Better Global Prospects Yield Favorable Outlook for Developing East Asia Pacific www.worldbank.org

Bangkok, October 4, 2017: Improved global growth prospects and continued strong domestic demand underpin a positive outlook for the developing economies of East Asia and the Pacific, says the latest World Bank report on the region. Stronger growth in advanced economies, a moderate recovery in commodity prices, and a recovery in global trade growth, are the favorable external factors that will support the economies of developing East Asia and Pacific to expand by 6.4 percent for 2017. 

The October 2017 edition of the East Asia and Pacific Economic Update reports that the uptick in growth in 2017 relative to earlier expectations reflects stronger than expected growth in China, at 6.7 percent, the same pace as in 2016. In the rest of the region, including the large Southeast Asian economies, growth in 2017 will be slightly faster at 5.1 percent in 2017 and 5.2 percent in 2018, up from 4.9 percent in 2016.

Several external and domestic risks could impact this positive outlook. Economic policies in some advanced economies remain uncertain, while geopolitical tensions centered on the region have increased. Monetary policies in the U.S. and the Euro Area could be tightened more quickly than expected. Many countries in the region have high levels of private sector debt while fiscal deficits remain high or are on the rise.

“The recovery of the global economy and the expansion of global trade are good news for the East Asia and Pacific region and its continued success in improving living standards,” said Victoria Kwakwa, World Bank Vice President for the East Asia and Pacific Region. “The challenge will be for countries to strike a balance between prioritizing short-term growth and reducing medium-term vulnerabilities, so that the region has a stronger foundation for sustained and inclusive growth.”

China’s gradual rebalancing away from investment and towards domestic consumption is expected to continue, with growth projected to slow to around 6.4 percent in 2018.

Thailand and Malaysia are expected to grow more rapidly than expected, due to stronger exports, including tourism, for the former, and increased investment in the latter. Gains in real wages are fueling strong consumption in Indonesia, and a rebound in agriculture and manufacturing is boosting growth in Vietnam. In the Philippines, the economy is projected to expand at a slightly slower pace than in 2016, partly due to slower than expected implementation of public investment projects.

The outlook for smaller countries is mixed. Mongolia and Fiji are expected to fare better in 2017-2018. Mongolia’s macroeconomic stabilization program is encouraging new foreign direct investment in mining and transport. Fiji’s growth will be supported by reconstruction from Cyclone Winston. Growth in Cambodia and Lao PDR is moderating compared to 2016, but its pace remains higher than other countries in the region; trade and FDI in Cambodia and expansion of the power sector in Lao PDR are the main drivers.

Expanding tourism, low world commodity prices, high levels of revenue from fishing fees, and rising construction activity are supporting moderate GDP growth rates in most of the small Pacific Islands. In the longer term, reforms in tourism, labor mobility, fisheries, and the knowledge economy have the potential to lead to significantly higher incomes, employment, and government revenue. 

“The improved prospects for global growth offer a window of opportunity for countries to reduce vulnerabilities while pursuing reforms that can yield growth dividends over the longer term,” said Sudhir Shetty, World Bank Chief Economist for the East Asia and Pacific region. “Reducing risks to financial sector stability and strengthening competitiveness, including through deeper regional integration, remain priorities.”

To maintain resilience against risks, the report calls for a move away from measures aimed at short-term growth towards policies that address financial sector and fiscal vulnerabilities. These measures include: strengthening supervision and prudential regulation in countries experiencing rapid growth in private-sector credit and debt; reforming tax policies and administration to help boost revenue collection; and being ready to tighten monetary policy if warranted by the pace of interest rate increases in advanced economies.

Structural reform priorities differ across countries. Sustained reforms of the state-owned enterprise sectors in China and Vietnam can improve growth prospects. The Philippines, Thailand, Lao PDR and Cambodia will benefit from continued improvements in public investment management systems to support expanding public infrastructure programs. In Indonesia, liberalizing the regulations for foreign investment remains important. 

The report also highlights the potential that tourism development and deeper regional integration offer to offset the risks of protectionism. Growth in tourism, if well managed, has the potential to yield substantial benefits to the region, including for the Pacific Island Countries. The ASEAN Economic Community offers one avenue for promoting further regional integration, including by further liberalizing trade in services and reducing non-tariff barriers.

Despite success in reducing poverty, high and rising inequality is a growing concern, as are falling mobility and growing economic insecurity. For lasting inclusive growth, measures to reduce extreme poverty must be accompanied by policies that broaden access to quality services and more productive jobs, and stronger social protection systems that reduce the consequences of adverse shocks.

EU goes after Amazon & Apple over unpaid taxes www.rt.com

In the latest crackdown by EU authorities over unfair tax deals, US tech company Amazon has been ordered to pay €250 million ($294.38 million) in back taxes to Luxembourg.

Ulaanbaatar to address indoor air pollution and influenza prevention www.theubpost.mn

The Ulaanbaatar Mayor and his advisors discussed the implementation of the Ulaanbaatar Economic and Social Development Guidelines for 2017, ongoing projects and new projects to be carried out next year during their latest meeting last Friday.

Biggest Mongolian library to open soon www.news.mn

Mongolia's biggest and most modern library will officially open on 5th of October. Situated at the National University of Mongolia (NUM), the library is not just for students, but is open to everyone who loves books.

Mongolia and Russia discuss economic cooperation programs www.theubpost.mn

Speaker of Parliament M.Enkhbold received Russian delegates led by Russia’s First Deputy Chairman of the Federation Council Committee on Economic Policy Sergei Kalashnikov on Monday at the State House.

Gold exchange increases by 10 percent at BoM www.montsame.mn

Ulaanbaatar /MONTSAME/ As of October 2, 2017, Bank of Mongolia’s gold purchase reached 15.1 tons. The number indicates 1.3 tons of increase compared to the same period of last year. Within this period, a total of 182 individuals and 106 private entities sold their gold to BoM.

After Anti-China Campaign Rhetoric, Mongolia’s President Congratulates China on National Day www.thediplomat.com

Mongolia’s newly-elected President Khaltmaa Battulga won office in July on the back of a campaign laced with anti-China rhetoric. Nonetheless, on September 28, Battulga sent a congratulatory message to Chinese President Xi Jinping, marking the 68th anniversary of the founding of the People’s Republic of China.

Russia to Reap Benefits from Climate Change www.themoscowtimes.com

While numerous countries around the world fear the humanitarian and economic crises climate change is expected to bring, Mongolia — and to a lesser extent Russia and several other CEE/CIS countries — will reap significant economic benefits from a modest rise in global temperatures, a new International Monetary Fund (IMF) study finds. 

Mongolia is the clear outlier; the IMF forecasts that the country’s per capita output will grow by just under 1.4 percent in case of a 1 degree Celcius increase in temperatures. 

More broadly, the CEE/CIS region as a whole is set to benefit disproportionately from hotter temperatures. The same 1 C increase would boost the economies of a total of 13 countries across the region, more than half of the 22 countries worldwide that the IMF anticipates will benefit. 

They include Russia, where a 0.83 percent increase in per capita output is expected if temperatures rise 1 C, along with Belarus, the Baltic states, Kazakhstan and Kyrgyzstan.

Mongolia in particular is a country of extreme temperatures. Ulan Bataar has the dubious distinction of being the world’s coldest capital — beating the capitals of Canada and Kazakhstan — and temperatures range from above 40 C in the Gobi desert in summer to below minus 40 C on winter nights. 

In such extreme cold temperatures, also seen in parts of Russia and Kazakhstan, economic activity is inhibited in winter. Construction sites sit idle, transport is interrupted and — despite specially adapted technologies — industries such as mining are also affected.

In addition, warmer, wetter weather, as forecast in the IMF study, could make it possible to grow a greater volume and variety of crops in countries like Russia — which has already become the world’s top exporter of wheat this year. 

The melting of the polar ice cap, albeit a mounting catastrophe in global terms, is also seen by some as good news for Russia, whose ships are now able to navigate Arctic waters. This will also help open up exploration of the Arctic continental shelf, where substantial energy reserves still lie untapped.

Recognising the potential of the Russian Arctic, Moscow plans to spend 209 billion rubles (3.4 billion euros) in the region over the next three years, with state and commercial companies are pledging billions more.

President Vladimir Putin acknowledged this in an interview with CNBC this spring. “What I’m about to say may be unpopular… Climate change brings in more favourable conditions and improves the economic potential of [the Arctic] region,” he told the news channel. 

In other countries in the CEE/CIS region, the impact is likely to be insignificant, and none are expected to experience a fall in output. 

This is similar to the situation in most of Europe and North America, but in stark contrast to other world regions. Africa is set to be the worst affected, while a fall in output is also forecast in Latin America, the Middle East, the Indian subcontinent, Southeast Asia and Australasia. This means most countries worldwide and the vast majority of the world’s population would be negatively impacted. 

“Close to 60 percent of the world’s population currently resides in countries where an increase in temperature would likely lead to such pernicious effects. By the end of the 21st century, this number is projected to rise to more than three-quarters of the global population,” the report says. 

“Higher temperatures hurt economic activity in hot countries through many channels. They lower agricultural output, reduce the productivity of workers exposed to heat, slow investment, and damage health,” it warns. Many of the countries in the affected region are low income, making it harder for them to adapt to climate change. 

The 1 C increase examined in the survey falls far short of the expected temperature hike by the end of this century, which could be as high as 4 C or even more if sufficient measures are not taken to curb global warming.

This would “erase close to one-tenth of the per capita output of the median low-income country by the end of the 21st century, relative to a scenario of unchanged temperature,” says the IMF. Overall, “Climate change is a negative global externality of potentially catastrophic proportions,” it concludes. 

The IMF also acknowledges that country-level data doesn't show the whole picture as there are significant differences within countries, meaning that just because warming would result in an overall increase in output in CEE/CIS countries, it doesn’t mean they would avoid a weighty humanitarian cost and damage to some economic sectors. 

Southeast Europe, for example, already experiences long hot summers and this year droughts have hit agriculture and pose a threat to hydropower production in parts of the region. Large parts of Central Asia are desert and the region is also vulnerable to climate change. 

“[C]limate change is likely to create economic winners and losers at both individual and sectorial levels, even in countries where the effect might be moderate or positive on average,” the IMF warns. 

This even includes Mongolia, where climate change is believed to be to a large extent responsible for the increasing severity and frequency of the “dzuds” — extremely cold winters that hit the country every few years, during which millions of livestock are killed. 

A government decision to remove regulations that prevented overherding in the 1990s, together with increasingly hot summers and more extreme winters, has led to recent dzuds taking a heavy toll on herders.

Hundreds of thousands have given up their nomadic way of life and migrated to shanty towns around Ulan Bataar, which has brought its own set of environmental problems in terms of the chronic air pollution in the city. 

Hot weather is also causing severe problems this year, as drought forced Mongolia to suspend its grain exports, a setback for the country’s plans to diversify its economy away from over-reliance on commodity exports such as copper and coal.

Temperatures in the landlocked country have already risen by 2 C in the last 70 years, three times faster than the global average, the United Nations Environment Programme says. That has brought about rising desertification rates, the melting of glaciers and drying rivers and lakes, threatening livelihoods.

AmCham members meet with the U.S. Department of Commerce’s Deputy Assistant Secretary for China and Mongolia www.amcham.mn

ULAANBAATAR, Mongolia – The American Chamber of Commerce (AmCham) in Mongolia hosted a members-only October Monthly Meeting with the U.S. Department of Commerce’s Deputy Assistant Secretary for China and Mongolia, Mr. Alan Turley, on October 3, at Shangri-La Hotel Ulaanbaatar. The Honorable Jennifer Zimdahl Galt, United States Ambassador to Mongolia, attended the meeting as a guest of honor.

Sandstorm Q3 gold output jumps, second best in company history www.mining.com

Sandstorm Gold Ltd. (NYSE MKT: SAND, TSX: SSL) is pleased to report the attributable gold equivalent ounces sold during the third quarter of 2017 and recent updates from the Company's royalty properties.