1 FOREIGN RELATIONS OF MONGOLIA’S ROAD TRANSPORT SECTOR BROADENING WWW.MONTSAME.MN PUBLISHED:2019/02/21      2 MONGOLIA EXPRESSES READINESS TO CONTRIBUTE TO STRENGTHENING ASIA-EUROPE COOPERATION WWW.MONTSAME.MN PUBLISHED:2019/02/21      3 OYU TOLGOI FUNDED 35.1 KM ROAD OPENS IN KHANBOGD WWW.GOGO.MN PUBLISHED:2019/02/21      4 POLYMER BITUMEN TO BE DOMESTICALLY PRODUCED WWW.MONTSAME.MN PUBLISHED:2019/02/21      5 KHURELBAATAR CHIMED: 319 ENTITIES DREW LOANS FROM TWO FUNDS WWW.ZGM.MN PUBLISHED:2019/02/21      6 CONSTRUCTION OF TAVANTOLGOI-GASHUUNSUKHAIT ROAD TO BE INTENSIFIED WWW.MONTSAME.MN PUBLISHED:2019/02/20      7 OVER 30 MEASURES PLANNED FOR REDUCTION OF ENVIRONMENTAL POLLUTION WWW.MONTSAME.MN PUBLISHED:2019/02/20      8 MONGOLIA SAYS IT EARNS OVER 169 MLN USD FROM COAL EXPORTS TO CHINA IN JAN WWW.HELLENICSHIPPINGNEWS.COM  PUBLISHED:2019/02/20      9 RUSSIA’S GAZPROM TO START CHINA GAS PIPELINE BY DECEMBER 1 WWW.RT.COM PUBLISHED:2019/02/20      10 MONGOLIA'S FOREIGN TRADE UP 41.6 PCT IN JAN. WWW.XINHUANET.COM PUBLISHED:2019/02/20      УГСАРМАЛ ОРОН СУУЦНЫ ДУЛААЛГАД ЗОРИУЛЖ 12.7 ТЭРБУМ ТӨГРӨГИЙГ УЛСЫН ТӨСВӨӨС ГАРГАХААР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/21     2018ОНД ЦАГААН БУДАА , ЭЛСЭН ЧИХЭР , ТАХИАНЫ МАХНЫ ИМПОРТ 24-32 ХУВИАР ӨСЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ДЦС IV: 2018 ОНД НИЙТ АШИГ 4.7 ДАХИН ӨСӨЖ , 4.48 ТЭРБУМ ТӨГРӨГ БОЛСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ТУСГАЙ САНГУУДААС ГАРГАСАН ЗЭЭЛИЙН 100 ОРЧИМ ТЭРБУМ ТӨГРӨГ ХУГАЦАА ХЭТЭРСЭН ӨР БОЛЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     МОНГОЛ УЛСЫН БОРЛУУЛАЛТЫН МЕНЕЖЕРҮҮДИЙН ИНДЕКС СҮҮЛИЙН 12 САРД АНХ УДАА УНАЛТЫН БҮСЭД ШИЛЖИВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     2018 ОНД ХАМГИЙН ЧИНЭЭЛЭГ БҮЛГИЙН ХЭРЭГЛЭЭ ЯДУУ БҮЛГИЙНХНЭЭС 5.1 ДАХИН ИХ БАЙВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     ХОВД ГОЛД ОСОЛДСОН 6 НАСТАЙ ХҮҮХДИЙН ЭРЛИЙГ ЗОГСООЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2019/02/21     ДБНХ-НООС П.ОРХОНЫ БАРИЛДАХ ЭРХИЙГ 4 ЖИЛЭЭР ХАСАВ WWW.MONTSAME.MN  НИЙТЭЛСЭН:2019/02/21     УУХҮЯ: II САРЫН БАЙДЛААР НИЙТ НУТАГ ДЭВСГЭРИЙН 5.6 ХУВЬД АШИГТ МАЛТМАЛЫН ЛИЦЕНЗ ОЛГОСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/20     300 ОРТОЙ ТӨРӨХ ЭМНЭЛГИЙН БАРИЛГЫН АЖИЛ 80%-Д ХҮРЧ ГУРАВДУГААР САРЫН 1-НЭЭС ДУЛААНД ХОЛБОГДОХООР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/20    

Events

Name organizer Where
“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

NEWS

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International conference on hazardous waste management takes place www.montsame.mn

Ulaanbaatar /MONTSAME/ The Ministry of Environment and Tourism, the General Agency for Specialized Investigation (GASI) and the European Bank for Reconstruction and Development (EBRD) jointly organized ‘Hazardous Waste Management in Mongolia- Further Actions’ international conference yesterday, November 28.

Citizens understand hazardous waste as only toxic chemicals. But even widely used batteries are hazardous. It is important that citizens have knowledge on possibilities to recycle their waste, Head of Environment and Natural Resource Management Department of the Ministry G.Nyamdavaa highlighted during the conference.

He also added that our country disposes medical waste at certain level, nevertheless, it cannot remove chemical agents. Therefore, having sites for burying and recycling hazardous waste is becoming a pressing issue for us.

Hence, it is impossible to export hazardous waste, there is necessity to recycle it at home and dispose in a way of not causing adverse impact to the nature. A survey says that the country produces 10 thousand tons of hazardous waste nationwide a year, of which only 10-20 percent are recycled.

“Revised law on Waste was adopted by the Parliament in 2017 and it became possible for GASI to oversee entities that produce hazardous waste. The entities are now aware of damage and importance of hazardous waste management,” said U.Ulziitsetseg, Senior environmental inspector at GASI.

At the end of the meeting, representatives of the Ministry of Environment and Tourism, GASI and EBRD released recommendation on reduction of hazardous waste in Mongolia to submit it to the Cabinet and other relevant organizations.

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Non-performing loans grow 45 percent in one month www.zgm.mn

Bank of Mongolia (BoM) recently reported the results of commercial bank balance sheet data for October 2018. Key highlight from the report was that the balance sheet resulted MNT 200 billion in loss in the first 10 months of this year.

Although the indicator was MNT 42 billion in surplus in September, the surplus shifted into a loss of MNT 240 billion within a month. As for the same period of last year, the balance sheet of domestic commercial banks was at MNT 220 billion in surplus.

Also, the amount of non-performing loans (NPL) reached MNT 1.9 trillion which is 11.9 percent of total gross loans. Total amount of NPL jumped by MNT 600 billion or 45 percent month over month.

Mongolian Bankers Association, in its February 2018 report, explained that the loss is related to the measures under the Asset Quality Review, which was organized within the frames of the International Monetary Fund (IMF) program.

At the completion of the sixth review under the Extended Fund Facility program, the IMF team warned, “The undercapitalized have until end-December to raise the necessary new capital and failure to do so will face Central Bank intervention or be resolved as per the Banking Law.” The BoM informed that the undercapitalized banks increased their assets by MNT 140 billion as of yesterday. Furthermore, a BoM spokesperson noted that 2-3 banks are currently in systematic risk.

Analysts highlighted the fact that the percentage of NPL to total gross loans entering double-digits means is an alarming signal for the financial system. Due to inflation reaching 7 percent in Ulaanbaatar city, NPL to total gross loans totalling 12 percent and rapid depreciation of MNT rate, the BoM raised the interest rate to 11 percent from 10. On the contrary, the Parliament approved the 2019 State Budget with MNT 11.6 trillion expenditure and MNT 2 trillion in deficit. Local media outlets are pointing out that this will further increase debt pressure starting from 2021 when sovereign bond repayments are due.

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Mongolia restores power in parts of country after massive outage www.news.mn

Mongolian power utility said on Thursday it had started to restore electricity to western parts of the country after country was hit by a massive blackout on 24 November. A snow storm from Siberia hit Mongolia last week causing a massive power blackout across western parts of the country. Three people were injured and 1600 livestock were lost in the storm.

Nearly 50 districts across the four western provinces were left without power. According to the Mongolian National Emergency Management Agency (NEMA), 13 power lines with a capacity of 330 kW were torn down by the strong winds.

According to the National Agency for Meteorology and Environmental Monitoring, strong winds and heavy snow are expected to hit large parts of the country over the coming days.

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Indian billionaire won't use tax dollars for controversial coal mine in Australia www.cnn.com

New Delhi (CNN Business)One of India's richest men is pushing ahead with a controversial coal mine in Australia, but the project will be scaled back after plans for state subsidies were dropped following huge protests.

The Adani Group, owned by billionaire Gautam Adani, said Thursday that its Carmichael mine in Queensland state will be "100% financed" through its own resources.
Construction of the project, which has been repeatedly delayed by protests from politicians and environmentalists, can now begin, Adani's mining chief Lucas Dow said.
"We will now deliver the jobs and business opportunities we have promised ... all without requiring a cent of Australian taxpayer dollars," Dow said in a speech in Queensland released by the company.

The proposed use of Australian taxpayer dollars had enraged opponents of the mine, who say it will be a "death sentence" for the Great Barrier Reef because of the high levels of carbon pollution that coal produces. Large parts of the reef have already been destroyed by rising ocean temperatures linked to global warming.
Adani has significantly scaled back its ambitions for the mine. It had projected production of 60 million tons of coal a year, but says now that it will peak at 27.5 million tons.

Adani had initially said it would spend about $12 billion on the project, which also included a new railway line and an airstrip. It did not reveal how much the smaller mine will cost.
"The project stacks up both environmentally and financially," Dow said on Wednesday, adding that the company is working with regulators to get the remaining approvals it needs to start actually producing coal from the mine.
Angus Watson contributed to this report

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What happens when CEOs have too much power www.cnn.com

In recent weeks, we've seen how concentrated power and a lack of diverse perspectives on corporate boards can cause systemic blind spots in organizations and lead them into avoidable crises.
Facebook, for instance, is currently in the crosshairs of regulators, business partners and users after damning reports came to light about its reaction to a drumbeat of bad news. Carlos Ghosn's devastating fall from the upper echelons at Nissan has thrown both the auto maker and its longtime partner Renault into crisis, and has cast doubts on the structure of corporate governance in Japan. And his behavior as an "imperial CEO" led to Jeff Immelt parting ways with GE, heralding a corporate meltdown of epic proportions. These are just some of the most recent and visible examples of how power — particularly absolute power with few checks and balances — can presage a crisis.
Here's how absolute power can lead a company down a self-destructive path:
Shrinks cognitive bandwidth

Practices such as having the same person serve as chairman and CEO, failing to give decision making power to truly independent directors, and selecting directors from the same tired pool of contenders, are all likely to increase the chances that corporate leadership will miss something important in the external environment. By definition, the number of perspectives weighing in on decisions are reduced if the diversity of the people making consequential decisions is limited.
Moreover, research suggests that more homogenous teams (as one finds when only a small group of people — or even a single individual — is in power) perform more poorly when tasks involve imagination, creativity and out-of-the-box problem solving. Precisely because it is harder to come to an agreement on information and its implications, more diverse teams do a better job.
Discourages sharing uncomfortable news
The people most likely to encounter evidence that the world is changing tend not to be comfortably seated in corporate headquarters. They are at what the late businessman Andy Grove long ago called the "edges" of the organization.
It's the person at Facebook who first noticed something strange going on with accounts that could be traced to Russian operatives, only for Facebook's then-security chief to be met by anger from the top of the company when he shared early findings in a conference room deliciously named "only good news," according to The New York Times. It's the whistleblower at Nissan who pointed out that all did not seem well with respect to the car company's books. And they're the external analysts looking at GE's businesses and wondering whether something wasn't "broken" over there, despite corporate management's denials that anything was problematic at all.

Enables self-interested decisions
When power is overconcentrated in a few players, executives have the latitude to take actions that are comfortable for themselves, but not necessarily consistent with the good of the organization or the people in it. While this should be obvious, we still see many examples of how long-term decisions are colored by the outcomes that will reward the most powerful, even if they prove negative in the longer term.
This can take the form of outright criminal behavior, as the allegations against Carlos Ghosn — which he has denied — imply. Or it can take the form of claiming generous retirement payments, stock options and access to company resources, as has apparently happened with Jeff Immelt, who used a spare plane for travel until 2014, according to GE. During his tenure, GE's decisions to buy back its own stock (which has the effect of strengthening the share price) were blamed for contributing to GE's cash problem.

Or it can take the form of prioritizing advertising revenue over the protection of a user's confidential information and strict adherence to the law. According to a complaint filed by the Housing and Urban Development Department, Facebook, for instance, has promised advertisers it won't show housing ads to people in protected classes, such as the disabled who might need certain accessibility, which is considered housing discrimination and actually illegal (and for which the company is being sued — Facebook said it would address HUD's concerns).

Given these obvious drawbacks, why are so many organizations working under governance structures that expose them to these risks? One reason is that good governance, challenging group discussions and quests to find real information, is hard. It takes time and effort to identify and recruit diverse board members. It can feel uncomfortable to insist that the influence of more powerful people be reduced. And bringing women and underrepresented groups into the conversation means the conversation itself is likely to be different. Nonetheless, it's an effort worth making — unless you want your organization to star in the next set of shocking corporate headlines.

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Russia’s Rosneft aims for $500bn worth of energy deals with China www.rt.com

Russian energy major Rosneft has a “leading role” to play in ensuring China’s energy security, according to the company’s Chief Executive Igor Sechin.
Speaking at the first Russian-Chinese Energy Forum in Beijing, he said the total volume of Rosneft’s crude shipments to China is expected to exceed 50 million tons this year. “Rosneft is one of the leaders in terms of petrochemical supplies to China,” he said.

According to Sechin, the company supplied about 40 million tons of oil last year, “thereby providing about 6.5 percent of China’s total raw materials demand.”

The CEO said: “Taking into account the mutual trade turnover on already concluded contracts, the total volume of deals between Rosneft and its Chinese partners will exceed $500 billion by 2035.”

He noted that “Beijing, in turn, is interested in ensuring its energy security and reliable supply channels.”

Statistics show that Russia was the largest crude oil supplier to China for the past two years on an annual basis. Exports of Russian oil to China have more than doubled over the past six years, up by more than 550,000 barrels per day.

In 2011, Russia began supplying China with crude through the Skovorodino-Mohe branch of the ESPO pipeline. That followed Rosneft, Transneft, and China National Petroleum Corporation (CNPC) signing agreements.

Rosneft and CNPC inked a 25-year oil deal in 2014 worth $270 billion under which the Russian company is expected to supply 360.3 million tons of crude to China. Since then, Russia has overtaken Saudi Arabia to become China’s biggest crude supplier.

Last year, Rosneft agreed crude oil deliveries with China’s CEFC Energy. According to the agreement, the Russian oil major will supply CEFC with 60.8 million tons of oil annually until 2023.

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Mongolia-Hungary road transport agreement established www.montsame.mn

Ulaanbaatar /MONTSAME/ During the Mongolia-Hungary intergovernmental commission’s meeting held in Budapest, Hungary, an intergovernmental agreement on freight and passenger transportation by road transport was initialed.

Within the agreement, road transporters of the two countries will be allowed to provide freight and passenger transport services under a permission. In addition, the agreement will enable Mongolian people and entities to carry out third-country transport operations through Hungary, creating a favorable environment for them to travel and conduct businesses.

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President receives ambassadors of the European Union and its member states www.president.mn

Ulaanbaatar /MONTSAME/ Today, President of Mongolia Khaltmaagiin Battulga received resident and non-resident ambassadors of the European Union (EU) and its member states to Mongolia.

Present at the annual meeting were, 21 ambassadors of the EU and its member states, including the Federal Republic of Germany, the Italian Republic, the Republic of Austria, and the Kingdom of the Netherlands, and representatives of the diplomatic missions of other EU member states that are accredited to Mongolia.

On behalf of the ambassadors, Ambassador Extraordinary and Plenipotentiary of the EU to Mongolia, Mr. Traian Laurentiu Hristea gave remarks, in which he noted that the EU attaches importance to its relations with Mongolia. Ambassador Traian Laurentiu Hristea underscored the EU ambassadors’ commitment to promoting bilateral trade and investment relations and working towards the diversification of the Mongolian economy, as well as cooperating within the Framework Agreement on Partnership and Cooperation between the European Union and Mongolia, which came into force on November 1st, 2017.

Moreover, Ambassador Traian Laurentiu Hristea stressed that Mongolia should continue to put efforts into improving investment transparency and the environment while requesting the Government to remain committed to the dialogue with the EU and its member states.

During the meeting, President Battulga answered the questions of the ambassadors and discussed the development of tourism and agriculture sectors in Mongolia and policies and ongoing works that are being implemented in these sectors. For instance, President Battulga expressed interest in inviting European tourism and agriculture specialists to Mongolia and learning from their expertise. Furthermore, the President emphasized the importance of productive celebration of the 30th anniversary of bilateral relations between Mongolia and the EU, which will fall next year.

At the end of the meeting, the ambassadors thanked President Battulga for the audience and the open discussion. The ambassadors also expressed their confidence in the continuation of the annual meeting and that bilateral relations will flourish on all levels.

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Private entities request swap deals to stabilize FX rate www.zgm.mn

Yesterday, the Bank of Mongolia (BoM) received the representatives of Top 200 private entities to discuss the current business environment and economic situations. Participants addressed the necessity of swap agreements in coordination with currency volatility and corporate planning of private entities.

Deputy Governor of the BoM Lkhagvasuren Byadran stressed in his opening remarks that the bank is planning to annually organize the event and expand its scope as interrelations of wealth makers play an import part in actualizing state policies by preparing demand-driven policies. The meeting further touched upon the implementation of the 2018 Monetary Policy and economic challenges.

Myagmarjav Luvsandach, CEO of the MCS Coca-Cola LLC, remarked, “It is essential for the BoM to provide information on monetary policy, economic and financial situation for businesses, which are operating in an economy that is highly dependent from domestic and foreign environments, to be able to plan ahead,” and suggested to hold the meeting semi-annually before the cycle periods, such as the approval of monetary policy.

“Coordination between banks and financial institutions are necessary in the implementation of monetary policy. The State and government bodies need to regulate this,” recommended Khuyagtsogt Ognon, Deputy Director of Mongolian Stock Exchange (MSE), and highlighted that there are currently 220 firms listed at the MSE. “Over 180 entities have been delisted so far. The current financial and economic situations are the main reasons here. Furthermore, private entities are lacking transparency that leads to delisting,” noted Mr. Khuyagtsogt.

Regarding foreign exchange (FX) rate, Unenbat Baatar, Chief Financial Officer at MobiCom Corporation LLC, addressed, “Tech companies require high amount of investment in the short-term; however, the shrink in purchasing power of consumers is causing MNT-based operations to have FX costs. We need protection measures for national currency via flexible swap deals that are in line with corporate plans of private entities.” He then highlighted that political risks in businesses and economy stand at around 70 percent. Participants at the meeting shared the same view on political risks. Former Parliament member and current CEO of Economic research and Training Institute Demberel Sambuu warned that sudden announcement of the Parliament on economy and finance is affecting the stability of business and economy.

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Mongolian Ambassador to Sweden resigns after three months www.news.mn

Mongolian Ambassador to Sweden O.Enkhtsetseg has presented her resignation letter to the Ministry of Foreign Affairs. In the letter Ms. O.Enkhtsetseg requested to resign from the post for private reasons.

She flew to Sweden in September after receiving her credentials from the President of Mongolia succeeding M.Enkhsaikhan.

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