Mongolia is shifting its centuries-old festival online due to coronavirus for the second year. Rather than subject the population to an outright cancellation of Naadam, the government has taken the creative decision of moving this ancient festival online. Therefore, the core competitions such as horse racing, archery and wrestling will be held without a live audience. The government has also banned mini-Naadam festivals which normally continue through July and August nationwide in 360 soums and all 21 provinces.

Originally, the government approved a budget of MNT 10 billion for organising Naadam Festival this year; however, it will be economized as shifting to online. The money saved from the Naadam Festival will be used for fighting Covid-19.

This year, Naadam Festival commemorates the 100th anniversary of the Mongolian People’s Revolution.

The second largest festival and sports competition of the year is Mongolian New Year or Tsagaan Sar. It was completely cancelled back in February, for the second time in centuries.

The first official Naadam was held in 1206, the Year of the Tiger, when Temujin, the man who the world would come to know as Genghis Khan, inaugurated the largest celebration that had ever taken place on the Mongolian steppes. According to Jack Weatherford, author of “Genghis Khan and the Making of the Modern World”, the Great Khan called together hundreds of thousands of soldiers, wrestlers, archers, horse racers, women, families, and camp followers for several days of celebration and sports competition.

We often forget that a lot of the clothes we wear come from nature. Natural fibers such as cotton, linen, wool and cashmere are sourced from plants and animals, and need land and water. Sustainable sourcing of raw materials is essential so that we do not overstress land or overuse water, this is especially important in the context of climate change. For World Day to Combat Desertification and Drought, we looked at the impact of fashion on land and water resources on cashmere in Mongolia.

Cashmere comes from the soft coat produced by goats during the winter. By passing a cashmere scarf through a ring, it is said one can assess the fiber’s quality and fineness. “Due to the extreme climate, Mongolian cashmere is the thinnest and highest quality cashmere,” says O. Misheel, Deputy Director of GOBI.

GOBI, a non profit international corporation, has been working in cashmere for almost 40 years. It deals directly with herders and provides training to ensure quality. Through investments in processing, it creates jobs and helps Mongolians benefit from the full value addition of finished products.

“Sustainability is among our core promises to our customer. And we have started communicating our traceability, to make it transparent how we procure our cashmere, as well as manufacture our cashmere,” O. Misheel says.

The demand for cashmere has increased and meeting it has resulted in more goats. It’s a reliable income for the 30 percent of the population that rely on nomadic herding. But goats are particularly harsh on the land, they pull grass out by the root when grazing, keeping it from regenerating.

Traditional grazing methods took this into account and allowed three sheep to one goat to avoid overstressing pastures. However, goats and sheep now graze in about equal ratio.

The overall herd size has also grown, doubling to about 70 million animals since 2000 and exceeding the land’s carrying capacity in some areas.

Overgrazing and climate change are both contributing to land degradation and desertification in Mongolia. Higher temperatures and less rain have resulted in a drying trend, affecting pastures and water supplies.

“Pasture resources and water supply, pasture conditions, full nourishing of livestock and proper conducting of animal husbandry and breeding should all go hand in hand. That will allow for sustainable cashmere production,” says herder G. Oyunchimeg.

About 70 percent of pastureland in Mongolia is degraded to some extent. However, through climate-informed planning, protection of land and water sources and sustainable livestock management, most of it can be restored.

With increasing livestock and supply of raw cashmere, can also come price competition and decreasing quality. There is a value to high quality and sustainably sourced products if the means of verification are there - they can reduce herd size, reverse land degradation and lessen pressure on water resources, without an adverse impact on herder income.

But verifying sustainability, or even defining it, is not straightforward. “The fashion and textile industry needs more clarity on what is meant by sustainability, furthermore the validation of information and data needs to be available for the private sector. The infrastructure and ecosystem to provide validity and accountability to the information, on which herders are applying sustainable practices or not, are lacking,” says O. Misheel.

Change can present risks for herders. As B. Batkhishig, co-founder and Country Director of the Sustainable Fibre Alliance says, “Knowledge gaps and willingness to take confident action can be challenges for herders to take on new standards or certification requirements. Establishing trustful and effective communication across multiple actors involved in the cashmere supply chain is the most critical factor to give realistic and common understanding about the benefits and processes related to sustainability standards certification.”

UNDP is supporting the Government of Mongolia through a number of complementary initiatives, including the Improving Adaptive Capacity and Risk Management of Rural Communities in Mongolia project. It brings together climate-informed natural resources management and sustainable livestock planning, building on traditional cooperative approaches among herders while also introducing innovative technologies for traceability and verification of sustainably sourced livestock. UNDP has also launched the Sustainable Cashmere Platform, which engages brands, local processors, herder groups, development partners, civil society organizations and public authorities for common agreement on sustainability in cashmere and establishes partnerships and coordinated investments to advance sustainability in production and processing.

As income from cashmere is primarily from raw cashmere, little value addition comes from processing. About 80 percent of Mongolian cashmere is exported, while only 20 percent is processed, and small businesses can struggle to get finance for value chain investments. The government’s Cashmere Programme aims to increase the level of local processing and UNDP is exploring ways to attract investment which improves both domestic and export opportunities.

Reversing land degradation in Mongolia requires collaborative efforts, to both contribute to the sustainable development ambitions of the country and benefit from the growing consumer demand for sustainability. As consumers, we can support this by asking brands about how they are ensuring that their cashmere is being sustainably sourced – placing greater accountability on brands and providing assurance of the economic viability of sustainability.

Mongolia reported 2,395 new COVID-19 cases over the past 24 hours, the highest daily count since the start of the pandemic

the country's health ministry said Wednesday.

This is the seventh straight day of record new infections, bringing the national tally to 83,128, the ministry said.

Of the latest confirmed cases, 561 are children aged 17 or under, the ministry said, urging citizens to avoid crowded places and maintain good personal hygiene habits to keep themselves and their loved ones safe.

Meanwhile, nine fatalities and 827 recoveries from the coronavirus were reported in the past day, taking the national counts to 403 and 58,649 respectively, the ministry said.

The Asian country launched a national vaccination campaign in late February, aiming to vaccinate at least 60 percent of its 3.3 million population. About 1,667,800 people have been vaccinated so far, according to the health ministry.

Ulaanbaatar /MONTSAME/ The Asian Development Bank (ADB) has approved a loan and technical assistance package totaling $31 million to support the improvement of livestock production systems in 20 soums (districts) of four aimags (provinces) in Central Mongolia.

“Mongolia’s agriculture sector remains a key pillar of the economy, with a majority of the poor depending on agriculture and extensive livestock production—especially meat and milk—to sustain their livelihoods,” said ADB Senior Natural Resources Economist Jan Hinrichs. “A high incidence of poverty and food insecurity is particularly alarming in rural areas. There is great potential to boost exports and increase income generation significantly if the major constraints facing the sector are addressed in a sustainable manner.”

The lack of a regulatory framework, enforcement capacity, and coordinated policies to control livestock numbers has led to an increase in sheep units by 71%, from 69.5 million in 2009 to 119.0 million in 2019. Consequently, 70% of Mongolia’s pastureland is now degraded. These developments are exacerbated by extreme climatic events such as droughts and dzuds (episodes of extreme winter weather), which have resulted in significant livestock deaths and increased the risk of rural–urban migration. Further, a lack of appropriate water points, animal shelters, and feeding throughout the winter leads to the concentrated use of surrounding pasture and undermines pasture management.

Mongolia also faces challenges throughout the meat value chain, limiting access to export markets that are vital for lifting incomes and overall sector growth. Transboundary animal diseases are prevalent, and the veterinary system has been unable to manage outbreaks effectively. Food hygiene practices and sanitary standards have also fallen short of international standards.

ADB supports Mongolia’s economic diversification with several projects encouraging labor-intensive growth through utilizing and preserving Mongolia’s natural capital.

The new Climate-Resilient and Sustainable Livestock Development Project will build the climate resilience of herders against the increased frequency of severe weather, promote a reduction in livestock numbers, and increase the quality of livestock products. The project will also build the capacity of the public institutions of the Government of Mongolia to better assist the sector.

Specifically, the project will work toward pasture rehabilitation and carbon sequestration while increasing the incomes of herder households through forming pasture user groups and implementing rangeland user agreements. It will also construct or rehabilitate 382 wells and develop 466 water use agreements, while establishing hayfields and storage for herder groups.

To improve the quality and health standard of livestock herds and products, the project will better coordinate and integrate the respective livestock value chain participants through activities such as establishing standards for health and carcass quality, supporting veterinary units, cashmere marketing, and animal breeding

More than 38,500 people in the 20 soums, including 7,709 poor and vulnerable persons, are expected to benefit from the project, which is supported by a $1 million technical assistance financed by the Japan Fund for Poverty Reduction. The technical assistance will strengthen Mongolia’s food safety and traceability system, enhancing the livestock sector regulatory framework and capacity.

The project is financed by an ADB $23 million ordinary loan and $7 million concessional loan, with the government and beneficiaries providing $2.08 million and $2.42 million, respectively, toward the total project cost of $34.5 million. It is due for completion in June 2027.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: ADB

Ulaanbaatar /MONTSAME/ At its regular meeting on June 16, the Cabinet approved a resolution on air transport and tourism-related measures for prompt recovery of air travel and tourism industry.

The resolution includes implementing a joint plan to promote tourism and air transport and increasing the number, frequency, and routes of flights for tourists.

Moreover, a special pricing policy will be in place and preparations will be made to open new flight routes based on tourist arrivals and market demand and to help the airlines’ increase their load factors.

Ulaanbaatar /MONTSAME/. On June 15, representatives from the public-private sector discussed about the Sustainable Food Systems in Mongolia at the State Palace in Ulaanbaatar. Representatives of major private companies working in the food sector gathered to discuss about the challenges and solutions in the food and agricultural value chains, exports, public-private partnerships, sectoral policies and potential policy changes for the improvement of the sector.

The dialogue, held under two main themes, including ‘Value added chains and market’ and ‘Market expansion, new market opportunities, was co-organized by the Prime Minister's Office, National Development Agency, Mongolian National Chamber of Commerce, and the Food and Agriculture Organization of the United Nations as part of the national food systems dialogues on ‘Mongolia's Sustainable Food System’.

The main purpose of the dialogue is to come up with solutions and propose of short, medium and long term policy recommendations to support the private sector development and investment opportunities in the food and agriculture sectors.

A national dialogue on Mongolia’s sustainable food system will be organized on June 22 and 24, 2021 with the aim of identifying appropriate food systems in Mongolia and ways to achieve sustainable food systems.

Ulaanbaatar /MONTSAME/ National producer Monpellets LLC is manufacturing 100 percent organic fertilizer pellets from sheep wool and exporting it to European markets besides supplying the product domestically. The company’s director B.Tsogbadrakh said, “We carried out a feasibility study into making fertilizer from sheep wool with the European Union and the German Government. The quality fertilizer was created as a result of 10 years of work” He spent a great amount of time on research and experiments and finally built the factory in Mongolia after it was confirmed in Germany that the fertilizer has high nitrogen and is of good quality.

The company opened its factory in the fall of 2018 and has been exporting its product to Germany since last year. It has also started working with local herders, farmers and businesses.

The company is planning to export the chemical-free organic fertilizer, made by processing wool into pellets without using water, to Turkey. Requests for product samples have also been made from France, Britain, and other European countries. The product is the first organic product to be listed by the Research Institute of Organic Agriculture, headquartered in Switzerland, from Mongolia.

Another local producer Eco Wool LLC is exporting an insulation material made from sheep wool to Japan. The company produces a high quality insulation material using sheep wool, some properties of which makes it suitable for insulating buildings. The company received MNT 6.4 billion funding from the Development Bank of Mongolia as part of the SME promotion project. Thanks to that, Mongolians are now domestically producing a high-performance insulation material domestically and selling it abroad. The insulation material called Khaan Noos is in high demand on the Japanese market. Mongolian sheep Fleece has hollow hair textures which separate heat very well. The product is also durable and fire and insect resistant.

Ulaanbaatar /MONTSAME/. In the first 5 months of 2021, Mongolia traded with 131 countries from all over the world, and the total trade turnover reached USD 5.9 billion, of which USD 3.3 billion were exports and USD 2.6 billion were imports. The total foreign trade turnover increased by USD 1.9 billion (48.2%), where exports increased by USD 1.3 billion (65.7%) and imports increased by USD 609.2 million (30.6%) compared to the same period of previous year. In May 2021, exports reached USD 827.3 million, increased by USD 331.0 million (66.7%) and imports reached USD 640.4 million, increased by USD 202.8 million (46.4%) compared to the previous month.

The foreign trade balance was in surplus of USD 722.4 million in the first 5 months of 2021, increased by USD 708.5 million from previous year and compared with surplus of USD 13.9 million in the first 5 months of 2020.

Trade with China reached USD 4.0 billion in the first 5 months of 2021, which is 68.2% of the total trade turnover.

Bituminous coal and copper concentrates accounted for 29.0% and 33.4% of total exports to China, respectively, gold accounted for 99.0% and 76.9% of total export to Switzerland and Republic of Korea.

In the first 5 months of 2021, USD 1.3 billion increase in exports from the previous year was resulted from USD 211.8 million increase in Iron ores and concentrates, USD 386.7 million increase in copper concentrates exports and USD 428.7 million increase in coal exports.

In May 2021, USD 331.0 million increase in exports was mainly due to coal exports volume reached 1.4 million tonnes and increased by 685.3 thousand tonnes from 710.6 thousand tonnes in April 2021.

In the first 5 months of 2021, 40.2% of the total imports was from China, 25.8% was from Russia, 6.6% was from Japan, 4.0% was from Republic of Korea and 4.0% was from Germany, which are accounting for 80.6% of the total imports.

In the first 5 months of 2021, 49.0% of the total imports from Russia was petroleum products, 68.5% of the total imports from Japan was cars, and 5.1% of the total imports from China was electricity, 15.6% was trucks and 79.3% was imports of other products.

The USD 609.2 million increase in imports from the previous year was mainly due to USD 40.7 million increase in wheat, USD 121.3 million increase in trucks, USD 38.7 million increase in diesel and USD 29.1 million increase in cars.

Exports of mineral products, food products, and vegetable origin products made up 87.7 percent of the total export. On the other hand, 64.6 percent of the total imports was mineral products, machinery, equipment, electric appliances, transport vehicle and its spare parts and food products.

Source: National Statistics Office of Mongolia

Ulaanbaatar /MONTSAME/. At the end of May 2021, the total amount of outstanding loan to enterprises and individuals amounted to MNT 18.3 trillion, increased by MNT 580.1 billion (3.3%) from the previous month, and increased by MNT 1.1 trillion (6.2%) from the same period of the previous year. In the total outstanding loans, MNT 9.2 trillion (50.2%) was individual loans.

The standard loans reached MNT 14.9 trillion at the end of May 2021, increased by MNT 526.5 billion (3.7%) from the previous month, and increased by MNT 856.9 billion (6.1%) from the same period of the previous year. The performing loans made up of 81.7% of total loans, decreased by 0.1 percentage point from the same period of the previous year.

At the end of May 2021, the principals in arrears amounted to MNT 1.3 trillion, increased by MNT 23.6 billion (1.8%) from the previous month and increased by MNT 164.0 billion (14.3%) from the same period of the previous year. The principals in arrears made up of 7.2% of the total loans, increased by 0.5 percentage points from the same period of the previous year.

At the end of May 2021, the non-performing loans in the banking system amounted to MNT 2.0 trillion, increased by MNT 30.0 billion (1.5%) from the previous month and increased by MNT 51.8 billion (2.6%) from the same period of the previous year. The non-performing loans in the banking system corresponds 11.1% of the total loans, decreased by 0.4 percentage points from the same period of the previous year.

At the end of April 2021, the loans from commercial banks to individuals amounted to MNT 8.8 trillion, decreased by MNT 92.2 billion (1.0%) from the previous month, while it is increased by MNT 191.8 billion (2.2%) from the same period of the previous year.

In terms of types of individual loans, 46.5% was loan for business activities, 30.1% was salary loans, 8.1% was herder loans, 6.4% was deposit backed loans, 2.5% was car loans, 2.3% was credit card loans, 1.5% was pension loans, 0.6% was household consumption loans, and 2.0% was other loans.

In terms of period of MNT 8.0 trillion performing individual loans, 10.7% was loans with terms up to 1 year, 54.6% was loans with terms from 1-5 years and 34.7% was loans with terms of 5 and more years.

Source: National Statistics Office of Mongolia

Ulaanbaatar /MONTSAME/. According to the preliminary results in the first 5 months of 2021, the total revenue of the general government budget was MNT 5.9 trillion. The equilibrated revenue of the general government budget was MNT 5.3 trillion and 90.6% of the total revenue of general government budget.

On the other hand, the total expenditure and net lending was MNT 6.2 trillion in the first 5 months of 2021, resulting in deficit of MNT 866.3 billion.

In May 2021, the total equilibrated revenue and grants of general government budget was MNT 860.9 billion, decreased by MNT 956.2 billion or 52.6% compared to previous month and increased by MNT 194.2 billion or 29.1% compared to the same period of previous year.

The total expenditure and net lending were MNT 1.2 trillion, decreased by MNT 974.5 billion or 44.1% compared to previous month and decreased by MNT 365.3 billion or 22.8% compared to the same period of previous year.

In May 2021, the equilibrated balance of the general government budget was in deficit of 375.8 billion, decreased by MNT 18.4 billion or 4.7% compared to the previous month.

In the first 5 months of 2021, the general government budget revenue was comprised of 78.0% from tax revenue, 12.7% from non-tax revenue, 5.6% from the future heritage fund and 3.7% from the stabilization fund. In the first 5 months of 2021, non-tax revenue increased by 4.6 percentage points and stabilization fund revenue increased by 3.5 percentage points while tax revenue decreased by 7.8 percentage points and the future heritage fund revenue decreased by 0.3 percentage points compared to the same period of previous year.

In the first 5 months of 2021, tax revenue reached MNT 4.6 trillion, increased by MNT 1.5 trillion or 49.4% compared to the same period of previous year. This increase was mainly due to MNT 850.3 billion or 2.1 times increase in income tax revenue, MNT 317.1 billion or 43.4% increase in value added tax revenue, MNT 112.9 billion or 44.1% increase in other taxes revenue, MNT 81.6 billion or 30.7% increase in foreign activity revenue, MNT 100.2 billion or 14.6% increase in social security revenue and MNT 36.5 billion or 13.0% increase in excise tax revenue.

In May 2021, tax revenue reached MNT 777.8 billion, decreased by MNT 606.3 billion or 43.8% compared to previous month. This decrease was mainly due to MNT 676.9 billion or 82.1% decrease in income tax revenue and MNT 120.2 billion or 77.9% decrease in other taxes revenue while MNT 136.9 billion or 2.1 times increase in value added tax revenue, MNT 26.7 billion or 45.7% increase in foreign activity revenue, MNT 13.5 billion or 8.6% increase in social security revenue, MNT 8.4 billion or 17.5% increase in excise tax revenue and MNT 4.9 billion or 49.7% increase property tax.

In the total capital expenditure, 55.8% was construction expenses, 31.3% was other capital expenses, 9.3% was equipment expenses, 2.3% was capital repairs expenses and 1.3% was strategy reserve fund capital.

Source: National Statistics Office of Mongolia