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ECONOMY
MOBICOM AND THE BCM ORGANIZE DIGITAL ENTERPRISE 2019
The “Digital Enterprise 2019” was held on June 18, 2019, jointly organized by MobiCom and the BCM at the Shangri-La Hotel.
CEO and President of MobiCom Mr. Tatsuya Hamada, who is also chairs the BCM’s Growth and Innovation Working Group, delivered the opening remarks. Member of Parliament and Chair of the Sustainable Development Goals Subcommittee A.Undraa also delivered opening remarks, along with Jon Lyons, Vice President of Erdene Resource Development Corp. and BCM Board Member.
The three sections of the forums covered the topics of digital transformation in Mongolia, next-gen cybersecurity, and data analytics and cloud computing. Mongolian and international experts gathered to share their knowledge on the state of digital transformation, including a keynote speech by Ling Wu, a Principal Strategy Marketing Expert at Huawei Technologies.
“Mongolians are quick learners and have the ability to adapt to anything, and so we have begun to implement digital transformation,” stated A.Undraa.
Source: GoGo News (Mongolian)
ECONOMY
BANK OF MONGOLIA LEAVES KEY INTEREST RATE UNCHANGED
Bank of Mongolia, the central bank of the country, on Wednesday decided to maintain the benchmark interest rate unchanged at 11 percent.
"Considering the external economic environment and internal economic activity, inflation is likely to be stabilized around the target level of 8 percent. So we decided to leave the benchmark interest rate unchanged at 11 percent as needed to stabilize inflation around the target rate and maintain macroeconomic stability in the medium term," Byadran Lkhagvasuren, vice chairman of the bank, told a press conference.
"Mongolia's economic growth has regained its strength. Growth in mining sector surpassed expectations and foreign direct investment inflows to the country increased in the first quarter of this year," he added.
The resource-rich Asian country's gross domestic product expanded 8.6 percent year-on-year in the first quarter of 2019, amounting 3.5 trillion Mongolian tugriks (about 1.3 billion U.S. dollars).
Source: Xinhua
Click here to view the BoM statement
MEAT AND FUEL PRICES TRIGGER INFLATION TO INCREASE
Statistics show that nearly 80 percent of the inflation was caused by the rise in prices of meat and petroleum. For example, meat prices increased by over MNT 2,000 per kilogram last month.
In addition, the exchange rate was one of the main factors that affected inflation. The price of imported goods purchased on foreign currencies increased and this caused inflation. For example, the average USD rate increased 10 times or by 0.4 percent from the same period of the previous year. In addition, the CNY/MNT rate increased by 2.3 percent and RUB/MNT - 5.6 percent.
In addition, the average household income and expenditure differ by MNT 36,000 at the end of last year. In particular, at the end of 2018, the average household income was MNT 1.2 million and the expenditure was MNT 1.23 million. However, three months later, the household expenditure has increased in the first quarter of this year, doubling the gap. In other words, rising prices have begun to stimulate public spending.
Source: ZGM Daily
MAY COAL EXPORTS DOWN 7.36 PCT YOY
Mongolia saw a clear year-on-year fall of 7.36% in coal exports in May, yet a slight rise compared with a month ago, official data showed.
The country exported 3.69 million tonnes of coal in May, inching up 0.87% from the previous month, showed data from the National Statistics Office of Mongolia.
Over January-May, Mongolia exported a total of 15.14 million tonnes of coal, increasing 5.81% from a year ago, with exports value worth $1.27 billion, gaining 14.36% year on year, data showed.
In May, the inland country produced 4.42 million tonnes of coal, rising 1.38% on the year and 13.18% on the month.
In the first five months, it produced 21.21 million tonnes of coal in total, increasing 10.84% from the preceding year.
During the same period, Mongolia's trade surplus totaled $948 million, increasing 34.24% from the previous year.
Source: SXcoal.com
MONGOLIA-JAPAN TEACHING HOSPITAL OPENS
The opening ceremony of the Mongolia-Japan Teaching Hospital of the Mongolian National University of Medical Sciences (MNUMS), built with the non-refundable aid of the Government of Japan in Bayanzurkh district, took place on June 16.
Prime Minister U.Khurelsukh, Minister of Health D.Sarangerel, Minister of Foreign Affairs D.Tsogtbaatar, Minister of Foreign Affairs of Japan Taro Kono, Director of MNUMS J.Tsolmon and other corresponding officials attended the ceremony.
Alongside the construction work of the hospital, the installation of the latest equipment and technology, such as high-capacity diagnostic MRI and CT equipment, coronary angiography kit and fully automated analyzers were funded through the aid.
Surgery, internal medicine, pediatrics, gynecology, intensive care--health care services for a total of 17 specializations will be available. In his speech at the opening ceremony, PM U.Khurelsukh highlighted that the number of citizens going to other countries for health care will decrease as a result.
Source: Montsame
DRINKING INCREASES DESPITE PRICE HIKE
Despite some improvements over the last decade, alcoholism is still a big issue in Mongolia, silently killing the population.
According to surveys by the National Statistical Office (NSO) and the police, half of all men between the ages of 15 and 54 who were surveyed and a third of women between the ages of 15 and 49 drank alcohol at least once a month.
An adult Mongolian drinks approximately 52.5 liters of alcoholic beverage annually as of 2018, according to studies. It also suggests that Mongolians have been drinking 1.9 times more beer and 1.6 times more alcohol since 2008. Experts evaluated that on average, an adult consumes two bottles of alcohol (0.5 liter), six cans of beer (0.5 liter), and a glass of wine (100 milliliter) a month.
Source: The UB Post
GGGI MONGOLIA TO SUPPORT THE REVISION OF MONGOLIAN NDCS IN TWO SECTORS: AGRICULTURE AND IPPU
GGGI is working alongside several of its member countries to fulfill the objectives of the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement (Nationally Determined Contributions). With countries expected to submit their revised commitments in 2020, the Government of Mongolia is assessing the possibility and conditions to raise the ambition of its current targets and has requested GGGI Mongolia to support the revision of its NDCs in two sectors: Agriculture and IPPU (Industry), as part of a consortium of development partners.
On June 13, 2019, and under the auspices of the Ministry of Environment and Tourism and Ministry of Food, Agriculture and Light Industry (MOFALI), GGGI Mongolia organized a Stakeholders’ sectoral Consultation Meeting to introduce the Agriculture sector’s emissions baseline scenario, possible GHG emissions reduction pathways. Representatives of MOFALI, government and non-government organizations, international organizations and projects, science and research institutes participated in the meeting.
Source: GGGI
THE GROWING WAVE OF PSYCHOTHERAPY IN MONGOLIA
Stress is definitely the disease of the twenty-first century. The causes are numerous: the frantic big-city lifestyle, traffic jams, misunderstanding at work, inability to talk to friends, the pressures of social media and consumerism, shifting values and uncertainty about the future – to name but a few. In Mongolia, there is a definite rise in related alcoholism and domestic violence, say psychologists.
Compared to the 1990s, there has been an increase in the number of young Mongolians turning to psychologists in order to solve their stress-related problems. In order to meet the rising demand for psychotherapy, the Sukhbaatar District General Hospital in central Ulaanbaatar has opened four new consulting rooms. These enable the public to receive one-on-one psychotherapy and alcoholism therapy.
Today (20 June), for example, 14 people are attending the psychology counselling classes and 42 others are meeting professional psychologists.
This particular hospital is clearly not an exception.
Source: News.mn
SOUM GOVERNOR: “MINING HARMING THE WHOLE ECOSYSTEM IN TSOGTTSETSII” - INTERVIEW
O.Badarch, Governor of Tsogttsetsii soum in Umnugovi aimag, tells Ch. Sumiya that while mining has brought prosperity there and to the 20,000 people now calling it home, its negative impact on the environment is taking disastrous proportions.
How many mines are active in Tsogttsetsii soum?
Our aimag has 15 soums, and Tsogttstetsii is the smallest of them, only about 7,000 square hectares. Some 16 percent of this is under mining licences. Three large projects -- the State-owned Erdenes Tavantolgoi, the locally-owned Tavantolgoi, which is the first mine of the aimag, and the privately-owned Energy Resources -- are extracting at the Tavantolgoi group of deposits, together exporting about 20 million tonnes of coal annually. There are 20-30 subcontractors removing soil.
What has been the negative impact of their operations?
There is no denying that work in these mines has brought about economic development, but if living standards have improved, the local community has also seen its quality of life badly affected.
Source: Mongolian Mining Journal
MONGOLIA’S ECONOMY NEEDS DIVERSIFICATION PART II - EDITORIAL
The national link of export promotion remains inadequate and many other problems, including the weak, decentralized, scattered policy of the government to support exports, and lack of cooperation of Mongolians, still linger. From a different point of view, human resource exports became common in the modern world, while Mongolia did not have the basics of it. This is simply a money transfer from abroad. There are many social reasons that are failing and becoming a barrier to development. Not even the first step of eliminating these causes are implemented. For example, informal income, informal sources of livelihood, and informal networks are very large. They have a huge impact on society, but it does not contribute to the development of the country.
The country is not focusing on human capital. It is no longer okay to ignore human and social capital. When the causes of political and personal relations are combined, Mongolia will have a huge loss on human development.
Source: ZGM Daily
Click here to read part 1
POLITICS
JAPAN SEEKS COOPERATION FROM MONGOLIA IN NORTH KOREAN ABDUCTION ISSUE, DENUCLEARIZATION
Foreign Minister Taro Kono on Sunday sought cooperation from Mongolia over efforts to settle the issue of past abductions of Japanese nationals by North Korea, as Ulaanbaatar maintains friendly ties with Pyongyang.
During talks between Kono and his Mongolian counterpart, Damdin Tsogtbaatar, in the Mongolian capital, the two agreed on the importance of fully implementing U.N. sanctions against North Korea to push the country toward denuclearization, according to Japanese officials.
Kono said the two countries are strategic partners sharing universal values and that he hopes to further develop their relationship. Tsogtbaatar agreed to deepen ties.
Tokyo, which has no diplomatic ties with North Korea, has often looked to Mongolia to act as a mediator. It is the first time in about nine years that a Japanese foreign minister has visited the country.
Source: The Japan Times
L.OYUN-ERDENE: 11 CONCESSION AGREEMENTS TERMINATED
At today’s regular Cabinet meeting, discussion about concession agreement was made and resolution to terminate evitable agreement has been made.
In other words, 11 concession agreements will be terminated due to consideration of debt pressure and strategic unimportance. It includes:
- Altanbulag- Ulan-Ude agreement
- 130 km road in Delgerekh soum, Dornod province
- Elementary school and kindergarten concession agreement
- Steel factory construction concession agreement
Furthermore, working group related Khutul cement factory agreement termination will be established.
However concession is one gateway of country development, concession agreements that the government is able to take care by itself are considered to be terminated.
L.Oyun-Erdene said that the government need to take decisive actions during this moment of 25-year development strategy of Mongolia, and we cannot leave the case to next government.
Source: GoGo News
CHINA, RUSSIA, MONGOLIA BOOST TRILATERAL RELATIONS IN DATONG
The 2nd China-Mongolia-Russia (Datong) International Commodity Expo and Economic Cooperation and Development Forum was held in Datong city, Shanxi province, from June 13 to 16.
Organized by the Datong government, the Mongolian Economic Cooperation Confederation, and the Chamber of Commerce and Industry of the Russian Federation, the event was divided into two parts – an exhibition and forums.
The event, with the theme of Belt and Road international production capacity cooperation, focused on industrial chains, culture, and international logistics sectors. It invited local and international companies, institutions and experts to share their ideas and best practice in industrial development and technology trends, to promote more joint ventures.
At the opening ceremony, government representatives from China and Russia signed a memorandum of friendship and cooperation between the cities of Datong and Volgaski. The Chinese and Mongolian business representatives signed a memorandum of cooperation on the wool industry. Some companies in Datong city reached strategic partnerships with government departments and companies in Mongolia and Russia.
Source: China Daily
EXECUTIVE DIRECTOR OF IMF WORKING IN MONGOLIA
N.Bayartsaikhan, President of Bank of Mongolia, hold meeting with Nigel Ray, Executive Director at International Monetary Fund on June 18, 2019.
N.Bayartsaikhan expressed his gratitude on his visit to Mongolia and stated that Mongolia implemented 6 projects since it joined IMF in 1991 and IMF support to Mongolian economy and social development is huge. He also stated that “Extended Fund Facility” is under implementation successfully.
Bank of Mongolia considers completing the program successfully impacts on further challenges to Mongolian economy, and requested to show support on this. During the meeting, Bank of Mongolia presented “Economic situation of Mongolia, future challenges” and exchanged information about “Extended Fund Facility”.
Nigel Ray highlighted that numeric data shows that “Extended Fund Facility” is effective in Mongolia, and expressed his further support.
Source: GoGo News
MEN DOMINATE DECISION MAKING LEVEL IN MONGOLIA
What is the women rate in decision making level?
Have you ever considered this?
Women rate is the highest in middle or operational levels. Nevertheless, 15% of men possessed higher education and 20% of women.
Mongolia has Gender national committee and Law on gender equality, but its operation and the law implementation are uncertain.
Following graphics show women participation on decision making level. Political parties have solution to change the situation, but it is unclear whether they want to make change.
43% of participants of questionnaires made from Social policy and development research institute answered “Politic parties should work more to make women having decision making level at politics”. The most interesting question of this questionnaire and its answers are shown below:
Source: GoGo News
EUROPE AND MONGOLIA IMPLEMENT NUCLEAR SAFETY PROJECT
The European Union, together with its Mongolian partners, has completed a €1.1 million joint project aimed at strengthening the nuclear safety in Mongolia in accordance with the Union’s highest standards and best practice.
The project was financed through the EU’s Instrument for Nuclear Safety Cooperation and will strengthen regulatory framework to ensure the safety of radioactive sources, establish system of control of nuclear materials and develop radiation emergency preparedness and response plan.
Following the Chernobyl accident in 1986, the EU launched a nuclear safety programme under the Technical Assistance to the Commonwealth of Independent States which, between 1991 and 2006, allocated some €1.3 billion to nuclear safety and security projects.
Source: NewEurope.eu
EURASIA’S DISTANT INTEGRATION - EDITORIAL
At a roundtable discussion on Eurasia’s integration, one of the participants said that until recently these five countries haven’t been able to set clear borders, which resulted in landmines being buried along border lines.
Integration of nations usually means a shared market in terms of commerce, manufacturing, supply, finance, and labor. These five countries have only started talking about these possibilities. If you combine it all, their population will reach nearly 70 million – a market as big as Germany’s. In this era of information and communications revolutions, there are more opportunities to cooperate on this market.
For any cooperation to start, all parties must have mutual dialogue and trust. These five countries have only started that dialogue at the state level. It looks like that this work will require a great deal of patience and composure to have a shared understanding of words, a shared vision, and a shared goal.
Source: Jargal DeFacto
MONGOLIA: BRIDGE OR BUFFER IN NORTHEAST ASIA? - EDITORIAL
What if you held a big party for 200 people and one of the guests you most wanted to see RSVPed but never showed up? This was the scenario with North Korea’s absence at the sixth Ulaanbaatar Dialogue (UBD) on Northeast Asian Security, a 1.5 level forum for officials and academics, which I attended from June 5-6 in the Mongolian capital. Nonetheless, Mongolia succeeded in making its case as a meaningful interlocutor on North Korean issues and a participant in Northeast Asian economic integration efforts, such as ongoing discussions about expanding the use of wind and solar power in a regional power grid.
Mongolia is also one of a few countries to enjoy good relations with both South and North Korea. Mongolia’s relations with South Korea have deep historical and cultural roots, and democratization in both countries has deepened their mutual affinity. Alicia Campi, a former diplomat and scholar of Mongolia’s foreign policy, notes that its longstanding bilateral relations with North Korea are “underappreciated.”
Source: The Diplomat
STOP CHILD ABUSE! - EDITORIAL
There are two generations of children who suffered domestic violence or sexual abuse, endured loneliness and abandonment, and lived through the psychological anguish of parent’s divorce. The first generation is supposedly people born in the 1990s whose parents had left them to grow up in loneliness as they were busy trying to make a living after the democratic transition. Now, they’ve become adults and parents themselves. Many of them are working abroad, entrusting their children to their family or relatives and creating the second generation of ill-treated and lonely children. These children who are growing up in the absence of their parents without a proper place they can call home are more likely to commit crimes or abuse than children who grew up showered with parental love, according to researchers. It’s apparently common for people who suffered a rough childhood to inflict the same pain they went through to their own children.
Source: The UB Post
MONGOLIA RAPIDLY MOVING OUT OF RUSSIAN WORLD, RAISING CONCERNS IN MOSCOW - EDITORIAL
Just how dire the situation of the Russian language and, with it, of Russian cultural and political influence in Mongolia has become was recently described by Nyamzhav Naymdavaa, a Russian-language teacher in the Mongolian capital. In a paper for delivery at a Moscow competition on Russian-language use outside the Russian Federation, she recalls “the golden times of the end of the 1940s, when Russian was studied in all the schools of the country four or five hours a week, or the end of the 1970s, when a Pedagogical Institute of the Russian Language was established, an institution that, over the decade of its existence, graduated 1,847 Russian teachers.” Those times, she says, are not likely to reappear. Worse, Naymdavaa argues, in 1989, Ulaanbaatar canceled the contracts of all Russians teaching Russian in Mongolia. As a result, 500 lost their jobs altogether, and “more than 200” stopped providing Russian-language classes and began to teach English instead (Rossyiskaya Gazeta, June 11, 2019).
Source: The Jamestown Foundation
BUSINESS
NRGI DISPLAYS ASSESSMENT RESULT ON ERDENES MONGOL
Natural Resource Governance Institute (NRGI) has conducted an external assessment on the structure, operations and financial information of Erdenes Mongol (EM) SOE over the last two years and presented its results. Erdenes Mongol has 21 subsidiaries and the NRGI assessed the financial information of five companies, namely Baganuur JSC, Shivee Ovoo JSC, Erdenes Mongol LLC, Erdenes Oyu Tolgoi LLC, and Erdenes Tavan Tolgoi JSC.
Since its establishment in 2006, Erdenes Mongol did not report any profit until 2015. However, the company’s net profit amounted to MNT 41 billion in 2016-2018. Such profitability was the result of increased coal prices and coal transportation from Tavantolgoi to China.
Despite the increase in total profitability, EM and its subsidiaries do not pay dividends regularly to the Mongolian State Fund. However, some state-owned mining companies such as China Shenhua Energy, India’s Coal India, and Indonesia’s Antam pay 30-100 percent of their profits regularly to the state fund.
Source: ZGM Daily
See also: NRGI: Is ‘Wild Growth’ at Erdenes Mongol Good for Mongolians?
DEMAND SHIFT TO ECO-FRIENDLY PRODUCTION CALLS FOR IMMEDIATE CHANGE IN MONGOLIAN CASHMERE
The world’s leading brands that are shifting their production towards more animal and environmentally friendly products are demanding Mongolia’s cashmere shipment, which accounts for almost half of the total supply, to convert to eco-friendly production. Mongolia exports most of its combed cashmere to developed countries such as Italy, the United States, and Britain. However, without ready-made cashmere products manufactured under the cutting edge practices that are certified to have a good impact on the environment, overseas buyers refuse to purchase Mongolian cashmere.
Some organizations that are against animal abuse have uploaded a video of Mongolian herders combing a coat in a rude, old-fashioned way. This caused the world's apparel firms and cashmere processors to seek other options over Mongolian cashmere.
H&M’s representative in Asia Sherry Gu said, “Some large-scale international brands are turning away from products that are environmentally harmful and abuses animals. However, this does not mean that cashmere products will come to a complete standstill.”
Source: ZGM Daily
LEADING COMPANIES JOIN RESPONSIBLE MINING CODEX
The leading firms in Mongolia’s mining industry signed the “Memorandum of Understanding on Implementing Voluntary Mining Codex” yesterday. These include the big names, such as Erdenet Mining Corporation, Oyu Tolgoi LLC, Erdenes Tavan Tolgoi, Energy Resource, Aspire Mining, Baganuur, SouthGobi Sands, Terra Energy, and Monpolimet.
Mongolian National Mining Association and the Ministry of Mining and Heavy Industry (MMHI) jointly commenced the campaign to promote accountability and responsible mining practices. Three of the top five mining companies in Mongolia, namely Erdenet Mining Corporation SOE, Oyu Tolgoi LLC, and Energy Resource LLC that are directly affiliated with this event show the significance of the codex. Also, Monpolymet, a leading company in the field of rehabilitation experience, and other coal companies are joining.
The Codex has been developed under the UNDP's Sustainable Natural Resource Management program that has five core and 187 requirements. Companies have voluntarily joined the codex and encouraging other companies to associate.
Source: ZGM Daily
OYU TOLGOI LLC RELEASES ITS 2018 YEAR IN REVIEW
Oyu Tolgoi LLC released its 2018 Year in Review today. Oyu Tolgoi had a very productive year in 2018 with strong achievements across all aspects of the business including: safety, production, underground project development, environmental and social performance.
In June 2018, the Board approved the 10 year business development strategy of the company. The strategy defines the key priorities and the development path for the next 10 years. The key priorities include a strategic mine development plan, enhancing employees’ skills and capabilities, construction of a power plant, the development of partnership opportunities and the local workforce in the Umnugovi province, the implementation of the marketing strategy and as well as the maintenance of our compliance framework.
Source: Oyu Tolgoi
LEGAL SUMMARY OF THE CORPORATE GOVERNANCE CODE OF MONGOLIA
The issue of a corporate governance started to receive attention in Mongolia since the year 2000, and it is viewed that development of corporate governance in our country is important for creation of appropriate conditions for sustainable and proper management and organisation of companies, in particularly of publicly listed companies, so that trust bonds between shareholders and companies is maintained and ability of companies to attract investment is improved.
Therefore, the Corporate Governance Code of Mongolia has been developed by taking into account internationally recognised OECD principles of corporate governance, recommendations proposed by ADB, EBRD and other international organisations, international best practices and experiences, and local specific conditions and realities.
The code is structured into 10 chapters, and content wise comprises guidance, recommendations and explanations in addition to main principles to be pursued.
Source: Mondaq.com
MONGOL ADVOCATES: INCOME TAX RATE IN CORPORATE INCOME TAX LAW
Taxpayers in Mongolia are separated into two separate classifications – resident and non-resident, with different rates applying to various revenue streams depending on whether the entity is s tax resident in Mongolia.
A resident taxpayer is an entity that resides in a Mongolia on a permanent basis and comprises of entities established under Mongolian law and foreign entities that have their headquarters in Mongolia
A non-resident taxpayer is an entity that undertakes business activities in Mongolia through a permanent establishment or foreign entities that earn income sourced in Mongolia.
Taxpayers that resides in Mongolia on a basis – tax rates for common income sources:
Source: Mongol Advocates
MSE AND OTHERS URGES T+2 FROM THE FRC
Mongolian capital market professional organizations, including Mongolian Stock Exchange, Mongolian Securities Clearing House and Mongolian Association of Securities Dealers submitted a request to FRC on June 14, 2019 on resolving critical issues encountered in the development of domestic capital market.
The request includes the following issues:
- Re-adapting the T+2 settlement cycle to ensure favorable environment for trading;
- Improving liquidity of some illiquid securities by reducing the gap between their market price and book value; and
- Reducing the regulatory service fee charged by the FRC to support market professional organizations.
Resolving these issues will assist in increasing the market turnover, improving the liquidity of the listed companies, creating more favorable environment for investors and achieving the Frontier market status.
Source: Mongolian Stock Exchange
PRIVATE EQUITY FIRM CERBERUS PREPARES FIRST MONGOLIAN INVESTMENT
New York-based Cerberus Capital Management is in talks to make its first investment in Mongolia as part of a broader push into the world’s riskiest markets.
The private equity firm, which manages $39bn of assets including shares in Deutsche Bank and Avon, is in talks to buy a stake in the telecommunications and consumer goods units of MCS Group, one of Mongolia’s largest companies, according to people familiar with the situation. Cerberus may offer $110m for a 25% stake in the units, one of the people said.
The Mongolian deal is being negotiated by Cerberus Frontier, a new investment team created in November when Cerberus acquired SGI Frontier Capital, a Singapore-based private equity firm led by Gabriel Schulze and Alexander Benard. They specialise in emerging markets, with a particular focus on Mongolia, Ethiopia and the former Soviet republic of Georgia. Cerberus Frontier plans to raise a new fund dedicated to emerging markets, the people said.
Source: FNLondon.com
STARTUP SEEKS INVESTORS FOR HEMP ‘BRIDGE’ BETWEEN ASIA, EUROPE
Startup HempMongolia is inviting investors to look into the country’s potential for hemp farming and production by hosting a trade visit set for mid-August during which participants can meet government officials.
“We need investors to help us accelerate production,” said Anar Artur, CEO at Ulaanbaatar-based HempMongolia. “Our goal is to develop Mongolia into one of the most advanced agricultural economies in Central Asia. Hemp can play a huge part in that.”
HempMongolia has been working for the past three years enlightening government agencies about hemp’s promise for the land-locked nation, which is sandwiched between China and Russia.
Anar sees Mongolia becoming an international trade corridor bridging European and Asian economies, with the nation developing into a regional supplier of a wide range of hemp products. Favorable tax incentives, inexpensive labor and cheap land lease fees are all investment incentives, Anar noted.
Source: HempToday.net
ADB PROVIDES FUNDING FOR ECOTOURISM DEVELOPMENT
The Sustainable Tourism Development Project (STDS) is designed to improve opportunities for tourism in Mongolia and create new avenues for local communities to generate income. Tourism has long been an underdeveloped part of Mongolia’s economic potential. Tourism generated an estimated $1.2 billion in revenue in 2017, making up just over 11% of Mongolia’s GDP that year. New Tourism projects like that aim to maintain stable investment and growth in the tourism sector in Mongolia. STDS along is expected to bring greater economic benefit to about 11,000 local individuals in communities around Mongolia, and will improve local environmental conservation efforts.
In a first, the Asian Development Bank will loan funds to Mongolia for the STDS project, earmarked for better management of protected areas. The ADB wishes to support the diversification of the Mongolian economy by expansion of tourism sector. This will also help meet ADB’s goals of bringing greater economic activity to rural communities.
Source: LehmanLaw Mongolia
LEGAL PROVISIONS REGARDING THE INHERITANCE SUCCESSION
Inheritance succession means the manner in which the property is distributed or transferred after the death a person either by his/her own will or by legal provisions.
Pursuant to the Mongolian legislation following persons are entitled to the devolution of the property and are deemed as rightful heirs:
- Husband, wife /the marriage shall be duly registered/, child and adopted child, child born after the death of the person, parents and adopted parents.
- If persons stated above are absent or such people denied the interitance succession, then grandparents, brothers, sisters and grandchildren.
- If persons stated above are absent or such people denied the interitance succession, then great-grandchildren.
In case the rightful heirs mentioned above did not reside at the same address together with the deceased person, then he/she shall file the request on the receipt of the inheritance property to the notary within 1 year upon the date of the death of the decedent. If, however, both the decedent and the rightful lived at the same address such requests are not required.
Source: LehmanLaw Mongolia
PETRO MATAD LOSSES DEEPEN AS IT RAMPS UP MONGOLIA EXPLORATION SPENDING
Mongolia-focused oil explorer Petro Matad booked a deeper annual loss, owing to a higher exploration bill.
Pre-tax losses for the year through December amounted to $18.4m, compared to losses of $9.9m on-year.
The loss included $11.5m of exploration and evaluation spending, up from $4.4m on-year.
The company had drilled two frontier exploration wells, Snow Leopard 1 and Wild Horse 1, in the previously undrilled Valley of the Lakes in central western Mongolia.
Operations were completed within the 2018 drilling season and within budget.
Snow Leopard 1 in Block V proved up a working petroleum system in the Taats Basin, high grading nearby prospects as potential follow-up targets for future drilling.
Petro Matad said three wells would be drilled in Block XX in 2019: Heron 1 and Red Deer 1 were expected to spud in July.
Gazelle 1 would follow the drilling of Heron 1.
Site construction was now complete at Heron and Gazelle, and was underway at Red Deer
Source: StockMarketWire.com
SKYMEDIA TAPS ANEVIA TO SUPPORT OTT SERVICE
Based in Ulaanbaatar, the SKYmedia group provides a wide range of capabilities including mobile phone and broadband data connectivity.
SKYmedia has partnered with Anevia since 2014 when it chose Anevia's origin-packager and content delivery network solutions. The existing platform has now been renewed and expanded with a latest-generation packager, NEA-DVR, as well as NEA-CDN, plus an Anevia Genova encoder. The combined result is a full end-to-end OTT video-delivery solution that will power the Sky GO service, scheduled for launch this month.
This new investment comes at a time of healthy growth in demand for IP-related services. The total number of Internet subscribers in Mongolia has increased by more than 60% over the past five years and take-up of IPTV subscriptions has grown by 116% in the same period, the firms said.
Source: RapidTVNews.com
OYU TOLGOI: WAS IT A MISTAKE? - EDITORIAL
Whether it was a mistake or not, OT is a mega project that is carrying Mongolia’s economy on its back. However, we continue to see increased negative sentiment towards OT. Based on a metric called the Q Score, the gap between positive and negative sentiments appears to have consistently grown smaller from 2015 to 2019. There is now a need for the public to clearly understand what issues the Mongolian government and the investors are actually having differences on.
If Mongolian people don’t achieve clarity over OT and come to a shared stance, there are growing concerns that the election fever might cause OT to stop and push investors out of Mongolia. Rio Tinto faced similar circumstances a year ago in Indonesia and ended up walking away from the 40 per cent interest they held in the world’s second largest copper deposit Grasberg.
Source: Jargal DeFacto
GLOBAL AND REGIONAL NEWS
OIL PRICES SURGE AFTER IRAN SHOOTS DOWN US DRONE
Oil prices climbed around three percent on Thursday amid escalating tensions in the Middle East after a US military drone was shot down by Iranian forces.
The drone was brought down in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile, a US official told the Reuters news agency on Thursday, speaking on condition of anonymity.
Iran's elite Revolutionary Guard force said the American aircraft was shot down after flying into Iranian airspace in the southern province of Hormozgan.
The different accounts couldn't be immediately reconciled.
Tensions have been rising in the Middle East after last week's attacks on two tankers near the Strait of Hormuz, a chokepoint for oil supplies.
Fears of a confrontation between Iran and the United States have mounted, with Washington blaming Tehran for the tanker attacks and Tehran denying any role.
Source: Al Jazeera
FED INDICATES IT WILL CUT RATES — BUT NOT UNTIL 2020
The Federal Reserve on Wednesday said it does not expect any rate cuts this year, but did forecast one for 2020.
The central bank’s median target for the federal funds rate is still 2.4% for 2019, unchanged from its March projection. But eight members of the Federal Open Market Committee indicated they were in favor of one rate cut this year, according to the panel’s projections.
The Fed, however, ticked down its expectations for future years. A narrow majority, or nine members, indicated it expects the federal funds rate to approach 2.1% by the end of 2020, instead of its previous outlook for 2.6%.
As expected, the central bank also announced Wednesday that it is leaving the benchmark rate unchanged in a target range of 2.25% to 2.5%.
Source: CNBC
See also: China shares jump as Fed hints at rate cut; 10-year Treasury yield drops below 2%
COPPER PRICE SURGES AS SUPPLY WORRIES RETURN
The price of copper surged on Tuesday after a strike at one of the largest copper mines in the world and optimism about a ceasefire in the trade war between the world’s two largest economies.
In afternoon trading in New York, copper for delivery in July touched a high of $2.7125 a pound ($5,980 a tonne), up 2.5% from Monday’s settlement. Copper is now trading back in positive territory for 2019 although the bellwether metal has lost 18.7% of its value measure from highs hit in June last year.
Chile’s state owned copper giant Codelco said on Monday that its Chuquicamata mine had maintained output at 50% of capacity as it faced its fourth full day of a union strike. The mine produced just under 321kt tonnes of copper in 2018, representing around 5.5% of Chilean annual output.
Source: Mining.com
See also: Chile confident of turning around low copper productivity as global competition bites
GOLD PRICE JUMPS TO 5-YEAR HIGH
Gold reached a five-year high on Wednesday breaking through a major resistance level after the US Federal Reserve signalled a rate cut is in the offing.
Gold for delivery in August, the most active futures contract trading in New York, reached an intraday high of $1,366.60 an ounce, up 1.3% from yesterday settlement price and the highest since mid-March, 2014.
Gold is up 6.6% this year, finding support from safe haven buying amid geopolitical worries and trade tensions, but expectations of lower interest rates and a drop in bond yields in the US saw the metal finally breaking through $1,360, considered a major resistance level.
The relationship between long-term interest rates in the US (as proxied by 10-year Treasurys) and the gold price is strongly negative. The yield on the 10-year note fell to 2.023% on Wednesday, the lowest since the election of Donald Trump on November 8, 2016.
Source: Mining.com
CHINA'S IMPORT THERMAL COAL MARKET JITTERY ON IMPORT CONTROL TALK
Chinese import thermal coal market jittered after a customs notice asked more efforts to keep coal imports in check, especially low-quality coals, which, though in lack of details, could be sign of a tough way ahead for coal imports into the world's top buyer.
Sources said China's state planner required in a notice to the General Administration of Customs that supervision and control should be strengthened for coal imports, inferior coal in particular, as key part of the drive to resolve surplus capacity in coal and steel industries.
Market participants are generally treading carefully before more details of the policy available, like the ports, coal types, time span and magnitude of the enforcement.
One Fujian-based trader said he was still waiting for more details of the import control. He noted import coal arrivals were in a large size in May, which reached a four-month high of 27.47 million tonnes, up 22.99% from May 2018.
Source: SXcoal.com
VIETNAM FINTECH SECTOR SET FOR 'BLOODBATH' COMPETITION
Vietnam's fast-growing but fragmented digital payments market is set for a wave of consolidation following the recent merger of e-wallet service VIMO and point-of-sale startup mPOS, with one analyst predicting a "bloodbath" as competition heats up.
VIMO and mPOS announced last week that they have combined their operations and rebranded as NextPay. The new entity, which says it has 1.5 million e-wallet users and more than 35,000 acceptance points across 45 cities, estimates it will handle $1.5 billion worth of payments this year. That would be a significant share of the local market: The total value for digital transactions in Vietnam is estimated to hit $8.5 billion in 2019, according Statista, up 20% on the year.
While the merger was long envisioned for the Hanoi-based startups -- both were founded in 2014 by the incubator NextTech, led by Nguyen Hoa Binh -- the move casts a spotlight on Vietnam's crowded fintech market.
Source: Nikkei Asian Review
GERMANY TO SUPPORT THREE BATTERY CELL ALLIANCES: ECONOMY MINISTER
Germany will award to three consortiums 1 billion euros ($1.12 billion) in funding it earmarked last year to support domestic battery cell production, Economy Minister Peter Altmaier told Reuters, part of a bid to cut carmakers’ reliance on Asian supply.
Securing a regional supply chain for electric vehicles (EVs) would help Germany achieve European Union goals to lower carbon emissions and cut fossil fuel consumption.
It would also strengthen the ability of the continent’s automakers and battery makers to compete with Asian rivals CATL, LG Chem and Samsung.
“We’ve now reached a point where we can say that there is likely to be not only one battery cell consortium, but probably three,” Altmaier said in a Reuters interview.
The Economy Ministry will submit all necessary state aid documents to the European Commission once it has completed its selection process, Altmaier said.
Source: Reuters
CODELCO SWEETENS CONTRACT OFFER IN BID TO END MINE STRIKE
Chilean miner Codelco has presented a sweetened contract offer to workers in a bid to end a 5-day strike at its key Chuquicamata copper mine, two people with direct knowledge of the negotiations told Reuters on Tuesday.
Striking miners and police clashed earlier on Tuesday, with authorities using rubber bullets and tear gas as workers tried to block access to the state-owned firm’s mine, one of its most important copper deposits.
The two sources asked not to be named because the new contract offer had not yet been made public.
Source: Mining.com
FACEBOOK’S CRYPTOCURRENCY FACED WITH REGULATORY WARNINGS FROM GLOBAL CENTRAL BANKERS
Facebook will find itself dealing with plenty of regulatory questions about its new cryptocurrency, central bankers around the world said Thursday.
The social network detailed plans for its virtual currency, called Libra, earlier this week, a move that almost instantly provoked a reaction from politicians and regulators alike.
France’s Finance Minister Bruno Le Maire warned against Facebook’s crypto becoming a “sovereign currency,” hours after Facebook’s announcement, while a German politician called the company a “shadow bank.”
Meanwhile, the U.S. Senate Banking Committee recently called on the tech giant to join a hearing on its ambitions to create a virtual currency.
Now, several central bankers are also weighing in on the debate.
“I think there’s a lot of water to flow under the bridge before Facebook’s proposal becomes something that we’re using all the time,” Reserve Bank of Australia Governor Philip Lowe said at a press conference Thursday.
Source: CNBC
IN JUST 8 YEARS, INDIA WILL OVERTAKE CHINA AS WORLD’S MOST POPULOUS COUNTRY: UN REPORT
Around 2027, India is projected to overtake China as the world’s most populous country, says the latest report released by United Nations.
The World Population Prospects 2019: Highlights, which is published by the Population Division of the UN Department of Economic and Social Affairs, provides a comprehensive overview of global demographic patterns and prospects.
The new population projections indicate that nine countries — India, Nigeria, Pakistan, the Democratic Republic of the Congo, Ethiopia, the United Republic of Tanzania, Indonesia, Egypt and the US — will account for more than half of the projected growth in global population between now and 2050, with India registering the most increase, and the US, the least.
“Growing at a slower pace, world population is expected to reach 9.7 billion in 2050 and could peak at nearly 11 billion around 2100,” the report says.
Source: The Hindu Business Line
THE CAPITAL PROJECTS COMEBACK - EDITORIAL
During the mining industry’s heydays – the mid-2000s – capital projects were global mining investment hotspots, and the pace of projects in exploration and construction in the pipeline was staggering.
But the commodity price meltdown changed that, as many investors got burned on over-funded projects that yielded sub-par returns.
As a result, capital expenditures in new developments by 2017 fell by almost two-thirds compared to the $80.8 billion peak of 2012, Deloitte’s Tracking the Trends 2019 report found.
“Burdened by years of cost overruns and impairment charges, many mining companies opted to concentrate on maximizing output from their existing operations rather than investing in new mine supply and exploration,” Deloitte said.
Capital projects were also overshadowed when investors turned their attention to the emerging and controversial cryptocurrency and cannabis markets.
Source: Mining.com
ABE'S CORPORATE REFORM PLAN FACES ACID TEST AT GOVERNMENT-RUN COMPANIES - EDITORIAL
In a promising development for corporate governance in Japan, Prime Minister Shinzo Abe has charged officials with making new rules for the uniquely-Japanese phenomenon of "listed subsidiaries"--- publicly-traded companies controlled by a dominant shareholder.
The new regulations, due to be unveiled later this summer, will be a revealing test of the Abe Administration's commitment to real corporate governance reform -- not least because the government itself is the controlling shareholder of some of Japan's most prominent listed subsidiaries.
If the government is serious about requiring, for example, listed subsidiaries to fill a majority of their board seats with truly independent directors, how can it credibly exempt itself from the new rules as they apply to companies that the government itself controls?
A key feature of the new rules will be raising the number of independent directors who sit on the boards of listed subsidiaries.
Source: Nikkei Asian Review
THE BUSINESS COUNCIL OF MONGOLIA AND NATIONAL DEVELOPMENT AGENCY ESTABLISH MEMORANDUM OF UNDERSTANDING
Under the purpose of expanding cooperation, Chairman of the Business Council of Mongolia B.Byambasaikhan and Director-General of the National Development Agency B.Bayarsaikhan established a Memorandum of Understanding (MoU) on April 17, 2019. The purpose of the MoU is to stabilize Mongolian investment policy, boost competitiveness, improve the legal environment, provide information to investors, and to intensify the activities of the Public-Private Dialogue Council.
Works to be implemented by the parties under the scope of the MoU include protection of the legal interests of investors, improvement of the investment climate, informational exchange between the two organizations, introduction of international experiences, as well as creation of a handbook for investors.
In addition, the Business Council of Mongolia has taken on the role of Coordinator for the Public-Private Dialogue Council established under the Investment Protection Council, and is facilitating discussion of pending proposals by government and parliament with the aim of actively representing the interests of the private sector and raising issues faced by investors to government organizations.
UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
Works to be implemented by the parties under the scope of the MoU include protection of the legal interests of investors, improvement of the investment climate, informational exchange between the two organizations, introduction of international experiences, as well as creation of a handbook for investors.
In addition, the Business Council of Mongolia has taken on the role of Coordinator for the Public-Private Dialogue Council established under the Investment Protection Council, and is facilitating discussion of pending proposals by government and parliament with the aim of actively representing the interests of the private sector and raising issues faced by investors to government organizations.
UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
- Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
- Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
- Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
- Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
- Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
"DOING BUSINESS WITHOUT BRIBERY" E-LEARNING TOOL
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
The Business Council of Mongolia in partnership with Transparency International Mongolia through its project funded by the Asia Foundation is promoting free access to the best available anti-bribery training resources for all individuals at all companies.
This one-hour online learning module provides comprehensive anti-corruption training designed by leading experts in the field, and enables organizations to provide training for their personnel.
You can quit and re-enter the module as often as you would like. There are no restrictions as to the number of times you can take the course, or the number of individuals from the same organization who can take it.
The Business Ethics Working Group of the Business Council of Mongolia encourages all businesses to adapt this e-learning tool as part of their on-boarding process for new employees.
Click here to take the e-learning course.
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION
This one-hour online learning module provides comprehensive anti-corruption training designed by leading experts in the field, and enables organizations to provide training for their personnel.
You can quit and re-enter the module as often as you would like. There are no restrictions as to the number of times you can take the course, or the number of individuals from the same organization who can take it.
The Business Ethics Working Group of the Business Council of Mongolia encourages all businesses to adapt this e-learning tool as part of their on-boarding process for new employees.
Click here to take the e-learning course.
Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.
Resources for information on Air Pollution
- Ministry of Environment Tourism on Air Pollution;
- National Committee on Reduction of Air Pollution;
- The Resolution of the National Committee to Reduce Air Pollution;
- Measures taken in connection with the adoption of the Law on air pollution reduction;
- Air Quality in Ulaanbaatar: Monitoring outputs by Air Quality Department, Capital City;
- City Health Authority: UB Health Index;
- UNICEF Reports on “Understanding and addressing the impact of air pollution on children’s health in Mongolia”
- Parents against air pollution FB page;
- www.agaar.mn
- www.ub-air.info
- www.stateair.mn
- http://ubairpollution.org
- Smart Air Mongolia masks
- mobile apps: AirVisual, “Аgaar”
Specific ACTIONS that companies can take NOW:
Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees
- Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;
Work environment:
- Improve energy efficiency in building/office to reduce energy consumption;
- Plant & maintain trees; install air cleansing plants in the office;
- Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.
com/mn/en/; - Install monitoring devices;
- Smart Air Mongolia masks
Work activities:
- Ensure company vehicles are well maintained to reduce pollution emissions;
- Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
- Implement carpooling activities;
- In polluted air, ensure employees wear pollution masks;
Social responsibility:
- Focus CSR (corporate social responsibility) initiatives to tackle air pollution
- Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
- Run marketing/PR campaigns & contests that raise awareness about air pollution.
List of distributors for pollution masks:
- BRB – 70119967, 99658555
- BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
- CATD LLC – 11327308, 99114346
- Mmarket – 75758001 – Facebook: Утааны Маск
- MONOS Pharmacy – 99190858
- Seven summits – 11317923
- 3M Mongolia Premier Service - 9400-3088, 9910-3335
- Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
- Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members
- AREC Mortgage Corporation is offering discounted rates on salary loans to BCM member company employees: 2.8% interest per month (usual rate 3.4%). Further discounts are possible for second-time borrowers.
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
Please click here to view full list of Member-to-Member special offers & Benefits.
- AREC Mortgage Corporation is offering discounted rates on salary loans to BCM member company employees: 2.8% interest per month (usual rate 3.4%). Further discounts are possible for second-time borrowers.
- Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance.
Please click here to view full list of Member-to-Member special offers & Benefits.
ECONOMIC INDICATORS
HISTORIC ANNUAL INFLATION
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015 *1.9% [source: NSOM]
Year 2016 *1.1% [source: NSOM]
Year 2017 *6.4% [source: NSOM]
Year 2018 *8.1% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015 *1.9% [source: NSOM]
Year 2016 *1.1% [source: NSOM]
Year 2017 *6.4% [source: NSOM]
Year 2018 *8.1% [source: NSOM]
*Year-over-year (y-o-y), nationwide
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
SOVEREIGN CREDIT RATING
| Moody’s | Fitch | S&P |
| B3 – stable - 18 Jan 2018 Caa1 – stable – 30 Mar 2017 Caa1 – neg. watch – 15 Feb 2017 Caa1 – stable – 18 Nov 2016 |
B – stable – 9 Jul 2018 B- – positive – 17 Nov 2017 B- – stable – 22 Nov 2016 B – stable – 24 Nov 2015 B+ – negative – 13 Dec 2013 |
B – stable – 10 Nov 2018 B- – stable – 19 Aug 2016 B – stable – 03 Nov 2015 B+ – neg. – 29 Apr 2015 |
CURRENCY RATES – 20 June 2019
| Currency | Rate | ||
| U.S. dollar | USD | 2,656.18 | |
| Euro | EUR | 3,000.82 | |
| Japanese yen | JPY | 24.67 | |
| British pound | GBP | 3,378.66 | |
| Hong Kong Dollar | HKD | 339.93 | |
| Russian ruble | RUB | 41.94 | |
| Chinese yuan | CNY | 388.06 | |
| South Korean won | KRW | 2.29 |
BCM HIGHLIGHT
INT'L CONFERENCE ON NORTHEAST ASIAN SECURITY HELD IN MONGOLIA
The Sixth International Conference of the Ulaanbaatar Dialogue on Northeast Asian Security kicked off here Wednesday.
The two-day conference had brought together more than 200 government officials, scholars and representatives from around 20 countries and international organizations, including China, Russia, South Korea, the United Nations and the European Union.
According to Mongolian Foreign Minister Damdin Tsogtbaatar, the conference would cover five topics of opportunities and challenges in Northeast Asian security environment, cooperation and competition dynamics in the region, regional energy cooperation, humanitarian challenges in emergency situations, and perspectives for dialogue in Northeast Asia.
Initially intended to facilitate a peaceful solution to the Korean Peninsula issue, the agenda of the conference had been expanded year after year, said Tsogtbaatar.
"There should be new attempts to establish regional security regime that includes all regional states. The Ulan Bator Dialogue on Northeast Asian Security is an excellent move towards this direction," said Yuan Chong, deputy director of Institute of Japanese Studies at the China Institutes of Contemporary International Relations, at the conference.
Source: Xinhua
See also: President sends message to Ulaanbaatar Dialogue
Japanese, N.Korean officials will not meet
North East Asian Youth-Peace and Security seminar running
HOWARD LAMBERT AWARDED NAIRAMDAL MEDAL, VISITS BCM BOARD
Howard Lambert, Managing Director and Head of Corporate Clients, Middle East, of ING bank, was bestowed with the “Nairamdal Medal” on June 3 – one of the highest honors bestowed upon foreign citizens by the Government of Mongolia – for his contributions to the Mongolian economy during his time as the head of ING Mongolia.
The BCM hosted a lunch meeting in honor of Mr. Lambert and his accomplishments.
Source: BCM internal
ECONOMY
FISCAL FRAMEWORK STATEMENT PREDICTS
Mongolia’s legislative body approved the Fiscal Framework Statement last week, approving the economic prediction of next year, draft fiscal framework for 2020 and 2021-2022 budget. The key indicators of the next year’s fiscal policy are written below.
Experts warn that in the coming year, the economic crisis may embrace the global market. Mongolia's economy expanded by 8.6 percent in the first quarter of this year and has seen an unprecedented increase in the last few years. This year's growth is expected to decline, according to the Fiscal Framework Statement. As a result, GDP growth is expected to stand at about 6 percent. The Asian Development Bank and the World Bank are slightly optimistic about the GDP growth of Mongolia with 6.3- 6.9 percent growth estimations. The World Bank forecasted Mongolia's GDP to grow 6.5 percent in 2021. Economic growth is expected to be supported by mining, agriculture, industry, and services.
Source: ZGM Daily
FDI UP BY 7.5 PCT IN JAN-APRIL
Mongolia has attracted foreign direct investment (FDI) worth 661.8 million U.S. dollars in the January-April period, up by 7.5 percent year-on-year, the country's central bank said Thursday.
Over 90 percent of the FDI goes to the Oyu Tolgoi copper-gold mine, which is partly owned by the Mongolian government, the Bank of Mongolia said in a statement.
The mine is expected to produce an average of 430,000 tons of copper and 425,000 ounces (about 12,050 kg) of gold annually for 20 years.
It will attract at least 1.3 billion U.S. dollars of FDI this year, making up one third of government revenue in 2019, according to the Mongolian Finance Ministry.
Mongolia is rich in natural resources, and FDI in the mining sector has been one of the main drivers of the country's economic growth.
Source: Xinhua
BOM INJECTS USD 850 MILLION THROUGHOUT THIS YEAR TO STIMULATE ECONOMY
The Bank of Mongolia (BoM) pumped USD 850 million into the banking system to intervene in the growing USD rate this year. Officials are highlighting the fact that the net amount of the first few months of this year is nearing the full year funds of 2018.
The BoM is continuing to inject liquidity to strengthen the weakening exchange rate of the MNT, as well as holding a policy to increase foreign currency reserves. Although the FX reserves have increased by 3-4 times over the past three years, international organizations previously estimated FX rates to stabilize if the reserve expanded by another USD 1-2 billion. Accordingly, the greenback reserves, which currently stands at about USD 3.8 billion, need to to reach at least USD 5.5 billion in the following years.
As of April 18, the BoM purchased USD 660 million from "Oyu Tolgoi", "Erdenet Mining Corporation" and "Erdenes Tavan Tolgoi" LLC this year.
Source: ZGM Daily
DEMAND FOR INVESTMENT RISES IN AGRICULTURE AS LIVESTOCK HEADS INCREASE
According to the statistical data on the growth of livestock heads in Mongolia, the share of livestock in the macroeconomy is declining, calling for investment in the field. The agricultural sector accounts for only about 10-15 percent of the gross domestic product (GDP) according to the Ministry of Food, Agriculture and Light Industry (MOFA). The amount falls further for animal husbandry.
Foreign trade partners and delegations tend to emphasize the potentials of animal husbandry in Mongolia; however, the agriculture accounts for only 0.04-0.08 percent of direct foreign investment (FDI) in Mongolia. The sheer amount displays the investors’ interest and value in the sector. The agricultural sector, especially, animal husbandry is highly dependent on the weather condition. The sun, wind, and rain affect the number of livestock and benefits of it. The traditional animal husbandry sector has been facing difficulties due to risks including the carrying capacity of a pasture, the low livelihood of herders, and animal diseases.
Source: ZGM Daily
OIL PRICE DECLINE MAY IMPACT MONGOLIA’S FUEL PRICES
Crude oil prices fell for five consecutive days reaching the lowest level in May, which is likely to have an effect on Mongolia's economy and potentially reduce fuel price. Brent crude price slumped 0.51 percent to USD 60.97 per barrel on Wednesday. Brent crude oil price, which reached USD 75 since late April, decreased around USD 15 over the last month.
Particularly, the price of oil decreased by USD 9 per barrel last week, which was a multiple-month sharp drop. However, the decline in crude oil prices will not have immediately trigger Mongolia’s fuel price to decrease. The oil price changes takes longer time to have an effect on Mongolia's economy.
The joint council on fuel price held a meeting on Tuesday and submitted a suggestion containing four or five articles. “Global price of oil usually rise in April and May. In addition, commodity prices rose in recent months, due to the Iranian ban and Libya and Venezuela crisis. However, prices are likely to decline this month.
Source: ZGM Daily
NONPERFORMING LOANS JUMP BY MNT 84.5 BILLION
At the end of April, the amount of outstanding loan to entities, enterprises and individuals amounted to 17.5 trillion MNT, up by 182 billion MNT (1.1 percent) from the previous month and by 3.2 trillion MNT (21.9 percent) from the same period of last year.
On the other hand, the number of new loans issued to individuals increased by 28 percent to stand at 9.1 trillion MNT as the number of new loans issued to private organizations rose by 15 percent, reaching 8.2 billion MNT.
While loan performing normally rose by 31 billion MNT, or 0.2 percent, from March to April this year, nonperforming loans hiked by 84.5 billion MNT, or 4.5 percent. Loans to private organizations account for 85 percent of all nonperforming loans.
As for overdue loans, 79 percent belonged to organizations.
Source: The UB Post
EU SCHEME TO SUPPORT MONGOLIA YAK AND CAMEL WOOL TRADE
An EU-funded initiative is to support the development of the yak and camel wool trade in Mongolia, helping to improve access to international markets and the formation of partnerships with foreign companies.
A meeting of the TRAM project - Trade Related Assistance for Mongolia (EU TRAM) - last month discussed establishing a yak and camel wool cluster to manufacture end products and promote them overseas.
According to the MNCCI, the aim is to create high-standard products as competitive as Mongolian cashmere goods.
Launched in March last year, EU TRAM is a four-year project, worth almost EUR5m (US$5.6m) with the aim of increasing and expanding Mongolian exports, and contributing to sustainable economic growth and development of the country. It has a special focus on specific products/sectors with high potential for export.
Mongolia has preferential duty-free access to the EU market under GSP+ scheme, yet there is low usage of these benefits due to low capacity of Mongolian products to fulfil EU market requirements.
Source: Just-Style.com
WORLD COMPETITIVENESS RANKING 2019 INTRODUCED
On June 3, Economic Policy and Competitiveness Research Center introduced IMD World Competitiveness ranking 2019.
This year, Singapore, Hong Kong and the USA topped the ranking. Mongolia is ranked at 62nd, remaining unchanged from previous year’s ranking.
Mongolia’s consumer price index or inflation, living cost and rental costs of apartments and offices ranked lower as compared with that of other countries, reported I.Odonchimeg, deputy director of EPCRC.
In the economic performance category, one of four basic categories, Mongolia is ranked at 58th. Last year, it stood at 48th in the same category. The decline of Mongolia’s competitiveness score was mainly influenced by the worsening indications of current account, transparency and pension fund, alongside weakness of employment, business law, health, environment and educational index.
Since 2010, The EPCRC, in cooperation with the World Competitiveness Center, has been publishing Mongolia in World Competitiveness Report.
Source: Montsame
NASA IMAGERY: THE URBANIZATION OF ULAANBAATAR
Mongolia’s capital, Ulaanbaatar, sits near the confluence of the Selbe and Tuul rivers on a plateau at the foot of a large, forested mountain. This was not always the case. When the town was initially established in the 1600s, it was a migratory settlement built as a center for Buddhist priests. It changed locations more than two dozen times.
Several teams of scientists have used Landsat images to monitor how the city—particularly the ger districts—have changed over several decades. According to some estimates, ger districts now hold more than 60 percent of Ulaanbaatar’s population.
The Landsat 7 and 8 satellites captured these natural-color images of the city in 2000 and 2018. Notice the development in the river valleys (green linear features) that lead out of the city. Note also how forested areas in the hills north and south of the city have lost tree cover over the years, probably due to people harvesting wood to heat their homes.
Source: NASA
CAPITAL SAFER FOR FOREIGN TOURISTS WITH STUDENT VOLUNTEERS
A total of 40 selected students are working in the Mongolian capital as volunteers to provide information services for foreign tourists as part of local efforts to boost tourism, according to a local official Tuesday.
The students who are proficient in English are expected to provide foreign tourists with all the information they need and protection-related services during the tourism peak season or until the end of August. They started working on Monday under an annual program launched six years ago, which is aimed at making Ulan Bator a safer place for foreign visitors.
"Majority of foreign tourists visiting Mongolia travel through the capital city. So, ensuring the safety of tourists is one of the priorities for us," Tsend Enkhtuvshin, deputy head of Ulan Bator's tourism department, told Xinhua.
Source: Xinhua
THE RAILWAY RIDDLE - EDITORIAL
As he laid the foundation stone of the 414.6-km railroad between Tavantolgoi and Zuunbayan on May 24, President Kh. Battulga noted that something was at last happening on the ground to implement the State Policy on Railway Transportation adopted by Parliament in 2010. For nine years, he said, domestic politics and politicians with personal stakes in coal mining had not allowed anything to move.
Recalling his days as Minister of Road Transportation in the coalition government, Battulga said he had tried to build the railroad in the northern part of the country. He had formed a team, determined routes, signed agreements, laid foundation stones, obtained loans and had spent some of the money, too. Yet, not one km of railroad has been built. There is only piled earth and crumbling embankments on the route from Tavantolgoi to Gashuunsukhait. The government is paying interest on the $200-million loan and the principal must be repaid in 2022.
Source: Mongolian Mining Journal
POLITICS
SECOND BILL TO AMEND THE CONSTITUTION OF MONGOLIA PRESENTED
The second bill to amend the Constitution of Mongolia was presented today (6 June) to the speaker of parliament during a united session. The Constitution of Mongolia was approved in 1992 and was amended in 2000 for the first time. After 19 years, D.Lundeejantsan has presented a new amendment bill; this has been signed by 64 member of parliament. All members of the opposition Democratic Party and some members of the Mongolian People’s Party refused to sign the document.
Source: News.mn
JAPANESE OFFICIALS SEEK NORTH KOREAN DIALOGUE IN ULAANBAATAR SECURITY SUMMIT
Japanese and North Korean foreign ministry officials will meet today in Mongolia on the sidelines of the Ulaanbaatar Dialogue on Northeast Asian Security.
Japan and North Korea have never formally established diplomatic relations. Tokyo has refused to establish relations due to claims that the North Korean government abducted Japanese citizens between 1977 and 1983 and that North Korea’s nuclear program poses a significant threat to Japan’s security.
Due to the current collapse of American diplomatic efforts with North Korea and growing tensions between China and the US over trade, Japan continues to see North Korea as a threat. Last month the rogue country tested short-range ballistic missiles, an indicator of an emboldened Pyongyang.
Japan’s most recent response to the threat of North Korea has been largely diplomatic. Japan is now taking a larger role in negotiations with the country, both working with China and garnering US support for a potential Kim-Abe summit.
Source: ForeignBrief.com
See also: Japanese, N.Korean officials will not meet