|“Doing business with Mongolia”, “UK Investors show” бизнес хөтөлбөр March 27-April 02. 2019 ЛОНДОН ХОТ, ИХ БРИТАНИ||Mongolian Business Database||London UK|
|SYMPOSIUM ON GLOBAL MARKETS Nationalism and Protectionism: The United States in the International Arena June 17-18, 2019 The Center for American and International Law Plano, Texas, USA||The Center for American and International Law (CAILAW)||Plano Texas June 17-18 2019|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
ULAANBAATAR, Aug 15 (Reuters) - Mongolia's economic growth accelerated sharply in the first half of 2017, the government said, helped by a revived coal market and a bailout package led by the International Monetary Fund.
The country's gross domestic product (GDP) expanded 5.3 percent from a year earlier, to 12.8 trillion tugrik ($5.26 billion), the National Statistics Office said on Tuesday.
In the first quarter, Mongolia reported 4.2 percent annual growth. For all of 2016, the economy expanded only 1 percent, the slowest pace in seven years.
The northeast Asian country's economy has improved since an agreement in May for a $5.5 billion economic rescue package from the IMF and partners helped prevent defaults on sovereign loans and bolstered the flagging currency.
The coal industry in Mongolia has also seen a boon from a Chinese ban on coal from North Korea and curbs on deliveries into smaller ports.
Coal exports grew more than four times from January through July compared with the same period last year, to $1.4 billion. Mongolia sold 97 percent of its coal to China, with the remainder going to Russia and the United Kingdom.
Copper exports in the first seven months this year fell by 14.3 percent to $888.75 million, the statistics office reported.
Mongolian President Khaltmaa Battulga, who was sworn in July, on Monday met with a council of business leaders to discuss how he plans to run the country alongside a parliament and cabinet run by an opposing political party.
"The business environment should be expanded, and I will work in collaboration with the government on this," said Battulga, according to a summary of the event from the Business Council of Mongolia (BCM) on Tuesday.
$1 = 2,433 tugrik Reporting by Terrence Edwards; Editing by John Ruwitch and Richard Borsuk
US regulatory filings show George Soros is still investing in options that will profit him only if the stock market they are linked to declines in value.
Soros Fund Management held put options on PowerShares QQQ Trust, SPDR S&P 500 ETF, iShares Russell 2000 ETF as of June 30. Each is an exchange-traded fund that tracks a broad US stock market index. The bet is worth $1.8 billion. Soros stands to profit only if the stock market falls.
Michael Vachon, a spokesman for Soros Fund Management, said the company would not comment on the filing.
In January, Soros said "it's impossible to predict" US President Donald Trump's actions, but he was nonetheless sure the market would plunge.
Soon after the election, Soros lost over $1 billion by taking a short position on the market. While Soros called Trump a "would-be dictator," and predicted uncertainty and a sell-off after his win, the markets have rallied significantly.
The US S&P500 index is up over 10 percent this year, the Nasdaq is up 18 percent, and Dow Jones is up over 11 percent.
Soros is best known for making a fortune on his short play against the British pound. On 16 September 1992, Soros' $10 billion short position on the pound forced the Bank of England to withdraw Sterling from the European Exchange Rate Mechanism (ERM) after it was unable to keep the currency above its agreed lower limit in the ERM.
Copper has been one of the best-performing commodities of the last few months. With the red metal up over 15 percent since late May, to a current $2.88 per pound.
And that price action is spurring some important project activity. Including a little-noticed, but critical move this week from the world’s largest copper mining company.
That’s Chile state mining firm Codelco. Which said it is preparing an entry into a new and far-afield jurisdiction, in pursuit of new copper reserves.
In an interview Friday with Reuters, CEO Nelson Pizarro said that Codelco is “preparing” to invest in Mongolia copper projects. With Pizarro noting the country holds significant untapped potential for new developments.
Pizarro further suggested that Codelco will be looking for development-stage projects. Which he described as “medium-term” investments — likely meaning Codelco will take a role in proving up and developing new mineral resources here ahead of putting them into production.
That approach makes sense, given that Mongolia currently has only a few advanced copper mining projects. Led by the massive Oyu Tolgoi deposit being mined by Rio Tinto through the former Ivanhoe Mines vehicle, Turquoise Hill.
But mines like that demonstrate Mongolia’s big potential. With Oyu Tolgoi currently containing an appraised 23.5 million tonnes of contained copper metal, along with 36 million ounces of gold.
Here’s the most critical part: this move would be an incredible step-out for Codelco. Up until now, the copper major has been exclusively focused on mining in Chile and exploring in nearby Latin America — with projects in Brazil and Ecuador.
The fact that management is willing to leap from South America to Mongolia shows they see something big in the geology here — a major endorsement for the country, which has struggled lately to attract mining investment.
Mongolia’s government is trying to change that. Just last week, regulators kicked off a new bid round for mineral projects — which may be where Codelco is planning to pick up new licenses.
Watch for confirmation of Codelco’s entry into this high-potential nation. If the move does materialize, it could signal a new wave of project activity coming here.
Here’s to taking a leap.
By Dave Forest
Recap of the BCM Special Monthly Meeting in August with President Battulga Khaltmaa www.bcmongolia.org
Business Council of Mongolia organizes President Battulga Khaltmaa's first meeting with investors
BCM's special monthly meeting was held on Monday, 14 August 2017 at the Blue Sky Hotel, with over 300 international investors, business leaders, as well as Ambassadors, diplomats, and dignitaries. International attendees included a significant number of Chinese and Russian investors and business representatives.
Upon the invitation of the Business Council of Mongolia, the guest of honor President of Mongolia Battulga Khaltmaa attended the meeting and held a candid discussion during his first meeting with a large number of international and local investors and business leaders since his inauguration a little over a month ago.
Introduction of President Battulga Khaltmaa by CEO of Erdenes Mongol Ts.Tumentsogt
Battulga was born in 1963 in Ulaanbaatar
1978: graduated high school from State School No. 34
1982: Graduated from School of Fine Arts
1982-86: Worked as an artist at the Union of Mongolian artists
1983-89: Participated in a variety of different international sports competitions, earning Mongolia 2 gold, 2 silver and 2 bronze medals in the discipline of sambo as well as judo.
1992-97: Director of Genco LLC
1997-98: Director of Bayangol Hotel
2000-04: CEO of Makh Impex
Prior to establishing Genco, Battulga imported electronics and equipment from Singapore to sell in Mongolia.
Was elected as an MP three times
2004-2008: Was the Chairman of the Human Rights Subcommittee
2008-2012: Was also the Ministry of Roads, Transportation, Construction and Urban Development
2012-2016: MP, as well as Minister of Agriculture and Industry from 2012-2014
2006: President of the National Judo Association and also Representative of Asia at the Policy Committee of the International Judo Federation
From 2009, Head of the Mongolian Democratic Union
Current member of the Democratic Party’s National Policy Committee
President of the Mongolian Union of Herders
President of the Mongolian Bodybuilding and Fitness Association
Battulga has been awarded various athletic honors, such as the “State Honored Athlete” medal of Mongolia and the Golden Star award by the International Judo Federation.
During his tenure as President of the Mongolian Judo Federation, Mongolia’s very first Olympic Gold Medal was earned by judoka N.Tuvshinbayar in 2008
Battulga has initiated and was involved in various economic and social development projects, such as the Genghis Khan Equestrian Statue Complex, Sunny Bridge (Нарны гүүр), Mt. Bogd Road, Coal liquification plant, Sainshand Industrial Park, Altanbulag port, connecting all provincial capitals with the capital via paved roads, etc.
Main points from the speech by the President
I would like to thank the Business Council of Mongolia for hosting this event, my first with the international community of investors and business leaders.
BCM and other non-profit organizations have a big role to play in voicing their interests to the state.
It has been 34 days since my inauguration as president and this is the first event with the business community.
I believe you all have your own ideas for improving the legal and investment environment
The recent election highlighted the wishes of the business community for greater stability and opportunities
On foreign policy
In terms of foreign policy, there are many ideas being talked about, but it is important to ensure a unified foreign policy.
I want to underline that there is a single, unified foreign policy – not contradictory policies of one ministry, the president, or other political entities.
As the President, I will maintain the same foreign policy as the government.
The business environment should be expanded, and I will work in collaboration with the government on this
Since the democratic revolution, I have worked as a sole proprietor up to major industrial companies – I am of one mindset with entrepreneurs
I was an MP three times, and worked in the Cabinet in two of those terms
Minister of Road and Transportation for four years from 2008-2012, during which the blueprints for roads connecting 21 provincial centers was developed with support from the ADB.
There is currently blueprint for a 1,100 km road connecting Zamiin-Uud and Altanbulag, which can be a major transit transport corridor to connect China and Russia. This will facilitate trade. I mention this because it is important for businessmen to know that such projects are ready to be implemented.
Another major project concerns railways. As a landlocked country between two big neighbors, in order to ensure the development of the economy, in 2010 we got approval for a railway project. It reflects 460 km in the first stage, 1,800 km in the second stage, and the third and final comprises 5,000 km of railway along three longitudinal corridors connecting Russia and China. The blueprint for 1,800 km of this has been developed by the company McKinsey.
In terms of aviation development, the policies have been instituted, so we will now leave it to business.
On other infrastructure
We have started work on re-development of provincial centers
As for housing, a 100,000-apartment complex and the Maidar City project are ready for investment. The Maidar City project’s blueprints have been designed by a German company; the city is planned to be developed close to Ulaanbaatar, capable of hosting 400,000 people.
The agricultural sector has become a forgotten industry
We boast 60 million heads of livestock, but we cannot effectively sell and export meat, hides, wool, cashmere, etc.
I intend to, together with the government, to elevate and pay greater attention to this sector.
Every year, we export up to 10 million pieces of skin and hide as unprocessed goods, with no value added.
The same applies to cashmere; even though the country is a major cashmere industry (30% of global raw cashmere production), there has been little policy support. As such, we have another project ready to go. Feasibilities studies for a factory which processes hides and skins and exports to Europe have been conducted by a Spanish company. This project is worth USD 300-400 million and can export up to 10 million hides to Europe per year.
I want to reiterate my commitment to working with the government to creating a stabile business environment. The business community today is restricted by oligarchs.
Question and Answer segment
Byambasaikhan, Chairman of BCM: Today we invited not only BCM members, but also major Chinese and Russian companies and officials. Taxes are a sticking point for any business. Mongolia’s tax system does not follow international standards. This inconsistency hinders investment, so what is your stance on this issue?
Poverty and unemployment has reached disastrous levels in Mongolia. This contributes to the weakness in FDI. There is also insufficient support for domestic investors as well. In order to support foreign and domestic investment, the tax regime must be stable and clear. We have spoken about improving investment for many years, and this is due to the inconsistencies. Hence, we must work together with the business community to fix these inconsistencies.
There are many MPs and officials who are former business people. They would understand the issues, and can raise the issues.
The Mongolian National Chamber of Commerce should play this role, and the Chamber must be non-partisan.
Anton Prosekin, Head of the Investment and Development Agency of Irkutsk Oblast (Russia): Mr. President you stated last week in an interview on Mongolian National Broadcaster that one of the key issues of trade relations with neighboring countries is customs tariffs. We agree with you on this. There are two ways of addressing this issue: by taking slow steps or by solving the very core of the problem. In relation to this, there are free trade initiatives underway in the Eurasian region. Mongolia itself has the “Steppe Road” initiative, which can be harmonized with China’s One Belt, One Road project. What are your thoughts on this?
President: We neighbor two major economic powers. As a businessman, I see that we are unable to export value-added products to our neighbors. One reason has to do with customs tariffs.
In my interview I referred to issues in reducing barriers to trade, perhaps not by removing tariffs completely, but by having a favorable (low) tariff system.
In terms of Mongolia joining a Eurasian customs union, Mongolia’s stance is being studied at various levels. An update will be issues on this matter after consultation with the Ministry of Foreign Affairs and other related agencies.
Yan Xiao Chi, Head of the Zhun-hua Association, an association for Chinese investors in Mongolia: What are your thoughts on Mongolia’s macro-economic situation? Has a recovery started? If not, when do you expect it to start?
I have to say that at the moment, we lack a major economic theme or agenda. The business environment is still restricted. Our economy has not worsened and it has not recovered. The business environment, in my opinion, has been in stagnation for the past 20 years. They say Mongolia’s economy is improving when the price of coal rises, and they say the economy is declining when the price of coal falls.
So my answer to you is that there is a lack of a macroeconomic theme. Hence, the economy hasn’t improved or degraded; it just linked to the price of coal.
I think the message of the election was to restore the economy, and for this reason I am here with you.
Representative from Mongol Group: I would like to inquire about your itinerary for your first foreign trip?
The itinerary is still in discussion, but will begin with our two neighbors.
September 4-8, the heads of state from Asia-Pacific countries will attend a forum in Vladivostok, accompanied by members of the business community. Registration is still open with the President’s Office.
Mergen, Executive Director of BCM: What are your thoughts on China’s One Belt, One Road initiative?
I have only very general information on this major initiative that will link Asia and Europe.
I don’t recall the exact figures, but we have a small stake in the Asian Infrastructure Investment Bank, through which financing for the OBOR is being provided.
Implementation of infrastructure development determines many things for a country. Infrastructure projects create jobs.
As for Mongolia’s involvement in the initiative, we must study the opportunities.
However, I believe it would be more immediately beneficial to businesses if we were to improve connection to the East Asian markets of South Korea, China, and Japan. These account for 30% of the local economy.
I have many thoughts on this particular issue, but perhaps it is not the time for such detailed discussion. Perhaps if we had a map.
Question from Masa Igata, Director of Frontier Securities: You mentioned that Mongolia will have a unified foreign policy. Recently, you appointed Asashoryu to improve relations with Japan? Does that overlap with the duties of the Ambassador?
Second question: Regarding the topic of constitutional amendments, in which areas do you think constitution could be amended? What are your thoughts on the powers of the President?
Foreign policy is directly related to foreign investment. Asashoryu is the first Mongolian grand champion of sumo and has a very special standing. My appointment of him to Japan will not overlap with the Ambassador. Presidents have personal advisors and counselors. I myself was a counselor.
As for the constitution, 25 years has passed since the current constitution was ratified. Today we met with the official heading the work on constitutional amendment. The answer to your question can actually be found on president.mn. This is a matter of principle, will the majority party push amendments for powers and positions, or will it be for real empowerment of the citizens.
Batlkham, representing MonOros company: How much information do you have on the Asian Super Grid project? Talks are underway for exporting renewable energy to Japan, how aware of you about these topics?
Energy is a crucial topic. Mongolia is a sunny country, which has a high number of sunny days per year. Wind energy is also being talked about it. We had a very interesting discussion with a US-Spanish joint venture. Renewable energy is a topic we must support.
Export aspirations depend on where we are talking about. China and Russia want to export energy. Japan of course is dependent on nuclear and thermal energy. Thermal accounts for about 30 percent of energy generation there.
Exports are a more intricate issue, which we can have a more detailed discussion later on.
There are regions of Mongolia where it is sunny for 280 or 290 days per year.
Burmaa, from a real estate company: There is a great inconsistency and overlap in the tax environment. We are willing to pay taxes, but in a fair way. Furthermore, there are unclear tax penalties that are slapped on companies by tax inspectors, who seem to pull numbers out of thin air. What should be done about this?
Second question: What is your vision regarding the knowledge economy? For example, the skins and hides having a low value right now. It seems entirely possible to create value-added products.
The real estate market is still in stagnation and I suspect that you face many challenges. You refer to tax inspectors subjectively imposing penalties; however, they have a duty to perform. If fiscal issues are resolved, I hope such problems can be corrected by that. But I agree with you that taxes must be fair for companies. We must expand our tax base so that not only a few companies take on a greater tax burden.
As for agriculture, the cost of a piece of raw hide is only MNT 600. A bowl of instant noodles cost MNT 1,500 – almost three times more than that valuable raw material.
Regarding one of the projects in preparation I mentioned earlier with the Spanish tannery, we have completed a feasibility study where one piece of raw hide can be processed to have USD 300 of added value. You can imagine the economic benefit and value that can be retained if 10 million hides can be processed and USD 300 of added value.
Steve from the Canadian Embassy: As an athlete, how does the sports sector fit into your plans? How about infrastructure for sports?
Mongolia is a country with a long history of nomadic culture. The nomadic heritage helps Mongolians to be adaptive in any environment.
Of course, sports is very close to my heart. Sports and culture can bring people closer than perhaps diplomacy can.
I met with representatives from the Canadian Embassy, and a discussion took place. Perhaps Mongolia can support Canada in wrestling, and Canada can support Mongolia in hockey. Considering Mongolia’s climate, I think we can make strides in ice hockey. We are familiar with harsh winters, but our winter sports sector has much room for development.
We must also support sports development in the provinces and rural areas. The support of the diplomatic corps is certainly welcome in this area.
That leads me to Asashoryu, who was the very first non-Japanese yokozuna (grand champion). This shows that sports can be a great bridge between cultures.
As for sports infrastructure, I am committed to this issue and I would like your support.
Erdenebaatar, International Mining Consulting: You did not talk so much about one key sector, which is mining. You made good on other sectors, but we cannot forgot the mining sector. What is your policy stance on attracting foreign investment into mining, especially since we scared away investors and made them afraid of investing in Mongolia?
I will support mining and investment into mining. One thing I must emphasize is that the investment needs to be based on global standard technology and global standard contracts. The mining sector is the subject of great concerns and reservations, given the amount of money involved. Due to the power of the mining industry, the luring of politicians or bribing of politicians is something we have to be very careful of.
Again, it is important that the best international standards are utilized in this sector.
Investment will be supported, and the reflection of this is the investment forums supported by the government.
Closing words by Ts.Tumentsogt, CEO of Erdenes Mongol
Let me give a brief introduction on the Business Council of Mongolia, which was established in 2007 to support a transparent, vibrant business community.
We feature eight Working Groups ranging from tax, to customs, to law, to education, etc. These Working Groups comprise over 400 experts and business leaders, working to form policy recommendations and deliver other vital business interests to the government and regulatory bodies.
Our members receive a weekly News Wire on business and economic developments.
We maintain a close engagement with various state organizations, such as the President's Office, Prime Minister's Office, Parliament, the Government, acting as a voice for the various sectors and our members who number up to 250.
Thank you Mr. President for holding this candid discussion today.
Shares in Azerbaijan's top gold producer Anglo Asian Mining (LON:AAZ) soared Monday after the company boosted resource estimates at its Ugur gold deposit and said the project, located by its flagship Gedabeck mine, was on track to begin production next month.
The London-listed firm said Ugur is now known to contain 199,000 ounces of gold and 1,049,000 ounces of silver, while the proven and probable reserves stand at 147,000 ounces of gold and 808,000 ounces of silver.
The miner also said that mining and haulage of ore to the processing facility stockpile at the project would begin before the end of the month, with production to start in September.
Anglo Asian’s stock skyrocketed on the news, trading 9.7% higher at 25.50p shortly after 2:00PM GMT.
The company, which also produces copper and silver, started a significant exploration program at the end of last year after making a new gold discovery at Ugur, located just km (1.8 miles) from Gedabek’s processing facilities.
Gold is produced at Gedabek and other Azeri mines under a joint venture between Anglo Asian and the country's government, which has as 49% stake.
Anglo Asian began production at Gedabek, 350 km west of the capital Baku, in July 2009 with plans to extract 22 tonnes of gold. Overall, Anglo Asian plans to exploit seven mines in western Azerbaijan with estimated gold reserves of 430 tonnes.
President Trump is getting tough on trade with China.
Trump signed a memorandum Monday that directs U.S. Trade Representative Robert Lighthizer to determine whether an investigation is needed into alleged unfair Chinese trade practices. Shortly after Trump signed the directive, Lighthizer said his office will launch a probe and, "if needed, take action to preserve the future of U.S. industry."
The move represents the first step in a process that could allow Trump to impose tariffs on Chinese imports or other punishing trade actions.
"This is just the beginning," Trump said at the White House Monday. "We will defend our workers."
It's Trump's latest warning to China on trade, and it comes the same week that administration officials begin to renegotiate NAFTA, the free trade deal between the U.S., Mexico and Canada.
The new order focuses specifically on alleged Chinese theft of U.S. intellectual property, a complaint expressed by a wide array of U.S. corporations that do business in China.
China is accused of trying to take a short cut by spying, hacking or forcing companies to hand over their intellectual property, such as a patent on a software product.
Chinese laws require foreign firms in some industries, such as energy and autos, to form joint ventures with local partners, which often results in the transfer of technology to Chinese companies.
In a report published this year, the Commission on the Theft of American Intellectual Property named China as the main offender, estimating it costs the U.S. economy up to $600 billion a year.
Trump's memorandum comes as his administration also seeks cooperation with Chinese President Xi Jinping on North Korea's ongoing missile threats.
Some experts say the wording of the memorandum is watered down, reflecting how high a priority North Korea is for the administration. Trump's order did not direct Lighthizer to open an investigation. It directed Lighthizer to determine if an investigation is needed.
"For an administration that portrays itself as tough on trade, it keeps taking one baby step after another, and this is another one," says Edward Alden, a senior fellow at the Council on Foreign Relations.
The softened language in Monday's order is the second time in as many weeks that Trump has agreed to changes to ease the potential backlash from China. Last week, the administration delayed the trade move in favor of securing China's support for a United Nations resolution imposing new sanctions on North Korea.
The final version of the memorandum reflected a desire to put some more distance between Trump and a potential investigation of Chinese trade practices, according to a senior administration official.
The Chinese Commerce Ministry on Tuesday warned that "any actions of trade protectionism from the U.S. side would be harmful to the bilateral trade and business relationship and the interests of companies on both sides."
It urged the U.S. to "respect objective facts and be cautious" or risk prompting Beijing to "respond with proper actions to firmly protect China's legitimate rights."
Trump routinely slams China's trade practices, and blames China for the loss of millions of manufacturing jobs. The U.S. had a $347 billion trade deficit with China last year, by far the largest deficit the U.S. has with any country. Trump wants to lower the deficit.
The memorandum was the administration's latest effort to get tough on longstanding Chinese trade abuses, but it also reflected a recognition inside the White House of bureaucratic processes and a complex international situation.
Known in Mongolia as the "dark blue pearl," Lake Khuvsgul is Mongolia's deepest and purest source of fresh water. But it is now under threat.
Lake Khuvsgul in Mongolia is one of the biggest lakes on earth, but dozens of vehicles that have fallen through its ice since the 1950's, and a small diesel leak could have disastrous consequences.
Lake Khuvsgul is one of the biggest lakes on earth. It also flows into the world's largest freshwater lake, Baikal, in Russia.
But this vital resource is under threat. Dozens of vehicles have fallen through its ice since the 1950s.
"One of the trucks fell half-way through the ice. The other sank 45 metres. One of our divers went under the ice and connected the cable to pull it out. The other truck had a body inside," Tengis Boldbaatar, the Khuvgul National Emergency Management Agency Sergeant Coast Guard said.
Some vehicles, however, are still submerged, and are believed to contain fuel that may contaminate the water. Experts warn if they leak, the consequences would be catastrophic.
Grace Brown reports from Khuvsgal.
A Mongolian official has denounced the recent sanctions imposed by the United States on Iran, Russia and North Korea.
Mongolian president’s special envoy Lundeg Purevsuren has lashed out at Washington’s sanctions on Iran, saying, “Sanctions are not good, and we condemn them.”
The Mongolian official said the recent sanctions imposed on Iran, North Korea and Russia are not friendly, adding, “We don’t recognize the US sanctions because slapping sanctions are not a good way and we denounce them.”
Speaking in a Farsi interview with ICANA, he said Iran has a history of peaceful relations with other countries, adding, “Today, Mongolia and Iran are keen to boost the level of their foreign relations.”
He said many Iranian companies are investing in Mongolia and vice versa, which means “the two states have constructive economic relations.”
The Mongolian official had travelled to Iran heading a delegation to attend the swearing-in ceremony of President Hassan Rouhani.
The Mongolian Civil Aviation Authority (MCAA) signed a memorandum of understanding with the Civil Aviation Administration of China on increasing cross-border air routes during the International Civil Aviation Organization’s August 7 to 11 Conference of Asia-Pacific DGCAs in Ulaanbaatar. Speaking at the conference, Mongolia’s CAA chairman, Byambasuren Luvsansambuu, noted that increasing the number of airways would help lift the traffic burden on an underdeveloped route structure. Chinese carriers now account for 27 percent of all flights through Mongolia.
Mongolia and China share six border points, and direct regular flights operate from Mongolia to four Chinese cities. Airline officials from the two countries continue to work on finding a seventh viable route. Chinese tourists account for the largest share of the inbound tourism market of Mongolia. During a recent conference on development of the western region of Mongolia and the country’s Khovd Province, local government promoted the potential for a route between Khovd city and Urumqi, the capital city of China’s Xinjiang Uyghur Autonomous Region.
Meanwhile, a so-called Chinese silk road in the air could pass over Mongolia’s territory, as Mongolia considers opening its airspace for domestic flights from China’s northwest Xinjiang Uyghur region to northeast provinces such as Jilin and Liaoning.
Separately, Mongolia’s flag carrier, MIAT Mongolian Airlines, plans to expand its own network in the region under its 2018-2020 business plan. The carrier recently launched Busan-Ulaanbaatar and plans to start regular flights to Bangkok in November. To support the expansion, MIAT has agreed to lease two Boeing 737 Max 8 narrowbodies starting in January and May of 2019. At the same time, MIAT has started negotiation with its partners to launch flights to cities in North America. Most recently, it signed a contract with Amadeus to upgrade its information technology system.
On the third day of the IATA conference, the Civil Aviation Authority of North Korea expressed interest in launching direct flights between Pyongyang and Ulaanbaatar, while the Mongolian CAA consulted with its Russian counterpart over joint use of a trans-Siberian air route.
In May, 2017, Mongolian commercial bank “Xacbank” received 500’000 dollars’ grant from Green Climate Fund. It was the first phase of GCF’s 20 million dollar contribution to reduce carbon emission rates in Mongolia. Mongolia’s capital Ulaanbaatar is one of the world's most polluted cities, mainly because of coal-fired power plants, and coal-fueled stoves and boilers which are used to heat homes in this world's coldest national capital. Even though the pollutants in the air is estimated to be 8 times the world standard, Government of Mongolia is too busy dealing with the financial crisis to take actions against it. GCF’s grant could bring major positive changes as it would kick start the biggest climate program with 60 million USD budget. Only 0.07 percent of the national budget goes to the Ministry of Environment and Green Development. Thus, climate projects are in serious need of financing, and that 500’000 USD might have come in just the right time.
Mongolia is known by its vast, beautiful landscapes, wonderful solitudes, and the rich hospitality of nomads. Sadly, the landscape changed drastically due to the sudden increase of mining business. Almost half of the domestic budget comes from coal exports and it doesn’t seem to change in the near future. The biggest attempt to turn into sustainable energy resources are mostly invested by the private sector. Mongolian economy is solely dependent on their export of mining products and income rates shown below illustrates how much Mongolia is in need of an economic support to overcome the challenge.
Efficient investment with safe monitoring is crucial when it comes to Mongolia. The reason hardly any foreign investor approaches Mongolia is corruption. To make sure the funding is going to places they intended to, international organizations tends to directly connect with private sectors rather than government officials. Recent events such as partnership with Xacbank proves it as well. But the fact that there are very few corporations big enough to run the financial grant also puts this option at risk. Therefore, careful partnership with the Government with strict monitoring, or funding the private sector to support low-carbon energy sector seems to be two most suitable choices.
Tight provincial budgets
Despite the fact that all protected landscapes are in the hands of local governments, the state always puts major restraints on provincial budgets. Tight budgets put those local governments in position to issue more mining licenses in order to create their own reserves. They have even started granting mineral exploration licenses after banning it for 5 years due to negative environmental impacts. More mining means more CO2 will be released into the atmosphere, thus, to efficiently finance the climate change mitigation; strong local budgets must be constructed firsthand.
Private sector investment
Mongolia’s first wind farm was built and funded by Newcom LLC and Clean energy LLC, both are private companies. They are currently funding another major sustainable energy project, which is to build the first solar energy plant. Hopefully, other private sectors might take more interest in low-carbon energy sector now that the Xacbank is providing low interest loans. Judging from these facts, it seems that private sectors are pioneering the way towards more climate-friendly Mongolia.
Problems we are facing do not end here. In fact, there are even more problems involving the mining boom Mongolia experienced during the last decade. Mining companies execute land rehabilitation poorly, or not at all; because there is a legal way to make small contribution to local government’s fund rather than constructing rehabilitation. Law makers must reconsider such ways that offer big corporations a way out.
Sustainable energy, responsible mining and strong will to bring positive changes are the things we must do to keep our country as stunning as it has been through the history. Mongolians have worshipped nature for as long as they existed and that love can be the source of motivation to do what is right.
By Tushigjargal Bold