Ulaanbaatar/MONTSAME/. According to the preliminary results of 2020, the total revenue of the general government budget was MNT 10.4 trillion, of which the equilibrated revenue of the general government budget amounted to MNT 9.4 trillion or 90.6% of the total revenue of the general government budget.

At the end of 2020, the total expenditure and net lending reached MNT 14.0 trillion, showing a deficit of MNT4.5 trillion in the equilibrated balance.

In December 2020, the total equilibrated revenue and grants of the general government budget reached MNT 1.2 trillion, with an increase of MNT 476.5 billion or 68.6%. The total expenditure and net lending were MNT 2.0 trillion, increased by MNT 852.4 billion or 74.3% compared to the previous month.

Local Government budget: In 2020, the total revenue and grants of the local government budget amounted to MNT 3.2 trillion. Total expenditure and net lending amounted to MNT 3.2 trillion, resulting in a surplus of MNT 40.5 billion in the equilibrated balance. The equilibrated balance increased by MNT 20.7 billion or 2.0 times compared to the previous year.

The total revenue and grants of the local government budget reached 3.2 trillion and increased by MNT 267.2 billion or 9.1%, compared to the previous year. This increase was primarily from MNT 329.0 billion or 19.8% increase in non-tax revenue, though tax revenue decreased by MNT 61.8 billion or 4.8%.

Insurance fund: In 2020, the total revenue of the social insurance fund reached MNT 1.9 trillion, showing a decrease of MNT 582.4 billion or 23.4%, while the total expenditure of the social insurance fund was MNT 2.4 trillion, increased by MNT 387.1 billion or 18.8% compared to the previous year.

Source: National Statistics Office

China’s relations with Australia aren’t getting better any time soon. The list of grievances from both sides is extensive, and there's been Twitter clashes and commodity import bans on Australian products. Fortunately, iron ore and LNG remain untouched.

China is Australia's biggest trading partner. Australian businesses in mining, petroleum, agriculture, education and tourism have gained a lot from this trade over the past two decades, with exports to China reaching US$117 billion in 2019. And now many of these items are under threat.

The disruption of Australian coal shipments to China caught the attention of many. Mongolia is trying to ramp up its exports to fill the coal supply gaps created by Australia (see the chart above) competing with Russians and Indonesians.

Yet, there may be additional ways that Mongolia can take advantage of the trade spat.

Here, I’d like to focus on beef, tourism, and wheat - all big-ticket items on Australia's export list to China.

Last December, China banned beef imports from another Australian supplier, the sixth so far. Lamb exporters were also unable to get into the Chinese market due to Covid-19.

Chinese beef consumption has been steadily growing, particularly in the country’s northwest (close to Mongolia). Per person, beef and veal consumption in China jumped from 3.3 kg in 2011 to almost 5 kg last year.

Mongolia has been pushing for a greater share of meat exports to China for many years. Capitalizing on the above opportunity would require Mongolian beef suppliers to meet Chinese inspection and quarantine standards, which is difficult for an industry made up of mostly small or medium-sized enterprises.

Compared to the multi-billion-dollar coal export sector, meat exports to China are tiny - only $57m in 2019.

A German report found that Mongolia’s beef suppliers’ share of the Chinese market is ‘very low’. According to the report, the government needs to improve cross-border infrastructure for refrigerated goods like beef, which can often rot during transport to China. It also recommends better enforcement of domestic livestock hygiene standards and cross-border cooperation on food safety enforcement.

If these logistics and hygiene challenges are resolved, Mongolian beef exporters will then have to compete with their international peers and offer better terms to Chinese buyers. The Argentinians, Russians, and Brazilians have all been doing their best to meet beef demand in China.

Another opportunity arising from the China-Australia trade spat is tourism for Mongolia once the Covid-19 pandemic is over.

Last June, China warned its citizens not to travel to Australia due to a ‘spike in racism’ during the pandemic (which the Australian government disputes). Even though Chinese tourists can’t currently come to Australia anyway due to border closures, this warning could remain once borders re-open.

It could even escalate to an all-out ban on package tours, which has previously happened to both South Korea and Canada. Around 60 percent of Chinese tourists use package tours to travel.

Mongolia has similarities with Australia that could appeal to this market, including an extremely low population density and wide-open spaces. Although there are also big differences (especially the weather), even securing a small slice of this market could prove lucrative.

If China does move to ban package tours to Australia, the Mongolian government could capitalize on the opportunity through a tourism branding exercise in China. A good model could be New Zealand’s ‘100% Pure’ campaign, which showcases the country’s natural beauty and is renowned as one of the world’s most successful tourism campaigns.

A third opportunity is more remote but is still worth keeping an eye on – wheat.

There’s now talk that Australian wheat could be next up on China’s hit list. China has already increased inspections of Australian wheat, and the Australian Bureau of Agricultural and Resource Economics, which is a federal government agency, warned that China could soon ban Australian imports.

Yet China’s demand for foreign wheat is now the strongest it’s been in 25 years thanks to high domestic prices.

Whilst this could come mostly from the US and elsewhere, it could represent a business opportunity for Mongolian wheat farmers. It is true the harvest was not that great last year at 408,900 tonnes. Mongolia barely meets its domestic demand and iwas negotiating to procure additional wheat from Russia. However, once Covid is over, Mongolia may be well placed to produce more wheat and export it to China with improved harvesting.

Of course, none of this is guaranteed – circumstances could change quickly as the China-Australia relationship evolves. Nonetheless, there could be new opportunities emerging at a time when the Mongolian government is looking to diversify the economy. It would do well to investigate further.

by: Ewen Levick is the editor of Mongolia Weekly. He is also a co-founder of Taiga Travel Mongolia LLC, an experienced tourism operator based in Ulaanbaatar.

Rio Tinto said on Thursday it will become North America’s first producer of critical mineral scandium with the construction of a commercial-scale demonstration plant at its metallurgical complex in Sorel-Tracy, Quebec.

Rio said it would invest $6 million to build the first module at Rio Tinto Fer et Titane (RFTF) with commercial production starting in the second quarter of this year.

The plant will have an initial capacity to produce three tonnes of scandium oxide per year, or approximately 20% of the current global market.

Rio said it has developed a process to extract high purity scandium oxide from the waste streams of titanium dioxide production, without the need for any additional mining at its ilmenite mine in Havre-Saint-Pierre in the Canadian province.

Scandium oxide is used to improve the performance of solid oxide fuel cells, which are used as a power source for data centres and hospitals, as well as in niche products such as lasers and lighting for stadiums or studios.

It is also used to produce high-performance aluminium-scandium master alloys for the aerospace, defence and 3D printing industries.

The Government of Quebec is contributing approximately C$650,000 to the project through the Quebec Plan for the Development of Critical and Strategic Minerals.

Rio Tinto Iron and Titanium managing director Stéphane Leblanc said Rio Tinto has been engaged in the exploration and production of rare earths and critical minerals globally for a number of years to meet the demand in new and emerging technologies.

“With the support of Rio Tinto’s aluminium business, we are uniquely positioned to deliver aluminium-scandium master alloys and develop synergies with North America’s manufacturing supply chain.”

(Reuters) - Airbnb Chief Executive Officer Brian Chesky on Thursday predicted travel would permanently change due to the pandemic with people seeking out thousands of smaller cities and spending more time visiting friends and family.

Traditional tourism and sightseeing at top global destinations would be significantly reduced by travelers who will drive to smaller communities and fly less for business meetings.

Travelers are “yearning for what was taken away from them,” Chesky said at the Reuters Next conference in an interview with Jonathan Weber, Reuters global technology editor. “They’re not yearning to see Times Square. What they are yearning to do is to see their friends and their families they have not seen in a long time.”

The startup was hit by the COVID-19 pandemic in early 2020 and its business dropped by 80% in a little over eight weeks.

However, as lockdowns eased, more travelers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm gained from increased interest in renting homes away from major cities.

The home rental firm went public in a blockbuster initial public offering in December, its shares more than doubling in their stock market debut. Shares of Airbnb rose as much as 10% to record high of $187.42 on Thursday.

The rental platform has been canceling home-sharing reservations in the Washington D.C. area for President-elect Joe Biden’s inauguration’s next Wednesday after law enforcement warned of a threat from armed militias.

Chesky recalled the white supremacist rally in Charlottesville, Virginia and said that he did not want the platform facilitating people traveling to commit violence in communities.

Airbnb made the decision of after consulting local and federal officials and after a number of hosts worried about potential attacks sought to cancel bookings.

However, major hotel chains including Hilton Worldwide Holdings Inc and Marriott International have said they planned to uphold existing reservations.

People across the world are delighted to see the back of 2020, a year that brought a global pandemic and an increasingly aggressive China. Mongolia was spared these global developments to some extent. The country largely weathered the COVID-19 storm successfully and held a parliamentary election that added another feather to its governance cap: a government returned with a landslide victory in a freely contested national election.

A child looks at a dog outside a Mongolian ger in Tov province outside Ulaanbaatar, Mongolia (Photo: Reuters/B Rentsendorj).

Until November, Mongolia was a rare COVID-19 success story. Recognising the limits of its public health system, the government reacted quickly to news of the COVID-19 outbreak in January Tsagaan Sar (lunar new year) was reimagined to curtail family visits and the same is envisioned for the coming festivities in 2021. The government built on lessons from a 2019 World Health Organization-supported ‘Pandemic Flu Readiness’ workshop. Mongolia’s relative isolation enabled the government to react quickly and tightly control its borders, preventing community infections for much of 2020. As is the case for many countries, the question of procurement of vaccines is on the horizon and somewhat unresolved.

But on 11 November, Mongolia saw its first case of community infection. A strict lockdown was enacted the next day. While this lockdown seemed to have effectively curtailed infections, a new cluster appeared in Ulaanbaatar around Christmas and the government is still struggling to contain it with rigid lockdowns.

The economic impact of COVID-19 in Mongolia has been mitigated by preventing community transmission. Still, self-employed and herder households have suffered losses. The economy has been hit hard by limits imposed on mineral exports, especially after the closure of the China–Mongolia border which blocked truck-based coal exports. Mining sites have now reopened and are operating somewhat normally. Tourism has been decimated. The largest copper mining operations, Erdenet and Oyu Tolgoi, hire significant numbers of expatriate employees and have been impacted by travel restrictions. Mongolian GDP shrunk by nearly 10 per cent in 2020, but the Asian Development Bank projects a 5.1 per cent recovery in 2021.

Somewhat surprisingly, Mongolia joined the Asia Pacific Trade Agreement (APTA) in late September. While the immediate impact on trade with APTA members like Sri Lanka and Bangladesh may be limited, and trade with larger economies like China and South Korea is unlikely to change, this membership represents another step in Mongolia’s regional trade diplomacy. It signals to domestic industries that international trade relations are improving, bringing further standardisation and other benefits.

One foreign policy development with significant long-term implications was the confrontation over new language policies in China’s Inner Mongolian Autonomous Region (IMAR) in September. Some Mongolian and international advocates refer to the IMAR as ‘Southern Mongolia’ and this perspective gained traction in Mongolia over the summer. Protests against the policies in Southern Mongolia built over the summer.

The most prominent Mongolian to join the online protests was former president Tsakhiagiin Elbegdorj. This was noticed by Beijing in preparation for a visit by Chinese Foreign Minister Wang Yi in September. This may represent a shift towards a harder attitude to Mongolia in line with more aggressive stances elsewhere in the region. Perhaps in an effort to please the visiting boss, Chinese Ambassador Chai Wenrui called out Elbegdorj as a hypocrite.

Given there have been no further tensions in China–Mongolia relations, this may have been a blip of negativity. But with more reactions to Chinese assertiveness likely to come from Australia, Europe and the United States, Mongolia will be forced to walk a fine line between objecting to Chinese aggression and authoritarianism while maintaining constructive, economically vital relationships.

The biggest event in domestic politics was the parliamentary election on 24 June. With a campaign that was mildly constrained by COVID-19 distancing measures, Mongolians voted in strong numbers and gave a landslide victory to the Mongolian People’s Party (MPP). This was the first time in 30 years of multiparty democracy that a sitting government was re-elected with a majority.

The MPP now holds 62 of the 76 seats, but nearly half of those parliamentarians are newly elected, largely due to Prime Minister and party leader Ukhnaagiin Khurelsukh’s efforts to rejuvenate the party. The MPP’s success can be attributed to its efforts on curbing air pollution in Ulaanbaatar in 2019–20, and its competent response to COVID-19.

Following constitutional amendments passed in 2019, Khurelsukh’s cabinet now only includes four sitting MPs, with the majority of ministers bringing professional expertise to portfolios. It remains to be seen whether this signals a shift of power and interaction between cabinet and parliament, and whether new MPs will develop a coherent policy and legislative agenda.

Despite the MPP’s supermajority, further legislation to specify aspirations of the 2019 constitutional amendments has not been passed. This is particularly glaring when it comes to appointments to and dismissals of judges and prosecutors to bolster judicial independence. 2020 has seen a spate of prosecutions of former politicians that seem politically motivated in terms of timing.

In June 2021, Mongolians will elect a president to a single six-year term as per the 2019 constitutional amendments. President Khaltmaagiin Battulga is expected to be ‘grandfathered’ out of the single-term provision and will seek the nomination of the Democratic Party. Most observers expect Prime Minister Khurelsukh to be nominated by the MPP, riding his wave of COVID-19 success and election popularity. With two additional parties in parliament, it remains unclear what the race will look like. Given the constraints on presidential power, the race to succeed Khurelsukh as prime minister and party chair may turn out to be more significant in policy terms.

by: Julian Dierkes is Associate Professor at the University of British Columbia’s School of Public Policy and Global Affairs. He is one of the principal authors of the Mongolia Focus blog.

This article is part of an EAF special feature series on 2020 in review and the year ahead.

Ulaanbaatar /MONTSAME/ In May 2019, we reported that a 13-year-old Mongolian boy had been selected for the cast of the reboot of Nickelodeon’s sketch comedy series from the 1990s, ‘All That’. That boy, Chinguun Sergelen, is to take part in the National Children’s Inauguration to be organized by the National Children’s Campaign, a national youth advocacy organization, in the United States on January 17, prior to U.S. President elect Joe Biden's inauguration, as a guest speaker.

Last December, S.Chinguun worked with Nickelodeon, TIME, and TIME for Kids alongside other children to help pick the ultimate Kid of the Year from the finalists for the first-ever Kid of the Year honor, a multiplatform initiative recognizing extraordinary young leaders who are making a positive impact in their communities.

About the upcoming event where celebrities, activists, elected officials and youth are speaking on topics that the next administration must address to prioritize children, Chinguun wrote on his Facebook page, “I'm super excited to join this special event and I will definitely be there, hope to see you guys there too!!”.

Today (Jan 13) marks the 30th anniversary of Mongolia's first democratic constitution. A communist country for most of the 20th century, Mongolia has today proven itself a buoy of democracy in a region and era where authoritarianism, corruption and disinformation are on the rise. Since its adoption, the constitution has institutionalized Mongolia’s democratic system.

To honor the occasion, the International Republican Institute (IRI) is highlighting Mongolia’s recent democratic milestones and showcasing how its programming helped the country achieve them.

Prior to Mongolia’s June 2020 parliamentary elections – which saw a 76 percent turnout – IRI conducted a nationwide youth poll to gauge public sentiment on democracy in the pre-election period. After the survey concluded, the findings showed overwhelming support for strengthening the country’s democracy. Despite 60 percent of surveyed Mongolians acknowledging little confidence in their current political parties, the overwhelming majority (94 percent) believes inclusivity is an essential component of democratic resilience.

After the June parliamentary and October local elections, Mongolia saw women make up 17 percent of the State Great Hural, 15 percent of the Citizens’ Representative Khurals, 18 percent of the Capital City’s Citizens’ Representative Khurals and fill six leadership positions in the capital. And, it was recently announced that Mongolia will have its first woman seeking to become a presidential candidate this upcoming campaign season.

As the nation prepares for the pivotal election in June, new and expanded opportunities for increased public engagement show that Mongolians intend to consolidate their recent democratic gains. To support the country in these efforts, IRI’s Strengthening Women and Youth Engagement in the Electoral and Political Processes of Mongolia (SWYEEPPM) program remains dedicated to increasing representation in Mongolia. For instance, through the SWYEEPPM program, local partner Parent Teacher Association of Mongolia (PTAM) is training deaf and disabled Mongolians to act as domestic election observers in the country’s first-ever initiative to enable the participation of Mongolians with disabilities in the electoral process.

Another local partner, Youth Policy Watch, is building the capacity of youth and women coalitions to lead advocacy initiatives that promote women’s issues and their engagement with political parties and elected officials. In a similar vein, partner Globe International Center is conducting trainings for youth and women journalists to counter misinformation and promote ethical journalism ahead of the upcoming election. These activities, which are just a few examples of programming IRI is currently implementing in Mongolia, bolster the ideals of representative government and encourage political participation through a variety of vehicles.

In addition to enhancing political inclusivity, Mongolia’s government has also increased its efforts to promote anti-corruption initiatives – especially amidst increased allegations of corruption at the highest levels of government. In December 2019 and 2020, the State Great Hural (SGH) passed two election laws that disqualify any Mongolian convicted of corruption from vying for office in both presidential and parliamentary elections. The 2020 law also created provisions for using indelible ink on voters’ hands, increasing polling center transparency and guaranteeing full paper ballot audits in some polling places to promote election integrity.

Additionally, the State Great Hural also approved a revision for how territorial and administrative units will now be governed by decentralized organizational structures (like working groups and standing committees) rather than by political groups. These laws are just a few examples of how the government has attempted to thwart malign influence, corruption and nepotism ahead of the upcoming elections.

Through its elections, democratic laws and inclusive civil society programming, Mongolia has proven it wants to be accountable to its people and to the constitution it drafted 30 years ago. Despite its democratic nascency, the country’s resilience proves that it won’t fold to geopolitical or autocratic pressures (both foreign and domestic, near and far), and will continue to be an example of a successful democracy in Asia that encourages citizen activism and the civic participation of its people.

by Wallis Stanfield

Solongoo Bayarsaikhan, Deputy Chief at Cabinet Secretariat yesterday, January 13, gave information on the official position of the Mongolian government on the situation surrounding the Oyu Tolgoi copper and gold mine project.

In December 2019, the working group was set up to hold talks with investors of the Oyu Tolgoi project with the aim of improving Oyu Tolgoi-related agreements, including Investment Agreement, Shareholders’ Agreement and Underground Mine Development and Financing Plan in line with Mongolia’s legislations. Solongoo is a member of the Government working group.

“The government of Mongolia supports the Oyu Tolgoi underground mine development, which is viewed as holding benefits to the Mongolian economy because 80 percent of Oyu Tolgoi's value lies beneath the surface, and it is expected to become the fourth largest copper mine in the world after the underground starts its production. The working group has been studying the financial estimate of the benefits Mongolia to receive from the project.”

On the basis of revised definitive estimate for the underground mine development announced by Rio Tinto on December 16, 2020, which extended the date when sustainable production to be achieved to October 2022 for development capital of USD 6.75 billion, already USD 1.4 billion higher than the first estimation, the underground’s economic benefits for Mongolia are likely to decline, underlined Ms. Solongoo.

“It is calculated that Mongolia will not receive dividend payments until 2051 and will incur debts of USD 22 billion. In addition, Oyu Tolgoi is estimated to pay profit taxes or corporate income taxes only in four years until 2051. Therefore, the Mongolian government has sent a letter to the investor side to have careful discussions to enhance the economic benefits of the project to Mongolia."

Under the parliament’s 2019 resolution No. 92 aimed at protecting the rights and interests of Mongolian people in the exploitation of Oyu Tolgoi deposit, the government has been forwarding certain proposals and demands to investors and talks are underway, according to the Deputy Chief.

However, she reaffirmed that the government has never expressed any position to stop the ongoing Oyu Tolgoi project. “I believe the situation will not become dire of having to stop the project and this matter could be settled in a mutually beneficial manner. Both Rio Tinto and Turquoise Hill Resources have also expressed that the issue is in no way under that serious circumstances of ending the development".

“The government has put forward proposals to coordinate and lower the management services payment received from Rio Tinto in line with performances, and reduce shareholder loans interest rates with LIBOR plus 6.5 percent with a view to increase Mongolia’s benefits” added the Deputy Chief.

Oyu Tolgoi Board of Directors has decided to set up an independent committee made up of experts nominated by Erdenes Oyu Tolgoi LLC and Turquoise Hill Resources to review the causes of cost overrun and delay in the Oyu Tolgoi underground development. “Once the experts are selected, the committee is expected to make conclusion on the matter within six months,” says Solongoo.

According to her, Oyu Tolgoi company’s current copper production from its surface mining with sales revenue of USD 1.1 billion equals to half of the total copper export of Mongolia.

On January 14, 2021, the United States, through the United States Agency for International Development (USAID), signed a MNT 8.5 billion ($3.0 million) expansion of the bilateral agreement with the Ministry of Finance of Mongolia to promote good economic governance; reliable, efficient and affordable energy; and sustainable, private sector-led growth in Mongolia.

These new funds bring the total value of the United States’ contribution of this 17-year agreement to nearly MNT 360 billion ($126 million).

“The United States and Mongolia share a commitment to inclusive democratic governance, the growth of small and medium enterprises, and a financially sustainable energy sector,” Ambassador Michael Klecheski said.

“As a friend and third neighbor, the United States will continue to support Mongolia’s good governance, economic growth, and sovereignty. The expansion of this long-standing agreement is the latest demonstration of how the U.S. – Mongolia strategic partnership is making a real positive impact.”

The expanded bilateral agreement will help grow and diversify Mongolia’s economy by continuing to assist small and medium enterprises (SMEs). USAID will work with the government and private sector to foster an environment conducive to the growth of SMEs, including easier access to financing and improved corporate governance, capacity-building training on transparency and accountability, and the provision of small grants to disadvantaged enterprises.

USAID, lead U.S. government agency for international development and disaster assistance, will also initiate a new sustainable energy program that will provide focused capacity building and technical assistance. The program will help establish a competitive, diversified, modern and financially sustainable energy sector that will help move Mongolia toward energy independence.

USAID, building on the success of previous programming, will also continue to back the Government of Mongolia’s efforts to reduce corruption, increase transparency, improve administrative reform, and promote a culture of civic participation and education, thereby contributing to an improved climate for private sector growth.

Jan. 14 (Xinhua) -- Ten more COVID-19 cases were recorded in Mongolia in the past 24 hours, bringing the national caseload to 1,479, the country's National Center for Communicable Diseases (NCCD) said Thursday.

"A total of 15,899 tests for COVID-19 were conducted across the country yesterday and 10 of them were positive," said Amarjargal Ambaselmaa, head of the NCCD's Surveillance Department, at a press conference.

Nine of the latest cases were locally transmitted, and the remaining one was imported from Afghanistan, said Ambaselmaa.

Mongolia has so far recorded two COVID-19-related deaths and 909 recoveries. Enditem