1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 103, January 29 2010
NEWS HIGHLIGHTS:
Business:
Khan Resources strikes peace, signs MoU with MonAtom;
SouthGobi raises USD373 million in Hong Kong share sale;
Red Hill Energy and Prophecy Resource announce business combination;
SouthGobi targets becoming largest coal producer in Mongolia;
MobiCom selects Alcatel-Lucent to deploy network in Mongolia;
Banks to work for “green” business;
Incofin lends USD3 million to XacBank for microfinance;
Khan Bank sets up business center to help SMEs;
Team names six best Mongolian CEOs;
Nominations invited for this year’s Silk Road awards;
Joint campaign launched for herder relief;
Rusal’s shares sink 11% as trading begins;
Peabody Energy eyes 'red hot' Asian coal demand;
Bucyrus acquires Terex Mining.
Economy:
Central Bank chief and his deputies resign;
MPs express concern about proposed privatization regulations;
Poverty rate has risen since 2008, says report on MDGs;
New policy aims to reform overall social welfare program;
“Unique” economic forum early next month to discuss development issues;
Private sector wants more understanding from State organizations;
EBRD says Mongolia will grow 7.2 percent in 2010;
PM urges actual business reforms, not just mouthing a slogan;
S.Korea, Mongolia sign deal on mine reclamation, environment;
Minister leads Mongolian team to meat export fair in China;
World Bank report warns of growth wilting if stimulus fades;
Managing post-crisis growth is complicated: IMF;
No “overnight recovery”, the poor will suffer, says World Bank chief economist;
President leads Mongolian team to Davos;
Experts at Davos see long, slow global recovery ahead;
Davos to discuss problems piling up for post-crisis world;
European Commission begins antitrust probe of Rio-BHP iron-ore JV;
China’s sharp rebuke to USA on calls for a probe into Google attacks;
S&P puts negative outlook on Japan;
Beijing tightens reins on new loans;
China economist sees 2010 GDP growth at 9.5 percent.
Politics:
Probe group hears Enkhbayar’s account of events during Emergency;
Russian President’s special envoy pays a day’s visit;
Mongolian MCF head calls rejection of MCC grant a force majeure;
Law on right to information “not necessary”, feels head of drafting group;
International body offers programs for Mongolian MPs;
U.S.-Mongolian educational exchanges to be expanded;
“Suitcase” companies flourishing, regrets Consul at Ereen;
2. 60 North Koreans working here;
China, Mongolia claim same heritage objects as their own;
Special license to sell cigarettes;
Mongolian antelope invasion causes alarm in Russia;
“Avatar” becomes highest-grossing film ever.
*Click on titles above to link to articles.
BCM 2010 MEMBERSHIP DRIVE CONCLUDES; A RESOUNDING SUCCESS
BCM’s 2010 Membership Drive concluded today, after reaching a 40% increase over the 2009
strength. BCM now has 119 members, as against 84 a year ago. Almost all the 2009 members have
remained with us and several new members have joined, eight of them since Monday’s monthly
meeting. For those who have not renewed, we will be pleased to welcome you back in the coming
months if you change your mind.
RECAP OF MONTHLY MEETING
The first monthly meeting of the new year on January 25 was a full house with 82 in attendance.
Membership is also flourishing, standing presently at 111, a 30% increase over last January, raising
hopes it should reach the year’s target of 150 in the months ahead. As Executive Director Jim
Dwyer pointed out, this indicated a faith not just in BCM and what it does, but also in Mongolia and
what it is set to achieve.
The four new members since the last meeting are BD Sec, brokers and underwriters; Chandman Tal,
construction, drilling and exploration; Nomin Insurance; and SM Container Bag, manufacturers of
industrial bags.
U.S. Ambassador Jonathan Addleton, who had served as the USAID Director here not so long ago –-
―Great to be back,‖ he said -- noted that while ―the challenges facing resurgent economies with
small populations are huge‖, he found many ―positive indications‖ in the business environment in
Mongolia to be optimistic. U.S. help has been increasing, with the 2009 amount being the largest in
any single year so far, and the USD385 million from the MCC, to be spent over just five years, was
way ahead of the about USD200 million in total aid since 1991. The U.S. Embassy now has three old
Mongolia hands, including himself, and Mr. Addleton was confident of steady progress in the work
of building a firm platform to develop entrepreneurship here.
The next speaker was also one who has come back. Mr. B. Bold has returned home to take over as
CEO of the Newcom Group after 13 years of working in senior positions in investment banking and
financial institutions abroad. He outlined the ways in which Newcom planned to expand and
diversify in the coming years. He noted they will be helped along by other professionally-qualified
Mongolians coming back from foreign countries -- whom Mr. Bold has named ―re-pats‖ -- a
development BCM Chairman Laurenz Melchers found to be of significance, as indicating the
changing perceptions of Mongolia’s economic future.
Mr. Mandar Jayawant, Chairman of BCM’s Capital Markets Working Group, gave an update of their
work. This focused on three major areas. The first was to provide assistance to the Financial
Regulatory Committee and the group was now clear about what the FRC would need to do improve
its oversight of the Mongolian Stock Exchange (MSE) and non-banking financial institutions. The
second was to help the MSE grow and the group was finalizing its draft recommendations. GTZ was
expected to play an important role in funding international experts’ advisory input to enhance the
management and technical capabilities of the MSE and to enable it to be privatized. The third was
to help the National Development and Innovation Committee (NDIC) in investment planning,
especially in the present capital markets downturn.
Mr. Barry Evans, head of the BCM Food & Beverage Working Group, gave what he called his
―monthly pitch‖, and described a few blatant anomalies in the VAT regulations that make things
difficult for businesses.
The NDIC reports directly to the Prime Minister and thus has the standing of a Ministry. Its
Chairman, Dr. Ch. Khashchuluun, said its recommendations on a 5-year program for the national
3. economy were almost ready to be submitted. These included reforms in the business environment
to help achieve more competitiveness. Infrastructure development was hamstrung by the
difficulties in raising the huge sums needed, and so was setting up heavy industry units, even
though the availability of locally produced raw material was a help.
There still was no national consensus on finally setting up the Development Bank of Mongolia (DBM),
but the NDIC has completed its assignment of preparing a blueprint for this institution, after
detailed and extensive consultation with the Japanese international development agency, JICA.
The Government was willing to be a minority shareholder to make the work of the DBM transparent
and efficient. A lively question and answer session concluded this presentation and the business
part of the meeting.
For a fuller account of the meeting, please visit BCM website, News - Monthly Meeting Recap.
BUSINESS
KHAN RESOURCES STRIKES PEACE, SIGNS MoU WITH MONATOM
Shares in Khan Resources surged 14.7% in Toronto on Monday following the announcement that the
company has signed a non-binding memorandum of understanding (MoU) with MonAtom, Mongolia's
State-owned uranium development company, on setting up a joint venture company to own and
develop Khan's uranium project in the country.
Khan's main asset is a 58% interest in Central Asian Uranium Company (CAUC), which holds a mining
license on the Dornod uranium project in Mongolia. Khan also owns 100% of an adjacent license.
Both MonAtom and a subsidiary of Russia's Atomredmetzoloto (ARMZ), which has launched a hostile
bid for Khan, own 21% each of CAUC. The Dornod project has faced uncertainty after Mongolia
passed a new nuclear energy law, and with Khan fending off ARMZ's takeover campaign.
Khan said it believes the deal with MonAtom will enable it to fulfill the requirements of the new
law in Mongolia and provide certainty for the project, while still retaining value for its own
shareholders. The new nuclear energy legislation gives the Government the right to take
ownership, without payment, of at least 51% of a project if uranium resources were determined
through exploration with State funding.
Under the terms of the MoU, MonAtom would buy a 51% interest in both CAUC and Khan Mongolia,
in accordance with the new nuclear energy law, but MonAtom would then transfer to Khan part of
its interest in the joint venture in exchange for shares representing 17% of Khan, and a warrant to
buy another 2.9%. At the end of the day, Khan would own 65% of the new JV company, which in
turn will own 74% of CAUC and 100% of Khan Mongolia.
Read more…
"With this MoU, we think we have achieved the right balance,‖ said Khan CEO Martin Quick. ―It
gives us a stable ownership and regulatory platform upon which we can obtain the necessary
financing to complete the project.‖ The parties aim to have a definitive JV agreement signed by
the end of March.
―Khan's board of directors believes that the transactions contemplated by the MoU will, when
completed, deliver far greater value to Khan's shareholders than the price per share offered by
ARMZ in its hostile bid,‖ the firm said.
Khan said that under the agreement with MonAtom, applications to reregister the existing CAUC
mining license and Khan Mongolia exploration license would be approved and new licenses issued
within seven days of signing the MoU. The company's exploration license would also be converted
into a mining license within 45 days of signing the MoU and Khan Mongolia will be appointed as the
operator of the Dornod project.
The company said the JV partners will aim to negotiate and finalize an investment agreement with
the Government of Mongolia within six months after signing a definitive JV agreement. The
investment agreement will likely be modeled on the deal secured last year by Rio Tinto and Ivanhoe
Mines for their Oyu Tolgoi copper/gold project.
Source: www.miningweekly.com
SOUTHGOBI RAISES USD373 MILLION IN HONG KONG SHARE SALE
Mongolia-based coal miner SouthGobi Energy Resources will debut at the Hong Kong Stock Exchange
on January 29 after raising USD373 million from a share sale that was very well received. While it
has all its mining operations in Mongolia, the company is really Canadian and it is already listed in
Toronto. This means that technically its share sale was not an IPO, although the marketing and
structure of the deal was almost the same as if it had been.
4. One difference was that the deal was marketed against a live share price in Toronto, although
sources said that the stock is so illiquid that most investors paid little attention to it and chose to
submit their orders at an absolute price anyway. In fact, most investors put their orders at strike,
which meant there was hardly any price sensitivity in the deal. Instead of setting a price range for
the share offer, SouthGobi also offered its shares at a maximum price of CAD17 apiece. At the
beginning of the bookbuilding this translated into HKD133.50 per share, but because of a weakening
of the CAD during the marketing period, the price in HKD came down slightly.
Ten percent of the deal was allocated to Canadian investors - down from 15% initially indicated --
and of the remaining 90%, Hong Kong retail investors ended up with 30% after they subscribed to
more than 20 times the shares initially earmarked for them, triggering an increase of the retail
tranche from the initial 10%. The institutional offering was said to have been more than 10 times
covered, although no specific numbers were released.
SouthGobi sold 16.8% of its enlarged share capital, or 22.95 million new shares.
Source: Haymarket Media
RED HILL ENERGY AND PROPHECY RESOURCE ANNOUNCE BUSINESS COMBINATION
Red Hill Energy Ltd. and Prophecy Resource Corp. have announced that their respective Boards of
Directors have unanimously agreed to combine the companies through an all-share transaction. Red
Hill has the right, prior to closing of the proposed transaction, to transfer to a newly formed
subsidiary all of Red Hill's non-Mongolian assets.
Red Hill controls 100% interests in the Ulaan Ovoo Coal Project located within 10 km of the Russian
border in northern Mongolia and the Chandgana Tal and Chandgana Khavtai Coal Projects,
contiguous to Vale's largest Mongolian coal project.
Mr. Ranjeet Sundher has resigned from the board of directors of Red Hill and will remain as an
independent consultant to facilitate and oversee Mongolian coal operations.
Source: www.redhillenergy.com
SOUTHGOBI TARGETS BECOMING LARGEST COAL PRODUCER IN MONGOLIA
SouthGobi Energy Resources is the new star in Mongolia. It is the only Mongolian coal producer
listed outside the country, and is already an outstanding success story of bringing a coal mine from
exploration into production in a record time. The next target is to become the largest coal
producer in Mongolia in coming years.
The company may embark on an acquisition trail, becoming a major M&A player in Mongolia and
pursuing acquisitions in steel upstream assets such as iron ore and molybdenum. Capital raised and
increasing revenue from 2010 onwards leaves substantial financial resources for it to pursue further
expansion.
What will Ivanhoe Mines do? It recently announced that it would review its strategic options. ―The
sale of subsidiaries‖ was listed as one of the options. A possibility of the sale of Ivanhoe’s
controlling stake in SGQ is highly unlikely in the near term. However, if and when Ivanhoe Mines
decides to sale its coveted SouthGobi stake, there will be a frantic scramble among global and
Asian players eager to enter Mongolia.
Source: Eurasia Capital
MOBICOM SELECTS ALCATEL-LUCENT TO DEPLY NETWORK IN MONGOLIA
Alcatel-Lucent has been selected by MobiCom, the largest mobile operator in Mongolia, to deploy a
3G wireless broadband network. This will enable MobiCom to extend its network capacity and
coverage and meet the growing demand for new broadband data services in Mongolia.
―This contract highlights our strong partnership with Alcatel-Lucent,‖ said Mr. B. Gansukh, chief
technical officer of MobiCom. ―Their converged solutions and professional services make them the
ideal choice as we transform our network to roll out next generation services.‖ Alcatel-Lucent will
provide MobiCom with its advanced converged radio access network (RAN) portfolio to sustain the
rapid increase of voice and data traffic and to enable MobiCom’s smooth transformation to LTE.
Source: The FINANCIAL
BANKS TO WORK FOR “GREEN” BUSINESS
The Mongolian National Chamber of Commerce and Industry (MNCCI) has signed a Memorandum of
Understanding with three major banks of Mongolia -- Khan Bank, Golomt Bank and XacBank –- to
jointly work to make 2010 the Year of Green Economy-Green Business Development. The
Government has earlier announced that 2010 would be the Year of Business Environment
Improvement.
5. The memorandum calls on the signatories to collaborate on launching innovative new products and
services to support ecologically clean and environment-friendly businesses and to provide financial
support to such efforts.
Another Memorandum of Understanding has been signed between the MNCCI and Khan Bank
exclusively to implement a Green Environment-Our Future program in 2010. The program is meant
to help in environmental protection efforts by spreading awareness among children and youth on
how to protect nature and properly utilize natural resources.
Source: Ardiin Erkh
INCOFIN LENDS USD3 MILLION TO XACBANK FOR MICROFINANCE
Belgian microfinance investor Incofin issued a USD3 million subordinated loan to XacBank in
December. The loan was made through Incofin’s Impulse Microfinance Investment Fund and will
have a seven-year maturity. Since beginning operations in 2001, XacBank has grown to become both
Mongolia’s leading microfinance provider and one of its largest banks, serving over 200,000 clients
with a gross portfolio of more then USD130 million.
Source: www.microfinancefocus.com
KHAN BANK SETS UP BUSINESS CENTER TO HELP SMEs
The newly inaugurated Business Center at Khan Bank has begun providing a full range of one-stop
financial services to SMEs. It aims to offer a set of products tailored to the specific needs of
individual entrepreneurs/customers, and also to improve their business skills by providing them
with up-to-date information. SME entrepreneurs will also be able to access consultancy services
based on the resources of Khan Bank.
Officials from the Ulaanbaatar Mayor’s Office, the SME Agency, and the Mongolian National
Chamber of Commerce and Industry attended the inauguration ceremony of the center and pledged
support to the program. Similar centers are planned to be opened in other districts of the capital
city and in Darkhan-Uul and Orkhon provinces.
Khan Bank has lowered the interest rates on all its loans and has introduced new products.
Currently, business loans account for 60% of the total loan portfolio of the bank, with SME loans
constituting 33% of this. The bank has plans to organize small and medium entrepreneurs’
conference in 21 provinces jointly with state organizations in 2010.
Source: www.khanbank.com
TEAM NAMES SIX BEST MONGOLIAN CEOs
A team of independent observers has chosen Mongolia’s six best CEOs, based on their success in the
past three years to take their company to a position of leadership in their respective sectors
following modern business practices which include a commitment to social responsibility. They are
Mr. D. Bolor of MobiCom, Mr. Sh. Altanbagana of APU Trading, Mr. J. Peter Morrow of Khan Bank,
Mr. Ts. Bayanmunkh of Mongol Tamkhi, Mr. Ch. Gankhuyag of Tenger Financial Consortium, and Mr.
S. Bolorsaikhan of Vitafit Group.
Source: Zuunii Medee
NOMINATIONS INVITED FOR THIS YEAR‟S SILK ROAD AWARDS
The Mongolian National Chamber of Commerce and Industry (MNCCI) will hold this year’s annual Silk
Road Awards ceremony at 6 pm on February 10 in the main hall of the MNCCI building. It is asking
its members and also outsiders to send their nominations by February 3. The awards are given to
both foreign and domestic companies, organizations, and individuals for their contribution to the
national development efforts of Mongolia.
Source: www.mongolchamber.mn
JOINT CAMPAIGN LAUNCHED FOR HERDER RELIEF
The Mongolian National Chamber of Commerce and Industry, Khan Bank and TV9 television channel
have jointly responded to the call by the Mongolian Government to help herders hit hard by the
harsh weather conditions. They have asked for widespread public support for the Herder Relief
Campaign they have launched to fulfill their social responsibility.
The three sponsors of the campaign have chalked out their own roles. The MNCCI will mobilize its
members, TV9 channel will appeal to the general public and keep them informed of all help
received and of their manner of distribution, and Khan Bank, on its part, will, besides donating
MNT10 million donation, make available, through its 100% online network, details of donation
accounts and updates on the condition in rural areas with the assistance of its local branches. It
6. will be responsible for efficient distribution of the aid collected, oversee delivery of relief to
critical locations, and track the results of the efforts in conjunction with the Mongolian
Government, the Emergency Response Office, and the Ministry of Food, Agriculture and Light
Industry.
Any donation to the HERDER RELIEF CAMPAIGN can be sent to Khan Bank account # 5000050001.
Source: Udriin Sonin
RUSAL‟S SHARES SINK 11% AS TRADING BEGINS
After raising USD2.5 billion through a controversial initial public offering, Rusal's shares sank 11% on
the first day of trading. It is not the worst performance by a newly listed stock on the Hong Kong
exchange in recent months. Rusal's debut has also come amid subdued market sentiment, with
investors worried that China may be starting to rein in its economic growth. Rusal's pitch as a play
on growing Chinese aluminum consumption may have made it particularly susceptible to such
concerns.
Still, the sharp drop in the new stock's value might suggest that Hong Kong regulators got it right by
limiting the Rusal IPO to institutional and high-net-worth investors. The Securities and Futures
Commission (SFC) set such a high minimum lot for IPO subscribers that retail investors were
effectively excluded. That, however, would be the wrong conclusion.
By allowing the Rusal IPO to go ahead with a restricted investment base, the Hong Kong Exchange
and the SFC signaled they had significant qualms about the quality of Rusal as a company. But so
keen was the exchange to have a high-profile foreign company listing, the concerns fell by the
wayside.
Read more…
Assuming Rusal's IPO prospectus disclosed all the risks faced by the company—the list ran to 30
pages—investors should have been allowed to make their own judgments about the risk-reward
balance of investing in the stock.
The fall in Rusal's share price Wednesday could provide retail investors willing to buy the company's
long-term growth story a cheaper entry, although they will still have to come up with roughly
USD25, 000 for the minimum lot. Certainly, given the low turnover of shares on the company's first
day of trading, it seems Rusal's cornerstone investors are willing to be patient.
But that doesn't excuse the mess the Hong Kong authorities have made of this particular listing.
Source: The Wall Street Journal Asia
PEABODY ENERGY EYES „RED HOT‟ ASIAN COAL DEMAND
U.S. miner Peabody Energy has seen already-strong Asian markets become ―red hot‖, as demand for
metallurgical and thermal coal strains supply, president Rick Navarre says. ―The demand for met
and thermal coal from the industrialization of developing countries will continue to outpace the
supply for the foreseeable future,‖ he has said.
Metallurgical coal supplies are tight, and customers are pulling forward shipments where possible,
and paying premiums for prompt deliveries. China's total coal imports more than tripled in 2009,
reaching 125 million tons, while India reached record coal import levels of 80 million tons. ―It's
clear that China, India and emerging Asia remain at a full-throttle growth pace that continues to
dwarf the US and Atlantic,‖ Peabody CEO Gregory Boyce commented. China is ―the major force
reshaping global resource markets,‖ he said, asserting that the strong demand levels from China
are sustainable.
Source: www.miningweekly.com
BUCYRUS ACQUIRES TEREX MINING
Bucyrus International, which sells mining equipment in Mongolia, has acquired Terex Mining, the
mining equipment business of Terex Corporation, for USD1.3 billion. The transaction means Bucyrus
will offer a more comprehensive product portfolio and a full line of drills and belt systems for all
mining applications.
Bucyrus’ CEO Tim Sullivan says, ―Customers will reap benefits as Bucyrus will be able to offer a
broad, complementary product line driven by technology, quality, and first class service. We will
expand our geographic footprint and diversify our portfolio of products across a broader range of
commodities.‖
The Terex mining equipment business has 38 facilities around the world with about 2,150
employees. As a result of the transaction, Bucyrus will have a team of about 10,000 people in
nearly 100 locations around the world.
Source: www.bucyrus.com
7. ECONOMY
CENTRAL BANK CHIEF AND HIS DEPUTIES RESIGN
Parliament accepted on Thursday the resignation offer of Central Bank Governor L. Purevdorj. On
Wednesday, Parliament accepted the resignation offers of First Deputy Governor B.Enkhkhuyag and
Deputy Governor D.Enkhjargal. No word yet as to a possible successor for Mr. Purevdorj.
The likely successors for the Deputy Governors are Mr. M.Zoljargal and Mr. B.Javkhlan. It is
believed the former will be acceptable to the DP and the latter to the MPRP. Mr. Zoljargal is
reputed to be close to Mr. Kh.Battulga, Minister for Road, Transportation and Urban Development,
and is a former Director of the Mongolian Stock Exchange. There is not much information about Mr.
Javkhlan beyond that he once worked at the Trade and Development Bank.
The outgoing deputies are believed to have been ―asked‖ to resign because of their ―failure‖ to
save Anod and Zoos Banks from going into liquidation. Mr. Enkhkhuyag, however, told newsmen he
had resigned on health grounds and there had been no pressure on him. Mr. Enkhjargal, who had
refused to say anything until Parliament took a decision on his request, was unavailable for his
comments.
Source: www.news.mn
MPs EXPRESS CONCERN ABOUT PROPOSED PRIVATIZATION REGULATIONS
During a discussion in Parliament on the draft protocol on privatization of state property which
calls for setting up public companies and joint ventures based on Mongolian strategic deposits and
raising funds for them by selling their shares in international markets, several MPs wondered how
Mongolia would suddenly be able to raise such funds.
The draft says three companies will be established and their shares sold in domestic and
international markets. These are Mongol Erde LC, to be set up after talks with Russia, which will
own half the shares of Erdenet LLC, Mongolrostsvetment LLC, Oyu Tolgoi and other strategic mines;
Mongol Erchim LC, which will own Mongolian uranium deposits; and Mongol Infrastructure LC, which
will own all new railroads, and roads designated as having economic significance.
Besides, Thermal Power Station-3 will be owned by a new LC, whose shares will be owned by the
Government and the company bearing the costs of its upgrading. More investment, both foreign
and domestic, will be invited in the Khutul Cement and Chalk LC.
The original terms governing the operation of UB Railway, set up in 1949, will be renegotiated with
its Russian shareholders so that the joint venture better serves Mongolian interests.
Read more...
In Parliament, Mr. N.Ganbyamba (MPRP) wondered how the MNT 200-300 billion reported to have
been raised by the privatization of 200 state companies so far has been spent. ―We are yet to see
the benefits, and not a single factory has come up. Now, too, we are talking about selling our
shares even though the companies have not been established,‖ he said. Mr. N.Batbayar (DP) felt
selling shares of 15 strategic mines is ―the equivalent of selling the country‖.
Ms.S.Oyun (Civil Will) wanted to know what will happen if Russians buy all the shares offered in
international markets. She also asked if the Mongolian Telecom Company was to be sold to South
Koreans, and Minister Ch.Khurelbaatar said there might not be a choice if the Koreans offered a
good price.
Source: en.News.mn
POVERTY RATE HAS RISEN SINCE 2008, SAYS REPORT ON MDGs
Dr. P. Khashchuluun, head of the National Development and Innovation Agency, has said in a report
on the progress of implementation of Millennium Development Goals (MDGs) that 66% work has
been done on six of the nine MDGs and 18 of the 24 targets. The level of poverty stands as 35.2
percent and ―has not much decreased‖ from the level of 1990. Indeed, it is now more than what it
was in 2008.
He submitted the report to the Standing Committee on Social Policy, Education, Culture and
Science. During the discussion there, MP S. Byambatsogt said that some provinces have a high rate
of poverty because lack of infrastructure distances them from access to markets and regretted that
nothing has so far been done to remedy this.
Instead of going down, the maternal mortality rate has actually increased from 49 per 100,000
births in 2008 to 81 in 2009.
Source: Udriin Sonin
8. NEW POLICY AIMS TO REFORM OVERALL SOCIAL WELFARE PROGRAM
Ambitious policies and large amounts of international aid since 2000 have not been able to bring
the poverty rate in Mongolia down from the 35 percent recorded in 1995. The latest promise to
erase the 15-year-old blot comes in the form of a draft law to reform social welfare programs and
allowances. If Parliament approves the law, it will take effect in 2011. The draft proposes several
poverty alleviation measures, wants allowances to reach those, and only those, who really need
them, and combines different kinds of welfare programs for better implementation.
Fresh standards have been adopted to identify beneficiaries. Some new allowances will also be
introduced. A new income calculation system will be used to determine poverty. A preliminary
estimate places the number of poor families in Mongolia at 100,000 and MNT75 billion has been
budgeted for the allowances. It has been proposed that the money will be more effective if it is
paid as an annual lump sum, and not a smaller amount every month. Reduction in poverty will also
keep crimes down.
Transition allowances are proposed to be given to those who will suddenly find themselves losing
previous allowances. Special allowances will be given to those who lose their home following a
natural disaster as well as to meet the funeral expenses of elders and the disabled. A survey shows
that 2,400 families lose their home each year. The ―homeless‖ also include the 1,000 or so
prisoners released every year and the around 2,500 people who leave State ―shelters‖ when they
come of age. All of them will be entitled to receive the allowance.
Source: Ardiin Erkh
“UNIQUE” ECONOMIC FORUM EARLY NEXT MONTH TO DISCUSS DEVELOPMENT ISSUES
The Mongolia Economic Forum will hold its first meeting on February 8 and 9 in Ulaanbaatar under
the auspices of the Prime Minister, with active support of the President and Parliament. Its main
goal is to bring together all stakeholders in Mongolia’s future -- policy makers, academics, and
domestic and international investors – on the same platform to exchange views on development
issues. The Government intends the Forum to become a permanent and independent NGO and hold
annual public meetings in succeeding years as well as serve as a permanent venue for open
discussion of policy issues, especially issues affecting economic development.
The North America-Mongolia Business Council Chairman Ed Story has urged all NAMBC members and
friends of Mongolia ―to attend, participate actively and support the Economic Forum‖. He says,
―What makes this forum unique is that that it is a project of both major political parties, of both
Prime Minister Batbold and President Elbegdorj, and represents a genuine effort by the Mongolian
Government to reach out for the broadest possible domestic and international range of good ideas
and good advice. This forum isn't merely an academic exercise or a feel-good showcase for
investors. This can be the real thing if participation is broad and active.‖
The Forum’s organizers say that for 2010, at the top of the agenda is finding ways to better utilize
Mongolia’s human and natural resources to improve national competitiveness. Other agenda items
include budgetary reforms, development of mining and related infrastructure, developing financial
markets and stock markets, ―green‖ economy and land rehabilitation, preparing an educated
workforce and improving the overall business environment.
The Forum will have plenary discussion sessions, round tables, exhibitions of companies and
consulting companies, presentations of investment projects and regions, workgroup sessions and
bilateral meetings. The organizers expect the Forum to adopt recommendations for key policy
issues.
Source: Montsame, www.nambc.org
PRIVATE SECTOR WANTS MORE UNDERSTANDING FROM STATE ORGANIZATIONS
A consultative meeting last week on coordinating external trade policy with economic policies was
marked by criticism from the private sector that policy-makers, Ministries and Government
bureaucrats do not understand its problems. Some 60 representatives of over 40 professional
associations and the private sector took part in the conference organized by the External Trade and
Economic Cooperation Department at the Ministry of Foreign Affairs and Trade.
They discussed urgent problems and difficulties facing Mongolia's external trade, and were
generally agreed that a lot of chances are missed because there is no comprehensive policy on
collaboration between state-run professional associations and the private sector.
Source: Montsame
9. EBRD SAYS MONGOLIA WILL GROW 7.2 PERCENT IN 2010
With an anticipated 7.2 percent growth, Mongolia has been identified as a star performer in 2010,
according to a report last week from the European Bank for Reconstruction and Development
(EBRD) on Eastern European and Central Asian economies. Overall, they will grow faster than
expected in 2010, but recovery from recession remains fragile.
The others set to do well are Turkmenistan (13 per cent), and Azerbaijan (9 per cent). Russia is
predicted to grow by 4.2 per cent, Turkey by 4.2 per cent, and Poland by 3 per cent. As a result of
the global economic crisis, the economies of the region suffered a 6.1 per cent drop in GDP in 2009,
after years of sustained growth.
Source: www.monstersandcritics.com
PM URGES ACTUAL BUSINESS REFORMS, NOT JUST MOUTHING A SLOGAN
A ceremony was held on Monday to inaugurate the ―Year to reform the Business Environment‖. It
heard a message from Prime Minister S. Batbold urging that the whole thing must go beyond being a
mere slogan, and a sustainable environment helpful to entrepreneurs must be set up. Requests and
proposals must be dealt with quickly and individuals and enterprises should not feel left out of the
decision making process. It might be necessary to make amendments to certain laws, rules and
regulations, and these must be identified without delay.
He expected that during the year the legal environment for running businesses will show marked
improvement, new financial possibilities and sources will be found, and financial risks and costs
reduced. With the number of new businesses going up, transparency in their operation and fair
competition will gain ground, he hoped.
Source: www.News.mn
For the detailed master plan of the mission in both English and Mongolian, please visit the BCM
website, News - Articles on Mongolia.
S. KOREA, MONGOLIA SIGN DEAL ON MINE RECLAMATION, ENVIRONMENT
South Korea's Mine Reclamation Corp. (MIRECO) signed an environmental protection and clean-up
deal with Mongolia on Monday that could fuel bilateral business tie-ups, the state-run firm said.
The memorandum of understanding involves Mongolia's Ministry of Mineral Resources and Energy
and a consortium of South Korean construction companies operating in Mongolia, and could allow
Korean businesses to be involved in proposed reclamation works at the Oyu Tolgoi and Tavan Tolgoi
mines.
Large scale development projects slated to take place in the two regions in the near future
threaten to cause soil and water contamination that Ulaanbaatar wants to prevent. The Mongolian
Government has announced a plan to inject USD200 million into preventive and reclamation efforts
from 2010 through 2015 with funds coming from the sale of natural resources.
The blueprint could fuel business opportunities for companies specializing in environmental
protection, MIRECO said. "MIRECO enjoys world-class skills in land clean-up and water purification,"
company chief Lee Lee-jae said, adding this will allow the corporation and the other companies
involved to resolve challenges facing the land-locked country.
Source: Yonhap
MINISTER LEADS MONGOLIAN TEAM TO MEAT EXPORT FAIR IN CHINA
Over 60 companies (10 from Mongolia and 50 from China), and diplomats and delegates of over 20
foreign missions in Beijing attended an open Q & A session on the challenges of exporting meat
from Mongolia held as part of the recent ―Mongol Meat Export‖ trade fair. The Mongolian team to
the exhibition was led by Mr. T.Badamjunai, Minister for Food, Agriculture and Light Industry, and
included its Ambassador to China, several MPs, and senior officials. The Executive Director of the
Mongolian Meat Association and the Head of the Meat Research Institute gave a joint presentation
on Mongolian meat export and veterinary control.
Source: Meat Trade News Daily
WORLD BANK REPORT WARNS OF GROWTH WILTING IF STIMULUS FADES
The global economy will suffer the fallout from the financial crisis for years to come, the World
Bank said last week in a report warning that growth may wilt later this year as stimulus spending
fades. The Washington-based bank forecasts the world economy will grow 2.7 percent this year,
and 3.2 percent in 2011. It contracted 2.2 percent in 2009.
"A great deal of uncertainty clouds the outlook for the second half of 2010 and beyond," the report
said. Though the "acute phase" of the crisis has passed, chronic weaknesses remain. Much depends
10. on the timing of withdrawal from massive stimulus programs and adjustments to monetary policy,
the bank said. Mishandling could result in a "double-dip", with a return to recession in 2011, it
warned.
Developing countries will as usual see higher growth rates, at a combined 5.2 percent this year, but
will be plagued by shortages of financing and investment that will handicap their progress. Rich
countries will grow more slowly, by 1.8 percent in 2010, as fragile financial markets and anemic
private demand crimp job creation and investment, the report says.
Source: AP
MANAGING POST-CRISIS GROWTH IS COMPLICATED: IMF
Countries around the world have emerged from recession more quickly than expected, but the
International Monetary Fund warns that managing post-crisis growth is becoming complicated by
the divergence in advanced and developing economies. The IMF has presented a much brighter
outlook for this year, with the world economy forecast to expand at a 3.9% pace instead of the 3.1%
estimate given in October. Global growth is expected to continue to pick up in 2011, with the
forecast edging up to 4.3% from 4.2%.
The rebound will increasingly be driven by developing countries as public stimulus measures
recede, the IMF said, trimming some advanced-economy forecasts for next year given continued
weak private demand and credit constraints. "The global recovery is off to a stronger start than
anticipated earlier but is proceeding at different speeds in the various regions," the IMF said in its
update to the World Economic Outlook. "Policies need to foster a rebalancing of global demand,
remaining supportive where recoveries are not yet well sustained," it said.
Most advanced economies will remain "sluggish", the fund said, with the group expected to expand
2.1% this year and 2.4% in 2011. Internal demand in many emerging and developing markets will
provide "relatively vigorous" growth, the IMF said, forecasting 6% growth in 2010 and 6.3% in 2011.
The IMF acknowledged the difficulty of timing exit strategies. Once private demand becomes
sustainable, countries should consider concerns about debt levels, asset-price bubbles and currency
appreciation, it said. A risk is that rebounding commodity prices could hamper growth, though IMF
chief economist Olivier Blanchard said the chance of another oil-price jump is "quite limited".
Read more…
The divergence in growth paths raises significant policy challenges, as some developing countries
are facing the risk that surging inflows will cause new asset bubbles at a time when many advanced
economies continue to rely on extraordinary support measures. The unprecedented policy support
has raised concerns about sovereign-debt risk, the fund said, but it continued to warn that "a
premature and incoherent exit from supportive policies may undermine global growth and its
rebalancing".
Source: The Wall Street Journal Asia
NO “OVERNIGHT RECOVERY”, THE POOR WILL SUFFER, SAYS WORLD BANK CHIEF ECONOMIST
Warning that there cannot be an ―overnight recovery‖ from the present economic crisis, Mr. Justin
Lin, World Bank chief economist, has said that in the many years it will take for economies and jobs
to be rebuilt, ―the toll on the poor will be very real". While they will do better than industrial
nations, developing economies will have growth rates that fall short of their potential due to the
deterioration in conditions for financing, and growth and unemployment will remain a serious
problem. Given the reduced appetite among both investors and financial institutions for risk,
money will remain tight, in many cases penalizing the countries least responsible for the frenzy of
speculative investments that led to the crisis.
Global investment fell nearly 10 percent in 2009 and will rise only 4.9 percent this year, the report
said. The poorest countries will need between USD35 billion and USD50 billion in extra funding just
to maintain pre-crisis social programs, not taking into account the extra 64 million people pushed
into extreme poverty, living on less than USD1 a day, due to the crisis, he said.
World trade volumes, which plunged 14.4 percent last year, are expected to rise 4.3 percent this
year and 6.2 percent in 2011 -- though excess manufacturing capacity will limit gains in jobs and
growth.
Source: AP
PRESIDENT LEADS MONGOLIAN TEAM TO DAVOS
The Mongolian delegation to this year’s World Economic Forum in Davos is led by President Ts.
Elbegdorj and includes Mr. G. Zandanshatar, Minister of Foreign Affairs and Trade. They will join
11. the approximately 2,500 other representatives from 90 countries. The President is scheduled to
make a presentation on mining opportunities in Mongolia on the sidelines of the main conference.
Source: Onoodor
EXPERTS AT DAVOS SEE LONG, SLOW GLOBAL RECOVERY AHEAD
The global economic recovery could lose pace later this year, dashing hopes for a rapid escape from
the deepest downturn of the postwar era, economists and investors said at the opening debate on
the economy at the World Economic Forum's annual meeting at the Swiss ski resort of Davos. As
many expected, the debate on regulating big banks also stoked passions. The push for more
stringent regulation has accelerated in Europe and around the world since last week, when U.S.
President Barak Obama's administration proposed a plan to tax and curb activities of big banks.
The annual gathering of much of the world financial elite in Davos offers a chance to gauge the
mood of business, regulators and analysts about the year ahead. Wednesday's debate suggested
that while the global economy is growing again, it is not out of the woods yet.
The world faces a long, slow recovery "ending in subpar growth", with the risk of a renewed
recession along the way, said Mr. Nouriel Roubini, an economics professor at New York University
who accurately predicted the financial crisis three years ago, also in Davos. Mr. Roubini was
uncharacteristically optimistic about the growth prospects for the world's emerging economies. But
even there he found nits to pick in the form of China's risk of bubbles, Russia's aging population and
political obstacles to structural overhauls in Brazil and India.
Read more…
Turning to bank regulation, Mr. Roubini was among those who argued for even more stringent
measures that would separate commercial banking from investment banking. Financier George
Soros said he backed Mr. Obama's plan to curb the activities of big banks, though he said it was
both insufficiently broad and "premature", coming before banks had the chance to earn themselves
out of their problems.
Others warned that the new regulations against banks—and growing protectionism—pose a serious
risk to continued recovery. "We have moved from a period of great economic uncertainty to a
period of great political uncertainty," said Mr. Raghuram Rajan, finance professor at the University
of Chicago.
Mr. Rajan said the combination of 10% unemployment in the U.S. and 10% economic growth in China
could prove politically toxic, as U.S. politicians might resort to "populism" and protectionist
measures.
The disparity of the outlook between emerging and developed economies is particularly stark, he
noted. "Emerging markets used to be associated with indebted governments, lax monetary policy,
suspicion of markets, a polarized electorate and a suspect private sector," Mr. Rajan said. Now, he
said, that description better fits the world's advanced economies.
Many leading economists and investors showed little confidence that good times are back. The U.S.
and Europe will have "U-shaped" or "W-shaped" recoveries, economists on the panel argued,
meaning they believe the upturn since late 2009 will fizzle out later this year.
Source: The Wall Street Journal Asia
DAVOS TO DISCUSS PROBLEMS PILING UP FOR POST-CRISIS WORLD
The world economy is back from the brink after a mammoth USD5 trillion in fiscal and monetary
stimulus, but the list of things for the rich and powerful to worry about in Davos this week has been
longer than ever. Perhaps the biggest unknown for 2010 is how smoothly the world's central banks
can withdraw the monetary crutch that buoyed markets in 2009.
Beyond that, the worsening finances of both governments and individuals raise the specter of
sovereign debt defaults and may also mean the next leg of the crisis is social, Mr. Klaus Schwab,
executive chairman of the World Economic Forum (WEF) that organizes the Davos gathering, has
said. "As a consequence of the debt and fiscal situation of governments, we will have certainly
squeezed public and private households and we will have increased unemployment figures," he has
said.
World leaders and policymakers have gathered in record numbers for the annual Davos forum from
January 27 to 31. The WEF prides itself on building bonds between corporations and the wider
world -- but its own research suggests the public's patience with big business may be running out. A
survey, based on 130,000 respondents on Facebook, found only one quarter of people believed that
large, multinational companies applied a values-driven approach to their business.
12. The five-day gathering, meeting this year under the motto "Rethink, Redesign, Rebuild" with 2,500
participants, will take no decisions but bring together a wide spectrum of movers and shakers to
seek solutions to the world's most pressing problems.
Read more...
In an effort to pick up the pieces after last month's Copenhagen meeting, the forum will discuss
climate change with Mexican President Felipe Calderon, who is to chair the follow-up climate
summit later this year. A panel on January 30 on the global economic outlook will include top
White House economic adviser Larry Summers, the managing director of the International Monetary
Fund, Mr. Dominique Strauss-Kahn, French Economy Minister Christine Lagarde, and the deputy
governor of China's central bank, Mr. Zhu Min.
Source: Reuters.com
EUROPEAN COMMISSION BEGINS ANTITRUST PROBE OF RIO-BHP IRON-ORE JV
A formal antitrust investigation into the proposed Rio Tinto-BHP Billiton iron-ore joint venture (JV)
has been opened, the European Commission said on Monday. The commission said that Rio Tinto
and BHP Billiton - the world's second- and third-largest iron-ore producers after Vale of Brazil -
were being probed under the European Union's rules on restrictive business practices, given that
the three miners collectively supplied most of the world's seaborne-traded iron-ore.
BHP and Rio proposed in December that the companies' entire iron-ore assets in Western Australia
be combined. Examined by the commission in particular would be the proposed JV's impact on the
global seaborne iron-ore market.
The opening of proceedings did not imply that the commission had conclusive evidence of an
infringement but merely that it would investigate the case as a matter of priority.
Source: www.miningweekly.com
CHINA‟S SHARP REBUKE TO USA ON CALLS FOR PROBE INTO GOOGLE ATTACKS
China delivered a bristling response on Monday to the United States’ demand that it investigate
recent attacks on American computers from Chinese soil, saying that any suggestion that it
conducted or condoned the hackers’ intrusions was ―groundless and aims to denigrate China‖. The
comment, in a published interview with a Government spokesman, was part of a broadside in
China’s state-run news media on Monday that cast the USA as a cyberhegemonist, trying to
dominate the global information flow by meddling in Chinese Internet policies.
Interviews and news articles placed in major state newspapers and on prominent Web sites
underscored the chill in public exchanges between the governments since January 12, when Google
threatened to leave China unless Beijing stopped censoring its search results. Google issued the
ultimatum after discovering efforts by still-unidentified Chinese hackers to steal valuable corporate
software code and break into the Google mailboxes of Chinese human-rights activists. Dozens of
other American computers were also targets of the attack, Google has said.
China’s reaction to the issue, at first muted, has been caustic since Friday, a day after Secretary of
State Hillary Clinton had called for Beijing to conduct a ―transparent‖ inquiry into the attack. Mrs.
Clinton also singled out China’s Internet censorship as a threat to the free flow of information.
Monday’s fusillade by the Chinese not only dismissed Mrs. Clinton’s statements, but also depicted
the United States as cyberspace’s villain and China as its unwilling victim.
Read more…
From blocking or closing down thousands of blogs and social-networking sites to accusing the USA of
seeking information hegemony, the Government has made it clear that the control of information
has become even more of a central priority than in years past, according to an analyst.
The sharpest language, however, came from the Communist Party-backed Global Times, which
frequently criticizes American policy. The newspaper quoted a Chinese analyst as calling Google’s
complaint ―a U.S. Government-initiated strategy with covert political intentions‖.
Source: The New York Times
S&P PUTS NEGATIVE OUTLOOK ON JAPAN
Standard & Poor's Ratings Services Tuesday threatened to cut Japan's government debt rating by a
notch, saying the Government is not fixing the nation's bloated finances as fast as expected.
Lowering the outlook on Japan's AA rating to negative from stable, S&P said, "The Japanese
Government's diminishing economic policy flexibility may lead to a downgrade unless measures can
be taken to stem fiscal and deflationary pressures."
13. The threat to Japan's rating, the third-highest that S&P assigns, hit the yen and Japanese
government bond prices and prompted concern that the move might dim previously robust
prospects for bond issuance throughout Asia over the near term.
The ratings on Japan could fall by one notch if economic data remain weak and measures to boost
medium-term growth are not forthcoming, given the country's high government-debt burden and its
weak demographic profile," S&P said. Net general government debt burden, forecast to be 100% of
gross domestic product at the end of March, "is among the highest for rated sovereigns" and looks
set to peak at 115% of GDP over the next several years, S&P said.
Japan's high rating was sustained by such strengths as its status as the world's biggest net creditor,
massive foreign reserves and the yen as a reserve currency.
Source: The Wall Street Journal Asia
BEIJING TIGHTENS REINS ON NEW LOANS
Several state-run Chinese banks have ordered some branches to suspend new lending for the rest of
this month, suggesting a coordinated effort by Beijing to manage state banks' torrid lending at the
beginning of the year. Industrial & Commercial Bank of China Ltd., the country's biggest lender by
assets, last Friday ordered its branches in Beijing not to issue any new loans for the rest of January.
China Citic Bank Corp. also suspended new lending in Shanghai last week because its local
operations have already used up their monthly quota for new loans in the city An official at the
medium-sized bank said that both the bank's own headquarters and the People's Bank of China, the
country's central bank, "have told us to control the pace of lending this year".
The moves by the two state-owned banks follow similar steps taken last week by state-run Bank of
China Ltd. Concerns that China may be moving more aggressively to rein in bank credit rippled
through Asian markets on Tuesday. The curbs on lending come after China last week announced
higher-than-expected economic growth for 2009 — 8.7%, comfortably above its 8% target. Now, the
Government appears to be winding down the bank-led stimulus program that helped it weather the
global economic slowdown.
It remains unclear how severely China will continue to curb credit flows. Chinese banks, which
traditionally rush out loans at the start of the year, have already issued more than 1 trillion yuan in
new loans in the first two weeks of the year, more than double the monthly average of 400 billion
yuan in the second half of last year, according to Chinese media reports.
Some economists said the Government was attempting to smooth the flow of credit throughout the
year. Beijing is unlikely to drastically slow lending since many projects that were started as part of
the Government's stimulus measures still need at least another year of credit to bring them to
completion.
Source: The Wall Street Journal Asia
CHINA ECONOMIST SEES 2010 GDP GROWTH AT 9.5 PERCENT
China's gross domestic product is likely to grow about 9.5 percent in 2010, largely driven by strong
domestic consumption and corporate investment, a government researcher said in remarks
published on Monday. The economist at a think-tank under the State Council said he saw little
chance of serious inflationary pressure this year; the headline consumer price index (CPI) was likely
to rise at most 3 percent.
China's GDP last year grew 8.7 percent.
Source: Reuters
POLITICS
PROBE GROUP HEARS ENKHBAYAR‟S ACCOUNT OF EVENTS DURING EMERGENCY
The working group established by Parliament Speaker D.Demberel last September to assess how
well Government organizations had coordinated their actions during the state of emergency
following the July 1 incidents in 2008 heard on Monday former President N.Enkhbayar and some
other officials give their account of events. The meeting was held behind closed doors.
The group is led by MP U.Enkhtuvshin, head of the Standing Committee on State Structure. He told
newsmen after the meeting, ―We’ve heard everything that needs to be heard. We shall now study
the information we have.‖
Source: en.News.mn
14. RUSSIAN PRESIDENT‟S SPECIAL ENVOY PAYS A DAY‟S VISIT
Mr. A.V.Gordeev, Governor of Voronej Region of the Russian Federation and the Russian President's
special envoy in charge of promoting cooperation with Mongolia in trade, economic matters and
investments, called on President Ts.Elbegdorj, Prime Minister S.Batbold and Deputy Speaker of
Parliament N.Enkhbold during a day’s visit to Ulaanbaatar last week. He told them the Russian
Government wished to expand bilateral economic and trade relations and was ready to invest and
cooperate in the railway, uranium and banking sectors. He also urged talks on new joint ventures
and underlined the "need to begin work in terms of political agreements".
After Mr. Enkhbold had noted that the Mongolia-Russia parliamentary group, which has the biggest
number of members among all such groups, plays an important role in furthering ties, Mr. Gordeev
requested the group to be active when Mr. B.Gryzlov, Chairman of the Duma (the Russian
Parliament) visits Mongolia later this year to share views on cooperation in railway, extraction of
uranium and banking sectors.
Before leaving for home, Mr. Gordeev briefed the press on the meetings but did not take any
question, citing lack of time.
Source: en.News.mn
MONGOLIAN MCF HEAD CALLS REJECTION OF MCC GRANT A FORCE MAJEURE
Mr. S. Bayarbaatar, Executive Director of the Mongolian Millennium Challenge Fund, has said
unforeseen circumstances were responsible for the rejection of the USD188 million grant for the
railway project and no one should be held culpable for it. ―Great nations’ policies‖ had come into
the picture and for the Mongolian side, it was a force majeure, an extraordinary situation brought
about by circumstance beyond its control. There was no negligence or other malfeasance involved.
He was happy that the U.S. party has agreed to transfer the allotment for the railway project to
two others proposed by Mongolia, and implementation will begin once Parliament endorses the
transfer.
Source: Undesnii Shuudan
LAW ON RIGHT TO INFORMATION “NOT NECESSARY”, FEELS HEAD OF DRAFTING GROUP
The MP who led a working group to prepare a draft law on citizens’ right to information surprised a
joint meeting of the Standing Committees on Legal Affairs and on State Structure last week. When
asked to introduce the draft, he refused, saying, ―There is no need for such a law.‖
His considered opinion was that granting such a right to citizens would conflict with other rights of
individuals and organizations, and, what is worse, state secrets will no longer be safe. Mr. O.
Enkhtuvshin, head of the Standing Committee on State Structure, wanted MPs’ opinion on whether
the proposed discussion should indeed be deferred. Most of them agreed, and there has been no
further information on when the right to information will be debated, let alone granted.
Source: Udriin Sonin
INTERNATIONAL BODY OFFERS PROGRAMS FOR MONGOLIAN MPs
A delegation of the International Association for Business and Parliament (IABP), headed by its
Secretary-General, Mr. Frederick Hyde-Chamber, called on Parliament Speaker D.Demberel on
Monday and told him the IABP intended to involve Mongolian MPs in two programs this year.
The IABP works for the establishment of a transparent process of understanding between legislators
and business people, in a bid to strengthen democracy and national economies. At present it
manages the European Business and Parliament Scheme (EBPS) offering programs and services for
the 732 Members of the European Parliament and its officials. It intends to extend these services to
other nations in the EU and some other countries closely related to it.
Source: Undesnii Shuudan
U.S.-MONGOLIA EDUCATIONAL EXCHANGES TO BE EXPANDED
Meeting in Washington on January 25, the U.S. Under Secretary of State for Public Diplomacy and
Public Affairs, Ms. Judith A. McHale, and the Mongolian Minister of Education, Culture and Science,
Mr. Y. Otgonbayar, recognized the value of educational exchanges to the development of bilateral
relationship. As such, they agreed to promote greater exchange opportunities, to encourage more
students from both countries to consider studying abroad, and to encourage collaboration between
American and Mongolian universities.
The Mongolian Ministry would contribute USD1 million to support the exchange of students and
scholars under the Fulbright Program, while the USA would increase its base allocation to the
15. program to USD500, 000 in 2010. The total contribution from the U.S. Department of State to
educational exchanges with Mongolia will exceed USD1 million this year.
The two leaders acknowledged and noted with appreciation ongoing private sector efforts to
further develop a variety of educational exchanges between the two countries.
Source: U.S. Department of State
“SUITCASE” COMPANIES FLOURISHING, REGRETS CONSUL AT EREEN
Mr. S. Maygmar, who has just finished his term as Mongolian Consul at Ereen in China, has said that
there is no official agreement with China on import of Chinese labor. Construction and road
building companies find workers through intermediaries. They mostly pick unskilled and
unemployed people and take them into Mongolia after applying for, and receiving, tourist visas.
However, tourism is the last thing on their mind. Because they ―pack‖ people on a regular basis,
these companies are popularly called ―suitcase‖ companies. His impression was that such
companies have flourished and have unfortunately caused much loss to Mongolia.
Source: Onoodor
60 NORTH KOREANS WORKING HERE
Altogether 19,134 citizens from 87 countries were employed in Mongolia in the first half of 2009,
most of them from China working in the construction sector. Russians, South Koreans, Americans
and Canadians also contributed to the number.
North Koreans are allowed to work in Mongolia since the signing of an agreement last year, but only
about 60 of the projected 300 have come. They are employed mainly in the construction and
medical sectors.
Source: Ardiin Erkh
CHINA, MONGOLIA CLAIM SAME HERITAGE OBJECTS AS THEIR OWN
Mr. N. Urtnasan, General Secretary of the Mongolian National Commission of UNESCO, has revealed
that China sent a request to register the tsam dance, the Geser epic poem, and the khuumii as
parts of Chinese culture about four months before Mongolia submitted its list of national heritage
items to UNESCO last August. Asked if Mongolia could safely claim its traditional script as its own,
Mr. Urtnasan said he could not be certain as the script has been uninterruptedly in use in Inner
Mongolia and so any claim by China will merit serious attention. He has heard that China wants to
register the deel as its own, but all such requests are kept confidential.
Denying that the Mongolian Government has been tardy, he said a lot has been done since 1990 to
revive the national heritage. Regular meetings are held. However, the work needs money and
specialist help. Traditional Mongolian shoes, costumes, ovoos, and other items of traditional life
will be submitted to UNESCO before May 1. He would not hazard a guess how the UNESCO review
will decide.
Mr. Urtnasan said the horse-headed fiddle is registered as a Mongolian heritage. Specialists from
UNESCO visited Inner Mongolia to check on China’s claim on the long song which is now registered
as ―Mongolian national long song‖ to be protected by both China and Mongolia. About khuumii, Mr.
Urtnasan told a UNESCO conference, ―China has just registered it. Inner Mongolians seem to have
khuumii. We have also submitted our list which includes it. Khuumii is an exquisite art born and
developed in the Altai mountains and is an inalienable part of the Mongolian inheritance. Thus we
trust after review our claim will be accepted.‖
Source: Zuunii Medee
SPECIAL LICENSE TO SELL CIGARETTES
Private entities and shops will need a special license to sell cigarettes, according to a regulation
approved by the Citizens’ Representative Assembly of Ulaanbaatar. The decision has been taken to
reduce the consumption of tobacco, especially among the youth. The National Statistics
Commission has released figures to show that both domestic production and import of cigarettes
have been rising.
Source: www.business-mongolia.com
MONGOLIAN ANTELOPE INVASION CAUSES ALARM IN RUSSIA
An influx of up to 40,000 dzerens, or Central Asian wild antelopes, from Mongolia has led to
authorities in East Siberia's Baikal Region to consider imposing a state of emergency. Another 60-
70,000 animals have flocked to border areas.
16. Authorities fear a hike in poaching and a threat to livestock fodder. "Migrating animals have been
consuming livestock fodder, and poaching has increased. The Governor ordered the monitoring of
the situation, allowing the imposition of a state of emergency in some areas," an official has said.
The mass migration began in late 2009, driven by a shortage of food for the animals during a severe
winter. The number of police and environmental inspectors has been increased in the border areas
and the authorities have handed out leaflets to locals warning them not to hunt the animals.
Dzerens are included in Russia's Red Data Book of endangered and protected species prohibited for
hunting. The Siberian region hosts a nature preserve for the animals.
In Mongolia, where the dzeren population is estimated at some 1.2 million, hunting of the animal is
restricted, but illegal hunting is widespread. Apart from in the Mongolian steppe and adjacent
areas of Russia, the animal can also be found in northeastern China.
Source: RIA Novosti
“AVATAR” BECOMES HIGHEST-GROSSING FILM EVER
The science-fiction epic ―Avatar‖, now showing in Ulaanbaatar, has passed ―Titanic‖ to become
history’s highest-grossing film, with a sizable boost from higher-priced tickets for 3-D and Imax
showings. ―Avatar‖ has also benefited from the steady inflation of ticket prices, meaning that
―Titanic‖ had to sell many more tickets to reach box-office totals like ―Avatar’s‖.
Through Monday its ticket sales around the world reached USD1.86 billion, edging past the USD1.84
billion in sales posted by ―Titanic‖ which came out in December 1997. Privately, some involved
with the film are guessing that final ticket sales will go as high as USD2.5 billion. ―Avatar‖,
however, still needs a very long tail to surpass the number of viewers who saw ―Titanic‖.
Source: The New York Times
ANNOUNCEMENTS
INTERNATIONAL FRANCHISE EXPO 2010 IN WASHINGTON DC ON APRIL 09-11
The Business Council of Mongolia and the U.S. Embassy’s Commercial Section will be hosting the
Mongolian Business Mission to the International Franchise Expo 2010 in Washington DC on April 09-
11, 2010. The Expo will feature over 80 businesses, including in cosmetics, food and beverage,
tanning, ice cream, pizza, child care, home improvement, education, health care, tax prep, and so
much more. Seminars at various levels are being designed, from basic how-to sessions to advanced,
in-depth examinations of different franchise relationships.
Intending participants are requested to register with BCM early. They can call 976-11-332345 or e
mail to serod@bcmongolia.org to register or to get more information.
_____________________________________
“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.
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ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended January 22, 2010, trading activity on the Mongolian Stock Exchange (MSE)
totaled 161,000 shares with 27 companies traded. Total market value of transactions was MNT 62.8
million. Total market capitalization of the 358 stock companies listed on the MSE was MNT 629.4
billion, and increased by MNT 11.6 billion or 1.9% from Jan 15, 2010.
The Top-20 Index increased by 122.17 points or 2.0% compared to the previous week, closing at
6360.39 points. MSE Composite Index increased by 49.28 points or 1.6% compared to the previous
week, closing at 3,108.50 points.
Most active stocks traded were: Khukh gan (90,000 shares), UID (27,200 shares), Jenco tour bureau
(19,500 shares), and NIC (16,100 shares).
Major share price percentage gainers were: Gazar suljmel (15.0%), Mongolian telecommunication
(14.8%), Moninjbar (5.3%), and Darkhan nekhii (5.0%). Major share price percentage losers were:
Makh impex (13.0%), Atar urguu (6.5%), and Gutal (6.3%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
*Year-over-year (y-o-y)
18. 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]
CURRENCY RATES – January 28, 2010
Currency name Currency Rate
US dollars USD 1453.74
Euro EUR 2043.67
Japanese yen JPY 16.26
British pound GBP 2347.35
Hong Kong dollar HKD 186.97
Chinese yuan CNY 212.94
Russian ruble RUB 48.05
South Korean won KRW 1.25
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.
