NSO releases April 2018 report www.theubpost.mn

The National Statistics Office of Mongolia (NSO) has released its Social and Economic Report for April.

The report shows some interesting changes in the economic and social situation of Mongolia observed in the first quarter of this year, including a wage increase, higher unemployment rate, and increase in the average monthly household income.

Economically active population declines

There are 1.3 million economically active population aged 15 and above in Mongolia, according to the first quarter results of the 2018 Labor Force Survey. Among these people, 665,400 people (52.6 percent) are men and 600,400 people (47.4 percent) are women.

The survey showed that 61.5 percent, or 778,800 economically active people, live in urban areas, while 38.5 percent, or 487,000 people, live in rural areas.

In the first quarter of 2018, the Labor Force Participation Rate (LFPR) stood at 60.6 percent, falling by 1.8 percentage points from the preceding quarter but increased by 1.1 percentage points from the same period of last year. The employed decreased by 4,100 people, or 0.4 percent, compared to the same period of the previous year and economically inactive population went down by 36,500 people, or 4.2 percent. However, the number of unemployed people increased by 7,600 people, or 6.6 percent, over the last quarter and reached 122,900 people by April 31. The majority of the unemployed are men, taking up 56.6 percent.

The unemployment rate has risen by 2.4 percentage points to 9.7 percent since the fourth quarter of 2017.

NSO reported that by the end of April, 34,500 people had filled applications at employment and labor organizations in search of jobs and that 23,400 of them are unemployed while the rest are people searching for a second job.

Labor organizations operating in Ulaanbaatar and provinces registered 294 new people who don’t have a job since January. A breakdown by gender shows that 12,300, or 52.6 percent of the total registered unemployed people are women. In the registered unemployed by region, 33.8 percent are living in Ulaanbaatar, 19 percent in the western region, 18.7 percent in the central region, 16.7 percent in Khangai region, and 11.8 percent in the eastern region.

Newly registered unemployed at the Labor and Social Welfare Services Agency, by reason, by percent, as of April 2018
Nationwide, there are 468 people living with disabilities who wish to work but don’t have jobs, according to labor and social welfare services agencies.

One of the shocking things found in the report was the fact that the majority of newly registered unemployed people (51.8 percent) were dismissed from their previous job. Other reasons included unemployed after university, migration, being released from prison, returned from abroad, and unemployed after military.

According to NSO, unemployment is highest among young people living in Umnugovi, Arkhangai, Uvs, Khovd, Tuv, Orkhon, Dornod, and Govi-Altai provinces.

Registered unemployment trends
Average family earns 1 million MNT per month

The first quarter result of the 2018 Household Socio-Economic Survey showed that the monthly average household income amounted to one million MNT, surging by 137,600 MNT (15.4 percent) compared with the same period of the previous year. It was mainly driven by higher wages, which increased by 52,300 MNT (10.4 percent) in the last quarter, and higher revenue from non-agricultural production and services, which rose by 26,600 MNT (38.7 percent).

As of April, the monthly average household real monetary income (eradicated price inflation impact) stood at 967,100 MNT, increasing by 73,800 MNT since April 2017.

The monthly average household monetary expenditure also went up by 12.6 percent to 1.1 million MNT. This increase was mainly driven by an increase of 96,400 MNT, or 13.8 percent, in non-food expenses and services and other expenditure.

Social insurance and welfare

The following are the key findings in the NSO report related to social insurance and welfare:

The revenue of the Social Insurance Fund reached over 720 billion MNT in the last four months in Mongolia, which is an increase of 72.7 billion MNT and a whopping 11.2 percent compared to last year. It amounted to 190.6 billion MNT in April.
The expenditure of the Social Insurance Fund amounted to 679.7 billion MNT, also rising by 78.1 billion MNT (13 percent) compared to last year. It amounted to 175.7 billion MNT in April.
The revenue of the Health Insurance Fund saw a decline of 13.1 billion MNT (13.1 percent) while the Unemployment Insurance Fund revenue went down by 2.5 billion MNT (17.5 percent) since 2017.
The expenditure of the Unemployment Insurance Fund decreased by three billion MNT (22.6 percent).
Monthly cash allowances, also known as children’s money, was not distributed in April.
Birth rate increases in April

NSO reports that more babies were born in the first quarter of this year compared to the same period of last year.

Over 25,400 babies were born in the first quarter of 2016, over 22,790 babies in the first quarter of 2017, and this year, the number of newborn babies increased to 25,310, according to statistics. Infant mortality and under-five mortality, on the other hand, had increased by 3.1 percent and 4.3 percent respectively by April. Hospitals recorded 370 infant deaths and 440 deaths of children under the age of five. However, a slight improvement was seen in these indexes in April – infant mortality fell by two babies and under-five mortality by 108 children compared to April 2017.

NSO recorded 13,418 patients affected by communicable diseases, which is more than 3,000 patients lower than last year. Reportedly, patients affected by measles fell by 2,145 (62.7 percent), varicella patients by 1,415 (32.3 percent), trichomoniasis patients by 97 (six percent), and tuberculosis patients fell by 66 (five percent) compared to the same period of last year.

In April, five new HIV/AIDS cases were detected, making the total number of HIV/ AIDS cases in Ulaanbaatar 260.

Mongolia vs Philippines www.theubpost.mn

Like Mongolia, the Philippines is a lower-middle income country with a GDP of 399 billion USD and although the two countries are less than five hours away, there is a great contrast between their economic and social situations.

While Mongolia is landlocked and heavily dependent on mining, the Philippines is situated on an island with sea ports all around. It is primarily considered a newly industrialized country, with an economy in transition from one based on agriculture to one based more on services and manufacturing.

The economy of the Philippines is the world’s 34th largest economy by nominal GDP according to the 2017 estimate of the International Monetary Fund. It was also defined as the 13th largest economy in Asia and third largest economy in the ASEAN after Indonesia and Thailand. The Philippines is one of the emerging markets and is the sixth richest in Southeast Asia by GDP per capita values, after Singapore, Brunei, Malaysia, Thailand and Indonesia. The country is expected to become an upper middle-income country by late-2019, with economic growth poised to clock faster driven by an ambitious infrastructure program, according to the National Economic and Development Authority.

The economy of Mongolia, on the other hand, is one of the fastest growing economies in the world. Impressed with the developments in the mining industry and foreign interest increasing at an astonishing rate, Renaissance Capital predicted that the “unstoppable” economic growth would make Mongolia the new Asian tiger, or “Mongolian Wolf” as they prefer to call it.

The principal industrial activities in Mongolia are mining and agricultural production, namely cashmere. GDP from mining averaged almost 1.78 trillion MNT from 2010 to 2017, reaching an all-time high of 3.97 trillion MNT in the fourth quarter of 2016 and a record low of 3.95 trillion MNT in the first quarter of 2010, as reported by Trading Economics. Meanwhile, GDP from agriculture averaged nearly one trillion MNT from 2010 to 2017, reaching an all-time high of 2.25 trillion MNT in the fourth quarter of 2017 and a record low of 0.46 trillion MNT in the first quarter of 2011.

I had the chance to talk about the economic situation in the Philippines with local experts during my recent visit to the capital, Manila, for the 51st Annual Meeting of the Asian Development Bank (ADB)’s Board of Governors. After my initial surprise at the scorching but humid weather, I was fairly impressed with the completed and ongoing infrastructure work in the city. But in this article, I will compare the two countries with their economic performances as well as delve into some operations by ADB which accelerated each nation’s economic growth.

Without further ado, let’s have a closer look at these two countries.

Mongolia

The economy revived in 2017 from slowing growth in previous years. Growth will remain solid in 2018 and 2019, albeit with slight moderation, thanks to large investments in mining, according to ADB.

Inflation is expected to rise in 2018 before decelerating modestly in 2019, and the current account deficit will narrow considerably in 2018 before widening somewhat in 2019. Urban air pollution, especially in winter, poses an urgent and complex policy challenge.

A fall in copper concentrate quality at the Oyu Tolgoi mine lowered mining production by 6.9 percent in 2017 in spite of a 32.7 percent increase in coal production attributed to favorable prices. Strong recovery in manufacturing—particularly in coal washing, cement production, and meatpacking—helped the industry contribute 0.2 percentage points to growth notwithstanding subdued mining production and a decline in construction.

Large mining-related investments and imports underpinned expansion in the transport, wholesale, and retail industries, making the service sector the main driver of growth, with a contribution of 4.3 percentage points.

ADB commended the government for slashing its budget deficit from 15.3 percent of GDP in 2016 to 3.9 percent last year through its commitments under an agreement with the International Monetary Fund Extended Fund Facility.

Economic growth is forecast to decelerate slightly to 3.8 percent this year before shooting back up to 4.3 percent in 2019, supported by foreign direct investment anticipated to exceed one billion USD annually this year and next to develop the Oyu Tolgoi underground mine. The quality of copper concentrate from the open-pit mine is expected to improve significantly.

The Philippines

Broad expansion in aggregate demand, attributed to higher export growth, underpinned strong economic growth last year. Inflation picked up, and the current account posted a marginal deficit, according to ADB. Accelerated investment is expected to offset moderation in exports this year and next, enabling higher growth. Inflation is forecast to edge up, and the current account to remain in deficit.

ADB believes that strengthened project planning and implementation capacity is crucial to the success of an ambitious public infrastructure program in the country.

The Philippine government has embarked on a massive infrastructure program worth 160 billion USD to 180 billion USD from 2017 to 2022, entitled “Build Build Build.” The program aims to address infrastructure bottlenecks that have long constrained Philippine competitiveness globally, as well as its long-term growth prospects. Under the program, public infrastructure spending is targeted to rise from 4.5 percent of GDP in 2016 to 7.3 percent by 2022.

The program has already gathered momentum, with public spending on infrastructure estimated to rise by nearly a percentage point of GDP last year to reach 5.4 percent. This is a remarkable achievement for the first year. However, considering the wide array of infrastructure projects under the program, the challenge for the government is to ensure that government departments and other implementing agencies have the adequate absorptive capacity to roll out and implement such large and complex projects.

Encouragingly, efforts are already underway to enhance the absorptive capacity of government agencies, including their technical and institutional capabilities for project readiness and budget execution. Initiatives include a proposed shift from a multiyear budget system to an annual cash-based system effective in January 2019, with a view to improving budget execution. A budget reform bill is being pursued in the legislature to institutionalize improvements in the financial management, budgeting, accountability, and result-orientation of the budget process and public spending.

Conclusion

Both Mongolia and the Philippines are considered fast-growing countries but the Philippines is hurtling toward becoming an upper middle-income country with its ambitious strides, while Mongolia continues to take less risky moves.

The Philippines government may seem to be spending an alarming amount of money on infrastructure but this will ultimately bring much larger yield in the long run. Also, the government has shown a remarkable improvement in terms of government debt, depreciating it to 42 percent by the end of 2017, which is said to be the lowest in 20 years. This was possible with improvements to the fiscal management, consolidation of deficits, ramp-up in expenditure, and implementation of tax reforms.

Playing safe is a good method to produce consistent results and that’s exactly what the Mongolian government has been doing so far. However, we can definitely do better considering the immense potential of the Mongolian people and the resources contained in our vast land. Right now, Metro Manila in the Philippines is fully engaged in construction work. This is what is needed to improve and develop a country. Mongolia has many targets and the main reason they haven’t been achieved is slow implementation, with the exception of long-term targets that require substantial time.

Mongolia also needs to diversify its economy so that it can grow without being heavily dependent on mining. The Philippines’ economy and employment were dependent on agriculture several decades ago, but through investments and effective policies for the information and technology sector, it has become less dependent on farming and created many jobs in other sectors. Looking at this, investing in people and infrastructure like the Philippines will most likely boost Mongolian society and its economy.

Parliament approves 4 new ambassadors www.theubpost.mn

During its Thursday session, Parliament approved the president’s four nominees for new diplomatic mission heads who will represent Mongolia to their designated countries.
During the meeting of Parliament’s Foreign Policy Standing Committee held on Wednesday, MP N.Enkhbold remarked that Parliament should review nominations for ambassadors in a closed session as crucial issues regarding the nation’s foreign policy would be discussed.

At the beginning of Thursday’s session, former Minister of Foreign Affairs Ts.Munkh-Orgil said that Parliament needs to discuss appointments of diplomatic mission heads in an open session because Mongolians living abroad should be informed of the plans of newly appointed diplomatic mission heads serving in their respective countries.

As lawmakers supported Ts.Munkh-Orgil’s proposal, Parliament reviewed appointments of the new ambassadors in an open session. Legislators asked the four nominees about the plans for their respective diplomatic missions abroad, and relations between Mongolia and these countries.

SWEDEN

Diplomat O.Enkhtsetseg, appointed ambassador to Sweden, said that trade turnover reached 33.4 million USD between the two countries last year, which includes exports worth 628,000 USD from Mongolia to Sweden, mainly textile products and Mongol ger, and imports of 32.7 million USD from Sweden, mainly heavy equipment for mining projects.
O.Enkhtsetseg pointed out that she is looking forward to increasing Swedish investment in Mongolia, learning more about Swedish experience in innovation, green development, and sustainable development and promoting bilateral cooperation in these areas.

She noted that more than 6,000 Mongolians are living in Sweden, and many of them ask the Ministry of Foreign Affairs and the Embassy of Mongolia in Stockholm to create an opportunity that will bring social insurance fees paid by them in Sweden to Mongolia.
O.Enkhtsetseg stated that to fulfill their request, she will work to establish an agreement between the two countries’ governments on labor cooperation and social protection.

JAPAN

D.Batjargal, ambassador to Japan, underlined that Japan has granted 3.6 billion USD to Mongolia for projects implemented under Japan’s Official Development Assistance, and trade turnover between the two countries reached 330 million USD. Exports from Mongolia to Japan are less than 30 million USD, which is why he plans to make efforts for reducing the current trade deficit by promoting cooperation between the two countries’ small and medium-sized enterprises. He added that thanks to the mid-term program for the Japan-Mongolia strategic partnership being carried out from 2017 to 2021, the two countries have seen some progress in bilateral economic cooperation. Therefore, he will actively work to improve the program.

CANADA

Ya.Ariunbold, ambassador to Canada, emphasized that he will work to take economic cooperation between the two countries to a new level through the Program for Mongolia’s Economic Foreign Relations adopted by Cabinet in 2015, and Canada-Mongolia Foreign Investment Promotion and Protection Agreement signed by the two countries in 2016, which will provide a more transparent and predictable regulatory environment for Canadian investors in Mongolia.

The new ambassador stated that he will focus on reaching goals outlined in a trade agreement established by the two nations in 1994 to increase exports, which is currently at 3.4 million USD. He noted that as the two countries are seeking collaboration opportunities for promoting bilateral commercial cooperation, he will concentrate on developing agricultural cooperation and increasing Canadian investment in Mongolia. Ya.Ariunbold added that as he served as the director of the Consular Department of the Mongolian Ministry of Foreign Affairs, he is well informed about challenges facing Mongolians living abroad, which is why he will take care of the nearly 6,000 Mongolians residing in Canada.

UNITED KINGDOM

N.Tulga, ambassador to Great Britain, pointed out that he is looking forward to approaching Mongolia’s collaboration with the British Veterinary Association to promote meat exports from Mongolia to the UK. He noted that the Embassy of Mongolia in London will focus on providing Mongolians living in the UK and foreigners with fast and accessible consular services by sending consular officers twice a year to places where many Mongolians are living in, such as Scotland and North Ireland, to listen to their challenges and provide them with consular services.

N.Tulga stressed that he will seek to establish a mutual legal assistance treaty with the UK.
Lawmaker B.Bat-Erdene said as people living abroad criticize that instead of taking care of Mongolian citizens living abroad, Mongolian diplomats and consular officers are serving few government officials from Mongolia visiting their respective countries, the ambassadors need to provide Mongolians living abroad with fast and fair consular services without bureaucracy.

During the meeting, MP B.Bat-Erdene asked Director of Department of State Administration and Management at the Ministry of Foreign Affairs N.Ankhbayar about policies the ministry is executing to improve consular and state services for Mongolian citizens living abroad, and visa requirements for foreign tourists for promoting the Mongolian tourism sector.

N.Ankhbayar said that the ministry is taking several measures to provide Mongolian citizens with fast, effective and accessible state services. For instance, a Mongolian national living abroad is able to apply for their new passports online, and the ministry is also working to create standards and deadlines for providing notary and state registration services. He added that the ministry is reviewing the budget for opening new consular posts in countries such as Sweden, Australia, France, the Czech Republic, and Poland to manage the workloads of state and consular services, and a tender process for a project to adopt an electronic visa system for foreigners is in progress.

Aspire Mining coking coal production ambitions boosted by Russia-Mongolia talks www.smallcaps.com.au

Coal explorer and aspiring coking coal producer Aspire Mining (ASX: AKM) has received an indirect boost as a result of macroeconomic developments within its operational area in northern Mongolia.

The developer of a key railway connection that’s crucial to Aspire’s chances of production success in Mongolia, Northern Railways LLC, hosted a senior delegation from Russia’s Tuva Republic during their official visit to Mongolia last week. The delegation included Mr Brockhurt, the Deputy Chairman of Tuva and Ms R Sambu-Ho, the director of foreign economic relations in the Tuva Republic.

The collaboration between Mongolia and Russia towards building a mutually beneficial infrastructure project is encouraging for Aspire Mining and improves its chances of entering production of coking coal at its respective Ovoot and Nuurstei projects.

The chairman of the Government of Tuva Republic, Mr Sholban Kara-Ool met with the Mongolian President Mr Battulga with both policymakers noting that the Northern Rail Corridor and its proposed rail connection up to the Tuvan capital of Kyzyl will “play a positive role in the economic development for both countries.”

Communal agreement
Aspire Mining also reports that the parties signed a Memorandum of Understanding (MoU) which supports continued cooperation on seeing the Northern Rail Corridor completed to Kyzyl and to support transit freight volumes commencing in the region.

The Northern Rail Corridor is an important part of the Tuva Republic’s economic development plan which has the support from policymakers in all three of the provinces through which the railway will pass, including Russia’s Tuva region.

Mr Alexander Brokert, the Deputy Chairman of Government of Tuva Republic, said in an interview that the Russian Government is interested in the implementation of the Erdenet to Ovoot Railway Project which will boost trade and economic development between Russia and Mongolia.

Furthermore, collaboration is being supported at the highest levels of government and is “seen as an important step in growing and diversifying the local economy to boost exports and the local tourism industry,” according to Mr L Ganbold, the Governor of Mongolia’s Khuvsgul province.

Mr Ganbold said that the Citizens Representative body voted to support infrastructure projects including railway development and that “the Erdenet to Ovoot Railway is seen as one of the projects with the most potential to have a positive impact.”

Today’s news means that one of the most important features of Aspire’s ongoing project development in Mongolia (the Erdenet to Ovoot Railway) is on course to being built and is supported by all its stakeholders including local residents.

The news was also well received by investors, with Aspire Mining shares rising 5% up to $0.02 per share in early morning trade.

Commercialising coal in northern Mongolia
Aspire Mining currently holds several mining and exploration licences in Mongolia’s northern provinces and is focused on identifying, exploring and developing quality coking coal assets.

Its flagship asset is the Ovoot coking coal project which the company says is highly dependent on the construction of the Erdenet to Ovoot Railway which is being progressed by Northern Railways, a Mongolian rail infrastructure company, mandated to pursue the development of the Erdenet to Ovoot Railway, and supported by an international consortium consisting of Aspire Mining, and subsidiaries of Fortune 500-listed China Railway Construction Corporation ‑ China Railway 20 Bureau Group Corporation and China Railway First Survey & Design Institute Group.

Its other asset is the Nuurstei coking coal project which Aspire hopes to eventually connect into the railway export route but for the time being, is working towards an initial road-side production operation that’s currently being developed prior to the completion of the Erdenet to Ovoot Railway.

Mongolian President urges Malaysia to reopen 2006 model murder case www.reuters.com

ULAANBAATAR - Mongolia's president has urged new Malaysian Prime Minister Mahathir Mohamad to reopen investigations into the murder of a Mongolian model near Kuala Lumpur in 2006, a move that could put more pressure on Mahathir's embattled predecessor.

Mongolia to hold conference on security in NE Asia www.xinhuanet.com

ULAN BATOR, May 17 (Xinhua) -- The 2018 Ulan Bator Dialogue on Northeast Asia Security is scheduled to be held here on June 14-15, and over 150 representatives from countries in the region are expected to attend, a Mongolian Foreign Ministry spokesperson said Thursday.

Leaders of China, Russia and Mongolia to meet www.news.mn

D.Tsogtbaatar, Minister of Foreign Affairs of Mongolia held a meeting with his Russian counterpart, Sergey Lavrov, in Moscow on 16 May. During the meeting, the two top diplomats discussed activating relationships between Mongolia and Russia more effectively. At the meeting, D.Tsogtbaatar invited Russian business leaders to invest in the Mongolian energy and other sectors; from his side, Foreign Minister Lavrov raised issues regarding deepening relations between Mongolia and the Eurasian Economic Union.

Mongolia plans spending MNT 200 billion fighting air-pollution www.news.mn

The Mongolian Parliament held its first discussion on the 2019 socio-economic development guideline on Thursday (17 May), during which MPs debated the budget for fighting air-pollution.

Silicon Valley startup seeking software developer from Mongolia www.ubinfo.mn

Intutech LLC, a tech startup based in Silicon Valley, California, is recruiting a software development contractor from Mongolia. The company has announced to run selection between May and July 2018. The reason behind the specific recruitment is that the founders, who are Mongolians, are willing to create opportunities for Mongolian youth to learn from the practices of Silicon Valley startup company.

Number of mortgage loaners falls drastically www.ubinfo.mn

Since 2016, number of citizens who received mortgage loan has been decreased drastically. In 2016, over 12 thousand citizens obtained the eight percent mortgage loan. By the end of 2017, the number was decreased three times, to 3.9 thousand.