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Tuesday, May 26, 2015
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TRQ closed +0.18% Monday to C$5.42, ETG +3.16% to C$0.49. NYSE closed for Memorial Day
Rio Tinto to Raise Up to $6 Billion for Mongolian Mine Expansion
By Michael Kohn
May 25 (Bloomberg) Rio Tinto Group will seek to raise as much as $6 billion of external funding for the Oyu Tolgoi underground mine in Mongolia as the company prepares a war chest to develop one of the world's largest untapped deposits of copper and gold.
The money will be raised through third-party project financing, product off-take arrangements and other forms of funds, according to a development plan published by Turquoise Hill Resources Ltd., which owns 66 percent of Oyu Tolgoi. Overseas investors led by Rio control the project through this stake.
Rio and the Mongolian government last week ended a protracted dispute that stalled construction of the underground mine. A midnight signing of the plan in Dubai followed two years of start-stop talks between the two sides that tested the resolve of foreign investors in the Asian country.
Rio has a goal of raising more than $4 billion in third-party project financing and will target 15 to 20 banks, Jean-Sebastien Jacques, head of its copper and coal business, said in a May 19 phone interview. Discussions on terms are to begin in the "coming days and weeks," he said.
Less than 10 percent of the 200 kilometers (124 miles) of underground tunnels needed for the mine have so far been built, Jacques said. This will take five to seven years, he said.
The negotiations, which included about 30 points of dispute, centered on taxes and cost overruns on the first phase of the mine construction.
Strong Signal
Signing the plan "is a strong signal to investors," Mongolian Parliamentary Speaker Enkhbold Zandaakhuu said on Saturday. "Mongolia will honor its obligations to investors. I think it's a very good sign."
Both sides agreed phase one costs were in line with approved programs and budgets and there are no outstanding issues between the two sides over expenses in this stage, the plan shows.
The initial phase, with a price tag of more than $6 billion, included an open-pit mine that went into production in mid-2013.
The agreement also resolved differences of opinion on using Oyu Tolgoi mine licenses as collateral for financing the underground portion.
Mongolia agreed to provide "security interest" to lenders, including pledges of the Oyu Tolgoi mining licenses and immovable property, as well as benefits of the investment and shareholders' agreement.
Review Meetings
The parties will hold monthly operational review meetings that will include updates on capital expenditure to address Mongolia's complaints over a lack of transparency.
The country stands to benefit from a clarification on the management services payment, which must be paid to the team running the project. The rate has been lowered to 3 percent of the capital costs of the underground stage from 6 percent before.
Estimated underground development capital is $4.7 billion, sustaining capital is $1.5 billion and the value-added tax and duties on capital is $600 million, the agreement shows.
The government of Mongolia is to receive $2.2 billion in direct payments and the total estimated direct spending in the country is $9 billion during the underground stage of construction and funding.
While construction of a copper smelter to process concentrate from the mine isn't yet assured, the agreement states that Oyu Tolgoi LLC will prepare a research report by September 2016 on the economic viability of constructing and operating a smelter.
The agreement also re-states earlier estimates that the government of Mongolia will receive more than 53 percent of the total value of project during its lifetime in the form of taxes, royalties and payments.
Link to TRQ conference call webcast, transcript, presentation download page
Mogi: looks like the author meant exploitation, not exploration
Oyu Tolgoi will start exploration at high grade zone this week - CEO
May 25 (UB Post) Mongolian Mining Journal spoke with the president and executive director of Oyu Tolgoi LLC, Andrew Woodley, regarding current issues at the company.
I guess the media must be asking a lot about the underground mine. But I want to know about the open pit mine. In last week's parliamentary session, it was said that the copper concentrate export of Oyu Tolgoi's (OT) open pit mine has been decreasing, and the decrease is expected to continue. What is the cause of the sudden fluctuation?
I don't know based on what sources the discussion was held at Parliament. But in the last year, we had logistic issues at the border, so a great amount of reserves from exploration and export was accumulated. After fully resolving the logistics issue ,we exported a great amount of concentrate by the end of the previous year. We sold the generated concentrate and continued exploration, so export was high at the end of 2014. Since the new year, the company's activities has been progressing normally.
Three years have passed since OT started exploration at the open pit mine, so in some places ore grades are good, while some are poor. In the first quarter of 2015, exploration was made at low grade areas, so the export amount was low. At the beginning of this week, we are going to explore in a high grade areas, so the results of the second quarter of 2015 will be higher. These are the reasons for sale and production fluctuations, but there wasn't a high fluctuation as mentioned at Parliament.
In the underground mine plan, it was stated that Mongolia will control purchase and project selection. How will this change sales and project selection?
The general principle will be the same as in the open pit mine purchase process. Firstly we will make purchases from domestic producers. On this issue, we hope to effectively cooperate with Erdenes Oyu Tolgoi.
How will the construction of railroad to Gashuunsukhait lower OT's transportation costs?
The railroad construction to Gashuunsukhait will have a great positive influence on OT's production. But the main consumer of the railway will be coal mines, so it will provide a chance to all mines.
When will Mongolian managers start working at the decision making level of the company? Some people were involved in professional trainings, and some believe that they reached the necessary level. What is their current position?
We are a Mongolian company, and our shareholders are Mongolians, so we pay attention to this issue. Four leaders that were involved in trainings will work in the management level. In particular, one of them is chairing my task group. We will discuss his appointment to the managerial position soon. Moreover, we will keep training our Mongolian staff. I would like to say that Mongolians gain high skills in a short period of time.
How much will OT save by purchasing electricity from Tavan Tolgoi power station?
We haven't yet established an agreement on power purchase from Tavan Tolgoi power station. But purchasing power from Tavan Tolgoi power station will bring positive results for sure.
How will the exploration technology of the underground mine be different from the open pit mine? Will the changes affect project expenditure?
In regards to the economic condition and various technological solutions, we will change not only conveyers but seek other solutions in the other parts of our exploration. We will have to study all solutions, and finalize our feasibility study. We will be reporting about solutions that will be made in the feasibility study.
Besides the management service payment, a new expense called "manager's payment" was included in the underground mine plan. How will the additional payment to Rio Tinto increase OT expenses?
I don't think there is a concept about manager's payment. Rio Tinto provides information technology and software services to OT through the management service. We make purchases from many subsidiaries of Rio Tinto, so we save on expenses and receive quality services. In some cases, we take advice from Rio Tinto. The concept might refer to that kind of expenses.
Announcement made before TSX open, HKEx closed Monday for Buddha's Birthday. 1878 closed +2.67% Friday to HK$5.77, SGQ +1.19% to C$0.85
SouthGobi Announces Extension of TSX Delisting Review to June 22
HONG KONG, CHINA--(Marketwired - May 25, 2015) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") today announces the extension of the delisting review following confirmation that the Continued Listing Committee (the "Committee") of the Toronto Stock Exchange ("TSX") has determined to defer its delisting decision until no later than June 24, 2015.
On February 25, 2015, the Company was placed on a remedial delisting review in connection with its reliance on the financial hardship exemption which allowed the Company to complete the private placement with Novel Sunrise Investments Limited ("Novel Sunrise") without seeking shareholder approval. A delisting review is customary practice under TSX policies when a listed company relies on the financial hardship exemption; refer to the Company's Management Discussion and Analysis ("MD&A") issued on May 11, 2015 and available on SEDAR at www.sedar.com for additional detail.
On May 12, 2015 the Company requested an extension of the delisting review following delays in the closing of the share purchase agreement between Novel Sunrise and Turquoise Hill Resources Ltd. and the associated delays in the implementation of the Company's proposed funding plan ("Proposed Funding Plan"), as discussed in the section Liquidity and Capital Resources under the heading Proposed Funding Plan in the MD&A issued on May 11, 2015 and available on SEDAR at www.sedar.com.
On May 22, 2015, the Company received confirmation that the Committee of the TSX had extended the review and would meet on June 22, 2015 to consider whether the Company has met the listing requirements of the TSX. The Committee is expected to issue its decision on a potential delisting of the Company's Common Shares on the TSX no later than June 24, 2015.
The Company believes the above extension will provide it with sufficient time to continue with the implementation of the Company's Proposed Funding Plan and allow it to demonstrate that it will be compliant with the continued listing requirements of the TSX. However, no assurance can be provided as to the implementation of the Proposed Funding Plan nor the outcome of the remedial delisting review.
For additional detail, refer to the section Liquidity and Capital Resources under the heading TSX Financial Hardship Exemption Application and Status of Listing on the TSX in the MD&A issued on May 11, 2015 and available on SEDAR at www.sedar.com.
YAK closed -0.92% to C$1.08
Mongolia Growth Group Announces Interim CFO Transition
Toronto, Ontario (FSCwire) - Mongolia Growth Group Ltd. (YAK - TSXV and MNGGF - USA) ("MGG") or ("the Company") a commercial real estate investment and development company participating in the dynamic growth of the Mongolian economy announces that Genevieve Walkden will assume the duties of Interim CFO in addition to her role as Corporate Secretary.
Talha Siddiqui has served as Interim CFO since February 2014 and will be leaving Mongolia following two years with MGG in order to spend more time with his family.
"I want to thank Talha for stepping in as Interim CFO for the past year. We all greatly appreciate his efforts and dedication," said Harris Kupperman, Chairman and CEO of MGG.
Ms. Walkden has an MBA, CFP, and CAIA designations. She has been with the Company since April 2011 in various roles including Director of Operations and Corporate Secretary and has been actively involved in the preparation of the Company's financial statements over the past few years.
"When I stepped back into the CEO role, my first priority was to restore our operations, stabilize the business and dramatically reduce our losses. Now that these initiatives are gaining traction, we have begun the search for a permanent CFO as our focus transitions towards the next stage of our growth. Given our improving operating numbers, we believe that we are now in a much better position to attract a highly qualified CFO."
For more information about Mongolia Growth Group, please visit the Company's website at www.MongoliaGrowthGroup.com
Mongolia Growth Group Ltd. is a publicly traded and leading property investment and development company in Ulaanbaatar, Mongolia. MGG owns an extensive property portfolio in diversified segments of the property market, with an emphasis on institutional-grade commercial assets.
MGG undertakes its own property acquisitions, develops brownfield land assets and repositions outdated properties, relying on in-house services for all facets of both the investment portfolio and development side of the business. In addition, MGG acts as a full-service third-party provider for institutional clients and tailors transactions covering acquisition-to-suit, build-to-suit, as well as refurbish-to-suit, for property owners and major tenants.
WOF closed -8.33% Monday to A$0.022
Wolf Petroleum: Jason Peterson's Final Director's Interest Notice
May 25, Wolf Petroleum Ltd. (ASX:WOF) --
Name of director: Jason Peterson
Date of last notice: 31 March 2015
Date that director ceased to be director: 18 May 2015
Part 1 – Director's relevant interests in securities of which the director is the registered holder
Jason Peterson and Lisa Peterson
- 12,550,678 ordinary shares
- 10,213,846 listed options exercisable at $0.05 on or before 31 July 2018 (WOFOA)
Part 2 – Director's relevant interests in securities of which the director is not the registered holder
Celtic Capital Pty Ltd - Director and shareholder
- 1,800,000 ordinary shares
- 2,000,000 WOFOA
Cunningham Peterson Sharbanee Securities Pty Ltd - director and shareholder
- 425,000 ordinary share
…
MSE News for May 25: Top 20 +1.03% to 12,759.73, Turnover ₮40.1 Million
Ulaanbaatar, May 25 (MONTSAME) At the Stock Exchange trades on Monday, a total of 31 thousand and 977 units of 17 JSCs were traded costing MNT 40 million 118 thousand and 455.50.
"Remikon" /18 thousand and 790 units/, "APU" /7,330 units/, "State Department Store" /1,346 units/, "Tavantolgoi" /1,155 units/ and "Moninjbar" /1,020 units/ were the most actively traded in terms of trading volume, in terms of trading value were "APU" (MNT 25 million 326 thousand and 880), "Tavantolgoi" (MNT four million 289 thousand and 640), "Khasu-mandal" (MNT three million 218 thousand and 500), "Gobi" (MNT one million 646 thousand and 400), "Bayangol hotel" (MNT one million and 428 thousand).
The total market capitalization was set at MNT one trillion 257 billion 339 million 037 thousand and 347. The Index of Top-20 JSCs was 12,759.73, increasing 1.03% and the all index of MSE was 931.73, increasing 0.62% against the previous day.
MSE Weekly Trading Report: MSE ALL -1.3%, Stocks ₮46.7 Million, T-Bills ₮25.5 Billion
May 25 (MSE) Mongolian Stock Exchange organized 5 securities trading sessions and made transaction of MNT25,577,126,406.00 between 18 May 2015 and 22 May 2015.
Share trading:
46,797 shares of 42 joint stock companies worth of MNT 46,726,406.00 were traded.
MOST ACTIVILY TRADED SECURITIES
№ | | Securities Name | Value /MNT/ |
1 | APU | APU | 13,847,350 |
2 | GOV | GOVI | 8,394,845 |
3 | MRX | DARKHAN NEKHII | 4,420,600 |
4 | GTL | BAYANGOL ZOCHID BUUDAL | 3,640,000 |
5 | TCK | MERECS | 2,610,000 |
MOST ACTIVE BROKERAGE COMPANIES IN SHARE TRADING
№ | | Company Name | Value /MNT/ |
1 | BDSEC | BDSec | 29,166,516 |
2 | STIN | Standart investment | 21,520,548 |
3 | UNDR | UndurKhaan invest | 5,384,200 |
4 | DELG | Delgerkhangai securities | 4,853,194 |
5 | ZRGD | Zerged | 4,751,188 |
Government retail bonds trading:
255,304 Government retail bonds worth of MNT25,530,400,000.00 were traded through one bonds trading session.
MOST ACTIVE BROKERAGE COMPANIES IN GOVERNMENT SECURITIES TRADING
№ | | Company name | Value /MNT/ |
1 | TNGR | Tenger Capital | 25,002,000,000 |
2 | BZIN | Deu securities mongolia | 489,800,000 |
3 | BDSEC | BDSec | 11,000,000 |
4 | ALTI | Altan Khoromsog | 10,600,000 |
5 | STIN | National securities | 10,000,000 |
As of May 2015, market capitalization was MNT 1,246,791,487,484.00 which indicated desreases of 1.34%, and MSE ALL index reached 925.99 units which indicated decreases of 1.30% from the previous week.
MSE, JICA hold conference on establishing self-regulating body
May 22 (MSE) In order to create Self Regulator Organizations (SROs), Mongolian Stock Exchange (MSE) and Japan International Cooperation Agency (JICA) organized the conference meeting.
During the meeting, Angar.D acting CEO of MSE introduced about principle of CROs, Vision of MSE, team of JICA gave presentation about International standard of SROs, regulatory responsibilities of Exchanges, and other issues to Board members of MSE and two parties exchanged ideas with each other.
Accordance with the "Securities law in Mongolia", Mongolian Stock Exchange /MSE/, the Securities Clearing House and Central Depository /SCHCD/ and Mongolian association of Securities Dealers /MASD/ are indicated as a self-regulated organization. To become SROs will gain some authorities from Financial Regulatory Commission.
Bank rates at time of sending: TDB (Buy ₮1,919 Sell ₮1,935), Khan (Buy ₮1,919 Sell ₮1,935), Golomt (Buy ₮1,918 Sell ₮1,935), XacBank (Buy ₮1,919 Sell ₮1,933), State Bank (Buy ₮1,917 Sell ₮1,936)
BoM MNT Rates: Monday, May 25 Close
| | 5/25 | 5/22 | 5/21 | 5/20 | 5/19 | 5/18 | 5/15 | 5/14 | 5/13 | 5/12 |
| USD | 1,927.89 | 1,935.23 | 1,936.77 | 1,939.09 | 1,940.60 | 1,940.73 | 1,943.19 | 1,943.88 | 1,944.13 | 1,944.13 |
| EUR | 2,121.55 | 2,158.65 | 2,150.59 | 2,148.80 | 2,193.56 | 2,216.70 | 2,216.21 | 2,217.58 | 2,173.34 | 2,173.34 |
| CNY | 310.89 | 312.21 | 312.27 | 312.49 | 312.77 | 312.80 | 313.10 | 313.52 | 313.10 | 313.10 |
| GBP | 2,988.23 | 3,034.34 | 3,007.03 | 3,002.87 | 3,040.05 | 3,049.08 | 3,065.67 | 3,063.94 | 3,027.98 | 3,027.98 |
| RUB | 38.69 | 38.72 | 38.62 | 39.04 | 39.26 | 39.44 | 38.89 | 38.68 | 37.90 | 37.90 |
MNT vs USD (blue), CNY (red) in last 1 year:
Mongolia Sees $109.2m FDI Withdrawal in Q1, Central Bank Says
By Michael Kohn
May 25 (Bloomberg) -- Mongolia experienced a net outflow of $109.2m in foreign direct investment in the country in Jan.-March this year, according to revised data released by central bank on Monday.
* NOTE: That compares with net inflows of FDI in 1Q 2014 of $283.5m and 1Q 2013 of $845.8m
* First quarter current-account deficit at end-Mar. was $43.4m vs $517.6m deficit yr earlier
* First quarter capital and financial account was $126.7m deficit vs $385.1m surplus yr earlier
(BFW)
Mogi: TDB bond money must've came in last week
BoM issues ₮164 billion 1-week bills at 13%, total outstanding +12% to ₮1.05 trillion, 1-year high
May 25 (Bank of Mongolia) BoM issues 1 week bills worth MNT 164 billion at a weighted interest rate of 13.0 percent per annum /For previous auctions click here/
The Sales Managers' Index: Mongolia
SMI signals the downturn in business conditions is ameliorating
· Sentiment improves significantly but remains weak
· Gentler falls in product sales and market growth
· Rate of job shedding moderates though only slightly
The Headline Sales Managers' Index for Mongolia rose from 36.3 in April to 40.5 in May, amid stronger contributions from all five of its individual components. The latest reading signalled the third straight monthly gain and the sharpest rate of improvement in the history of the series. An index above 50 indicates growth, while an index below 50 indicates contraction. Positive influences on the Index were sharper improvements in business confidence, market growth and product sales. In addition, prices charged and staffing moderated but only marginally. That said, the headline index remain well below 50 (no-change) threshold.
Survey data showed a further strengthening in business expectations in May, with the Business Confidence Index registering 44.1, up from 37.9 in April. This was the third successive rise, and the strongest increase on record for the panel. Most panellists signalled hope of a turnaround in economic conditions, which should lead to sales and development opportunities in the coming months. However, the latest reading remained well below the 50 (no-change) mark. A reading above 50 indicates an overall positive business outlook.
The Market Growth Index came in at 37.6, up from 31.7 in April, indicating a considerable improvement from the previous month but that growth in the marketplace continued to contract but at a slower pace. Furthermore, the current index represented the fastest increase in three month of successive rises. Similarly, the Product Sales Index stood at 37.3 in May, up from 29.3 in April. This indicated the second month of increases, and the quickest rise since May 2013. Surveyed businesses, nonetheless, continued to experience a strong decline in monthly sales, with panellists commenting on stagnant wages as the main factor undermining sales.
On the prices front, the Prices Charged Index rose from 44.4 in April to 44.8 in May, indicating that sales managers continued to reduce prices in an effort to boost domestic demand. The deceleration in prices, have been linked by panel member to falls in global commodity prices, in particular, those of gold, copper and coal.
Finally, the Staffing Index inched up slightly to 38.6, from 38.1 in April, indicating an ongoing weakness in labour market conditions across the country. The majority of surveyed companies reported job cuts due to low domestic demand.
Summary
World Economics Chief Executive Ed Jones commented:
"May saw a further, albeit slower, downturn in business conditions in Mongolia. The Confidence index was up again significantly from the previous month and both market growth and product sales moderated markedly. Accordingly, the rate of job shedding eased a little. Meanwhile, prices remained falling at a slightly slower rate compared to the previous month. Overall the majority of panellists are growing more confident about future business conditions."
INS Article: Economy is Back to Business
May 25 (Institute for National Strategy of Mongolia) The prolonged dispute between Rio Tinto and the government has finally ended. The signing of the Oyu Tolgoi Underground Development Plan (UDP) in Dubai, signifies the turning of an important page. Mongolia has stepped up to the big league, and successfully negotiated a settlement with a global business force. This deal is equitable and sets great precedents for those contemplating investments – large and small – in Mongolia.
The PM appointed an internationally experienced Mongolian negotiator, and supplemented the Erdenes Mongol team with international legal and strategic advisors. This ensured that a principled and strategic approach was taken and that the team was clear about what needed to be achieved for Mongolia.
The key principles driving the GoM side were
1. The IA (Investment Agreement) and ARSHA (Shareholders Agreement) were to be sanctified, as they were the bedrock for Oyu Tolgoi's Phase 1 funding of over $6B. The IA is also critical to winning the worlds largest ever Project Financing package in the mining industry.
2. That Mongolia modified or clarified certain tax and legal issues and ensured that these issues removed any confusion and uncertainty for Rio and the Project Finance consortium.
3. To ensure the parties understood that the achievements of Phase 1 were clearly seen as achievements. For far too long politicians have fired cheap shots at OT when in fact the construction was a well executed project and that OT is now operating at over the nameplate capacity.
4. To get Rio to negotiate quickly when they had repeatedly stated they were being patient and had given their best and final offer some eight months ago. It was important here to rebuild confidence and trust in the negotiating process and across the negotiating teams.
5. To leverage the government's interest in OT.
These five priorities meant refocusing the debate away from when dividends would flow to ensuring that OT became (again) the engine of growth for the Mongolian economy. This meant that the critical priorities were
· Resolving the shareholder stand-off,
· Quickly accessing the project finance and starting the underground development.
This in turn would free up the 80% of project value, stimulate the economy and generate more tax revenues – directly and indirectly. This approach will also put Mongolia back onto the lenders map and ultimately OT will become the source of an annuity income stream for Erdenes Mongol for decades to come.
In a relatively short 10 weeks the Erdenes Mongol team were able to reach settlement, on a dispute that was already in play as early as 6 months after the signing of the Investment Agreement – back in October 2009.
While the whole of Mongolia has suffered due to the actions of irresponsible politics, it is pleasing that the current political leaders have had the courage to seek a solution that meets international standards.
Critically, Mongolians should be proud that the global mining industry's largest ever Project Finance raising will be for the OT project. This $4.2B facility will be implemented in accordance with international lending standards led by EBRD/IFC and 15 global lending institutions. This is an international benchmark facility that future Mongolian financings will benefit from.
So has Mongolia been short-changed or cheated here? The answer is clearly no, but there will undoubtedly be a small group of populists who criticize the solution. But their criticism will be purely on the basis of local politics and not what is in the national interest of Mongolia.
Effectively this agreed solution now unlocks a $6B capital project that will spend about one billion dollars per year, employ 1,700 people directly and open up a score of business contracts for local companies. Importantly it will triple the revenues of OT, and provide additional tax revenues to GoM. It will also help turn around Mongolia's macro-economic fortunes, especially regarding foreign exchange, interest rates and GDP growth.
The GoM still has problems to fix but let us at this time focus on the achievements on the policy front – namely the investment law, tax reforms and transparency improvements.
The government policy agenda is making Mongolia's laws and regulations more internationally competitive. This is important and ongoing work – potential investors look at both the risk profile and how attractive Mongolia is versus other countries competing for the investment dollar.
For Mongolia's national interest it is critical to balance the relationship and trading interests of its two neighbors with the need to integrate effectively with third neighbors. This solution is a powerful indicator that this can be achieved.
The PM has emphasised that his governments focus has been threefold – economy, economy and economy. He has said that he will treat domestic and international investors equally and make investors feel safe about investing in Mongolia. He will have his critics who will look for any angle to gain political advantage.
What is important for Mongolia now is that irrational arguments on growing the economy are flushed out and criticized early. This will help guard against a negatively focused election period – where fear of investors is promoted over growing the economy.
So congratulations to the Prime Minister and his cabinet, and to Mr. Byambasaikhan and Mr. Ganbold and their team for resolving the shareholder dispute, and opening up the next wave of economic growth for Mongolia.
Troublesome Times for the Mongolian Economy
By Mark Golman, Doctor of Historical Sciences, senior researcher at the Institute of Oriental Studies of the Russian Academy of Sciences. Exclusively for online magazine "New Eastern Outlook".
May 25 (New Eastern Outlook) In early October of 2014, the Mongolian coalition democratic government, because of its policy known as the "Reform Government" at the initiative of Prime Minister Norovyn Altankhuyag proposed a reform of the government by reducing the number of ministries from 16 to 13 by their merger, updating their composition, etc. Norovyn Altanhuyag, in his letter to President Tsakhiagiin Elbegdorj, justified the need for these changes by the economic situation, the desire to reduce bureaucracy and cut the costs of the administrative apparatus.
However, despite the President's agreement in principle, the Government's proposal has met stiff resistance from the Mongolian parliament – the State Great Hural (SGH), especially from deputies – members of the Mongolian People's Party.
The MPP had long been leading an attack against, the Prime Minister and Chairman of the Democratic Party Norovyn Altankhuyag. And on October 19, 2014, all 26 members of the BNP's MPP faction and two independent deputies through the Speaker of the Parliament Zandaakhüügiin Enkhbold demanded resignation of Norovyn Altankhuyag accusing him of a variety of unforgivable sins: the collapse of the consolidated budget for 2015, the consolidation of the 2013-2014 budgets with a large deficit, the failure of the "100-day Economic Stimulus Initiative", the devaluation of the national currency, the Tögrög, nepotism in the appointment of advisors, etc.
From our point of view, most of these accusations are far-fetched, because Norovyn Altanhuyag was one of the most successful Mongolian Prime Ministers who had done a lot within the 2 years when he was leading the government for the good of the people and the country and promotion of democratic governance. He fell because of the ploys and pressure from the MPP.
Whatever the reason may be, on November 5, 2014, at the plenary session of the SGH, on the recommendation of the Parliamentary Standing Commission on State Building, 36 members of parliament voted for the resignation of the Prime Minister (with 30 votes against this decision) and, accordingly, for the resignation of the entire truly reformist government.
It can be said that this lead to an intergovernmental crisis, but it was resolved by November 19, 2014 when 72 out of the 76 members of the SGH (with 95.5% present at the session), with 2 votes against and with the absence of all the 26 members of the MPP fraction, elected the new Prime Minister, member of the DP and former chief of staff of the government, a 45-year-old historian and lawyer Chimediin Saikhanbileg, who formed a coalition government from almost all political parties. Moreover, unlike in the previous Government, more than half of ministers, are not members of the SGH, which should please President Tsakhiagiin Elbegdorj, who is an opponent of "double-purpose garments" when one person is a member of the SGH while holding a position in the government.
Consequently, Mongolia for the first time was faced with a paradoxical situation when there is virtually no opposition in the Parliament, except for the votes of three independent members, who are usually critical of the policy of any office, but they make no difference, which makes it possible for the Government, together with the Parliament, to proceed to solving the backlog of the acute problems, the economy, which has seen better times, being the first and foremost priority.
The fact of the matter is that 2014 was the year of the fall of important economic indicators when the GDP growth declined from 17.3% in 2011 to 7.2-5% in 2014. The forecast for 2015 also predicts a 5% growth. By all means, 7.2% or even 5% growth is not yet a crisis, but there is a clear sharp economic slowdown which is caused by objective and subjective reasons.
The Mongolian economy is powered, to a great extent, by foreign investment which fell 7.5 times from USD 4.5 billion in 2011-2012 to USD 600-845 million in 2014. Accordingly, the rate of the national currency Рthe Țgr̦g Рalso fell from 1,320 MNT per USD at the beginning of 2014 to 1,995 MNT at the end of the same year, i.e. by more than 40%.
The financial situation is also very unstable. Mongolia's currency reserves are only sufficient to meet the country's needs for 18 weeks. It can be said that Mongolia is mired in debt: as of October 2014, the amount of outstanding loans increased 3.4 times and reached MNT 550 billion. The country also has a large foreign debt – USD 19.8 billion – which has to be repaid to foreign creditors, with USD 580 million due by March 2017. According to estimates, Mongolia will have to spend 10% of its budget revenues each year for 16 years to fully repay its foreign debts.
The high inflation rate which reached 11.5% in 2015 instead of the planned 6.8%, the upward surge in consumer goods prices from 10.6% to 177% on average, the closing of over half (54.1%) of businesses by the middle of 2014, all these are evidence of the serious difficulties and signs of crisis in the Mongolian economy.
Most certainly, the main reason for these negative developments is the effect of the global economic crisis which caused a sharp drop in the prices of basic articles of Mongolian exports: copper, coal, iron ore, cashmere, resulting in the 2014 budget losing USD 800 million. But in many ways, these challenges are man-made. The new Prime Minister Chimediin Saikhanbileg admitted in the address to the members of the parliament "We have created this crisis ourselves. Our efforts to expand production failed and our laws scared away investors."
One of the subjective reasons for the current difficulties is the irrational waste of budgetary funds by the previous government, especially of USD 2.3 billion received on global capital markets through the issue of the so-called "Genghis Khan bonds" and "Samurai bonds."
Part of these extra-budgetary revenues was simply handed out in cash, including through various types of grants: scholarships to students regardless of their academic performance, high severance payments to retiring government officials, allowances to mothers of large families who have the "Mother Glory" award, monthly payments of MNT 20,000 to all children under the age of 18, etc. All this has enabled the columnist of the Morning Newspaper D. Enyatuvshin to describe Mongolia as a "subsidized state" in his article titled "The Real Situation" in January of this year.
An example of the irrationally generous spending, which was pointed out by the Prime Minister in his first big TV interview on January 28, 2015, was the construction of 29 cultural centers in the centers of somons with a population of up to 1000 people and two-story schools in areas which had as little as 100 students.
It is clear from all of the above why Chimediin Saikhanbileg, when answering the question during the same interview on the priorities for the government, repeated three times "the economy, the economy and the economy again." The Prime Minister believes that the current economic difficulties will be temporary and that they can be overcome by relying on the private sector and that there are two options to achieve this: "1) to launch large-scale projects and attract investment and 2) to reduce costs and become economically disciplined."
An online, e-mail and TV opinion poll was carried out from January 31 to February 3, 2015 to identify the ways for development of Mongolia in 2015-2016. 56.1% of the 365,841 respondents were in favor of the first option, i.e. for the implementation of large-scale formative projects and 43.9% were supported the reduction of costs and strengthening of economic discipline.
Thanking the poll participants, Chimediin Saikhanbileg said during a government meeting on February 3, 2015 that the cabinet will work actively to promote large-scale projects, to harmonize the economic and fiscal policy and to reduce budget losses.
The first efforts of the government are evidence of its determination to use both ways identified by the Prime Minister. As such, the government has approved the Mongolian-Chinese-Japanese consortium as the investor for the development of the rich mine in the Umnugovi Aimag Tavan Tolgoi that has 100 billion tons of coal, including coking coal. The consortium is comprised of the leading China Shenhua Energy Company, the Japanese group Sumitomo and the Mongolian Energy Resourcees (Erdenes Tolgoi).
Minister M. Saihan has already announced the successful start of negotiations with the consortium. The deal will require the investment of USD 3-4 billion to increase the production and export of coal; in 2014, exports amounted to about 6 million tons (or 10% of China's coal imports, the plans for 2015 are to export 11 million tons), to construct a coal preparation plant by 2017 with the annual capacity of 30 million tons, power plant and railway to the Chinese border: Tavan Tolgoi – Gashuun Sukhait.
Commissioning of the Sharyn Gol coal preparation plant with the annual capacity of 600,000 tons of coal is scheduled for the end of Q1 2015.
The 2015 budget has been approved with amendments and additions. Expected revenues are MNT 6,000,632,000,000 (27.5% of the GDP), expenditures – MNT 7,000,237,000,000 (32.7% of the GDP). Although budget expenditures have been cut by MNT 400 billion, the deficit is still very high: MNT 1,204,000,000,000 or 5% of the GDP.
The number of state employees will be reduced by 15% or 1,600 people, whose numbers in 2014 increased from 4,400 to 6,800 people leading to the increase in the payroll by MNT 210 million.
The government is also forced to discontinue the New Somon project which provided for a radical transformation of somon (district) complexes, leaving only 2 of the previously planned 14 complexes, to implement restructuring of the Academy of Sciences which currently has 49 research institutes and employs 1,500 research staff with the payroll of MNT 400 million. The focus is being made on transferring research work to universities where it should be combined with teaching and training of professionals.
On the whole, the government is committed by 2015 to reduce all budget and off-the-budget costs by almost MNT 1 trillion after obtaining from international financial institutions cheap long-term loans with the annual rate of 2% maturing in 10-15 years.
The austerity measures will go hand in hand with the income tax raise by MNT 60 billion from businesses and MNT 7.3 billion from individuals.
It looks like it will not be easy for the government to sustain the policy of austerity measures, because the Parliament insisted on retaining all the multibillion social commitments: the increase of state employees' salaries by 10%, the allocation of MNT 19.4 billion. in benefits to mother heroines and MNT 9.1 million to pregnant women and nursing mothers, the MNT 19 billion increase of pensions and the allocation of MNT 70 billion for soft-term financing to small and medium-sized businesses, etc.
Under these conditions, the signing on February 11, 2015 by the Japanese Prime Minister Shinzo Abe and the Mongolian Prime Minister Chinediyn Saikhanbileg of the long-awaited Economic Partnership Agreement following the working visit of the Mongolian Prime Minister to Japan on 9-11 February 2015 is becoming even more important. The idea of preparing such an agreement (which is the 15th of this kind for Japan and the first one for Mongolia) was announced for the first time in 2010 during the state visit of then President of Mongolia Tsakhiagiin Elbegdorj to Tokyo, when Japan was named a strategic partner of Mongolia. Since that time, this idea has been gradually acquiring form and substance. And in 2014, after three years of work, 80 experts presented the preliminary text of the 1,000-page Agreement. It is a general agreement which covers a wide range of issues of trade, industry, production, services, competitiveness, etc. In February 2015, the Parliament of Mongolia, SGH, ratified the Economic Partnership Agreement with Japan and it entered into force. The Agreement is intended to smooth the trade structure: today Mongolia imports account for 90% and its exports for 10% with 50% of imports being used Japanese cars and exports comprised of meat, horse meat and cashmere.
The Agreement also paves the way for increasing the inflow of direct investments from Japan which was USD 500 million in 2014 and which, according to the Mongolian counterparts, was clearly unsatisfactory. There will be a manifold increase in investments as during the negotiations, the Government of Japan allocated a further ODA loan of JPY 46,800,000,000 (or USD 310.6 million) at the request of the Mongolian side for completion of the construction of the new Khöshig Valley Airport near Ulan Bator.
Finally, the ties of the Mongolian economy to the third most powerful economy in the world will, to a great extent, contribute to the country's industrialization. According to Chinediyn Saikhanbileg "we have agreed to solve many problems that have long been awaiting a solution, including the implementation of the medium-term program of Mongolia-Japan strategic cooperation in such areas as construction of power plants, railways, steel and copper production factories, hard surface roads and a subway in the capital city."
As such, it can be safe to assume that the measures undertaken by Chinediyn Saikhanbileg's government, which is said by the public the government of national unity and the government to "solve all problems," the policy of austerity measures and the promotion and implementation of major projects, along with the help and support from Japan, will prevent Mongolia from sliding into an economic crisis and will help it to achieve sustainable development, which we sincerely wish they will do.
Parliament Session Agenda for May 25
May 25 (gogo.mn) Party Groups and Coalitions seated at State Great Khural have sessions today.
ONE.PARTY GROUPS AND COALITIONS AT STATE GREAT KHURAL SESSIONS:
· DP Group Session at Hall A;
· MPP Group Session at Hall B;
· Justice Coalition Session at Hall C.
TWO. WORKING GROUP SESSIONS:
· "Draft Law on Trade" discussion by the Economy Standing Committee sub-working group;
· Amendments to the Law on Forest and other related regulations discussion by the Environment, Food and Agriculture Standing Committee working group;
· Law Drafting, Submission and Implementation regulations related law discussion by the Justice Standing Committee;
· "Approval of the Draft Resolution of the Basic State Policy on Military" discussion by the Security and Foreign Policy Standing Committee sub-working group
· "Approval of the Main Socio-Economic Development Principles for 2016" draft of the State Great Khural resolution discussion by the Economic Standing Committee working group.
· "Draft Law on Child Care Service" State Great Khural Resolution discussion by the Social Welfare, Education, Culture and Science Standing Committee
· Law Drafting and other related law discussion by the Justice Standing Committee;
· Administrative, General and other related draft laws discussion by the Justice Standing Committee;
Speaker Backs Establishing Casino at Khushig Valley, Modeling Dubai Airport Freezone
Ulaanbaatar, May 25 (MONTSAME) The Premier Ch.Saikhanbileg gave a report at a regular meeting of the Democratic Party's faction, said B.Garamgaibaatar, a head of the faction, and S.Odontuya and J.Batzandan MPs.
They said the Premier had spoken about his recent working visit to the United Arab Emirates (UAE) especially about a signing of the agreement on resuming underground mine of the Oyu Tolgoi project. He had said Mongolia established a memorandum on creating an investment fund of USD one billion. The PM had also said Mongolia will export meat to the UAE and had mentioned about a chance of erecting meat factories. He had proposed bringing standards of meat export into one level, the MPs said.
They also reported that the Speaker of parliament Z.Enkhbold had spoke about his works to get au fait with current level of constructing an international airport in Khoshig valley in Tov aimag. "He expressed his position over establishing casino and a free-zone near the new airport, and we shared views and considered a possibility of developing a free-zone under a model of the Dubai international airport," the MPs said. "As estimated, some 70% of tourists at the Dubai free-zone are from China, so the Chinese can cover 1-2 hours of flight to play in Mongolian casino instead of flying 6-7 hours to Dubai's, so it is appropriate to put forward a proposal to a company on establishing the casino".
The faction also received reports from three sub-working groups on matters on unemployment, urban development and new countryside, they added. "The New Yaarmag project is the work we should focus on this week. Our faction has set up these groups to be responsible for realizing this project which aims to provide the inhabitants of Yaarmag area with vocation education, jobs and shelters," said S.Odontuya, a head of the sub-working groups on urban area and new countryside. Batzandan is leading the sub-working group on unemployment.
Cabinet Submits Bill on Allowing Movable Properties as Bank Collateral
Ulaanbaatar, May 25 (MONTSAME) Head of the Cabinet Secretariat for Government S.Bayartsogt MP Monday submitted to the Speaker Z.Enkhbold draft laws--on fire safety and on the pledges of movable properties and non-material properties.
Passed in May of 1999 by parliament, the present law on fire safety regulates matters on ensuring fire safety, duties and powers of state organizations, entities and citizens for firefighting, their correlation and collaboration. In 2014, four thous.222 building fires were recorded, they caused 11.38 Togrog loss, also 59 people died and many got injured. The number of fires increased in 2013 by 10.5% and the size of loss--by 15.3% against 2013. In the last decade, the number of fires consecutively went up by 10-15% every year. By this reason, it is time to reform the legal environment for intensifying measures for preventing fires, Bayartsogt said.
If this law is adopted, it will be available to issue legal documents about a general rule of fire safety, passing fire safety products and tools at state borders as well as their sales, transport, industry and storage, he said.
The bill on pledges of movable properties and non-material properties has been submitted to parliament in order to refine related legal regulations because many developing countries have recognized that a legal regulation of pledging is an essential part of the market economy, Bayartsogt said.
95.9% of projects financed through govt soft loans being implemented
May 25 (gogo.mn) Ministry of Industry conducted monitoring during March-May of 2015 of the entities that were financed with the soft loans.
According to the briefing session, the monitoring have covered the entities total of 1479 projects or 88 percent of 1680 projects in total, which have received the soft loans financed by the Government Bonds, Chinggis Bonds and SME Development Fund during 2012-2014 which totals to MNT 419.7 billion. The implementation is at 95.9 percent currently.
83.5 percent of the total loans were disbursed at increasing the current assets, purchase of equipment leading to increase of the prodcution capacity, jobs, introduction of the new products into market and expading the market share, which in turn resulted in sales revenue increase by 20-30 percent.
At SMEs 5529 jobs could be kept and 5871 more jobs were created.
While 61 projects with investments totalling to MNT 23.3 billion were having below the average performance.
Ministry of Industry will revise the loans which were not used properly:
· Loans for 22 projects to be changed into commercial loans
· Revise 20 project whether to change to commercial loans
· 19 projects to conduct repeated monitoring.
Soft loans were issued:
· During 2012-2014 to support SMEs from the SME Development Fund totalling to MNT 241.4 billion to 1572 projects
· During 2013-2014 to support leather, cashmere and textile industry from Government and Chinggis Bonds totalling to MNT 178.2 billion to 108 projects
· In 2013 to fund the production of student uniforms totalling to MNT 23 billion
· During 2013-2014 total of 13,198 individuals and entities received MNT 75.9 billion soft loans from the Soum Development Fund.
In last three years total of MNT 518.6 billion loans were issued to 14,897 projects.
National Workshop on Authorized Economic Operators Program for Mongolia
Ulaanbaatar, Mongolia: 27–29 May 2015
The Government of Mongolia, with support from Asian Development Bank, will conduct a national workshop on the requirements to launch an Authorized Economic Operators program.
The workshop aims to improve the skills and capacity of the Mongolian Customs in its efforts to modernize its risk management system.
Experts from the World Customs Organization will discuss in detail the SAFE Framework of Standards and the basic principles of the AEO Program.
Japan Customs will also share its implementation experience.
Contact Person
Ms. Maria Cristina Lozano,
Regional Cooperation Specialist,
Asian Development Bank
clozano@adb.org
M.A.D. Launches Mongolia's First Parking Focussed Investment Fund
An opportunity to gain exposure to market with huge potential through equity investment in a car parking fund focussed on the heart of Ulaanbaatar.
VIDEO: Mongolia's First Parking Focussed Investment Fund
We believe the underlying fundamentals of Mongolia's parking sector – low and restricted supply coupled with a increasing demand, growing population and intensifying urbanisation – will lead to the success of this promising investment platform.
THE OPPORTUNITY
Opportunity exists to leverage the high demand for parking spaces along with the low supply to launch the country's first parking focused investment fund.
The primary concept would be to raise equity capital from a wide variety of sources with a low minimum capital investment of US$10,000, the investment would be based offshore.
It is proposed that the private close-ended fund be established in co-operation with M.A.D. Investment Solutions to maximise this untapped potential.
The fund will be focused on the purchase of underground heated parking spaces which can be resold throughout the life of the fund once sufficient capital growth has been achieved and can be rented in the mean time at an above market yield of 10 to 15%.
Since the market is still relatively small, it is expected that the total investment should not exceed 2 Million USD in its initial stages so as to maximise return on investment and minimise the impact on market dynamics.
The equity capital should be raised over a period of 18 months through 3 capital events to allow for conservative capital deployment. While not being deployed, the capital will be held in a high interest USD account in Mongolia (6.5% APR).
Khan Bank Recognized as Best Retail Bank of Mongolia
May 25 (Khan Bank) Global Banking & Finance Review named Khan Bank as the Best Retail Bank Mongolia 2015 acknowledging its reliable and solid financial position, programs and projects implemented in order to support its customers and offer wide access to variety of banking services.
Khan Bank's customer base is composed of 98% retail clients and, accordingly, delivery of accessible and flexible financial service is a worthy contribution to the future development of the country. Bearing that in mind, Khan Bank disbursed 20 types of project loans worth a total of MNT 73.3 billion to 3,473 individual and company clients within the framework of governmental and international multilateral projects in 2014.
Moreover, as a proof of its well-diversified business portfolio, Khan Bank has provided 60% of its loans to individuals and small and medium businesses demonstrating its firm support to improvements in the livelihood of people and sustainable growth of business.
In addition to that, we have comfortably satisfied the prudential ratio requirements set by the Bank of Mongolia, and continued to maintain solid growth in our performance. As of 31st March 2015, the bank's total assets, which is the main indicator of basic capacity, was MNT 4.9 trillion, deposits MNT 4.0 trillion, loans MNT3.0 trillion and capital was MNT 673.8 billion respectively.
Global Banking & Finance Review hereby recognizes the bank's sincere effort toward improving the accessibility of banking and financial services for the retail market, an important component of Mongolian economic development.
Khan Bank expresses its sincere gratitude to all customers for their trust in the bank and also to our employees who strive together for success.
Mongolian mining offers benefits despite risks
May 25 (University of Queensland News) Mining provides income and infrastructure to Mongolia, but it also brings drastic social and environmental changes, new research shows.
Research from The University of Queensland's Sustainable Minerals Institute, in conjunction with the Gender Center for Sustainable Development in Mongolia, has found the impact has been greatest on herder populations.
Dr Isabel Cane of the CSRM Mongolia Research Hub, who managed the research, said recent controversies had highlighted that there were positive financial and physical outcomes from mining, but this was often accompanied by drastic social change and environmental degradation.
"We can't underestimate the benefits that mining has brought to these regions," Dr Cane said.
"Mining provides an alternative income source for herders during difficult seasons and extreme weather conditions.
"Improved public infrastructure through investments in hospitals, telecommunications and schools has also improved access to care and widened social networks.
"One of the most difficult issues for minerals development globally and within Mongolia is balancing or indeed ensuring that the positive impacts from mining outweigh the negative."
The two-year research was funded by the Australian Government Overseas Aid program through the Department of Foreign Affairs and Trade, and focussed on the Northern forest regions and Southern Gobi Desert of Mongolia.
Dr Cane said household interviews and geographic information system (GIS) mapping enabled the research team to document social changes and impacts to the local environment since the arrival of mining.
Researcher and GIS specialist Phillip McKenna said one of the challenges identified was the lack of available pasture and subsequent losses of income and livelihood options for nomadic farmers, based on 30-years of documented changes in mine-affected areas.
"Our findings suggest that unmanaged roads have impacted up to 400,000 hectares of area that supports herders. This raises concerns for loss of access to pastureland and income," Mr McKenna said.
The team will present its findings at the Ministry of Foreign Affairs Mongolia with the International Mining for Development Alumni Forum on 3 June. The event will showcase Australian-Mongolian research and collaborations in responsible mining and development.
The research will be published here in both Mongolian and English.
The research was led by SMI's Centre for Social Responsibility in Mining under the direction of Professor Saleem Ali.
It involved SMI's Centre for Water and the Mining Industry, the Centre for Mined Land Rehabilitation and the Australian National University.
Image above: Satellite imaging shows the growth of the Coal Road by estimating the number of trucks traversing the unpaved road per day.
Media: Dr Isabel Cane, +61 7 3346 4042, i.cane@uq.edu.au.
Keidanren Sees Boost in Commodities Trade from Mongolia-Japan EPA
Ulaanbaatar, May 25 (MONTSAME) Within a working visit to Japan, the President of Mongolia Ts.Elbegdorj Saturday received Mr Sadayuki Sakakibara, the chairman of the Japan Business Federation (KEIDANREN), in Tokyo.
Expressing his satisfaction with meeting with the President, Mr Sakakibara pointed out Japan's parliament recently has adopted the bilateral Economic Partnership Agreement (EPA), and said this agreement will significantly contribute to expanding the economic cooperation and increasing the flow of investments. "As our countries have ratified the EPA, the trade of mining products to contribute to Mongolia's development and investment and commercial works will boost. The KEiDANREN will back these works based on the EPA," Mr Sakakibara emphasized.
In response, Mr Elbegdorj said he highly appreciates the KEIDANREN, saying that a cooperation with this organization means having comprehensive ties with Japan. Mentioning that the Mongolia-Japan economic forum successfully took place last year, the President said he thought a main function of state organizations is to support business institutions. He underlined an importance of businessmen's collaboration for realizing the EPA.
Present at the meeting were Mr S.Khurelbaatar, the Ambassador Extraordinary and Plenipotentiary of Mongolia to Japan; S.Bayartsogt MP, head of the Cabinet Secretariat for Government; Mr Takenori Shimizu, the Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia; Mr Satoshi Mukuta, the KEIDANREN deputy chairman; and other officials.
Related:
Chairman of the Japan Business Federation Pays Courtesy Call on President of Mongolia – news.mn, May 25
Shunkhlai's Jardin Residence Awarded Best Apartment Mongolia at Asia Awards
Best Apartment Mongolia: Jardin Residence, S Development
HIGHLY COMMENDED
Residential Development Mongolia: Jardin Residence, S Development
Link to awards page (click Development)
Ukraine government permits Biofarma to export $7m worth blood products to Mongolia, Vietnam, Azerbaijan, Kazakhstan, and Belarus
May 25 (Interfax-Ukraine) The Cabinet of Ministers has approved the proposal of the Health Ministry to permit PJSC Biofarma in 2015 to export donor blood components and products manufactured from blood and its components.
Corresponding decree No. 522-r dated May 25 has been posted on the website of the government.
According to the decree, donor blood products and its components are sold under the list and volume approved by the Cabinet.
As reported, on May 14 company with foreign investment PJSC Biofarma said that it intended to stop the production of drugs within seven days due to its inability to obtain government approval to export finished blood products under previously signed contracts. Biofarma Board Chairman Oleksandr Makovsky said that this concerns contracts for the supply of blood products worth a total of $7 million to Mongolia, Vietnam, Azerbaijan, Kazakhstan, and Belarus.
Two steps to turning our knowledge into value
By Jargalsaikhan "De Facto" Dambadarjaa
May 25 (UB Post) Every economic decline we face reminds us that mineral resources must not be relied upon solely to achieve a prosperous livelihood. Although the discussion around transitioning from a traditional, resource-based economy to a knowledge based economy has long been on the table, there has not been enough work done. Firstly, the opportunity and capability to acquire, use, share, and advance knowledge must be created. This will allow us to gradually become a nation that produces and uses knowledge, and to form a knowledge-based economy.
Nevertheless, the current debate and heated discussions are around digging up depletable resources rather than using non-depletable resources, such as knowledge. Why is that? How can we bring about this much needed innovation? These questions were discussed last week during a national conference on innovation, which took place at the Government Palace. The conference was attended by senior officials from universities, professors and scholars.
Mongolia now has a science and education system, and dozens of public and private universities that are turning money into knowledge to some extent. However, we have yet to form an innovation system that transforms this knowledge into wealth and value.
FIRST STEP – GIVING FREEDOM TO SCIENTISTS
Today knowledge is globally viewed as an economic resource and a tool for production. The main driving forces of development for the last 20 years were information technology, manufacturing technology, resource technology and health technology. Due to historical advancements in science and technology, the existing driving forces have been supplemented by biotechnology, nanotechnology, power, culture and model technology. Scientists note that a new, flourishing era full of development opportunities has come before mankind.
What about Mongolia? Where did we get lost in this historical change? Who is seeking out and seizing these opportunities? We could talk about some trivial inventions such as having rainproof covers on our gers or manufacturing certain products, but the real question is around what goods Mongolians have produced that are in strong demand on the international market. If we are turning money into knowledge by certifying diplomas, why can't we transform that knowledge into money, value and businesses?
This question can be best answered by the fact that, despite lacking capabilities, the government has had too much involvement in the economy, society, science and business. The government has been obstructing scientists, scholars and businessmen from turning their knowledge into value. If the government had done everything they promised to do to bring about innovation, Mongolia would have had dozens of new businesses and billionaires born from our science sector.
The authorities passed a law on science and technology in 2006, which defined innovation as "a comprehensive activity to turn outcomes of research work into end products to be introduced into market, production and service."
What have they done since passing the law? Why do the Mongolian Academy of Sciences (MAS) and other research institutions still fall short of clients? The answer is that the MAS, research institutions, and universities do not possess the financial right and freedom to sell their research work, set up a business, and start making money. There would be a substantial change if they started making profits, which would then be invested into the institution rather than shared amongst themselves. The performance of the director or the institution should be measured by how much value they create.
The board of directors of research institutions should be given the freedom to select a director by reviewing talent and skill, establishing a labor contract, with the right to dismiss the person or extend his service, based on performance. In order to do so, decision makers must get rid of their mentality of prioritizing political party affiliation and serving personal interests.
If this step is taken, management will be wiser and they will find a way to sell research works to businesses. In turn, companies will be happy to buy their innovative work and aspire to enter the global market. When that happens, the government should not stand in their way, demanding bribes and enforcing legislations, making the process more difficult.
In 2012, a law on innovation was passed and innovation was again defined as "a comprehensive activity to turn knowledge into value". However, nothing has changed since. Where is the innovation fund that they said they would establish? Why bother making decisions if they are never implemented? So far, not a single penny has gone into the fund and even though it was discussed that funding would be provided to promising start-up research works, the final decision will come from government officials, not scientists. Those who practice in the profession have a better understanding as to where funding should be invested and how the investment will yield its return. Yet again, research works without clients are being commissioned.
If this goes on, Mongolia will always be Minegolia – only a supplier of natural resources to foreign countries.
SECOND STEP – CREATING FREE COMPETITION
Mongolia offers a lot of opportunities to make money through knowledge. Our advantages, emphasized by the participants at the conference on innovation, included natural resources, a strategic location, a good education system, openness of thinking, a capable and young population, and a small, dynamic economy that has good maneuvering.
Some participants stressed the importance of making unique products, adding value, and focus on small, unoccupied parts of the market. A university director said that the government is not providing any funds and it would be far better to direct at least half of the small and medium enterprises fund to research works. All participants shared a common sentiment that the intellectual property is currently locked without being put into market circulation, thus knowledge is not being turned into value.
The products that have the most potential to be competitive, are software and applications customized for clients in the information technology industry. The next best potential can be found in the tourism industry, whilst organic products including meat, animal skin, wool, cashmere, and plants also have a good chance. If these products are promoted as coming from Mongolia's vast steppes and beautiful reserves, they can be unique products branded "Made in Mongolia". Our private sector already has the capability to do this.
Nothing will be done if we wait for the government to do something about it. The private sector should be encouraged to take part in innovation, and be exempt from taxes on its investment in innovative works. Free and transparent competition should be promoted. If politicians, ministers and former officials stopped getting involved in profitable businesses, everything would be regulated by the market and achieve success. Mongolia will not be able to develop if ministers and officials keep doing business in industries they are in charge of.
Industry clusters are formed only when they are in a good location and there are many companies in one industry with free competition. It not only allows but also prompts businesses to share their knowledge, information and skilled workforce.
Furthermore, each company would have the need to work with universities and research institutions, procure their service, and provide funding. Our science institutions must get rid of its communist mentality. A policy to turn knowledge into value and encourage companies to compete on the international market should be pursued.
Supporting fair competition will establish a good synergy between private and public funds. Furthermore, it will create infrastructure elements that support innovation, and improve the environment for preparing a skilled workforce. It will also develop the information network that promotes innovation. The market will naturally demand technology that is environmentally friendly and advanced. The government must provide support by ensuring transparency and swiftness in protecting intellectual property, transfer of technology and use of licenses. In addition, the government should waive the tax on investment in shared research centers for multiple companies, open laboratories, and technological incubators.
If we manage to ensure fair competition, Mongolia will be allowed to have a competitive knowledge-based economy. Only then, Mongolia can become Mindgolia. Mongolia may be landlocked, but we are not knowledge-locked.
Trans. by B.AMAR
Fire at sub-power station causes citywide blackout on Sunday
May 25 (UB Post) A fire broke out at the Ulaanbaatar sub-power station at around 9:00 a.m. on Sunday and caused a city-wide power out.
An engineer at the Ulaanbaatar Electricity Distribution Network, J.Batkhuu, was asked to clarify about the power outage.
"A fire broke out at the Ulaanbaatar sub-power station. The cause of the fire is still unknown, but the fire has been completely extinguished. Power in western areas of the city was recovered at around 10:00 a.m. Now, we're working quickly to recover power in eastern areas," he said.
Most buildings in eastern areas had regained power by 3:30 p.m.
According to a resident in Sukhbaatar District near 100 Ail Street, her apartment got access to power at around 3:00 p.m.
All traffic lights in the capital had been inoperative due to the power outage. Traffic police officers were immediately assigned at intersection to regulate traffic movement.
The Ulaanbaatar Electricity Distribution Network had taken speedy measures and distributed power and electricity to central districts right after the power out.
The UB Post will soon report on the cause of the fire at Ulaanbaatar sub-power station is revealed.
First Trilateral Meeting Held Between Mongolia, Russia, China Transport Ministers
Ulaanbaatar, May 25 (MONTSAME) The Minister of Road and Transportation of Mongolia N.Tomorkhuu has participated in the first Transportation Ministerial Trilateral Meeting of Mongolia, Russia and China in frames of the 7th Shanghai Cooperation Organization (SCO) Transport Ministerial Meeting which ran May 14-15 in Ufa of Russia.
Our delegation was chaired by Mr N.Tomorkhuu, the Russian--by M.Yu.Sokolov, the Russian Minister of Transport, the Chinese--by Yang Chuan, the Minister of Transport. Emphasizing that the cooperation among the three countries' Ministries has been boosting fruitfully, the parties affirmed an aspiration to deepen these ties and cooperation and said they attach a great importance to forwarding of the transit capabilities of their countries. They also held talks on developing the corridors of auto-roads and railways and on the trilateral collaboration in renovating current railways, and signed a protocol as the meeting's results.
After this, the Mongolian Minister Tomorkhuu met with D.F.Mezentsev, the SCO Secretary-General, to share views on the cooperation in the transport sector, on developing the transport network of Mongolia by connecting it to the SCO network of transport, and on a chance to finance the biggest projects of Mongolia on infrastructure by banking and financial organizations participated by the SCO.
Mr Tomorkhuu also attended an opening ceremony of a terminal annex of the airport of Ufa.
President Elbegdorj Meets Chairman of Japan-Mongolia Friendship Group at Upper House
Ulaanbaatar, May 25 (MONTSAME) In frames of his working visit to Japan, the leader of Mongolia Mr Elbegdorj Monday received Mr Satsuki Eda, a chairman of the Japan-Mongolia friendship group at the House of Councillors (Upper House) of Japan's parliament, in Tokyo.
The President said an active cooperation between the two legislative bodies has been significantly contributing to the bilateral cooperation at all levels, and expressed a satisfaction with an adoption of the Economic Partnership Agreement (EPA) by the two countries' parliaments.
In response, Mr Eda said the working visit of the Mongolian President has been continuing successfully, "it attests an intensive development of the bilateral ties". "Recently adopted by two parliaments EPA has opened a new volume of the bilateral cooperation," he underlined.
After this meeting, Mr Elbegdorj has given interviews to the "Nikkei" paper and "BS Fuji Prime news" TV channel.
President Elbegdorj Awarded Honorary Doctorate at Ritsumeikan Asia Pacific University
May 25 (gogo.mn) On May 22, a Conferment Ceremony of an Honorary Doctorate of Ritsumeikan Asia Pacific University to the President of Mongolia, His Excellency Mr. Tsakhiagiin Elbegdorj, was held in Tokyo, Japan.
The President of Ritsumeikan Asia Pacific University, Korenaga Shun presented an Honorary Doctorate diploma to President of Mongolia and noted:
Mr. President,
Today it is my great honor and privilege to confer an Honorary Doctorate from Ritsumeikan Asia Pacific University / APU / on His Excellency, the President of Mongolia, Mr. Tsakhiagiin Elbegdorj.
Founded on a vision of "Freedom, Peace and Humanity", APU was designed with a concept rare not only in Japan, but also in the rest of the world: a premise that half of its students would be recruited from all around the world. Fifteen years after opening our doors, of our approximately 5800 students some 2500 are presently international students, assembled from 80 different countries and regions. We deeply appreciate the students from Mongolia who have contributed to this diverse learning community.
APU has enrolled 250 students from Mongolia since our opening in 2000, and currently we have 25 Mongolian students studying on our campus. APU has concluded agreements with 3 Mongolian universities: Academy of Management, National University of Mongolia and the Mongolian University of Science and Technology, and with 4 high schools in Mongolia. We are extremely grateful for the support to the students from the Government of Mongolia.
APU aims to produce graduates able to compete on the international stage. Our students are "world citizens" who can accept each other's differences, have respect for other people from the region around them. President Elbegdorj has certainly been a leader as a "world citizen". He led the peaceful democratic revolution in 1990 that ended 70 years of communist rule in Mongolia. Since then, he has initiated and led the country's major social and economic reforms. His priorities - promoting the rule of law, fostering social justice, fighting poverty, combating corruption and supporting participatory democracy in government and education - have won him widespread praise and acclaim around the world. Raised close to nature as a nomad, President Elbegdorj actively speaks out for environmental conservation and was recently presented a Champion of the Earth award from the United Nations Environment Program.
As the chair of the Community of Democracies, President Elbegdorj has launched a number of initiatives which are vital to both mature and emerging democracies around the world. These include Zero Tolerance for Corruption and Education for Democracy, which he declared during the 66th General Assembly of the United Nations. Presidents of countries throughout the world have voiced support for President Elbegdorj's initiatives. As we can see, President Elbegdorj has prioritized education and democracy in Asia as core items on Mongolia's agenda to promote global peace and prosperity.
Once again I would like to express my heartfelt gratitude to President Elbegdorj and to say it is an honor to be able to present him with an Honorary Doctorate from Ritsumeikan Asia Pacific University.
Related:
Ts.Elbegdorj Receives Honorary Degree of Ritsumeikan Asia Pacific University – Montsame, May 25
President Elbegdorj Becomes an Honorary Doctorate of Ritsumeikan Asia Pacific University – news.mn, May 25
President Attends Signing Ceremony of Establishment of Diplomatic Relations with Marshall Islands
Ulaanbaatar, May 25 (MONTSAME) A joint communiqué on the establishment of diplomatic relations between Mongolia and the Republic of the Marshall Islands was signed Sunday by Mr L.Purevsuren, Mongolia's Minister of Foreign Affairs and his counterpart of the Republic of the Marshall Islands Mr Tony de Brum.
The President of Mongolia Mr Ts. Elbegdorj and the President of the Republic of the Marshall Islands Christopher Jorebon Loeak were present at this signing ceremony.
For the time being, Mongolia has diplomatic relations with 189 United Nations member countries, our Ministry of Foreign Affairs intends to establish such ties with all member states of the UN.
Ambassador of Belarus Stanislav Chepurnoy meets Governor of Umnogobi province of Mongolia
May 25 (MFA, Belarus) On May 25, 2015 Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to Mongolia Stanislav Chepurnoy met with the Governor of Umnogobi aimag (province) of Mongolia Badraa Badamgarav.
The sides discussed prospects of establishing interregional cooperation, as well as possibility of participation of Belarusian specialists and machinery in the development of mineral resources in Umnogobi aimag.
UN launches sustainable forest management project in Mongolia
May 25 (UB Post) The United Nations (UN) Mongolia launched a project for mainstreaming biodiversity conservation, sustainable forest management (SFM) and carbon sink enhancement into Mongolia's productive forest landscapes on Friday.
The project is funded by the Global Environment Fund (GEF), and the UN's Food and Agriculture Organization (UNFAO) is coordinating the project. UN country representative Percy Misika and Minister of Environment, Green Development and Tourism D.Oyunkhorol attended the launch ceremony and reported that the project will conclude in 2018.
The project is expected to enforce sustainable forest management, form a pleasant legal environment for the management, and protect biodiversity.
The commission will work closely with 84 forest cooperatives in Khuvsgul, Khentii, Selenge, Bulgan and Darkhan-Uul Provinces to spread sustainable forest management evenly nationwide.
The staff of domestic professional organizations for protecting forests will be enrolled in trainings for improved competency through the project.
Minister D.Oyunkhorol expressed her gratitude to the UN and GEF for implementing the project in Mongolia and promised to active cooperation in the project.
The UNFAO officials noted that it will assist the Ministry of Environment, Green Development and Tourism in carrying out the movement for planting a million trees this year by providing information about foreign countries' forestry experiences that can be applied in Mongolia.
Mongolia Finishes Third at 2015 World Judo Masters
May 25 (gogo.mn) Team Mongolia ranks third in overall performance as of final day of the World Judo Masters 2015 with two gold and two bronze medals.
Mongolian State Honored Athlete M.Urantsetseg wrestled at 48kg female category and won gold medal while International Master D.Sumiya won gold medal at 57 kg female category.
Judoka D.Tumurkhuleg won her counterparts Korval Loic from France at the World Master 2015 in 66 kg male category and won the bronze medal. It is his first medal from World Masters 2015.
G.Boldbaatar competed at 60 kg male category and won over Papinashvili Amiran from Georgia and received bronze medal. It is his second bronze medal from World Master and he won his first bronze medal from World Master 2013.
Related:
Mongolia Becomes Third in Judo World Masters – Montsame, May 25
Mongolia grabs two golds on Day 1 at World Judo Masters – UB Post, May 25
Ts.Sainbayar Elected President of Mongolian Chess Federation
Ulaanbaatar, May 25 (MONTSAME) A member of the Asian Executive Council at the FIDE Presidential Council Ts.Sainbayar was elected the president of the Mongolian Chess Federation (MChF) during its 7th session last Saturday.
This session brought together 147 representatives of chess clubs, academies, unions and chess masters with higher titles. They discussed works of 2014 and adopted a draft rule of the federation.
After Sainbayar, 15 people were elected the members of the MChF's Steering Council.
Born 1967 in Ulaanbaatar, Sainbayar Tserendorj is a diplomat. He worked in the Ministry of Foreign Affairs and in Mongolia's Embassy in the Czech Republic in 1991-1998. In 1998-2000, he studied in the Diplomatic Academy in London.
Help This Girl Race Horses In Mongolia
May 25 (Gizmodo) "Split fingernails, bleeding ass-crack, falling off, getting kicked, getting dragged, breaking fingers, breaking my neck, losing horse, trying not to crap myself at speed because my Cipro isn't working, death." Kat Whitney's got a long list of things she'd like to avoid at the Mongol Derby. The odds aren't in her favor.
One of 41 riders chosen to compete in what Guinness World Records decreed "the longest horse race in the world," she'll head to Mongolia in August to ride a 1,000-kilometer route that recreates Genghis Khan's circa-1200 AD postal system. The horses are semi-wild; "the Intercontinental Ballistic Missiles of the thirteenth century," says The Adventurists. The way-stations—where you swap horses and drink mare's milk with local families—are 40km apart. The route is unmarked. (Don't lose your GPS!) Everyone falls off.
As with all Adventurists events, Derby riders fundraise for charities as part of their overall costs. Have a few bucks to support Kat's guaranteed-to-be-painful (but beautiful) adventure? Donate to Cool Earth, the Ulman Cancer Fund for Young Adults, or just help her get some of that really good Cipro, right here.
Case Study – Working as a reporter for the UB Post in Mongolia
Posted by Dashiell Young-Saver 2015
It's been two years since I went to Mongolia for a journalism internship with the UB Post, the nation's largest independent English-language newspaper. And it's only now that I've realized the full impact of that experience on my life.
It changed my perspective. It changed my goals. And it allowed me to meaningfully contribute to the reporting of the paper during my six-week stay.
Admittedly, I didn't know all that much about Mongolia when I decided to work with Global Nomadic. But my first image when I arrived in Mongolia was, strangely, one of familiarity. When I got off the plane, depictions of Chinggis Khan ("Genghis Khan," in the American pronunciation) were all around me, on every poster and sign in the airport. Oddly, the airport was embracing and publicizing the most stereotypical Western association with Mongolia—an ancient figure known for both his glory and for his brutality. Over the next month and a half, I would come to realize how this embrace of Khan imagery, which can be seen in many areas of Mongolia, was a perfect symbol for the westernization, development, and cultural shifts in the rapidly changing nation of 3 million people.
When working in Mongolia, there seems to be one word on the tip of everyone's tongue—mining. And the vast majority of my reporting dealt, at least tangentially, with that topic. In recent years, foreign companies have been digging up the Gobi Desert in search of precious metals. The mining operations have given Mongolia a newfound wealth it has not enjoyed in many years. The country had a double-digit GDP growth rate from 2011-2013, making it the fastest growing economy in the world (by most estimates). In a country traditionally known in the West for its ancient history and pastoral nomadic herding lifestyle, this wealth has created rapid urbanization and development in Mongolia. And the mines have fostered debate around all sorts of issues that are fascinating to cover as a journalist, such as the environment, income inequality, globalization, and corruption, just to name a few.
One of the main challenges in dealing with the new wealth is the government, which is a relatively new democracy that formed after the collapse of the Soviet Union. The cultural impact of Mongolia's socialist period can be seen when first entering Ulaanbaatar, the nation's capital, as concrete structures covered in Cyrillic writing dominate the skyline. Since its socialist times, Mongolia has made a transition to a democratic and capitalist system, which shares most of its power between the Democratic Party and two more leftist parties—the Mongolian People's Party and the Mongolian People's Revolutionary Party. During the height of the USSR, Mongolia shirked many of its oldest symbols and traditions. But as the Soviet Union collapsed, the Mongolian government had to turn to its older history to find symbols of nationality and prominence. The result: a giant statue of Chinggis Khan sits in the front of the Ulaanbaatar's Government Palace, as the small nation with newfound wealth tries to assert itself on the world stage, while sandwiched between the two great powers of Russia and China.
I mention the history and background to underscore the feeling of dynamism in Mongolia. The traditional nomadic herders are still prominent, but new skyscrapers seem to pop up every month in the capital city.
I also mention the background to underscore the vital role of journalists in Mongolia. Successful democracies need independent journalists to check the government and inform the people. And that need is particularly important for a relatively new democracy handling large sums of money. Transparency International ranks Mongolia high on its corruption index. And among many of my coworkers, one of the first words out of their mouths after "mining" was often "corruption."
The challenges facing Mongolian media outlets are impressive. Strict defamation and libel laws force journalists to cut stories before they go to press. In addition, powerful government officials and business leaders own many of the papers and news outlets, threatening the media's ability to check the power of public officials and large companies. With the environmental impact of mining operations threatening the livelihoods of herders in the countryside, and with corporate profits exacerbating economic inequality in the city, the need for journalistic accountability in Mongolia is great. And that's exactly where the role of the foreign journalist volunteer comes into play.
From the beginning, I saw my role as supplementing the accountability reporting of the UB Post. The Post is largely a paper for foreigners, as most Mongolians either do not speak English fluently or prefer to get their news in Mongolian. In an increasingly globalized market and society like Mongolia's, the need for a paper like the Post to accurately and meaningfully inform foreigners about Mongolian issues is particularly important. Unfortunately, while I was there, the Post did not put out much original content. Rather, its journalists merely translated older news from a sister paper from Mongolian into English, which made the reporting dated, untargeted, and sometimes uninformed.
My supervisors, at first, wanted me to compile the paper's international page several times per week, as I'd write stories on international news. But I soon expressed a desire to do original reporting on domestic issues. After I did some reporting on local stories, I was able to work as a full-time reporter, producing original content for the papers on a variety of issues.
By taking initiative and building up connections over time, I was able to write some longer magazine-style features. The best part was that, unlike in America, I could report on important national-scale issues with only the experience level of a college student. I wrote about a family that went from herding in the countryside to working bank jobs in the city—a transition similar to those made by many Mongolian families in the new economy. I wrote about the poor conditions for the blind and partially sighted in Mongolia who, at the time, enjoyed only a 3% employment rate. For one story, I worked my way into getting a one-on-one interview with the President of the country, Ts.Elbegdorj. We talked about children's rights and his campaign for reelection that summer.
There were some fun and bizarre stories as well. I covered the Mongolian National Basketball Association's finals, during which I got to hear the captivating stories of American players, who were drafted from overseas to play in the league. I also covered the opening of the first KFC in the country, as they unveiled the massive smiling face of Colonel Sanders on a sign in downtown Ulaanbaatar.
The people, the issues, and the stories made me passionate about my work in Mongolia—passionate in a way that I had never really felt about my work before that point. It inspired me to learn more about public policy and economics at school, as well as do some research into Mongolian history. The experience and skills I acquired in Mongolia helped me secure a reporting internship at the Los Angeles Times the following summer. But the greatest impact that my experience in Mongolia had was showing me the importance and significance of working for a cause. In this case, the cause was accountability journalism. The UB Post gave me the chance to report on national accountability stories. I'll never forget that experience.
One day, I plan on going back to Mongolia, hoping to do more research and writing with a wider time frame. I also look forward to re-connecting with my generous host family and coworkers.
But for now, I'm grateful Global Nomadic gave me the chance to stare down the symbolically-charged statue of Chinggis Khan in Ulaanbaatar's center, as well as the great changes he has seen over the years from his throne.
Print Journalism Internship in Mongolia
Mongolian girl battles rare disease, separation from mother
May 23 (SFGate) Getting a library card was a revelation for Gan-Erdene Ganbat. He doesn't speak or read English — and the Oakland Public Library doesn't carry much in his native Mongolian — but he and his daughter walk there two or three times a week to look at the books, whiling away the afternoon hours.
It's an escape from the one-bedroom apartment they share with four Mongolian men while Ganbat's daughter Nomin, 4, undergoes experimental treatment for a rare brain disease at UCSF Benioff Children's Hospital Oakland.
They've been in Oakland since October and don't know when they'll be able to return to Mongolia, where Nomin's mother remains, unable to get a visa to visit the United States.
Nomin is doing well with her treatment so far — she's experienced no side effects, and her father says her condition, which causes degenerative neurological damage, may even be improving. Her response is a relief for Ganbat, who already lost his older daughter to the same deadly disease.
But living on their own, so far from their family, has been tough. Ganbat can't work, and Nomin can't go to school or day care, so father and daughter spend every hour of every day together.
"Of course it's nice to have my daughter around all the time. And definitely it's good for her to be with me," said Ganbat, speaking through a translator. But being with anyone 24/7 can have its downsides.
"She's lonely at her age," Ganbat said. "She needs other children."
Nomin has a genetic form of a type of disease called neurodegeneration with brain iron accumulation, or NBIA. Her illness can affect muscle function, including the ability to control the arms and legs, speak, chew and, in some cases, breathe. Nomin's sister, Nandin, died at age 5 when she lost the ability to breathe on her own.
Nomin was just 3 when Nandin died and already is showing signs that she had the same illness. So her parents began an anxious, global search for treatment. But there was none — there's no cure, and the only drugs available are used to treat symptoms, not cure or stop the disease's progression.
Difficult adjustment
What they found was a clinical trial, based out of the Oakland children's hospital. The catch was that only Ganbat — and not his wife — could get a visa to travel with Nomin. And they'd have to stay in Oakland for the length of the trial, 18 months.
Despite her father's optimism, it's unclear whether Nomin is actually responding to the therapy. In fact, the clinical trial is set up with a placebo arm, which means she may not even be receiving the drug. Ganbat and her caregivers won't know it until the trial is over.
The doctor running the trial said Nomin's condition does seem stable, even if he can't say for sure that she's improving.
"Emotionally, the dad and the kid are adjusting to life here. But the study is disruptive to their family unit. It's a stressor," said Dr. Elliott Vichinsky, director of hematology and oncology at the Oakland children's hospital.
And Vichinsky doesn't like their housing situation. "It's not the minimum standards I'd want to put someone in," he said.
He and others at the children's hospital are trying to get Ganbat and Nomin into something more suitable, ideally housing affiliated with the medical center. They've also been working with state legislators and officials at the Mongolian Embassy to find a way for Nomin's mother to get a visa, but so far that's not working out.
'It's a very tricky thing'
At the same time, hospital officials are trying to arrange for the pair to return to Mongolia for a visit, but that's a more challenging task than anyone expected. Nomin requires weekly blood tests to check iron levels, and while doctors could do that in Mongolia, making sure that those caregivers regularly report test results to Vichinsky is critical.
Plus, it's not clear that Ganbat would be allowed to bring the drug — or placebo — into Mongolia. And then there's the matter of his visa, which may not allow Ganbat to re-enter the United States if he leaves.
"We would like to be able to send them home, even for just a little bit of time. But I don't know if it's possible," said Nancy Sweeters, who is coordinating the clinical trial at the children's hospital. "It's a very tricky thing."
For now, Ganbat and Nomin must remain in Oakland and their downtown apartment. They live almost entirely off of money that Ganbat and his wife have saved from a small shop they own in the Mongolian capital. That covers their rent and food and not a lot else.
Daily routine
Their days are mostly the same from one to the next. They share a bed and wake up around 8 a.m., doing most of their morning preparations in the privacy of their bedroom before brushing their teeth and washing up in the apartment's only bathroom.
Ganbat makes breakfast, plus bag lunches to take along on whatever outing is planned for the day. The library has become their favorite place, but they also visit Lake Merritt and playgrounds in the neighborhood.
Most Sundays, Ganbat and Nomin attend a Christian Mongolian church, though their family is Buddhist — it's an opportunity for Nomin to play with children her own age. A few of the mothers have taken an interest in Nomin and brought her clothes to replace those she's outgrown in the past seven months.
They spend evenings in their bedroom, looking at books or watching DVDs. After Nomin falls asleep, Ganbat talks to his wife by Skype — it can be upsetting for Nomin to see her mother, he says — and takes care of any bills or paperwork that can't be done while he's watching his daughter.
Nomin and her mother "do talk to each other sometimes," Ganbat said. But Nomin doesn't often talk about her mother or feeling sad.
"From the outside, we wouldn't know she's missing her mom," he said. "But she is in her mind and her heart."
Erin Allday is a San Francisco Chronicle staff writer. E-mail: eallday@sfchronicle.com Twitter: @erinallday
How to help
Donations to help Nomin and her father with housing and other needs can be sent through the Children's Hospital and Research Center Foundation. Go to http://bitly.com/1rfXmadhttp://bitly.com/1rfXmad, and direct the donation to "other, " then type in "NBIA fund."
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Baga Toiruu, Chingeltei District 1
Ulaanbaatar 15170, Mongolia
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