Progress made in Mongolia’s economic situation

-Earth work for railway construction is well underway-

In accordance with provision 48 of the Law on proceedings of parliament, every last Friday of the month, the Prime Minister reports about the country’s socio-economic situation and issues at the plenary meeting that attract keen attention.

At the plenary meeting of parliament on October 4, head of the government N.Altankhuyag reported
about the macro economic situation in the first eight months of 2013. In the first quarter, the economy of
Mongolia was at 7.1 percent growth, growing further in the second quarter and reaching 11.3 percent per half year.

The growth of economic speed was influenced by OT’s processing industry that was commissioned in June by exporting copper concentrate in July, by building roads and infrastructure facilities with ‘Chinggis’ bond and Development Bank money, and support of economic sectors from the ‘Price stabilization program’, said
the Prime Minister.

The government implemented four sub-programs to support production and supply of oil, meat and flour that significantly influence inflation growth. As a result, 14.2 percent inflation at the end of
2012 dropped to 6.7 percent. Export in the first eight months fell to 6 percent against the previous year reaching US$2.7 billion. Coal exports dropped by 21 percent with the price on coal being reduced by 30 percent.
According to the Prime Minister, the currency rate was stable until mid 2013, and climbing in the past month, which as the PM explained, was related with the decline of foreign currency inflow and strengthening of
the US dollar on the world market. Nevertheless, said the Prime Minister, 77 thousand people were provided with jobs with the intensification of building and construction and the unemployment rate dropped by 1.1 percent against the same period in 2012 reaching 7.3 percent. Harvesting campaign and preparations for winter are underway with 800 soldiers and more than 300 students mobilized for the harvesting campaign, and 28 counter units to sell fresh vegetable operate in the capital city.

After his report the Prime Minister responded to the questions of MPs. MP S.Ganbaatar asked, “Having taken additional financing, the Rio Tinto company imposes demands profitable for them but not for Mongolia. The size of loans to be taken for 15 years may reach US$4-24.3 billion. Tangible and
intangible property is said to be given for loan security. This is for parliament to decide. It is impossible for the Cabinet to resolve matters worth many billions of dollars.I would like to get your comment’ said S.Ganbaatar.

“At this moment it is impossible to make an explanation as the finalization for additional financing was not
completed”, said N.Altankhuyag. “The goal of the Mongolian team in London is to find out how the
additional financing shall be taken and for what it shall be spent”, responded the Prime Minister. “No
issues shall be resolved detrimental to Mongolia”, he added. In the following talks, we will work to control 53 percent of shares, as indicated in the investment agreement, and the other side to hold 47 percent. Another task of the Mongolian team is to correct the perception spread by Rio Tinto internationally that the Government of Mongolia is not willing to move the Oyu Tolgoi project, commented the Prime Minister.

MP R.Gonchigdorj was interested in the railway policy and success reached in negotiations. P.Bat-Erdene,
the CEO of ‘Mongolian Railways’ company said following: “Earth work for railway construction in the Ukhaa Hudag-Gashuun Sukhait direction is at 46.4 percent. Drafting and projecting of the 1500 km railway road project eastward from Tavan Tolgoi in the Sanshand-Choibalsan direction is at 42 percent and the projecting will be completed this year, he said.

Bidding for the project general executive will be announced after the completion of the projecting the railway project and construction is planned to start in April 2014.

Last month, Minister of Road and Transportation A.Gansukh paid a visit to China related with the upcoming
state visit of the Prime Minister to PRC. One of the issues to be discussed with the Chinese side in the
framework of the visit was to revise the 1955 negotiations on borderlines, in particular, issues related to railways at the border points. “In other words, we considered it appropriate to resolve an additional four border points, in addition to the Zamyn-Uud border station, under the scope of the PM’s visit. Also, discussed will be the modification and renewal of railways passing through the territory of Mongolia.

Mongolia’s government proposes to call a consultative meeting in Ulaanbaatar involving relevant railway officials from Russia and China. Official letters were sent to the RF and China,” said the Prime Minister.

Source:Mongol Messenger