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October 11, 2017
MONGOLIAN ECONOMY MIGHT SEE POSITIVE INDICATORS Ulaanbaatar /MONTSAME/ The Asian Development Bank (ADB) has forecasted the economic growth of Mongolia would increase by 4% in 2017 and by 3% in 2018. This is more positive expectation compared to the forecast by last April. The World Bank (WB) assumed that the Mongolian Gross Domestic Product (GDP) would grow up by 2.8% in 2017 and by 3.1% in 2018. In 2019, it is possible to exceed over 7%, the WB said. Meanwhile, representatives of the International Monetary Fund (IMF) reported the GDP of Mongolia is expected to increase by 2% in this year after monitoring the first stage of a program being implemented in Mongolia. Deputy Governor of the Bank of Mongolia B.Lkhagvasuren explained its decision to keep the policy rate at 12%, saying the reason was a debt pressure expected from the next year as well as a political state. The inflation rate is expected to increase by end of this year, but it will be stable from beginning of 2018. The country’s foreign exchange reserves are expected to reach USD 3.8 billion by 2019, the BoM added.
September 6, 2017
THREE COUNTRIES HOLD MEETING ON ECONOMIC CORRIDOR ESTABLISHMENT
Ulaanbaatar /MONTSAME/ The second expert-level trilateral meeting on implementation of the Program on establishing Economic Corridor among Mongolia, China and Russia was held in Moscow, Russia on August 29, 2017. The meeting was co-chaired by V.Enkhbold, Director of the Mongolian Foreign Ministry Department of Foreign Trade and Economic Cooperation, Xiao Weiming, Deputy Director of the western development division of the China’s National Development and Reform Commission (CNDRC), and Ye.N.Popov, Head of the Asia, Africa and Latin America Department of the Russian Ministry of Economic Development. The parties initialed a Memorandum of Understanding on setting up a mechanism to accelerate the Economic Corridor’s implementation after coming to an agreement over the document’s context. In addition, the countries prioritized 32 projects, which are reflected in the Program, and discussed those projects to be realized in the first turn. The parties then included three of them in the Memorandum’s appendix on building up a central corridor of railways and learning a chance for Chinese companies to getting involved in renovation of the electricity network in Mongolia and Russia. In order to implement the projects in the first turn, the countries concurred to establish a joint center for investment and projection in Ulaanbaatar. Present at the meeting were representatives and officials from the Mongolian Ministry of Foreign Affairs, the Ministry of Road and Transportation, the Ministry of Energy, the Mongolian Embassy in Russia, the CNDRC, the Chinese Embassy in Russia, the Russian Ministry of Foreign Affairs, the Ministry of Economic Development, the Ministry of Environment, the Ministry of Transportation, the Ministry of Energy and the Russian Railways JSC.
August 30, 2017
MONGOLIAN AND RUSSIAN PRESIDENTS MEET IN BUDAPEST
Kh.Battulga, President of Mongolia, met his Russian counterpart Vladimir Putin, during the 2017 Judo WorldChampionships which kicked off Monday in Budapest, Hungary. The dignitaries watched the competitions together with Viktor Orban, Prime Minister of Hungary; and Marius Vizer, President of the International Judo Federation (IJF). Mr Putin expressed his satisfaction with meeting the newly-elected President of Mongolia. “We know you both as a politician and a good athlete. I would like to congratulate you on the excellent performance of Mongolian judokas at the world championships here,” Mr Putin said. “As for bilateral relations, we will have an opportunity to speak about it in more detail in Vladivostok, where I know you are planning to attend the forum as well. But it is already clear that the trend in trade is good. While last year it fell by 20 percent, in the first half year of 2017 it grew by over 34 percent. Work is being done on the political track, as well as in the economic and cultural areas. Our traditional Russian-Mongolian ventures are working hard and shipments are up. So, we will have plenty to discuss in depth in Vladivostok,” Mr Putin said. In response, the Mongolian President said he is pleased to meet his Russian counterpart at such a remarkable event as the World Judo Championships. “It is great that we are meeting at this event because it is something we are both interested in and fond of. I believe it will serve us well in the future. Naturally, we are planning to have a working meeting in Vladivostok in the near future,” he said. “The presidential election in Mongolia was less than two months ago. Considering modern realities, I am planning to further expand relations with our northern neighbor. “You have just said that trade has grown. This trade owes something to cross-border regions and I think it is important to pay attention to the relations between border regions because we have a common border of over 4,000 km. “Naturally, we are primarily interested in investment. Our priority is railways. We have a joint venture, Ulaanbaatar Railways, with fifty-fifty participation,” he said.
J.MUNKHBAT: WE AIM TO MAKE MONGOLIA AGAIN FAVORABLE COUNTRY FOR INVESTORS
J.Munkhbat, Head of the Cabinet Secretariat for Government and head of the Investor Protection Council (IPC), has addressed the August meeting of the American Chamber of Commerce in Mongolia organized with support from the US Embassy in Mongolia. “The Mongolian economy which saw a downturn last year has started increasing to 5.3%, and the budgetary income steadily growing up since 2017. This is a result of a policy, actions and cooperation performed with the International Monetary Fund, other organizations and countries. Confidence of foreign investors in Mongolia is reviving, brining some profit to companies. I wish Mongolia became again a favorable country for foreign investors,” said Munkhbat at the opening of the meeting. The Cabinet Secretariat Head expressed thanks to Ms Jennifer Zimdahl Galt, the Ambassador of the USA to Mongolia, for supporting certain works by the government to improve the environment for investors. “Mongolia has satisfied the IMF conditions, so the sustainable development policy and goals must be ensured. It has become a clear from statistical information that the parties should collaborate in upgrading the legal landscape on investment, tackling complaints, disputes and requests from investors and not repeating any controversial situation,” he noted. At the meeting, investors touched upon issues of instability of the Mongolian government, regular changes of laws, which leading dubious condition, and complained about bureaucracy of state servants. They also clarified some planned actions for backing investors through the tax policy, focusing attention to infrastructure of big projects and programs and attracting new investment. Last year, the World Bank Group made a survey among 33 foreign and domestic enterprisers to observe the state services, and then valued it as ‘seriously poor’ at resolving complaints and requests. Related to the complaints, investment of USD 1.9 billion has been considered as risky. Due to the reason, the IPC has formulated a draft rule on considering and tackling requests and complaints from investors towards state administrative bodies and servants in order to protect investors’ interest and to make the legal environment more stable and favorable. In addition, a draft law will be submitted to parliament soon on abolishment of contravention and duplication in laws. Head of the Cabinet Secretariat is expected to meet investors and businessmen of Australia and the UK in near future to hear their opinions and ideas. B.Khuder
August 1, 2017
AUGUST EVENTS TO LOOK OUT FOR
Ulaanbaatar /MONTSAME/ We are presenting events to attend to in August, the last month of the most fun season of a Mongolian year.
When: August 4
Where: Erdenetsogt soum, Bayankhongor
Erdenetsogt soum will host its annual Yak Festival on August 4 this year. Co-organized by the Governor’s Office of Erdenetsogt soum, the Ministry of Environment and Tourism and Division of External Relations and Tourism of the Governor’s Office of Bayankhongor aimag, the annual festival offers entertainment bits such as yak race, bucking yak event, best pair riding yak contest, best yak bull contest in addition to a traditional fair of yak products. Erdenetsogt soum leads in Bayankhongor aimag with its number of cattle herd which constitutes 30 percent of the total herd of domestic animals.
When: August 4
Where: National Park
Hosted by MNG Events Consulting Agency, the 2017 ‘Sunrise Festival’ has changed its venue to National Park, expanding the event’s reach even more. Over 30 thousand music-loving young people are expected to enjoy the festival which was previously organized at the River Beach Resort for 3 years and the central Stadium for another 3 years. The performers include headliners such as Lkhagvasuren, frontman of rock group Haranga, Uka, Amarkhuu, Nisvanis, Recon, UFO and DJs. The festival is divided into four main areas for Main DJ Festival, Rock Live Music, RnB Hip Hop and Salsa.
‘We love our country
When: August 5
Where: Central Stadium
By the initiative of rock group ‘Hurd’, Mongolian rock and pop artists unite to help better equip the National Emergency Management Agency in fighting wildfire, a recent outbreaks of which burned large territories in several aimags. The ‘We love our country’ benefit concert will be staged on August 5 at the central Stadium, Ulaanbaatar.
Dedicated to over 40 thousand Mongolians who want to contribute to wildfire suppression operations and protect their homeland, the concert will cost MNT 10 thousand per one ticket. The money raised from the benefit concert will be used by the National Emergency Management Agency in purchasing a firefighting aircraft.
Danshig Naadam-Khuree Tsam
When: August 5- 6
Where: Central Stadium
Gandantegchenling Monastery and the capital city authority join hands for the third year in organizing the Danshig Naadam-Khuree Tsam religious & cultural event. Comprising of Khuree Tsam religious ceremony and Mongolian Naadam, the festival was revived in 2015 in celebration of the 380th birth anniversary of Undur Gegeen Zanabazar. As the word ‘danshig’ translates into ‘firm stance’, the Danshig Naadam was celebrated by Mongolians for religious and political purposes more than 350 years ago. Although the Danshig Naadam brought a number of foreign and domestic tourists to Khui Doloon Khudag for the last two years, the organizers decided to hold the event at the Central Stadium, Ulaanbaatar this year, without horse race.
Khuur Music Festival
When: August 25-26
Where: Central Stadium
‘BRB’, ‘Mongol HD’ Channel, ‘Khuur’ app, ‘Brainstorm Branding Agency’ and ‘Skinny Studio’ are collaborating on a new music festival called Khuur (Хуур) Music Festival (XMF) which will be held on August 25-26 at the central Stadium. Dubbed as the last major show of this summer, the Khuur Music Festival brings together the hottest artists, DJs and musicians on the same stage just before the start of a new academic year. The organizers promise a show never-before-seen to the Mongolian audience, with the biggest ever stage, high quality sound and the most number of LED screens. The unique lineup of artists include Big Gee, Rokit Bay, Ice Top, Lumino, South Korean rapper G2, Vanquish, Opozit, Desant and Mekh Zakhq who will perform on Day 1, Hip Hop Night, and Dj Simon & Lush, DJ Zonderling, DJ Royal & Junior, DJ Henza, DJ Zolo and others for the second night of electronic dance music.
OIL EXPLORATIONS BEING CONDUCTED ON 25 SITES
Ulaanbaatar /MONTSAME/ The Petroleum Authority has reported that more than USD 50 million is expected to be invested in oil exploration in 2017. As of June, 21 contracted companies are conducting exploration on 25 sites. Deals for exploration on three other sites and one open exploration, and a tender is underway for two sites, reports the authority.
The most successful among the international companies that have been operating in Mongolia is Petro Matad. The company secured a deal with Sinopec and is starting drilling works this September. As of last Friday, price of Petro Matad’s stock rose by 1.49 percent at the London Stock Exchange.
The Government has set a goal to accumulate MNT 233.5 billion from the oil exports to the government budget. In the first five months of this year, MNT 83.7 billion was accumulated, with 42.2 percent export completion. Also, USD 452 million is going to be invested in extraction of oil.
DELEGATES FROM 100 COUNTRIES
Ulaanbaatar /MONTSAME/ “Expo Mongolia 2017” international exhibition and conference will be held at the Misheel Expo on October 10-12, with aim to support the growth of major economic sectors, such as mining, construction and transportation and introduce advanced technology. The 5th exhibit is expected to be attended by more than 2,000 guests, representatives and experts from over 100 countries and will discuss business partnerships and product sales and introduce advanced innovation technologies. The exhibition will be organized jointly by the Ministry of Mining and Heavy Industry, Ministry of Road and Transport Development, Ministry of Construction and Urban Development, the Governor’s Office of the Capital, Mongolian National Chamber of Commerce and Industry as well as the Federal Ministry of Economic Affairs and Energy of the Federal Republic of Germany, and the “Heavy Equipment Manufacturers Association” and the American Chamber of Commerce in Mongolia and French and Mongolian Chamber of Commerce. Exhibitors will be able to schedule and hold meetings with international guests, through organizers.
EXTERNAL TRADE SURPLUS SURGES
Ulaanbaatar /MONTSAME/ In the first half of 2017, Mongolia traded with 139 countries and total trade turnover reached USD 5.0 billion, of which USD 3.1 billion were made up by exports and USD 1.9 billion, by imports.
Total foreign trade turnover increased by USD 1.3 billion, in which, exports increased by USD 913.3 million, and imports, by USD 431.5 million against the same period of 2016.
In the first half of 2017, foreign trade surplus reached USD 1.2 billion, representing increase of USD 481.8 million from USD 693.3 million in the same period of 2016. The export rise of USD 913.3 million was due to increase of USD 960.9 million in mineral products export, particularly an increase of USD 989.2 million in coal export; however, export of precious metals decreased by USD 100.0 million.
The import increase of USD 431.5 million mainly reflected USD 148.2 million increase in mineral products import, especially, USD 108.0 million increase in diesel import and USD 30.1 million increase in petrol import, USD 99.1 million rise in machinery, equipment, electric appliances, USD 96.3 million increase in transport vehicles, their spare parts and USD 40.3 million in base metals.
Source: National Statistics Office
Q1 export revenue, trade surplus highest ever
Figures revealed by the National Statistics Office show that foreign trade turnover in the first quarter of 2017 reached $2.76 billion, the highest amount for the first quarter in the past 5 years. Export revenue reached $1.3 billion, a 35% increase on a YoY basis, and also the highest first quarter earning ever, largely due to the fivefold increase in coal export earnings.
The $523-million trade surplus was also the highest ever in the first quarter of a year.
Minerals export makes up the highest share in the export revenue.
Export of copper concentrate dropped to 366 million tons, or 11% YoY. Income from export was $380 million, a 21% decrease YoY. The share of copper concentrate in total exports was 29.2%, compared to 50% in the first quarter of 2015.
Coal export reached 8.1 million tons, up by 4.8 million YoY. Revenue rose by 5 times YoY to $541.3 million, having been $99 million in the corresponding period last year. The share of coal in total exports stood at 41.6%, highest in the past 4 years. This is the first time since mining started at Oyu Tolgoi when coal revenue has exceeded that of copper. The increase is directly linked to the rise in coal price. In March alone, coal export reached 3.3 million tons, earning $214 million.
Iron ore export reached 1.1 million tons, or an 11% YoY increase. Earning stood at $70.1million, $40 million more YoY.
Gold export shrank by 1.8 tons reaching 1.1 tons. Revenue fell to $43.7 million, 60% or $111 less YoY.
Oil export decreased by 17% to 1.8 billion barrels. However, revenue increased by around $20 million and reached $93.1 million. The share of oil in total exports was 7% compared to 7.6% in the same period in 2016.
Export of these 5 products earned a total $1.1 billion and was 86.8% of total exports, 4% more than last year’s 82.8%.
Source: Mongolian Mining Journal
Coal’s come back year
The first five months of the year saw Mongolia exporting 15 million tonnes of coal and earning $1 billion from it, taking us back to the heady days of 2011 when more coal than ever before was exported. Then, as now, the export success gave a big boost to a national economy in crisis.
The 2011 export figure of 21.1 million tonnes was surpassed in 2016 when 25.8 million tonnes were exported. However, the lower prices prevailing in 2016 kept the export revenue for that year at $973 million, substantially less than the $2.25 billion earned in 2011. Coal export revenue in the first five months of this year is already higher than that in 2016 as a whole. Additionally, in these five months, coal has outperformed copper in terms of earning, again something that was first seen in 2011. That was a year when coal prices skyrocketed but then they started falling, and from the next year until now, copper has again been on top. This could well be coal’s comeback year.
The increase in exports is not all due to the way the market has moved but credit also goes to Mongolian coal miners’ success in improving productivity. S.Bold-Erdene’s report in Mongolian in this issue details the hard work put in for this by major miners such as Erdenes Tavan Tolgoi, Energy Resources, the smaller Tavan Tolgoi, Mongolyn Alt, Chinhua MAK Narynsukhait, SouthGobi Sands, MoEnCo, and Usukh Zoos.
Exports perked up late last year, even if it only temporarily, with Mongolian miners grabbing the opportunity to export more as also to sell for a higher price. Now if prices hold in the coming months, Mongolian coal exporters will definitely be in a good position. The amended 2017 budget projects that 25.8 million tonnes of coal will be exported, putting MNT299.4 billion into the state budget. As the first five months have accounted for more than 60 percent of the anticipated volume for the whole year, it is safe to presume that the final results at the end of 2017 will be substantially much better than what has been projected.
Another topic we cover in depth in the Mongolian section in this issue is the likely effect on the Mongolian economy of the Extended Fund Facility (EFF) programme of the IMF. The government is confident of its successful implementation, with progress in mega projects, including Tavan Tolgoi, OT second phase, and Gatsuurt. This is now seen as the most important way to revive our economy, and nothing should be allowed to obstruct the development of these projects. Otherwise, all the money from the IMF programme would not be seen as having been effectively utilised.
China seeks to rebuild the ancient Silk Road connecting the western and eastern worlds under the new name One Belt, One Road. Some $5 trillion is to be spent on the ambitious project, which will allow Chinese President Xi Jinping to present a positive and powerful image of China. The success of his initiative will make dramatic changes to the global economy, and is expected to bring cheer to the global mineral commodity sector. B.Tugsbilegt’s analysis of how realistic such expectations are can be read in the Mongolian section.
It was decided in 2014 that the state will not hold any shares in the Tsagaansuvarga project and MMJ had lauded this decision. A few MPs, however, took certain steps to stall the fate of the project, and for almost three years, the project was in limbo. G.Tsogt, Deputy Director responsible for Production and Project Implementation at Mongolyn Alt, gives MMJ the good news that the project is now back on track.
Source: Mongolian Mining Journal
CABINET MEETING IN BRIEF
Ulaanbaatar /MONTSAME/ During its meeting on July 4, Tuesday, the Cabinet
made following decisions.
• The Cabinet adopted a revised Procedure for formulation of report on Mongolia’s compliance with multilateral international treaties’, and a schedule for institutions in charge of the report.
• The Cabinet discussed and agreed to add a few suggestions to a draft bill on Food services in Kindergartens and Schools, initiated by Member of Parliament B.Undarmaa.
• The Cabinet discussed a draft bill on Management Support to Reproduction,
and agreed to propose a few suggestions to bill initiator Member of Parliament N.Oyundari.
• The Cabinet adopted a procedure dealing with compensations of loss from confiscated properties, turning properties into state property and destruction of properties.
MONGOLIA CALLS FOR
NORTHEAST ASIAN COUNTRIES TO HOLD
Ulaanbaatar /MONTSAME/ Under the theme “25 years of CICA: For Asian Security and Development”, the second nongovernmental forum of Conference on Interaction and Conference-Building Measures in Asia (CICA) took place in Beijing, China on June 28-29. The forum was attended by over 300 delegates including CICA member states, observer states (organizations) and concerned countries in the region and discussed issues such as security situations in Asia, on how to achieve common, comprehensive, cooperative and sustainable security in Asia and jointly build the Belt and Road. Within the framework of the forum, eight roundtable panels focusing on the Asian security situation was held, such as the implementation of the United Nations 2030 Agenda for Sustainable Development, anti-terrorism cooperation, cyberspace security, addressing climate change, financial security, the role of the CICA Non-governmental Forum, and the role of the media. Also, Director of International
Relations’ Department of Mongolian Academy of Sciences PhD. J.Bayasakh
held a discussion on “Northeast Asian Security and Mongolia’s Contribution in the Region” during the roundtable panel on anti-terrorism cooperation.
“Northeast Asia’s security is still delicate. The issues are both bilateral (Japan-
Russia, Japan-China, China-Vietnam) and multilateral (China-ASEAN). And this is only Mongolia in the region which faces no challenges in terms of security. Owing to its geographical location and foreign relationship potentials, Mongolia is pursuing soft power policy in the region, and in taking advantage of its neutrality position it calls other regional countries for holding security dialogues” said PhD. J.Bayasakh during his presentation.
Overseas voter turnout 66.8 percent
Ulaanbaatar /MONTSAME/ Voter turnout in the overseas Presidential election was 66.8 percent, reported a Head Commission of the General Election Commission which was in charge of collecting the votes of Mongolian nationals living abroad.
Present at the press conference to brief journalists were D.Davaasuren, Chief of the Head commission, D.Bayanduuren, Deputy Chief and members N.Ankhbayar and L.Bazarsad.
Out of 7209 registered overseas voters for the 2017 Presidential election, 4816 partook in the election, successfully organized by 45 sub-commissions set up in 33 countries on June 10-11. Voter turnout was 44.6 percent at 2PM on Ulaanbaatar time on June 11.
In the 2013 Presidential election, out of 6233 Mongolian nationals that were registered, 4248 people voted.