, cinematographer Florian Langanke travelled all the way to Mongolia. Together with director Anni Seitz, he accompanied three young Mongolian cross-country skiers, who, in spite of difficult training conditions in their country, wish to participate in the global community of top-class athletics. Their biggest dream is to take part in the Winter Olympics.
With a small team consisting of the two graduates from the Filmakademie Baden- Württemberg and an interpreter, Langanke depended on the FSB 8 fluid head with the Speed Lock 75 CF tripod by Sachtler, part of Vitec Videocom, a Vitec Group company.
"Steppenlauf is a film about contrasts and commitment to a dream," explains Langanke.
On the way to the Olympics, the athletes have to do without appropriate training facilities and a competition trail recognised by the International Ski Federation FIS. They must make something out of nothing – Oyunchimeg, Usukhbayar, and Gerelt Od make up for this with motivation, happiness, and a fighting spirit. This is the working basis for former cross-country skier and national trainer Georg Zipfel, who is actively engaged in the FIS Aid & Promotion Programme for Developing Ski Nations in Mongolia. Steppenlauf gives audiences an intense look into a far-away world in the midst of transition. For example, the film shows Zipfel and his Mongolian athletes during summer training between sheep and yurts on the only paved street in the tiny town.
On the sidelines of the 2012 Winter Olympics in Austria or in the expansive Mongolian-Manchurian grassland – Langanke relied on the Sachtler FSB 8 tripod system, which is compact, lightweight, quick to set up, and – above all – easy to handle. With a weight of only 5.2 kg (11.5 lbs), it was convenient to transport; so, fast location changes were no problem for the small team. In addition to the compact design and the light weight, the cinematographer considers three features to be indispensable for his work:
"I particularly liked the fast but secure sideload camera connection, the self- illuminating Touch Bubble, and the fast-action clamping system of the Speed Lock tripod for spontaneous height adjustments during one-man camera operation."
On location, the conditions challenged both the team and the equipment. "The biggest challenge for the equipment was the weather in Mongolia. In the summer, we had to deal with wind and fine dust, which made its way into every nook and cranny. In the winter, the camera, tripod, and sound gear must work in temperatures down to -28 ºC (18.4 ºF)," explains Langanke.
That's why he chose the FSB 8 fluid head, which provided smooth camera pans at temperatures between -40 and +60 °C (-40 and +140 °F). "In combination with the Canon EOS C300, the FSB 8 tripod system delivered excellent precision and was always dependable," he said. Plus, Langanke appreciated the small size and light weight of the rig they carried through the challenging environment.
Steppenlauf is to be finished in December 2013, but Langanke is already prepared to report positive results concerning the film project: "Getting to know Mongolia was a profound experience for me. Besides the breathtaking natural environment, it was the people who especially impressed me. In spite of all the difficulties, they unremittingly fight for their dream: cross-country skiing. Everyone can learn from them."
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Mogi Munkhdul Badral Bontoi
Founder & CEO
Cover Mongolia
Email: mogi@covermongolia.mn
Mobile: +976 9999 6779
Skype: mogibb
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