|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
Ulaanbaatar /MONTSAME/ Ahead of the 72nd regular session of United Nations General Assembly, the European Union, Argentina and Mongolia co-lunched the initiative Global Alliance for Torture-Free Trade on September 18 at the UN Headquarters in New York, USA.
The initiative's purposes are to raise public awareness, to improve legal environment, to exchange practices, to create an information network and to involve private entities and civil societies to stop the trade in goods used to carry out the death penalty and torture.
On the launch day, the 58 countries joined the initiate have signed a joint political declaration that expressed willingness to ban the trade of goods used for the death penalty and torture.
Opening the event, Acting Foreign Minister Ts.Munkh-Orgil stressed Mongolia has abolished death penalty and expressed his hope that the initiative would have significant contribution in maintaining and protecting human rights.
The Monetary Policy Committee meeting was held on 15 September 2017, and it was decided to keep the Policy rate unchanged at 12 percent.
As of August 2017, annual inflation measured by the consumer price index has reached 5 percent nationwide and 5.4 percent in Ulaanbaatar city. In the first half of this year, growth of the Mongolian economy exceeded forecasts and reached 5.3 percent (on annual basis). Furthermore, economic growth is expected to accelerate and inflation is expected to stabilize around the medium term target rate of 8 percent.
Mongolian economy is currently stimulated by improved external demand, relatively high prices of the major export commodities and increased investments in the mining sector. While the Bank observes positive changes in market sentiment and positive trends in economic activities, further prospects are highly conditional on export prices and volume.
The Bank’s decision to maintain the policy rate unchanged is consistent with its mandate to stabilize inflation around the target rate and thereby facilitate the stability of macroeconomic environment in the medium to long run.
Extracts of the meeting minutes will be released in two weeks on the Bank of Mongolia’s website.
On September 18, 2017, 338,753 securities worth MNT 645,889,989 were traded on the MSE.
Of the 338,753 shares of 28 firms listed as Tier I, II, and III traded, 21 firms’ stocks increased while 3 decreased in price and 4 remained unchanged. Arig Gal JSC was the top performer, increasing 14.38 percent, whereas Talkh-Chikher JSC was the worst performer, decreasing 3.04 percent.
On the secondary market for government bonds, 773 bonds worth MNT 76,152,430 were traded whereas 4,094 securities worth MNT 409,400,000 were traded by the block.
On the secondary market for corporate bonds, 20 bonds were traded at a value of MNT 2 million.
The MSE ALL index and TOP-20 index rose 2.2 percent and 2.8 percent respectively, while the MSE’s market capitalization hit MNT 2,027,180,739 – the highest level since March 30, 2012.
MONGOLIAN STOCK EXCHANGE
Russia and China have seen a 25 percent expansion in mutual trade in the first seven months of the year, as business links between the countries continue to grow.
"The bilateral trade turnover has significantly increased in the first seven months of this year and reached $46.62 billion. It is 24.96 percent more compared to the same period last year," said Chinese Ambassador to Russia Li Hui speaking at the Rossiya Segodnya news agency on Monday.
According to the ambassador, China has been Russia's largest trading partner for seven years.
Li Hui also said there has been an increase in energy cooperation.
"China and Russia have launched a joint construction of the Amur gas processing plant, the first phase of the Yamal liquefied natural gas project, which will be implemented this year," the ambassador said.
In September, Russian Direct Investment Fund (RDIF) CEO Kirill Dmitriev said in an interview with the Xinhua news agency that 2016 saw a 12 percent growth in Chinese direct investment in Russia.
One of the recent business successes was the agreement on a Russian-Chinese investment fund worth 68 billion yuan ($10 billion) to bolster trade in the ruble and yuan, he said.
The countries are also working closely on projects in transport and logistic infrastructure, especially under the Belt & Road Initiative, also known as the New Silk Road, and projects of the Eurasian Economic Union.
Russian state-owned industrial giant Rostec has proposed working with China on developing engines for long-haul passenger jets. The countries are both working to create civil aircraft to compete with Boeing and Airbus.
Moscow has strengthened ties with Beijing in recent years after the US, the EU and their allies imposed sanctions against Russia over the conflict in Ukraine and the Crimea reunification.
The Mongolia Immigration Agency (MIA) has promoted a goal of “Online Immigration Service” in 2017, under this goal the agency has initiated services which would make the service more timely and consistent with an international standard. This time, the Mongolia Immigration Agency is implementing “Telephone appointment service” and we have interviewed Mr. Erkhemjargal, information officer of the MIA, regarding the new service.
-That is the first time that the government agency has applied “Telephone appointment service” in Mongolia. Please provide detailed information about the service.
-High technology is being widely used worldwide. At the same time, our agency is implementing “Telephone appointment service” starting from 15th September, which applies to international standard. Our customers can ask an appointment to a certain type of visa permit service via telephone, without waiting in a queue.
In the first stage, the service is covering foreign investors, educational field clients such as students and teachers as well as an inter-governmental organization customers.
The MIA customers are foreigners and mainly foreign investors, businessmen and applicant form an educational arena among them. Thus, the service is up-to-date as it not only saving the time of customers but also reducing the state service burden. On the other hand, it can be one way to attract foreign investors. Since the customer made an appointment, one does not have to wait in line to apply, which makes customers more satisfied with the service. On top of that, the Mongolia Immigration Agency is quite far from the city center. Regarding those circumstances, we have executed the service which could be time and economic friendly.
-How can we make an appointment? What are the requirements for customers?
-Customers can make telephone appointment by making a call to information center 1800-1882 and the appointment due time could be up to 1 (one) month. The customer can apply for the MIA service in the prearranged time and if the customer didn’t arrive on time, the appointment shall be canceled. More importantly, customers who are making an appointment must bring proper and complete documents in compliance with applicable laws and regulations, as inquiring from the information center and from our website. There are common incomplete documents as having no photographs and filling out application form incomplete.
We only receive complete documents for visa permit and issue the service within timeline in accordance with laws and regulations. Having an appointment with unprepared and incomplete documents is certainly avoidable. Due to lack of documents, service could become complicated as the customer need to come over again. Therefore, I strongly advise to our customers to increase one’s responsibility for not having a difficult situation for themselves.
Finally, I would like to highlight that the service is not decision-making period, but to check the completeness of the visa permit documents during the given time.
-How would the Mongolia Immigration Agency provide service for those who do not have the appointment?
-The MIA would provide service normally for those customers with line numbers issued in service hall. “Telephone appointment service” does not mean all customer must make an appointment for applying for visa permit. Accordingly, the state service will proceed typically in working hours as before.
-What are the new services that the MIA planning to launch in the near future?
-The Mongolia Immigration Agency’s goal of this year is “Online Immigration Service”. Furthermore, we would continue working to provide online services in compliance with an international standard. For example, our agency will test online visa permit service from September 20, 2017. This service would check whether applicant’s documents are complete or not, and more importantly, it would save the time of our customers. If the examination can be conducted successfully, we will continue working on the improvement of more online services.
Ulaanbaatar /MONTSAME/ The Export Development Project aimed to help small- and medium-sized enterprises in non-minerals sectors strengthen their export capabilities and boost their access to export markets has being implemented since this March. A cooperation memorandum between the Project implementing unit and the Development Bank of Mongolia was signed on September 18.
The parties agreed to collaborate in improving foreign trade knowledge of non-mineral sector companies and small and medium enterprises, making promotion and distribution of required information to businessmen, who intend to get financial support. Moreover they will cooperate in helping SME and companies to enter to new export market, to produce and develop export oriented products.
The project is funded with a USD20 million credit from the International Development Association, the World Bank’s fund for the poorest. Through the project, existing and future SME exporters in Mongolia’s non-minerals sector will have broader and easier access to export credit insurance, learn practical knowhow, and receive financial support up to USD100 thousand to improve their export quality and competitiveness.
The project will be implemented by the Government of Mongolia in the next 4.5 years.
Ulaanbaatar / MONTSAME/ Sustainable Tourism Project will be implemented in Mongolia with an aim to augment the number of tourists to up to one million a year.
To be co-implemented by the Thailand International Cooperation Agency (TICA), the German Society for International Cooperation and the National Development Institute of Mongolia, the project will continue until 2020.
On September 18, a discussion was held on the project at the National Development Institute of Mongolia (NDIM). The implementation progress is expected to launch in November. According to the project, it aims to attract one million tourists in the next years.
D.Erdenebayar, Chair of NDIM Department of Development Policy and Regulation, pointed out a research will be conducted on working out tourism models for 21 aimags, and will help define specific locations to boost tourism services and routes after making them in right order. Through the project, the tourism will be developed in three directions--travelling, local development and cultural industry, he said.
TICA consultants will work here to share experience and cooperate in the project until 2020. In the first turn, the project will launch in Bayankhongor, Selenge and Uvs aimags.
Paisan Rupanichkij, Deputy Director of the TICA, emphasized that Mongolia is possible to boost the tourism industry thanks to its natural landscapes and the nomadic culture, and it could be realized easily in combination of the well-developed infrastructure of Thailand. "Every country faces a risk to deteriorate environment when they develop tourism. Due to this reason, we focus attention to quality instead of quantity. It means that the project aims to introduce high-standard services," Paisan Rupanichkij underlined.
He also noted that Thailand has well-developed infrastructure so we made it opportunity to improve our tourism service quality. Flourishing tourism shows negative impact on environment. Due to this reason, we shift our attention to quality. It is important to have quality service with value.
Next discussion is expected to be held on September 22. The parties plan to exchange views on the project's implementation process, organizational structure, management, role and duties.
(Reuters) - Software startup Slack Technologies Inc said it raised $250 million from SoftBank Group Corp (9984.T) and other investors in its latest funding round, boosting the company’s valuation to $5.1 billion.
The latest fund-raising, led by SoftBank through its giant Vision Fund and joined by Accel and other investors, lifted Slack’s total funds raised to $841 million, the enterprise messaging operator said in an emailed statement.
The fund provides resources which will help Slack to run as a cash-generating company and the raise will reduce its dependence on outside financing, Slack Chief Executive Stewart Butterfield said.
In July, sources had told Reuters that Slack was raising $250 million in a new funding round led by SoftBank.
The company in the past has raised money from venture firms including GGV Capital, Spark Capital and Thrive Capital, among others.
Slack’s sizeable funding round reflects the trend of a growing number of $100 million-plus checks pouring into technology startups. In the second quarter this year, there were 34 venture capital deals of $100 million or more, nearly triple the 12 such transactions in the first quarter, according to data firm PitchBook Inc.
These large rounds have helped drive an uptick in startup funding since the end of last year, with venture capitalists investing $15.7 billion in companies during the second quarter this year, a 27 percent increase from the first quarter and making for the strongest quarter in a year, according to Thomson Reuters data.
Bloomberg and Financial Times previously reported the funding deal.
DETROIT (Reuters) - Honda Motor Co Ltd (7267.T) said on Monday its has invested $267 million and will add 300 new jobs to support increased production of its revamped 2018 Accord sedan model at the Japanese automaker’s plant in Marysville, Ohio.
Honda unveiled the newest-generation Accord in July, one of four re-engineered midsize sedans that Asian automakers are betting on to win market share as Detroit rivals shift focus to SUVs, crossovers and pickup trucks.
The new Accord, like rival Toyota Motor Corp’s (7203.T) all-new Camry, offers more horsepower, safety technology like standard collision-avoiding braking and better fuel economy although Honda did not release figures.
Honda’s investment in Ohio consists of $220 million for the Marysville plant, including a new $165 million welding department with 342 welding robots. The automaker is also investing $47 million at its Anna, Ohio, engine plant to provide turbocharged engines for the Accord.
The Marysville plant also makes the Acura TLX, a luxury midsize sedan, and the Acura ILX, a luxury compact sedan. With the new investments the plant will have a capacity of 440,000 vehicles a year and can add volume for the Accord as necessary, Steve Rodriguez, Honda’s manufacturing leader for the Accord, told reporters on a conference call on Monday.
Ray Mikiciuk, Honda assistant vice president for sales, said the company is not giving a sales forecast for the Accord, but added “I don’t expect to sell fewer Accords in 2018 with this great new product.”
Honda’s announcement follows Toyota’s last month that it would take a 5 percent stake in smaller Japanese rival Mazda Motor Corp (7261.T) as part of an alliance that will include a $1.6 billion U.S. assembly plant and collaboration on electric vehicles.
The plant came as a surprise for investors at a time of weakening U.S. new vehicle sales.
It also stands in contrast to recent moves by General Motors Co (GM.N) and Ford Motor Co (F.N). Faced with declining sedan sales, GM has cut the third shift at a couple of its plants.
Ford has announced it will move production of its next generation Focus sedan to China from Mexico to save $500 million in retooling costs. The U.S. automaker also announced in May it was laying off more than 1,000 salaried workers.
Passenger car sales have steadily declined since 2012 when they made up 51.2 percent of the U.S. market. Sedans sagged to a 38.1 percent share in the first half of this year.
Let’s start with what you think Mongolia should prioritize. What should we focus on the most?
Due to problems with repayment of the Chinggis Bond, Mongolia had no choice but to look to the International Monetary Fund. Even though the global interest rate had never been lower, Mongolia found itself in a debt crisis. US President Donald Trump is undertaking tax reforms and as a way to eliminate the budget deficit, the US is seeking out capital from the global market, which could be adverse for many countries.
In Mongolia’s case, in order to avoid raising capital on the global market, it has no choice
but to reform its taxation system and create a domestic source of revenue. I personally believe Mongolia needs to increase its taxes. During my previous visit to Ulaanbaatar, I talked about how the number of vehicles on the road has exceeded the capacity that the roads can handle. In order to balance the number of cars and road accessibility, it is essential to reform taxes.
It is also important for Mongolia as a nation to look at how they are using their natural resources. There is a need to focus on how to increase revenue from that sector. It sounds unfathomable that the 1.5 billion USD Chinggis Bond has caused Mongolia to tether on the brink of bankruptcy. The total value of the Oyu Tolgoi mine is 50 billion USD.
It would be beneficial for young Mongolian professionals to work and learn from experts around the world. This will help the Mongolian government retain its stake in the mine. If Mongolia was able to conduct its own exploration expeditions and find new potential mines, it could ink a favorable agreement with private investors. The contract established with Rio Tinto at the time essentially meant that this country would not receive any revenue from the mine in at least 25 years.
Rio Tinto contributed two thirds of the 10 billion USD in capital required to commence operations at the mine and to develop local infrastructure, while the government would finance the remainder. I want to discuss about why Mongolia came to pay money. Mongolia is allowing Rio Tinto to mine the 50 billion USD copper underground and is paying money on top of that.
The exploration company that found the Oyu Tolgoi mine paid a small amount of money for the license and sold it off to Rio Tinto. Even though this is not technically illegal, it is an unfortunate circumstance in the eyes of an economist. In order to address this issue, the Mongolian government must work to improve its capacity for mining exploration. For instance, establishing a mining institute, preparing engineers, and giving them practical experience will help Mongolia determine the total amount of natural resources it possesses.
Seems like it will take a long time, don’t you think?
Yes. Until then, world-class professionals can be contracted to conduct exploration efforts. Invite experts and professionals from around the world to work with young Mongolian professionals, imparting valuable information to them. This will help prevent any loss of stake in the Oyu Tolgoi mine.
As I said, Mongolia will not see any revenue from Oyu Tolgoi in the first 25 years. The government did originally own the license for the mine. A highly valuable mine was given up for a small amount of money. In order to not repeat thismistake, education reform, training of exploration professionals and people to negotiate a beneficial contract with investors is required.
I want to talk about the Mongolian education system briefly. I am from Munich, Germany. Munich, approximately the same size as Ulaanbaatar, has two universities and one military academy. There are a few other schools. Ulaanbaatar in contrast has many universities. Those universities are only preparing people to wear a tie and sit behind an office desk.
Mongolia needs people that work with their hands, professionals trained in technical institutes and that have the ability to perform high skilled tasks. The country does have professional training and manufacturing centers. These institutes need to be expanded and developed further, helping produce capable professionals. The students need to work at companies four days out of the week, accumulating practical knowledge and to also learn theoretical knowledge in class once a week. This type of dual education will be most beneficial.
Germany implements this education system. The trade balance of Germany is positive and we are one of the largest exporting countries in the world. This has a lot to do with this dual education system. The Mongolian education system is similar to that of the United States, possessing a large number of universities and colleges. However, it has already been proven that this type of education system does not have optimum results. All you need to do is look at the manufacturing sector of the United States. Possessing a large amount of land and a small amount of people, Mongolia is best suited to focus on mining, roads, and the construction sector.
Would it be correct to say that you do not support allowing foreign mining exploration companies to conduct exploration expeditions in Mongolia?
Yes, that’s correct. At the moment, Mongolia has no choice but to contract highly skilled
foreign professionals. But when Mongolia allows the whole company to conduct the exploration activities, they tend to lose their ownership of the mines. Mongolian companies should contract foreign professionals to conduct exploration and help retain ownership within the country.
It is possible then to attract investors and sign a contract. However, Mongolia must be unwavering on certain clauses in a potential mining agreement with an investor. When establishing a long-term contract, the two sides must agree to the general agreements and obligations. A clause must be added that in the event of any extenuating circumstances, the two sides will amend the agreement accordingly. I think it is important to note that the attorney contracted to draw up the contract plays a very important role.
My wife and I were both involved in the privatization efforts in East Germany. Based on my experience then, I wrote the book “Jumpstart”. The experiences I noted in my book were implemented during the privatization of the Bolivian mining sector. Bolivia had made it constitutionally illegal to sell ownership of its mines. In this circumstance, we gave advice on how to involve private businesses and investors in the privatization efforts.
The solution was to establish a joint company. In order to make use of the experience and technical capability of private companies, the government established a joint company. The government reached an agreement on what the machinery, technical equipment, and know-how of the company was worth and established a joint company accordingly. I came to Mongolia in order to share this.
Mongolia issued a 1.5 billion USD bond and also enrolled in the extended fund facility program with IMF. What are your views on the program?
This is not a solution, only a sign of more hardships to come. If a person with a low-income receives a loan from one person and uses a loan from another person to pay it off, where will that get them? Country-wise, it will cause the country to be directly influenced by someone else. Norway does not waste its reserves and invests in the global stock market. This helps maintain a relatively low interest rate. Venezuela, on the other hand, has caused artificial inflation due to uncontrolled spending from its oil revenue. The country is on the brink of bankruptcy due to its reliance on oil and decreasing oil prices on the global market.
If Mongolia spends its mining revenue on products such as vehicles or televisions, it is not beneficial. Investors see that there is an economic bubble that has formed in Mongolia that is about to burst, and therefore, they believe it will not be profitable to do business. It would not be outlandish to say that debt is poison. Increasing debt causes a bleak future. It might be time for Mongolia to tighten its belt and increase taxes in order to overcome this hardship. If Mongolia is able to overcome its current crisis, a great and prosperous future is waiting.
How do you see the potential of tourism in Mongolia?
I have heard that many tourists from German speaking countries such as Germany and Switzerland come to Mongolia. Germans wish to see and marvel at the ancient culture and beautiful nature of Mongolia. “The Story of the Weeping Camel” being shown in Germany moved a lot of people emotionally. Mongolia has the opportunity to attract tourists from all over the world. The development of rural infrastructure is key in developing the tourism sector.
Improving the services of rural hotels is also important. Many people come to see the history of the great empire that once was. Not only during Naadam, but year-round, organizing interesting sights will be helpful.
The government must be actively involved in tourism to attract investment and support the sector policy wise. The cooperation between the national government and local governments will help Mongolia see results. Germany is one of the countries with a very developed tourism sector.
There are many companies that send our citizens to many different countries. It is possible
to work together with them. Of course, they will have their requirements and standards. Using those avenues, it is possible to develop the tourism sector much further. Since tour operator companies have a vested interest in operating long-term, it will help establish a sustainable source of income for Mongolia.
What must be done to support domestic manufacturing?
Mongolia would be hard-pressed to establish say a vehicle factory and compete globally. But, Mongolia has the chance to initially supply all of its domestic demand. You can build your own buildings and roads. Of course, you do need experts that have experience in this matter.
On a related note, the Chinese market is large but we must not forget that the European Union’s market is even larger. Of course, China will always be an important economic partner for Mongolia but it is also important to diversify....