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Mongolia Said to Demand Rio Tinto Keep Mine Revenue in Country
By Michael Kohn
June 21 (Bloomberg) Mongolia is insisting that revenue from Rio Tinto Group (RIO)'s $6.6 billion Oyu Tolgoi copper and gold mine be kept in the country before it will allow sales to start, according to a government official with knowledge of the matter.
Government officials want revenue from the mine to be held at a Mongolia-based bank, a decision that Rio rejects, said the person, who asked not to be identified as the talks are private. London-based Rio postponed an event scheduled for today that was to mark the first shipment of copper concentrate from the mine to China, citing a "request from the government of Mongolia."
The standoff threatens Rio's June deadline for shipments and revives a dispute over the mine that will account for 35 percent of Mongolia's GDP when fully operational in 2020. The Manhattan-sized deposit will produce 450,000 metric tons of copper and 330,000 ounces of gold a year, as well as silver and molybdenum. With fees, royalties and the 34 percent stake held by the government, as much as 71 percent of the profits will go to the Mongolians, the International Monetary Fund estimates.
Rio wouldn't comment on whether the banking issue caused the delay to the first shipment, or specify the reason for the postponement, with Melbourne-based spokesman Bruce Tobin saying the mine is ready to start shipments.
"Rio Tinto is keen to start shipping as soon as possible in order for the benefits from Oyu Tolgoi to start flowing to all parties, including the people of Mongolia," Tobin said in an e-mailed statement. "Shipping will commence as soon as the government indicates its support for us to do so."
Frozen Accounts
In February, the Mongolian government blocked some of Rio's bank accounts in the capital Ulaanbaatar over unpaid tax claims, said three people familiar with the situation. While the accounts were unfrozen, the two sides remained in protracted talks over how to solve a raft of issues, including management control. In April, Rio hired Mongolian national Bold Baatar as president of its copper group.
Oyu Tolgoi had invited reporters to a ceremony marking the first shipments of copper to China today. It was called off late yesterday, the second time this month it had been canceled. Mongolia holds presidential elections June 26 and there have been media reports that the event was canceled to avoid politicizing Oyu Tolgoi, a lightning rod for public debate.
The official who spoke to Bloomberg denied that the government called off the event because of the election.
Similar:
Rio Tinto delays Mongolia copper mine shipment – BBC News, June 21
Rio Tinto delays Mongolia copper mine shipment – Radio Australia, June 21
Stand-off delays Mongolia mega-mine export – Al Jazeera, June 22
Bulk Sampling for Wash-Testing Underway at Shanagan Coal
June 24 -- Newera Resources Limited (ASX: NRU) is pleased to advise that it has executed a Works Completion Agreement with a reputable Mongolian mining company to complete a declined bulk sample access shaft at the Shanagan coal project in Mongolia.
The shaft will be used to extract approximately three tonnes of coal which will be used to undertake definitive coal quality and washability testing, to be supervised by international coal preparation specialists Sedgman LLC.
The bulk sample access shaft will be sunk at a location proximal to Newera's drill hole SHDH14 (which intersected 12.8 metres of net coal between 9.10m and 25.40 metres) and sunk to a depth of approximately 26m.
The access shaft is designed to cut through the known coal seam and allow the miners to access three tonnes of representative coal sample material. The coal sample material will be delivered into three one tonne bulk bags ready for transport to Ulaanbaatar. One bulk sample bag will be delivered to Sedgman's complex for Sedgman to undertake definitive coal washability testing. By extracting three separate bulk samples, it affords Newera the opportunity to export (under licence - if granted), a bulk sample to a Chinese testing facility if required, particularly from a marketing perspective.
Under advice from the mining services company, works are expected to commence on Sunday the 23rd June 2013, and be completed within a month. The contractors also advise that double shifts will be worked in order to complete the works at the earliest possible date.
The Works Completion Agreement (contract) is a fixed price contract of 35.5 million Mongolian Tugriks (~AU$25,000) and is inclusive of the mining operation, the transport of approximately 400 tonnes of waste to a suitable site and the complete rehabilitation of all disturbed sites to the satisfaction (under documentation) of the Mongolian environmental authority. The Mining contractor assumes all responsibility for safety and compliance matters and any and all liability that may be associated with the works.
Newera looks forward to a successful bulk sampling operation and a successful outcome to the washability testing under Sedgman's supervision.
Xanadu Chairman Adds Stake On-Market
June 24 (Cover Mongolia) A Change in Director's Notice filed June 24 reveals Xanadu Mines Limited (ASX:XAM) Non-Executive Chairman Dennis Gately acquired 75,000 shares on June 20 for total consideration of A$5,625 or 7.5 cents per share on average.
MATD closed -12.82% to 4.25p
Petro Matad still a 'buy', says Westhouse, target price 12p
June 13 (Proactive Investors) Petro Matad (LON:MATD) is still a 'buy' according to Westhouse Securities, however, the City broker says a possible farm-out would be the only catalyst for the share this year.
The Mongolia focussed explorer has gone back to the drawing board following a disappointing phase of exploration which ruled out a development of what was its flagship asset.
Under the guidance of new management the company is now pursuing new prospects within its portfolio and it hopes to bring in a partner to the project. To this end a data room was recently closed and a deal could be a possibility during the third quarter.
Whilst pointing to the inherent risk of exploration, Westhouse Securities believe that at the current price investors are too harshly judging the group's prospects.
As a pure frontier exploration play Westhouse says the attractiveness of Petro Matad should be measured by comparing the chance of success implied by the market (Westhouse calculates this as a 2% chance) versus the prospects geological chance of success.
"Given the exploration work conducted by the new management and the fact that there has already been discoveries in the general area, we believe that the geological chance of success is higher than what the market is implying (we have assumed 5% chance of success)," it said.
"From that perspective, at current share levels we see Petro Matad as a longer term good risk/reward opportunity."
The broker adds: "The outcome of the farm-out is likely to be the only major catalyst for the stock this year."
Following a recent US$5mln share placing Westhouse has cut its target price top 12p from 15p – the explorer currently trades at 4.88p.
BDSec Daily Market Update: Top 20 +0.44%, Turnover ₮26.8 Million
21 June, 2013 (BDSec) - After two consecutive days of decline, Mongolian Market gained 0.44% to reach at 14,385.80 points. Most of the "A" board companies had a value gain, as 8 out of 16 companies went up, 5 stocks stayed flat and remaining 3 stocks had negative gain. In total of 26.8 million MNT (~19.1 thousand USD) worth of stocks were traded. Among top gainers, 2 manufacturing stocks let the list: Mongol Nekhmel (MNH) and Darkhan Nekhii (NEH), gaining 7.2% and nearly 3% respectively.
Corporate headlines
Mongolia tells Rio Tinto to delay Oyu Tolgoi copper exports according to Reuters. Rio Tinto said its plan to start exporting copper from the $6.2 billion Oyu Tolgoi mine on Friday has been delayed at the request of the Mongolian government, heightening investor concerns about the risks of mining in the country. "Oyu Tolgoi is ready to start its first shipments of copper concentrate from its Mongolian mine and all necessary permits to do so have been received from relevant authorities," Rio Tinto spokesman Bruce Tobin said on Friday. The company declined to comment on what was behind the latest delay. The event on June 14 had been postponed due to a demand from the government that Rio Tinto keep all export revenue in Mongolia, Prime Minister Norov Altankhuyag said earlier this week. That issue has been resolved, people familiar with the situation said. The agreement that governs the Oyu Tolgoi project gives Rio Tinto the freedom to put the export revenue anywhere it wants, they added.
Macro headlines
Invitation to pre-selection of the plants in Sainshand Industrial Complex was announced. Participants are requested to submit their projects to construct the following plants for the pre-selection (project can be pre-feasibility study or a completed feasibility study):
o Metallurgical coking plant
o Copper smelter
o Iron ore pelletizing plant
o DRI/HBI plant
o Coal gasification plant
o Thermal power station
o And accompanying light industry plants
Pre-selection documents may be received from 09:00 am to 05:00 pm, between June 21, 2013 and July 22, 2013. Project materials should be submitted from July 23, 2013 until 03:00 pm of August 01, 2013. Foreign legal entities are allowed to apply and materials should be submitted both in Mongolian and English languages.
Top movers
Trading Value Leaders | Close MNT) | Value (MNT) |
Remicon (RMC) | 166 | 13,981,794 |
APU (APU) | 3,620 | 2,508,660 |
Genco Tour Bureau (JTB) | 84 | 2,038,680 |
Top Gainers | Close MNT) | % Change |
Mongol Nekhmel (MNH) | 7,000 | 7.20% |
Baganuur (BAN) | 4,751 | 3.15% |
Darkhan Nekhii (NEH) | 6,745 | 2.99% |
Top Losers | Close MNT) | % Change |
Remicon (RMC) | 167 | -0.60% |
HBOil (HBO) | 330.12 | -0.60% |
Khukh Gan (HGN) | 140 | -0.18% |
MSE & CITI GROUP ORGANIZE PRESENTATION ON GLOBAL DEPOSITORY NOTES
June 21 (MSE) MSE successfully co-organized with Citi Corporate and Investment banking group a presentation event on "Global Depository Notes'' on the 20th June 2013.
Revised Securities Markets law of Mongolia provides provision for the issuance of Depository Receipts which will diversify the current products on the capital market whilst offering another opportunity to foreign investors to access the Mongolian Capital Market. Hereof, the purpose of this event was to provide general information about the Global Depositary Notes as well as to present the advantages of introducing this new instrument on the domestic market.
There was a representation from Bank of Mongolia, Ministry of Finance, Ministry of Economic Development, Financial Regulatory Commission, World bank, City of Ulaanbaatar and commercial Banks.
MSE presented an overview of the revised Securities Markets law, analyzed the opportunities that are being created and shared the vision of the future safe and efficient Post Trading Environment.
BoM issues 1-week bills
June 21 (Bank of Mongolia) BoM issues 1 week bills worth MNT 150 billion at a weighted interest rate of 11.50 percent per annum /For previous auctions click here/
First JBIC credit line to Mongolian government signs
The first export credit line in support of Japanese companies' exports to Mongolia has been signed by JBIC with Nexi support.
June 21 (Trade Finance) The Ministry of Economic Development of the Government of Mongolia has signed an ¥8 billion ($82 million) export credit line with the Japan Bank for International Cooperation (JBIC). The credit line is cofinanced with private financial institutions, with Nippon Export and Investment Insurance (Nexi) providing buyer's credit insurance for the portion cofinanced by private financial institutions.
The credit line is the result of a memorandum of understanding signed in March 2012 between JBIC and the Ministry of Finance of Mongolia to enhance financial cooperation. This credit line is first extended to Mongolia to provide medium- and long-term financing in Japanese yen or US dollars for the purchase of Japanese machinery and equipment by Mongolian local companies, as part of the ERCH initiative proposed to promote the economic relationship between the two countries upon Prime Minister Abe's visit to Mongolia back in March.
The Mongolian economy is growing briskly through the development of its abundant coal, copper and other natural resources, and the country has increasingly become important for Japanese companies as a promising export market. This includes high demand for Japanese construction machinery for infrastructure development associated with mineral resource development projects. It is expected that supporting Japanese companies' exports to Mongolia through this credit line will contribute to maintaining and improving the international competitiveness of Japanese industries, as well as strengthening the economic relationship between the two countries.
Coming – Phase II of the Mongolian Boom!
June 20 (CapitalistExploits) Since this blog is pretty much a running commentary of our "exploits", today I decided to post up an email conversation I had with our colleague Harris Kupperman. I took a few liberties with editing, but only slightly so that it would make sense to you, dear readers.
By now most of you will likely be familiar with Harris Kupperman (Kuppy), whom I believe we first introduced here. For those unfamiliar with Harris, he is a protégé hedge fund manager who saw an opportunity in the land of Chinggis Khan, and in similar fashion set out to build his own little empire. He is the CEO of Mongolia Growth Group (YAK.V – MNGGF).
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Chris: Harris, we're told that Oyu Tolgoi pours its first concentrate this Friday (the 21st of June). Regardless of what skittish investors are thinking of in terms of Mongolia, the facts are that there never was a lot of risk to OT actually happening. (Note: We recommended shares in Turquoise Hill a while back in a Trade Alert. It might not be a bad idea to revisit that idea now). We always thought the political posturing was key to this. Further to that, on the 26th of this month elections will be held. The incumbent Elbegdorj is set to take it away, and his stance has been progressive and pro-business. What think ye?
Harris: Let's start with the obvious. The first rule of frontier markets investing is that you should pretty much ignore whatever nonsense is in the English language papers — particularly if those papers do not even have full-time correspondents living in the country in question. In the end, the major papers are all fighting for readership and sensationalist articles sell newspapers.
The real truth is that over the past year, the papers have made advertising profits by beating up on OT, but there was never any real risk that the mine would produce a whole lot of copper. Even more amazingly, it seems to be starting up roughly on time — which is a true rarity in mining.
Mongolia understands and recognizes that it needs foreign capital in order to build out its dozens of very sizeable mining assets. In addition, it needs foreign capital to finance the infrastructure in general. No one is going to do anything that seriously imperils that. No matter who wins the election next week, I think that the country will continue on the same path of openness, pro-business governance and rapid development.
Chris: I couldn't agree with you more regarding what passes as news these days. It's truly astonishing really, and interestingly has become one of our main centres of attention over the last 10 years or so. Identifying the disconnect between the perceptions created by a media-fed populace incapable of, or unwilling to, rationalize the sensationalist sales pitches which pass as news, versus the reality on the ground, has (not) coincidentally provided us with numerous opportunities to profit in the past.
Right now I find it somewhat amusing that a flood of hot money is flowing into places like Myanmar, a country many years behind Mongolia in terms of financial stability, political stability and still far from foreign investor friendly. I'm not denying the vast opportunities, but pricing of assets and the perception of risk is far less than the real risks right now. Basically it's the opposite of what I look for.
I've said it before and I know from experience that many will lose their shirts in Myanmar just like many lost their shirts in Mongolia more recently. Stupid money will always follow the major news cycle which is great from a trading perspective, but in frontier markets the way to make fortunes is in identifying at what stage of the cycle we're in. The MSE is down some 80% from its highs and we're seeing insiders buying.
What's your take on values in Mongolia right now?
Harris: I agree completely on Myanmar, hot money is flowing in and a lot of shady characters will be taking it from investors. Just like rare earths and whatever else the fad was before that… When this all shakes out in a few years, Myanmar will probably be worth a good long look. For now, it's over-promoted and over-promised. From what I hear, prices for assets are just short of ridiculous and legal title isn't even secure.
You want to go where the story is strong and investors have given up interest — or even better, where investors are genuinely bearish. 2 years ago, Mongolia was white hot, a lot of money flowed in and the MSE went vertical. The companies on the MSE have continued to grow, meanwhile, most of them have dropped in price — substantially. All of this negative talk about Oyu Tolgoi has scared off investors right when they should be buying! The mine is going to ship its first copper before shortly. That will start the process of injecting a whole lot of capital into a country that is starved for growth capital.
Our research on lots of these commodity booms seems to show that you want to invest right at the inflection point where the money stops going into the ground, but instead starts coming out of the ground as the resources are produced. In typical form, the investors got it all wrong. They rushed in on the promise of what will happen in the next few years, then they lost focus before it actually has come to fruition. That's the opportunity today as an investor in Mongolia.
On the subject of the MSE, I haven't really looked through the individual names, but my friends who follow this closely tell me that there's very real value there today. That's for other investors to sort out though. There just isn't enough liquidity for me. Besides, transparency and corporate governance still aren't what I would want.
I'd rather focus my time on our company, Mongolia Growth Group, where I know what the numbers are and I trust that the assets are real.
Chris: OK so give me the dirty on present day UB real estate. I'm also curious about this new mortgage law.
Harris: Right now if you want to borrow money in Mongolia it will cost you about 15% in US Dollars and around 25% in Togrogs. In addition, it's nearly impossible to get a mortgage for more than 5 years. These high rates are making it prohibitively expensive for Mongolian families to buy apartments or trade up to nicer apartments. This is a very real problem, as we have seen from some of our employees who spend a disproportionately large percentage of their salaries on interest payments for their apartments.
The Mongolian Government recently set up the framework for lower interest mortgages. These mortgages will be for 20 years, and are fixed at 8% interest rates. This means that the carrying cost of home ownership will drop substantially — which should allow families that have homes to reduce their interest payments and have more disposable income. It will also mean that families without property can now start on the property ladder with their first purchases.
This is a really huge development for Mongolia and the property sector. The development of a liquid mortgage market has always been a big focus of our company. It starts with apartments but will eventually lead to lower interest rates for commercial mortgages as well. Lower interest rates will then lead to lower capitalization rates on property assets. Remember, the move from a 15 yield to a 7.5 yield means that your property asset doubles in value. That's a stunningly huge move for a property asset. The creation of a more mature mortgage market is one very big step in this process.
Chris: Interesting. The leverage available in real estate is what has made many of the wealthiest people I know their fortunes. There was a time when I leveraged the snot out of my own balance sheet, where my net spread was over 5%, and it was one of the most profitable investment period of my life.
Regarding Mongolian RE, I've shied away from owning apartments or anything of that sort outright. It's just very difficult to manage from afar and I would need to buy a lot to achieve the diversification I need in order to mitigate the inevitable management problems.
As you well know I've been an incredibly happy shareholder of your company since its founders round and beyond. It's my favoured way of participating, but I can't help but think about leverage in a bull market where your running costs are self-financing. While your strategy has never been to build a cash flow machine with MGG, are you, or will you consider adding any debt to the balance sheet given the environment?
Harris: As you note, property has created many billionaires and debt is naturally a big part of that wealth creation. I am a risk adverse guy, I really don't want MGG to be taking on a lot of financial leverage. Property already gives an investor huge leverage to what happens in Mongolia. You don't need to turbo-charge that upside. That said, I'm not opposed to some debt. The important thing is that it has to be long-dated debt and it has to have an interest cost that is palatable.
I think that as the mortgage market matures, we will begin to take on debt locally. Even more interestingly, as our company starts to show cash flow, I think we will be able to get overseas debt in the form of a bond offering and get it at interest rates that are substantially lower than we could get in Mongolia. That would be the real value creator — a long dated bond that would let us buy property that yields a huge spread over our funding cost, just like you did. The beauty of being public is that it allows you to eventually do this, and as the only overseas publicly traded property company in Mongolia, we would be one of the only companies in Mongolia that could do this. More importantly, a large bond offering would finally justify all of those fees that we've paid along the way to get to this point.
Chris: I hear you; pubco costs are horrendous. Getting in early when assets are not yet financialised makes perfect sense. Liquidity is poor while fundamentals of a rapidly growing, industrializing frontier market economy are driving demand and growth. The memory of fund managers is short lived indeed. 2 years ago you'll recall many touting the fact that Mongolia would be experiencing double digit GDP growth on the back of the substantial mining assets discovered, and now being brought into production.
Many of these guys were raising tens of millions of dollars without much clue as to how or where to put that money to work. I remember having conversations with some and asking them how they were going to allocate their cash into this tiny economy. They had no answer but were very happy to take 2/20 and just raise as much as they possibly could. I'm glad many of these clowns have blown away in the wind. I was encouraged to see Sam Zell, a man who has proved his acumen in real estate, recently mentioning that his two favourite RE markets in the world are Colombia and Mongolia.
Typically when we look at previous booms of this nature the initial money which is made is about 1/3rd of the entire market move, which may last up to a couple of decades before flattening out or coming back to earth. To me it feels like we're on the verge of the 2/3 move given the leverage coming into the market, the real economic growth, and the extent of the pull back thus far. I think the reason much of the move is in the latter stages is likely due to access to the market. Buying assets in Myanmar, Mongolia, Cambodia, Mozambique, etc. – all countries we're focused on – is impossible to do from your sofa and E-Trade account. One thing I find interesting though is that the liquidity often follows the brand names. We've just had KFC setup shop in UB. Are you aware of any others who will surely follow?
Harris: One thing that we wanted to do with MGG was to create a way for investors, like our own management team, which owns 30% of the company, to invest in the shares without all of the headaches of opening special accounts or filling out forms and locking up your money for years. I am sure that other companies like ours will be set up over time and flood the market with capital and liquidity. As you say, this is the next 2/3 of the move as these guys chase after scarce assets.
In terms of brand names, we always knew that the big move in property values would come when brands moved into the country. Brands pay rent on time and sign long term leases that they honor. More importantly, they are professional operators of businesses, so they know what they can afford to pay in rent, and then they pay top dollar for the best locations. What this eventually lets you do is it lets you borrow against the future income streams that are rather reliable. So, naturally we have been very attracted to bringing international brands into Mongolia.
When we started to reach out to these firms in 2011 they ignored Mongolia. In 2012 they asked for some more information, then ignored Mongolia. Now in 2013, with KFC opening their first branch, these guys are all converging on Mongolia. They all want a presence in one of the last emerging markets that has almost zero penetration of international brands. We've been approached by a number of brands already – a number have sent representatives to Mongolia and they want to be involved. It probably isn't 2013 that they open shop, but I expect that by 2014 we will be signing lots of leases with these guys. For that matter, we signed our first 2 leases with an international firm last week. It was a huge milestone for us—it proves that our thesis is playing out.
Chris: OK so lets talk valuation. Real estate price growth is averaging what… 3% monthly?
Harris: Ha ha — that's so 2011… Prices are increasing rapidly, but it's more like 1 to 2% a month lately. Basically prices are tracking rental increases, and cap rates are staying constant in the low teens.
Chris: Book value for MGG is somewhere around $2.50 to $3 per share, so I'm looking conservatively at forward book value 12 months out to be $3.50 upward. Figuring out price to book is difficult for such a small market as Ulaanbaatar, but the way I think about this is to compare it to other emerging markets with larger data sets. I figure it's probably somewhere around 3x book. Bear in mind this is simply a rule of thumb figure based on doing this for a long time, so don't quote me on the figure but I'm confident I'm not too far off.
Since the only way you get paid in your company, given that you take no salary, is by creating shareholder value. So, what do you think of the present valuation of the company?
Harris: Let me start with the obvious, our lawyers would kill me if I validated your book value number or told you what I thought the right multiple to book should be. That's for you to do, but you should be pretty capable of doing it, as you've spent a month in Ulaanbaatar and know many property people who are familiar with our assets.
In terms of how I think of our company valuation, we have created something that is truly unique in Mongolia. We have created the only publicly traded platform for overseas investors to invest in Mongolian property assets. We have a unique offering in terms of our ability to source assets, perform due diligence on them, add value through renovations, lease them and then manage them once they have tenants.
We are one of very few companies in Mongolia that have this ability, and while we've only been a company for less than 3 years, we have recruited a number of Mongolians with very substantial experience in the property market in Mongolia. In the end, our people are our biggest asset as we move onto the next phase of our company, which is using our platform to take capital from overseas and invest it in Mongolia at very high rates of return, and do it in a way that provides investors with liquidity, transparency and a management team that has a whole lot of skin in the game – looking out for their investment. As you say, I take no compensation. I'm at MGG because I think that over time my shares will appreciate substantially.
In terms of our physical assets, we have invested approximately $40 million in Mongolian property that has appreciated quite a bit. I think you'd have to spend well more than twice what we paid if you were to try and replicate our portfolio today. Our portfolio is specifically designed to have the maximum leverage to the growth of consumer spending as the Mongolian consumer sees his wages and net worth increase. I think that this is a trend that we can play for a long time, as Mongolia will become a very wealthy country over the next few decades. It took us over 2 years to get positioned with the assets and the team. The next few years will be the time that we can use these resources to create real value for our shareholders.
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That's it for the week. Have a great weekend!
But before we sign off, one last thing… For all of you bored "regulators" out there that may be reading this blog, here's my disclosure: Mark and I participated in the seed round of MGG at $0.60, the second round, and I participated in each subsequent private placement. I am therefore a shareholder, but Harris doesn't pay me to talk about his company (though I think he may owe me a beer next time we're in the same country). This is not a solicitation to buy shares in YAK.V, or the stock of any company we may mention herein. If any of you reading this are foolish enough to buy (any) shares that I/we speak of without doing your own DD (due diligence), then at some point you'll get what's coming to you – without any help from the gubbermint.
- Chris
" As far as Mongolia… it's going to be the fastest growing economy in the world this year." – Sam Zell
WORLD ECONOMISTS TO GATHER AT 2ND FORUM OF ECONOMIC STUDY
Ulaanbaatar, June 21 /MONTSAME/ A gathering themed "2nd Forum of Economic Study" of world famous economists will run on July 2-3 in Ulaanbaatar, Mongolia.
Organized by the School of Economics at the Mongolian State University (MSU), the upcoming event aims to discuss the latest research works and analysis of economics, to create a network of Mongolian economists working home and abroad and to develop cooperation between international famous economists and research institutions.
Not only considering the general theory of economics, tendency and research basis, the upcoming forum intends to back the ties among economists, policy makers and business organizations.
Reports under four basic themes "Employment and salary", "Unclearness and capital price", "Consumer economics" and "Economic theory" will be given by economists and scholars Mongolia, USA, Denmark, Canada, South Korea and Turkey.
FINANCE MINISTER ULAAN SUBMITS 2012 MASTER BUDGET PERFORMANCE REPORT
Ulaanbaatar, June 18 /MONTSAME/ The Minister of Finance Ch.Ulaan submitted Tuesday to L.Tsog, a Vice Speaker the performance of 2012 master budget and a report on governmental finance.
These documents must be discussed and adopted at the spring session of parliament.
According to the performance of 2012, the total balanced income of Mongolian budget reached MNT 4,881.1 billion, increasing by MNT 653.9 billion or 15.5 per cent against 2011. The total expenditure reached money of MNT 6.017.8 out of expected MNT 6,499.2 billion.
PROSPERITY IN DEPTH: MONGOLIA: The Paradox of Riches
By Peter Murrell and Chuluunbat Narantuya
THE 2012 LEGATUM PROSPERITY INDEX™ RANKING: MONGOLIA 59/142
ABOUT THE AUTHORS
Peter Murrell is a Professor in the Department of Economics at the University of Maryland specialising in development issues in post-Soviet transition economies.
Chuluunbat Narantuya is a lecturer at the National University of Mongolia and advanced PhD student at the University of Maryland. She received her initial training in political economy from the Moscow State University.
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Mongolian democracy is showing signs of stress, and the economy is overheating, with monetary growth, fiscal policy, lax banking regulation, and corruption to blame.
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Mining wealth distribution key issue in Mongolia polls
June 23 (AFP) Mongolia goes to the polls Wednesday to elect a new president as the country's mining boom raises questions over the role of foreign investors and the distribution of new found wealth.
Observers expect President Tsakhia Elbegdorj to win a second term and continue his policy of using foreign cash to help drive the rapid development of Mongolia's economy, which grew by 17.5 percent in 2011 and 12.3 percent last year.
The expansion has been achieved following the arrival of overseas mining giants such as Rio Tinto, which have moved in to exploit huge and largely untapped reserves of coal, copper and gold.
The Anglo-Australian miner and Canada's Turquoise Hill Resources have jointly led construction (Mogi: jointly?) of the $6.2 billion Oyu Tolgoi mine, which is expected to produce 450,000 tonnes of copper concentrate a year and generate up to one-third of government revenue by 2019.
Against the background of intense inward investment, the landscape of Mongolia's capital city Ulan Bator is changing rapidly with plush new department stores opening amid a high-rise frenzy.
But concerns over rising inequality and environmental damage to the largely rural country are likely to be used by Elbegdorj's opponents in a campaign dominated by the resource nationalism issue.
"This is the issue, and because of that people will prefer the current president who is more foreign investment-friendly," Jargalsaikhan Dambadarjaa, a Mongolian political commentator and television presenter told AFP.
"Mongolians now more and more understand the importance of foreign investment."
Elbegdorj's main challenger is likely to be Badmaanyambuu Bat-Erdene, a champion wrestler and candidate from the Mongolian People's Party (MPP).
The MPP and Elbegdorj's Democratic Party have spent much of the last decade in power together as part of a coalition in Mongolia's parliament, the State Great Khural. However, the Democratic Party took control as a coalition leader at last year's parliamentary elections.
The third candidate, Natsag Udval, from the Mongolian People's Revolutionary Party (MPRP), is a supporter of former president Nambar Enkhbayar, who is now serving two-and-half years in prison on corruption charges.
Bat-Erdene helped draw up a new environmental protection law amid concerns that the country's breathtaking landscape was being damaged by industry.
And both of Elbergdorj's challengers have policies aimed at amending Oyu Tolgoi's contract, Jargalsaikhan said, amid concern that profits generated by foreign companies were not trickling down to the poorest Mongolians.
"But equality is most closely connected to the issue of corruption. Where there is money, there is the corruption issue," the political commentator said.
Fraud allegations against the president have surfaced, but are largely considered by the electorate to be a late smear tactic. Bat-Erdene has placed great stress during the campaign on his "clean hands".
A run-off will be held between the two leading candidates on July 10 if no-one attracts more than 50 percent of the votes.
However, polls suggest that Elbegdorj should beat his opponents at the first hurdle.
A survey carried out on June 14-16 by the Ulan Bator-based Sant Maral Foundation in the capital -- a traditional Democratic Party stronghold -- suggests 54 percent of people would vote for Elbegdorj.
"According to our poll, 71 per cent of the urban population said they would actively participate in the electoral voting," Sant Maral official Sergelen Tsogt-Ochir said.
However Julian Dierkes, an associate professor at the Institute of Asian Research, University of British Colombia, said on his online blog Thursday that "the assumption that Elbegdorj will win" could lead to voter apathy.
"The kind of consensus that I'm hearing here makes me a bit suspicious as to the impact it might have on voters," the election observer wrote, two days after arriving in Ulan Bator.
Landlocked Mongolia, wedged between China and Russia, shook off seven decades of communist rule as a satellite of the Soviet Union without a shot being fired in 1990, and held its first elections two years later.
Since then, its transition to a democratic capitalist state has been largely peaceful, although accusations of vote-rigging in the 2008 parliamentary elections resulted in deadly riots.
A range of new measures were introduced at last year's parliamentary election to boost transparency, including an electronic voting system.
Despite some allegations that the electronic system was faulty, the elections were largely successful.
Polling in UB One Week Before Election: 54% for Elbegdorj, 37% Bat-Erdene and 9% Udval
June 18 (Julian Dierkes, Mongolia Focus) Sant Maral has released a poll ahead of the presidential election that gives a glimpse of some of the tendencies in public opinion.
As of June 19, no more polling is allowed, so one week ahead of the election, this will be the only indication of possible outcomes we'll have.
Methods
As I have done previously, I would caution that methodological challenges in administering these kinds of surveys in Mongolia (for example, the absence of some kind of baseline general social survey that would allow for a comparison of the survey respondents with the general population) makes this kind of poll suggestive of some tendencies, but no more.
From what I can tell from the report published by Sant Maral, this poll was limited to Ulaanbaatar further casting doubt on its utility as anything akin to a prediction of the election result.
But, a week before the election, this is the best information we have and much credit goes to L Sumati for conducting these kinds of polls.
At least, a sample of nearly 1,500 respondents in Ulaanbaatar sounds promising, though the report offers no information on the sampling methodology.
Candidate Choice
The most important information comes right at the outset, i.e. respondents intention to vote for one of the three candidates.
Percentages come out as 54% for Elbegdorj, 37% Bat-Erdene and 9% Udval.
Given DP strength in Ulaanbaatar, we'd expect him to do well with city voters, so this result suggests a victory by Elbegdorj, but perhaps a very closely won victory where a run-off is still a distinct possibility.
How Firm is Voters' Commitment?
The poll suggests that commitment to Elbegdorj is higher than to Bat-Erdene or Udval which might mean that we could still see some movements between those two, and possibly to Elbegdorj as well, in the final days of the campaign, though only 57% are "very confident" in the choice they made for the poll.
Run-Off, Participation, Issues and Voting Blocks
If we assumed something like 30% of voters to be living in Ulaanbaatar (it may be higher in population terms [check census], but many of those might not be registered in Ulaanbaatar and turnout will be greater in the countryside as well), Elbegdorj would have to do very well (close to 50%) in the countryside to win an outright majority of votes in the first round. To me, this poll doesn't seem to settle my debate with Mendee regarding a run-off in previous posts (Me I, Mendee, Me II), other than to suggest that my original expectation for Udval to be garnering around 8% of the vote may hold roughly.
The 70% who stated that they would be voting on June 26 would be wonderful news in that this would be an increase over 2012, certainly in terms of participation in the city. If this holds true, it may also avoid the re-polling that will be necessary in polling stations where fewer than 50% of voters cast their ballots next week. Over ¾ of the respondents see the election as being fair or only facing minor problems. That is obviously good news in terms of voters' confidence in the process and in democracy
If we look at issues that voters are focused on, it's noticeable that the top two issues (standard of living and unemployment) are not particular subject to presidential powers or policy. The third issue, corruption, is one that Elbegdorj is certainly campaigning on.
As far as election platforms of the candidates go, over half of the respondents report no opinion on Udval's platform suggesting that her communication or campaign has not been very effective on substance. The corresponding numbers for Bat-Erdene and Elebgdorj are around 1/3.
Surprisingly (to me) support for Udval is not heavily concentrated in older age groups, at least in Ulaanbaatar, while Bat-Erdene definitely receives more support among older voters.
As the first female candidate for president, Udval does seem to be drawing some women to vote for her, though primarily from Bat-Erdene who has a 5.4% differential between male and female voters, while Elbegdorj is supported more strongly by women than men, though only slightly. This suggests that Udval's gender will have some impact, but may not really be producing the emergence of a women's voting bloc of any kind.
Support for Elbegdorj increases with level of education while the reverse is true for Bat-Erdene. Voters who have received some higher education are clearly more supportive of Elbegdorj and the drop-off among Udval voters is high. Perhaps not surprisingly given her association with Enkhbayar and the MPRP, Udval's support is strongest among the least economically well-off voters.
Dierkes: Some Perspectives on Election Campaign from Parties and Observers
June 21 (Julian Dierkes, Mongolia Focus) In meetings with party officials from the DP and MPP, I heard – not surprisingly – very different perspectives on the election.
On the one hand, voters were described as interested in specifics of platform proposals, on the other hand they were described as essentially making a strategic calculation about whether they want to support an incumbent or support the opposition in order to curtail the power of the DP. From the latter perspective, there's still a significant amount of movement possible in the electorate.
If voters are making strategic calculations, perhaps support for Udval will decline at the last minute, as MPRP supporters fall in behind Bat-Erdene to oppose the DP. Likewise, some voters who see Elbegdorj as an incumbent juggernaut might shift to Bat-Erdene to temper DP dominance.
Lacklustre Campaign
Generally, the campaign was seen as somewhat lacklustre. The only reason offered in conversations is "election fatigue", but I couldn't help myself and had to counter that we didn't see much evidence of such fatigue in the campaign for the parliamentary election last year.
I asked at the MPP why I was unable to find a single Bat-Erdene billboards in the very centre of Ulaanbaatar to take an election snapshot and was offered a fairly generic answer pointing to a lack of funding, a requirement for pre-commitment to secure billboards, and a declining belief in the efficacy of billboards. Nevertheless, not a single one?
Views from Twitter Followers
At a "tweet-up" with some of my Twitter followers in Ulaanbaatar yesterday the conversation also naturally turned to the election.
I was virtually alone in still thinking that a run-off is fairly likely.
Others expressed surprise and disappointment in the lack of support Udval has received from other women in politics who have not really acknowledged the significance and symbolic importance of the first female presidential candidacy. For many this significance is tempered by the perception of Udval as very little more than a stand-in for Enkhbayar.
There seemed to be a near-consensus on the likelihood of an Elbegdorj win, though there was some discussion on the impact that turnout would have on the result, particularly whether the DP and MPP would be able to motivate their supporters to cast their votes when the campaign has been so quiet and the result seems to be pre-determined. The biggest caveat on these views is the TV debate that is scheduled for the evening of Monday, June 24, the very last hours of the campaign. There were some views that Elbegdorj has had a tendency towards emotional responses to criticisms in the past that might hurt him in a debate like this, but that Bat-Erdene also needs to urgently demonstrate presidential stature to overcome perceptions of a thin political CV. I learned about a joke that is circulating that compares Bat-Erdene and Elbegdorj in terms of their focus at important moments in Mongolia's democratic history and notes poignantly that Bat-Erdene was mainly engaged in his wrestling rivalry with Munkh-Erdene at times when Elbegdorj was leading a democratic revolution or serving as prime minister.
Suspicious Consensus
Yesterday I already noted that the seeming consensus on an Elbegdorj victory makes me somewhat suspicious. There is no real evidence in the form of polling or other research to conclude anything about relative vote shares, of course, even though many people (including myself) bandy about percentages as if we knew something concrete.
What are some scenarios that might see Elbegdorj loosing? There seems to be agreement that the MPP still is significantly stronger in many parts of the countryside. While the DP is no longer shout out of the country vote, there seems to be a continuing disparity of levels of support. This difference means that Elbegdorj has to win big in Ulaanbaatar but it is in the city where turnout might be the most likely to dip further from previous elections because of continuing voter registration issues, seasonal migrations, and a more blasé attitude to democracy among the young.
If a run-off does become necessary, then Elebgdorj is seen at a distinct disadvantage. Voting fatigue and proximity to Naadam may imply that only the most committed voters will participate and here Bat-Erdene might have an advantage as he gathers in Udval supporters.
As mentioned above, the TV debate could still throw a wrench in Elbegdorj's re-election as well.
Given that any discussion about the election outcomes is speculative, it still does seem likely that Elbegdorj will be re-elected, but there are some scenarios that call that into question that are at least plausible.
Bits and Pieces about the Campaign and Upcoming Vote
By Dr. Julian Dierkes
June 22 (Mongolia Focus) Three days remain in the presidential campaign, Saturday, Sunday and Monday. In central Ulaanbaatar, there still is very little of a sense of excitement or at least public drama around the campaign.
Certainly, residents of the downtown core are a very specific demographic and do not reflect overall voter sentiments in the country, but the lack of buzz continues to be noticeable.
Even without buzz, I've been able to learn bits and pieces of observations and speculation about the campaign and the upcoming votes.
Campaign
Udval
The general sense of the MPRP Udval's campaign is that it is somewhat half-hearted. Somewhat disappointingly to some, other women in politics have not supported her candidacy and most have not even acknowledged the historical significance of the first woman candidacy.
Udval herself has pointed to the lack of funds available to her in the campaign as an explanation, though most campaigns would complain about such constraints.
At least, a spot that had been held by an Udval billboard, that had been removed, was filled again on Sukhbaatar Square yesterday. The photo on the billboard shows Udval with the official photo that will also appear on the ballot in the election on Wednesday. I have not heard any discussion of Udval's likely goals or performance in Monday night's candidates' debate.
Bat-Erdene
The MPP seems to be framing the vote largely as one of support for an incumbent (Elbegdorj) which would create DP dominance for the coming three years, as opposed to a vote for Bat-Erdene who would bring about cohabitation between the MPP president and the DP-led government coalition and thus represent some kind of balance. There are frequent complaints about the unfairness of DP dominance of state institutions, yet these are complaints that sound eerily familiar from previous elections and other parties regarding the role of the MPP in the past.
There is one view that holds that if the result on Wednesday is closer than is perhaps generally expected and thus forces a run-off election, Bat-Erdene's chances might be significantly improved. In such a run-off, so goes the assumption, Udval support would swing entirely to Bat-Erdene and he might carry any momentum that he might gain in the candidates' debate into the period before the run-off election, a period when no further campaigning is permitted.
Elbegdorj
The dominant view in Ulaanbaatar is still that Elbegdorj will win in the first round. He has clearly been very active campaigning in the provinces, obviously trying to combat the imbalance in DP support between the city and the country.
His main task for the debate on Monday is to keep his cool, look presidential and to cast a light on Bat-Erdene's lack of political activities despite having served in parliament for years.
Election
There is none of the obvious tension in this presidential election in the city that was so palatable in 2009, following the 2008 riots. A quiet campaign also means a quiet atmosphere for the most part, though it's best to recall that the ger districts surely harbour some reservoirs of discontent with the lack of economic opportunities that are accruing to many ordinary Mongolians while the country is booming.
There is also a lot of concern about voter turnout on Wednesday. I have not heard anyone suggest that they're expecting an increase in turnout from previous
Presidential candidates sign commitment to child rights
By Dashiell Young-Saver
June 23 (UB Post) The three Presidential candidates – Ts.Elbegdorj (Democratic Party), B.Bat-Erdene (Mongolian People's Party), and N.Udval (Mongolian People's Revolutionary Party) – signed a statement on child rights and protection supported by UNICEF and the National Authority for Children (among other organizations) during the closing days of the campaign, effectively making a common commitment towards supporting the rights of children through their individual policies.
Earlier this month, five hundred Mongolian children from a variety of socio-economic and geographic backgrounds gathered at the National Forum on Children to construct the statement the candidates endorsed. In total, the document contains 27 mostly unedited complaints, statements, and suggestions from the children regarding their rights and protection, which range from discussions on alcoholism and fighting in the home to divorce, school hours, and even evening cinemas.
"Because of the commitment of politicians around children's issues, it really shows that when it comes to children, they are ready to work across their traditional divides and have a consensus," said Mohamed Fall, the UNICEF representative in Mongolia. He further emphasized that the candidates not only demonstrated their own commitment, but the statement also showed the children's commitment to participating in the process of shaping their own legal and cultural environment.
"With this event, we are bringing the issues of Mongolian children to the level of decision-makers in order to make sure they follow up on those when elected," said I.Naratuya, the President of the National Authority for Children. She and Mr Fall were in attendance for each of the signings.
At the MPRP headquarters Saturday morning, N.Udval became the first candidate to sign the statement. In addition to currently serving as the Minister of Health, N.Udval has been trained in pediatric work and was a main contributor to a joint health survey done by UNICEF and the Ministry of Health in 2000. During the event, she emphasized her background in children's health and her platform regarding child health rights, which she claimed separates her commitment to the children from those of the other candidates.
"Above all else, I'm for children's rights and protection for their health and well-being in a safe environment," she said.
The current President, Ts.Elbegdorj of the DP, was the second candidate to sign the document. After providing his signature, Ts.Elbegdorj spoke about solving the issues raised by allocating new funds generated by the mining sector to education development. If reelected, the President stated that he would give assistance to mothers raising five or more children, increase the number of elementary schools in the country (he said in two years, there will be 80 such schools in UB), decrease the distance children have to travel for school, build social infrastructure to connect children with disabilities with other children, and institute various other policies relating to improving educational access.
"I think we have to relate … economic success with our people and we have to support them," he said. "Mongolia historically has been really committed to the children and to their families … and I think we have to continue with that tradition."
B.Bat-Erdene of the MPP signed the document yesterday. After the ceremony at the party headquarters, he could not be reached for comment.
Organizers were optimistic that each of the candidates genuinely showed their support for change in the legal and cultural environment for children in Mongolia. Yet, they emphasized that putting names on paper was only the first step in the process of acting upon the concerns the children expressed in their statement."I think the country has really set a standard that can be shared with other areas of the world for the advancement of children," stated Fall. "But the remaining challenge is … the gaps. We need to work with the nation as "one" around the issues of children; and that means that we need to work with communities, we need to work with families, and we need to work with civil society."
Testing of every voting machine starts today
June 21 (news.mn) For the preparation of the Presidential Election of Mongolia the automatic voting machine has been tested and programmed individually. After the testing the voting machines were delivered to every electoral district with certifications on time as scheduled according to the law on the election.
A test of every voting machine for reading ballot papers and comparing results will be carried out in order to ensure voting machine availability, conventional maintenance and preparation for the Presidential Election. The machine will help to deliver information about the election process, voting results and other news to the public.
The General Election Commission announced that the test event of voting machines will begin at every electoral and sub-electoral district at 12:00 am today June 21st.
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DELL HOLDS TRAINING SEMINAR ON ADDRESSING CORPORATE IT CHALLENGES
Ulaanbaatar, June 21 /MONTSAME/ A branch of the Dell Inc in Mongolia organized Thursday a training-seminar themed "Addressing your IT challenge" in the "Corporate" hotel.
This seminar brought together some hundred business delegates, IT engineers and experts from state organizations. They have got information on new products and technologies of the Dell corporation and on the Microsoft Windows-8 system.
Reports were delivered by Goo Peng Chan, a manager for the Dell Rest of Asia Pacific region; Lois Lim and Calvin Lim, business developmental managers of the Dell South Asia region; Charlotte Rogacion, a marketing advisor; and Tony Lim, a sales manager.
The Summit Computer Technology company became an official distributor of the Dell in 2008, and has already become a Premier Partner.
TURKISH BUSINESS DELEGATION VISITING MONGOLIA JUNE 24-27
Ulaanbaatar, June 19 /MONTSAME/ Turkish business delegation will visit Mongolia on June 24-27 within the efforts to develop the cooperation between Mongolia and the Republic of Turkey.
Turkish Exporters Assembly will arrange the visit to Mongolia for its member organizations.
In frames of the event, face-to-face meetings of two countries' businessmen will be organized jointly by Mongolian National Chamber of Commerce and Industry and the Trade Representative at the Turkish Embassy in Mongolia on June 25 at the Mongolian National Chamber of Commerce and Industry.
SgurrEnergy: Mongolian Minister of Energy Officially Opens Country's First Wind Farm
Mongolia's first wind farm has been officially opened by the Mongolian Minister for Energy. SgurrEnergy has provided a range of technical advisory services to support client, Clean Energy LLC, since 2011, taking the project from initial concept stages, through to energy generation.
Glasgow, United Kingdom, June 22, 2013 --(PR.com)-- Mongolia's first wind farm, located deep in the Mongolian Steppe, 70km from its capital, Ulaanbaatar, was officially opened today by the Mongolian Minister of Energy, Mishig Sonompil.
The multi-million dollar Salkhit wind development, which consists of 31 GE wind turbines, will provide 50 megawatts of clean power for the country, offsetting coal powered generation and costly energy imports from other countries.
The opening ceremony, which took place on site, was attended by dignitaries from the Mongolian Government; developer, Clean Energy LLC; members of the European Bank for Reconstruction and Development; representatives of GE and Newcom; and project technical adviser, SgurrEnergy.
The ceremony's 11 key speakers each pushed a button to bring the wind farm's turbines online and commence the first grid connected, wind energy generation in Mongolia.
David Scott, the Honorary Consul of Mongolia in Scotland, said, "Wind energy represents a step change in Mongolian fuel generation. The opening of Salkhit wind farm today is an exciting first for the country and an outstanding achievement for developer, Clean Energy LLC. This project will make a positive contribution to the Government's target of generating 25% of its energy from renewables by 2020."
SgurrEnergy, has been working for developer, Clean Energy LLC, on the landmark project since June 2011. The Glasgow-based company has provided expertise across resource analysis, development, tendering, financing, contracting and construction, supporting the project from conceptual feasibility stages, right through to operation.
Neal Detert, project manager at Clean Energy LLC, said, "Completing this landmark project is going to change the face of the electricity sector in Mongolia. We are breaking the ground for a pipeline of future privately funded wind farm and power plant projects in Mongolia, and SgurrEnergy has helped us to lead the way."
Andrew Barker, SgurrEnergy's director of engineering, said, "SgurrEnergy is delighted to be standing with Clean Energy as they open Mongolia's first wind farm. This is a very proud day for our technical teams in Glasgow and Beijing; and our site team of experts from our offices in Vancouver, Glasgow and Portland; who have lived and breathed the project on a daily basis. We congratulate Amgaa, Neal and their team for achieving a first for their country."
Mongolia is currently undergoing rapid economic and energy development and the Salkhit wind farm will help to ease the country's reliance on external energy sources and offset current coal-fired generation.
Mongolia currently has a production capacity of 813 megawatts domestically but peak demand is around 850 megawatts and growing at a rate of approximately 15% per year.
FRENCH GOATS AND CATTLE INTRODUCED IN TUV AND UVURKHANGAI AIMAGS
June 21 (InfoMongolia) On June 20, 2013, during his working visit to Uvurkhangai Aimag, the Speaker of State Great Khural (Parliament) Z.Enkhbold had participated in the reception ceremony of some 202 Alpine goats being bred and originated in the French Alps.
As part of his action plans, when he was a Member of Parliament, Speaker Z.Enkhbold promised to domesticate and breed dairy goats and cattle, and now it has been implemented by presenting the Alpine goats to the people of Uvurkhangai Aimag.
The Alpine goats are often used for commercial milking and able to produce 1.5 times more milk and use less food than cows. Also, these are adaptable animals that thrive in any climate while maintaining good health and excellent production. The Alpine goats are multi-colored and have no set markings. They have erect ears, horns and have a dish-face, weighing around 60-65 kg and produce around 1,000 liters of milk with an average butterfat of about 3.5% a year. Experts say this is very economically significant.
During the event, the Speaker Z.Enkhbold noted that with these goats, the residents of Uvurkhangai Aimag were now able to consume affordable milk and dairy products, before they used to buy a liter of milk for 2,000 MNT during the winter season.
Compared to other mammal milk, goat milk is high in protein, naturally homogenized, has higher digestibility and suitable for infants. Goat milk has distinct alkalinity, higher buffering capacity, and certain therapeutic values in human medicine and nutrition.
In addition, 50 cattle raised as livestock for meat and as dairy animals for milk were brought from France with these Alpine goats, which were presented to Bayanchandmani Sum of Tuv Aimag.
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Mongolia's 'Third Neighbor' Foreign Policy
Beyond Russia and China, third neighbor countries play a crucial role in Mongolia
SEOUL, June 18, 2013 (Asia Society) – In Part 4 of Asia Society Korea Center's 2013 Ambassador Series, H.E. Baasanjav Ganbold, Ambassador of Mongolia to the Republic of Korea, gave a lecture called Mongolia's 'Third Neighbor' Foreign Policy: The Concept and Evolution.'
While Russia and China are the giant neighbors that Mongolia shared borders with, the idea of a third neighbor refers to countries other than Russia and China that Mongolia has built relationships with. The term 'third neighbor' was first mentioned by U.S. Secretary of State James Baker during a meeting with Mongolian leaders during his visit in August 1990. "[Baker] said that referring to the U.S. as a third neighbor," Ambassador Ganbold said. "That was a rhetorical gesture to support Mongolia's first move toward democracy." The concept of third neighbors was picked up by Mongolian policymakers and eventually became formalized in its foreign policy and legislation.
Balancing its relations with Russia and China on one hand with relations with other major countries is not an easy task for Mongolia, but it is a familiar one. "In the mid 1920s, the new Mongolian government sent dozens of students to study in Germany," Ambassador Ganbold said. "That reflected the age old sentiment of Mongolia, to look beyond our two neighbors." Mongolia's decision to adopt Buddhism from India over Chinese Confucianism and Russian Slavic religions also reflected its consciousness of looking broadly in geopolitics.
Ambassador Ganbold described the first stage of Mongolia's third neighbor policy as a success. In the early 1990s, when Mongolia began political reforms, the support of the U.S., United Nations, and other Western countries was crucial to its transition to a liberal democracy. These third neighbors' expertise in drafting legislation about the electoral system helped establish the foundation of Mongolia's political system. The third neighbor policy was also an economic success. Donor countries helped Mongolia overcome its hardships after the sudden end of Soviet investment and subsidies, guiding the country to transition to a market economy.
As the scope of the third neighbor policy expanded, it began to include more bilateral and multilateral political partnerships. Mongolia became a member of the World Trade Organization (WTO) in 1997; the ASEAN Regional Forum in 1998; and the Organization for Security and Co-operation in Europe (OSCE) in 2012. "Mongolia's military is very small, but it's transformed very well with the help of U.S. and U.N. institution to become an active member of international peacekeeping campaigns." Ambassador Ganbold said. "This helped to increase Mongolia's international profile and is also part of our efforts to implement this third neighbor policy."
As the scope of this policy expanded and evolved, it also faced challenges. The term 'third neighbor' was frequently used by American leaders such as George W. Bush in recognition of Mongolia's successful liberal democratic reforms and efforts to join the coalition against terrorism. However, this caused a misperception that Mongolia sought to promote the U.S. agenda, causing some mistrust with its close neighbors Russia and China. "This kind of mindset both inside and outside Mongolia created some problems, but now it's all right," Ambassador Ganbold said. "Our two neighbors support [this policy] because the very foundation of it is balancing each of our partner countries' interests."
"We proudly call India our third neighbor," Ambassador Ganbold said. "Turkey and South Korea also fall into this category." In addition to being Mongolia's biggest trading partner, South Korea is also home to 26,000 Mongolians working and studying in the country. About 100,000 Mongolians live and work abroad, with most of them currently in third neighbor countries and regions including the U.S., Europe, Australia, and Japan. Ambassador Ganbold described this situation as an important source of cultural relations and cooperative projects.
Economically, Mongolia seeks to integrate its economy with regional economies. In 2012, Mongolia started official talks with Japan to establish their first Economic Partnership Agreement (EPA). While Russia and China have a large impact on the Mongolian economy, Ambassador Ganbold emphasized that Mongolia's booming mineral sector presents an opportunity to attract greater economic interest from its third neighbor countries. "We hope that this will be a good chance for us to forge a full sense of the third neighbor strategy, economically, with opportunities in the mining sector," Ambassador Ganbold said.
Ambassador Ganbold spoke of the mining corporation Rio Tinto's copper mine project in Mongolia as a strategically important project. "Next week, the project will export its first products abroad," Ambassador Ganbold said. He highlighted the importance of third neighbors, particularly in their role of bringing financial capital, high technology, and much-needed eco-friendly strategies and management to Mongolia.
"We talk a lot about the processing industries in Mongolia," Ambassador Ganbold said. "We need more processing factories in Mongolia with high technology so we can export finished products, not just raw products." He went on to discuss how in the fine act of balancing interests in international cooperation, Mongolia seeks opportunities where economic interests match. "When the interests of potential investors don't match, it's difficult to move ahead on projects," Ambassador Ganbold said. "When the interests match, Mongolia can be a good partner."
President Of The UN Assembly Vuk Jeremic Visited Mongolia
ULAN BATOR, June 21 (In Serbia) - President of the UN General Assembly Vuk Jeremic visited Mongolia and conferred with President Tsakhiagiin Elbegdorj over the energy security, sustainable development, human rights and fight against corruption.
The talks covered this year's presidency of Mongolia over the Community of Democracies as an international organisation set up by the U.S. and Poland in 2000 which now gathers 25 member countries that cooperate in reinforcement of institutions, promotion of rule of law and support to the civilian society.
In the talks with Elbegdorj, Jeremic congratulated Mongolia on OSCE membership it won this year and on the renouncement of nuclear materials.
Jeremic promised institutional support to Mongolia in initiating the talks on the first international convention for the fight against alcoholism.
Mongolia holds a strategic position in central Asia, situated between Russia and China, and it has been recording one of the highest economic growth rates since 2007, while at the same time holding major reserves of mineral resources.
Jeremic used the chance to back intensification of business cooperation with Serbia and he also discussed procurement of concessions for Serbian companies concerning the exploitation of sites rich in minerals.
Foreign Policy Roundup: June 9-22, 2013
By Brandon Miliate
June 22 (Mongolia Focus) Below you will find the 3rd posting of our bi-weekly series, entitled "Foreign Policy Roundup". In each roundup, I provide a 1-2 sentence summary of Mongolian foreign policy news, most of which come from Mongolian-language news sites. If you have any suggestions for how these posts might be improved, please do let me know.
Please note, that I am not a native Mongolian speaker, nor am I a professional translator. As such, I would welcome any corrections that others might have to offer. Finally, future postings might be delayed during the month of July, as I will be traveling in Mongolia, often in more remote areas. I will resume regular posting in August.
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For summaries of Presidential candidates' foreign policy proposals, taken straight from their Mongolian-language action plans, please see my previous post, here.
Diplomacy
Director of the Finnish Parliament, Eero Heiniluoma, made an official visit to Mongolia. During his stay, he met with the head of the Mongolian Khural, Z. Enhbold, and PM N. Altanhuyag to discuss cooperation in the technological and educational sectors.
Minister of Foreign Affairs, L. Bold, traveled to Japan to participate in Japan's Global Economic Forum-2013.
Interpol's General Secretary, Roland Kennet, traveled to Mongolia to meet with Mongolian Minister of Justice, Kh. Temuujin.
Canadian Ambassador Greg Goldhawk announced that Canada would now grant up to a 10 year multiple entry visa to Mongolian citizens.
Japan and Mongolia agree to cooperate on issues related to North Korea, including abductions.
L. Bold traveled to Germany to discuss bilateral cooperation in minerals and technology. Mongolia agreed to allow German citizens 30 days to stay in the country for up to 30 days visa-free
Vuk Jeremic, President of the UN General Assembly, made his first visit to Mongolia.
Mongolian auditors traveled to Turkey to gain experience in the legal and technical issues of their field.
Mongolia established formal diplomatic relations with Antigua and Barbuda. This is part of a larger strategy for Mongolia to establish diplomatic relations with all UN member states.
UK-based news agency, The Telegraph, reported that Tony Blair is now a consultant for the Mongolian government. His experience in international diplomacy at previous consulting in the region under his company, Tony Blair Associates, is stressed.
Economics
Mongol Bank released its Trade Review, outlining Mongolia's trade statistics up to May 2013.
Security
Political Secretary of the Mongolian Ministry of Defense, Gen. Z. Boldbaatar, arrived in Germany for the 10th advisory meeting between the Mongolian and German defense departments.
Ex-Pat Mongolians
On June 14th, Mongolians living abroad casted their votes for the 2013 Mongolian Presidential Election.
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Social, Environmental and Other
ULAANBAATAR IN PREPARATION FOR PEAK SEASON OPENS TOURIST HOTLINE
June 21 (InfoMongolia) In conjunction with the peak tourist season in Mongolia, the Ulaanbaatar City Tourism Board and Metropolitan Police Department are organizing several works to provide tourist safety, prevent and protect from possible crimes, and provide conditions for convenient travels.
For instance, an open line (+976) 7010 8687 has been activated to receive and resolve tourists' complaints and comments. This hotline was set up by Tourist Information and Promotion Center of Ulaanbaatar city operational in both English and Mongolian languages administered by the City Tourism Board.
Also, vocational trainings on ethics and English language classes were organized, where patrol officers, employees and officials affiliated the Metropolitan Police Department, "Chinggis Khan" International Airport, General Authority for Border Protection and Ulaanbaatar Railway were involved.
Cooperating with the City Police, the number of security cameras in main streets was increased, these 24/7 surveillance cameras are capable of adjusting a position to photograph or capture video images of a monitored area, turning 360° and zooming plate numbers, which were placed at Sapporo 4-Way Intersection, Baruun Durvun Zam (West 4-Way Intersection), State Department Store, Central Post Office, Mongolian State University of Education, 13th micro-district and Zuun Durvun Zam (East 4-Way Intersection). In addition, another 84 cameras are being installed at 42 bus stations located on Peace Avenue and is to be fully operative by June 28, 2013.
Moreover, many other activities are being organized in order to be a friendly and safe city for tourists.
Back in Ulaanbaatar Town
June 19 (Julian Dierkes, Mongolia Focus) --
Für Mongolei Nostalgiker…
懐かしいねえ
After too long an absence, I'm back in Ulaanbaatar. Returning 1-3 times per year over the last eight years has given me time lapse glimpses of rapid developments in Ulaanbaatar.
At ULN, I was delighted to find a special lane in the immigration section dedicated to "Passengers with Children". Everyone has separate lanes for their own nationals (something the U.S. started a long time ago, as far as I recall), but where do you see kids' lanes?
This prompted me to start a hashtag: #ykyiMgl = you know you're in Mongolia when…
I always find the drive in from Chinggis Khaan International Airport into town particularly poignant as lots of changes are observable along that route. This post just roughly follows the drive in from ULN as I was jotting down notes on the cell.
There is lots of new housing springing up right next to the airport now. That whole road has developed massively in the past eight years. My memory of first driving that road in 2005 was of pasture and darkness. Then gers started showing up, then khashaas were built. Now: sports palace, apartments, bus stops, etc. have been put in right up to the airport.
The road itself was going to be widened and construction started very suddenly last summer when I was here. Not much has happened since then, although there was some machinery seemingly at work on the road today.
Off the road I quickly saw the first polling station marked by the familiar red banners around the door announcing the date of the election as well as the number of the polling station. The Mongolian flag was fluttering on the rooftop.
You know that fenced-in long stretch of trees planted by the road? I think somewhere along the way it says that this is a Japanese-Mongolia development project. I swear the trees haven't grown more than 25cm in the past eight years and they still look rather sad.
There is a giant addition to the British School of Ulaanbaatar going in along the road. Private school must be good business.
The American Center for Mongolian Studies had kindly arranged for me to be picked up. Soon enough, the driver turned on the radio to one of those moments when there is a long declamation set to a familiar Mongolian melody in the background. Ah, the sounds of Mongolia! Naturally, she was singing along to some songs later on.
Just before you cross the Tuul, there are some huge very colourful apartment blocks now. Interesting that most of the construction is going for colour on a brick-colour base, rather than the strange neo-classical styles or – even worse, I think – the strange giant buildings with pagoda-tops that you see in China. No ger-themed apartment designs yet, as far as I've seen.
Once past that bridge, traffic kicks in of course. What was meant to be a two-lane road when it was constructed in the state socialist period soon turns into a four-lane highway with much honking and swerving. Smiles all around.
BMWs seem to have arrived in some numbers, primarily X5. Lots of cars with many people piled in, including the preferred riding position for infants: on passenger lap riding shotgun. BUT also some child seats and fastened seat belts!
There are very few campaign posters on the drive into town; the election is much less visible than parliamentary election or even than what I remember from the presidential election four years ago.
The Bat-Erdene posters that I saw make no reference to the MPP while Elbegdorj posters include a stylized horse with the MPP flag (Mogi: DP I'm sure). I have yet to see an Udval poster.
As we come into town, the traffic patterns have definitely changed around. Must be a consequence of the additional connections across the railroad and other new roads. For example, the building that houses my friends of the Mongolian National Olympic Committee used to sit somewhat majestically by that large traffic circule just across the railroad bridge from the centre of town (Peace Bridge, I think), but it is now increasingly surrounded by large apartment blocks and there is no more traffic circle, having been changed into a giant intersection. That in itself is also curious as more traffic circles are being set up in Vancouver, they're disappearing in Ulaanbaatar. Are bike lanes next?
GALLERY: Photographer documents wild Mongolia
June 21 (Newcastle Herald) THE love of horses and a determination to capture on film a disappearing culture propelled Hannah Rose Robinson into the adventure of a lifetime two years ago in Mongolia.
The photo series, The Last Nomad, by the 29-year-old Novocastrian has won acclaim, winning a slot in the Reportage Festival celebrating documentary photography at the recent Vivid Festival in Sydney.
It was not Robinson's first foray into unknown adventure. In 2009 she shot a photo series on homeless men living on the site of the former Empire Hotel on Hunter Street in Newcastle. She earned some top accolades for that work, too.
The Mongolian project was no easy feat. Although Robinson has loved horses since she was a youngster, travelling to an isolated country, renting a van and buying a horse and living among the locals was a major task. She and her four female travelling mates rode horses about 30 kilometres a day, following the local custom of stopping at the nearest home for shelter and food at the end of each day.
"They were open to strangers," she says. "Their custom is, if you travel the rule is that if you turn up, they feed you. They expect it when they travel."
Robinson's choice of camera was a Leica M6 Rangefinder, chosen for its unobtrusiveness. She shot 33 rolls of film, and worried throughout the trip home every time they went through an X-ray machine.
She did almost all of her shooting in black and white.
"I wanted to do the opposite," she says. "I wanted another challenge, to be thinking all the time."
Communication was difficult.
"I hired a translator at one point, but he only knew 'Yes, I understand,' and 'Yes, in five minutes,' " she says.
"But we stayed with his family and met his dad, who was an excellent horseman. We didn't speak any English, we spoke horse."
The constant diet of meat was hard on Robinson, a vegetarian.
The basic meal was often flour noodles and meat in hot water, with Robinson favouring the hot flavoured water most of the time. The other staple was deep fried bread in butter and sugar.
She calls the food all "part of the adventure" and admits to dreaming about fresh broccoli.
The local custom of drinking vodka to bless journeys was equally hard.
"Getting on a horse at 7am after three shots of vodka makes for a tough day," she says.
The works are showing at Global Gallery in Paddington.
ANCIENT TURKIC INSCRIPTIONS FOUND IN BURIAL SITE IN SUKHBAATAR AIMAG
June 21 (InfoMongolia) On June 20, 2013, researchers at the Archeology Institute affiliated the Mongolian Academy of Sciences (MAS) has informed that they were preparing to propose to the Ministry of Culture, Sports and Tourism and the Ministry of Education and Science to carefully study, recover and preserve the monuments that have been found nearby the Delgerkhaan Mountain in Tuvshinshiree Sum of Sukhbaatar Aimag.
During an exploration research conducted during August 14-28, 2011, the team led by scientific researcher at the Institute of the MAS Dr. Ts.Bolorbat exposed many monuments and discovered ancient Turkic inscriptions from the monuments, which were depicted with flower patterns. Recently, these writings were decoded based on paper copies of the inscription by scientific researcher at the Archeology Institute of the Academy of Sciences, R.Munkhtulga and the Institute's guest researcher from Osaka University, Prof. Takashi Oosawa. It has been currently discovered that there are altogether 2,832 letters, 646 words in 20 lines, and over 30 markings on the 2 monuments. The inscriptions believe to have been dedicated to the deceased noblemen, written by other men from other tribes to participate in the burial ceremony of the deceased. Researcher R.Munkhtulga stated, "There have been no discoveries of so many large memorial monument complexes in Mongolia to this day".
The Delgerkhaan memorial is an important evidence to study the history of eastern Turkic tribes and Aimags, some tribes such as Khyatan, Tatabi and Tatar that spoke in Mongolian language, and the Tatar tribe that resided in eastern Mongolian regions during the first half of the VIII century.
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