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ECONOMY
CENTRAL BANK FORECASTS 5.1 PCT GROWTH THIS YEAR
According to the Bank of Mongolia’s forecast in December 2021, the Mongolian economy is expected to grow by 5.1 percent this year.
The central bank projected the economy to grow by 4.5 percent in 2021. However, the actual performance was 1.4 percent. It is explained that the unpredictable and sudden “shocks” in the internal and external environment have led to assumption’s deviation from the reality. For example, the scale and duration of China's policies have led to the export disruptions and the rise of transportation costs and inflation.
Spread of the pandemic and the emergence of new variants are still posing challenges.
Although supply-side inflation is on the rise, the central bank emphasizes that inflation is likely to be driven by demand by the end of the year as the economy recovers from the pandemic. Therefore, in January, the decision was made to increase the policy rate by 0.5 percentage points, said Governor of the Bank of Mongolia B.Lhagvasuren.
Source: Montsame
MONGOLIAN ECONOMIC FORUM TO BE ORGANIZED UNDER THEME ‘NEW REVIVAL POLICY’
At its regular meeting on March 2, the Cabinet made a decision to organize the Mongolian Economic Forum, which has been suspended since 2018 due to the pandemic, under the theme ‘New Revival Policy’ on April 7-8.
A working group chaired by the Minister of Finance B.Javkhlan set up to organize the forum. The forum will focus on determining how Mongolia needs to work along with global post-Covid economic trends, growth, and expansion.
"We are studying the possibility of cooperating with foreign investors and development partnerships as widely as possible. Although the forum’s main focus will be about post-Covid 19 economic situation, views will be exchanged on how the Russia-Ukraine crisis will affect the economy, and the practices of the countries that are overcoming negative effects with minimal loss. Ensuring and supporting the economic growth, particularly economic growth and expansion based on the cooperation between the government, private sectors, foreign and domestic investors, is the main topic to be touched upon during the forum," said B.Javkhlan.
Source: Montsame
BOM PURCHASES 795.3 KG OF PRECIOUS METAL
In February, the gold purchase of the Bank of Mongolia (BoM) was 795.3 kg, raising the BoM’s total precious metal purchase of 2022 to 2.4 tons. The figure shows an increase of 464.6 kg as compared with the same period of the previous year.
In February, the BoM branches in Darkhan-Uul and Bayankhongor aimags bought 15.7 kg and 59.2 kg of precious metals respectively.
The average price of BoM’s purchase of 1 gram of gold was MNT 170,600 last month.
Source: Montsame
ETT TASKED WITH FINANCING ALMOST USD 400 MILLION FOR OIL PIPELINE
At its regular meeting on March 2, the Cabinet made the following decisions:
-The Board of Directors of Erdenes Tavan Tolgoi JSC has been tasked to finance the amount of USD 397 million set out in the investment agreement for the construction of the oil pipeline through the pre-sale of coal, and Minister of Mining and Heavy Industry G.Yondon was instructed to oversee the construction of the pipeline.
-The apartments of 52 households registered in the fixed assets of the Erdenet Mining Corporation (EMC) state-owned enterprise will be privatized to their current residents free of charge. The corresponding works are also underway to gradually privatize apartments of 375 families at the request of the residents and authorities of Orkhon aimag.
-In order to increase the volume of exports during the pandemic, it was decided to build an automated container terminal on 66 hectares of land at the Gashuunsukhait border checkpoint.
Source: Montsame
CONSTRUCTION WORK TO CONNECT BORDER PORTS BY ROAD BEGINS
Construction work to connect border checkpoints by auto roads in the framework of the Government’s ‘New Revival Policy’ has commenced.
Minister of Road and Transport Development L.Khaltar became acquainted with the progress of the ADB-funded project ‘Western regional road corridor investment programmе-2’. As part of the project, a 25.8 km paved road is being built in route of Tsagaannuur- Ulaanbaishint in Bayan-Ulgii aimag.
The construction work, which is scheduled to be completed by August 30 this year, is currently at 60-70 percent except for the pavement foundations.
“With the commissioning of the road, the amount of freight to be imported to Mongolia will increase. Aside from this, it will create an opportunity to conduct international transport between Russia and China through the territory of Mongolia. As traffic intensifies, there will be a lot of service points along the road, creating more jobs,” highlighted Minister L.Khaltar.
Source: Montsame
MONGOLIA IMPORTS 275.2 THOUSAND TONS OF PETROLEUM PRODUCTS YTD
According to the Ministry of Mining and Heavy Industry, Mongolia has imported 275.2 thousand tons of petroleum products from the beginning of this year. Specifically, the country has imported 106.1 thousand tons of gasoline, 144.5 thousand tons of diesel fuel, 3.4 thousand tons of aviation kerosene and 21.2 thousand tons of other oil products.
As of February 18-24, the country exported a total of 1.196.9 thousand tons of coal (1884 containers by road, 350 containers by rail), 191.5 thousand tons of copper concentrate (192 containers by road, 220 containers by rail) as well as 280.0 thousand tons of iron ore and concentrate (754 containers by rail) from the beginning of the year.
The purchase of gold by the central bank was 2,122.9 kg from the beginning of the year, which represents an increase of 6.7 percent compared to the same period of the previous year.
Source: Montsame
BOGDKHAN RAILWAY PROJECT WORKS PLANNED TO BE LAUNCHED THIS SPRING
Last year, the Cabinet gave the permission to construct the main infrastructure of the Bogdkhan railway project to ‘Tavantolgoi Tumur Zam’ LLC in 2021, with plans to launch its works this spring.
The railroad will connect the stations of Maanit and Rashaant by going around the capital city on its northwest side and passing through the Chinggis Khaan International Airport area in Khushig Valley. In the framework of the project, a railroad tunnel and a large-scale bridge structure are planned to be built.
During the international scientific conference themed, ‘The Pressing Issues in Mongolia’s Railway Sector Development’, CEO of ‘Tavantolgoi Tumur Zam’ LLC N.Udaanjargal said, “The project will be constructing the first railway tunnel in the country. As corresponding studies have been completed, it has now become ready to draft detailed plans and blueprints. In Gashuunsukhait and Zuunbayan, 33 bridges were built, of which total lengths amounted to 3.7 km.
Source: Montsame
CONSTRUCTION OF ERDENEBUREN HPP TO BEGIN NEXT MONTH
At the regular meeting of the Cabinet dated March 2, Minister of Energy N.Tavinbekh presented the progress of the Erdeneburen hydropower plant project, which is being implemented as part of the ‘New Revival Policy’.
The Ministry of Energy signed a turnkey contract with the project’s contractor last September to ensure the timely construction of the Erdeneburen 90 MW hydropower plant. Construction of the plant will begin on April 1 and be completed within 61 months.
The western region where more than 390 thousand people reside imports 75 percent of its energy needs from Russia and China, which means it uses five or six times expensive energy than that being produced at Durgun HPP. The establishment of the hydropower plant will create the possibility to provide the country’s western region with domestically produced energy.
Source: Montsame
FLIGHTS OVER MONGOLIAN TERRITORY DECREASED BY ABOUT 50 PERCENT
Due to the international situation, the number of international flights over the Mongolian territory have decreased by 50 percent, said S. Munkhnasan, chief of the Civil Aviation Authority.
At the Cabinet meeting on March 2, he introduced about the establishment of air freight logistics center and improvement of air freight circulation. At the press briefing following the cabinet meeting, he said, “In 2019 there were about 500 flights a day flying over the territory of Mongolia, but fell to 150 during the pandemic. It rose back to about 200 flights at the end of last month, but has fallen by about 50 percent in the last three days, which connects with restrictions on airspace by countries.
Source: Montsame
CHINA-MONGOLIA BORDER PORT SEES GROWTH IN FREIGHT TRANSPORT
Erenhot, the largest land port on the China-Mongolia border, has seen a significant rise in China-Europe freight trains so far this year, according to the local railway authorities.
Since Jan. 1, the port has handled a total of 503 China-Europe freight trains, up 27.9 percent from the same period last year.
The 500th China-Europe freight train this year passed through the port at 1 p.m. Monday, a milestone that took 18 fewer days to accomplish than last year.
The number of inbound trains totaled 232, up 33.3 percent, while the number outbound trains reached 271, a rise of 23.6 percent.
The port in north China's Inner Mongolia Autonomous Region now serves 54 China-Europe freight-train routes, connecting over 60 overseas destinations across more than 10 countries.
Source: News.cn
MONGOLIAN MINING POISED FOR BIG CHANGES AS IT ENTERS ITS SECOND CENTURY - EDITORIAL
The mining sector is preparing to celebrate its centenary this year, as it was on 25th December 1922 that the People’s Government had decided to nationalize the Nalaikh coal mine.
The last thirty of these 100 years have been epoch-shaping. This followed Mongolia’s transition to a market economy which led to the privatization of state property and emergence of private companies. However, Mongolia did not have sufficient domestic resources to invest in this capital-intensive industry. So, it had no choice but to create an investment-friendly environment, and seek foreign investment. Most of Mongolia’s foreign investment has been made in the mining sector.
As N. Algaa wrote in his book “Will Mongolian Mining Sector Retreat or Move Forward”, geological expeditions, and a few wolfram and tin mines owned by the state were privatized. However, gold mines were excluded from the privatization list.
Source: Mongolian Mining Journal
POLITICS
DRAFT LAW ON LICENSING
A working group has been established by Resolution No.38 by the Chairman of the State Great Khural (the Parliament) dated 2021 with responsibilities of preparing the draft law on Licensing which was submitted by the Government, approving the license list and other draft laws submitted together with it for discussion at the plenary session, and drafting proposals.
The draft law regulates relations with respect to issuing, suspending, revoking and cancelling issued license from an authorized person to engage in certain types of activities that may adversely affect national security, financial stability, public interest, human health, environment for conducting certain business, or possess and use State and public properties as well as to determine the classification and types of permits, their registration and activities prohibited in the territory of Mongolia. The draft law has 8 chapters and 35 articles.
Source: Mondaq.com
DRAFT LAW ON AMENDMENTS TO THE LAW ON PUBLIC PROCUREMENT APPROVED
At its regular meeting on March 2, the Cabinet approved the Bill to amend the Law on Procurement of Goods, Works and services with State and Local Funds and decided to submit it to the State Great Khural for a very urgent consideration.
The amendments propose that projects and actions on the list of development projects to be implemented as part of the New Revival Policy be processed with the establishment of contracts and not to follow the law if less than 30 percent of the funding for a project or an action is provided from a state owned or state controlled enterprise.
It has become possible to make procurement arrangements online and retrieve necessary information from state databases. Therefore, the proposed amendments also include the reduction of the timeframe for the client to make a decision and establish a contract from 30 days to 15 days.
Source: Montsame
MONGOLIA’S OPPOSITION PARTY CONDEMN RUSSIA OVER UKRAINE
Today (28 February), Mongolia’s main opposition party has issued the following Statement condemning Russia’s attack on Ukraine.
The statement reads, ‘Over the past several days, Kremlin authorization by Putin is conducting full-scale military aggression entitled “special military operation” in Ukraine which is an independent, sovereign and democratic member of United Nations. Mongolia’s Democratic Party is condemning Russia’s invasion of Ukraine. We are demanding that Russia immediately stop its act of aggression that may cost many innocent lives of civilians and leads to greater economic losses. There is no way to justify Russian invasion that is treat to European and world peace and stability.
All members and supporters of Mongolia’s Democratic Party is expressing a solidarity with Ukrainian people’.
Source: News.mn
See also: Mongolia tiptoes around Russian aggression toward Ukraine
ABOUT 50 BILLION MNT REPAID TO DEVELOPMENT BANK
Development Bank of Mongolia gave an update on non-performing loans of the bank last Friday.
CEO of Development Bank N.Manduul informed that as of February 24, about 50 billion MNT had been repaid to the bank. Over the past month, the bank has been assessing and monitoring its non-performing loans. This work is about 75 percent complete, he said.
A total of 195 real estate buildings of non-performing borrowers were sealed, including 44 service facilities worth 52.4 billion MNT, seven factories worth 1.9 billion MNT, 46 apartments worth 32 billion MNT, 82 plots of land worth 26.6 billion MNT, four cellars worth 2.3 billion MNT, three unfinished buildings worth 656 million MNT, seven farms buildings worth 228 million MNT and six garages worth 564 million MNT.
Three companies are being monitored by the police. Other cases related to the bank are being investigated by the Independent Authority Against Corruption (IAAC).
Source: The UB Post
ALL MONGOLIAN STUDENTS BASED IN UKRAINE EVACUATED
On March 2, Minister of Foreign Affairs B.Battsetseg announced that the works carried out to evacuate all of the Mongolian students in Ukraine have been completed.
The repatriation works were launched on February 25.
With 15 Mongolian students based in Kharkiv crossing the Poland-Ukraine border today, all of the Mongolian students in Ukraine are being brought to their home country. The repatriation works have been carried out efficiently as a result of the active efforts put in by the Honorary Consul of Mongolia in Ukraine and the Embassy of Mongolia in Poland, mentioned the Foreign Minister.
In connection with repatriation requests received from Mongolian citizens with permanent residency in the country, corresponding works are also planned to be carried out.
Source: Montsame
MONGOLIA GOES AHEAD WITH SOYUZ/VOSTOK PIPELINE SIGNING WITH RUSSIA DESPITE UKRAINE OUTCRY
A project plan for the Soyuz/Vostok gas pipeline that is to run from Russia to China via Mongolia was on February 28 signed by Amarsaikhan Sainbuyan, the Mongolian Deputy Prime Minister, and Alexey Miller, chairman of the Gazprom board, during an online meeting.
The signing might attract some controversy given ongoing attempts by multiple countries to force Russia into an economic corner with sanctions and boycotts in response to the Russian invasion of Ukraine. Germany, for instance, has frozen the Nord Stream 2 pipeline project to deliver Russian gas to Europe.
In late January, Mongolia and Gazprom signed a protocol to complete a feasibility study for the Soyuz/Vostok gas pipeline.
The project plan covers an agreement for the next stage of the project, including design, engineering exploration work and the licensing of Russian subcontractors.
"Today, we ratify our work plan for the next three years, beginning in 2022," Miller during the signing.
Source: bne IntelliNews
See also: Agreement signed for launching engineering exploration works for natural gas pipeline project
LATEST ON COVID-19 IN MONGOLIA
Below are headlines from the past week concerning Covid-19 in Mongolia:
Source: Various
REVISED LAW ON PERSONAL INFORMATION PROTECTION FOR DIGITAL AGE
The parliament adopted a revised Law on Protection of personal information on December 17, 2021, and this law will come into force on May 1, 2022. This law is a revised version of current Law on Individual secrecy, which will be repealed on the date when revised law comes into force.
Current Law on Individual secrecy was adopted in 1995. It has passed over 20 years since then and social relations have changed and evolved a lot. The revised law covers a wider range of personal information than the current law, and regulates protection of personal information rather than “personal secrets”. Law on Protection of personal information covers personal information (such as name, date and place of birth, citizenship, educational background, membership, information on property, etc.) and sensitive information (such as nationality, religion, gender, key to digital signature, criminal and medical records, sexual orientation, correspondence, etc.), which also include genetic and biometric information.
Source: LehmanLaw Mongolia
‘LAW ON VIRTUAL ASSET SERVICE PROVIDERS’ ENTERS INTO FORCE
The Law on Virtual Asset Service Provider and accompanying laws (adopted on 17 December 2021) were published in №6 of the Government Information bulletin on 14 February 2022. The above-mentioned laws entered into force today (1 March 2022), according to Paragraph 26.3 of the Constitution of Mongolia.
Accordingly, legal entities shall not provide virtual asset services without registering with the Financial Regulatory Commission of Mongolia. Please note that legal entities that are not registered as virtual asset service providers by the FRC, shall be subject to liabilities specified in related laws, if they offer virtual assets to the public, organize trading activities, participate in financial activities, and/or provide services.
Please click the links below to see the details.
The Law on Virtual Asset Provider
Amendments to the accompanying laws
Source: FRC
KYRGYZSTAN, MONGOLIA AGREE TO INTENSIFY BILATERAL COOPERATION
Bishkek hosted on Tuesday a meeting between Minister of Economy and Commerce of Kyrgyzstan Daniyar Amangeldiev and Ambassador of Mongolia to Kyrgyzstan Ganhuyag Sodnom.
The press service of the Kyrgyz Economy Ministry reported that the sides noted that the level of bilateral trade between Kyrgyzstan and Mongolia does not meet the existing potential, which in 2021 amounted to $1.076 million.
The minister and the ambassador also discussed the issue of revitalizing the intergovernmental Kyrgyz-Mongolian Commission on trade-economic, scientific-technical and cultural cooperation, the last, third meeting of which was held on Oct. 30, 2019 in Bishkek.
The sides also discussed the establishment and continuation of cooperation in sending Kyrgyz experts to Mongolia to study the best practices of the country on VAT refunds and incentive lotteries on cash vouchers.
The meeting debated the opening of regular flights between Kyrgyzstan and Mongolia.
Source: Kabar.kg
B.JAVKHLAN: CITIZENS MUST BE PATRIOTIC IN THIS DIFFICULT TIMES OF ARMED CONFLICT
During the briefing after the Cabinet meeting, B.Javkhlan, the Minister of Finance gave the following information.
We are making research on the economic risk of an armed conflict between Ukraine and Russia. Mongolia has a fuel reserve of 36-70 days. This is a normal amount and there will be no supply disruptions in the next three months. There will be no obstacles to fuel payments until June 24. Citizens must be patriotic in these difficult times. Starting from consumption, we must be united and patriotic to overcome difficult times with less damage.
The government has agreed to organize the Mongolian Economic Forum with the cooperation of the Mongolia Economic Forum. The main topic of this year’s forum is the policy of revival and the economic conditions of the pandemic. This year, we will organize the forum with the cooperation of foreign development partners. And the forum will be more detailed and take more days than before.
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