Cover Mongolia: [Chinggis Bonds Round II; Moody's affirms B2; BoM cuts rates; MNT closest ever to ₮2K; and Gatsuurt advances in SGK]

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Friday, January 15, 2015

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Overseas Market

Mongolia looking to tap dollar bond market for second time

January 14 (fastFT) Mongolia is looking to take the plunge into the international bond markets for the first time in just over three years.

The landlocked mining-focused economy has got a number of Western banks on board to arrange investor meetings next week, writes Joel Lewin.

Mongolia last tapped dollar bond markets in late 2012, offering $1.5bn in debt that earned the moniker 'Genghis bonds'. At the time, it managed to borrow at a lower yield than Spain. Now, the yields stand at 8.64 per cent, up from 4.5 per cent as recently as May.

Sentiment towards emerging markets has been heading rapidly south over the last 12 months amid a US rate rise, slowing growth and a commodities rout, which has certainly done no favours for Mongolia, where mining accounts for about a fifth of GDP.

The cost of borrowing in dollars for developing countries has jumped over the last year, and any looking to issue bonds face a potentially tricky task getting investors on board.

Last year, Ghana had to offer 10 per cent to borrow $1bn in 15-year debt, far higher than expected, while Iraq, Kurdistan and Pakistan were forced to rethink borrowing plans as a slowdown in China, a rise in official US borrowing costs and falling commodity prices diminished demand for their bonds.

Link to article

Moody's assigns (P)B2 rating to bonds issued under Mongolia's Medium Term Note Program

Singapore, January 14, 2016 -- Moody's Investors Service has assigned a provisional long-term rating of (P)B2 applicable to the forthcoming drawdown under the US$5,000,000,000 Global Medium Term Note Program of the Government of Mongolia, in line with the Government of Mongolia's B2 issuer rating. The outlook on the Government of Mongolia's B2 issuer rating is negative.

The rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents reviewed by Moody's.

RATINGS RATIONALE

…

Link to release

Moody's affirms Mongolia's B2 sovereign rating; negative outlook

Singapore, January 14, 2016 -- Moody's Investors Service has today affirmed Mongolia's government bond rating at B2. The outlook on the rating remains negative. Concurrently, Moody's has affirmed the government's B2 issuer rating, its senior unsecured MTN rating at (P)B2 and the short-term Not Prime issuer rating.

The affirmation of the rating signifies Moody's view that Mongolia's credit profile will remain in line with B2 peers over the medium term, with current credit-negative trends dissipating over the coming one to two years. Key credit supports include strong potential growth and abundant mineral resource wealth.

The decision to maintain a negative outlook reflects Moody's view that while some of the credit pressures that drove our assignment of the outlook in July 2014 have diminished, others have emerged. The external environment has worsened, particularly in relation to Mongolia's major commodities exports. Until such time as a ramp-up in production and exports from large mining projects occurs, risks stemming from the country's external position will remain elevated. At the same time, the government's debt burden has not fallen and fiscal space is limited.

Mongolia's long-term local currency bond and bank deposit ceilings are unchanged at Ba3. The long-term foreign currency bond and bank deposit ceilings are unchanged at B1 and B3, respectively. The foreign currency short-term bond and bank deposit ceilings are unchanged at Not Prime. These ceilings act as a cap on ratings that can be assigned to the foreign and local currency obligations of entities domiciled in the country.

RATINGS RATIONALE

…

Link to release

Mogi: both moved to final readings

Mortgage, Gatsuurt Bills to Be Discussed Today in Plenary Session

January 14 (gogo.mn) Following two issues to be discussed at the plenary session today.

Amendments to Civil Law and amendments to Mortgage Law
Draft Resolution of State Great Hural on establishing state-owned shares of Gatsuurt deposit

27 MPs including MP D.Ganbat submitted amendments to Civil Law and amendments to Mortgage Law. Today it will be decided whether to discuss this issues. As amending the laws, commercial banks will continue to grant mortgage laws while condition to lower the interest rate will be created.

Government submitted the draft resolution of State Great Hural on establishing state-owned shares of Gatsuurt deposit on Oct 23, 2015. The first discussion of the draft resolution to be held today.

Thus, the Parliament has discussed Gatsuurt deposit issues for its third time.

Link to article

Local Market

MSE Trading Report: Top 20 -0.63%, ALL -0.28%, Turnover ₮5.9 Million Stocks, ₮100 Thousand T-Bills

January 14 (MSE) --

Link to report

₮12 Billion 52-Week T-Bills on Offer at 15.2% Discount via MSE

January 14 (MSE) Buy order of 52 weeks Government bonds with 15.200% annual coupon rate has started through brokerage companies and buy order will end on 18th January.

Click here to see the detailed information of Government retail bonds.

Link to release

Economy

Historic low ₮1,999.93/USD set January 14, 2016

BoM MNT Rates: Thursday, January 14 Close

	1/14	1/13	1/12	1/11	1/8	1/7	1/6	1/5	1/4	12/31	12/30	12/28	12/25	12/24	12/23
USD	1,999.93	1,999.37	1,998.88	1,998.23	1,998.32	1,998.61	1,998.14	1,997.63	1,996.66	1,995.51	1,995.98	1,993.32	1,992.71	1,996.50	1,996.32
EUR	2,171.72	2,162.52	2,177.68	2,177.87	2,175.77	2,155.80	2,144.20	2,159.24	2,178.86	2,181.19	2,182.70	2,185.58	2,185.50	2,185.67	2,183.08
JPY	16.93	16.91	17.03	17.02	16.91	16.93	16.83	16.73	16.78	16.57	16.58	16.53	16.57	16.58	16.50
GBP	2,881.10	2,886.29	2,903.27	2,904.33	2,921.84	2,916.47	2,926.08	2,938.11	2,947.87	2,958.14	2,957.54	2,975.33	2,977.71	2,976.18	2,965.73
RUB	26.18	26.14	26.09	26.30	26.90	26.45	27.08	27.31	27.33	27.02	27.40	28.16	28.32	28.70	28.15
CNY	303.57	304.00	303.95	303.48	303.28	303.11	304.98	306.41	306.60	307.30	307.54	307.28	307.83	308.17	308.23
KRW	1.65	1.66	1.65	1.65	1.66	1.67	1.67	1.68	1.68	1.70	1.70	1.71	1.70	1.71	1.70
SGD	1,390.53	1,393.14	1,387.39	1,390.27	1,391.88	1,393.15	1,395.35	1,403.96	1,404.61	1,411.45	1,411.88	1,416.72	1,418.25	1,421.81	1,420.67
CAD	1,393.58	1,404.10	1,402.53	1,410.13	1,416.49	1,414.64	1,422.57	1,436.06	1,433.71	1,438.15	1,440.83	1,438.55	1,442.53	1,442.35	1,435.38
AUD	1,392.05	1,404.76	1,387.92	1,393.97	1,405.62	1,408.32	1,420.38	1,439.59	1,441.19	1,456.82	1,454.77	1,447.25	1,451.79	1,452.55	1,446.23
HKD	257.43	257.68	257.65	257.44	257.57	257.81	257.78	257.73	257.61	257.46	257.53	257.18	257.08	257.59	257.57
CHF	1,982.88	1,989.13	2,003.39	2,007.67	2,003.33	1,986.49	1,979.83	1,990.17	2,006.59	2,015.56	2,014.62	2,016.61	2,017.32	2,020.95	2,017.71

Bank USD rates at time of sending: TDB (Buy ₮1,994 Sell ₮2,001), Khan (Buy ₮1,995 Sell ₮2,001), Golomt (Buy ₮1,994 Sell ₮2,001), XacBank (Buy ₮1,995 Sell ₮2,001), State Bank (Buy ₮1,996 Sell ₮2,001)

MNT vs USD (blue), CNY (red) in last 1 year:

Link to rates

Bank of Mongolia Cuts Policy Rate to 12% on Low Inflation (Yday)

January 14 (Bloomberg) -- Bank of Mongolia's monetary policy committee cut its policy interest rate to 12% from 13% due to drop in inflation, according to a central bank statement dated Jan. 13.

* Rate is effective Jan. 14; decision made at policy meeting on Dec. 22

* Annual inflation rate fell to 2.9% in Nov. and has been lower than the targeted level for the last five months: this increases room for monetary policy expansion

* Supply-driven inflation low and stable while demand-pull inflationary pressure expected to be at a low level

* Positive and stable outlook for FDI in medium-term will support macroeconomic external balance

* Cautious and gradual monetary easing will positively affect monetary and credit growth and private sector investment

* NOTE: November CPI of 2.9% y/y was slowest rise since October 2009 when inflation was 0.9%

* Previous story: Mongolia Central Bank Keeps Rates at 13% on Falling CPI, Low FDI

* Related story: Mongolia Affirmed at B2 by Moody's, Outlook Remains Negative

(BFW)

BoM FX auction: US$20.43m sold at ₮1,999.87, accepts $12.3m MNT, $20m USD swap offers

January 14 (BoM) On the Foreign Exchange Auction held on January 14th, 2016 the BOM has received bid offers of USD 35.53 million between the rates of MNT 1998.50-2000.51 and bid offers of CNY 24.0 million in a rate of MNT 303.80-304.21 respectively. The BOM sold USD 20.43 million in a closing rate of MNT 1999.87.

On January 14th, 2016, The BOM has received MNT Swap agreement buying bid offers equivalent to USD 12.3 million and USD swap agreement selling bid offers of USD 20.0 million from local commercial banks and accepted the offers.

Link to release

BoM issues ₮172.4 billion 1-week bills at 13%, total outstanding +1% to ₮384.4 billion

January 13 (BoM) BoM issues 1 week bills worth MNT 172.4 billion at a weighted interest rate of 13.0 percent per annum /For previous auctions click here/

Link to release

₮15 Billion 2-Year GoM Bond Auction Receives No Bids

January 13 (BoM) Auction for 2 years maturity Government Bond was announced at face value of 15 billion MNT and each unit was worth 1 million MNT. The Government bond was not sold the due to absence of both competitive and noncompetitive bids.

Link to release

₮25 Billion 52-Week GoM Treasury Auction Receives No Bids

January 13 (BoM) Auction for 52 weeks maturity Government Treasury bill of 25.0 billion MNT was announced and each unit was worth 1 million MNT. The Government Treasury bill was not sold the due to absence of both competitive and non-competitive bids.

Link to release

BoM buys 0.7 tons of gold in Dec, 15.1 tons in 2015, +18.7% from 2014

Date	Month	Year-to-Date	YTD Change
2015/12	694.7	15084.0	2379.3
2015/11	1518.4	14389.2	2605.4
2015/10	2674.0	12870.7	2137.4
2015/09	2793.5	10196.7	1444.2
2015/08	1993.8	7403.2	391.8
2015/07	1647.6	5409.3	1.5
2015/06	1344.1	3761.7	-335.4
2015/05	895.4	2417.6	-663.1
2015/04	536.7	1522.2	-530.0
2015/03	287.0	985.5	-680.3
2015/02	218.4	698.5	-801.1
2015/01	480.1	480.1	224.3
2014/12	920.8	12704.7	6662.8

Link to release (in Mongolian)

Business

Mogi: James Passin

North Korea Is Newest Frontier for a Daredevil Investor

January 13 (New York Times) He searched for oil in the badlands of Somalia and fueled a stock market boom in Mongolia. He sued the world's smallest republic, far out in the Pacific, for a chunk of what it is worth.

Now, he is betting on North Korea.

James Passin, a hedge fund manager at Firebird Management, believes the nuclear-armed country sits on as much as a billion barrels of crude — enough to make it as big a producer as Oklahoma. If the oil exists, he wants to help unlock it.

"You have a country with 25 million people — young, highly disciplined, literate — and a strong military-industrial complex," he said in an interview. "It's possible that the early investors will be rewarded with potential for massive appreciation."

The risks of sinking cash — even just $7 million or so of Firebird's $700 million in assets — into a neo-Stalinist state with labor camps and virtually no private property are obvious. The geopolitical volatility was on full display last week, as North Korea claimed that it had tested a hydrogen bomb. And Mr. Passin is treading on murky investment territory, given the American sanctions against the country.

His investors have experienced the wild rides that come with such frontier markets. Two of his funds are being liquidated after deep losses, including on banking in Iraq, gold in Armenia and oil and gas in Kenya.

But Mr. Passin isn't deterred. "I see opportunities when other people are afraid," he said.

Mr. Passin, 44, studied philosophy at St. John's College in Maryland. He was inspired to enter finance, he said, in part by the story of Thales, a philosopher in ancient Greece who got rich by monopolizing olive presses before a bumper harvest he had foreseen in the stars.

After graduating, Mr. Passin began his career as an editor at Taipan, a financial newsletter in Baltimore, recommending obscure foreign stocks.

Peter Schiff, the chief of Euro Pacific Capital in Connecticut, met Mr. Passin in his newsletter days and later invested, on his advice, in Hurricane Hydrocarbons, an oil company in Kazakhstan, buying shares for as little as 25 cents apiece. Eventually, the company was sold at $55 a share, Mr. Schiff recalled.

"I've bought some stocks from him that have gone to zero," Mr. Schiff said. "But this was such a big winner."

In 1999, Mr. Passin joined the New York-based Firebird, becoming one of several fund managers at the firm.

"He took a very different path than your typical hedge fund manager," Mr. Schiff added. "He's not a Harvard M.B.A., he didn't work at Goldman Sachs, he didn't do a two-year internship — he's just a smart guy."

Contrarian instincts have led Mr. Passin to out-of-the-way markets like Chechnya, Congo and Somalia.

Joseph Naemi, one of Mr. Passin's longtime business partners, recalled joining him in a brash attempt in 2002 to buy Uzbekistan's national oil company, Uzbekneftegaz. They had a meeting with a dozen Uzbek government officials, and Mr. Passin's pitch was simple: He was there to write a check for $600 million to $700 million to buy the entire company. But the country did not go for the proposal.

"The skeptical look around the boardroom was actually hilarious," Mr. Naemi wrote in an email.

In 2006, Mr. Passin toured Mongolia and zeroed in on its stock exchange. It was "just a room with some computers," Mr. Passin recalled.

He said he snapped up shares in "anything that was listed." By 2011, the country's economy was clocking one of the fastest growth rates in the world — 17 percent a year — as vast troves of minerals were discovered under the steppes.

Since then, Mongolia's bull market has crashed, Mr. Passin said, and the economy has slowed. But he is redoubling his efforts there, aiming to construct a set of world-class Mongolian corporations — a project he has broadly likened to the empire-building of Genghis Khan.

Mr. Passin is also wagering on distressed debt in the South Pacific. Firebird has been suing the tiny, destitute island nation of Nauru for repayment on about $24 million of defaulted government-backed bonds, equal to about one-sixth of the country's gross domestic product.

Firebird, which bought the bonds from the original creditors at a fraction of their face value, stands to make money if it wins. The hedge fund has been fighting in Australian courts to garnish Nauru's state bank accounts — and briefly succeeded in freezing the accounts.

The tactics are similar to those used by larger, more prominent firms like Elliott Management, run by the billionaire investor Paul E. Singer, who has sued Argentina over debt repayment.

In December, Australia's highest court denied Firebird access to Nauru's state bank accounts. But Mr. Passin might still try to claim any wealth the eight-square-mile coral atoll holds outside Australia.

"We will go to every corner of the world to find assets," he said.

Mr. Passin's North Korean investments may be his most contentious.

Firebird owns nearly half of a Mongolian company, HBOil, which entered a joint venture with the government of Kim Jong-un in 2013. The partnership gave the small company expansive rights to overhaul North Korea's primitive energy sector by opening 100 gas stations, restarting a derelict refinery and drilling for oil and gas.

The projects have yet to materialize. Companies have been searching for oil and gas there since the 1980s, and it remains unclear whether the country has any significant quantities.

Mr. Naemi, who is advising HBOil, believes there are deep reserves of oil — perhaps as much as a billion recoverable barrels on land. But the current low price of oil means that if it exists, and can be extracted, it still might not be profitable.

Mr. Passin's investment also raises legal questions. Alexandra López-Casero, a sanctions lawyer at the Boston-based law firm Nixon Peabody, said the investment might violate American sanctions against North Korea absent a license from the Treasury Department in Washington. Other experts disagree, noting that the United States has not issued a blanket prohibition on investing in the North.

Mr. Passin said that Firebird had neither sought such a license nor needed one. He added that an expert had reviewed the venture for him and concluded that it was legal.

Some analysts worry that any oil exploitation would fortify Mr. Kim and others in the country's ruling elite. "The security risk is not small, as the oil business in D.P.R.K. is exclusively handled by the Communist Party and the military," said Keun-Wook Paik, an expert on North Korean oil at the research institution Chatham House, using the abbreviation for the Democratic People's Republic of Korea, the country's official name. "It will be a kind of Pandora box opening."

Mr. Passin dismisses such concerns.

He said business with North Korea would both benefit ordinary people and encourage the totalitarian state apparatus to become "more open and less harsh." Besides, he argued, if the West avoided commerce with unsavory nations, much of the world would be off limits.

"I believe there are companies that will emerge out of the D.P.R.K. that will be of lasting importance," he said. "That will survive for centuries."

Link to article

Moncement Plant Tour – Part 1

January 14 (World Cement) Building a greenfield cement plant in any location is not without its challenges. Building a greenfield cement plant in the Gobi Desert, Mongolia, where there is a lack of both water and infrastructure, is more challenging still. But Mongolian mining and construction company, Monpolymet Group, took on this challenge and in August 2015 its subsidiary company Moncement Building Materials began commissioning at the Senj Sant plant.

Background and financing

Initial work on the project began in 2008 with the first limestone mine exploration and permits. Much of the preliminary research had already been undertaken by the time the European Bank for Reconstruction and Development (EBRD) came on as a major investor in the project in May 2013. The EBRD was attracted not only by the need for investment in the region and the plans for the plant to utilise the best available technology, but also by the fact that Moncement is led by a strong female team with a high environmental and social consciousness, and a strong sense of responsibility and integrity. A further loan agreement was signed in April 2014, which covers 50% of the debt. The remaining 50% was financed by the Development Bank of Mongolia.

The EBRD is currently the largest financial investor in Mongolia, with over e1.1 billion invested to date. About 9% of these investments have gone to companies operating in the building materials sector, and almost all the investments support private sector companies and banks. The EBRD is focused on supporting projects that foster growth and innovation and promote a country's transition to market economies.

Mongolia's cement industry

In 2014, cement consumption in Mongolia reached around 2 million t, equivalent to a per capita consumption of 650 kg. As much of 80% of this was imported from China, as Mongolia had just one significant cement operation. The main market for cement is Ulaanbaatar, where increasing urbanisation is spurring on housing construction. From 2016 onwards, important public projects and foreign investments are planned that will increase cement demand, while new entrants such as Moncement are joining the market and will, over the next five years or so, be able to meet all of the country's needs, putting an end to imports.

In addition to the new cement plant, Moncement has also started work on a new cement terminal in Ulaanbaatar, which is expected to be completed in 3Q16. The two projects together will give a total capacity of 1 million tpy of cement, enough to provide 30 – 40% of the anticipated market demand in 2016. An additional production line is also planned at the plant, though the timing of this second phase has not yet been announced.

Choosing the location

The location of the plant in Orgun Soum was chosen based on the availability of limestone reserves and its accessibility to Ulaanbaatar (540 km away) and Sainshand via a direct rail connection situated close by. An extension linking the existing railway with the plant was built as part of the project. Two sites were looked at in Orgun, but ultimately the Senj Sant site was chosen for logistic and environmental reasons, being downwind of the existing village, which should reduce the potential impact of the plant on the local community.

This is part three of a three-part article written by Katherine Guenioui for World Cement's January 2016 issue and abridged for the website. Subscribers can read the full issue by signing in, and can also catch up on-the-go via our new app for Apple and Android. Check back tomorrow for part two of the article on www.worldcement.com.

Link to article

Ulaanbaatar

UB opens one-stop City Service Center

Ulaanbaatar, January 14 (MONTSAME) The Prime Minister Ch.Saikhanbileg Thursday attended a ribbon-cutting ceremony to open the City's Service Center (CSC) at the "Dunjingarav" commercial center.

"An improvement of the quality of state services and an increase in their adequacy for people are the main goals of the government, so it has established the "11 11" center to receive views and requests from people, has installed 125 units of state service automatic machines across the country," he reminded all and said that this new CSC is a continuation of these works.

New culture and new tendencies have been introduced, "and we should boost such a culture", Saikhanbileg said and thanked the city's authorities, officials of the city's administration, private sector and international organizations' representatives for collaborating in the CCS's establishment. He also said all Ministries and agencies' services must be connected to the CCS, moreover, "such a center must be created in centers of all provinces". In the UB city, such centers are projected to be established in the "Misheel EXPO" center in Khan-Uul district and in Songinokharikhan district-based "Sodon" micro-district.

The CCS provides people with some 200 kinds of services of 25 state organizations regardless of the address of people.

Present at the opening ceremony were also E.Bat-Uul, the Mayor of Ulaanbaatar, and D.Battulga, a head of the Citizens' Representative Khural (council) of Ulaanbaatar.

Link to article

Diplomacy

Mongolia and Bulgaria to review bilateral documents

Ulaanbaatar, January 14 (FOCUS NEWS) A Mongolia-Bulgaria intergovernmental protocol on reviewing international treaties established between Mongolia and Bulgaria was signed Wednesday by Lundeg Purevsuren, Mongolia's Minister of Foreign Affairs, and by Mr Ivan Stamatoff, the Charge d'Affaires of Bulgaria's Embassy in Mongolia, Montsame national news agency reported.

By the protocol, the two countries will review an effectiveness of the treaties that have been established between them in 1967-2013. As a result, 28 documents will remain valid, two will be annulled.

The Protocol will enter into force on the date of receipt of the last written notification by which the two sides inform each other, through diplomatic channels, of fulfilment of their internal legal procedures necessary for the entry into force of the Protocol.

Link to article

Art, Entertainment

Exhibition at Wolfson College captures the spirit of Mongolia

January 14 (Oxford Times) WOLFSON College has taken on a central Asian theme with the installation of a new exhibition of Mongolian art.

The Spirit of Mongolia exhibition features the work of three artists from the vast country and aims to bring its colour and splendour to Oxford.

The works on display have been inspired by Mongolia's vast steppe, blue sky, nomadic culture and a contemporary interpretation of Buddhist art.

Artist Soyolmaa Davaakhuu was the 2008 recipient of the female artist of the year prize in Mongolia and is well known for bringing the clarity and precision of traditional Buddhist art to a contemporary audience.

She is joined by Sukbaatar Davaakhuu an award-winning calligrapher and artist.

His works depict symbolic animals which represent human emotions and modes of expression, accompanied by lines of calligraphic writing of poems in Mongolian script.

The third artist, Davaanyam Tsedendamba, depicts nomadic culture and the unspoiled nature of Mongolia.

The exhibition runs until Friday, January 29 and is open daily from 10am until 7pm at the college in Linton Road.

Visitors are advised to ring the college lodge on 01865 274100 before attending.

Link to article

Travel

MIAT set to launch direct flights between Delhi and Ulaanbaatar by March

NEW DELHI, January 14 (The Economic Times) Mongolian national carrier MIAT Mongolian Airlines is all set to provide direct air connectivity to India with a flight service to Delhi from its capital city Ulan Bator by this March.

The airline has appointed Delhi-based cargo firm Zeal Global Services as its General Sales Agent (GSA) to handle its sales, marketing and distribution business prior to spreading its wings to the Indian skies.

MIAT Mongolian Airlines is one of the two international Mongolian carriers in the east-central Asian country.

A GSA is a sales representative for an airline in a specific country or region, responsible for selling all products including tickets and cargo services in the region where the airline does not operate.

"We had signed the GSA agreement with MIAT Mongolian Airlines in June last year. However, our registration with the Customs was in process and it got completed recently. Following this, we have now officially become the offline GSA for the Mongolian carrier," Zeal Global Managing director Nipun Anand said.

Once the airline launches its operations, which is expected by March, Zeal Global will act as online GSA for the carrier, he said.

The agreement was signed following Prime Minister Narendra Modi's visit to Mongolia in May last year, he said.

"The airline is expected to commence services to Delhi from Ulan Bator by March. The airline is presently awaiting regulatory approvals from its civil aviation authorities," he said.

The airline with its hub at Chinggis Khaan International Airport at Ulan Bator, currently operates with a fleet of five aircraft -- three Boeing 737s and two 767s.

Link to article

Top 10 ethical travel destinations for 2016: Mongolia

January 13 (CNN) Help has arrived for travelers who've resolved to avoid spending their tourism cash in countries with poor human rights and environmental records.

Non-profit group Ethical Traveler -- a project of the Berkeley-based Earth Island Institute -- has just released its annual list of the 10 most forward-thinking countries in the developing world.

According to the California-based group, each country is reviewed for its performance in the areas of human rights, social welfare, animal welfare and environmental protection.

At the same time, it also needs to have plenty of appeal as a travel destination.

Five first-timers have made this year's list -- Grenada, Micronesia, Mongolia, Panama and Tuvalu.

"By spending travel dollars in forward-thinking countries, explorers can reward the good guys -- and encourage humane practices worldwide," says Ethical Traveler's report.

The 2016 winners, in alphabetical order, are:

1. Cape Verde

2. Dominica

3. Grenada

4. Micronesia (Federated States)

5. Mongolia

6. Panama

7. Samoa

8. Tonga

9. Tuvalu

10. Uruguay

"There are seven island nations on the 2016 list, marking a continuing trend in the winners' circle," says the report.

"Climate change affects islands dramatically, so island nations tend to put extra effort toward effective environmental policies."

Mongolia's inclusion is also significant, as it's the first developing mainland Asian country to ever appear on the list.

"While we acknowledge that no country is perfect, we honor those that strive to build a better, more sustainable society," says Ethical Traveler co-founder and travel author Jeff Greenwald.

"Their neighbors can learn and benefit from their example -- and so can we."

…

Link to article

KNOW BEFORE YOU GO: ULAANBAATAR

January 12 (Roads and Kingdoms) --

1. Ulaanbaatar is a sprawling, fluid, crazy boomtown. Until about 15 years ago, 'UB' was a sleepy capital of about 500,000. Then, international mining firms literally struck gold (plus coal, copper and uranium) in the hills. Long considered a remote satellite of the Soviet world, Mongolia suddenly found itself sitting on up to $1.3 trillion in minerals. Gold rushers flocked to the capital in droves. By 2005, the city's population had nearly doubled to 947,000 people; today it's over 1.3 million, making up about 45 percent of Mongolia's three million souls. Up to 40,000 more arrive yearly. Mining contracts also brought an influx in wealth. Although growth has slowed (to three percent in late 2015) thanks to a slump in developing-world markets, Mongolia's GDP grew tenfold from 2000 to 2012 and in 2011 Mongolia experienced 17.5 percent growth, making it the world's fastest-growing economy that year.

2. Maps are worthless.

…

3. The city's a cultural free-for-all.

…

4. Visit a ger district.

…

5. Master grunt-based communications.

…

6. Visit the heart of Mongolian Buddhism.

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7. Let Zandraa Tumen-Ulzii blow your mind.

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8. Beware the Nazis.

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9. It's too easy to get hammered.

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10. Stay with locals whenever possible.

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11. Take your time.

…

12. Naraan Tuul is your one-stop shop for yak needs.

…

13. Ask about the Death Worm.

…

14. DO NOT GO IN WINTER.

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Fight club: Are YOU hard enough for this Mongolian warrior retreat?

CARVE weapons, wrestle like a warrior and ride into the sunset at this remote Mongolian holiday.

January 14 (The Daily Star) If you fancy shooting a arrow from a bow you've made yourself, whilst on horseback with the taste of Mongolian milk vodka still piercing your lips, then this trip is for you!

On this adventure holiday you'll soak in the scenery while carving your own weapons, learning battle tactics and making fire from scratch.

Days are spent out in the wild dressed in full traditional costume and at night guest's are tucked up in nomadic ger tents.

The nine-day trip by Responsible Travel lets you immerse yourself in the culture while transitioning into a true Mongolian warrior.

The website reads: "Immerse yourself amongst the culture, landscapes and legends of Mongolia and find out if you've got what it takes to earn your spurs in the shadow of Genghis Khan."

"This trip is all about unleashing your inner-warrior and if you're excited about discovering Mongolia whilst spending time in the saddle, then this is the one for you."

But this trip isn't for the faint-hearted. There won't be any luxuries and although the spacious yurts look like glamping tents they're quite basic.

"Ger camps often include minimal electricity and key times for hot running water don't expect a yurt 'glamping' experience," the site says.

"Also, don't forget to pack plenty of layers for when the fire starts to cool during the wee small hours."

The action-packed holiday starts in Ulaanbaatar, where guests learn about the history of the country and you'll spend the first night in a hotel.

This is also when you're given your tailor-made traditional costume. On the seconds day thrill-seeking visitors head to a bow and arrow workshop to make weapons for the trip.

Throughout the rest of the stay participants will learn to ride and lasso horses, take part in archery lessons and learn Khan's most successful 13th-century battle methods.

The training holiday starts from £2,150 for nine days, excluding flights. For more information go to responsibletravel.com

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In Mongolia, a search for Genghis Khan's legacy

January 13 (Shanghai Daily) THE thunderous sound of a thousand horses rages in the near distance. From across the seemingly infinite steppes of the Central Asian hinterlands, the air is transformed into a deafening roar of hooves, howls and cries. Huge iron swords ready at the hilt, piercing eyes gazing from hardened leather helmets, stout bodies shrouded in tough hide armor, the noses of their fierce mounts flared in flaming fury. In the long shadow of impending doom, it is then that one realizes: It is too late. Genghis Khan has arrived.

From the 13th to the 14th centuries, Genghis and his Khan descendants, the ground quaking under the weight of their mighty armies, unleashed a fury of global conquests that became the largest contiguous land empire the Earth has ever known, ruling over one-fifth of the world's land mass and subjugating a staggering 25 percent of the planet's population. The extent of the Mongol Empire are nearly impossible to comprehend, stretching across a huge swath of land from Eastern Europe all the way to the Korean peninsula, touching the Mediterranean, the Himalayas, Arabian deserts, Siberia and the shores of the Sea of Japan.

An adventurous start

In Ulaanbaatar, the Mongolian capital, sand was pouring down from the sky like rain during a monsoon. It was one of their frequent sandstorms, and we were stuck in Beijing. After numerous delays and a day-long wait, making good friends among our hodgepodge group of stranded yet spirited strangers, we finally took off and, upon landing in Mongolia, the entire plane broke out in frenetic applause.

Ulaanbaatar and its surroundings offer some impressive sights, including a mystical temple in the mountains at Aryabal Meditation Center, a towering 26.5-meter-high golden statue of the Buddhist figure Avalokitesvara at Ganden Monastery, the magnificent Winter Palace of Mongolia's last emperor and a grandiose public square featuring a gigantic statue of Genghis Khan, seated regally on a majestic throne.

As interesting as Ulaanbaatar is, I was eager to get to the destination I had truly ventured here for, the location where the great Genghis Khan embarked on his extraordinary campaign across much of the known world.

From whence a mighty cavalry once rode

Sitting in a quaint valley, surrounded by soft, rounded mountains, the legendary town of Karakorum was the capital of the Mongol Empire. It was from this exact spot that Genghis Khan rallied his troops before advancing into much of Western Asia. Born as Temüjin, he became a respected tribal leader and consolidated his growing power base through politics and warfare. During a kuriltai (traditional council meeting) in 1206, he was elevated to the super status of "Genghis Khan," meaning supreme leader or king of kings, uniting all the regional nomadic peoples as the head of "all who lived in felt tents".

While very little remains that reveals Genghis Khans' once powerful presence in Karakorum, save for some old fire pits and palatial foundations, his power can be felt just by trekking atop the very soil that his mighty cavalry embarked from. When all was quiet, I could almost hear the rumbling of horses as the Mongol's fierce armies charged their way into Europe and China. Eventually undone by overextension and infighting, the ambitiousness and brutal rule of Genghis Khan and his successors still reverberates centuries after their fateful demise.

A run-in with a modern Genghis Khan

Driving among grazing cattle, curious camels and meandering sheep, we made our way to Erdene Zuu, the oldest surviving Buddhist monastery in Mongolia. While exploring the extensive grounds and remarkable temples, I met a large Mongolian man whose intense eyes were imbued with strength and confidence. He was wrinkled and weathered. He wore a thick moustache, a dark leather coat with fine embroidery and an enormous silver-studded belt that looked like it belonged to an emperor's tunic. His appearance was imposing, and I felt as if I was staring at Genghis Khan himself.

As I gazed up at him, I reached my hand out. He shook it and smiled warmly, his dark-hued eyes staring straight into mine.

A portal into the past

The wind howls through a small opening at the top of the simple, round tent. Through the ger's opening, I can see eagles roam and horses saunter while dust blows over the stark, dry terrain and the lingering goats — a moment that seemed frozen in time. A ger is a traditional, portable Mongolian tent, made from a wooden frame and covered with skins or felt. Surprisingly spacious, they seem almost impossibly larger inside than outside. No trip to Mongolia would be complete without a crisp night under the infinite arrays of stars in a local tent, the same way the nomads of the world have been living for thousands of years.

After a pleasant stay in a cozy ger camp, it was time to head back to Ulaanbaator. Luckily for us, a special treat was in store: From out of nowhere emerged the 80km stretch of giant sand dunes known as Mongol Els, part of the outer extremities of the mighty Gobi Desert. Here, the hot grainy sands of the arid landscape stream over mounds of gold, conspiring to form magical mirages and drifts of dreams. Genghis himself may have traversed these very same trails. In this wondrous place one can meander under the soaring sun, frolic about in the sea of sand or take a ride on the affable two-humped Bactrian camels that trudge along this area.

The jubilant romp in the sand worked up quite a big appetite, so we stopped for a traditional Mongolian lunch. After we were seated, a huge bowl of hardy meat and vegetable soup was placed in front of me. Thinking the gigantic broth was to be shared with everyone, I readily pushed it to the middle of the table, so that all could enjoy the steaming scrumptiousness. Much to my surprise, more of the titanic soups emerged from the kitchen — it was then that they told me that the bowl was all mine. It seems that in this vast country of grand places and larger-than-life people, the word "small" doesn't exist.

The undiscovered mystery

One final destination was in order before our adventure in Mongolia was complete. We stopped at Tsonjin Boldog, just east of Ulaanbaatar, where a recently-built colossal figure of Genghis Khan towers a remarkable 40 meters over the surrounding countryside. The world's largest equestrian statue is made of a staggering 250 tons of gleaming stainless steel. The site has myth and intrigue floating in the air, as legend holds that on this very location Genghis found a golden horsewhip, considered by Mongolians to be a very good omen, and that he was inspired by this fortuitous find to become the ruler of all Mongols. The statue rises from the Earth with the same awe Genghis' army did as it thundered across the world. Though the man passed away nearly 800 years ago, he left an extraordinarily indelible mark on the world, as permanent as the global connections he formed, yet as fleeting as the free-loving nomadic lifestyle he led.

Perhaps, then, it is fitting that Genghis' burial site remains undiscovered. It's one of the world's greatest unsolved mysteries. According to legend, every one of the 2,000 people who attended his funeral in 1227 was executed by a total of 800 soldiers, who in turn were killed to ensure his eternal resting site was undisturbed. Folk stories whisper that a river was diverted over his grave to make it impossible to find. Other legends say that trees were planted over the site to conceal it.

Perhaps his final resting place will be found some day — either way, his spirit will forever linger in this vast, astounding land.

Getting there:

Visas for Mongolia are required for Chinese citizens with the exception of Hong Kong residents. Ulaanbaatar is the only international airport. Airlines mostly connect from Beijing, Seoul, Tokyo or Moscow. For a grander adventure, the famous Trans-Mongolian Railway also gets you to Ulaanbaatar, departing from either Beijing or Moscow. While in Mongolia, it is recommended to get a four-wheel drive vehicle due to the rugged, barren terrain.

Where to stay:

Accommodation in Mongolia will be basic hotels or guest houses in the cities and main towns. In rural areas, Ger (traditional felt tents) camps are available. Travel agents can also arrange for you to camp with a nomadic family. Ger tents or village homestays are a wonderful experience, but they are also the only option in between the sparsely situated towns.

Travel tips:

• Avoid the winter months due to the brutal cold, strong wind and impassable roads — the best time to travel is between May and September.

• Although fresh food is abundant in populated areas, it is recommended to carry protein bars and snacks when you travel to more remote areas. Bottled water is mandatory.

• A flashlight is essential. Do also bring sturdy shoes, a rain parka, toilet paper and layered clothing, as it gets pretty hot during the daytime, but nighttime can be very cold.

• Mongolia is predominately Buddhist and also has gone through numerous political changes in the past century. Respect the local culture.

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