Leather industries to be supported with Tgs200 billion in bonds

National milk industry proposed
Parliament is deliberating to issue Tgs200 billion in bonds to support leather industries. On December 18,
the budget and economic standing committees of parliament met and discussed this issue and the majority of MPs supported Parliament’s resolution draft to issue bonds.
“Issuing Tgs300 billion in bonds with 7 percent interest for 7 years to support the wool and cashmere branch was successful; this is why parliament decided to propose issuing the following securities”, declared Kh.Battulga, Minister of industry and agriculture. “Mongolia produces good leather boots but has no domestic processing industries. By importing processed hides from Russia, we experience significant economic losses, said the minister, pointing out the importance of developing national leather processing industries.
The draft resolution envisaged spending Tgs140 billion of the total Tgs200 billion on leather and hide manufacturing and Tgs60 billion as encouragement to herders who provide and supply raw material. MP G.Uyanga proposed increasing the capacity of waste water purification facilities engaged in leather production, introduce technology for primary chemical cleaning of leather and hides, and close industries that pour sewage and waste into the central purification facility.
MP S.Byambatsogt proposed to issue Tgs100 billion in addition to the Tgs200 billion to support milk and dairy production. Mongolia consumes 380 million liters of milk each year. The country has more than 40 million head of animals but imports more than 70 percent of its milk need from abroad. “We have all the conditions to develop a national milk industry and supply the population with safe, good quality of Mongolian milk. By issuing bonds and supporting national milk dairy production, we will be able to ensure the population with good quality, inexpensive milk and dairy products”, said S.Byambatsogt.
By developing the national farming economy, Mongolia will succeed to produce milk products, increase technology of milk industries and produce dry power milk at home, thus reducing milk prices which today is being imported for US $3.7 per kilo. The standing committees agreed to set up a working group to study the proposal of the MPs expressed in connection with the draft Bill.
On November 28, the government sold Tgs 1.5 billion in bonds on the world market. US $500 million in bonds has been loaned for five years at 4.125 percent interest, and US $1 billion for ten years at 5.125 percent interest. Much money will be paid in interest every day. While the government has not yet defined how to spend this money, much money is lost every passing day, criticize some MPs, economists and press. For instance, the ‘Undesnii Shuudan’ Daily posted a warning in its December 19 issue saying ‘The government debt for this day reached Tgs4 billion, 117 million in interest. On which project has the bond money started to be spent? . On December 17, Prime Minister N.Altanhuyag made a statement to the DP group about how to spend the money they received from the bond. Construction of the projects to be implemented with Tgs 1.5 billion bond will start next spring. In the first stage, this money will be spent to build paved roads connecting six aimags with Ulaanbaatar, to build oil refineries and reduce housing prices by balancing the housing demand and supply. Also, the 5th power plant in Ulaanbaatar and other power plants relying on coal mines will be built. “For the purpose of effectively managing the spending of the Tgs 1.5 billion and guarantying positive macro-economic influence, the government decided to conclude an agreement with the Mongolbank”, said the Prime Minister.


Latest software system launched at Mongolia’s Stock Market

Automated system allows online transactions, payment, control and savings capabilities
Ribbon-cutting ceremony at the Mongolian Stock Exchange by Mongolian and Australian dignitaries
On December 17, Prime Minister N.Altankhuyag attended a launching ceremony for the MSE’s new comprehensive system called Millennium IT. The PM noted that this is the second wave of changes in the Mongolian Stock Market that enables the MSE to work at international standards and opens new opportunities for citizens and companies to expand their businesses. “A massive privatization program of twenty years ago laid the foundation for people to have their own businesses and a stock exchange was established for the first time”, he mentioned. Mr. David Lester, Director of Corporate Strategy of the London Stock Exchange Group, said that the new system was tested and installed in just 18 months in Mongolia; whereas, it took several decades in some nations to introduce similar systems. This was a significant achievement, he added.
The Government has been working with the London Stock Exchange at the strategy and management level to bring Mongolia’s Stock Exchange’s (MSE) activity to international standards. Within the cooperation,
a comprehensive information technology system Millennium IT was installed and came into operation at the MSE. 
MSE has been operating the Millennium IT system since July this year, testing the software and making necessary modifications throughout the system. Key professionals and brokerage firms had a chance to attend training and learn the system in this short period of time, making it possible for the software to be fully
operational and be handled by the national team.
Millennium IT, a leading technology solutions provider and part of the London Stock Exchange Group, provides a fully automated trading system with transaction, payment, control and savings capabilities.


UN independent expert warns economic growth in Mongolia is not benefiting the poor

While the Mongolian economy has experienced continued growth, this has not benefited the country’s poor, a United Nations independent expert warned today, urging the Government to adopt poverty reduction strategies based on human rights approaches.
“While some parts of the country are being transformed, poverty remains very high and is becoming entrenched not only in rural areas but also in urban centres as the income gap widens and inequality increases” said the Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda, following a visit to the Central Asian country.
She added, “The fact that poverty levels remain high and there are increasing inequalities is a clear demonstration that the benefits of economic growth have not trickled down to the poor.”
Ms. Sepúlveda expressed concern about the challenges faced by vulnerable groups affected by poverty and social exclusion in Mongolia, such as women, children, persons with disabilities, older persons, migrants, herders and nomadic communities; ethnic minorities; lesbian, gay, bisexual and transgender people; persons living with HIV/AIDS, and stateless persons.
During her five-day visit, Ms. Sepúlveda met with senior Government officials, donor agencies, international organizations, financial institutions, civil society and communities living in poverty both within the capital, Ulaanbaatar, and surrounding districts, as well as Erden soum in the Tuv province.
The Special Rapporteur urged the Government to immediately address the critical needs of the poorest and most marginalized, ensuring that their rights are protected and they are provided with adequate resources and access to basic services.
“I have found that, for the most part, Mongolia has established a robust legal framework, recognizing that everyone must enjoy the rights to education, health, housing, food, etc. –however, the laws do not necessarily translate into the everyday reality for many Mongolians,” she said, stressing that “there are severe implementation gaps in almost all social policies, ranging from domestic violence to trafficking.”
Accountability mechanisms to monitor the implementation and progress of poverty reduction strategies will be necessary, Ms. Sepúlveda noted.
“Mongolia must foresee the necessary budgetary implications and ensure sustainability in the long term and implement the strategy with strong cross-sectorial coordination through the leadership of a designated ministry,” she said. “Those living in poverty in Mongolia can wait no longer.”
Independent experts, or special rapporteurs, are appointed by the Geneva-based Council to examine and report back on a country situation or a specific human rights theme. The positions are honorary and the experts are not UN staff, nor are they paid for their work. Ms. Sepúlveda is scheduled to report her findings during this visit to the Council in June 2013.

Source: www.business-mongolia.com

Mongolia’s export of gold and copper fell in 2012

Mongolia is rich in copper, coal and gold. These commodities play an important role in the economy and represent large portion of the country’s exports.
National Statistics Office (NSO) of Mongolia has recently released data on exports of various products including minerals. The nation has exported 18.8 million tons of coal in the first 11 months of this year. There has been a slight increase if compared to last year’s export, which was at 18.4 Million Tons. Government revenue to the date from the sale of coal totals to MNT 1.151 Trillion.
The gold export, however, has been significantly decreased to 2.3 tons in 2012 from 3.2 tons 2011. Interestingly, the amount of gold extracted in the country grew a bit from 5.4 tons to 5.5 tons.
Export of copper concentrate was also declined in 2012. 544 thousand tons of copper was sold overseas within the first 11 months of the year, compared to 524 thousand tons exported in 2012.
There was a growth in the export of iron ore in 2012. Mongolia exported 5.743 Million tons of iron ore to date this year, increasing from 5.085 in 2011.

Source: www.business-mongolia.com

Mongolian Bonds Rebounds after Taking a Hit due Political Uncertainty

After taking a hit due to political uncertainty, Mongolia’s bonds rebounded with the 2018s quoted at 97.50/98.50 and the 2018s around 98.15/99.15, which is fastrecovery considering it reached levels as low as 93.50 and 94.50.
Mongolian bonds plunged 7-8 USD on Wednesday due to the news that the Mongolian People’s Revolutionary Party (MPRP) refusingto work with the Democratic Party.
Prime Minister N.Altankhuyag was in Kyrgyzstan and no one has yet officially accepted the MPRP’s resignation.
The MPRP ordered all its members holding ministerial posts to resign during a meeting on Monday. General Secretary of MPRP, G. Byambasuren said the decision was made as a protest against Enkhbayar’s imprisonment.
This news lead the bond prices to plummet until the next day (Thursday), institutional investors were picking them up, which boosted prices by as much as 5 USD. The bonds are still below reoffer of 99.996 and par and have not recovered to the 101.50/102.00 which they reached shortly after being priced.
During its launch, Mongolia’s 1.5 billion USD debt offering was 10 times oversubscribed or 15 billion USD demand which is twice the size of Mongolian GDP. The attraction of Mongolia is that it is rich in resources such as copper, uranium and coal and its 17.3 percent rate of economic growth in 2011.
Mongolia’s government has stated that it plans to sell a total of 5 billion USD in bonds to finance the infrastructure required to develop its flourishing mining sector.
“It’s one of the fastest-growing economies in the world, with greatly improved policies, and Mongolia is considerably less likely to default in the next few years than Spain,” said Charles Robertson, chief economist at Renaissance Capital to the Wall Street Journal.
The final outcome of the MPRP’s departure could “depend on how the exit is handled”, said Vidur Jain, an analyst at local investment bank Monet Capital to Reuters.”This may affect the yields on the recently issued bonds, and make a second bond issuance more expensive.”
The MPRP is a part of the “Justice Coalition”, which fought the June parliamentary elections on a largely resource-nationalist platform.This means, MPRP’s departure could eventually be welcomed by foreign investors if it helps lift fears of growing resource nationalism in the country.
“If the current (Democratic Party) government could maintain control it would be positive for investors, provided the fallout is handled effectively, as the MPRP was strongly opposed to foreign investment,” Jain said.
The MPRP’s partner in the Justice Coalition, the Mongolian National Democratic Party, said it would remain a part of the coalition government.

Source: ubpost.mongolnews.mn

Magnai Trade received a soft loan of MNT 14.6 Billion

The Bank of Mongolia is jointly implementing a program called SIFS with the Mining Ministry in order to finance the importation of petroleum products at minimal expense, prevent from sudden price increases at the local market and ultimately, maintain retail prices paid by consumers.
In the framework of this initiative, Magnai Trade, one of the largest importers of petroleum goods in Mongolia, received a loan of MNT 14.6 Billion at an annual interest rate of 3.8% for a period of one year. The financing was provided through Golomt Bank.
This is the fourth loan issued to private companies by this particular program and the total amount of the financing is now MNT 41.4 Billion. It is hoped that these participating companies, having received a loan with favorable terms, will be able to maintain stability for retail prices on the fuel products regardless of fluctuations of the foreign currency rates.

Source: http://www.business-mongolia.com

In Mongolia, a backdoor to the Hermit Kingdom

They come and they go without much international fanfare: delegations of North Korean ministers in Mongolia, invited by the pro-Western government to discuss trade, cultural ties and questions of “mutual interest.”
The specifics of these meetings are hard to nail down.
“The two sides exchanged views on the issue of further developing the exchange and cooperation between security organs of the two countries and matters of mutual concern,” one news release stated in November.
But unrevealing as these news releases may be, they hide a more interesting relationship: Mongolia, a fast-growing democracy whose mineral riches have made it the darling of global capitalism, has cultivated perhaps the warmest relationship of any country with the notorious Hermit Kingdom.
Intelligence and diplomatic officials see the Mongolian connection as a source of information on the North’s activities, as well as a potential conduit for dialogue with the unpredictable regime in Pyongyang.
With the North again rattling swords — a long-range rocket now stands ready for launch — opportunities to sound out senior officials are rare.
At the moment, for instance, North Korea watchers are reading tea leafs, trying to figure out whether longtime defense minister, Marshal Kim Jong Gak, has been replaced by Gen. Kim Kyok Sik, who is reputed to have closer ties to the ruling Kim Jong Un.
“This is exactly the kind of stuff that drives us crazy,” a Western diplomat in Seoul said, requesting anonymity. Kim Kyok Sik “commanded the units that launched the unprovoked artillery attack on the South that killed a bunch of people in 2010.”
And this is exactly where Mongolia comes in handy.
“Working through China is very difficult,” the diplomat said. “But the Mongolians might be able to just make a phone call.”
Sandwiched as it is between giants China and Russia, Mongolia is expert at navigating the rocky diplomatic territory between friendly disagreement and impudence.
It shouldn’t come as a surprise then that it has proven adept at balancing ties with Washington and other Western powers while pursuing warm relations with North Korea, Iran and other pariahs.
The Mongolian press regularly refers to the United States as “our third neighbor.” Mongolian President Tsakhia Elbegdorj met President Barack Obama at the White House in 2011, and President George W. Bush dropped in on Elbegdorj’s predecessor in 2005 — in part to thank Mongolia for sending troops to join US-led forces in Iraq and Afghanistan.
Even as foreign direct investment from G7, Russian and Asian investors has surged in Mongolia, earlier this year Elbegdorj became the first foreign leader allowed to visit the Iranian centrifuge array at the uranium enrichment center in Natanz.
Mongolia also has strong ties with two energy-rich Central Asian states known for their standoffish attitude, Uzbekistan and Turkmenistan. And it has kept strong ties with China, its largest trading partner, in spite of open criticism in Mongolia’s press about the suppression of their ethnic cousins in China’s province of Inner Mongolia.
But it is the relationship with Pyongyang that stands out most starkly.
During the Korean War, when Mongolia was effectively a communist satellite caught between China and Russia, Mongolia sent 200,000 head of cattle to help feed the North’s population.
The tacit alliance ended in 1990, when Mongolia recognized South Korea and embraced market reforms and democracy. But after some rocky times later that decade, ties have flourished again.
A top-level North Korean military delegation’s visit to the Mongolian capital was revealed in 2009, partly by accident — literally, an automobile accident. The crash made the local papers since North Korea’s deputy defense minister required treatment at an Ulan Bator hospital.
So what exactly is discussed when the North and Mongolia meet? North Korea may press Mongolia to follow China’s example and turn over North Korean defectors who use Ulan Bator’s air links as a gateway to South Korea. To date, the Mongolian government has held its ground, winning praise from human rights groups.
But land-locked Mongolia also has serious economic interests in developing the so-called Rahon Special Economic Zone, a port development at the northern tip of North Korea that offers Mongolia a way to export manufactured goods via the trans-Siberian railroad, bypassing Chinese and Russian ports.
There is also a controversial labor arrangement whereby some 5,000 North Koreans work in Mongolia’s booming mines and factories. Many work under miserable conditions, according to The Independent, and are likely forced to turn their pay over to Pyongyang — in effect, allowing North Korea to raise hard currency otherwise banned under sanctions.
The fact that neither the US, South Korea nor Japan has made an issue of these workers suggests there are good reasons not to upset Mongolia’s ties with the North.
But don’t oversell the Mongolia-North Korea friendship, experts say.
“These [North Korean] ties are based neither on common interests nor shared values but exclusively on the psychological imperative to defend maximum sovereignty and maintain room for maneuver,” wrote Munkh-Ochir Dorjjugder, director of Mongolia’s Institute for Defense Studies, in a paper for the Brookings Institution.
“The last thing the Mongolian government is willing to do is to act, once again, as the ‘mouthpiece’ and ‘promoter of ideology’ of any neighbor, real-world or virtual.”

Source: www.business-mongolia.com 

Mongolia's former president jailed for corruption

Mongolia's former president jailed for corruption

Nyamdorj Enkhbayar, Mongolia's former President, has been jailed for four years on corruption charges after a court verdict hat could threaten the country's fragile government's coalition.

Nyamdorj Enkhbayar, Mongolia's former President
After a three-day trial, Enkhbayar was found guilty of charges that included the illegal privatisation of a hotel and newspapers and the misuse of donated television equipment to broadcast from his own television station.
Enkhbayar accused state prosecutors of twisting facts and said the corruption charges were politically driven. "I'm not afraid of anyone. I will fight for justice and a new Mongolia," he said.
His wife, Onon Tsolmon, blamed Mongolia's current President Tsakhia Elbegdorj and vowed to fight "the injustice" by all means.
Enkhbayar was president from 2005 to 2009, before narrowly losing to President Elbegdorj in the 2009 presidential election. He was arrested in April by the country's anti-corruption authority.
The court also ordered Enkhbayar to pay more than 54 million tugriks (£26,000) in damages.
Resource-rich Mongolia is in the middle of a mining boom that is set to transform its tiny economy, but political uncertainties have threatened to overshadow its efforts to attract the foreign investment needed to develop mines and build vital infrastructure.
The young nation held its parliamentary elections in July and the ruling Democratic Party, which won just 31 out of 76 seats, was forced to form a coalition with Justice Coalition, which is led by Enkhbayar's Mongolian People's Revolutionary Party (MPRP).
Although Enkhbayar was barred from taking part in the elections, he remains as the chairman of the MPRP, which won the third-largest block of seats in parliament.
"The Democratic party needs the Justice Coalition without them, it doesn't work and the partnership may now fall apart," said Luvsandendev Sumati, director of the Sant Maral Foundation, a polling agency.
Election results last month left more than a quarter of the parliament in the hands of politicians who advocate local control of mines. Investors said the latest episode could worsen the political gridlock and increase uncertainty for foreign investors.
Key decisions pending for major mining projects, such as the development of the massive Tavan Tolgoi coal mine, may also be delayed.
Enkhbayar, who served as president of the landlocked central Asian country from 2005 to 2009, has called for the $13 billion Oyu Tolgoi copper and gold mine project with Ivanhoe Mines
to be renegotiated to grant better terms to the government, and also wants to keep the coveted Tavan Tolgoi coal mine, potentially one of the world's biggest coal suppliers, in local hands.
Rio Tinto has a majority stake in Ivanhoe and has full operational control over the Oyu Tolgoi mine, which is due to start production this year.

Source: www.telegraph.co.uk   

Mongolia’s Best Scientific Researches Awarded

Mongolia’s Best Scientific Researches Awarded


On the occasion of the Day of Scientific Researchers, 28 people were granted with ‘The Best Scientific Researcher’ title and medals on November 30. Also, the best scientific researches of 2012 have been selected with dignitary, S.Shatar – the State Honoured Scientist of Mongolia, has won the first place with a four million MNT prize for his three series research of Terpenoid Chemistry. The second place went to D.Regdel, the Science PhD and academician, and S.Enkhtuya, the Science PhD, while Dulmaa who serves at the Institute of Chemistry and Chemical Technology of Mongolia was awarded with the third place for her research. The ‘Honourary Credentials’ of the Mongolian Academy of Sciences were granted to six scientists and two researchers took the Best Young Researchers of 2012. Sh.Tsend-Ayush, the Cultural Merit Worker of Mongolia and writer was also granted with ‘Scientist Writer’ certificate. In 2013, 25.8 billion MNT were budgeted for the science sector and 9.2 billion of which will be used for technological projects.

Source: ubpost.mongolnews.mn 

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