Nepal and China had signed a Memorandum of Understanding on Belt and Road Initiative on May 12 in Kathmandu before Nepali delegation led by Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara participated the Belt and Road Forum for International Cooperation in Beijing on May 14.

Speaking at the 14th meeting of Nepal-China Non-governmental Cooperation Forum on Thursday, a platform of apex private sectors of two countries, Mahara said Nepal should take advantage of the opportunity to attract more Chinese investment in Nepal.

"Nepal is very much keen to take advantage of China's high economic growth," he said.

Bhawani Rana, President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex private sector body of Nepal, said following the signing of the MoU on Belt and Road Initiative, the door has been opened for more cooperation between two countries.

"There is a lot of scope of investment from China in the areas of hydropower, manufacturing sector, tourism and road infrastructure under public-private partnership modality," she said.

The forum was formed in 1996 with the joint initiative of FNCCI and All China Federation of Industry and Commerce (ACFIC) to promote economic and business cooperation, joint ventures and cultural exchanges from the private sectors of two countries.

On the occasion, Chinese Ambassador to Nepal Yu Hong stressed that Nepal needs to take measures to improve investment climate including in the areas of policy stability and infrastructure development.

Apparently, Alibaba’s investment is motivated by rival Tencent Holdings being a stakeholder in Meituan-Dianping and also has a small stake in Ele.me.

China’s two largest internet companies Alibaba and Tencent have been focusing on the so-called on-demand services as a way to promote their lucrative online payments services.

Sales of on-demand services are expected to exceed $1 trillion this year in China as people turn to their smartphones or the web to order food, schedule beauty treatments and hire domestic helpers. Growth in local food and restaurant transactions is forecast to outstrip many other retail segments in the world’s second-largest economy.

Tencent is now “putting up quite a big initiative around the restaurant vertical” to propel WeChat Pay, said the company’s President Martin Lau. He added the firm had lost market share in restaurants but is “putting aside a pretty good budget to get back on the competition front.”

Alibaba’s deal with Ele.me which translates from Mandarin as “Are you hungry now?” was first reported in December 2015. The startup has previously raised $3 billion from Uber competitor Didi Kuaidi and a group of investors.

Officials from the EU are reportedly seeking to draw up a euro budget able to incorporate a fixed tax payment from all the member states. The raised cash is for investment across the bloc.

However, the EU Commissioner for the Euro and Social Dialogue Valdis Dombrovskis, says the whole thing has been misunderstood.

“There has been some confusion. What we discuss in the coming reflection paper is the completion of the economic and monetary union. It doesn’t mean the EU member states must adopt the euro. There is no specific time schedule, but we naturally encourage all member states to make the necessary preparations,” the EU Commission’s Swedish site quotes Dombrovskis.

The euro is the sole currency for 19 members of the bloc. The nine remaining countries, including Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom, that is currently in the process of quitting the EU, do not use the euro as the main national currency.

The EU Commission is reportedly due to hold a meeting regarding the future of the euro on May 31. The cabinet wants to re-establish control over the euro, according to the German tabloid.

OPEC held a meeting at its headquarters in Vienna, Austria, on Thursday. Participants agreed on the 9-month extension, citing the need to ease the glut of supply. The cuts originally were to finish at the end of June.

At a separate meeting with OPEC members, leading non-OPEC countries, including Russia, agreed on the extension.

The agreement is apparently in line with a similar deal struck between Saudi Arabia and Russia on May 15th.

OPEC and non-OPEC nations implemented the reductions in January to raise crude prices. But a rise in oil prices has been capped by expansion of shale oil production in the US.

Observers say the same cycle may occur again, clouding the prospect for higher crude prices.

“- Since the Government and Bank of Mongolia reached an agreement with IMF to implement EFF, credit rate of Mongolia has improved and investors’ trusts have been raised. In other words, economy of Mongolia has transferred from fall to growth and green light has been lit in the economy. The first funding of USD38.6 million will be disbursed very soon” said the Finance Minister. Later today, the Bank Mongolia reported that the funding of USD 38.6 million has been deposited into the central bank from the IMF.

If private sector financing is added, then the total amount of EFF will reach USD6 billion. The funding will be considered as the biggest in IMF history of operation in terms of GDP relations, said Mr Neil Saker. “The program will aim to stop high economic growth and drastic fall, ensuring stable economic growth of 8 per cent. Mongolia has potential and resource to ensure such growth”, he noted.

The program aims to stabilize the economy, restore confidence, and pave the way to economic recovery. A critical pillar of the program is fiscal consolidation, to reduce the pressure on domestic financial markets, stabilize the external position, and restore debt sustainability. The program includes important safeguards to protect the most vulnerable during this period of adjustment as well as institutional reforms to make sure the fiscal adjustment is durable. Another pillar of the program is a comprehensive effort to rehabilitate the banking system and strengthen the Bank of Mongolia. A broad set of structural reforms is designed to support private-sector led growth. 
B.Ooluun

The Ministry reported that Deputy Minister B.Battsetseg met with North Korean Foreign Minister Ri Yong-ho, but also had formal discussions with her counterpart, Ri Gil Song.

The discussions mainly focused on relations and cooperation between the two countries. The two sides discussed the status of the Northeast Asian region and, as an extension, regional security.

Deputy Minister B.Battsetseg formally invited Ri Gil Song to participate in the Ulaanbaatar Dialogue on Northeast Asian Security, which will be organized in the capital from June 15 to 16. Past conferences have included the participation of more than 35 representatives from Mongolia, Russia, China, Japan, the DPRK, the ROK, the U.S., Germany, and the Netherlands.

The working group was established on February 1. MP T.Ayursaikhan headed the group, whose members included MPs M.Oyunchimeg, Ts.Davaasuren, Kh.Bolorchuluun, J.Bat-Erdene, and S.Chinzorig.

Mongol Bank’s operational deficit was investigated. In the past four years, the bank’s deficit has doubled every year. In 2016, the bank reported a deficit of 962 billion MNT. The working group investigated the reasons for the deficit, as the bank’s deficit puts pressure on the state budget.

“Until 2011, the bank was working profitably. It experienced a deficit in 2010, but was profitable in most years. But in 2012, Mongol Bank began experiencing significant deficit. We will investigate and reach a conclusion,” the working group’s members stated in February.

The probe, which ended on April 30, encompassed all of the operations of the bank, including commercial loans that were issued that were alleged to be illegal, the bank’s transparency, and their financial statements.

Reports that the central bank has experienced a deficit of three trillion MNT since 2012 have not been verified, but analysts say they are plausible due to the bank’s spending on price stabilization and the state’s mortgage program. If the claims are true, the central bank’s deficit is equal to half of this year’s state budget.

Some members of the MPP advocated for keeping the results of the investigation classified, due to the controversy that might be created leading up to an important presidential election. There are unverified reports that Mongol Bank provided commercial loans with an interest rate of 0.85 percent when it is not legally allowed to do so.

Reports indicate that the results of the investigation were handed out to members of the MPP were confiscated after the meeting, and that all of them were required to sign a confidentiality agreement.

When reached for comment, a Mongol Bank public relations officer said, “Due to spending on the price stabilization project and the mortgage program, that number may be plausible.” However, the public relations officer failed to verify if Mongol Bank had a deficit of three trillion MNT.

Speaking on Mongolia-China relations, Ts.Munkh-Orgil said, “There are no misunderstandings or issues in relations between the two countries. We hold common ground on trade, investment, and cooperation. The priorities for these issues include large infrastructure, mining, and energy projects.”

“As part of the state visit, more than 21 agreements were signed by the government, ministries, and private businesses. One large agreement was to intertwine Mongolia’s Development Road infrastructure project with China’s One Belt, One Road initiative,” noted Ts.Munkh-Orgil.

The Foreign Minister answered questions from the media after the press conference.

China will provide two billion RMB in aid. How will you spend the money?

From 2018 to 2020, China will provide Mongolia with two billion RMB in aid. The Chinese side has told us to inform of them which sectors we will be spending the money on.

In 2017, we will receive 350 million RMB in aid, and will use the money for the redevelopment of the ger districts in Ulaanbaatar. The 300 million RMB in aid we receive in 2016 will be used to improve conditions at border crossings. Cabinet has not made a final decision on how the two billion RMB will be used.

You met with the administration of the International Monetary Fund, specifically Managing Director Christine Lagarde. What was discussed during that meeting?

Our delegation did meet with the administration of the IMF. Both sides expressed their positions and exchanged views on the program. The meeting of the IMF Executive Board to discuss enrollment in the extended fund facility is on May 24. Madame Lagarde will be chairing the meeting herself. The IMF has expressed interest in working with Mongolia. They expressed their confidence that the economy and macro economy will stabilize and that debt pressure will decrease if we work together closely. We are hopeful that the extended fund facility will be approved by the Executive Board on May 24.