After the IMF bailout package… What else?

Why the bailout?
The Mongolia government has jointly announced with the IMF that it will implement the politically difficult – but inevitable – rescue package, and avoid becoming a delinquent international debtor. Let’s be clear – this is an aid package, at very low interest rates. It is also coming from long-term friends of Mongolia – the IMF/World Bank, ADB and with support from Japan and other bilateral partners. The Chinese government will reportedly extend the term of the US$2.2B Yuan swap facility (due in August) by three years.
This multi-party package will only come into being because the Mongolian government has agreed to a structural reform of government finances and processes. Signing up to the US$440m IMF package has opened the door to a larger US$5B plus support and debt restructuring package.
The IMF $440m package by itself will make little up-front difference to Mongolia’s plight, being drawn down over 3 years.
This larger package will also make easier the refinancing of existing government debts. Just recently DBM’s bonds of 580 million USD (issued at 5.75% for 5 years) were exchanged for the new 600 million USD Khuraldai government bond (issued at 8.75% for 7 years). The new Khuraldai bond is 52% more expensive than the DBM bond raised 5 years ago. However it is a 2.1% lower interest rate than the last 500 million USD bond raised just 12 months ago – representing a 20% reduction in borrowing costs. This reflects a first benefit from the proposed IMF deal.
However the lenders are also saying, “if we are to help you then you must also help yourself”. The restructuring of government revenues and expenditures is required “with or without bond repayment” and “with or without IMF bailout”.
By the end of 2016, the budget deficit reached 15% оf GDP and public debt reached 78% of GDP (http://unuudur.mn/article/94871). Effectively government expenditures have grown at a far faster rate than its revenues. At the peak of commodity prices the government were running large deficits and borrowing internationally to fund this. With the downturn in commodity prices the debt situation has become chronic.
Fiscal restructuring has to take place, with or without IMF bailout, but with IMF bailout at least the country will receive fiscal support from donor community. So the main culprit is not just a temporary fall in mining products prices, its the underlying fiscal structure and policies which created the unsustainable budget deficit and inefficiency.
Some economists claim that the bailout package is either unnecessary or it’s terms are unfair – or both.
But we ask you – what do individuals, families and companies do when they fall on tough times? They restructure to survive. If they don’t this quickly their relatives, shareholders and trading partners quickly cut financial support. They restructure or fail – simple as that. For companies, you restructure or go bankrupt.
Officially governments do not become bankrupt – look at Zimbabwe for instance. However, where lending countries and major lending institutions see an economy and government finances being mismanaged or in very poor condition, they quickly reduce their support, and demand action before support is re-instated.
There are also notable examples of countries like Venezuela where political leaders prolong their own country’s agony. They pretend the crisis does not exist, or waste time placing the blame on other parties. They often continue to print money to pay their own bills and make debt repayments. They do this for personal survival (or benefit) – but economic recovery does not occur and the catastrophe moves closer because the underlying economic structure itself is erroneous.
Government leaders may take actions within their own country that defy commercial logic. In recent years, despite being in economic crisis, Mongolia failed to support implement a number of large investment projects which could deliver billions of US dollars in FDI and tax revenue. Projects like the Tavantolgoi coal deal, Power plant No 5 and Gobi power plant could bring in at least 5 billion of dollars in FDI. However, due to domestic politics it so far hasn’t happened. Unfortunately, No minister in Mongolia resigns when he or she pursues wrong policies and can’t work with investors (ie get projects to the starting line).
However, when governments borrow from international markets to fund domestic projects they ironically expose themselves to the reality of being a “commercial borrower” – where government must repay its debt on time or face significant consequences.
We know from limited experience that when your economy is strong your exchange rate is strong. This occurred during the OT stage one construction and the peak of the commodities boom when coal and iron ore prices were very high.
But now we, Mongolians also know from much longer experience that when your economy is weak, your exchange rate diminishes and interest rates climb to high levels. And critically the cost of repaying your international debt increases significantly in local currency terms. When government revenues have fallen and government costs are not reduced at the same rate, then a bad problem is made worse.
All of these factors are in play in Mongolia – and the only realistic option is to accept the IMF remedy. While it is bitter to swallow, it is better to face reality sooner rather than later. Without the remedy a declining future and financial disaster comes much closer. A mega-commodities boom is not around the corner – and is not our savior.
Let us be clear again – the current level of Mongolian government debt is not sustainable and Mongolia has significant international debts due for payment soon. Refinancing, on good terms, when you have already high debt levels and a weak economy is extremely difficult.
The current success of Khuraldai bonds was only possible because investors thought that the country is serious in its intent to rebuild its own troubled finances with the help of IMF.
The INS supports the IMF bail-out package and the co-commitment measures being put into place by the government. INS realises there will be hardships, but INS also wants a better future for Mongolia, and the bailout package is a first step towards this future.
However, INS states the long-term solution is not the bail-out package per se. We need our government to put in place “economic stimulation policies and programs” that ultimately provide better government services, higher incomes and more jobs for all Mongolians. Restructuring the fiscal system to make it sustainable is a precursor to recovery.
Support ourselves through a strong economy
Restructuring and repaying old debts is not enough. Cutting government expenditures and raising more tax is not enough. It is critical that Mongolia’s government deliver a strong engine room – that is a “strong and growing economy” to provide the things that other country’s citizens take for granted. Government needs to deliver the economic growth, solve escalating health issues and take real steps to actually improve the business climate.
We are all sick from pollution and anti-sanitary conditions. We need our government to deliver healthy cities and towns for our citizens, young and old, to live in. Health wise, and politically, this is not negotiable. The IMF bail-out package is not going to deliver clean cities..
We also need to remember that for every significant social problem (like pollution) not fixed – there is an ongoing and growing public cost. To government it is growing health budgets, for the business community it is lower productivity and absences, and for Mongolians specifically it is chronic illness and reduced life expectancy.
We absolutely need strong businesses, both domestic and international, that make profits, pay Mongolian taxes and provide well paid jobs. The current government has stated that the state should not play a role in business going forward. However, the jury is out here – where we see SOE’s reverting back to large panels of ministry representatives on their boards.
Both sides of parliament recognise the failure of our state-owned and state-run enterprises. They clearly do not deliver efficient business organisations or outcomes. They borrow from government, make very small profits and pay little tax. They also have higher levels of employment than would be the case in privately run companies.
Our government must solve (for themselves) the riddle of how to attract the next wave of foreign investment and international finance. Last three years have witnessed falling amount of investment of all kinds, from 6.57 trillion MNT in 2013 to 4.754 trillion in 2015 (NSO), which includes all kinds of investment. It is not just foreign investment that’s falling – public and private Mongolian domestic investment is also falling.
The Mongolian banks – standing alone – do not have the capacity to service the needs of local businesses.  Attracting investors (and finance) to Mongolia is critical for Mongolia’s economy. Lowering the cost of borrowing capital for businesses – to be profitable –  is critical. Both are essential if we are going to invest in new and efficient power and heating stations and smarter living technologies, to solve Ulaanbaatar’s pollution problem. Again, here the long term commitment to restructure and improve public finance is crucial.
The government urgently needs to accelerate the next stage of economic recovery. We need to harness the business sector and excite international financiers, promoters and investors about the prospects and returns from establishing business in Mongolia. This cannot be done on a basis of IMF bailout alone. Real and credible actions are needed to kick start the key projects.
Mongolia’s natural endowments are minerals and agriculture. Mongolians have a rich culture and the world shares a curiosity in Mongolia’s history. Mongolians in general are not isolationists. However, Mongolia does not have a large population so we must be smart in how we build external markets to attract and underpin new business ventures. We need to be even smarter in how we attract and retain our future business partners and those who will fund future grand enterprises.
Initiating large-projects (whether in mining, energy, infrastructure or agriculture) is the quickest way to stimulate economic growth, but this does not always have a broad impact on incomes or employment. Mongolian officials have unfortunately struggled in building good relationships with in-country investors and building confidence with offshore investors. The Prime Minister has stated that addressing this is a key focus for this government.
Mongolia needs to build a strong and credible case for “why business should focus on investing in Mongolia” – as opposed to other countries with similar opportunities.
The much-needed private sector investment will come when the correct conditions are in place. If these conditions are not attractive – compared to our competitors – the level of incoming investment will not be large.
This must be the next most critical task rapidly advanced by the government. It is not easy work, but critical to get right

Source: Institute for National Strategy of Mongolia
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Russian, Mongolian experts to meet for discussion of power plants in Lake Baikal area

Russian environmental and scientific circles have repeatedly expressed their concerns about Mongolia’s plans to build three dams at rivers that feed Lake Baikal

Russian environmental and scientific circles have repeatedly expressed their concerns about Mongolia’s plans to build three dams at rivers that feed Lake Baikal

MOSCOW, March 13. /TASS/. Experts of Mongolia and Russia will hold the first meeting in June to discuss construction of a chain of hydropower plants (HPP) on the Selenga river and its feeders, Mongolia’s Ambassador to Banzragchiin Delgermaa told TASS on Monday.
"A mutual decision was made according to results of the intergovernmental commission meeting [in December 2016 - TASS] that we will exchange information in the first instance," the diplomat said. "Mongolia has a conclusion of a French expert company that also built HPP in Russia regarding two our projects. According to their conclusion, construction of the HPP will not actually exert negative influence on environment. However, Russia has its conclusion and its studies," the ambassador said.
"It was decided to set up a joint research team with scientists and experts of both sides," Delgermaa said. "We suggested holding the meeting with participation of Russian and Mongolian experts in March but the Russian party made a proposal to postpone such a meeting until June," she said.


The Baikal Lake is unique, the ambassador said. "This is not merely the Russian but also the global treasury. Therefore we will undertake measures to prevent environmental problems and will jointly settle arising issues," the diplomat added.
Russian environmental and scientific circles have repeatedly expressed their concerns about Mongolia’s plans to build three dams at rivers that feed Lake Baikal, the world’s largest and deepest freshwater lake and a UNESCO World Heritage site. Under the plan, three dams are to be built: one at the Selenga River, that accounts for some 80% of all water that flows into the lake, and two at its main tributaries - the Eg River and the Orkhon River.
The announcement coincided with the unprecedented decline in the Baikal water level that started in fall of 2014 and continued through 2016.


Source:Tass, Russian News Agency
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Mongolian PM to visit Russia in first half of 2017

MOSCOW, March 13. /TASS/. Mongolia’s Prime Minister Jargaltulga Erdenebat will pay a visit to Russia in the first half of 2017, Mongolian Ambassador to Russian Banzragchin Delgermaa told TASS on Monday.

"At a meeting of the intergovernmental commission in Ulan Bator in 2016, we had a very efficient discussion of issues in all spheres, not only in the trade-and-economic sphere but also in humanitarian and other areas," she said. "We have already adopted a detailed plan to deal with the problems that have been piling up for years, including railway transport, excise duties during railway shipments, building a water storage facility, cooperation in border regions. Our embassy is working with Russian ministries and agencies in all spheres."

"As for concrete results, we expect that about 40-50% of problem issues in relations between our countries will be regulated and resolved in practical terms before the Mongolian prime minister’s visit which is expected to take place in the first half of this year," the ambassador said, adding that the next regular meeting of the intergovernmental commission is scheduled to be held in Moscow in late 2017.
Russian Prime Minister Dmitry Medvedev visited Mongolia in July 2016. He had a series of bilateral meetings with Mongolia’s top officials and took part in a summit meeting of heads of state and government of ASEM (Asia-Europe Meeting) member states.


Source:Tass, Russian News agency

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Milbank Acts on Successful Exchange Offer and New Issuance by the Government of Mongolia

HONG KONG, March 14, 2017 /PRNewswire/ -- Milbank, Tweed, Hadley & McCloy LLP advised Credit Suisse and J.P. Morgan as dealer managers and initial purchasers in a US$600 million sovereign bond exchange offer and new issuance by the Government of Mongolia.
The transaction was successfully completed amid highly challenging economic circumstances. Mongolia has faced potential liquidity issues over the past year related to slower economic growth, mainly as a result of the country's dependence on commodities which have suffered from slumping prices. Initially the Government was able to secure preliminary approval from the International Monetary Fund ("IMF") for a package of relief measures, which gave the exchange offer and new issue strong momentum in the market.
Despite challenges which included an extremely tight deadline, the ongoing IMF discussions and rapidly approaching maturity of the Development Bank of Mongolia ("DBM") bonds in March 2017, the transaction was successfully completed on very favorable terms that achieved all of the Government's objectives. Approximately $476 million in new sovereign Government bonds were exchanged for outstanding DBM bonds, while an additional $124 million in new Government bonds were issued for cash.  Holders of more than 80% of outstanding DBM bonds agreed to remain in the credit by exchanging for new Government bonds at a yield of 8.75%. Meanwhile new Government bonds were issued for cash at a premium of 106.016%, with the proceeds to be used for further repurchases of remaining DBM bonds.
Capital Markets partner Jim Grandolfo led the Hong Kong-based Milbank team, which included counsel Paul Pery, senior associate Kurt Sherwood and associates Adam Heyd and York Wu.
Mr. Grandolfo commented: "Despite the challenging economic conditions, the Government of Mongolia, with the assistance of our clients Credit Suisse and J.P. Morgan, was able to successfully address the concerns of the IMF and its international investor base to achieve their objectives, all within a limited timeframe. This marks an incredible turnaround for the Government and the country of Mongolia, providing what we hope will be a strong basis for long-term, sustained economic recovery. We are pleased to support our clients Credit Suisse and J.P. Morgan and the Government of Mongolia on a transaction of such national importance."
About MilbankMilbank, Tweed, Hadley & McCloy LLP is a leading international law firm that provides innovative legal services to clients around the world. Founded in New York 150 years ago, Milbank has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Seoul, Singapore, Tokyo and Washington, DC. Milbank's lawyers collaborate across practices and offices to help the world's leading commercial, financial and industrial enterprises, as well as institutions, individuals and governments, achieve their strategic objectives. For more information please visit www.milbank.com.
From:  Jocelyn De Carvalho, Public Relations Manager; 212-530-5509; 
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Mongolia Investing Nearly $1 Billion To Develop Downstream Capabilities

The proposed refinery, to be located in the Sainshand soum (district) in the province of Dornogovi, is forecast to cost around $700m, with a further $264m to be spent on pipelines needed to bring crude to the plant from local fields.
A decent proposal
According to the proposal, which was approved by the Cabinet at the end of last year, the facility will have a yearly processing capacity of 1.5m tonnes. Its output is projected to comprise 560,000 tonnes of petrol, 670,000 tonnes of diesel and 107,000 tonnes of liquefied natural gas.
This should meet all of Mongolia’s petrol and diesel needs for the immediate future, with a heavy emphasis on diesel production reflecting a reliance on heavy-duty vehicles, particularly in the extraction sector, which accounts for close to 20 percent of GDP and more than 80 percent of exports.
In late December, the government announced it was seeking approval from the Import-Export Bank of India to utilize a $1 billion loan for the construction of the refinery and associated infrastructure.
The credit, agreed upon last year during a visit to Mongolia by Indian Prime Minister Narendra Modi, was extended to help develop the country’s rail network and general infrastructure.
Security of supply
One of the driving forces behind Mongolia’s plans to develop local refining capacity is a broader concern
about energy security.
Although Mongolia produces around 8m barrels of crude a year – most of which it extracts from the Dornod fields in the east of the country – it does not have any significant refining capacity. As such, virtually all of the current output from Mongolia’s operational oil fields is exported to China, and the country fulfils 97 percent of its processed hydrocarbons needs via imports, mainly from Russia.
Last year Mongolia imported 1.2m tonnes of petroleum from the country, of which 800,000 tonnes was supplied by Russian state-owned firm Rosneft, according to official figures.
In addition to saving as much as $1 billion a year in import costs, the new refinery could help boost Mongolia’s GDP by 10 percent, according to statements from the Cabinet. Initial projections put the facility’s turnover at $1.2 billion per year, with extra tax revenues and net profits expected to reach $150m and $43m per year, respectively.
Feedstock for the refinery is expected to come, at least initially, from the Dornod fields, located 545 km to the north-west of the site of the proposed plant, though other reserves will have to be developed over time to maintain supply while still meeting export commitments to China.
Upstream meets downstream
The development of a major hydrocarbons processing facility could have broader implications for Mongolia’s industrial development. According to the Ministry of Finance, up to 30 separate manufacturing lines, ranging from rubber products and plastics, to cosmetics and pharmaceuticals, could be established if a domestic refinery were in place.
The presence of a downstream facility could also spur investment in Mongolia’s upstream sector, which experienced a drop-off in interest following the fall in crude prices in the late 2000s. With a ready domestic market for refined products, more of Mongolia’s fields could become financially viable in the future.
Mongolia has identified 332m tonnes of oil reserves; however, only 42.6m tonnes are technically available for extraction, according to data from the Ministry of Mining and Heavy Industry.
Long in the pipeline
The plan to build an oil refinery is by no means new, with similar proposals mooted since the 1990s. More recently, there was a scheme to develop a refinery at Darkhan-Uul aimag (province) in northern Mongolia with an annual capacity of 1.7m tonnes of crude and an output of petrol, diesel and aviation fuel.
A feasibility study for the for the $1.5 billion refinery was completed in November 2013; however, in early 2014 Mongolia’s National Security Council struck down the plan due to its expected reliance on feedstock imports from Russia.
As the latest refinery initiative includes plans to build a pipeline connecting it to Mongolia’s native crude supply in Dornod, a need for foreign imports should not be a sticking point.
While a refinery could help Mongolia fulfil its own basic fuel requirements, expansion of its industrial base will increase the need for more advanced products, such as lubricants and additives. Unless additional production lines are established at the proposed Sainshand refinery, Mongolia will still have to rely on imports for some oil-based products.
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US State Secretary Rex W.Tillerson congratules Mongolia on behalf of President Trump on Lunar New Year Occcasion

On behalf of President Trump and the American people, we send our best wishes to the people of Mongolia as you gather with your families and friends to celebrate Tsagaan Sar on February 27.

I hope that the new year brings you prosperity and success, and that the close ties between the American and Mongolian peoples continue to deepen as we mark the 30th anniversary of diplomatic relations between our countries.

Source: US State Department
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Mongolia sets minimum yield for new dollar bonds

By Daniel Stanton and Spencer Anderson
SINGAPORE/HONG KONG, Feb 24 (IFR) - The Government of Mongolia's new US dollar bonds, to be issued as part of an exchange offer for Development Bank of Mongolia's state-guaranteed March 2017 bonds, will have a seven-year tenor and minimum yield of 8.75 percent.
The exchange offer ends on March 1 and the new notes will be priced on March 2. Investor meetings run until February 28.
Credit Suisse and JP Morgan are managing the transaction.
There had been concerns that Mongolia might struggle to meet the $580 million DBM bond redemption on March 21.
However, over the weekend the International Monetary Fund said it had reached an agreement on funding for Mongolia. The agreement is subject to the confirmation of financing assurances and approval by the IMF executive board. That means funding would not be received before the DBM bonds mature, raising the need for the exchange offer. (Reporting by Daniel Stanton and Spencer Anderson; Editing by Vincent Baby)

Source:Reuters
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Mongolia reaffirms commitment to one-China policy

China supports the aid by international financial institutions to Mongolia, and it will also consider Mongolia's hope to expand exports of mineral, agriculture and husbandry products to China, Wang said


beijing, Feb 21 Debt-ridden mongolia has reaffirmed its commitment to the One-China policy and sought support from Beijing after bilateral ties were disrupted following the visit of Tibetan spiritual leader Dalai Lama to the landlocked country last year.
China yesterday assured to help Mongolia in its financial problems after Mongolian Foreign Minister Tsend Munkh-Orgil met his Chinese counterpart, Wang Yi here.
Tibet is an inseparable part of China and Tibet-related issues are China's internal affairs, Tsend Munkh-Orgil said after meeting Wang Yi.
This was Tsend's first visit to Beijing after bilateral relations were disrupted by the Dalai Lama's visit to the landlocked country in November.
China retaliated by various measures including cancellation of meetings to provide financial assistance to Mongolia to alleviate its debt burden.
Since then Mongolia made efforts to repair ties with China and promised it would never allow future visits by the Dalai Lama, state-run Xinhua news agency reported.
Hailing the Mongolian foreign minister's statement, Wang said it was important for the two countries to boost ties from a new beginning.
The two countries should outline high-level communication, synergise China's Belt and Road Initiative with Mongolia's Prairie Road program and promote cooperation in various fields, Wang said.
Munkh-Orgil said the Belt and Road Initiative would bring great opportunities for Mongolia's development, adding that Mongolian Prime Minister Jargaltulga Erdenebat will visit China and attend the Belt and Road forum for international cooperation in May.
He also thanked China for its support during Mongolia's financial difficulties. Mongolia had also approached India for assistance.
China's assistance included providing favourable loan terms to Mongolia and extending a bilateral currency swap deal that is vital to Mongolia's foreign trade and currency stability, state-run China Daily said.
The International Monetary Fund said on Sunday that Mongolia has agreed to implement an economic rescue package proposed by the IMF and refinance bond loans, easing concerns that Mongolia might default on a loan in March.
China supports the aid by international financial institutions to Mongolia, and it will also consider Mongolia's hope to expand exports of mineral, agriculture and husbandry products to China, Wang said.
Since Mongolia is trying to avoid missing a USD 580 million sovereign-guaranteed debt repayment due in March, the IMF said in its statement on Sunday that the Asian Development BankWorld Bank and bilateral partners, including Japan and South Korea, will provide up to USD three billion in aid, the daily said.
People's Bank of China, the central Bank of China, will extend a currency swap line to Mongolia worth 15 billion yuan (USD 2.18 billion), it said.
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Mongolia should enhance ties with China to push forward its economic reforms

By Hu Weijia

Forecasts by some observers that emergency aid from the IMF is likely to help Mongolia pull through its economic crisis might appear to be overly optimistic. The country's current crisis is the combined result of both external factors and an unbalanced economic structure, which is an incentive for Mongolia to speed up its domestic reforms. China will most likely be willing to provide more assistance to help the neighboring country push its economic reform forward, but it remains uncertain whether Mongolia will accept.

The IMF package may be accompanied by additional support from China as the country's central bank is expected to extend a currency swap line to Mongolia worth 15 billion yuan ($2.18 billion), easing concerns that Mongolia might default on sovereign-guaranteed debt in March. The IMF package would buy time for the debt-ridden nation to take a breath, but an international bailout cannot solve the fundamental problems that have caused Mongolia's current economic crisis.

The nation is expected to slash its budget deficit and adopt a set of fiscal reforms after receiving the IMF package, but such efforts might not be enough to restore debt sustainability. Mongolia's heavy dependence on the export of mineral resources makes the nation sensitive to commodity price fluctuations and at risk economically. In light of these problems, Mongolia has to carry out reforms to optimize its industrial structure, of which a key step will be improving economic efficiency.

China is willing to share its experience on how to promote economic diversification and investment efficiency it has had in resource-rich areas such as North China's Inner Mongolia Autonomous Region. Hopefully Mongolia will follow China's advice. It may even be worth considering setting up a mechanism to invite Mongolian grassroots officials to visit China in a bid to learn from the country.

Mongolia would benefit if its economy were more closely tied to China's rise. Lying between China and Russia, Mongolia has strived to remain politically and economically independent. It is understandable that Mongolia may have some concerns of getting too close to China, but the overall development of Sino-Russian relations creates a sound atmosphere for enhancing China-Mongolia cooperation and the crisis-hit nation should seize this opportunity.

China's aid to Mongolia is unlikely to be limited to emergency financial assistance but would include deep economic cooperation based on mutual political trust. Mongolia needs to show its sincerity for enhancing bilateral ties and pushing forward reforms.

Source:Global Times
http://www.globaltimes.cn/content/1034207.shtml
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Former lawmaker and minister from Democratic party arrested by Anti-corruption agency

Former lawmaker and minister from Democratic Party arrested by Anti-corruption body during investigation of misappropriation of funds at Development bank of Mongolia.

B.Garamgaibaatar, former lawmaker and owner of Monroad, road construction company and N.Batbayar, former lawmaker and minister of Economic development under previous gov't are arrested by agents of Independent agency against Corruption on Monday evening around 7 pm. 

They were under investigation in relation to misappropriation of funds at the Development bank. Monroad company is one of larger borrowers of the Bank. 

Garamgaibaatar was questioned from 3 pm until his arrest at the agency and then detained at Detention unit no.461.

N.Batbayar was arrested around 8 pm and detained under arrest warranty of State prosecutor. 


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Interview with Anaraa Nyamdorj, Pioneer human rights and LGBT activist in Mongolia

Gay marriage has been firmly in the spotlight recently, but in many parts of the world the LGBT community is still persecuted. In Mongolia, there is a brave transgender activist who is standing up for his community’s rights.

Friday, the 22nd of May 2015 was a momentous day in the history of my country. With the eyes of the world watching, Ireland became the first nation on earth to legalise same-sex marriage by popular vote. A small island that had for centuries been held within the moralistic shackles of the Catholic Church and where homosexuality was a crime up until 1992, almost 70% of the Irish population made the decision to embrace fairness and equality by voting “yes”. Labelled in the run-up to the referendum as “the civil rights issue of a generation”, the overwhelming result was viewed by many as a powerful statement of acceptance towards a section of the population that had been oppressed for so long.

For more, go to:

Source:http://www.postpravdamagazine.com/yes-we-khaan/
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China to expand economic aid to Mongolia

Beijing will expand economic aid as ties 'ready for another start'
China extended its support to Mongolia on Monday for overcoming economic difficulties, as Foreign Minister Wang Yi announced a number of measures to help the debt-ridden neighbor.
Observers said that since the bilateral ties are emerging from a time of political frustration, Beijing's latest help is a sincere move to assist the landlocked neighbor to diversify its economy.
The measures include providing assistance and favorable loan terms to Mongolia and extending a bilateral currency swap deal that is vital to Mongolia's foreign trade and currency stability, according to a joint news conference after Wang's talks with his visiting Mongolian counterpart Tsend Munkh-Orgil on Monday.
The International Monetary Fund said on Sunday that the country has agreed to implement an economic rescue package proposed by the IMF and refinance bond loans, easing concerns that Mongolia might default on a loan in March.
China supports the aid by international financial institutions to Mongolia, and it will also consider Mongolia's hope to expand exports of mineral, agriculture and husbandry products to China, Wang said.
Since Mongolia is trying to avoid missing a $580 million sovereign-guaranteed debt repayment due in March, the IMF said in its statement on Sunday that the Asian Development Bank, World Bank and bilateral partners, including Japan and South Korea, will provide up to $3 billion in aid.
People's Bank of China, the central Bank of China, will extend a currency swap line to Mongolia worth 15 billion yuan ($2.18 billion), while the IMF said it will offer three-year loans worth about $440 million, Agence France-Presse reported.
Mongolia angered China in November by allowing a visit by the 14th Dalai Lama, who has pushed for separating Tibet from China.
In January, during a phone call between Wang and his Mongolian counterpart, Mongolia said it had reflected deeply on the visit and promised to not allow the Dalai Lama to visit again.
On Monday, Wang said the bilateral relationship "is ready for another start".
Munkh-Orgil, the Mongolian foreign minister, said his country remains true to the one-China policy and Tibet is part of China. Additionally, Mongolia appreciates China's help in addressing economic problems, he said.
He added that Mongolia's prime minister expects to visit China in May to attend the Belt and Road Forum for International Cooperation.
Xing Guangcheng, a senior researcher on Russian and Central Asian studies at the Chinese Academy of Social Sciences, said the helping hand was offered at a time when Mongolia has fixed the trouble brought by allowing the Dalai Lama's entry, which "pushed on China's bottom line".
Zhang Jingquan, a professor on Northeast Asian studies at Jilin University in Changchun, said the measures announced by Wang on Monday "are meeting the desperate need" of Mongolia.
The country could take the improvement in bilateral ties as an opportunity to diversify its conomy and change its inefficient development pattern, Zhang noted.

Source:http://www.ecns.cn/2017/02-21/246131.shtml
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Debt-plagued Mongolia accepts IMF condition to refinance existing loan

Mongolia has agreed to implement an economic rescue package proposed by the International Monetary Fund (IMF) and refinance bond loans, easing the nerves of international investors and the business community fearing Mongolia might go default on its loan in March.
"The Mongolian government agreed to issue another commercial bond to replace the current 580-million-U.S. dollar bond due to be matured in March 21, 2017 at the suggestion of IMF," Mongolian Finance Minister Choijilsuren Battogtokh said on Sunday.
Koshy Mathai, the IMF mission chief for Mongolia, said the two sides reached an agreement on the program under the Extended Fund Facility.
It covers a period of three years, with 440 million dollars in financing from the IMF, and about 3 billion dollars from bilateral and multilateral partners, he said.
He added that this was a staff agreement only and was subject to confirmation of financing from the partners to the program and a few "prior actions."
The negotiation with the IMF lasted six months and was concluded at 1:30 a.m. local time on Sunday (1730 GMT Saturday), the Mongolian finance minister said, calling it a tough negotiation.
The minister listed three main conditions Mongolia has agreed upon.
"The 2017 budget has to be revised before the IMF executive board approval of the program. Secondly, the Mongol Bank must stop financing the mortgage scheme and transfer responsibility for the scheme to the government. Thirdly the Mongol Bank must stop any funding activities that fall outside the budget," he said.
The program is expected to be implemented in several stages when Mongolia revises its taxation laws and reduces social welfare spending which are conditions of the IMF program.
The looming 580-million-dollar bond was issued five years ago by the Development Bank of Mongolia with government guarantee. Most of the loans went to show-case projects such as construction of public roads and heavy industrial plants with no prospect of immediate returns.
Mongolia's total debt stands at 21.6 billion U.S. dollars including government loans, government guarantees and private company loans.
Mongolia's largest international bond, known as the Genghis Bond raised in late 2012, is due to be repaid in installments in 2018 and 2022. Endi

Source:Xinhua news agency
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IMF Reaches Staff-Level Agreement with Mongolia on Three-Year Extended Fund Facility

February 19, 2017
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
A staff team of the International Monetary Fund (IMF) led by Koshy Mathai visited Ulaanbaatar during February 1-19 to continue discussions with the Mongolian authorities on a set of economic policies that could be supported by IMF financial assistance. At the end of the visit, Mr. Mathai made the following statement:
“The Mongolian government and the IMF team have reached staff-level agreement on an economic and financial program to be supported by a three-year Extended Fund Facility (EFF) for SDR 314.505 million (435 percent of quota), or about $440 million. Other international partners also plan to support the government’s program: the Asian Development Bank (ADB), World Bank, and bilateral partners including Japan and Korea are together expected to provide up to $3 billion in budget and project support; and the People’s Bank of China is expected to extend its RMB 15 billion swap line with the Bank of Mongolia for at least another three years.
“The total external financing package will thus be around $5.5 billion and will support the authorities’ “Economic Stabilization Program,” which intends to restore economic stability and debt sustainability as well as to create the conditions for strong, sustainable, and inclusive growth, while protecting the most vulnerable citizens.
“This agreement is subject to the confirmation of financing assurances, the completion of prior actions by the authorities, and the approval of the IMF Executive Board. The Board is expected to consider Mongolia’s request in March.
“Mongolia is well endowed with mineral resources, strong potential in agriculture and tourism, and a young and dynamic population. Its long-run future is promising, but in recent years it has been hit hard by the sharp decline of commodity prices and a collapse in foreign direct investment (FDI). Attempts to stem the decline through expansionary policies proved ineffective after a few years, and the economy is now stagnating, weighed down by high debt and low foreign-exchange reserves.
“Fiscal consolidation is a key priority, as loose fiscal policy in the past was a major driver of Mongolia’s current economic difficulties and high debt. Budget deficits will be reduced steadily, while priority social spending will be maintained: for instance, the savings from better targeting the Child Money Program will be used entirely to increase spending on the food stamp program for the most vulnerable. Also, to boost revenue, the personal income tax will be made more progressive, with rates on only higher-income households increased.
“The Development Bank of Mongolia (DBM) will henceforth operate in an independent, purely commercial manner, as laid out in the recently passed DBM law, and the Bank of Mongolia (BOM) will not engage in additional quasifiscal activity, with the mortgage program now operating essentially as a revolving fund. In addition, the law on concession projects will be reformed, and the public investment program (PIP) will be rationalized and better aligned with national development priorities.
“The authorities will adopt a set of important fiscal reforms to ensure that budget discipline is maintained, building on the existing framework for fiscal responsibility. These include the creation of a Fiscal Council to provide independent budget forecasts and costings of new policy proposals, and provisions to give the government sole authority to determine the total amount of spending in the budget, as well as to require Ministry of Finance approval of any proposals to cabinet with a budgetary cost.
“Monetary policy will remain appropriately tight, given the objective of price stability. Over time, however, as the economy normalizes, it may be appropriate to cut the policy rate if external and inflation indicators permit. The exchange rate will continue to move flexibly, with intervention limited to smoothing excessive volatility and preventing disorderly market conditions. A major priority will be the adoption of a new BOM law to clarify its mandate, strengthen governance, and improve independence.
“Strengthening the banking system is a crucial part of the program, to ensure that the banks can support sustainable and inclusive economic growth. The authorities’ first priority is to undertake a comprehensive diagnosis of the banking system to assess institutions’ financial soundness and resilience. With the results of this diagnostic in hand, the BOM will engage banks to ensure appropriate restructuring and recapitalization, as necessary. The BOM will complement these actions by strengthening the regulatory and supervisory framework, and government is committed to improving the deposit insurance system. The authorities are also committed to strengthening the regime for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).
“The authorities intend directly to boost economic activity and prospects by attracting new investment to major mines, and by implementing an array of structural reforms to promote economic diversification and improve competitiveness, especially in agriculture and tourism. The broad range of reforms envisaged under the program have been developed in close collaboration with the World Bank and ADB.
“The authorities’ adjustment and structural reform program, supported by the large package of external financing, is expected to stabilize the economy and lay the basis for sustainable, inclusive, long-run growth. By 2019, growth is projected to pick up to around 8 percent, as economic and financial conditions improve and key mining projects take off. Foreign exchange reserves should rise to a healthy $3.8 billion (above 6 months of imports) by the end of the program, similar to levels seen in 2012, before Mongolia was hit by external shocks. Fiscal consolidation will leave room for the banking sector, over time, to extend more credit to the private sector, consistent with projected growth. These policies would also put public debt on a declining path over the course of the program.
“The government’s recently announced plan to engage with its private external creditors to secure financing assurances for the program should help restore debt sustainability. Specifically, the financing parameters of the program assume that external private creditor exposure will be maintained at its current level over the program period, on terms consistent with debt sustainability, and gross financing needs will remain at prudent levels during the post-program period.
“On behalf of the staff team, I would like to thank the authorities for their warm welcome, and the constructive discussions and excellent collaboration we have had over recent months, bringing us to today’s successful conclusion.”

Source:IMF
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