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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Government to receive US$ 100 million loan to reduce the non-performing loans www.mongolia.gogo.mn

 
The volume of non-performing loans is increasing. Thus, Government of Mongolia decided to implement a program to restore the banking sector and strengthen financial stability which aims to revise the structure of the banking sector and cover necessary funds.
In scope of the program, 12 measures to be taken including establishing active management company to manage non-performing loans, introducing system to address banks' debt burden, changing affiliated laws and regulations in order to ensure financial stability, improving banking supervision and strengthening governance.
In regards, Asian Development Bank agreed to grant US$ 100 million repayment period of 15 years.
The percentage of non-performing loans in total loans reached the highest level at the end of last year.
The non-performing loans at the level of the bank system reached 1 035.5 billion togrogs in 1Q`17, down by 34.6 billion togrogs or 3.2% from the previous month, up by 67.6 billion togrogs or 7.0% from the same period of 2016.
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City uses greywater to irrigate plants www.mongolia.gogo.mn

 
City Landscape Department uses 700 tons of water for irrigation per day.
In order to save groundwater, they started using purified greywater for irrigation that complies with the standard. City Landscape Department established a contract with APU and MCS Coca Cola LLCs to use their greywater that comes from beverage industries.
Graywater from APU LLC is used for irrigating plants and green areas of city center while greywater from MCS Coca Cola is used for irrigating plants and green areas of East of the city.
City Landscape Department is seeking an opportunity to water plants and green areas of West of the city using greywater. Thus, companies interested in supplying greywater are welcomed.
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Government and ADB agree to implement program to stabilize banking sector www.en.montsame.mn

 
Ulaanbaatar /MONTSAME/ The actual risk of irregularity in financial intermediary functions of banks is very high for some Mongolian banks due to a great amount of non-performing loans. In this regard, the government has agreed with the Asian Development Bank on implementing a Program on Restoration of Banking and Strengthening Financial Stability in order to compensate the financial deficit in banks to fulfill gaps of payment.
The program is going to be implemented on the loan of USD 100 million. The loan repayment term is 15 years, with the alleviation of principal payment in the first three years.
The program includes 12 key measures to be taken, including establishing an asset management company, introducing a system that will be capable of resolving debt pressures of banks, configuration of some laws and regulations in order to ensure financial stability, improving monitoring and evaluation and governance in banking.
Payable balances of non-performing loans have been increasing, and, as of 2016, balance of non-performing loans made up for 14.2 percent (MNT 1.7 trillion) of the total outstanding loans. This was the highest point reached by the weight of non-performing loans.
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ADB loan agreement backed www.en.montsame.mn

 
Ulaanbaatar /MONTSAME/ Yesterday, the Cabinet discussed and backed loan agreements between the Government of Mongolia and the Asian Development Bank to jointly implement “Social welfare support program-2” and “Restoring Bank sector and strengthening financial stability program”. Then the Cabinet decided to submit the agreements to relevant parliamentary standing committees for their consent.
 
“Social welfare support program-2” has goals to support realization of the Program to Revive Economy, to lower negative impacts of economic difficult conditions on vulnerable groups, to direct social welfare program for targeted groups and to recover budget deficit. The first program was implemented successfully in 2015-2016, however, Mongolia has to overcome the pressures of fall of economic growth, macroeconomic problems, accumulated debt, budget deficit and payment imbalance. In this regard, the Government works with the International Monetary Fund and Asian Development Bank and so on.
 
ADB loan of USD150 million will be spent to finance 19 policy measures in two stages. The loan will be repaid in 15 years, with exemption from principal loan repayment for the first three years and the loan interest will be equal to London Interbank' annual interest rate, plus a 0.6 per cent fee and 0.15 per cent charge for asset reserve guarantee.
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Salary loan interest rate to be lowered www.en.montsame.mn

 
Ulaanbaatar /MONTSAME/ During the yesterday’s cabinet meeting, Minister of Labor and Social Protection N.Nomtoibayar introduced about works being done to lower interest rate of salary loan of teachers, doctors and physicians of state owned schools and kindergartens and to invalidate fees.
 
The Ministry reached an initial agreement with the State Bank to lower the interest rate and fee in two stages. At the first stage, the fee for the salary loan of the targeted group will be canceled and then the current interest rate of 21.11 per cent will be lowered to 18 per cent. Salary loan of MNT48.2 billion is estimated to be issued to 8316 teachers, doctors and other employees of schools and hospitals, with lowered loan interest and fees of MNT1-1.6 billion annually. The Ministry is also holding talks with the Khan Bank authorities.
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Hilton Appoints Area President for Greater China, Mongolia www.hotelbusiness.com

 
Qian Jin, area president for Greater China, Mongolia
SHANGHAI—Hilton has named Qian Jin as the hospitality company's first area president for Greater China and Mongolia.
 
Jin most recently served as president at Wanda Hotels & Resorts. He spent the majority of his career at Starwood Hotels & Resorts Worldwide Inc., where he ultimately became president for Greater China. He studied in Australia and has worked in Fiji, Malaysia and Singapore.
 
He reports to Martin Rinck, area president of Asia Pacific Hilton, and serves on the regional executive committee.
 
Jin's appointment comes after several additions to Hilton's Greater China leadership team in recent months, all of whom are Chinese natives. He will replace outgoing SVP of Greater China and Mongolia, Bruce McKenzie, who is retiring.
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Russia’s agriculture sector booming despite or thanks to intl sanctions www.rt.com

There's a world of opportunities for investors in Russia's agriculture commodities market with farming in the country flourishing under international sanctions.
Following the Western penalties imposed on Russian companies in 2014 and subsequent countersanctions introduced by Moscow in response, some local officials took the opportunity to boost the development of domestic production. Many Russian enterprises managed to encourage import substitution and made exports more competitive.

Despite doubts expressed by traders and economists, that optimism has turned out to be justified on at least one economic front - agriculture and related sectors.

Last year, Russia managed to gain the world’s lead as an exporter of grain, after shipping 34 million tons out of its record crop of 119 million tons.

Apart from grain, Russian farmers have completely substituted imports of chicken and pork with domestic production. The country became a top producer of sugar beet with greenhouse vegetable output increasing 30 percent over the previous year.

Agricultural goods have become Russia’s second biggest export after oil and gas.

Besides increased government subsidies to farmers, the sector has also benefited from Russia’s geographical position with highly fertile “black earth” regions in central and southern Russia located close to export terminals on the Black Sea. The trade routes allow the country to supply significant North African and Middle Eastern wheat importers such as Turkey and Egypt.

Russian agriculture and associated industries have huge potential for further growth as increased earnings allow farmers to invest in technology and more fertilizers to boost productivity.

“Russia’s agriculture boom shows that, despite sanctions and the poor state of east-west relations, there are pockets of value and opportunity to be found in the Russian market,” reports the Financial Times.

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Come on Mrs May, Mongolia holds TV election debates, British voters deserve them too www.telegraph.co.uk

 
Television debates have, over the last seven years, become an immovable feature of the British political landscape. A staging post on the way to the polling station, a focal point on the journey to government or opposition – and, most importantly of all, a chance to speak more-or-less directly to the people calling the shots: the voters. Yet Theresa May has decreed she won’t agree to one. Instead she might take part in some stage-managed Q&A, which won’t set her head-to-head with her political opponents.
 
It won’t do. It’s more than half a century since America invented the televised presidential debate. Iran, Mongolia and Afghanistan have followed suit. But Britain’s prime minister has now decided this particular aspect of a modern democracy is not for her.
 
Her allies say this is politically sensible. A woman renowned for her caution has just taken the biggest gamble of her life.
 
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Mongolia Clears Hurdles Needed for $5.5 Billion IMF-led Bailout www.bloomberg.com

Mongolia has fulfilled prerequisites from the International Monetary Fund to receive a $5.5-billion bailout and is expected to receive an initial tranche of cash at the end of this month.
 
"All the prior conditions have been met" for Mongolia to receive an IMF-supported package, Neil Saker, resident representative for the fund said Wednesday in the capital, Ulaanbaatar. “It is their program and along the lines of their recovery plan. Strong country ownership will increase the chances of success.’’
 
A downturn in commodity prices and disputes with investors soured Mongolia’s once world-beating economy, sending economic growth to just 1 percent last year from 17 percent in 2011. The World Bank is forecasting a contraction of 0.2 percent this year.
 
The IMF will lend about $425 million, payable over 10 years, Saker said. Other donors including the World Bank, Asian Development Bank, Japan and Korea will lend around $3 billion at highly concessional rates, he added. The announcement of the IMF deal in February allowed the government to extend a 15 billion yuan ($2.2 billion) currency swap with China by three years.
 
The three conditions met by Mongolia include the passage of a supplementary 2017 budget, confirmation from the central bank that it will refrain from quasi-fiscal activities and an asset-quality review of the country’s banks, according to Saker. The review must be completed by November, he said.
 
Progress Review
 
IMF money will be used for balance of payment support, said Saker, adding that donor money will support the budget deficit, which last year reached 17 percent of gross domestic product. The ratio is expected to fall to around 11 percent this year and 4 percent by 2020, Saker said.
 
“Loans issued at a low interest rate will improve the debt burden,’’ said Saker. “The loans will improve confidence in the market. Policies to strengthen the banks will lead to lower interest rates, job creation and more inclusive growth. Reduced banking risk will also stabilize the currency.’’
 
Saker said confidence in Mongolia is picking up, as shown by the last month’s $600-million 8.75-percent seven-year “Khuraldai bond” sale, which was six times oversubscribed.
 
The IMF will review Mongolia’s progress every three months over the program, distributing money after each successful review, said Saker. Windfalls due to higher commodity prices should go toward building reserves and paying off debts, he said, adding that Mongolia’s total government debt is now close to 90 percent of GDP.
 
Some of the fiscal amendments passed by parliament turned controversial in Ulaanbaatar, where the Chamber of Commerce threatened to boycott tax payments. These include a progressive income tax that has the highest earners paying 25 percent and a new tax on the interest accumulated in savings accounts.
 
‘Bitter’ Medicine
 
Parliament also passed increased taxes on tobacco products, passenger vehicles and alcohol. Social insurance by both taxpayers and companies are also set to increase.
 
“The IMF medicine is bitter for the population, but in order to save the economy you have to do things that are not popular,” Khashchuluun Chuluundorj, an economist at the National University of Mongolia, said by phone. “This is a break from the past when the government was only doing populist things, like distributing money or stocks and lowering taxes.”
 
Swept into power with a clear mandate following elections in June, the Mongolian People’s Party has slashed government spending, including 30 percent to 60 percent salary cuts for the chief executives of state companies.
 
The market has reacted favorably to the changes, with Mongolia’s currency rising 2.5 percent against the dollar since March 1. The yields on Mongolia’s international bonds have declined to 2012 coupon levels.
 
The IMF projects that by 2019 Mongolia’s GDP growth will reach 8 percent. Foreign exchange reserves are expected to reach $3.8 billion by the end of the program, near 2012 levels, according to the fund.
 
Coal Prices
 
Even without the bailout, Mongolia’s fortunes are turning on the back of higher coal prices. Mongolia exported 8.1 million tons of coal in the first three months of 2017, worth $541.3 million, a year-on-year increase of 446 percent. The total value of Mongolia’s exports rose to $1.3 billion in the first quarter, an increase of 36 percent from a year earlier.
 
The increase in coal exports allowed Mongolia’s largest state-owned coal miner Erdenes Tavan Tolgoi JSC to complete a repayment of a $350 million loan it took in 2011 from the Aluminum Corp. of China Ltd.
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China gathers State-led consortium for Aramco IPO www.chinadaily.com

China is creating a consortium, including State-owned oil giants and banks and its sovereign wealth fund, that will act as a cornerstone investor in the initial public offering of Saudi Aramco, people with knowledge of the discussions told Reuters.

Saudi Aramco, a key exporter to China along with Russia's Rosneft, is due to list next year, with a potential $100 billion equity sale that is expected to be the world's largest to date.

The planned Chinese investment makes it more likely that the national energy giant would seek a listing in Asia, with Hong Kong currently the frontrunner among bourses in the region, the same people said.

Reuters reported earlier this month that Saudi Aramco's board would meet in Shanghai in May, its first meeting in China in seven years, as Chinese and Asian investors eye the share offering from the world's biggest oil exporter.

Saudi officials have said Chinese companies were interested in investing in the Aramco IPO as the country - the second biggest consumer of oil globally - seeks to secure crude supplies, but have not commented on how that would be done.

Half a dozen sources with knowledge of the discussions said China Investment Corporation (CIC), the country's sovereign wealth fund, oil majors Sinopec and PetroChina, and the country's State-run banks were among the State-backed entities set to participate in the Chinese investment consortium.

They did not name the banks. Reuters reported in February that Industrial and Commercial Bank of China International Holdings, a unit of Industrial and Commercial Bank of China, and China International Capital Corporation (CICC) were among the Chinese banks pitching for a role in the IPO.

One person involved in discussions between Aramco and potential Chinese investors said the ultimate size of the consortium's stake had not yet been decided. That source said the entity that would lead the consortium had also not been decided. That is likely to be decided by China's cabinet, the State Council, over the coming months.

"The IPO will help decide whom, or which country, can secure the crude supplies from the company and Saudi Arabia going forward," the person said, adding the size of each company's stake in the Chinese consortium would depend on its current relationship with Aramco and the Saudi government.

"For instance, if you were already a strategic investor or plan to become one in the long-term, things would become easier."

The State Council Information Office, CIC, Sinopec and PetroChina did not respond to requests for comment.

Last month, PetroChina's president and vice chairman, Wang Dongjin, said the company would consider participating in the IPO depending on market conditions, while Sinopec has said the oil giant would discuss the IPO with Aramco.

Saudi Aramco said in an email it did not comment on "rumor or speculation".

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