October 17 2008

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
Email: Jim@bcmmongolia.org Issue 42, October 17, 2008
NEWS HIGHLIGHTS:
Business: MPs, industry working on new draft of Minerals Law amendments; Which way to take
at the present crossroads?; Warning lights blink brightly; Peabody’s top officials tell
Bayar of interest in Tavan Tolgoi; Korean consortium wants to invest in Tavan Tolgoi;
Water channel to Gobi provinces planned; MNMA and BCM discuss more effective
cooperation; Ivanhoe Mines presents cash to medalists.
Economy: Expenses cut, taxes yield more, but budget still in red; No money for any new program
this year; Prices fall in Ulaanbaatar in September and for latest 12 months; Money for
Erdenet medical center will come to State budget instead; Children’s money may be
cut; High-level team in Kuwait to discuss oil import; No immediate rise in minimum
wages; Rise in both freight and passenger traffic; Money supply falls, savings rise;
Trade deficit climbs up to USD756.3 million; Flour factories buying little wheat;
Industrial output up 6.1%; Women 58% of unemployed.
Politics: MPRP wins in 16 provinces, re-election in Ulaanbaatar; Uncertainties about date of
fresh poll; Change in Parliament election law sought; Power from Durgun will not
lower consumers’ bills; Adoption figures rise 75% in four years; MPs refuse to raise
import duty on cars; Illegally imported bullets seized; Internet use more than doubles
in five years; Infant mortality rates rise.
BCM ANNUAL MEETING NOTICE
THE BUSINESS COUNCIL OF MONGOLIA (BCM) is pleased to announce that its first Annual
Meeting will be held on Thursday, October 23, at 9 AM at the Bayangol Hotel in the private
room adjacent to the Main Dining Room. All members are invited to attend.
BUSINESS
MPs, INDUSTRY WORKING ON NEW DRAFT OF MINERALS LAW AMENDMENTS
The 10-member Government working group entrusted with the task of preparing the draft
amendments to the Minerals Law has begun functioning. It is headed by Kh.Badamsuren, MP, and
apart from members from the MPRP and the DP, includes S.Oyun, former Foreign Minister and
leader of the Civic Will Party. It will review the draft amendments submitted to the last
Parliament. There were four such amendments. One of these was scheduled for a final hearing and
another had been submitted by MP Bat-Uul. The deadline for submitting new draft amendments to
Parliament is November 15.
On its part the Mongolian National Mining Association is also getting ready to submit its own draft.
At a meeting of its member organizations on October 10, its President, Do. Ganbold, urged that a
group be quickly set up to prepare the industry‟s draft amendment to the Minerals Law and to
enumerate the problems that companies commonly encounter when dealing with the Mineral
Resources and Petroleum Authority of Mongolia. N.Algaa, Executive Director of MNMA, was chosen
to lead the group. Once the draft is ready, it will be distributed to all member organizations. The
feedback will be reviewed and, if necessary, incorporated in the final version to be submitted to
the lawmakers.
Source: www.gogo.mn, www.miningmongolia.mn
WHICH WAY TO TAKE AT THE PRESENT CROSSROADS?
How long would the economic downturn last, and what should Mongolia do now? Some public figures

2. and experts give their views.
R.Amarjargal, MP: If the financial market settles down fast, Mongolia has nothing to fear. Even if
the investment agreements are signed today, the necessary funding will not be available, as the
world financial system is in deep recession. The inflation rate is 34% in Mongolia. The Bank of
Mongolia and the Ministry of Finance have performed very poorly. That the budget has to be
amended so drastically because copper price is now at US$6,100 per ton is a sign of poor political
vision.
A.Munkhbat, Senior Vice President of Ivanhoe Mines Mongolia Inc.: Copper price is dropping
significantly. On the other hand, production and investment costs have risen to an unprecedented
level. This has led mining companies to restrict their projects and cut down on their operation.
Some foreign exploration companies have even stopped working. Banks and financial institutions
are short of funds, so getting credit for mining projects will be a challenge. Everything is urging us
to sign the Oyu Tolgoi investment agreement fast.
L.Zorig, Chairman of the Mongolian Taxation Authority: Of course the low copper price will affect
the revenue that goes into the Mongolia Development Fund. We have to do a thorough study on the
future movement of copper prices. There is no need to rush into signing investment agreements
because the prices are falling now. The mining can be done at any time; everything under the
ground will still be there. It is important for the government and investors to agree on a plan that
benefits both of them. In my opinion, the price will not fall continuously. I think it will return to
the average or rise again in the beginning of next year. Even if prices go further down, it will still
be profitable for miners.
N.Dashzeveg, Director of the Mongol Institute: Copper price fall will continue in the future. In
many countries, the share prices of metallurgical companies have been going down. I think the
copper price will go down to USD4,000 next year, and our budget should be prepared on this basis.
In addition, the amendments to the Minerals Law must be adopted urgently. MPs should listen to
academic experts. The investment agreements should be offered as soon as possible, otherwise
nobody will be interested in Oyu Tolgoi, once copper price reaches USD3,000. Once a planned
Russian project begins producing 20 million tons of copper and availability of copper is increased,
prices will fall.
Source: Onoodor
WARNING LIGHTS BLINK BRIGHTLY
With copper prices recently falling more than USD3,000 since the 2006 peak, it is possibly time for
Mongolians to shelve their bravado. On top of this comes the unpleasant news of a drop in the share
price of Ivanhoe Mines. The reasons for this were the lack of progress in signing an investment
agreement, the general economic turbulence in the USA, and, thirdly, the copper price fall.
In 2006, when global copper price reached an unprecedented high of US$8,800, Monglian politicians
assumed that the good times would be forever, and passed a notorious Windfall Profits Tax law.
Now economists of major mining companies wonder whether our politicians realize that the cost of
production has been dramatically increased in the last two years. Infrastructure development for
the Oyu Tolgoi and Tavan Tolgoi projects has been neglected for the last four years under pressure
from nationalist and extremist politicians.
At this moment of national economic crisis we are creeping ahead with our only horse, Erdenet. If
the Oyu Tolgoi and Tavan Tolgoi projects had started during 2006-2007 when the demand and use of
copper and coal was high, Mongolia would be smiling and relaxing now. According to some
economists, the financial turmoil will continue until spring of 2009.
The new government is cutting down on budgeted expenses, which is good. The most practical
solution is to finalize the investment agreements on Oyu Tolgoi and Tavan Tolgoi as soon as possible
and start the economic cycle moving once again. World market events warn us of the need to speed
up the agreements. The world market is giving clear signals to Mongolians, who, however, appear as
relaxed as their vast steppes.
Source: an editorial comment in Onoodor
PEABODY’s TOP OFFICIALS TELL BAYAR OF INTEREST IN TAVAN TOLGOI
Mr. Gregory H. Boyce, Chairman and CEO of Peabody Energy, and Mr. Richard A. Navarre, its
President and Chief Commercial Officer, called on Prime Minister S.Bayar when he was in the USA
recently to express the company‟s interest in investing in the Tavan Tolgoi project. They noted that

3. they would bring with them the best American law firms, financial institutions and infrastructure
companies to Mongolia. Their plans for the project include production of liquid gas and combustion
gas besides coal mining.
The Prime Minister expressed his gratitude that the world‟s biggest coal mining company was
interested in investing in Mongolia and said the country would benefit from use of the best
technology, machinery and experience by foreign investors. The new coalition government gave the
highest priority to the mining sector, and wanted the raw resources to be processed also in
Mongolia. The country was at the moment paying special attention to reviewing the legal
environment framework for the sector and formulating guidelines of cooperating with foreign
investors.
Source: www.monamerchamber.org
KOREAN CONSORTIUM WANTS TO INVEST IN TAVAN TOLGOI
Representatives from a consortium of ten Korean companies that include giants like Korea
Resources, Daewoo International, LG International, and Hanwha, have met with Prime Minister
S.Bayar, now on a visit to South Korea. They expressed interest in investing in the Tavan Tolgoi coal
deposits. In recent years Mongolia has risen to be South Korea‟s fourth biggest trade partner.
Source: Zuunii Shuudan
WATER CHANNEL TO GOBI PROVINCES PLANNED
The Government is looking for private investment to construct a water channel to the five Gobi
provinces that will carry rain water in the Orkhon river to places like Dalanzadgad, Oyu Tolgoi, and
Tavan Tolgoi. The project has been named Orkhon Gobi, and should take four years to be ready, at
a cost of USD400-500 million. Investors will be able to recoup their costs by selling the water to the
Mongolian Government which will then supply it to mining companies and to habitations in the
provinces. During his recent talks with the visiting Turkish delegation, the Minister of Environment
and Tourism asked for help in conducting an initial surface and technical feasibility study that
would cost USD3 million. The Turkish International Cooperation Association is likely to respond
favorably.
Source: Onoodor
MNMA AND BCM DISCUSS MORE EFFECTIVE COOPERATION
A team from the Mongolian National Mining Association, comprising its President, Mr. D.Ganbold,
his Advisor, Ms.Sodontogos, and an Economist, Mr. N.Bolor, last week met with Mr. Jim Dwyer,
Executive Director of the Business Council of Mongolia, and Ser-Od Ichinkhorloo, Vice Director, to
discuss avenues of more effective cooperation between the two organizations. They exchanged
views and agreed to proceed to set up a „Joint Committee‟ to address problems faced by their
memberships which include many mining companies that are members of both organizations.
Source: www.miningmongolia.mn
IVANHOE MINES PRESENTS CASH TO MEDALISTS
At a ceremony last Monday, Ivanhoe Mines Mongolia Inc. honored Mongolian medalists at the Beijing
Olympics and Paralympics. Gold medalists N.Tuvshinbayar, E-Badar-Uugan, and D.Baatarjav each
received USD7,640, which was what a ton of copper sold for on August 14, the day the first medal
was won. Silver medalists O.Gundegmaa and P.Serdamba each received half of this amount.
Source: Ardiin Erkh
ECONOMY
EXPENSES CUT, TAXES YIELD MORE, BUT BUDGET STILL IN RED
The deficit in the general government budget at the end of the first 9 months of 2008 reached
MNT3.1 billion. The 20.6 percent or MNT419.6 billion cut in expenditure and net lending was not
enough to meet the revenue shortfall of MNT30.3 billion or 1.8 percent of estimates. The current
account in the budget however shows a surplus of MNT382.2 billion.
Compared with the same period in 2007, tax revenue has increased 42.3 percent, taxes on foreign
trade have yielded 61.4 percent more, and excise duties 41.0 percent more. The share of

4. expenditure in the total expenditure and net lending was 75.6 percent, falling 5.3 percent against
the 2007 figures, but the share of capital expenditure and net lending in this, amounting to 17.3
percent and 7.1 percent respectively, showed an increase of 3.9 percent and 1.4 percent against
the corresponding period last year.
Source: National Statistics Office
NO MONEY FOR ANY NEW PROGRAM THIS YEAR
The Standing Committee on the Budget has finalized and approved adjunct recommendations to the
budget of 2008 that would now be discussed in Parliament. The committee says it has “formulated
a macroeconomic protocol to curb inflation, boost the national economy, help Mongolia develop
rapidly, and bypass the global financial crisis”. Budget expenses, originally planned to be 0.5
percent of the total GDP, needed to be cut. Statutory expenses cannot be touched even though
they have risen by Tg 261 billion because of increased heating, water and petroleum costs and
general price rise. No new programs will be taken up this year, and will instead be included in next
year‟s budget.
However, the committee did not take any decision on six projects at a cost of Tg 2 billion and has
asked the Government to review them once again. These include construction of power lines in
Tsagaannuur and Nogoonnuur of Bayan-Ulgii province and two school buildings.
Source: en.News.mn
PRICES FALL IN ULAANBAATAR IN SEPTEMBER AND FOR LATEST 12 MONTHS
National consumer prices in September 2008 were 0.5 percent above those in August, 24.6 percent
above the end of 2007, and 32.2 percent above September, 2007 (as compared to 34.2 percent for
the year-over-year ended August). The major contribution to the increase came from higher costs
for heating and electricity that rose 8.4 percent over the previous month. Prices of food and items
in the non-alcoholic beverages group decreased 0.1-6.5 percent in 11 aimags and Ulaanbaatar, but
other prices went up by 0.6-2.4 percent. Judged against August figures the Consumer Price Index in
September fell by 0.2-3.1 percent in Khovd, Dornogovi, Sukhbaatar, Gobisumber, Selenge and
Darkhan-Uul aimag and in UB city, stayed stable in Bayankhongor aimag and increased 0.1-5.7
percent in the other provinces.
Source: National Statistics Office
MONEY FOR ERDENET MEDICAL CENTER WILL COME TO STATE BUDGET INSTEAD
With a resource crunch forcing chopping of projects, State authorities are laying their hands on
money wherever it can be found. Ch.Khurelbaatar, head of the Standing Committee on the Budget,
has said the Erdenet factory would contribute Tg 25.3 billion more to the state budget. Denying
that this would make it difficult for the factory to extend its capacity, Khurelbaatar said the money
would not come from the fund kept to construct a new plant. The factory decided last spring to set
up a medical center for USD20 million but work is yet to begin on this. “This money is now being
pulled into the state budget,” he said.
The money kept for updating the factory may come next. D.Zorigt, who heads Parliament‟s sub
committee to monitor budget expenses, has criticized the factory‟s retaining MNT60 billion for 10
years for some technical innovations. “Erdenet is the Mongolian people‟s property and they want to
know what is happening to the money. It has turned into a closed factory.”
Source: Ardiin Erkh
CHILDREN’S MONEY MAY BE CUT
At present every Mongolian child is entitled to MNT25,000 annually. This money comes from the
Mongolia Development Fund and is likely to amount to MNT104.6 billion in 2008. The allowance was
fixed on estimates that copper price would be USD6,800 or higher per ton. Falling copper prices
have led the Ministry of Finance to revise its calculations. The present estimates are that if the
copper price falls to USD5,000 per ton the allowance will have to be cut by MNT 5,000, and if it
falls further, to USD4,500 or so, the children‟s money will be brought down to MNT12,500. A similar
fate might await the “newly weds‟ allowance” in the event of lower collection of the windfall
profits tax. A final decision on any of these will however have to be taken by Parliament.
Source: Zuunii Medee

5. HIGH-LEVEL TEAM IN KUWAIT TO DISCUSS OIL IMPORT
The newly appointed advisor to Prime Minister S.Bayar on issues relating to foreign investment,
K.Sairaan, swung into action immediately on taking up his newly created position by leaving for
Kuwait along with D.Zorigt, Minister of Minerals and Energy, looking for investment. Sairaan is a
former Member of Parliament from the Democratic Party who has experience of working with Arab
countries where he served as Ambassador. They will also discuss details of oil import from Kuwait.
This follows talks D Amarsaikhan, vice head of the Mineral Resources and Petroleum Authority of
Mongolia, held in Kuwait earlier this month. The Ministry of Foreign Affairs & Trade was then asked
to prepare a memorandum of understanding on importing oil from Kuwait at discounted rates.
Further negotiations will be the responsibility of Minister Zorigt. Kuwait has said it prefers to work
with an authorized Mongolian company. Zorigt will also choose this company, in accordance with
related laws and regulations.
Source: Zuunii Medee
NO IMMEDIATE RISE IN MINIMUM WAGES
Prolonged tripartite negotiations –- held with the participants seated at a special triangular table --
among the Government, The Mongolian Federation of Trade Unions, and the Mongolian Employers‟
Union ended recently, agreeing to set up a working group to recommend amendments to the
existing Labor Law on minimum wages, and providing free lunch and transport to staff by
employers. The Government agreed to consider wage raise step by step from October 1 and create
a good business environment aimed at increasing real income.
All three sides gained something from the talks. The Labor Unions convinced the Government to
make a real promise to improve the livelihood of employees, while the employers succeeded in
incorporating a provision in the Government platform on the need to create a better business
environment. The Government managed to stall any immediate injection of more cash into the
market by deferring a raise in wages, while accepting the demand in principle. The talks are an
annual event and the present negotiations were for 2008. Since the year is almost over, the labor
union may not have missed too much. In general, all its demands were accepted, but nothing was
said about a time frame for their implementation.
In a related development, the basic living wages in different areas of Mongolia for 2008 have been
determined. They have been pegged at MNT94,300 in the western region, MNT89,000 in Khangai
region, MNT90,800 in the central region, MNT85,100 in the eastern region, and at MNT94,800 in
Ulaanbaatar.
Source: Udriin Sonin, Ardiin Erkh, Montsame
RISE IN BOTH FREIGHT AND PASSENGER TRAFFIC
There was a rise in the volume of both freight and passenger traffic in all types of transport in the
first nine months of 2008, when compared to the figures in the same period last year. Freight rose
by 9.7 per cent and the number of passengers by 17.1 percent. Freight movement on the railway
increased by 5.9 percent but passenger traffic went down 1.4 per cent. Domestic freight rose 10.1
percent and international freight 1.4 percent. Transit freight dropped a sharp 34.0 percent.
Despite fuel price increase, road transport grew in terms of both goods and passengers. The
increase in the former was 16 percent and in the latter 17.7 percent. Eight percent more cargo was
moved by air, but passenger traffic fell by 3.6 percent. International passengers numbered 0.7
percent more but there were 12.4 percent fewer domestic passengers.
Total transportation revenue ín the first nine months of 2008 reached MNT300.4 billion, an increase
of 15.9 per cent over the corresponding period last year.
Source: Montsame
MONEY SUPPLY FALLS, SAVINGS RISE
The Central Bank, the Bank of Mongolia, reports that money supply (broad money or M2) at the end
of September decreased by 1.1 percent or MNT28.8 billion over August. However, the figure of
MNT2,547.1 billion was an increase of 16.2 percent or MNT355.2 billion compared to September last
year. Currency in circulation decreased 8.7 percent or MNT34.6 billion against August, but at
MNT361.1 billion was an increase by 8.3 percent or MNT27.7 billion over September, 2007. The
MNT1,112.0 billion time saving deposits were an increase by 0.7 percent or MNT7.3 billion over
August of 2008, and by 7.8 percent or MNT 80.8 billion over September, 2007. Foreign currency

6. deposits amounted to MNT474.9 billion, an increase of 5.2 percent or MNT23.4 billion over August,
and of 35.4 percent or MNT124.3 billion over September, 2007.
The amount of loans outstanding at the end of September, 2008 climbed to MNT2,716.9 billion, an
increase of 46.1 percent. Individual and private sector outstanding loans increased by 49.7 percent
and 47.6 percent respectively, while those in the public sector decreased by 18.7 percent. Principal
amounts in arrears increased by 9.3 percent and substandard and doubtful loans increased by 8.8
percent. Nonperforming loans, at MNT75.1 billion, were 2.8 percent of the total loans outstanding
and decreased by 0.9 percent against August, 2007.
Compared to September 2007, the nominal rate of MNT against USD at the end of this September
was stronger by 3.2 percent, against EUR by 1.8 percent, but weaker by 6.2 percent against CNY.
Source: www.mongolbank.mn
TRADE DEFFICIT CLIMBS UP TO USD756.3 MILLION
Mongolia‟s total external trade deficit reached USD756.3 million in the first 9 months of 2008. This
is USD593.8 million more than the same period in 2007. The same comparison shows total external
trade turnover has grown by 69.9 percent, exports by 51.5 percent and imports by 86.4 percent.
Mineral products exports increased by USD355.7 million. The volume of copper concentrate exports
decreased by 3.4 percent but their value in USD rose by 16.9 percent. The average price of copper
concentrate per ton in the first nine months of 2007 was USD1,293, while this year it rose to
USD1,565, an increase of 21 percent. The volume of gold exports, unwrought or in semi-
manufactured forms, increased by 64.7 percent and their value in USD increased 2.3 times. The
average price of gold per ton, unwrought or in semi-manufactured forms, was USD19,500 in
January-September 2007, and USD27,700 this year, an increase of 42.2 percent.
Mineral products imports form a high percentage of total imports, and rose by USD352.5 million.
Imports of cellulose, paper, cardboard and articles thereof increased by USD238.7 million; of auto,
air and water transport vehicles and their spare parts by USD197.2 million; and of machinery,
equipment, electrical appliances, recorders, TV sets and spare parts by USD152.5 million. Food
products and vegetable origin products imports cost USD61.7 million and USD48.3 million more
respectively.
Petrol import was up by 38,300 tons and cost USD119.7 million more. Altogether 13,500 more cars
were imported, costing USD77.5 million more. Flour import rose by 47,600 tons or USD31.8 million.
Electricity import decreased by 6.5 million kwh, but the price went up by USD1.3 million.
Source: National Statistical Office
FLOUR FACTORIES BUYING LITTLE WHEAT
With a production of about 206,000 tons Mongolia is this year expected to meet 49.1 percent of its
wheat demands internally. However, flour factories are buying little of the harvest, and lack of
storage facilities has made farmers seek help from the government to lift their stock.
The Government wants to formulate a clear policy to prevent price rise, ensure regular supply of
flour to retail consumers, and encourage farmers by assuring them of proper prices. It also plans to
buy 100,000 tons of wheat to be kept as reserve, meant to be released in the market according to
demand. The proposals will be placed before Parliament.
Source: en.News.mn
INDUSTRIAL OUTPUT UP 6.1%
Total industrial output in the first nine months of 2008 reached MNT1,257.2 billion at 2005 constant
prices, more than by 6.1 per cent or MNT72.8 billion over the same period last year. The rise was
not evenly spread over all sectors. Among items whose production increased are electricity,
thermal energy, coal, distribution of water, crude oil, fluorspar concentrate, meat, sausage, sour
milk and yoghurt, bread, bakery products, sweets, noodles, spirits and beer, purified water, juice,
cigarettes, carpet, lime, plastering mortar, and metal sheets. On the other hand, decrease by
volume was noticed in copper, molybdenum, gold, and zinc concentrates, flour, wine, medicines
and disposable needles, metal sleepers, steel casting, and candles.
Industrial products worth MNT2,234.6 billion at current prices were sold in domestic and foreign
markets in the first nine months of the year.
Source: National Statistical Office

7. WOMEN 58% OF UNEMPLOYED
At 31,700 at the end of September, the number of registered unemployed showed a fall of 1.6 per
cent against the same period last year. The number of unemployed women stood at 18,400 which is
57.9 per cent of the total. Of those who registered as unemployed, so far 33,200 have found work,
13.5 per cent of them getting a job with government or state-owned enterprises and the remaining
86.5 per cent in companies, cooperatives or other types of employers, such as small-scale private
businesses.
Source: National Statistical Office
POLITICS
MPRP WINS IN 16 PROVINCES, RE-ELECTION IN ULAANBAATAR
General Election Committee (GEC) Chairman B. Battulga has said official declaration of Sunday‟s
local election results will take time. Unconfirmed reports have given the MPRP victory in 16 of the
21 aimags, with DP claiming a majority in the other five. Meanwhile, lower than the mandatory
acceptable turnout will necessitate re-election in all Ulaanbaatar constituencies to elect members
to the capital city‟s Civil Representatives‟ Assembly. The GEC is still collecting data on voter
participation in the district constituencies. Only after this will it be able to decide where and if re-
elections are to be held.
At least 50% of voters have to cast their ballot to make an election valid, but in Ulaanbaatar only
about 47% of the voters did so. Observers attribute the voter apathy to some amount of urban
cynicism but more to disenchantment with recent political developments. The re-election will cost
the country time, money and energy it can ill afford right now. The total expenses of Sunday‟s
election amounted to around MNT2 billion. Altogether 1,786 polling stations were manned by
20,000 staff. Sunday‟s election in Ulaanbaatar cost Tg460 million, and a similar amount will have
to be spent on the fresh election.
Source: www.news.mn, www.gogo.mn
UNCERTAINTIES ABOUT DATE OF FRESH POLL
The head of the Metropolitan Election Committee, Z.Ganbaatar, told media on Tuesday that the
new dates for election in Ulaanbaatar would be announced this week, but only after analyzing the
data from the individual constituencies. All the ballot papers used in Sunday‟s election would be
destroyed, and new ones printed.
Asked what would happen if voter turnout again failed to reach the mandatory minimum,
Ganbaatar said there was no legal provision for a third election, so the present laws would most
likely have to be changed. He admitted that election issues were in a flux. A reelection has to be
held within 14 days of the first election being countermanded. But if the present GEC resigns, as it
is widely expected to do, it will take some time for a new one to be set up. The law also says a
reelection or election can be held under a GEC that has been in office for at least 28 days. They
have sought clarification on these knotty problems.
Source: www.news.mn
CHANGE IN PARLIAMENT ELECTION LAW SOUGHT
The experience of the last Parliamentary election has convinced a number of MPs from both parties
that the law on election needs to be changed. They have set up a working group to draft
amendments. The general feeling is in favor of a proportional system of representation, in which
people will vote only for parties and the parties will choose their representatives to Parliament.
The quota for women MPs is likely to be reintroduced. Women interested in a political career have
come together and established a club without any individual party affiliation to work for this goal.
Source: en.News.mn
POWER FROM DURGUN WILL NOT LOWER CONSUMERS’ BILLS
With electricity from the new hydropower plants of Taishir and Durgun replacing imported power,
citizens in the western region were hoping for a drop in their energy bills, but this is not to be.
They will continue to pay more for their power needs than people in most other parts of Mongolia.
R.Ganjuur, head of the Energy Regulatory Agency, has said that the Durgun plant cost USD26 million

8. to build, and the annual interest on this amounts to around USD4 million. This money has to be
recouped from the sale of power. He also said there was never any talk of power import from Russia
being stopped. Actually, even when it works at full capacity, the Durgun plant will meet only 57
percent of the demand, and the rest will continue to be imported.
Source: Onoodor
ADOPTION FIGURES RISE 75% IN FOUR YEARS
A total of 753 children were adopted by foreigners and Mongolians in 2007, a 75.1 percent jump
over 2004 figures. In some cases, the adoptive parents were found guilty of child rights violations.
Children taken by foreign citizens are interviewed every six months, and there has been no
complaint of bad treatment from any of them. According to Mongolian law they continue to retain
their Mongolian nationality until they reach a majority age when they can choose citizenship.
Source: Ardiin Erkh
MPs REFUSE TO RAISE IMPORT DUTY ON CARS
Parliament has followed the standing committee‟s lead in rejecting the Finance Ministry proposal to
raise the present import duty on cars. The increase was sought on two grounds. Government
revenue needed a boost, and, secondly, the Minister wanted some disincentive to importing cars,
“as their number has been increasing so much and so fast that the city roads cannot bear the load”.
MPs said traffic jams were not caused by there being too many cars. Road management had to be
better. “We cannot expect citizens to walk because our public services are inefficient,” they said.
The Minister clarified he was not against an increase in the number of cars as such but only against
growing use of luxury vehicles or cars that guzzled petrol and created pollution. The tax was thus
proposed to be raised for only old and luxury cars. MPs then said not too many people can afford
the price of a new car even when the tax on it is low. Old cars are more popular and cannot be put
beyond the common man‟s reach. Also, such differentiation might lead to corruption in the
Customs.
Source: Ardiin Erkh
ILLEGALLY IMPORTED BULLETS SEIZED
In two separate but similar incidents within days of each other, a large number of illegally imported
bullets have been seized. Earlier this month about 92,500 sports and hunting caliber bullets in 1,870
boxes were concealed among other goods coming from abroad, and about a week later another
62,000 hunting bullets were found in a box in a container that had a number of other medium size
boxes. There was no sender‟s address on that box.
Source: en.News.mn
INTERNET USE MORE THAN DOUBLES IN FIVE YEARS
The ways in which Mongolians access information have changed much in the last five years.
According to a survey by the Press Institute made in August and September, the number of people
who rely on television for news has fallen to 66.5 percent from the peak of 91 percent in 2003.
Newspaper readers are now 30.8 percent from the earlier 47 percent, and radio listeners are just
9.3 percent in place of the 34 percent five years ago. Internet use has more than doubled, from
nine percent in 2003 to 19.6 percent now. The media sector is now much more competitive. New
TV stations are adopting aggressive marketing strategies to push others out.
Source: www.news.mn
INFANT MORTALITY RATES RISE
There were 47,200 live births in the first nine months of 2008, showing an increase of 17.2 per cent
over the same period last year. The national Socio-Economic Guidelines have set targets in infant
mortality and maternal mortality rates. The first is planned to be reduced to 18 per 1,000 live
births, the mortality rates for children under five will be less than 24 per 1,000, and the maternal
mortality rate will be restricted to 69 per 100,000 childbirths. Maternal mortality has fallen 36.1
per cent in the first nine months, infant mortality under the age of one has increased 26.7 percent
and the under-5 mortality rate has risen 4.4 per cent. Mortality per 1,000 live births was 20 showing
a 2 percent increase.
Incidence of infectious diseases increased 5.8 per cent, affecting 118 per 10,000 people. These nine

9. months also saw 10 new HIV positive cases, taking the number registered nationwide to 46.
State-run hospitals served 480,400 people and private hospitals 654,000 others. Taken together, the
numbers show a fall of 1.4 per cent against the same period ín 2007, while costs increased by 15.0
percent.
Source: Montsame
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SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended October 10, 2008, trading activity on the Mongolian Stock Exchange (MSE)
totaled 605,100 shares with 42 companies traded. Total market value of transactions was MNT
136.3 million. Total market capitalization of the 358 stock companies listed on the MSE was MNT
652.3 billion, and decreased by MNT 24.4 million or 3.6% from the previous week.
The Top-20 Index decreased by 328.2 points or 4.0% compared to the previous week closing at
7,963.22 points. The MSE Composite Index decreased by 146.15 points or 3.8% compared to the
previous week, closing at 3,755.34 points.
Most active stocks traded were: Khuh gan (187,500 shares), Remicon (162,800 shares), Hermes
center (102,700 shares), Moningbar (44,900 shares), and Anod bank (31,400).
Major share price percentage gainers were: Mongol Securities (35.3%), Shivee Ovoo (15.0%), UB buk
(14.9%), Genco Tur buro Khotgor (14.5%), and Makhimpex (13.8%). Major share price percentage
losers were: Barilga (50.0%), Solongo impex (14.8%), Gazar Suljmel (13.3%), Shimtleg (13.3%), and
Bayantooroi (12.5%).

10. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 Avg. 9.0% [source: NSOM]
Year 2007 *15.1% [source: NSOM]
September 30, 2008 *32.2% [source: NSOM]
* year over year (yoy)
CURRENCY RATES – October 16, 2008
Currency name Currency Rate
US dollars US 1144.45
Euro EUR 1557.37
Japanese yen JPY 11.28
British pound GBP 1997.75
Hong Kong dollar HKD 147.47
Chinese yuan CNY 167.5
Russian ruble RUB 43.73
South Korean won KRW 0.92
DISCLAIMER: Except for reporting on BCM‟s activities, all information in the BCM NewsWire is
selected from various news sources. Opinions are those of the respective news sources.