November 25 2010

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 146, November 25 2010
This issue of the newswire is being distributed a day ahead of schedule, as November
26 is Independence Day in Mongolia and observed as a national holiday.
NEWS HIGHLIGHTS
Business:
 Charges fly at DP meeting over Oyu Tolgoi shareholding;
 Centerra Gold may lose four licenses;
 MEC says its licenses not involved;
 Meritus Minerals says its exploration licenses not affected;
 Magazine says Hunnu Coal’s IPO this year’s best in Australia;
 SouthGobi continues share buyback program;
 Garrison completes geophysics survey at Tuvshir;
 UB Railway official denies all reports about damaged locomotive;
 Khan Bank’s special office for foreign organizations;
 MSM appointed official distributor of MTU;
 Lotus completes sale of Mongolian mining subsidiary;
 Leyshon applies for five licenses;
 Air strip at Oyu Tolgoi being expanded.
Economy:
 Decision response to "difficult situation", says Minister Zorigt;
 Good intentions placed against unknown execution and uncertain impact;
 License issue may have serious repercussions;
 Profligate budget risks causing high inflation: World Bank;
 Fitch raises Mongolia’s rating to B+;
 No “conflict of interest” in TT choice, PM warns;
 Government’s plans on Tavan Tolgoi remain unclear;
 Quick budget revision explained;
 MPP MPs want a development budget;
 Rare earths development discussed;
 Foreign control of oil sector against national interest;
 Speaker opposes proposal to raise registration fees;
 Trade Union issues 12-point charter of demand;
 Plan for capability-based vocational training:
 Chinese dominate meat trade;
 Organizations agree on helping business reforms;
 Mongolia the 'next Chile', Ivanhoe's Friedland says;
 Peru asks UN to assess environmental impact of copper project;

2.  Mongolian resources lure Japan, but others, too, are enamored;
 China’s twilight economy boosts inflation.
Politics:
 DP will not quit coalition, asserts party chief;
 Goldman Sachs reported to have sent legal notice to Government;
 Democracy incomplete without economic freedom, says First Deputy PM;
 Children’s rights continue to be violated;
 Tele-meeting discusses Canadian help in civil service reform;
 Goyo apparel named best export product;
 Potholes on China’s road to global dominance;
 World’s center of gravity is shifting eastwards.
BUSINESS
CHARGES FLY AT DP MEETING OVER OYU TOLGOI SHAREHOLDING
Heated exchanges among leaders and allegations and counter allegations over issues related to Oyu
Tolgoi marked the DP National Consultative Committee meeting last week. Mr. N.Batbayar claimed
that Finance Minister S.Bayartsogt had misled the country by saying Mongolia had 34% share in Oyu
Tolgoi LLC, when the actual figure was 6.8%. Mr. Bayartsogt denied this and said he had learnt from
Minister Kh.Battulga and former PM S.Bayar that Mr. Batbayar had also alleged “that I would
entirely give Oyu Tolgoi to China”. He added that when he had asked Mr. Batbayar for an
explanation, “he said he wanted to make me famous. Thank you, I do not need such popularity.”
Minister Kh.Battulga was angry that his name was being dragged in and left the meeting in a huff.
Mr. Bayartsogt then read out a letter to Prime Minister S.Batbold from Ivanhoe Mines CEO Robert
Friedland and Rio Tinto CEO Tom Albanese (published in last week‟s newswire) that referred to
“the distortion of facts by some MPs” regarding the shareholding in Oyu Tolgoi, and says it is
“patently false to suggest that the Government owns anything less than 34%”. Mr. Batbayar,
however, continued to claim he was right in his facts and doubted if the translation of the text of
the letter was accurate.
Source: English. News.mn
CENTERRA GOLD MAY LOSE FOUR LICENSES
Centerra Gold may lose four gold mining licenses in Mongolia as the government plans to revoke
permits on environmental concerns. The permits are “not material to the company” and its
principal Gatsuurt field is not on the list of the 254 alluvial gold mining licenses Mongolia will cull,
Toronto-based Centerra has said in a statement.
Centerra said it continues to talk with the government to resolve uncertainty over the
implementation of the Water and Forest Law and to get the approval for the commissioning of its
Gatsuurt hardrock project. Its main Boroo mine permits are not subject to the law, Centerra said.
Centerra will end mining at its current Mongolian operation, Boroo, at the end of this month and
had planned to replace the production with ore from Gatsuurt, which is located about 50 km away.
The company has said that it would cut about 250 jobs at Boroo, as the plan had been for those
workers to be redeployed at the now-delayed Gatsuurt. The firm will also keep capital spending on
the Gatsuurt project "minimal" until the approvals are received, CEO Steve Lang said at the time.
Source: Bloomberg, www.miningweekly.com
MEC SAYS ITS LICENSES NOT INVOLVED
Mongolia Energy Corporation (MEC) says preliminary enquiry with its legal advisers in Mongolia
reveals none of the 254 mining licenses for gold across the country to be revoked on environmental
grounds involves the licenses of the company‟s operating subsidiaries in Mongolia.
The company reported in its recent Annual Report that on July 16, 2009, the Parliament of Mongolia
enacted the Mining Prohibition Law (MPL) which prohibits minerals exploration and mining in areas
such as headwaters of rivers and lakes, forest areas and areas adjacent to rivers and lakes. Under
the MPL, new exploration licenses and mining licenses overlapping the defined prohibited areas will

3. not be granted, while previously granted licenses that overlap the defined prohibited areas will be
terminated within five months following the adoption of the law. The MPL further states that
affected license holders shall be compensated. Details as to how the compensation is determined
have not been specified in MPL. The company will closely monitor developments in Mongolia.
Source: Mongolia Energy Corporation
MERITUS MINERALS SAYS ITS EXPLORATION LICENSES NOT AFFECTED
The two exploration licenses held by Gutain Davaa LLC, subsidiary of Meritus Minerals, are not
affected by the Mongolian Government‟s decision to cancel mining licenses in certain areas, the
company has said. Two other exploration licenses in which Sutirem LLC, Meritus' other Mongolian
subsidiary, has an interest are not affected either.
The Government has announced the cancellation of 254 mining licenses used for placer (alluvial)
gold mining and has said compensation will be paid to license holders. No exploration licenses have
been canceled. It appears that only mining licenses used for the production of gold by placer mining
methods are involved although this has yet to be confirmed.
Source: Meritus Minerals Ltd.
MAGAZINE SAYS HUNNU COAL‟S IPO THIS YEAR‟S BEST IN AUSTRALIA
Australia‟s Resource Stocks Magazine last week announced its selection of Hunnu Coal Limited‟s IPO
earlier this year as the Best Australian IPO of 2010.
Source: CPS International
SOUTHGOBI CONTINUES SHARE BUYBACK PROGRAM
SouthGobi Resources bought 18,800 of its own shares on November 18 and subsequently canceled
them on November 22. This brings the number of total shares bought since the share buyback
program was announced this June to 371,600 or 0.202% of existing shares at the time of decision.
Source: SouthGobi Resources
GARRISON COMPLETES GEOPHYSICS SURVEY AT TUVSHIR
Garrison International says that the initial Induced Polarization Gradient Array (IPGA) geophysics
survey over major areas of interest within the company's Tuvshir Project's northern exploration and
mining licenses has been completed. A Mongolian company, GPGD LLC, was contracted for the
work.
An interesting relationship is seen between the Tuvshir results and Centerra's Boroo Gold Project,
which is a world-class mine and is currently Mongolia's largest operating gold mine. Although the
two projects are approximately several hundred kilometers apart they sit within the same regional
thrust belt, which is host to Mongolia's major gold deposits. The chargeability highs in Centerra
Gold's map display the same traits as those of the Tuvshir results, i.e. mineralization is sitting in or
on the margins.
Source: Garrison International
UB RAILWAY OFFICIAL DENIES ALL REPORTS ABOUT DAMAGED LOCOMOTIVE
The case of the Russian locomotive gets more and more curious. Russian media report two were
sold to Ulaanbaatar Railway and one is not working in the Mongolian winter, suggesting that old and
substandard equipment was passed on to Mongolia. An official of the railway says only one
locomotive came from Russia and there is nothing wrong with it. Mongolian workers say there were
two locomotives but one has not been seen for some time and they do not know where it is.
The Chief of the Locomotive Engine Shed of Ulaanbaatar Railway, Mr. N.Khuyag-Erdene, told media
that they have a new locomotive in the shed and it is working well. Its bearings are made of metal
and can withstand the cold without problem. Denying that two locomotives had come, he also said
that, contrary to media reports, there is no agreement to buy a fixed number of locomotives from
any Russian factory.
He agreed that a Russian specialist was here, but denied media reports that a team had come, or
that they had come to repair any damaged locomotive. He said the Russian had come to train
Mongolian workers in maintenance, and not to repair anything.
Source: News.mn
KHAN BANK‟S SPECIAL OFFICE FOR FOREIGN ORGANIZATIONS
Khan Bank has opened a Diplomatic Office, specially designed to cater to the financial needs of
embassies, international organizations, foreign invested companies, and their officials. The office

4. will offer a full range of banking services under the motto “Your priority is our priority”. English,
Japanese and Chinese will be used for transactions but the staff will speak German, Russian,
Spanish, Turkish and Korean also.
Source: Khan Bank
MSM APPOINTED OFFICIAL DISTRIBUTOR OF MTU
Mongolian Star Melchers has been appointed official distributor in Mongolia for MTU, one of the
leading mining and industrial engine suppliers in the world. MTU powers some the world‟s largest
mining trucks, the biggest yachts, the fastest high-speed trains, and provides power generation to
the largest stadiums and the tallest skyscrapers.
The following services are now available in Mongolia through MSM: Technical services and supply of
genuine spare parts, warranty assistance, repowering of machinery, and large scale diesel power-
plant sales, installation and maintenance.
Source: Mongolian Star Melchers
LOTUS RESOURCES COMPLETES SALE OF MONGOLIAN SUBSIDIARY
Lotus Resources has completed the sale of its Mongolian mining subsidiary, Lotus Minerals Mongolia,
to Mongolian Minerals, under terms and conditions announced earlier.
Source: Lotus Resources
LEYSHON APPLIES FOR FIVE LICENSES
Paul Atherley has no problem deciding what he wants. Getting it is another matter. As chief
executive of Leyshon Resources he may be sitting on AUD46.5 million of cash and years of
accumulated knowledge of the Chinese energy and metal end-user markets, but he and his team
have still had to spend most of this year sifting through thousands of pages detailing possible deals
all around the world. Now, though, it looks as though the spade work is beginning to pay off.
Leyshon is making progress. Paul already has a license application in for exploration in the Gobi
Altai region of South West Mongolia, and others on the way. Currently he is focusing on thermal and
coking coal, and gold, in north western China and southern Mongolia.
Leyshon has applied for five licenses in all, over a total of 2,664 square km. The first license
application is subject to Mongolian government approval, while for the others the company will
submit to a tender process which is due to start in the December quarter. Leyshon‟s geologists
consider the license areas to be highly prospective for high quality coals, including hard coking and
semi soft coals as well as high energy thermal coals. They have completed extensive ground
sampling programs and so far what they‟ve seen looks pretty good.
Source: Minesite
AIR STRIP AT OYU TOLGOI BEING EXPANDED
Work has started on the Oyu Tolgoi project site to prepare the runway at the strip there to receive
large passenger carriers like Boeing 737-800 as well as C-130 cargo aircraft. Traffic to and from the
project will increase incrementally as development proceeds and the project authorities are
progressing accordingly. The air strip will meet international requirements and care has to be taken
that fights do not interfere with mining operations, most of which will be open-pit.
Source: Zuunii Medee
ECONOMY
DECISION RESPONSE TO “DIFFICULT SITUATION”, SAYS MINISTER ZORIGT
Minerals Minister D. Zorigt has called the termination of many gold mining licenses a response to a
"difficult situation", and justified it by saying, "Lots of Mongolian land is tundra. It is difficult to
rehabilitate. Forest is easily damaged." Work is now taking place to sort out which of the nongold
licenses under review will be terminated. Some may be partially terminated, Mr. Zorigt said, in
cases where only part of the area covered by the license is in violation of the law. Some mines may
be classified as strategic deposits, in which case they could be exempted from the law, though the
government would then acquire an equity stake in the project.
The Water and Forest Law prohibits mining activities in water basins and forest areas of the
landlocked desert country of fewer than 3 million people, where water in scarce supply. Since the
law was passed in July 2009, the government has conducted surveys to see what licenses might be
affected. Mr. Michael Waring, a fund manager who specializes in mining stocks for Toronto-based
Galileo Global Equity Advisors, has said the review shouldn't be viewed as an attack on foreign

5. miners. "Mongolia is only really moving towards where the rest of the developed mining world is
already at, in terms of protecting watersheds," he said.
Source: The Wall Street Journal Asia
GOOD INTENTIONS PLACED AGAINST UNKNOWN EXECUTION AND UNCERTAIN IMPACT
Last week, headlines surfaced from Mongolia that the Government has decided to suspend mining
activity of 1,782 license holders in areas near river basis and forests. While very surprising to those
only recently covering the Mongolian story, some additional color is helpful in gaining a better
understanding.
In July 2009, the Mongolian Parliament enacted legislation that would prohibit mineral prospecting,
exploration and mining in water basins and forest areas in Mongolia and provides for the revocation
of licenses affecting such areas (the "Water and Forest Law"). Last week, Mongolia's cabinet
announced its intention to initiate the revocation of licenses under the law on a staged basis,
beginning with the revocation of 254 alluvial gold mining licenses. The background of the law
passed 18 months ago is around prohibiting minerals exploration and extraction near
environmentally vulnerable areas. The rules are like those in developed mining countries including
Canada and Australia.
For investors in Mongolia, the estimated 1,700 licenses at risk have been known for some time. But
the largely unknown factor for those impacted is the compensation claims which need to be
assessed and most find it difficult to see the source for the payment.
Good intentions are thus placed against unknown execution and uncertain impact. Mongolia is set
with growing challenges as it develops. At the China Mining Conference last week, ResCap
presented a 30-minute module to investors asserting “Mongolia will change more in the next 12
months than it has in the past 5 years”. Balancing the interests of local citizens and international
capital markets will need to be core to that change.
Source: www.resource-cap.com
LICENSE ISSUE MAY HAVE SERIOUS REPERCUSSIONS
The Mongolian government dropped a bombshell on the international mining industry by suspending
254 gold mining licenses last week. The Ministry of Minerals and Energy revoked the licenses citing
“environmental concerns”, and hinted that others licenses may also follow. The government is
providing compensation to investors affected. The licenses are being revoked under a 2009 law
which protects Mongolia‟s forests and river basins. Mongolians consider the ground sacred and are
reluctant to dig, fearing it may upset the balance of nature. Living close to nature also, as many
Mongolians do, means they have an in-built awareness of the environment and are highly sensitive
to damaging or polluting the land. Proposed golf courses for example, a lucrative form of
investment in nearby China, are banned in Mongolia due to concerns over the use of fertilizers and
weed killers.
The license issue may have serious repercussions if it spreads beyond gold. Several international
mining companies have recently established operations in Mongolia and have gone on to IPOs in
Hong Kong and Canada. The government says it will release a full list of companies affected.
Analysts warn of the dangers of investing too much in emerging countries such as Mongolia due to
the dangers of government U-turns over investment policies.
This is not the first time the government has banned mining companies. Following a deal in which a
five-year, 100 percent tax break was agreed with one of the large international mining companies
for the extraction of coal, the Mongolian government was not amused when a project expected to
last for 20 years and produce tax revenues for 15 of them was fully completed in less than five
years, leaving the government with an empty mine and no income. International mining companies
have not always behaved well in Mongolia, and this, coupled with an emerging regulatory
environment, has lead to stresses.
Source: www.mongolianviews.com
PROFLIGATE BUDGET RISKS CAUSING HIGH INFLATION: WORLD BANK
Calling the revised draft 2011 budget “risky”, the World Bank has said in a strongly worded analysis
that if approved, it will compound already existing inflationary pressures caused by the sharp
economic rebound and the lack of spare capacity in the economy. The draft envisages a steep
increase in government spending, together with a sharp rise in the fiscal deficit to 8.6 percent of
GDP. The Bank sees this as contravening the fiscal management principles contained in the recently
passed Fiscal Stability Law, in particular the principle to aim to create macroeconomic stability and
restrain inflation. The Bank‟s conclusion is that the draft makes Mongolia set to witness a replay of

6. the 2006-8 boom years, leaving it vulnerable to a bust similar to the one that occurred in 2008-
2009.
The draft budget is inconsistent with the guidelines set out in the Medium Term Budget Framework
(MTBF). First, the overall deficit target is a significant deviation from the 5 percent deficit ceiling
specified in the MTBF. It is also a sharp deterioration compared to the 2.2 percent deficit outcome
expected by the IMF for 2010. Moreover, both expenditure and revenue estimates in the 2011
budget proposals are much higher than that of the MTBF baseline scenario. Under the proposal for
2011, general government spending will reach a whopping 50.5 percent of GDP, compared to the
40.4 percent in the MTBF.
Read more…
The 2011 increase is primarily driven by a 22 percent rise in spending on wages and salaries
compared to the 2010 budget (reflecting the 30 percent increase in public sector wages and salaries
that took place in October 2010) and a nearly 50 percent increase in spending on transfers.
“We estimate that this budget will add about 15 percent inflation on top of the already existing
inflation of around 10 percent. That will quickly erode the real value of the cash transfers, making
these politically less attractive than they seem today,” notes Mr. Rogier van den Brink, the World
Bank‟s Lead Economist for Mongolia. High domestic inflation also causes the currency to appreciate
in real terms, hurting the export sector, which includes agricultural exports, on which the rural
population depends, and an already small manufacturing sector.
Another bout of extremely high inflation could also, again, undermine confidence in the currency
and the financial system. Mongolia‟s banking system remains fragile and a number of problems
including undercapitalization, high levels of non-performing loans, and systemic problems of poor
governance and risk management systems combined with poor oversight remain to be fully
addressed.
Finally, there are significant risks in the global environment. The external risk factors which could
set this downturn in motion again include continuing uncertainty in international financial and debt
markets, a severe slowdown in growth in developed countries, an external terms of trade shock
(commodity prices once again seem to be entering a super cycle and it is hard to ascertain the
degree to which commodity price increases over the past year are warranted by fundamentals or
not) and a domestic confidence shock to the banking sector that is currently weighed down by high
levels of non-performing loans on its books.
The World Bank team hopes it can be adjusted to better reflect the lessons from the previous boom
and bust.
Source: The World Bank
FITCH RAISES MONGOLIA‟S RATING TO B+
Mongolia‟s long-term debt ratings have been raised by Fitch Ratings after the nation‟s economy
returned to growth and its foreign-exchange reserves climbed to a record. Fitch revised the
country‟s long-term foreign- and local- currency rankings to B+ from B, reversing a January 2009
cut, and affirmed short-term ratings at B, it said in an e-mailed statement yesterday. The ratings
have a stable outlook, it said.
Growth in Mongolia‟s gross domestic product will be spurred by demand for its exports from China,
according to the credit assessor. “A solid growth outlook in Mongolia‟s key export market, China,
supports its economic prospects in 2011 and 2012,” the ratings company said in the statement. “A
generous and diversified endowment of natural resources supports long-term economic prospects.”
Fitch predicted Mongolia‟s economy will expand 7.5 percent in 2011 and 8 percent in 2012. Annual
output from the Oyu Tolgoi copper and gold mine may rise to USD3.5 billion by 2013, equal to more
than 90 percent of Mongolia‟s gross domestic product this year, based on current prices of the
metals, according to Fitch.
Mongolia‟s decision in September not to draw the final installment of a USD229-million loan from
the International Monetary Fund underscores the nation‟s economic recovery, Fitch said. Its foreign
reserves increased to USD1.7 billion on September30, from USD500 million at the end of March
2009, according to the statement. The currency gained 16 percent by the end of October from its
March 2009 low. “The key risk remains a return to unsustainable government spending growth,
which could squander this progress,” says the Fitch statement.
Source: Bloomberg
NO “CONFLICT OF INTEREST” IN TT CHOICE, PM WARNS
Prime Minister S.Batbold has instructed those preparing for selection of cooperation partners in
developing the Tavan Tolgoi coal deposit that the final choice should exclude companies with any

7. possible “conflict of interests”. He explained that this referred to companies or consortiums who
already own a special license for development of areas in Tavan Tolgoi. "Mongolia's position should
be clear. The interests of more than two million Mongols, and not just two, have to be met," he
said, and stressed the imperative need for the selection process “to be open and transparent,
allowing citizens access to information at every stage”. He also stressed the need to make the
bidders understand that Mongolia wants them not just to excavate the coal, but also to arrange for
its sale and, eventually, to construct a coking coal plant.
Source: Undesnii Shuudan
GOVERNMENT‟S PLANS ON TAVAN TOLGOI REMAIN UNCLEAR
The Government‟s plans for economic utilization of the Tavan Tolgoi deposit are not clear and
every new statement from Prime Mnister Su. Batbold seems to add to the confusion. He keeps
saying that the license over the deposit will remain with the Mongolian people, but hints that the
profit from the resource will go to others. These could include domestic enterprises, both small and
big, where politicians are involved. Surely, the Parliament resolution authorizing the government to
take decisions on Tavan Tolgoi was not intended to allow it to keep its plans and policy secret and
forever changing. It seems the Government is now ready to offer Tavan Tolgoi to whoever will
agree to pay an advance amount that will enable the Government to the promised MNT21,000 to
each citizen per month from January 1. For this, it may even agree to divide the deposit into five or
six separate sections with different operators, a concept that had been considered and rejected.
Source: Undesnii Shuudan
QUICK BUDGET REVISION EXPLAINED
Many people were surprised that the Government could revise the budget draft within 24 hours, but
the Chief of the Budget Policy Board of the Ministry of Finance, Mr. B.Batjargal, explained to media
that time was of the essence as the budget approval deadline is drawing near. One objection to the
original draft had been that specific and confirmed sources had not been mentioned for the
MNT805.2 billion shown for the income of the Human Development Fund. Explaining why the Fund
income the same after revision, Mr.B.Batjargal said the Ministry of Mineral Resources and Energy
and officials of Erdenes Mongol LLC have assured the Finance Ministry that Erdenes Mongol will
provide MNT420 billion of the MNT805.2 billion shown as income of the Fund. “We shall sign the
required documents soon” he said.
He also said that the proposal to raise import taxes on cars was not aimed solely at making money
but also to rationalize regulations. For example, at present there is just one rate of tax for all
trucks with more than 20 tons of carrying capacity. “But we have trucks with capacity up to even
100 tons and they cause much more damage to roads. And if you talk about people‟s hardship, they
will find out that buying new cars actually make more economic sense,” he said.
Source: Ardiin Erkh
MPP MPs WANT A DEVELOPMENT BUDGET
MPs of the erstwhile MPRP last week held their first group meeting under the new name of the
party, MPP. The discussion was focused on the draft budget for 2011 and the MPs wanted it to be
presented as a development budget for the country, implementing goals set out in the Action Plan
adopted when the Government was formed in 2008. Their specific demands were for wage revision,
more state recognition of women‟s achievements, and assistance to herders. There should be
enough fodder for livestock under any condition and MPs wanted allocation from the budget to buy
more 35-hp tractors and to install more irrigation facilities so that output can be increased.
Source: Zuunii Medee
RARE EARTHS DEVELOPMENT DISCUSSED
The National Development and Innovation Committee and GTZ, the German international
cooperation organization, last week organized a seminar at Ministry of Foreign Affairs to explore
the possibilities of developing rare earths based industries in Mongolia. The participants exchanged
views and information on cooperation with German industries, and with scientific and financial
organizations to produce final product and to export them. Presentations were made on
international rare earths demand and production, Mongolia‟s rare earths deposit reserves, current
geological research status, and foreign investment in the sector. Participants included
representatives of Parliament, the Ministry of Mineral Resources and Energy, the German Embassy,
universities, the Science Academy, FIFTA, and Mongolrostsvetmet LLC.
The seminar came at a time when President Ts. Elbegdorj was welcoming the entry of Japanese

8. companies into Mongolia's rare-earths market. He told the National Press Club in Tokyo, "Japanese
companies should be the first ones to enter the market, rather than only observing what other
countries will do." Mr. Elbegdorj added that the governments of both countries have agreed to do
their best to prepare the environment needed to enable Japanese firms to develop the minerals in
Mongolia.
Source: Mongolian National Mining Association, Nikkei.com
FOREIGN CONTROL OF OIL SECTOR AGAINST NATIONAL INTEREST
Mr. T. Namjim, Director of Mongolsekiyu, the company that has signed an agreement with two
Japanese companies, Marubeni and Toyo Engineering, to set up an oil refinery in Darkhan, said oil
has a strategic role in every country‟s economy and it is very important to make sure that
production and processing of oil in the country should remain as much as possible in the hands of
national companies. Foreign control of the sector will be against Mongolian national interest. Apart
from the fact that 90% of the money spent by Mongolian consumers to buy petrol will go to a foreign
company, national security will also be endangered. He felt steps should be taken early to declare
the Darkhan refinery project as one of national importance.
Mr. Namjim felt the current fuel consumption per year is about 850,000 tons but once mining
expands, industries come up and infrastructure is developed, this will reach more than 1.5 million
tons by 2015 and keep growing thereafter. The refinery should thus have a capacity to produce two
million tons per year. Construction work would begin next year. It will save the country MNT700
billion now spent on importing oil, and should recoup costs in four years.
Source: Onoodor
SPEAKER OPPOSES PROPOSAL TO RAISE REGISTRATION FEES
Several members of the Standing Committee on the Budget expressed at a meeting last week of the
committee their disapproval of the Government‟s proposal to increase fees for registering
documents, as also to raise property tax and import duties on cars. Mr. B. Choijilsuren and Mr. Sh.
Saikhansambuu, both of the MPP, said registration fees were getting to be as much as the tax
proper and this would only widen the rich-poor divide. Speaker D. Demberel is a member of the
committee and he also felt the government proposal would put pressure on citizens, particularly
those with low income. Since the documents, charges for which are sought to be raised, are needed
by everybody, Mr. Demberel felt “the increase would be wrong, as our primary duty is to see people
are not inconvenienced”.
Source: Undesnii Shuudan
TRADE UNION ISSUES 12-POINT CHARTER OF DEMAND
The Confederation of Trade Unions has issued a public statement jointly with public servants in the
health, transportation, telecommunication, and oil sectors. It said there was no response from
officials of the Ministry of Finance whom they had invited for the budget. The statement makes 12
demands, including total exclusion from the budget of the money to be spent by MPs in their
electoral districts, distribution of cash to only those who need assistance and support, drastic
reduction in the expenses of public officials, including a cut in the number of their foreign trips,
increasing minimum wages to MNT170,000, and further raising the wages of lower-level public
servants, beyond their 30% recent increase.
Source: Onoodor
PLAN FOR CAPABILTY-BASED VOCATIONAL TRAINING
The National Council of Vocational Education and Training met last week to approve the procedures
to elect members of provincial sub councils, and to identify measures to facilitate cooperation
among TVET, labor organizations, and NCVET‟s provincial, industrial and service sub councils. The
meeting also discussed suggestions to formulate a capability-based training system for vocational
education.
Source: Mongolian National Mining Association
CHINESE DOMINATE MEAT TRADE
Trucks full of meat from the provinces come daily to Khuchit Shonkhor market to be greeted by
waiting traders. Some of them buy for storage while others are daily retail sellers. Many of those
new among the traders are based in Narantuul-2, the new market that has come up next to Khuchit
Shonkhor. One of its attractions is that no charges have to be paid for the trade outside, so more
trucks are coming here.

9. No Chinese face is seen here but it is common knowledge that most of the traders driving expensive
cars work for traders from across the southern border. One trader from Arkhangai said his Chinese
buyers for three years have all gone and he, too, feels, the present Mongolian buyers actually are
employees or partners of these Chinese. The Chinese have enough capital to keep the meat in hold,
waiting patiently until spring to start selling when meat prices go up, making a handsome profit.
They are reported to hold storage places at several places, including near Sooton LLC and Tsaiz
market, and may even be exporting to Vietnam.
Mongolians are proud of their animal wealth but it seems it is Chinese traders who set the meat
price in local markets and export it, too. Their Mongolian associates come in handy in both.
Source: English.News.mn
ORGANIZATIONS AGREE ON HELPING BUSINESS REFORMS
The Foreign Investment and Foreign Trade Agency of Mongolia, The Mongolian Chamber of
Commerce and Industry, the Mongolian Stock Exchange, and the Mongolian Employers Federation
signed an agreement last week to cooperate in programs to help implement the Government's
avowed intention to make 2010 the Year of Business Environment Reforms.The
signatory organizations will take joint steps to make their activities more open to outsiders and
helpful to the private sector and entrepreneurs.
Source: Montsame
MONGOLIA THE „NEXT CHILE‟, IVANHOE‟S FRIEDLAND SAYS
Mongolia will be the next powerhouse in the global copper mining industry, surpassing even Chile in
the scale and efficiency of projects, according to Mr. Robert M. Friedland, founder and executive
chairman of Ivanhoe Mines Ltd. Mr. Friedland, whose company has been developing the Oyu Tolgoi
copper-gold mine in Mongolia for more than a decade, said that rapidly declining ore grades at
many of the world's existing copper mines make new projects in Mongolia particularly attractive.
Source: Metal Bulletin
PERU ASKS UN TO ASSESS ENVIRONMENTAL IMPACT OF COPPER PROJECT
Peru has asked a U.N. agency to evaluate the environmental impact of its Tia Maria mine, as
opponents worried about water supplies rallied to oppose the latest natural resource project
dogged by protests in the country. Mines and Energy minister Pedro Sanchez said the UNOPS
agency, which works on peace building and development issues, would improve the quality of
environmental planning and the evaluation of the project.
Peru has lured billions of dollars in foreign investment to the mining and oil sector, but more than a
hundred towns nationwide have voiced opposition to new projects. Violence at times has broken
out and last year President Alan Garcia was forced to fire his entire cabinet after three dozen
people died in the Amazon in a clash over a law to encourage oil projects on tribal lands. It was the
worst domestic crisis of his term.
After a previous round of strident protests by farmers earlier this year, Lima-based Southern Copper
said it would build a desalination plant fed by seawater to appease planters who said the Tia Maria
project would have taken their supplies of freshwater. Since then, at least two local groups have
taken different positions about the project -- with one saying the mine could be built if it is
carefully planned and another saying it would cause pollution.
Source: www.miningweekly.com
MONGOLIAN RESOURCES LURE JAPAN, BUT OTHERS, TOO, ARE ENAMORED
Japan is making a concerted effort to strengthen its relationship with Mongolia, one of the world's
richest stores of minerals. At summit talks last week, visiting President Ts. Elbegdorj and Prime
Minister Naoto Kan agreed to begin negotiations as soon as possible to conclude a bilateral
economic partnership agreement and accelerate joint development of uranium and rare earths.
However, China and other leading resource developers are also paying close attention to Mongolia,
threatening Japan's hopes to take advantage of the abundant reserves in the central Asian nation.
Mongolia is known to have vast undeveloped resources. It is thought to possess the world's largest
unproven uranium reserve, as well as high-quality coal and rare earths deposits, but most remain
untouched. Mongolia's past communist regime not only delayed development of its railway and road
infrastructure, it did not allow foreign companies to develop the country's natural resources. The
country was democratized in the 1990s. As a result, there have not even been surveys of the
mineral resources in 70 percent of the nation's land, according to a leading Japanese trading
company.

10. Four leading Japanese trading companies--Itochu Corp., Sumitomo Corp., Marubeni Corp. and Sojitz
Corp.--are planning to jointly participate in international bidding for the Tavan Tolgoi coalfield.
With an estimated reserve of more than 6 billion tons, it is one of the largest in the world. Several
other large international companies are expected to participate in the bidding planned to be held
this year but the group of Japanese trading firms believes Mr. Elbegdorj's stance of treating Japan
as "the third-closest nation to Mongolia" will be a tailwind for it.
Read more…
Last year, Mitsubishi Corp. began exploration of a uranium mine with the French nuclear power
group Areva. Japan Oil, Gas and Metals National Corporation (JOGMEC) reached an agreement in
July with the Mongolian government to jointly explore deposits of rare metals.
The Mongolian government's affinity for Japan comes from wariness of China's military buildup, as
Mongolia is sandwiched by China and Russia. The country also appears to be grateful to Japan for
supporting Mongolia financially during the economic turmoil that ensued after the fall of the former
Soviet Union. At the same time, the Mongolian government is seeking Japan's cooperation to
develop its railways, roads and industrial complex. However, if Japan's rival countries propose
better deals on infrastructure, it is "still possible the Japanese trading firms will be tripped up",
according to a source close to the trading companies.
China seems to be an especially strong rival for Japan, as the country is cash-rich and has strong
purchasing power. Taking advantage of its geographical location next to Mongolia, China will also
be able to expand its profit margin by cutting the cost of transporting mined resources.
Source: Yomiuri Shimbun
CHINA‟S TWILIGHT ECONOMY BOOSTS INFLATION
Beijing has lambasted the US for its decision to launch another USD600 billion in monetary easing,
fearing that this may feed the flood of money rushing into mainland China from overseas.
But while capital inflows are a problem for Beijing, there should be no doubt that the country‟s
swelling money supply and resurgent inflation are primarily “Made in China”.
Bank lending – which ballooned to a record Rmb9,600 billion (USD1,445 billion) in 2009 as China
rushed to reflate its economy after the global financial crisis – is looking increasingly likely to break
through the government‟s solemnly decreed 2010 target of Rmb7,500 billion, after banks lent an
official Rmb6,900 billion in the first 10 months of 2010.
But more worrying than these official numbers are the inflationary pressures springing from a
subterranean world of informal finance. Although the size of China‟s underground financial system
is uncertain, it is unlikely to be modest. The system includes off-balance-sheet lending by state
banks, the funds under management by “private” funds and the assets of a booming multitude of
unregistered banks and loan sharks.
China Confidential research suggests that total assets under management by the almost unregulated
“private” funds industry – which is centered in Shanghai and typically involves “star” managers
investing funds for wealthy individuals – may total up to Rmb1,000 billion. The off-balance-sheet
lending by state banks this year was said to have reached at least Rmb2,000 billion by the time the
China Banking Regulatory Commission announced a clampdown.
But this clampdown seems to have been mild. According to figures by the Use-Trust, a trust industry
consultancy, the volume of bank-trust lending conducted off the balance sheets of banks totaled
Rmb2,005.26 billion in the third quarter of this year, up from Rmb1,928.87 billion in the second
quarter. In October, total bank-trust products sold amounted to Rmb385.22 billion, a slowdown
from prevailing monthly levels but still significant.
Read more…
Lastly, according to grassroots research in several provinces, it appears likely that underground
lenders have lent strongly during this year as savings exited formal bank deposits, where they
earned negative real rates of interest, and were placed with underground lenders offering annual
interest rates set at anywhere from 12-120 per cent. Total lending from such unregulated
institutions may reach about Rmb4,000 billion this year.
Thus, though there is likely to be some overlap between the assets of “private funds”, lending from
underground banks and the off-balance-sheet loans of state banks, the total assets contained within
China‟s twilight economy may well be in excess of Rmb6,000 billion. If this number is added to the
2010 official lending target of Rmb7,500 billion, then it becomes clear that China‟s 2009 record
lending splurge was no “one-off”.
It is the pressure caused by such ballooning money supply, coupled with various structural
influences inherent in the take-off of China‟s rural economy, that are the prime causes of inflation,
which in October rose 4.4 per cent year on year. Though Beijing may find it politically expedient to

11. shift some of the blame for its predicament on to the US, it is the homegrown nature of inflation
that makes it so troublesome an issue for Beijing.
China knows that it cannot bring discipline to its huge, unregulated underground economy without
sacrificing growth. Yet unless it grapples with the root causes of money supply, it may fail to tame
inflation. With food prices rising an official 10.1 per cent, almost certainly an underestimate, year
on year in October, the rising cost of living is inflaming public passions.
Facing so critical a challenge, it seems likely that Beijing may respond with many of the weapons in
its administrative arsenal. It could raise bank reserve requirements again, impose more controls on
prices, release reserves of key farm commodities, strengthen barriers to capital inflows and try to
bring as much of the underground financial system as possible into the regulatory fold. It may also
decide to raise interest rates. It may well be a turbulent few months for investors amid signs of
slowing growth.
Source: The Financial Times
POLITICS
DP WILL NOT QUIT COALITION, ASSERTS PARTY CHIEF
Addressing the meeting of the National Consultative Committee of the DP that concluded on
November 19, the party Chairman, First Deputy Premier N.Altankhuyag strongly repudiated all
suggestions that the party come out of the coalition, calling them “naïve”. He said the country‟s
interests come first and collaboration in governance was more important now than being in the
opposition for its own sake. He asserted that the DP was not overshadowed by the MPP in the
coalition Government and “I, Chairman of the DP, am not in the pocket of the Chairman of the
MPP”. Such allegations are “far from the truth and constitute calumny”, he said.He felt the DP and
the MPP have equal chances in the next election period. Indeed, opinion polls put DP 3-5
percentage points ahead of the MPP. Mr. Altankhuyag stressed that this indicates popular support
for the DP continuing in the coalition.
Several members were unimpressed by his speech and voiced strong criticism of the party‟s
leadership. Baabar found the Chairman‟s report one-sided, with no self-criticism, and unduly harsh
on all opposition. Others like Ms.S. Odontuya, Mr. S.Erdene and Mr. Z.Enkhbold all felt the address
did not present an objective picture of the present situation and felt it strange that “a party leader
chooses governance over the needs of the party”.
Source: Ardiin Erkh
GOLDMAN SACHS REPORTED TO HAVE SENT LEGAL NOTICE TO GOVERNMENT
A law firm representing Goldman Sachs is believed to have sent identical letters to the President,
the Parliament Speaker, the Prime Minister, The Minister of Justice and Internal Affairs, the
Minister of Minerals and Energy, and the Head of the Cabinet of Secretariat late last month. The
letter was in the form of a legal notice, warning the Government that the globally reputable
investment banking and securities company will go for international arbitration if no satisfactory
agreement was reached on the Olon Ovoot gold deposit issue. The letter gave the Government until
November 22 to explain its final decision.
That date is gone and we do not know what the Government has said. It has not also formally
admitted to or denied receiving the letter. The people have a right to know why there should be
more than one instance in recent years when our government has to defend itself at international
tribunals at enormous expense.
Source: Udriin Sonin
DEMOCRACY INCOMPLETE WITHOUT ECONOMIC FREEDOM, SAYS FIRST DEPUTY PM
First Deputy Prime Minister and Chairman of the Democratic Party, Mr. N. Altankhuyag, has told his
party‟s national council that Mongolia‟s democratic revolution, which also meant a transition to a
free economy, would be incomplete if it did not lead all the way to an economic revolution. Being
in power or out of it, he said, was not important, “as long as people get a fair and equal
distribution of the wealth from their underground natural resources, enjoy equality before law, see
a change in the vertical structure of authority, watch elimination of poverty, and live under
transparent governance”. Economic independence can be guaranteed only if the nation‟s human
resources are developed to the full, he said adding that the coalition government was working hard
to ensure this.
Source: Udriin Sonin

12. CHILDREN‟S RIGHTS CONTINUE TO BE VIOLATED
Despite the presence of many governmental and non governmental organizations that work for
children and receive substantial amounts of money, the status of children‟s rights and the condition
of many children continue to be alarming. Sexual abuse of minor girls is on the rise and a survey by
a children‟s rights protection organization reveals that one child in 1,000 lives on the streets, one in
750 has links to crime, one in 500 lives in a care center, and one in 26 has to work for a living,
which is against the law.
Domestic violence has not been included in the survey but many parents and guardians are not
mindful of their duty and responsibility. The trauma of sexual abuse lingers without coordinated
counseling from police, social workers and parents. Children‟s rights organizations, teachers,
parents and media should come together to educate children about risks and to take preventive
measures. Laws need to be made stricter, too.
Source: Undeshnii Shuudan
TELE-MEETING DISCUSSES CANADIAN HELP IN CIVIL SERVICE REFORM
Following the Memorandum of Understanding signed during the visit of Prime Minister S.Batbold to
Canada, calling for Canadian cooperation in reforming the civil service in Mongolia, a video tele-
conference was held last week at which members of the Canadian House of Commons Standing
Committee on Foreign Affairs and International Development exchanged views with members of the
Civil Service Council of Mongolia. Statements from Minister of Minerals and Energy D. Zorigt and the
Chairman of the Mongolian Civil Service Council, Mr. D. Zumberellkham, began the meeting, and
the talks ended with identification of possible programs to be supported by the Canadian Executive
Service Organization, and the Center for Trade Policy and Law.
Source: Montsame
GOYO APPAREL NAMED BEST EXPORT PRODUCT
The Mongolian Chamber of Commerce and Industry recently organized Mongolia‟s Best 99, an
exhibition to identify exporters who best popularize Mongolia in the international market. Goyo‟s
cashmere apparel collection was chosen “the best export product”.
Source: Udriin Sonin
POTHOLES ON CHINA‟S ROAD TO GLOBAL DOMINANCE
China‟s rise often seems so inevitable it is easy to overlook the obstacles in its way. The big short-
term risk is from asset bubbles. The monetary stimulus of the past two years, combined with rising
wages, has left China vulnerable to a bout of inflation – or worse. Given high savings levels and a
lack of investment options, today‟s negative real interest rates create a threat of speculative
excesses by domestic investors. Property is at particular risk but in recent months there have been
big jumps in the prices of Chinese art, medicinal herbs and garlic.
Securing energy supplies also poses huge challenges. At present, fewer than 5 per cent own a car. If
ownership approaches developed-country levels – about 75 per cent in the US, for example – oil
imports even greater than the 50 per cent required today will be needed. Then there is the
question of how to grow in an environmentally sustainable fashion. Pollution is already a main cause
of unrest. To power its factories and cities, China will remain dependent on its large deposits of
coal, one of the dirtiest forms of energy, for years.
Economists also worry that China, still moderately poor in per capita terms, will grow old before it
grows rich. India, with its younger population, is said to have a big demographic advantage. With a
per capita income less than one-third of China‟s, however, it has much ground to make up.
Ramachandra Guha, an Indian historian, says his country must improve its education system and
create millions of jobs. Those “keen for India to take its place at the high table tend to be in Delhi
and Mumbai”, he says, contrasting the cities‟ relative wealth with the poverty, violence and
inadequate infrastructure of rural areas. “This growth story is highly selective.”
Read more…
For China, the biggest long-term problem remains the political system. While the Communist party
has confounded expectations with its resilience in the past two decades, there are few one-party
states among the world‟s richest nations. India, by contrast, is at least a democracy. Beijing‟s
senior leaders today say openly that the demands of a modern economy will require political
reform. A gradual shift to a more plural system is a possibility; a wrenching period of instability
cannot be ruled out.
Source: The Financial Time

13. WORLD‟S CENTER OF GRAVITY IS SHIFTING EASTWARDS
How does one calibrate the momentous shift of economic and geopolitical clout towards the east?
Symbolized by the rise of China, it is part of a broader movement of capital, innovation and
economic muscle to Asia that is, in many people‟s reckoning, the most important rebalancing of
global wealth and power since America emerged as a new force at the end of the 19th century.
Does one find this transition in the remarkable growth rates of China, India and Indonesia; in the
western levels of income in Japan, South Korea and Singapore; or in the mountains of foreign
currency reserves piled up in the vaults of Asian central banks? Should one look for it, instead, in
the innards of the Tianhe-1A, the world‟s fastest supercomputer, built by scientists not from
America or Europe but from China? Or might it lurk in the pitying remark of a senior Indian diplomat
who, speaking before President Barack Obama‟s visit to India this month, said New Delhi needed to
spend billions on American aircraft and equipment “to help them out with all that unemployment”?
Naturally, it is to be found in all these things and a myriad of other data points, financial league
tables and attitudinal changes besides. From sales of vehicles in China, which surpassed those in
the US last year, to the rising global presence of companies such as Reliance of India, Samsung from
South Korea and numerous Chinese resources groups, there is a palpable sense that the world‟s
centre of gravity is shifting eastwards.
Though these shifts have been laid bare by the 2008 collapse of Lehman Brothers, the US
investment bank, they started at least 30 years ago with the initial success of China‟s economic
reforms, and before that with Japan‟s miraculous industrialisation. Yet even now, when western
powers are staring with alarm in the mirror of their own indebtedness and military weakness, the
magnitude of this move eastwards may not yet have fully hit home.
Read more…
“Some of them are just thinking this is a bad fiscal and trade-balance crisis, which surely will shake
itself out in five years‟ time and we‟ll be back to normal,” says Paul Kennedy, a Yale historian who
has long forecast the rise of Asia. “I just don‟t think that‟s right. The dollar‟s role in the world is
coming to a rendering of account, there‟s a shift of naval power to Asia ... and [Asian states] are
pretty much convinced that the US is on the way out of Asia,” he says. “The world‟s weights and
balances are shifting before our eyes.”
Zbigniew Brzezinski, US national security adviser when Jimmy Carter was President, says: “We are
dealing with something qualitatively different from what has gone before. It is a general awakening
of the far east.”
Before examining the economic, geopolitical and even psychological changes taking place, there
are important caveats. First, the rise of China and, behind it, that of India, is not preordained.
Enormous economic, political and environmental pressures at the heart of both national
experiments could yet halt their progress. Breathless predictions in the 1980s that Japan was
destined to become the world‟s largest economy are a cautionary tale against straight-line
projections.
Second, it is too easy to conflate the rise of China with the rise of Asia. In one sense, the economic
upsurge of first Japan, then the Asian tigers, and now China and India is part of a tilt back to a
region that accounted for half of world output in the 18th century. Lord Patten, former British
governor of Hong Kong, argues that we are witnessing the restoration of a more normal equilibrium.
But others counter that Asia is a region defined by the west and that, in the words of Amartya Sen,
Nobel Prize-winning economist, “the way you choose to partition the world makes a difference to
the perception of what‟s going on”. Of economic progress in Asia, he says: “Am I excited about it,
do I think it is a gigantic change? No. That fact, that India and China produced 50 per cent of global
GDP in the 18th century, is a fact. But I am not sure it is so interesting. They are big countries.”
The idea of a shift also masks the tensions that are accompanying the emergence of China as a
regional colossus. Many Asian countries are fearful of China‟s rise even though their economies are
riding on its back.
Third, these are relative shifts. Britain grew richer throughout most of the 20th century even as its
place in the world shrank. The rise of Asia does not necessarily threaten the comfort or security of
people in the west, though the narrative of a globalization in which everybody wins has taken some
pretty hard knocks.
Chris Gibson-Smith, chairman of the London Stock Exchange, has no time for talk of a struggle for
power. By the time China‟s economy is as big as that of the US and Europe in dollar terms, he
calculates, the global economy will have grown from $58,000 bn today to $150,000 bn. “And if you
can‟t find your place in a $150,000 bn economy, well, shame on you.”
Fourth, and related: it would be foolish to write off the US. America still has the best technology,
the biggest middle class, the largest and most sophisticated armed forces, the most creative

14. companies and many of the best universities. Its unipolar moment may be over but it could remain
the most important power for decades to come. “It‟s not that China has a big hammer and hits
America on the head and it disappears from the world,” says Mr. Brzezinski. “Obviously, there‟s
going to be some reshuffling of advantages. But it depends on what we do in America.”
That said, few would deny the relative shift to Asia (and to other parts of the developing world,
such as Brazil). Jonathan Garner, Asian and emerging markets strategist at Morgan Stanley, calls it
the “third transition”. Next year, China is set to overtake the US as the biggest producer of
manufactured goods by value – only the third change in global manufacturing leadership in 250
years. In 1990, says Mr. Garner, China and other emerging markets accounted for just 14 per cent
of manufacturing value added. Now, that number is 37 per cent.
This change is mirrored elsewhere. In 1973, Japan, China and India together accounted for 15 per
cent of global gross domestic product in purchasing power parity terms. This year, the three
countries will have reached 24 per cent, notwithstanding Japan‟s relative decline. Asia as a whole
accounts for around one-third.
Anthony Bolton, the legendary Fidelity stock-picker who deferred his retirement in order to invest
in China, talks about a “secular shift east”. Not only are four of the world‟s top 10 banks by market
capitalization now Chinese, he says, but western multinationals are increasingly tilting their
strategies towards Asia.
In the five years to 2009, for example, emerging market revenues at Procter & Gamble, the US
consumer goods company, rose from 23 per cent of the total to 32 per cent. In the first nine months
of this year, Citigroup reported $3.5 bn of profit in Asia out of roughly $9 bn globally. Asian
multinationals such as Lenovo, the Chinese company that bought IBM‟s personal computing
business, and India‟s Tata Motors, which bought Jaguar and Land Rover, are just two pioneers in
what is expected to be a wave of outward Asian investment.
Asia‟s economic progress underpins growing geopolitical clout. “The US military is getting obsessed
with China,” says Prof Kennedy, adding that the Chinese navy is doubling in size every seven years,
at a time when Washington is considering cutting defense budgets. Beijing has become more
assertive in pressing its claims over disputed territory, catalyzing an arms build-up. India already
has one aircraft carrier and is procuring two more. Vietnam, South Korea and Australia are building
up their navies. Even Japan, constrained by a pacifist constitution but nervous of China‟s
capabilities, is bigger navally than the UK, France and Italy combined.
Beijing, for its part, has shown it can shoot down satellites and has tested long-range ballistic
missiles for potential use against aircraft carriers within a 1,000-mile radius. Lord Patten says China
may be overplaying its hand. “I‟m not sure China is handling this all that well. „Hide your
brightness, bide your time‟ was much better advice than „throw your weight around‟,” he says,
quoting the entreaty of the late Deng Xiaoping, the Chinese leader who put his country on the road
to economic might.
Diplomacy in Asia is far from united. But over all, the region has carved out a much bigger
international role. Shortly before the collapse of Lehman, many leaders of the Group of Seven
industrial nations openly scoffed at the idea of enlarging their club. Now, China, India, South Korea,
Indonesia and Australia have claimed a seat at global summits and few imagine they will be easily
dislodged.
Since the financial crisis, Beijing has taken to lecturing the US about its loose fiscal and monetary
policy and has floated the idea of an alternative to the dollar as a global reserve currency. Newly
emerging Asian powers have challenged accepted (western) wisdom on everything from the make-
up of the International Monetary Fund to the best way of conducting aid programs for Africa.
Patrick Smith, an author on Asian affairs, argues that along with the region‟s material progress will
come something much more profound: self-confidence, and an overcoming of historical resentment
born of the region‟s colonial experience. A new way of looking at the world, when it fully emerges,
will affect how we think of everything from the role of the individual in society to the meaning of
economic progress and the history of the novel, he says.
Asia‟s coming contribution to the global debate should not be confused with any glib version of
“Asian values”, a supposed set of common ideas trumpeted by authoritarian governments to justify
themselves, Mr Smith argues. But, he says, it would be short-sighted to imagine that the only
consequence of Asia‟s historic re-emergence will be a change in the “Made in” labels on the
products we consume. “I don‟t think that Asia‟s rise or advance, its material success, means that
anybody has to lose out,” he adds. “But if the 19th and 20th centuries belonged to the west, the
21st century will be somebody else‟s.”
Source: The Financial Times

15. ANNOUNCEMENTS
EISENHOWER FELLOWSHIPS 2011 NORTHEAST ASIA REGIONAL PROGRAM
The Mongolia Nominating Committee of the Eisenhower Fellowships, c/o USAID/Mongolia, is
accepting applications for the 2011 Northeast Asia Regional Program (NARP), to be held in the fall
of 2011. The program will include China, China (Taiwan), Japan, Korea, and Mongolia. It will build
on the momentum created in these countries, and the EF network in the region as a whole, as a
result of the 2006 NARP. Given the growing importance of these countries to each other and
continuing importance to the United States, this program comes at an ideal time. It will enhance
existing relationships and foster new ones among leaders in the region which will influence the
future of Northeast Asia and its cooperation with the United States.
NARP Fellows will pursue rigorous, individually-tailored programs in the United States that will
provide them with the opportunity to meet with leaders in their fields, attend pertinent
conferences, and participate in relevant site visits.
NARP Fellows will be selected based on their leadership achievements to date, potential for future
impact, and plans for tangible outcomes. The NARP will consist of Fellows diversified by gender
and profession from the public sector, private sector, and civil society.
Those who are interested in applying for the Program, please carefully review the application
criteria and background materials, and send your application in English and in electronic form to
hmendsaihan@usaid.gov. The submission deadline is 5:00 PM, Friday, November 26, 2010. Please
find the relevant documents on 2011 Northeast Asia Regional Program, Criteria for Eisenhower
Fellows, Information for 2011 NARP Eisenhower Fellowship Applicants, and the 2011 NARP
Eisenhower Fellowships Application from http://mongolia.usembassy.gov/eisenhower2011.html.
______________________________________
ACMS RESEARCH FELLOWSHIPS 2011
The American Center for Mongolian Studies (ACMS) is pleased to announce the fourth year of the
ACMS Research Fellowship Program funded by the Luce Foundation. The program supports in-depth
research in Mongolia by scholars whose projects will enhance knowledge of Mongolia and the
Mongols within relevant academic disciplines or fields of study. Projects that link research
conducted in Mongolia to research in other parts of Eurasia or across academic fields are especially
encouraged. Up to three Fellowship awards will be made, for a maximum award of USD27,000 per
award (depending on the time spent conducting research in the region). Fellows will also organize
an academic conference in Mongolia that brings together international, regional and local scholars
and students. Research work under this program must begin between September 2011 and March
2012, and last for a continuous 6-12 months. Fellowship recipients must be based in Mongolia for
the duration of their fellowship, but research travel in the broader region is encouraged.
The deadline for receiving applications is February 15, 2011. For further details visit:
www.mongoliacenter.org/doctorate.
___________________________________________
“BSPOT" on B-TV
BTV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every
evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
___________________________________________
“MM TODAY” on MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on “MM Today”. This English news program is aired every Friday for 10 minutes and is
scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‟s BCM
NewsWire.
___________________________________________
NEW POSTINGS ON BCM WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIAN BUSINESS NEWS'
The speaker presentations which were presented at the Mining Investment Summit 2010 in Hong
Kong, October 14, 2010, are now posted on BCM's website (www.bcmongolia.org) in the "Resource,
Presentations " section for your review.
There are 17 new presentations made by Mongolian and foreign officials to the more than 200
attendees at the highly successful conference.

16. We are now posting some news stories and analyses relevant to Mongolia on the BCM website's
„Mongolian Business News‟ as they come, instead of waiting until Friday to put them all together in
the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will
incorporate items that are already on the home page, so that it presents a consolidated account of
the week‟s events.
SPONSORS
ECONOMIC INDICATORS

17. 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]
Oct 31, 2010 * 11.3% [source: NSOM]
*Year-over-year (y-o-y)
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]
CURRENCY RATES – November 24, 2010
Currency name Currency Rate
US dollars USD 1,258.38
Euro EUR 1,708.50
Japanese yen JPY 15.04
British pound GBP 2,005.10

18. Hong Kong dollar HKD 162.20
Chinese yuan CNY 189.32
Russian ruble RUB 40.26
South Korean won KRW 1.07
Disclaimer: Except for reporting on BCM‟s activities, all information in the BCM NewsWire is
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