“Open Letter - from former PM Saikhanbileg” BCM

I, Ch.Saikhanbileg, am writing this letter from the isolated 461st Detention Center.
People who haven’t been here couldn’t possibly imagine the despair of days and nights spent behind bars aching in mind and body in the tiny room where I am now.
If I ever took bribes or committed a criminal offence, I would do my time and get out. However, it's very frustrating to be sitting here for moving forward a project the country needed most while acting within my powers and duties set by the constitution.
By moving forward with the Oyu Tolgoi underground mine, Mongolia successfully avoided a budgetary and fiscal default that would have occurred in late 2016, which is something we are not talking about. Oyu Tolgoi is responsible for more than half of today's 5 percent economic growth, with OT’s development accounting for 3 percent. The company employs 14,000 Mongolian workers, whereas it fell all the way down to 3000 at one point. Furthermore, more
than a thousand enterprises and 41,000 people have had the opportunity to expand their businesses. Annual foreign investment, which had plummeted to minus $200 million, increased to $1.5 billion, with two out of every three dollars being invested for the Oyu Tolgoi underground mine.
If this project did not move forward in 2015, we would be losing out on $400 million annually. The most important thing is if we hadn’t gotten it moving in 2015, the underground mine’s extractive operation wouldn’t be set to commence 2020. If we did not start at that time, by looking at the current political situation, it is becoming increasingly clear even that even with the highest optimism, extraction would not commence until at least 2025 or even later. We would have lost at the very least 5-10 years or more. Go ahead and multiply this by $400 million
a year. If we did not make the decision, this would only be a part of the lost income. Yet, nobody is demanding that money back, and nobody is demanding people be held accountable for it.
As Prime Minister, I was mandated by the people to move forward with the Oyu Tolgoi underground mining project. About 450 thousand people voted for the first time with a text message, and 60 percent said to quickly move the project forward. At that time, parliament even passed two resolutions tasking the government with initiating the Oyu Tolgoi underground mine. During the lengthy negotiations, the government discussed the matter several times and ultimately gave the authority to sign the Financing Plan to the relevant officials.
The decision to move forward with this project was made by the Joint (coalition) Government of the time, which politicians from all parties with seats in parliament were part of. Then it was officially presented to parliament, and questions from all interested members were answered. After the Joint Government ended, the survey was presented to MPs during the 2015 fall session, and any further questions presented by MPs were also answered.

In addition, there was proposal by the parliamentary minority to recall the government in January 2016, and the majority of MPs decided that the government shouldn’t be punished regarding starting up the Oyu Tolgoi underground mine. In other words, parliament emphasized the issue
and took the time to convey its position clearly enough.
One thing must be highlighted here. The decision regarding whether to move forward with the Oyu Tolgoi underground mining project as well as how to move forward was purely a policy and POLITICAL decision. How the project was to be settled, calculation of costs, and receiving of financial reports were political questions to be decided within the executive branch. According to Article 45.2 of the Constitution and other relevant laws, if government decrees are not in line
with the law, the government itself (parliament, in other words) can invalidate it. (There were no such problems in parliament at the time). In other words, the correctness of policy or political decisions can only be determined by the legislature and the executive branch as stated in the constitution. If this basic power is transferred to the judiciary, the principle of separation of powers will be lost, and we will truly have a constitutional crisis on our hands. In developed
countries such as the US and UK, there is a principle of the judiciary not
overseeing/investigating political decisions.
Let me give an example. In 2017, Mongolia had a decision to make: to involve itself in the IMF program and borrow an additional $2.7 billion, or forego the program since the price of gold, coal and copper were improving and budget revenue was increasing. What if the next parliament, without understanding the situation in 2017, establishes a working group to investigate whether
the decision was right or wrong? Will the judiciary decide what was right or wrong? And who else will be arrested?
Recently, the Prime Minister of Mongolia said that he would soon introduce his political decision to move forward with the Tavan Tolgoi project. Can parliament support this unanimously with one voice? Will those who are opposed seek to have the matter resolved through the courts? Will there be another investigation to follow? The issue surrounding the Oyu Tolgoi underground mine is the same as the two examples above. This dispute, which has passed through three parliaments, cannot be left to three judges to decide. If the courts begin to
determine the correctness of POLITICAL decisions, then political prisoners in Mongolia will be born again (or will become a thing once again – alluding to the socialist days). Today, two Prime Ministers of Mongolia and a former Minister of Finance, as well as other relevant officials, have been detained for the making political decisions.
Therefore, I am sending you the following requests and comments.
One. To the President of Mongolia Kh.Battulga, Speaker of Parliament M.Enkhbold, Prime Minister U.Khurelsukh and members of Parliament and the Government:
1. I would like the National Security Council to pay attention to how two prime ministers are becoming living victims of Vyshinsky-style persecution (referring to Stalin’s Purges) for exercising their constitutional mandate and issuing POLITICAL DECISIONS.

2. One of the foundational principles laid out in the Constitution of Mongolia is the right, whether as a majority or minority, to politicize, debate, and decide on policy and political matters. Today we face the issue, whether intentional or unintentional, of a transfer of this fundamental power to the third branch of government. This raises the question of whether parliaments and governments of the future will be able to decide economic and political matters independently without external interference. Parliament, not the judiciary, should determine the correctness of issues. I want all MPs to hold a solid, unified position on this regard regardless of party and coalition.
3. I hope the Parliamentary Working Group on Oyu Tolgoi will work in an unbiased manner. I want you to meet with those who were in the working group that worked on the negotiations and have them clarify their views - not in a prison cell, but in the office.
Two. To Chief Justice of the Supreme Court of Mongolia Ts.Zorig, Prosecutor General M.Enkh-Amgalan, and Head of the Independent Authority Against Corruption Kh.Enkhjargal:
1. I hope that you no intention of stirring up the many political problems debated in parliament in the District Courts. Therefore, I would like to ask you to maintain a clear position from the beginning in order to prevent this problem from happening again.
2. Those imprisoned concerning this issue have repeatedly stated that they have not fled and will not flee; that they are no longer state officials, so are unable commit another such crime; and that they intend to respect law enforcement and fully cooperate. However, some people’s detentions have been extended. I implore you to review your decision to detain, which has left society confused, has us confused, and brings about no outcome.
3. I am 100 percent confident that no Mongolian official has ever taken bribes from a public, oversighted, international company in initially establishing as well as resuming the OT project. If this happened, we will be ready to accept any punishment.
Three. To the thousands of active social media users, media outlets, journalists,
newspapers, TV, radio, and websites:Out of respect for the Mongolian state, I came back to be questioned without seeing the completion of my sibling’s cancer treatment.
Despite needlessly jailing me for 30 days, I did not utter one word to the outside. In over a month of incarceration, I have been interrogated only once. Of course, as a human, I wish only to relieve my elderly father’s soul, even if just one day earlier; to kiss my wife and children; to hug my daughter who is barely introduced to life, who still believes her father is in the hospital, counting down the days until I get out. However, this is not just the problem of me and another 4 or 5 people in jail. This is a question of whether there will be more political prisoners in Mongolia; whether the fundamental principles of the Constitution will be adhered to; whether parliament and the government can function normally; whether they will be able to make decisions on a project or program that will bring development; and in what kind of society our children are going to live in.
As a man who firmly believes that those who stand for ethics, justice, and legitimacy far outnumber paid writers, I implore you to raise your voice through the media, news outlets, in your posts and comments, to resolve the issues above and support the great project that is Oyu Tolgoi, which has a positive impact on the country and economy, so that it may operate without
hindrance, and increase the benefits to Mongolia in the future.
Sincerely,
28th Prime Minister of Mongolia Ch.Saikhanbileg
May 2, 2018

Former top Chinese official jailed for life www.bbc.com

A former Chinese Communist Party official once tipped for a top leadership position has been sentenced to life in prison for bribery.

PM addresses at Parliament on water issues www.montsame.mn

Ulaanbaatar/MONTSAME/ Last Friday, May 4, Prime Minister U.Khurelsukh addressed at Parliament about Mongolia’s water resource, present water consumption and pressing issues and measures to be taken further.
Within the Sustainable Development Vision, Mongolia set a goal to provide 80 percent of its population with quality and standard potable water by 2020.

“As of 2015, about 65 percent of the population had access to standard water services. On the other side, about a million of people is still using unguaranteed, open and portable water. It means these people are likely to suffer health problems. …Now, Mongolia encounters a necessity to realize right management and good governance to use water resource decently and rehabilitate and safeguard water quality and reserve,” said the PM.

He introduced about the progress of the state policy on water and many related resolutions, including National Program ‘Water’, Green Development Policy, Sustainable Development Vision-2030 and Unified Management on Water Resource. In addition, there have been 22 laws regarding the Constitution of Mongolia and Mongolia’s water policy, over 20 resolutions issued by the Parliament and its Standing Committees, recommendations by the National Security Council, over 20 government resolutions and more than 30 regulations and rules approved by Environment and Tourism Minister and other relevant ministers.

“Today, the country’s total annual water consumption is around 500 million cubic meter, which equals 0.001 percent of its water resource. Groundwater, which makes up less than two percent of Mongolia’s total water resource, provides over 80 percent of the country’s water consumption. Water use of the population, industries, production and agriculture is growing fast. According to the study in 2011, Mongolia’s total annual water consumption was around 330.0 million cubic meter. However, it tends to double averagely by 2021. To satisfy such fast growing needs of water, we need to take urgent measures reflected in the water-related policies and programs punctually,” stressed the PM.

Due to recent climate change and global warming, the permafrost and water level of glacier declined by roughly 30 percent and as of 2017, 391 lakes, 344 rivers and brooks and 760 springs were found to have dried out.
In the end of his address, the Prime Minister presented essential measures to be taken to improve water supply and water resources to ensure Mongolia’s national security, population growth, sustainable economic development and adaptation to climate change.

The measures include resolving investment matters to implement objectives of the Government Action Plan 2016-2020, ‘Water’ National Program and others, accumulating surface water to increase water reserve, continuing the construction of water complex at Eg, Orkhon, Shuren and Tuul rivers and finding optimal solutions and making river flow adjustments at Kherlen and Tuul rivers. Surface water reserve for Ulaanbaatar’s water supply will be also created along groundwater for combined use and urban wastewater treatment plants will be newly built or expanded.

It also includes issues to train and re-retrain water professionals, intensify exploration and research works on increasing water resource according to the demands of rapid development of economic sectors and production, develop a water organization in charge of proper use of water, as well as others.

M.Unurzul

Korean investment ‘positive catalyst’ to Mongolian stock market: MSE chief www.koreaherald.com

The Mongolian Stock Exchange chief hailed South Korean financial companies’ engagement with its fledging stock market as a “positive catalyst” in its search for increased attention from foreign investors.

Speaking in an interview with The Korea Herald, Altai Khangai, chief executive officer of the MSE, cited the initial public offering of LendMN, Mongolia’s first financial technology company that began trading in March, as well as another upcoming IPO involving Korean investments.

Seoul-based institutional investor Rhinos Asset Management carried out a strategic acquisition of 4.5 percent of LendMN shares worth some $370,000 in the $2 million IPO deal, while Korean securities firm Mirae Asset Daewoo’s Mongolian underwriter unit led the listing procedure of the company.

Such an example of institutional capital investment played a pivotal role in the market that has sought to invite more divergence, the top market operator said in the telephone interview.

“(Rhinos Asset Management’s investment) was a positive catalyst to bring in international investors into the Mongolian market,” Khangai said, adding that the underwriter, Mirae Asset Securities Mongolia, “served as the ground” for more Asian investments.

Both firms marked the first Korean entities to be engaged in a Mongolian IPO.

LendMN is an instant lending service provider run on artificial intelligence through smartphones. After gaining regulatory approval in February, the company began trading on the tier-three market of the MSE on March 14.

Since then, LendMN has been one of the most actively traded stocks on the MSE. Each week since going public, LendMN has been picked as one of the top-five stocks with the highest weekly trading volume out of all 218 listed companies.

“The IPO of LendMN was a great addition to the MSE pool of stocks as the first fintech company to be listed on MSE.” Khangai said.

In addition, Khangai said he was pinning hopes on another IPO of a manufacturer led by local underwriter Gauli Investment Securities, involving an undisclosed amount of Korean investment. He declined to comment on details because the IPO has yet to gain financial authorities’ approval.

Korean institutional investors’ shift in focus -- from bonds to equities in Mongolia -- came as a surprise to Khangai.

“Korean investors are among the most active investors for local government bonds,” he said. “However, their participation in the equities market (had) been relatively limited.”

With a few market heavyweights holding sway, a boom in the Mongolian stock market re-emerged in 2017, after years of ups and downs since its heyday in 2011.

Leading the stock bull run in the landlocked country were partially state-owned coal miner Tavantolgoi and alcohol beverage maker APU.

If combined, the two account for nearly half of the total market cap made up of 218 constituents. The combined market cap of all MSE-listed firms came to some 2.5 trillion Mongolian tugrik ($1 billion) as of late April.

Both companies’ stock prices nearly doubled, while the MSE’s benchmark top-20 index surged over 50 percent. Total market cap topped the 2 trillion-tugrik mark in September 2017, for the first time in 5 1/2 years.

The renaissance of the market, on the other hand, exposed the stock markets’ chronic reliance on the performance of a few giants dedicated to the nontertiary sector, leaving the market susceptible to price volatility in commodity prices and the volume of resources exports to the adjacent China.

“As a country dependent on coal exports, the performance (of giants) had the most impact on the growth of the Mongolian capital market.” Khangai said.

In the long term, the market operator found it vital to boost the confidence of foreign investors through market diversification.

“We are working toward diversification of the listed companies, and LendMN (IPO) was a big step,” Khangai said. “(The LendMN IPO) may inspire other similar companies to come on to the market.”

To draw more attention from foreign investors, carrying out a trading system overhaul is crucial, he added, so that it can re-enter the Frontier Markets Watchlist of FTSE Russell.

The MSE was removed from the watchlist in September, due to a delay in compliance with the requirements in the trading system, such as adopting the T+2 settlement system, payment mechanism and global custodian presence.

“We are aware of the need to facilitate the post-trading environment for market players, both foreign and local ... in order to bring in more investors and make the standards more international,” he said.

By Son Ji-hyoung

Erdenes Tavan Tolgoi JSC to make a deal with Chalco www.gogo.mn

According to Erdenes Tavan Tolgoi JSC's (ETT) contract with Aluminum Corporation of China Limited (Chalco), ETT coal from Zuun Tsankhi is sold for 59.33 USD per ton.

Livestock birthing at 52.1 percent www.gogo.mn

Ulaanbaatar /MONTSAME/ More than 14 million or 52.1 percent of total dams have delivered offspring on the national level.

Nalaikh district challenged by instability of thermal power plant www.montsame.mn

Ulaanbaatar /MONTSAME/ The most pressing issues in Nalaikh district are lack of heat supply and apartment re-planning, according to its Governor Ch.Radnaabazar, who reported these issues during a meeting of the managerial staff of the capital city administration on May 7.

Nestle pays Starbucks $7.1bn to sell its coffee www.bbc.com

Nestle has announced that it will pay Starbucks $7.1bn (£5.2bn) to sell the company's coffee products.

China's imports from Belt and Road countries grow faster than exports www.chinadaily.com.cn

BEIJING - China's imports from "Belt and Road" countries increased faster that of exports for the first time in 2017, according to a think tank report.

Milk processing small plants to be established in six soums www.montsame.mn

Ulaanbaatar /MONTSAME/ On May 4, equipment of milk processing small plant were handed over to six soums of four aimags within the framework of a project ‘Increasing Job in Mongolia: Development of Value Added Network of Animal Product and Vegetable Production with Participation of Private Sector’.