BCM NewsWire Issue 449
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Transcript of BCM NewsWire Issue 449
BUSINESS COUNCIL of MONGOLIA NewsWire
www.bcmongolia.org [email protected]
Issue 449 – October 21, 2016
BCM NewsWire provides short summaries of news collected from around the world. Each
article is kept to a maximum of 150 words for brevity, but click on the link next to
“Source” to read the full article.
NEWS HIGHLIGHTS:
Business:
• OT mine hits all-time high in Q3 2016
• Thiess invests in Maptek I-Site laser scanner for OT mine
• Oyu Tolgoi signs a major contract for underground development
• Erdene up 22% after drilling 68 meters of 2 g/t gold
• Baganuur prepped for winter operations, energy minister says.
• KEPCO, SoftBank to embark on super grid project in Northeast Asia
• Minters, A&O, Bakers, NRF involved in Mongolia wind farm project
• Korean contractors set to build Asia’s 4th largest solar farm
• China’s Smart Oil Investment In Dornogovi
• Mongolia hopes to enlist Western tech firms for ‘high-speed data center’
• State hospital recruits Beijing partner for expertise and diagnosis
• Coca-Cola Happiness Center opens at MGG’s Tuguldur Shopping Center
• MIAT bans ‘Samsung Galaxy Note7’ on all flights
• Korea’s ‘Survivor’ type reality challenges celebrity cast in Mongolia
• SouthGobi Resources appoints authorized representative
• JV Consult represents German trade fair operator in Mongolia
• Mongolia hosts conference on nomadic tourism and sustainable cities
• XacBank Awarded “Best Bank of Mongolia- 2016”
• TDB named “The Leading Partner Bank in Mongolia” for 2nd consecutive year
Economy:
• Mongol Bank: FX Auctions, swaps, 1-week bills, T-bills
• Business confidence worsens as sales plunge
• Mongolian PM on mission to halve budget deficit ratio to 9%
• IMF team in Mongolia
• Poland to lend EUR50 billion for trade
• Subsidized mortgage program suspended, again
• Mongolian brands ready for export to Japan
• China, Mongolia eye energy deals
• Mongolia aims to become world’s center for nomadic tourism
• Mongolia ready to cooperate with Kyrgyzstan in agriculture, mining
• End poverty now, Mongolia
• Climate change collectives on the Mongolian steppe
• Why grass now costs more than sheep on Inner Mongolian prairie
Politics:
• Elections carry over scheduled for 23 Oct.
• Japan and Mongolia agree to strengthen ties further
• China, Mongolia to strengthen military cooperation
• Ex-head of Mongolian development bank arrested
• Former State Housing Corporation director accused of embezzlement
• Returned peacekeepers from Sudan waiting on salaries
• Government threatens to sue for allegations of illegal falcons trade
• UB Council investigates ‘Smart Ulaanbaatar’ spending
• Armed robbery goes awry and riot ensues
• Young Mongolian weightlifter sanctioned for doping
• Khoomei included in UNESCO Intangible Cultural Heritage list
• An open letter to citizens of Mongolia, Australia and Malaysia—EDITORIAL
BCM Updates:
• Working Groups News
• Job vacancies at member organizations
• Member-to-Member Special Offers & Benefits
• Websites Update - Presentations, Mongolia Reports, Interviews
Economic Indicators:
• Inflation
• Central Bank Policy Rate
• Currency Rates
*Click on titles above to link to articles.
SPONSORS
Khan Bank Wagner Asia Automotive
National News Corporation International SOS
BUSINESS
OT MINE HITS ALL-TIME HIGH IN Q3 2016
The Oyu Tolgoi mine has hit an all-time high for material mined in a quarter-year, 66
percent shareholder Turquoise Hill Resources in its third-quarter report. The mine, which
is also 34 percent owned by the government mined more than 25 million tons. However,
grades are on the decline, resulting in a 9.9 percent fall in copper production from the
second quarter and 57.1 percent gold.
Turquoise Hill continues to expect Oyu Tolgoi to produce 175,000 to 195,000 tons of
copper in concentrates and 255,000 to 285,000 ounces of gold in concentrates for 2016.
Meanwhile, Turquoise reported good progress with underground development.
Source: Turquoise Hill Resources Ltd.
THIESS INVESTS IN MAPTEK I-SITE LASER SCANNER FOR OT MINE
Maptek and IT Experts LLC have delivered an I-Site 8200 3D laser scanning system to Thiess
for the Oyu Tolgoi copper and gold project. Thiess, in joint venture with local contractor
Khishig Arvin, is delivering the boxcut and decline project from August 2016. The boxcut
will provide a safe and secure entrance for the underground tunnels and conveyors
expanding over 10 kilometers and depths of up to 1,300 meters.
The twin declines provide up to 395 meters of vertical lift with a maximum gradient of 18
percent. The conveyor to surface declines consist of 16.6 kilometers of tunnels and 35,000
cubic meters of large excavations to house the required conveyor transfer and drive
stations.
Source: Maptek
OYU TOLGOI SIGNS A MAJOR CONTRACT FOR UNDERGROUND DEVELOPMENT
Oyu Tolgoi LLC has contracted out underground mining and support services to a joint
venture between Hasu Megawatt and Australia’s Redpath, the gold and copper miner
announced on 14 October. The mine controlled by Rio Tinto Group signed a contract with
the joint venture called Dayan Contract Mining for the the sinking of Shaft 2 and Shaft 5 at
Oyu Tolgoi. “Dayan brings together the strength of a Mongolian company with international
expertise in underground development, and will bring long term benefits by creating world
class expertise and capability in Mongolia,” said Oyu Tolgoi’s chief development officer for
the underground mine, Marco Pires.
The contract also includes underground development services, which will cover lateral
development, large excavations and mine services of the underground mine. The mining
support services will cover development and provision of a skilled Mongolian workforce for
the underground project.
Source: Oyu Tolgoi
ERDENE UP 22% AFTER DRILLING 68 METERS OF 2 G/T GOLD
Shares of Halifax-based Erdene Resource jumped 22 percent after it reported intersecting
68 meters of 2 grams per ton of gold in 170 meter step-out hole at its Bayan Khundii gold
project in southwest on 19 October. Erdene highlighted a new zone discovered under
shallow cover, 170 meters north of Striker Zone, including 30 meters of 3 grams of gold per
ton of ore near the top of the hole. It also reported consistent gold mineralization
beginning at 20 meters, averaging 123 meters of 1.3 grams per ton.
Source: Mining.com
BAGANUUR PREPPED FOR WINTER OPERATIONS, ENERGY MINISTER SAYS.
The Baganuur coal mine will run throughout winter starting from this year, said the energy
minister. The extended months of operation will increase annual production, said Energy
Minister P. Gankhuu during a visit to the mine on 12 October. “We will complete winter
preparation by mid November,”
The government last summer directed MNT20 billion in state funds to the Baganuur and
Shivee Ovoo coal mines amid extreme financial stress, said the minister. Despite those
challenges, the government will not remove its subsidies on coal prices, even though they
contribute to these mines inability to profit.”Coal price cannot be freed up,” the minister
said, adding, “Government will control the price.”
Source: Udriin Sonin
KEPCO, SOFTBANK TO EMBARK ON SUPER GRID PROJECT IN NORTHEAST ASIA
Korea Electric Power Corp. (KEPCO) and SoftBank will soon embark on building a super grid
that will link South Korea, China, Japan and Mongolia for the ambitious push dubbed the
“Smart Energy Belt of One Asia.” “We have initiated a preliminary feasibility study on a
demonstration project linking a 2-gigawatt electricity grid between Korea and China, as
well as between Korea and Japan,” Cho Hwan-eik, president and chief executive of South
Korea’s state utility firm KEPCO, said during the World Knowledge Forum (WKF) in Seoul on
14 October.
The One Asia smart grid push aims to transmit new renewable energy such as solar or wind
power energy from countries that are best able to produce it to other countries that lack
such energy by building a power grid among the nations. About KRW7 trillion (USD6.2
billion) to KRW8 trillion would be injected in the first demonstration project.
Source: Pulse News
MINTERS, A&O, BAKERS, NRF INVOLVED IN MONGOLIA WIND FARM PROJECT
MinterEllison LLP and Norton Rose Fulbright have advised Denmark’s Vestas on a deal to
supply turbines for Mongolia's 50 megawatt Tsetsii wind farm. Baker & McKenzie.Wong &
Leow is representing the sponsors, while Allen & Overy are acting for the joint financiers
for the project, which is being led by Newcom Group’s renewable energy arm, Clean
Energy Asia LLC. Vestas will supply 25 wind turbines to the wind farm, expected to be up
and running by late 2017.
The project is part of Mongolia’s goal to boost renewable energy generation—currently at 7
percent—to 20 percent by 2023 and 30 percent by 2030.
Source: Legal Business Online, Lawyers Weekly
KOREAN CONTRACTORS SET TO BUILD ASIA’S 4TH LARGEST SOLAR FARM
Construction launched on Asia’s fourth-biggest solar plant being built by South Korean
contractors at Khushig Valley, where construction on an international airport is also being
led. A ceremony for laying the foundation was held on 17 October at Sergelen Soum, Tuv
Aimag for the 50 megawatt solar plant. Leading the project is Moseha Eco Energy, along
with contractor Korea Engineering Consultants and financier Idea Bridge. They have
estimated a total cost of USD94 million.
Development will run through three ages, beginning with the commissioning of 15
megawatt production in the first quarter 2017, followed by a 15-megawatt extensions in
2019 and 20 megawatts in 2021.
Source: Udriin Sonin
CHINA’S SMART OIL INVESTMENT IN DORNOGOVI
The Mineral Resources Authority (MRA) and Smart Oil Investment of China signed a
production sharing agreement for an oil exploration site on 14 October. Smart Oil
Investment of China was selected for the tender for oil exploration at Ergel 12. The
company previously obtained an eight-year exploration license. During that time, Smart Oil
Investment plans to conduct gravity and magnetic exploration, 2D and 3D seismic surveys,
and drill eight exploration and evaluation holes for the sum of USD35.5 million. The
company will spend USD1 million for land reclamation.
Smart Oil Investment has agreed to give 40 percent of oil explored to the government of
Mongolia. The MRA noted that Mongolia’s stake may increase to 70 percent if the
company’s oil exploration is higher than 15,000 barrels per day.
Source: Lehman Law
MONGOLIA HOPES TO ENLIST WESTERN TECH FIRMS FOR ‘HIGH-SPEED DATA CENTER’
Mongolia hopes to build a “high-speed data center” with the entrance of tech firms
Microsoft, Google and Intel, said MP B. Enkh-Amgalan. Buildings have already been built
and talks with Russian and Chinese Telecommunications companies have already taken
place, said the lawmaker, without elaborating on the purpose of the facility or how these
companies would contribute. Microsoft opened its office, last week. Google’s office may
open by the next week. Intel will come very soon,” he said.
“We do not need any guarantee from the government, we only need some support,” Enkh-
Amgalan said.
Source: Udriin Sonin
STATE HOSPITAL RECRUITS BEIJING PARTNER FOR EXPERTISE AND DIAGNOSIS
State Hospital No. 1 has launched a partnership with a Beijing hospital that will allow for
testing of more illnesses and bring more expertise to patients’ treatments. Beijing’s HenHe
Hospital will provide advice, information and services from its doctor staff electronically
through the e-out patient diagnosis program. “Tests can be sent abroad,” said Hospital
Director B. Byambadorj. “If needed, foreign doctors will join for patients’ surgeries.”
Hospital No. 1 also has plans to open a partnership agreement with a South Korean
institution, Byambadorj said.
Source: Unuudur
COCA-COLA HAPPINESS CENTER OPENS AT MGG’S TUGULDUR SHOPPING CENTER
A new new youth center for community activities, competitions and “delivering happiness”
has opened in central Ulaanbaatar from the TSX Venture-listed Mongolia Growth Group
(MGG). Mongolia Growth Group Properties LLC, MGG’s local subsidiary based in
Ulaanbaatar, opened the MCS Cola Happiness Center at its Tuguldur shopping center in
time for the new school year on 5 September. “This center will be focused on expediting
activities and competitions announced from MCS Coca Cola LLC for youth to take part in
and spend their free time in a fun and educational environment,” reads a 18 October
statement. “The center also provides the latest updates and news about the world’s No.1
brand, Coca Cola.”
The youth center offers free Wi-Fi, books for reading, consoles for video games, and space
on the second floor for lectures, seminars and entertainment.
Source: MGG Properties
MIAT BANS ‘SAMSUNG GALAXY NOTE7’ ON ALL FLIGHTS
MIAT Mongolian Airlines has banned Samsung’s Galaxy Note 7 from its flights following a
recall from the company because of reports that the device had caught fire. Bans were put
in place by the U.S. airline authority following about 100 incidents where devices
overheated and in some cases burst into flames. Previously, airlines had been urging
travelers not to turn on their phones, pack them in checked luggage or charge them during
a flight.
Samsung has estimates the recalls will cost it USD5.3 billion.
Source: News.mn
S. KOREA’S ‘SURVIVOR’ TYPE REALITY CHALLENGES CELEBRITY CAST IN MONGOLIA
South Korea's version of “Survivor” has been airing so far six episodes from its 27th
location Mongolia. "Law of the Jungle" is in Mongolia where actress Park Se Young,
accompanied by the group's maknaes, or youngest members, Eric Nam and Changsub of boy
band BTOB are shown hunting for marmots in the episode aired on 14 October. In the
show, the celebrity cast members are sent to less-inhabited, natural locations to survive
on their own and experience living with local tribes and people. The next location for "Law
of the Jungle" would be in the South Pacific Ocean where "Singer Special" would be its
theme.
The Mongolian season, with the theme "Nomad," started its broadcast on 2 September and
airs every Friday on SBS.
Source: iTech Post
SOUTHGOBI RESOURCES APPOINTS AUTHORIZED REPRESENTATIVE
SouthGobi Resources Ltd. has appointed Kwow Siu Man as authorized representative and as
the company’s secretary, replacing Executive Director and Chief Financial Officer Yulan
Guo, according to a 12 October statement. Kwok is an executive director and the head of
Corporate Secretarial of Boardroom Corporate Services (HK) Ltd. and a director of
Boardroom Share Registrars (HK) Ltd. He has over 25 years’ extensive legal, corporate
secretarial and management experience gained at company secretary and other senior
positions from companies overseas and in Hong Kong (including the Hang Seng Index
Constituent and Hang SengMid-Cap 50 stock companies).
Yulan Guo has resigned from the representative role, confirming no disagreement with the
company’s board.
Source: SouthGobi Resources Ltd.
JV CONSULT REPRESENTS GERMAN TRADE FAIR OPERATOR IN MONGOLIA
JV Consult LLC has become the official local representative of Messe München, a German
company specializing in global trade fairs around the world. The company this month
becomes be the direct contact point for Messe München’s upcoming trade fairs in Munich
and abroad, as well as support or organize private business delegations to visit Messe
München’s trade fairs.
Messe München organizes over 200 trade fairs in Europe, Asia and Africa
Source: JV Consult LLC
MONGOLIA HOSTS CONFERENCE ON NOMADIC TOURISM AND SUSTAINABLE CITIES
Ministers and high-level officials from nine World Tourism Organization (UNWTO) Silk Road
member states gathered to address the potential of nomadic and sustainable city tourism
at a conference held in Ulaanbaatar from 13 to 15 October. The Silk Road countries have
agreed that long-term success will depend on marketing and promotion, capacity building
and destination management, and travel facilitation. The Silk Road has become one of the
most visited international travel routes. Despite such growth, an increase in visitation also
brings challenges, such as the protection of the environment and the maintenance of
necessary heritage standards.
Sustainable growth for nomadic tourism “requires the collective engagement and
cooperation of Silk Road destinations, the private sector and the civil society,” said
UNWTO Secretary-General, Taleb Rifai, at the opening of the conference. “With these
ingredients in place, we can produce responsible nomadic tourism products to diversify
Silk Road tourism and achieve the adequate tourism development for the countries
involved.”
Source: Travel Daily News
XACBANK AWARDED “BEST BANK OF MONGOLIA- 2016”
XacBank LLC received the award “Best Bank of Mongolia, 2016” by the Global Finance
magazine on 10 October. The selection criteria included the bank’s capital increase,
profitability, strategic partnerships, customer service, sound pricing structures, and the
integration of cutting-edge technology into the product lines. XacBank received the honors
first in 2014 and now once again for the 15th anniversary of the awards.
Source: Mongolia.GoGo.mn
TDB NAMED “THE LEADING PARTNER BANK IN MONGOLIA” FOR 2ND CONSECUTIVE YEAR
Trade and Development Bank of Mongolia (TDB) has been recognized as the “Leading
Partner Bank in Mongolia” by Asian Development Bank (ADB). The award, which was
granted from ADB’s Trade Finance Program (TFP), recognizes TDB’s active involvement in
international trade funding programs since 2005. It’s the second time it’s received the
award since March 2010. TFP provides guarantees and loans to support trade in developing
countries and has supported more than 8,200 small and medium-sized enterprises across
Asia, totaling over USD23.6 billion.
In 2015, TDBM executed 77.9 percent of foreign trade related transactions and has proven
its leading position in the banking sector of Mongolia through its broad network of foreign
transaction settlements, highly educated banking staff and business affiliations with
international banks and financial institutions.
Source: Trade and Development Bank of Mongolia
ECONOMY
MONGOL BANK: FX AUCTIONS, SWAPS, 1-WEEK BILLS, T-BILLS
The Bank of Mongolia on 20 October sold CNY40 million to commercial banks at currency
auction (out of total bids for USD24.3 million and CNY63 million) for closing rates of
MNT2,288.61 and MNT340.50, respectively. Also that day, it rejected an equivalent of
USD17.1 million in tugrik swap agreements.
On 17 October, the central bank issued MNT126 billion in one-week bills at a weighted
interest of 15 percent. On 14 October, it received MNT90 billion in bids for 12-week bills
with a face value of MNT60 billion at a discounted price and weighted average yield of
16.848 percent. It received MNT30 billion in bids for 28-week bonds with a face value of
MNT30 billion (originally MNT40 billion) that was sold at a discounted price and weighted
average yield of 16.897 percent. It received 10 billion in bids for 39-week bonds with a
face value of MNT10 billion (originally MNT20 billion) that was sold at a discounted price
and weighted average yield of 16.99 percent.
Source: Bank of Mongolia
BUSINESS CONFIDENCE WORSENS AS SALES PLUNGE
The Headline Mongolian Sales Managers’ Index (SMI) continued to fall back on its summer
gains to post a value of 39.5 in October. This represents the second monthly fall in the
index value, as a run of 7 consecutive monthly gains came to an end in September. The
Market and Sales Growth Indexes both experienced sharp drops during the month which
has also been reflected in reduced business confidence levels.
Sales managers are reporting that the weakness of the Tugrik is hurting their businesses
considerably as the Tugrik is now at its lowest exchange rate against the Chinese Renminbi
for well over 10 years.
Source: World Economics
MONGOLIAN PM ON MISSION TO HALVE BUDGET DEFICIT RATIO TO 9%
Mongolian Prime Minister Jargaltulga Erdenebat aims to slash his government's budget
deficit for fiscal 2017 in half, as a percentage of gross domestic product. "We will review
overall government spending to reduce the ratio of the deficit to 9 percent from the
current 18 percent," he said while visiting Japan, declaring his determination to shore up
fiscal health quickly. Amid rising concern about a Mongolian default on foreign currency
debt, he said he would formally ask the International Monetary Fund for financial
assistance.
Erdenebat said it is impossible to keep the national budget at the levels seen when
resource prices were soaring. He indicated that the government would scrutinize all
expenditures for fiscal 2017 other than those directly related to national welfare.
Austerity could further strain the economy, but Erdenebat has reason to push for it. The
maturity of foreign currency-denominated bonds is close at hand, and default fears are
swirling. Japan could also lend a hand. “I am hoping for the provision of yen loans, as at
the time of the previous IMF support [in 2009],” Erdenebat added.
Source: Nikkei Asian Review
IMF TEAM IN MONGOLIA
The International Monetary Fund (IMF) is sending a working group to Mongolia on 20
October to assess the current state of economy. A delegation headed by the Governor of
the Bank of Mongolia took part in the annual meeting of IMF and the World Bank Group,
held last week in Washington D.C.
Source: Montsame
POLAND TO LEND EUR50 BILLION FOR TRADE
Plan has agreed to loan EUR50 billion for trade Poland, the foreign affairs state secretary
announced on 18 October. Secretary D. Davaasuren said the polish government has offered
the loan to be used for its export.
Source: Montsame
SUBSIDIZED MORTGAGE PROGRAM SUSPENDED, AGAIN
The Bank of Mongolia has once again suspended the government-subsidized mortgage
lending program to eliminate loans priced too cheaply by the past government, as the
Jargaltulga Erdenebat government attempts to manage fiscal challenges amid slowed
growth. Mortgages priced at 5 percent interest will be raised to 8 percent, according to
the Bank of Mongolia. It also said that the program needed to be put on hold in light of
findings that commercial banks had been using the banks’ funding for reasons other than
the mortgaging program.
The central bank is currently working on a new investment plan to finance apartments up
to 100 square meters. Meanwhile, it is considering a MNT120 billion bond to bring in
capital for the program. So far, MNT3.9 billion has been lent for homeowners to buy
86,200 apartments, it reported.
Source: Undesnii Shuudan
MONGOLIAN BRANDS READY FOR EXPORT TO JAPAN
Mongolian companies are beginning to reap the benefits from a trade agreement with
Japan that removes tariffs on goods for sale there. The garment brand Gobi Cashmere, the
carpet producer Erdenet and 27 other companies have entered the Japanese market
thanks to the Economic Partnership Agreement (EPA) that came into effect this year. The
agreement eliminates trade tariffs on 5,700 goods sold to Japan in mining, agriculture and
more, as well as 9,300 types of goods from Japan being sold here. Mongolia will eventually
wind up cutting 59 percent of its tariffs on 3,429 types of goods while Japan will remove
86 percent of its own taxes on 8,000 products.
Up to 80 percent of all imports from Japan are automobiles between three and six years
old, or parts and accessories for them.
Source: News.mn
CHINA, MONGOLIA EYE ENERGY DEALS
Prospects for future China-Mongolia shipments of energy equipment have improved now
that the head of China’s largest power distributor, State Grid, has told Mongolian
government leaders that China is ready to buy electricity from their country.
“Strengthening energy cooperation” and promoting development of a cross-border power
grid to serve Northeast Asia were discussed during talks in Ulaanbaatar between State Grid
Chairman Liu Zhenya and Mongolia’s prime minister. “Liu Zhenya said electricity would be
an important trading product in the future,” the statement said.
Earlier this year, the Japanese telecom and energy conglomerate Softbank said it was
leading an initiative for “feasibility studies on multinational power grid interconnection”
involving State Grid, PJSC Rosseti in Russia, and Korea Electric Power. Mongolia and China
are considering a proposal to jointly build and operate a USD12 billion power plant called
Xibe Obo.
Source: Break Bulk
MONGOLIA AIMS TO BECOME WORLD’S CENTER FOR NOMADIC TOURISM
Mongolian government aims to attract tourists by rebranding its current tourism based on
its rich nomadic culture and heritage, a top Mongolian official said on Thursday. "According
to a plan on sustainable development up to 2030, we envision that Mongolia will become a
center of nomadic tourism," Miyegombo Enkhbold, speaker of the Mongolian parliament
said at the opening of the International Silk Road Conference on Nomadic Tourism and
Sustainable Cities held at Ulaanbaatar.
Sluggish commodity prices and internal political struggles have plummeted the land-locked
country into deep economic crisis, and economic diversification is seen by many here as
the country's future development. Tourism has caught much attention in this regard.
Representatives of the Mongolian Ministry of Environment and Tourism have pledged to
improve competitiveness of its tourism sector and adopt about 30 standards to ensure
comfortable stay for tourists and attract them to Mongolia, including one for building
toilets in rural areas.
Source: Global Times
MONGOLIA READY TO COOPERATE WITH KYRGYZSTAN IN AGRICULTURE, MINING
Mongolia is ready to cooperate with Kyrgyzstan in agriculture and mining, Parliament
Speaker Miyegombyn Enkhbold said in a meeting with his Kyrgyz counterpart Chynybay
Tursunbekov. The Kyrgyz parliament speaker said his country’s MPs can learn much from
their Mongolian colleagues. “Studying of your experience in building a parliamentary
democracy is very important for us,” Chynybay Tursunbekov said.
Source: 24.kg
END POVERTY NOW, MONGOLIA
October 17 is End Poverty Day. Every day is a day to end poverty, but it helps to designate
one day per year to reflect on this goal. In Mongolia, poverty declined from 2010 to 2012,
and again from 2012 to 2014. But today, overall growth of GDP is projected to be only 0.1
percent for 2016, with production in the non-mining sector declining. And Mongolia’s pro-
cyclical policies that funded social programs in the boom years now face opposite
pressures.
Mongolia spends relatively more on capital investment than most countries, and much of
the spending is inefficient. On the revenue side of the equation, transitioning Mongolia’s
system of low, flat income tax rates to a more progressive system would also help protect
the working poor while freeing up needed revenues. And as tempting as it may be to
create new programs outside of the budget system, doing so only exacerbates the
problems.
Source: World Bank
CLIMATE CHANGE COLLECTIVES ON THE MONGOLIAN STEPPE
As the world prepares for climate change talks in Morocco next month, herders in Mongolia
are working to save their ecosystem and way of life—and they’ve borrowed a page from
their communist past to do so. Roughly 70 percent of Mongolia’s pastureland is degraded
or desertified, largely due to overgrazing and exacerbated by climate change. In response
to no government regulation, herders are self-organizing into collectives to better manage
resources, rehabilitate the environment and create emergency relief funds.
While the Paris Agreement aims to keep global warming well below 2 degrees Celsius,
Mongolia’s submission to the U.N. Framework Convention on Climate Change shows that
the nation has already surpassed that threshold. “We’re basically doing a similar thing to
Soviet times,” said B. Batnasan, a member of a herder collective in Ikh Tamir Soum. “How
we’re getting our livestock to be healthier; how we’re preserving pastureland; it’s been
done before.”
Source: IRIN News
WHY GRASS NOW COSTS MORE THAN SHEEP ON INNER MONGOLIAN PRAIRIE
Gazing at the thin grass barely covering the soil on what was once one of China’s lushest
prairies, herder Lingjae of China’s Inner Mongolia Autonomous Region was not optimistic
she would get a good price for her sheep. “The dealers are not satisfied: one sheep is
crippled, several others are too lean,” she said, sighing.
The Chinese territory faces similar problems to that faced in Mongolia. Over the summer,
the Hulunbuir grasslands were hit by the worst drought in decades. The extreme drought
pushed up the price of grass and caused livestock prices to plunge. That’s left herders
facing hefty economic losses and even led to a violent confrontation in August between
two groups contesting access to a piece of not-so-barren pasture before winter. The
extension of road networks and power grids had made it much easier for herders to move
around and had attracted outsiders grazing much larger herds, creating new challenges for
local governments.
Source: South China Morning Post
POLITICS
ELECTIONS CARRY OVER SCHEDULED FOR 23 OCT.
Local elections will be held again on Sunday, 23 October, following low voter turnout on 19
October. The Mongolian People's Party took a lead in the election this week, winning 200
counties throughout Mongolia's 21 provinces compared with the Democrats 100. About
7,800 posts were up for competition throughout the country.
Source: Montsame, News.mn, 2
JAPAN AND MONGOLIA AGREE TO STRENGTHEN TIES FURTHER
Mongolian Prime Minister Jargaltulga Erdenebat and Prime Minister Shinzo Abe agreed
Friday during talks in Tokyo to accelerate ongoing efforts to draw up a 2017-21 action plan
to strengthen bilateral ties. Erdenebat chose Japan as the destination of his first
diplomatic tour after he was appointed in early July, underlining his intention to place
great importance on Mongolia’s ties with Japan.
On Thursday Japan and Mongolia held a forum in Tokyo to attract more trade and
investment by Japanese firms to the landlocked central Asian nation. Abe said the two
leaders “had a very meaningful discussion” on the security threat posed by North Korea
and agreed to “keep cooperating” on the matter. Mongolia is one of the few countries that
has relatively strong political ties with the hermit state.
Source: Japan Times
CHINA, MONGOLIA TO STRENGTHEN MILITARY COOPERATION
China and Mongolia pledged to strengthen bilateral military cooperation as senior military
leaders of both countries met in Beijing on Friday. Xu Qiliang, vice chairman of China's
Central Military Commission, met with Dulamsurengiin Davaa, chief of the General Staff of
the Mongolian Armed Forces, who attended the seventh Xiangshan Forum, which
concluded in Beijing on Wednesday. Xu said the Chinese and Mongolian military should
enhance exchanges and cooperation as their bilateral relationship has been upgraded to a
comprehensive strategic partnership to make bigger contributions to regional peace and
stability.
Davaa said developing Mongolia-China ties has been a priority in Mongolian foreign policy,
adding the Mongolian military expects closer ties with the Chinese army.
Source: Global Times
EX-HEAD OF MONGOLIAN DEVELOPMENT BANK ARRESTED
A former chief executive of the Development Bank of Mongolia has been arrested on 11
October on suspicion of wrongly channeling money from the country's sovereign debt fund,
a spokeswoman from the country's Independent Authority against Corruption said.
Mongolia's Morning News newspaper reported that Munkhbat Nanjid had approved debt to
companies and commercial banks without issuing tender notices. In addition, he is alleged
to have extended USD1.49 million to the Mongolian Stock Exchange while he was a board
member. Munkhbat was removed from his position by the new Mongolian People's Party
government that took power in July.
Last Tuesday, the vice minister of justice claimed that the bank approved funding
Parliament’s permission and allowed infrastructure projects to receive far more money
than originally agreed. One payments totaling 1.3 billion tugrik (USD570,150) went to the
locally licensed affiliate of U.S. financial news company Bloomberg to fund a video
advertisement called Inside Mongolia, which aired in 2013 to sell Mongolian bonds.
Source: Nikkei Asian Review
FORMER STATE HOUSING CORPORATION DIRECTOR ACCUSED OF EMBEZZLEMENT
Authorities have accused a former director of the State Housing Corporation of embezzling
over MNT1 billion. The Independent Authority Against Corruption has opened an
investigation into A. Gantulga for allegedlylending at eased conditions to friends who then
squandered the money. The National Construction Consortium LLC never even begun
construction on a project agreed on for a contract signed by its direct, D. Tsend. That
same company reportedly fell short of completing a job from 2013 to build a small waste
water treatment plant in one of Ulaanbaatar’s ger districts. Troubles arose after National
Construction failed to pay for more than MNT27 million worth of materials purchased from
the company Erelt Impex.
Source: Unuudur
GOVERNMENT THREATENS TO SUE FOR ALLEGATIONS OF ILLEGAL FALCONS TRADE
The government is suing a private citizen for defamation of the Ministry of Environment
and Tourism for allegations that the ministry illegally sold Mongolian birds to Arab buyers.
The head of the group Mongolian Professional Hunters, D. Khurtsgerel, has accused the
government of illegally exporting wild sheep and falcons in secret and naming Environment
Minister D. Oyunkhorol as being directly linked to the alleged activities, Khurtsgerel said in
a 7 October press conference. The government, however, has responded that Khurtsgerel
himself is involved with the sale of falcons and is fighting back with its legal suit.
The environment minister has admitted that the Mongolian government quietly passed a
special decree for gifting Mongolian birds to visiting delegates of the Asia-Europe Meeting
last summer. Although there is currently no count for how many birds were presented as
gifts, Mongolia collected about MNT3 billion from a contract presiding over the
arrangement. “Moreover, people who were on this duty brought about MNT 15 billion to
the Mongolian economy by staying in Mongolia for seven-10 days as well,” said Oyunkhurul.
Source: Undesnii Shuudan
RETURNED PEACEKEEPERS FROM SUDAN WAITING ON SALARIES
Mongolian peacekeepers worked who worked for one year in South Sudan have not been
given their salaries from the Mongolian government, according to the returned soldiers.
Peacekeepers who returned from 31 August to 16 September have not received any
payment. Usually those returned from their mission receive their salaries within three days
of their return. Although the U.N. pays for the peacekeepers monthly, the Mongolian
government holds onto that money until they return.
Source: Unuudur
UB COUNCIL INVESTIGATES ‘SMART ULAANBAATAR’ SPENDING
A task force within Ulaanbaatar City Council has raised questions on past spending for the
“Smart Ulaanbaatar” program that was launched to bring technological solutions for
delivering public services. A petition has been launched by the council’s subcommittee for
the project on 13 October for what it calls exorbitant costs of MNT44 billion. That includes
MNT229 million for video conferencing equipment that has not been used and USD1 million
for a master plan from the company Cisco.
Source: Undesnii Shuudan
ARMED ROBBERY GOES AWRY AND RIOT ENSUES
A riot ensued in an apartment in one quiet neighborhood holding more than a kilogram of
gold. Around 20 men fought near Hospital No. 1 in Ulaanbaatar’s Sukhbaatar District that
reportedly resulted in a head injury and stabbings for two individuals. The fight occurred
after about a dozen men broke into an apartment to steel 1.5 kilograms of gold and
jewels. Another 10 men were reportedly already in the apartment and fought back to
protect their goods. The incident was reported by residents of the apartment building, and
police who caught the men on site.
Source: Udriin Sonin
YOUNG MONGOLIAN WEIGHTLIFTER SANCTIONED FOR DOPING
A young Mongolian weightlifter has been sanctioned after testing positive for testosterone,
the Court of Arbitration for Sport has announced. U. Chagnaadorj, aged 19, competed in
the 56 kilogram category at the Rio-Olympics but did not finish. He participated in the
competition in place of a Russian weightlifter who had been eliminated by the
International Olympic Committee. Chagnaadorj and other three athletes have been banned
for different periods of time. He becomes the seventh athlete to test positive for doping
during the Olympics in Brazil.
Chagnaadorj failed to lift 103 kg in his third attempt at the Rio Olympics on 8th of August.
He was listed fourth at the 2016 Asian Championship.
Source: News.mn
KHOOMEI INCLUDED IN UNESCO INTANGIBLE CULTURAL HERITAGE LIST
"Khoomei" or Mongolian throat singing has been inscribed in the UNESCO Representative
List of the Intangible Cultural Heritage of Humanity. For this type of singing, a singer
manipulates the resonances created as air travels from the lungs, past the vocal folds and
out of the lips to produce a melody attracted the attention of art connoisseurs. Khoomei is
divided up into four main styles that vary from bass, baritone and tenor tones. They are
"karkhiraa,” "isgeree," “narmai” and “shakhaa.”
Source: Montsame
AN OPEN LETTER TO CITIZENS OF MONGOLIA, AUSTRALIA AND MALAYSIA—EDITORIAL
The Altantuya Shaariibuu murder that took place in Malaysia 10 years ago remains
shrouded till today in a layers of injustice. It is a shame to not one but three governments
as we hear from the agonized father of the slain Altantuya, Dr Shaariibuu Setev, who
reports now that he “suspects Mongolia, Malaysia and Australia have colluded to mute the
politically sensitive case of an ex-Malaysian policeman who murdered his daughter a
decade ago and has lately been held in an immigration detention in Sydney.”
The Malaysian court ruled that motive was not essential for the case in hearing. But if
Mongolia, Malaysia and Australia do not see the importance of ensuring that justice is
done, seen to be done and acceptable to the three countries’ hallways of justice, will the
citizens of these three countries just let it slip like a cloud?
Source: Malaysiakini
BCM WORKING GROUP NEWS
BCM’S RISK WORKING GROUP MEETING HELD ON 13 OCT 2016
Risk WG Meeting was held on International Day for Disaster Reduction which is on 13
October of every year.
Objective:
1. Discuss and finalize the BCM Statement on the Draft Amendment of the Law on
Disaster Protection to submit it in an official letter to the NEMA and President’s Office.
2. Discuss the Risk Forum agenda and role of BCM and Risk WG members in the Forum
to be held on 9 November 2016.
3. Agree Risk WG Plans and identify needs of members.
Agreements:
1. The first draft of the BCM Statement as to which comments to include and remove
that were collected from the Joint Risk and Legislative WG members since the last
meeting held in June 2016.
2. to send the revised version for final comments to Risk and Legislative WG members,
and then submit the final version to relevant authorities.
Discussion:
Risk Forum to be held on 9 Nov 2016. Members are welcome to participate in the forum
as a panelist.
For more info, EMAIL A. Bayarmaa, Senior Manager for BCM at [email protected].
- Business Ethics Working Group meeting “Third Party Bribery Risks” 27 September 2016
- Education & Innovation Working Group Meeting on “Opportunities for Fostering
Innovation in the Mongolian Market” 22 September 2016
- Energy & Environment Working Group’s consultation meeting with J.Batbayasgalan,
Deputy Governor of Capital City on “MUNICIPALITY’S ACTION PLAN FOR THE NEXT 4
YEARS”, 15 September 2015
- Risk and Legislative Working Groups' Joint Meeting on the "DRAFT AMENDMENT OF THE
LAW ON DISASTER PROTECTION" 16 June 2016
- Business Ethics Working Group Meeting on “CSR, GIFTS AND HOSPITALITY POLICY”, 7 June
2016
- Capital Markets Working Group Meeting on “OYU TOLGOI UNDERGROUND PROJECT
FINANCING”, 5 April 2016
- Tax Working Group Meeting on “VAT LAW”, 2 March 2016
JOB VACANCIES AT MEMBER ORGANIZATIONS
- University of Humanities is hiring English language Instructor, Accountant Instructor and
Economics Instructor. Deadline for application: Oct 24, 2016, for more information: please
contact at: [email protected]
- B Production is hiring Accountant. For more information, please contact at
Please click here to view full list of Job Vacancies at member organizations.
MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
- Orchuulga 24 is providing 15% discount on written translation services to BCM Members
- MNC HD TV offers BCM members 20% discount from the fee to be showcased in their “The
Story of Business/Бизнесийн түүх” TV program.
- American University of Mongolia is offering BCM members a 20% discount on all of ELI
Summer Courses.
- Matoza LLC is offering 15% special discount to BCM members on Intensive Business English
Language Course in Poland with a Sightseeing Trip.
Please click here to view full list of Member-to-Member special offers & Benefits.
WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS
PRESENTATIONS:
- Presentations from “Invest Mongolia 2016” Conference
Please click here to view full list of Presentations.
MONGOLIA REPORTS:
- World Bank, “Mongolia Economic Brief”, Sep 2016
- WPP and Y&R Mongolia, BradnZ’s first ever “Spotlight on Mongolia”, Sep 2016
- ADB, “Asian Development Outlook 2016: Asia’s Potential Growth” (forecasts of the next 2
years for the 45 economies in Asia and the Pacific including Mongolia)
- Invest Mongolia, “Your Guide to Invest in Mongolia” 2016
- BTI, “Mongolia Country Report” 2016
- World Bank, “Doing Business: Economic Profile of Mongolia 2016"
Please click here to view full list of Reports.
ECONOMIC INDICATORS
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
August 31, 2016 *-0.2% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: -0.6% y-o-y - Ulaanbaatar City, August 31, 2016
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
July 30, 2014 12.00% {source: Mongol Bank}
January 14, 2015 13.00% {source: Mongol Bank}
January 14, 2016 12.00% [source: Mongol Bank]
May 6, 2016 10.50% [source: Mongol Bank]
August 18, 2016 15.00% [source: Mongol Bank]
CURRENCY RATES – 20 October 2016
Currency Rate
U.S. dollar USD 2,326.58
Euro EUR 2,553.54
Japanese yen JPY 22.43
British pound GBP 2,857.62
Hong Kong dollar HKD 299.89
Chinese Yuan CNY 345.21
Russian Ruble RUB 37.28
South Korean Won KRW 2.06