1 US-MONGOLIA 'THIRD NEIGHBOR TRADE ACT' ON THE WAY WWW.THEDIPLOMAT.COM PUBLISHED:2018/11/17      2 CHINA'S FIGHT AGAINST SMOG MAKES PALLADIUM 2018'S BEST METAL WWW.MINING.COM PUBLISHED:2018/11/17      3 MILLENNIUM CHALLENGE CORPORATION PRESENTS GMS LICENSES WWW.MONTSAME.MN PUBLISHED:2018/11/17      4 MONGOLIA CALLS FOR GLOBAL ATTENTION ON CLIMATE CHANGE WWW.NEWS.MN PUBLISHED:2018/11/17      5 ADB OPENS A NEW WASTEWATER TREATMENT PLANT IN ARVAIKHEER, MONGOLIA WWW.AGENPARL.EU PUBLISHED:2018/11/17      6 CHINA TO BOOST COOPERATION WITH INDIA, MONGOLIA: DEFENSE MINISTER WWW.GLOBALTIMES.CN PUBLISHED:2018/11/17      7 DEATH ON MONGOLIA’S ‘COAL ROAD’ WWW.NEWS.MN PUBLISHED:2018/11/17      8 MONGOLIA SHAKEN BY WIDENING LOAN SCANDAL WWW.ASIA.NIKKEI.COM PUBLISHED:2018/11/17      9 MONGOLIA’S UNEMPLOYMENT FALLS BY 2.2 PERCENT WWW.NEWS.MN PUBLISHED:2018/11/16      10 MEETING MEAT DEMAND: MONGOLIA TO TRADE 17.9 PERCENT OF LIVESTOCK WWW.NEWS.MN PUBLISHED:2018/11/16      БНСУ-ЫН АЖ АХУЙН НЭГЖҮҮДИЙН АУТСОРСИНГ ЗАХИАЛГЫГ ГҮЙЦЭТГЭХ ЗАЛУУЧУУДЫГ СОНГОН, ШАЛГАРУУЛНА WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/11/17     НҮҮРСНИЙ ЭКСПОРТ 10 ХУВИАР ӨСӨЖ, 31.3 САЯ ТОНН БОЛОВ WWW.GOGO.MN НИЙТЭЛСЭН:2018/11/17     СУДАЛГААГААР ЖДҮ ЭРХЛЭГЧИД ЗЭЭЛИЙН ХҮҮНИЙ ЗАРДАЛ ХАМГИЙН ИХ ХҮНДРЭЛ УЧРУУЛДАГ ГЭЖ ХАРИУЛЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/17     ERDENE RESOURCE DEVELOPMENT: ХАЙГУУЛЫН ЗАРДАЛ III УЛИРАЛД 42 ХУВИАР БУУРСАН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/17     ГОРХИ, ТЭРЭЛЖИЙН БАЙГАЛИЙН БОХИРДОЛД АНХААРАЛ ХАНДУУЛЖ ЭХЛЭВ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/17     ИРЭХ БААСАН ГАРАГТ ХОТЫН ДАРГЫГ ОГЦРУУЛАХ ЭСЭХИЙГ ХЭЛЭЛЦЭНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/17     “АМГАЛАН” ХОТХОНД БАЙРЛАХ ГЭРТЭЭ КАННАБИС ТАРЬЖ, УРГУУЛЖ БАЙСАН ТУРК ИРГЭНИЙГ БАРИВЧИЛЖЭЭ WWW.MEDEE.MN НИЙТЭЛСЭН:2018/11/17     ӨНӨӨДӨР АВТОМАШИНЫ ДУГААРЫН ХЯЗГААРЛАЛТ ҮЙЛЧЛЭХГҮЙ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/17     ГАШУУНСУХАЙТЫН НҮҮРСТЭЙ МАШИНЫ ЦУВАА 120 КМ БОЛЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/16     ТАТВАРЫН ОРЛОГО 32.2 ХУВИАР ӨСӨЖ, ТӨСВИЙН ТЭНЦЭЛ 341.9 ТЭРБУМ ТӨГРӨГИЙН АШИГТАЙ ГАРЛАА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/16    

Events

Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Russia's Rosneft discovers vast new oil deposit on Arctic shelf www.rt.com

Russian oil major Rosneft has announced the discovery of a new oil deposit while drilling at Khatanga Bay in the Laptev Sea in the eastern Arctic. The Ministry of Natural Resources says this could be the largest oil deposit on the country’s Arctic shelf.

“During the drilling of the Tsentralno-Olginskaya-1 well from the shore of the Khara-Tumus Peninsula on the shelf of the Khatanga Bay of the Laptev Sea, three core samples were taken from depths of 2305 to 2363 m, which showed high oil saturation dominated with light oily fractions,” the company said in a statement.

The potential of the newly-discovered deposit has yet to be verified, the company said.

“On the basis of primary studies, it can be concluded a new oil field has been discovered, the volume of the resource potential of which is increasing as the drilling continues. Core sampling continues at the moment,” a statement from Rosneft said.

Russian Minister of Natural Resources Sergey Donskoy congratulated the company on the discovery and said this could be the largest oil deposit in the Russian Arctic.

"Now we expect more discoveries from our colleagues. They promise to cheer up the sector soon," Donskoy posted on Facebook.

Russia’s largest private oil company – Lukoil – is also operating in Khatanga. Lukoil has been developing the Eastern Taimyr sector. The area’s coastal resources are estimated at 4.5 million tons of oil, 9.3 billion cubic meters of gas and 0.5 million tons of condensate.

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Prime Minister invites investors as positive economic outlook seen for Mongolian economy www.montsame.mn

Ulaanbaatar /MONTSAME/ The second annual summit of the Business Council of Mongolia is being held on June 19-20. Under the theme “Regional Connectivity in Asia”, the main topics of infrastructure, power, mining, environmental awareness and other potential projects are being discussed.

PM J.Erdenebat opened the summit with a speech and said “Foreign trade turnover of Mongolia steadily increased to USD 8.3 billion in 2016, while reached USD 4 billion in the first quarter of this year. Around 80 percent of the total exports consists of mining products. The Government is aiming to create multi-pillared economy by diversifying export products and manufacturing final products from the agricultural raw materials”.

After discussing the Economic Corridor program agreement, which was signed between Mongolia, China and Russia, PM J.Erdenebat noted “We perceive that an opportunity for increasing transit shipments and trades exists in Mongolia. Therefore, Mongolia is interested in cooperating with Russia, China and other countries in the region to increase rail freight transports, create power grid and develop pipeline transport. Also, the positive outlook of the Mongolian mid-term macro economy can be observed from the reports of international banks, financial institutions and experts. Therefore, we encourage foreign investors to invest in Mongolia”.

Within the framework of the summit, several world-leading companies, such as The Bank of Tokyo-Mitsubishi UFJ and SoftBank Group, are attending to present cooperation opportunities. Accordingly, Shigeki Miwa, General Manager of SoftBank's CEO Office, delivered a presentation on Asian Super Grid and highlighted the possibilities of joining the project.
B.Tugsbilig

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EU-standard meat factory to be built in Uvs aimag www.montsame.mn

Ulaanbaatar /MONTSAME/ During his visit to Uvs aimag, Minister of Food, Agriculture and Light Industry P.Sergelen attended the groundbreaking ceremony of “Khumen Negdel” LLC’s factory, which will manufacture meat and meat products under European Union standards with Austrian “BERTSCH LASKA” LLC’s equipment, on June 11.

The groundbreaking ceremony was attended by MP N.Tserenbat, local officials led by Governor of Uvs aimag D.Batsaikhan and representatives of local residents and herders.

The construction of the factory is expected to continue for 11 months in total. Once the operation starts, around 40-50 big and 120-150 small livestock animals will be processed through a single shift, producing thousand tons of livestock meat and 6 hundred tons of raw and pre-cooked meat products annually.

The current issue for the company is to establish a pre-contract with herders to register cattle with livestock branding, bar code systems and conduct preventive maintenance in order to provide healthy food to the consumers.

Secondly, the company is aiming to manufacture and export frozen meats, variety of sausages, meat products, meat preserves and offal products with HACCP and ISO standards. Furthermore, the factory is expected to create 70-80 jobs once the operation begins.
Source: Ministry of Food, Agriculture and Light Industry
B.Tugsbilig

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32 projects to be implemented in scope of China-Mongolia-Russia economic corridor www.gogo.mn

- The 2nd annual BCM Summit which is hosted by Business Council of Mongolia is being held under the theme “Regional Connectivity in Asia” to discuss opportunities in Mongolia to accelerate trade and economic development in Asia, today at Ikh Tenger Complex. -
The first panel on Regional Economic Integration: From Economic Necessity to Political Reality was attended by
V.Enkhbold, Director of Foreign trade and Economic Cooperation Ministry of Foreign Affairs,
Alex Gong, Executive director & Senior Vice President, Foun Group,
Haiming Xing, Ambassador of People`s Republic of China to Mongolia,
Og Song, Ambassador of the Republic of Korea to Mongolia,
Anastasiya Nabatchikova, Chief Administrative Officer, Bridgens,
Iskander Azzizov, Ambassador of the Rusian Federation
Ts.Tumentsogt. CEO, Erdenes Mongol.
The panel discussion was moderated by B.Byambasaikan, Board Member of Mongolian Business Council.

Iskander Azzizov, Ambassador of the Russian Federation to Mongolia said that Russia and Mongolia reached an agreement to upgrade the Ulaanbaatar Railway Joint Venture Company.
Haiming Xing, Ambassador of People`s Republic of China to Mongolia emphasized "There are six economic corridors between Mongolia and China. China is ready to invest in order to develop those corridors.
Og Song, Ambassador of the Republic of Korea to Mongolia stated that "Korea and Mongolia are discussing to establish Economic Partnership Agreement and I hope that it will enable Korean investors to turn their attentions to Mongolia. However, we must remember that stable policy is very significant.
Moreover, a technological fund of Korea and Japan agreed to invest in Mongolia. A meeting of the fund was held in Tokyo and the next meeting is planned to be held in Ulaanbaatar on 18-19th of July, involving delegations of major technological companies of the two countries; namely Hyundai, Samsung and Mitsubishi etc". 
 Heads of Russia, Mongolia and Chine agreed to implement 32 projects in scope of the China-Mongolia-Russia Economic corridor. Due to high number of projects, there is a necessity to choose the essential six projects that are needed to be implemented in near future. V.Enkhbold, Director of Foreign trade and Economic Cooperation Ministry of Foreign Affairs noted that Mongolia chosen the priority six projects and submitted the proposal. 
The next meeting of Presidents of Russia, China and Mongolia is scheduled to take place in Ulaanbaatar city and the new President of Mongolia will attend. Panelists noted that the President T.Elbegdorj played a key role in establishing the China-Mongolia-Russia Economic corridor.

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Western shore region of Khuvsgul Lake connected to electricity network www.montsame.mn

Khuvsgul /MONTSAME/ A region on the western shore of the Khuvsgul Lake, one of the top tourist attractions of Mongolia has been connected to the central electricity network. Construction work of 16 KW electricity line and sub-station were completed within 40 days.

Electricity connection from Khatgal village to Toilogt allows 73 tourist camps and 110 ger camps surrounding the lake and local households access to electricity supply and following benefits including comfortable toilet and hot shower, internet access and new jobs. New electricity lines continue up to 40 km, reaching the most remote tourist camp.

Construction work costs MNT1.6 billion and three companies, namely, Infrastructure, Selena and Plus and Minus have executed the work.

B.Ooluun

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Mongolian Warriors and Communist Soldiers: A Frontier Town in China www.nytimes.com

ENQUAN, China — Wenquan means “hot springs,” and the town, nestled in a fertile swath of Central Asia, certainly has its share. Alpine forests cloak the surrounding mountains. To the south is a wide lake where azure waters lap at stony shores. Horses and sheep roam the pastures.

But an abundance of natural beauty is not what brought the Mongolian warriors to this land of broad valleys in China, next to present-day Kazakhstan.

The Chahar made the long journey in horse and camel caravans in the 18th century, under orders from the Qianlong Emperor and his court in Beijing. Qianlong, one of the greatest of the Manchu rulers of the Qing dynasty, cobbled together a vast multiethnic Chinese empire through conquests and alliances. Mongolian khanates, armies and tribes fell under his rule, often after vicious battles.

Qianlong dispatched a Chahar army from near the Mongolian steppe to newly conquered territories along the empire’s northwestern rim, where the Chahar were to form a border garrison.

“My father was here from a young age,” said Xiu Yun, 48, a manager at a modest resort hotel built around the hot springs in the town center. “His parents were from here too. My family members are descendants of the Mongolians who came under the Qing. We Mongols are very proud of this history.”

Continue reading the main story
She added: “I can speak Mongolian and read and write it. Most Mongolians here can do the same.”

In recent years, Wenquan officials have begun highlighting the town’s Mongolian heritage. Street signs have both Chinese and Mongolian script. A new concrete mural on the main road next to the hot springs hotel depicts the ancient caravans that traveled west. A museum at the other end of the main street has a large map showing the three waves of Chahar migration. On one wall, a poem called “The Door of the Rainbow” pays tribute to that history.

For centuries, the Chahar claimed to have a seal from Genghis Khan, which conferred legitimacy. So their alliance with the Qing — they were incorporated into the banner system after a failed rebellion in 1675 — was important for the Manchu rulers. It bolstered Manchu standing in the eyes of other Mongolian tumen, or tribes.

“From Genghis Khan to the emperors of the Yuan dynasty to the khans of the Chahar tumen, there was this single lineage,” said Oyunbilig Borjigidai, a professor of Manchu and Mongolian history at Renmin University of China in Beijing. “Its status and influence were much greater than those of the other tumen.”

Another Mongolian group, the Dzungars, ruled northwest Xinjiang, on the Central Asian frontier, before Qianlong decimated them in a famous series of campaigns. Qianlong then wanted to build garrisons on the borderlands, and so armies from the Chahar, Xibe and Solon ethnic groups were dispatched.

“They truly played an important role in helping the Qing court establish a foothold in the northwestern border area and develop it,” Mr. Oyunbilig said of the Chahar. “They have a reason to be proud.”

Wenquan is part of the Bortala Mongol Autonomous Prefecture, the base of the Chahar in Xinjiang. (Their ancestral home is in present-day Inner Mongolia, where the majority of Chahar in China live.) The prefecture is one of several scattered enclaves that arose from Qing-era garrisons. Farther south, in the fertile Ili Valley, is another — that of the Xibe, who speak a language similar to Manchu and are one of China’s 56 official ethnic groups.

Wenquan is a quiet town beyond a pass north of Sayram Lake, the largest alpine lake in Xinjiang and where Kazakh herders graze sheep and offer horseback rides to tourists in summer. Wenquan has one short commercial strip — at one end is the hot springs hotel and at the other is the museum.

Half the town is taken up by a bingtuan, a term for an agricultural production center that originated in the Mao era as a garrison project of the People’s Liberation Army. It is a modern-day variation on the mission of the Chahar.

It is hard to tell where the town ends and the bingtuan begins. The two merge seamlessly. The bingtuan, the 88th Regiment of the Fifth Division, has streets, homes, schools, shops and office buildings.

While on a reporting trip to Xinjiang, I drove to Wenquan to spend a night here. I was curious about the town because my father, as a member of the Chinese Army, had been posted here from 1955 to 1957 to work in an earlier bingtuan, as an aide to the party chief.

He bunked with two others in a room with a coal stove. The town had a dirt road lined with homes. There were no shops then. The hot springs bathhouse stood alone, not as part of a hotel, and my father enjoyed dips there. The mud-walled home where my father lived was uphill at one end of the road, on the grounds of the headquarters of the Fifth Regiment.

“Every day, I would look at the mountains,” he told me. “Someone said, ‘You cross the mountains and you are in Russia.’ Kazakhstan was on the other side.”

Wenquan is a palimpsest of military conquest. In a sense, my father and the handful of other ethnic Han soldiers posted here in the first decade of Communist Party rule were spiritual descendants of the Chahar.

Though there were Mongolians in the area back then, most people in town and in the surrounding hills were Kazakhs, and they remain the largest ethnic group in Wenquan. On occasion, my father would ride a horse for a day to visit nomads in the high pastures and spend a night or two in their felt yurts. He learned to speak some Kazakh.

To visit Mongolians in the nearby prefecture seat of Bortala, my father and his comrades rode in a horse-drawn wagon. In Wenquan, there was no emphasis on Mongolian language or culture. After my trip, my father was surprised to hear of the displays of Mongolian culture I had seen.

Though the party’s ethnic policies are contentious, there has been a revived interest in some parts of China in the languages and traditions of smaller ethnic groups. Sometimes this has strong support by the national government, as in the case of the Manchus. In other instances, ordinary people or community officials drive the revival.

“There is this new sub-ethnic consciousness,” said Peter C. Perdue, a historian at Yale University who has studied the Qing conquest of Xinjiang. “The Chahar want to say they are a separate ethnic group, not mixed in with the other Mongolians there.”

“You hear about the Uighurs all the time there,” he added, referring to a Turkic-speaking group in Xinjiang. “The other minority people are also trying to regenerate a sense of their identity, in a somewhat different sense than the way the People’s Republic of China assigns ethnic labels to people.”

The evening I stayed in town, Mongolians, Kazakh, Han and Uighurs all showed up at the bathhouse in the hot springs hotel. In recent years, violence involving Uighurs and Han has erupted in oasis towns in southern Xinjiang, the Uighur heartland, and in the regional capital, Urumqi. There did not appear to be much tension in Wenquan.

Ms. Xiu, the hotel’s manager, has an uncle who writes Chahar poems for local newspapers and plays the topshur, a two-stringed instrument popular among western Mongolian tribes. The uncle, Madega, 66, runs a local company that makes the instrument. He lives with a daughter, Wuyunhua’er.

“The Chahar dialect is still widely spoken in Chahar families in Wenquan,” the daughter said. “But over all, I can’t say how well preserved the Chahar culture is in Wenquan.”

For the last decade, the prefecture has held a summertime festival called Naadam, in which Mongolians celebrate traditional sports that include wrestling, archery and horse racing. Wenquan began hosting it about four years ago. Last year, officials changed the name from Naadam, a common Mongolian word for such a festival, to the Hot Springs Festival, in a bid to attract more tourists.

But in other ways, the festival has been expanding the spotlight on the area’s Mongolian heritage.

At last summer’s event, Ms. Xiu said, “local Kazakhs and Mongolians sold costumes, handicrafts and relics for the first time, and this was popular with tourists.”

Vanessa Piao contributed research.

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Presidential Competencies and Election Platforms www.blogs.ubc.ca

By Julian Dierkes

One of the prominent topics in political discussions of the past 2-3 years has been constitutional reform. This has been brought about by the indeterminate compromise between a parliamentary and presidential democracy that the framers of the Mongolian constitution in 1992 reached. Periods of cohabitation (i.e. when the president of a different party than the majority of parliament as has been the case for the past year) are particularly difficult, but even when they represent the same party, conflict between the president and party leaders and the prime minister has been frequent.

Constitutional Powers

In practice, the main power that is reserved for the president is oversight over various parts of the judicial system. This has been even clearer under Pres. Elbegdorj as he has asserted this authority over the Anti-Corruption Agency (ATG), but also over the courts.

While the president also chairs the National Security Council and commands the military, this doesn’t actually give him/her the power to make military decisions. Likewise, the power to appoint ambassadors, doesn’t give formal authority over foreign policy. That’s why there are ministries of foreign affairs and of defence who are cabinet members, not subordinate to the president.

Current Debates

For a number of different reasons, constitutional debates have become more pressing in the past 2-3 years. Various reform proposals have been floated, and there currently is an experimental process in deliberative democracy that is meant to support these discussions, though it remains somewhat obscure in origins and directions.

Promises in the Election Platforms

Yet, despite these debates, the election platforms suggest an all-powerful presidency.

Battulga

After its broad preamble and topics covered under “2.1 Human Rights and Justice”, virtually all of Battulga’s campaign platform addresses topics that are not under the jurisdiction of the president. Take “2.3 Health Care” as an example. Few Mongolians would disagree with the aspiration that “Health Care and Medicine will be updated with newest technologies. A Mongolian citizen will be able to get diagnostics and treatments of the highest level in his homeland.” In fact, this addresses the serous topic of medical tourism that allows wealthier Mongolians to receive superior medical services abroad while ordinary Mongolians must rely on a domestic health care system that is hampered by budgetary and technology constraints. Yes, this is an important issue, but is it one where the president has any impact?

Ganbaatar

The beginning of Ganbaatar’s election platform is particularly ironic in this regard.

He opens his platform with a discussion of the “the gap between the election promises made by the political parties and their action after the election”. Yet, the very next paragraph discusses unemployment as a paramount problem. Yes, conversations with Mongolians and the results of several surveys confirm that unemployment is a serious issue. But, Ganbaatar proposes to address this issue by,

Making the government accountable;
Reducing and eliminating unemployment;
Reducing and eradicating poverty.
And how exactly would a president achieve that?

The remaining sections of Ganbaatar’s platform do seem more closely focused on some of the roles that the president takes on. The second part addresses justice and the judicial system. When he talks about “public interest” (part three) and national pride (part four), these are all broad claims about the direction of the country where the moral and symbolic leadership seems of a president seems more appropriate than in the concrete fight against unemployment. The platform largely continues in this vein, though that also means that it is exceedingly vague, sometimes even poetic in its aspirations.

Enkhbold

In structure, Enkhbold’s campaign platform is built more like Battulga’s than Ganbaatar’s. That is, he similarly starts with some very broad aspiration of his mission as president and some issues grouped under “National Unity, Mongolian Pride”.

After that discussion, a long list of issues that Enkhbold would hope to tackle follows. Where the first set of issues refers to the judiciary, the connection to the tasks of a president is fairly direct. But further down that list, for example in a section on “Middle Class – Wealth Creation”, it is less clear what the connection to constitutionally specified tasks for the president is.

Of course, Enkhbold would serve as a president with the collaboration of an MPP-led government and legislature, so he would be more likely to be able to implement some of his goals by collaborating with the government, but not necessarily through the nature of the presidency.

Caveats

Of course, the president does have the right to introduce legislation in the Ikh Khural. So, in some ways, he would be able to pursue an agenda on topics where s/he has no direct involvement. But is that what Mongolians are looked for, namely an alternative legislator who is not involved in the implementation of the legislation s/he introduces?

The president also chairs the National Security Council. Given the mandate of the NSC to safeguard the country, it has previously made statements on health care, the environment and other issues that are deemed closely linked to the welfare of the nation. So, statements on these topics by Enkhbold and Battulga could be interpreted to fall roughly into the portfolios addressed by the NSC. At the same time, the NSC itself is not an implementing body and relies on the government to actually do the things it maps out.

Audit of Electoral Campaigns

I’ve always been very interested in provisions in Mongolia’s election laws that require an audit and approval of electoral platforms by the General Election Commission. This is in part to present a situation like 2008 where the MPP and DP outbid each other in cash grants that they promised the population. Not only do platforms have to be approved, but candidates actually have to stick to these approved platforms in the campaign. Good idea, no?

Yet, all the examples of items in electoral platforms above suggest that this audit does not check electoral platforms on the question whether the president is actually in a position to affect the change that s/he has promised.

Coming Constitutional Reform

Will this mismatch between the constitutional role of the presidency and the campaign platforms matter?

There other factors in this election that will probably have a greater impact on the likelihood of constitutional reform. But that’s a topic for another post, I think.

Note

This blog post started with a conversation I had with a member of the diplomatic corps in Ulaanbaatar who pointed out the mismatch between constitutional powers of the presidency and the campaign platforms.

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Mongolia must open up to avoid aviation embarrassment www.asia.nikkei.com

Mongolia is to get a new international airport next year. The $580 million project, overseen by the Japan International Cooperation Agency, is a large investment for a country of only 3.1 million people and a gross domestic product of just $12 billion.

Yet unless the government liberalizes the country's aviation market and stops coddling state-owned MIAT Mongolian Airlines from competitors such as Air Astana and Turkish Airlines, air traffic is likely to continue to stagnate and the new airport will become a white elephant.

Ulaanbaatar's existing airport handled fewer than 1 million passengers last year. The new airport, about 50km outside the capital, will have capacity to initially handle 3 million passengers a year and up to 12 million passengers once construction is fully complete.

Mongolia's aviation market has tremendous growth potential but under the government's current restrictive policies, it is unable to spread its wings. International traffic has been stagnant at approximately 800,000 passengers a year since 2012. Yet the authorities are refusing to allow Kazakhstan's Air Astana to launch flights to Ulaanbaatar or permit Turkish Airlines to increase capacity to enable nonstop services from Istanbul.

Turkish carriers are currently limited to offering a paltry 500 seats a week under the air services agreement between the two nations. Turkish Airlines wants to double its capacity to Mongolia by launching two weekly nonstop wide-body flights from Istanbul to Ulaanbaatar while maintaining three weekly one-stop flights via Bishkek, Kyrgyzstan.

Flag carrier MIAT has objected to Turkish Airlines' request. Nonstop Turkish flights from Ulaanbaatar to Istanbul would impact MIAT's European business, particularly from Germany, the largest Western European source market for Mongolia's tourism industry and also a popular destination for Mongolians.

MIAT also has raised repeated objections to Air Astana's plans. The Kazakh flag carrier announced plans in February 2016 to launch three weekly flights from Astana to Ulaanbaatar four months later and began selling tickets. However, Air Astana had to a cancel the launch just two weeks before the planned first flight after what it described as an "ungrounded revocation of permission" by the Civil Aviation Authority of Mongolia. Air Astana has since reapplied for permission, with an eye toward starting flights by the end of 2017, but seems unlikely to gain approval given MIAT's opposition.

European connections

Air Astana would rely heavily on transit traffic to Europe, given that demand for flights between Ulaanbaatar and Astana is itself relatively small. This means Air Astana would be competing with MIAT's services to Russia and Germany. Turkish Airlines, which has an extensive network in Germany and Europe overall, would also become a much stronger competitor in the Mongolia-Germany and Mongolia-Europe markets if it were able to launch nonstop flights to Ulaanbaatar.

MIAT offers one-stop flights to Berlin via Moscow and seasonal flights to Frankfurt. It covers the rest of Europe via Moscow using codeshare partner Aeroflot. As such, MIAT and Aeroflot now enjoy a near monopoly over the Mongolia-Europe market. The only other options for passengers heading between Europe and Mongolia are to use Turkish Airlines with two stopovers or to backtrack via Beijing or Seoul with Air China or Korean Air, respectively.
New showcase international airport will go to waste without competition

Mongolia is currently served by only five foreign airlines, which carried a total of 360,000 passengers via Ulaanbaatar last year. MIAT is a tiny flag carrier, carrying less than 400,000 passengers to seven destinations with a fleet of four aircraft.

Mongolia also has two privately owned regional airlines, Aero Mongolia and Hunnu, which operate domestically and to destinations in neighboring China and Russia using turboprop planes; MIAT has not operated domestic flights for more than a decade. The domestic market is small, with only 230,000 passengers travelling in 2016 though the country has 23 airports.

Nonstop flights from Astana and Istanbul would be beneficial economically and certainly boost tourism to Mongolia. The limited services at Ulaanbaatar and MIAT's near-monopoly result in higher air fares and long travel times to several important source markets. Partly as a consequence, European visitor numbers have been stagnant for the last 12 years.

Mongolia needs to realize that increased tourism would have an overall economic benefit far greater than the negative impact on the country from rising competition for MIAT. In addition to new nonstop routes, a more open market should also help attract higher demand from Seoul, the busiest international route from Ulaanbaatar.

Visitor numbers from South Korea and Japan have been flat over the last decade. Asiana Airlines, South Korea's second-largest carrier, has not been able to launch services to Mongolia due to restrictions in the air services agreement between the two countries. MIAT and Korean Air have a codeshare partnership on the Ulaanbaatar-Seoul route which has resulted in an undersupplied market with high average fares.

Ulaanbaatar could also potentially support service from a Gulf airline and several Asian low-cost carriers, including ones from China, Japan and Southeast Asia. Budget airlines would stimulate demand both in the outbound and inbound markets, potentially leading to an influx of visitors and making it more affordable for Mongolians to travel abroad. South Korea's Air Busan last year became the first low-cost carrier to serve Mongolia but its service is limited to two weekly flights to Ulaanbaatar from Busan. The much bigger Ulaanbaatar-Seoul route remains protected.

The new airport's Japanese financiers are understandably pushing for greater openness. Without a change in government mindset, the new airport will be underutilized and it could be difficult to pay off the debt incurred for its construction.

The government must also open up ground handling at the new airport to competition. MIAT has the only ground handling license at the existing airport and will at least initially be the only handler at the new airport. Ground handling is likely a revenue churner for the otherwise unprofitable MIAT, which has so far successfully argued against the authorization of another handler as it has outstanding loans on its equipment. This is another example of ill-advised protectionism, which is stunting growth in the wider market.

Mongolia's aviation sector has underperformed for far too long. With a new airport about to be completed, it is time for the government to liberalize the market.

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Japan's five steps to a 5G world www.asia.nikkei.com

TOKYO -- Japan's mobile carriers are gearing up for the global shift to fifth-generation wireless communications.

The new technology offers a chance for Japan to re-emerge as a key player in the industry. For this to happen, Japanese companies will have to take an active role in the development of 5G technology and its application, and the government and mobile carriers should support these efforts.

The successor to 4G is expected to be widely available globally by 2020, dramatically raising transmission capacity and creating new possibilities for networks. For Japan, that target year conveniently coincides with the Tokyo Olympics, providing a valuable opportunity to showcase its technology to the world.

The new 5G technology promises ultrahigh-speed, ultrahigh-capacity wireless transmission. In particular, it will reduce the time lag between sender and receiver to just thousandths of a second for many applications. These fast transmission speeds are crucial if the internet of things -- a huge network of internet-enabled devices -- is to reach its full potential.

Mobile carrier NTT Docomo began trial runs in May of ultrahigh-definition 8K video at Tokyo Skytree tower in collaboration with Tobu Railway. The company is also experimenting with control systems for self-driving buses using 5G on the Kyushu University campus in a joint project with DeNA, an internet services provider.

On May 29, Kazuhiro Yoshizawa, president and CEO of Docomo, highlighted the new business opportunities 5G will create in a keynote speech to the Global Digital Summit 2017, a Tokyo event co-hosted by Nikkei Inc. and Japan's communications ministry. "We don't just want to provide telecommunications services, we also want to create new ecosystems by working with various businesses," Yoshizawa said.

Rival KDDI is also putting 8K video through its paces, sending images to a moving bus. Another player, SoftBank, is experimenting with self-driving buses using 5G in Nanjo, on the southern island of Okinawa.

There are five important issues that need addressing if Japan's 5G strategy is to pay off. The first is rapid development of technology. Both the International Telecommunication Union and Japan have set a deadline of 2020 for putting the technology to widespread, practical use. But overseas carriers are not letting themselves be bound by that timetable. They are pushing ahead with trials in hopes of creating industry standards. Japanese players must keep an eye on these developments.

Second is the issue of technical compatibility. Japanese technology is not readily adaptable to the 24 gigahertz to 86GHz frequency band that was agreed to for 5G by the ITU. Japanese carriers have been forced to go along with U.S. and European standards established in 5G trials. This is an area where the government should take the lead to protect the interests of Japanese industry.

The third issue for Japan is encouraging software development. At present, the world leaders in 5G are device makers such as Sweden's Ericsson, Nokia of Finland and China's Huawei Technologies. These are the companies that provided the technology for the trials conducted by Japanese carriers.

While it may be wise for Japan to enlist the support of these companies in building communications infrastructure, such as upgrades to mobile base stations, it should also encourage its own tech companies, such as NEC, to develop their own technologies for linking devices so that they can compete in the global marketplace.

Fourth is the question of how best to integrate telecommunications and broadcasting, an issue that has already been debated in Japan. The communications ministry has set a target for full-fledged introduction of 4K and 8K broadcasts by 2020, the same as for 5G. The ministry envisions use of communications satellites and broadcasting satellites for these ultrahigh-resolution video specifications, but 5G is a more viable option as it has broader applications and is more readily adaptable to a paid services model than is broadcasting technology. The government should rethink how telecommunications and broadcasting can be integrated for optimum results.

Finally, rules must be worked out for the use of data, and steps taken to enhance security as 5G transforms the network landscape. The amended personal information protection act, which addresses the use of big data, went into effect in late May. The new rules make it easier for businesses to take advantage of the huge amounts of data obtained from smartphones. But as 5G greatly expands data transmission capacity, traffic will grow apace.

It will therefore be necessary to set rules on who owns the data, and the scope and purposes for which it can be used in specific applications, such as internet of things and health care.

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Amazon to buy Whole Foods for $13.7bn in all-cash deal www.rt.com

Amazon has announced plans to acquire leading US organic food grocer Whole Foods Market for $13.7 billion. The e-commerce giant is making a huge bet on physical stores and the business of food.

In a deal that is set to be sealed in the second half of the year, Amazon will pay $42 per share in cash for the upmarket grocery chain.
On Thursday, Whole Foods shares were halted at $32.77 in premarket trading, while Amazon's shares were up 0.5 percent at $969.
Whole Foods’ co-founder and chief executive officer John Mackey will continue to run the chain with the headquarters of the company to remain in Austin, Texas, the companies said.
Whole Foods has been put under pressure by Jana Partners, one of the investors, and money manager Neuberger Berman. They criticized the company for poor performance and suggested the chain be sold.
“This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” said Mackey in a statement.
This is Amazon's second attempt to take over the grocery chain, according to a source familiar with the situation, as quoted by Bloomberg.
“Amazon clearly wants to be in grocery, clearly believes a physical presence gives them an advantage. I assume the physical presence gives them the ability to distribute other products more locally. So theoretically you could get five-minute delivery,” said Michael Pachter, an analyst at Wedbush Securities Inc.

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