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ECONOMY
ECONOMIC CORRIDOR “CHINA-MONGOLIA-RUSSIA”: INFRASTRUCTURE IN FOCUS
With logistical flows redirected, Russia’s interest in the opportunities of east-bound transport routes, including transit via Mongolia to China and on to other destinations in Asia, has dramatically increased. Alongside with the crucial infrastructure—the functional Trans-Mongolian Railway—other potential transit links could be in high demand. Enhancing cross-border infrastructure connectivity between Russia, Mongolia and China is an issue that has been discussed for many years, the main impetus being the China-propelled Belt and Road Initiative. Much of the projected infrastructure underpins the China-Mongolia Economic Corridor Program, jointly adopted in 2016 and aimed at competitive integration with global logistics routes and regional development. Despite low activity in practical delivery of the projects, the parties are still keen on cooperation, the best evidence being regular meetings between the heads of Russia, Mongolia and China that traditionally take place on the sidelines of the SCO summit. At their last Samarkand meeting in September 2022, the parties agreed on a five-year extension of the Program.
Source: Modern Diplomacy
FROM STEPPE TO GLOBAL DEMAND: MONGOLIA'S HALAL MEAT EXPORT INDUSTRY TAKES OFF
Halal meat is a lucrative and rapidly expanding market. Mongolia's vast livestock population and commitment to halal slaughtering norms make it a promising player in the global halal meat market.
Mongolia has exported 500 tons of meat and by-products to Uzbekistan in the first 10 months of 2022.
During a virtual meeting with the Minister of Agriculture of Uzbekistan, the Minister of Food, Agriculture and Light Industry of Mongolia expressed that there is a good opportunity for Mongolia to increase exports to Uzbekistan in the future.
In December 2022, Uzbekistan gave permission for nine Mongolian enterprises to import meat and meat products, which has increased the number of enterprises that can export to the country to 26.
In 2019, the two countries agreed to work on joint projects and programs to further expand cooperation in animal husbandry and veterinary care, and they mutually agreed on veterinary certificates. This opened the possibility of exporting meat and meat products to Uzbekistan.
Source: Mongolia Weekly
MONGOLIAN MINING JOURNAL: ONE HUNDRED YEARS FILLED WITH PRIDE
Mongolia’s mining industry is celebrating its centenary. 25 December each year is a day for celebration for the mining industry and miners. Following the victory of the People’s Revolution and the establishment of a new government, the country’s leaders, declared that underground resources were “the property of all the people”. They appointed a government representative to Nalaikh who announced that the mine had become a “state enterprise” on that historic day. Subsequently, the leaders of the National Congress of the Mongolian People’s Republic (MPR) issued a decree about celebrating 25 December as the “Day of Mongolian miners” and D. Davaajav, of the Nalaikh mine, was awarded the title of the first Labor Hero of Mongolia in 1957. That is how this day became a day making respect and celebrating many generations of miners. The successes and failures of the mining industry over the past century cannot be fully described in a page or even in dozens of books.
Source: Mongolian Mining Journal
MONGOLIA REGISTERS RECORD HIGH NUMBER OF LIVESTOCK
Mongolia logged 71.1 million head of livestock, a record high since the nomadic country began a livestock animal census in 1918, said a senior expert of the National Statistics Office (NSO) Wednesday.
A preliminary result of the annual livestock census by the NSO showed that the number of livestock in 2022 increased by 3.8 million, or 5.6 percent, from the previous year, Erdene-Ochir Myagmarkhand told a press conference.
Sheep accounted for 46.0 percent of all livestock, goats 38.8 percent, cattle 7.7 percent, horses 6.8 percent and camels 0.7 percent, said Myagmarkhand.
Mongolia is one of the world's last surviving nomadic countries. The promotion of livestock husbandry is seen as the most viable solution to diversify the landlocked country's mining-dependent economy.
Source: Xinhua
ENHANCING SOCIAL PROTECTION AND DISASTER RESPONSE IN RURAL MONGOLIA
Mongolia, a vast, sparsely populated, landlocked country, is prone to multiple natural disasters and shocks induced by climate change. At the time of our site visit, Mongolia’s western region was experiencing dzud – a natural disaster of extremely harsh and icy winter conditions due to a dry summer, which causes livestock to die in vast numbers due to the cold and a lack of pasture feed and green fodder. We were also assessing the preparedness for the COVID-19 pandemic.
The timing couldn’t have been better for the launch of the UN’s Joint Programme (UNJP) on Social Protection to reduce the vulnerability of Mongolia’s herders, who make up one-third of the country’s population, to natural disasters and other shocks through comprehensive social protection measures.
A semi-nomadic lifestyle, constantly moving in search of better pastureland for their herds, makes Mongolian herders and their families most vulnerable to poverty, pushing them to further margins.
Source: Joint SDG Fund
WHEN CHINA SNEEZES, THE MONGOLIAN ECONOMY CATCHES A COLD - EDITORIAL
US manufacturing orders in China have declined by 40% and many Chinese factories have already shut down for the lunar new year. Rising interest rates in the US are, meanwhile, contributing to the slowdown in China. It all spells trouble for Mongolia. That’s right: when China sneezes, Mongolia’s economy catches a cold.
China purchases more than 80% of Mongolia’s exports, mostly raw materials such as coal and metals. Its demand for these raw materials accounts for more than 40% of Mongolia’s economy. With Beijing’s “Zero-covid” curbs, inflation, increased gasoline and transportation costs and declining demand seen around the world, China’s imports are trending downwards. It’s bad news for a Mongolian economy still not fully recovered from nearly three years of covid lockdowns.
The Chinese border first closed due to covid in January 2020. It was still closed in 2021, restricting both imports from, and exports to, Mongolia. As a result, the Mongolian economy shrank by 4.4%.
Source: bne IntelliNews
IMPACT OF GENDER INEQUALITY ON LONG-TERM ECONOMIC GROWTH IN MONGOLIA - PAPER
Increasing the participation of women in the labor force can help boost overall economic growth in Mongolia, where the participation rate for working-age women is 53.4%, compared to 68.3% for men. The coronavirus disease pandemic is expected to have worsened this gender gap. Asian Development Bank estimates show that eliminating gender inequality at work and at home would increase female labor force participation in Mongolia to 63.2%, which would boost the annual per capita economic growth rate by 0.5 percentage points.
Source: ADB
See also: Supporting Health-Care Financing Reform in Mongolia: Experiences, Lessons Learned, and Future Directions
B. BAYARDAVAA: INCREASE IN THE BUDGET EXPENDITURE HAS A RISK OF WEAKENING THE EFFECT OF MONETARY POLICY - INTERVIEW
The following is the interview with Director of the Monetary Policy Department of the Bank of Mongolia B. Bayardavaa.
Last month, the State Great Khural discussed and approved the 2023 State budget. For the coming year, when the economy tends to be difficult due to external and internal factors, how well do you think the budget policy was coordinated with the monetary policy developed by the Bank of Mongolia? Specifically, can fiscal policy play an important role in stabilizing the economy and supporting monetary policy?
- The cause for the problem is that our economy, which had not recovered from the adverse effects of the COVID-19 pandemic, was hit by China's "Zero-Covid" policy and the tense geopolitical climate that has existed since the beginning of this year. As a result, there is a net deficit in the flow of foreign exchange, which makes it difficult to meet the foreign exchange demand for domestic activity. Or to put it another way, there was a balance of payments issue.
Source: Montsame
POLITICS
MINING PRODUCT EXCHANGE LEGALIZED
Last Friday, Parliament amended the Law on Procurement of Goods, Works and Services with State and Local Funds (commonly known as the Tender Law), passed the bill on mining product exchange and revised the Law on Forensic Science.
In order to ensure the implementation of Parliamentary Resolution No. 106 of 2021 on the approval of the New Revival Policy, the government developed the bill to simplify the participation of citizens and businesses in public procurement and reduce costs for small and medium enterprises.
In accordance with the amendments to the Tender Law, projects and tasks on the list of development projects to be implemented as part of the New Revival Policy will be carried out after contracts are signed. The law states that it will not be applicable if less than 30 percent of the funding for a project is provided by a state-owned or state-controlled enterprise.
Source: The UB Post
MONGOLIA TAKES A GAMBLE ON LEGALIZING CASINO TO BRING IN TOURISTS AND BOOST ECONOMY
The Minister of Justice and Home Affairs in Mongolia has submitted draft laws on casinos, betting, and lottery to the parliament. These laws are part of the government's plan to promote Mongolia as a tourist destination in the years 2023-2025, and the Minister emphasized the potential for casinos to contribute to the country's economy and increase tourist numbers.
Mongolia faces both challenges and opportunities in attracting international tourists. On the one hand, the country is relatively remote and not as well-known as other destinations, which can make it harder to attract tourists. Additionally, the country's infrastructure and tourism industry are still developing, which can make it more difficult to accommodate and serve visitors.
On the other hand, Mongolia has many unique and attractive features that could draw tourists. These include its rich cultural heritage, diverse natural landscapes, and opportunity for adventure travel.
Source: Mongolia Weekly
See also: Draft Law on Casino Submitted to State Great Khural
LEGAL FRAMEWORK OF INTERNATIONAL FINANCIAL CENTER AT KHUSHIG VALLEY TO BE CREATED
S.Amarsaikhan, Deputy Prime Minister of Mongolia and Chairman of the National Committee for Khushig Valley Development, presented the legal framework for the establishment of an International Financial Center within the framework of Khushig Valley development to the members of the government.
It is considered that there is an opportunity to establish an international financial center in the free zone of Khushig Valley and develop it into a center with independent special arrangements to meet the investment and financing needs of large scale domestic development projects.
Source: GoGo News
RUSSIAN GAS PIPELINE TO CHINA THROUGH MONGOLIA TO BE COMPLETED IN 2023
The designing of the Soyuz Vostok gas pipeline to China via Mongolia should be completed next year, Russian Deputy Prime Minister Victoria Abramchenko told journalists following a meeting of an intergovernmental commission with Mongolia, Interfax reported.
"The completion [of the designing] is scheduled for next year. We are supposed to ensure clearance by the three states," Abramchenko said.
Gazprom started to assess the possibility for supplying up to 50 billion cubic meters of gas per year to China via Mongolia in 2020. Design and surveying as part of the Soyuz Vostok trunk pipeline project began in February 2022. The pipeline is to go through Mongolian territory and will be a continuation of the Power of Siberia 2 pipeline.
Source: InfoBRICS.org
MONGOLIA ADVANCES TO PREVENT CRIMES AND OFFENSES AGAINST CULTURAL PROPERTY
In 2021, the Mongolian Parliament adopted a revised version of the “Law on Cultural Heritage Protection” and the “Law on Museums”. In this framework, the Government of Mongolia is making great efforts to facilitate the legal environment for the protection of cultural heritage, introduce good international practices, strengthen the capacity of human resources, increase public awareness about the importance of cultural heritage, prevent risks and combat the illicit trafficking of cultural property. Moreover, the Action Plan of the Government of Mongolia for 2020-2024 includes the ratification of the 1995 UNIDROIT Convention and the UNESCO 2001 Convention. In addition, Mongolia is planning to accede to the two (1954 and 1999) Protocols of the UNESCO 1954 Hague Convention for the Protection of Cultural Property in Armed Conflict.
Being a global issue concerning stakeholders from the public and private sectors as well as local communities, it is important that national and international agencies support awareness raising and capacity building activities for the human resources concerned.
Source: UNESCO
PRESIDENT ISSUES DECREE ON RESTORING MONGOLIA’S ANCIENT CAPITAL
On the occasion of the 111th Anniversary of the Victory of the National Liberation Movement and the Restoration of Independence of Mongolia, President of Mongolia Ukhnaagiin Khurelsukh issued a decree, instructing the Government of Mongolia to restore the ancient capital of the Great Mongol Empire, Kharkhorum.
The purpose of the decree is to create healthy and safe living conditions for citizens, improve accessibility to basic social services, decentralize the population, ensure a balanced development of the regions, promote the valuable heritage of the state and restore its history and culture.
In accordance with the decree, the issue of establishing the Kharkhorum city in the Orkhon Valley will be studied, a master plan for the development of the city will be developed and a necessary legal framework will be created.
Source: Montsame
INDIA TO FINANCE MONGOLIA’S GREENFIELD OIL REFINERY PLANT
In November, Mongolia and India closed a $1.2 billion soft loan to finance Mongolia’s greenfield oil refinery plant in the South Gobi. To diversify Mongolia’s energy sector, Ulaanbaatar is putting its third-neighbor foreign policy into economic practice.
Since Mongolia and India boosted their bilateral relations from “spiritual partners” to strategic partners in 2015, the two countries’ economic ties have improved. The signing ceremony between Mongol Refinery and Megha Engineering & Infrastructures Limited (MEIL) included the participation of Mongolian Deputy Prime Minister Amarsaikhan Sainbuyan, India’s Ambassador to Mongolia M. P. Singh, Economic Advisor to the President of Mongolia Davaadalai Batsuuri, and officials from Ministry of Foreign Affairs of Mongolia and India.
Mongolia’s natural resources, the main driver of the country’s economy, are indeed a foreign policy matter. In addition, Mongolia’s landlocked position between the two giants – Russia and China – means it takes extra effort for Ulaanbaatar to attract foreign investments from third-neighbor countries.
Source: The Diplomat
GUEST POST: THE SCARY PART ABOUT ‘OUR COMMON GEOPOLITICAL LANGUAGE’ - EDITORIAL
Way back in 2018, I led a first-ever scientific expedition from the headwaters of Mongolia’s Selenge River to Russia’s Lake Baikal, one of our planet’s great environmental treasures. In those halcyon days, our international team of Russians, Mongolians, and Americans was spurred to act by Mongolia’s plans for multiple dams in the Selenge watershed, which provides more than half of Baikal’s annual inflows.
Such plans were developed despite the potential harm to fish, wildlife, and nearby residents, most of whom are nomadic herders. And despite the region’s low suitability for sustained hydroelectric generation. (In winter, ice can form up to three-feet thick on even the fastest-flowing sections, while recent summers have been plagued by drought and flash-flooding, accompanied by high sediment loads that can prematurely degrade a reservoir’s capacity to store water.)
By the following year, one of those projects—on the Eg River—seemed to have been permanently beaten back, partly through environmental activism and partly by global geopolitics.
Source: Mongolia Focus
BUSINESS
FINANCIAL REGULATORY COMMISSION’S PERFORMANCE IN 2022
Today (27 December 2022), the Financial Regulatory Commission (FRC) of Mongolia conducted its annual meeting and assessed performance.
In his opening speech, Mr D.Bayarsaikhan (Chairman, FRC Mongolia) indicated that as a result of pursuing flexible and resilient policies in promoting sustainable development of the financial market, 2022 was a productive year, full of achievements for the capital market in Mongolia. In accordance with the preliminary estimates, the market capitalization of the FRC regulatory sectors is going to constitute 25.7% of GDP. Particularly, Banking Reform is being implemented, and systemically important banks including the State Bank and Golomt Bank issued IPOs and raised MNT144.2 billion. Capital market capitalization was increased by MNT1.5 trillion, MNT212.4 billion was traded on the OTC market, and MNT89.9 billion was raised by issuing 6 asset-backed securities at the secondary market.
Source: FRC
See also: German Agency for International Cooperation awards “Plaque Of Recognition” to FRC
FRC signs MoU with Umbrella Association of Real Estate Brokerage Institutions
FRC’s last regular meeting of the year held
MONGOLIAN STOCK EXCHANGE LAUNCHES PRIVATIZATION OF STATE-OWNED COMPANIES
The bell ceremony to mark the initial public offering (IPO) of the state-owned Mongolian Stock Exchange (MSE) was held today (26 December 2022). Mr B.Javkhlan (Minister of Finance), Mr D.Bayarsaikhan (Chairman, FRC Mongolia), Mr B.Tsengel (Head, Government Agency for Policy Coordination on State Property), Mr Kh.Altai (CEO, MSE), and other officials attended the ceremony.
In his opening speech, Mr D.Bayarsaikhan (Chairman, FRC Mongolia) indicated that 2022 was a productive year, full of achievements for the capital market in Mongolia. In particular, Banking Reform is being implemented, within the framework of the Amendments to the Banking Law. Systemically important banks including the State Bank and Golomt Bank issued IPOs and raised MNT144.2 billion. The State Bank became the first open joint-stock company - among systemically important banks - and its trade order exceeded 100% on the first day the stock was offered.
Source: FRC
FRC’S SANDBOX COUNCIL APPROVES 4 NEW PLATFORMS
It was decided that the “Monpay” digital bond issued by “Mobifinance NBFI” LLC had successfully tested in the sandbox environment, and would therefore be introduced on the market. It was also decided to continue testing the services of “Money Market Fund LLC - of receiving requests for repo deals, along with selling and buying according to deals through the Moneymarket web - for one more year.
It was agreed to test the following services in the sandbox environment for one year:
- Р2Р lending services through Zeel.mn platform of “Zeel MN Platform NBFI” LLC. It is a new service entering the financial market of Mongolia, using artificial intelligence and blockchain technology for credit scoring and registration.
- Mutual fund services based on loans, incentives and donations through the platform of “FinBerry” LLC. It offers SMEs the possibility to raise necessary funds quickly, but a regulatory framework for the service has not been created yet.
- Online services for offering …
Source: FRC
BELL CEREMONY ORGANIZED FOR THE PRIMARY MARKET OF "MONGOLIAN STOCK EXCHANGE"
The "Mongolian Stock Exchange" has started its primary market trading today by offering 34 percent of its total, which is 119,157,598 shares, to the public at 100 MNT each and raising 11.9 billion MNT.
Kh. Altai, CEO of the Mongolian Stock Exchange, opened the ceremony and stated:
"On the threshold of the 32nd anniversary of the establishment of the Mongolian Stock Exchange, a major publicization process is beginning. This publicization process is a significant policy issued by the government. Especially for this parliament, major decisions have been made in favor of the stock market. One of them is the decision to make 25 state-owned companies public as part of the "New Revival Policy" to transfer the governance of state-owned companies to the public control. The first of these companies, the Mongolian Stock Exchange, is starting its IPO subscription tod
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