Mongolia reports one more COVID-19 case www.xinhuanet.com

Mongolia's National Center for Communicable Diseases (NCCD) on Saturday reported one newly confirmed COVID-19 case, taking the tally of all confirmed cases in the country to 39.

Mongolian athletes stranded in Japan remain hopeful www.mainichi.jp

Overdue loans rise by 6.7 percent in Mongolia www.news.mn

The level of overdue loans and owed interest in the Mongolian banking system rose by MNT 120 billion to 6.7 percent of the total loan portfolio in the first quarter of 2020. The large sum of the outstanding loan stock is owed primarily by the process plant, construction and mining exploration sectors. According to reports by the Central Bank of Mongolia, the stockpile of poor-quality loans decreased by MNT 9 billion to 10.7 percent of the total loan portfolio in April from the previous month.

Mongolian eSports player becomes European Champion www.montsame.mn

Ulaanbaatar /MONTSAME/. ‘PUBG Mobile Club Open’ European Championship tournament was held on April 24-25 and Mongolian eSports player Munkhbat ‘RobdiNNi’ Davaadorj placed first, out of 16, along with his team ‘KoninaPower’.

Parliament approves resolution to ensure financial and economic stability during COVID-19 www.montsame.mn

Ulaanbaatar/MONTSAME/. Yesterday, April 29, the plenary meeting of the Parliament approved a resolution on the measures to ensure financial and economic stability, prevent risks and make the digital transition in public services during the COVID-19 pandemic.

Coal output of SouthGobi reaches 90,000 tons since export resumption www.zgm.mn

The border closure has adversely impacted sales and cash flows of Southgobi Resources Ltd. in the first and second quarters of 2020. Since the Shiveekhuren­-Sekhe border resumption, the company has been exported approximately 90,000 tons of coal within one month. In accordance with the company’s statement, coal will not be mined in May since existing coal has been purchased from the warehouse. SouthGobi also ceased major mining operations since February 11. The volume of coal export through Shiveekhuren-Sekhe is lower than usual and limited. China expects that fall in coal export will continue to affect the company’s revenue, cash flow, and profit. Southgobi Resource Ltd predicted a loss of USD 18 million in the first quarter of 2020 and the company’s net income stood at USD 2.1 million during the same period of the previous year. SouthGobi Ltd. shares traded at HKD 0.6 on the Hong Kong Stock Exchange, showing no fluctuation.

MNCCI: Pandemic impact on construction industry remains high www.zgm.mn

According to a survey by the Mongolian National Chamber of Commerce and Industry (MNCCI), the COVID-­19 epidemic is affecting construction businesses, with an average of 96 percent of respondents saying it has had a “moderate to severe impact on operations”. About 48.7 percent of the respondents said that the pandemic had a severe impact on the construction business, while 28.2 percent admitted that it had a moderate impact. In terms of its impact on employment, 51 percent of respondents said it had a notable impact on the construction sector. The Mongolian Builders Associ­ation had previously reported that the construction sector is facing a shortage of professional staff. Industry experts also assume that COVID-­19 could lead to further job losses as some facilities in the construction sector come to a standstill.

Mongolia’s effort against money laundering and financial crime praised www.montsame.mn

Ulaanbaatar /MONTSAME/. On April 30, Governor of the Bank of Mongolia (BoM) held a meeting with the Ambassador Extraordinary and Plenipotentiary of the U.S. to Mongolia Michael S. Klecheski.

Mongolia: Protecting consumers from unfair pricing during COVID-19 www.idlo.int

The effects of the social and economic fallout from the current COVID-19 crisis will be felt long after the pandemic itself has ended. In some countries, however, there are already encouraging signs of government efforts to mitigate some of the negative impact.

In Mongolia, IDLO has been working since February 2019 with the European Bank for Reconstruction and Development (EBRD) to strengthen the capacity of the government agency in charge of competition, the Authority for Competition and Consumer Protection (AFCCP). Steps are already being taken by the AFCCP to try and protect consumers against price hikes being introduced by companies taking advantage of the COVID-19 crisis.

On 12 February 2020, the Government of Mongolia passed a resolution, tasking the AFCCP to take measures to prevent and combat excessive pricing, creating artificial scarcity, misleading advertisements, commodity overstock and speculation in an emergency situation.

“The AFCCP has established taskforces to conduct inspections for commodities supplies and sales at trade centers, food factories, local markets, grocery stores and pharmacies in Ulaanbaatar. Inspectors investigate breaches and issue warnings for companies and traders to not exploit the current situation to take advantage of people. Most importantly, the public should stay calm and not believe misleading advertising,” said Mr. Lkhagva Byambasuren, the Chairman of the AFCCP at a press conference on 17 March 2020.

A number of companies have been fined under Mongolia’s competition laws for adopting anti-competitive practices while the AFCCP has taken legal action and is making sustained efforts to raise awareness among the public of the dangers of price hiking for essential goods.

Two nationwide supermarket chains were fined 20 million MNT (US$7,185) each for more than doubling their prices for lamb and beef from 1,500 MNT (53 cents) per kilo to 3,500 MNT (US$1.20) between 10-20 March 2020. For citizens of a country like Mongolia, with a relatively small population of just 3.3 million, large livestock supplies and per capita meat consumption of 16.4 kilos, such increases are seen as particularly unjustified.

Other companies under scrutiny were in the pharmaceutical sector, with one large chain of pharmacies being fined 6 million MNT (US$2,155) for illegally selling “N95” face masks, amid accusations of price fixing, non-transparency, and discrepancy between cash receipts and income statements. Several others were also fined for almost tripling their prices for hand sanitizers from 4,500 MNT (US$1.60) to 11,500 MNT (US$4.10).

The AFFCP has now asked license issuing state authorities to improve their oversight of compliance requirements and to revoke the licenses of business entities found to be non-compliant with Article 13 of Mongolia’s Law on Licensing and Article 13.4 of the country’s Competition Law.

“When the Mongolian Government first declared a state of high alert on 13 February 2020 closing universities and schools, restricting public gatherings and movements at border crossings with the People’s Republic of China, and when the first coronavirus cases were confirmed in the country on 10 March 2020, the price of commodities rose more than 50% within 1-2 days, creating panic and artificial demand. The AFCCP took immediate action by informing the public about sufficient reserves of products and resolved the issue quickly. Providing accurate information through a single channel to the public is vital,” said Ms. Tserendulam Shagdarsuren, Head of the Consumer Protection Division of the AFCCP.

On 15 March 2020, on the occasion of World Consumer Rights’ Day, the AFCCP also established a free customer service hotline for people to report complaints. Since then more than 1,600 calls have been received and the AFCCP is working to resolve the issues identified.

As part of its efforts to combat the COVID-19 crisis, and in light of its 4,700 km shared border including 13 crossing points with the People’s Republic of China, the Mongolian Government declared a state of high alert on February 13, 2020 and introduced strict measures to prevent and control the spread of the virus. As of 29 April 2020, the country had 38 confirmed cases of COVID-19 and no confirmed fatalities.

In February 2019, IDLO began implementing the project, “Competition in Mongolia: Legal Reform and Institutional Capacity Building”, with the support of EBRD. The overall aim of this three-year project is to foster free market competition by providing technical assistance to the AFCCP to draft amendments to the Advertisement Law, develop a digitized decisions database, build capacity of senior managers and inspectors, strengthen internal advocacy and increase cooperation between the AFCCP, sector regulators and the judiciary to enhance the competition framework in Mongolia.

Sheep diplomacy and a troubled economy: Mongolia amid COVID-19 www.fes-asia.org

Balancing two mighty neighbours is part of the DNA of Mongolia’s diplomacy and economic relations. The country’s economy depends heavily on trade with China and Russia. As demand is decreasing during the pandemic, the most vulnerable are expected to be hit hardest.

For Mongolia, landlocked between Russia and China, it has always been important to have good relations with its neighbours. Economically, Mongolia is more dependent on China to the south, which shares a 4,700-km border and takes almost 90 per cent of its exports, mostly coal and copper. Thus, the spread of COVID-19 in China poses particular challenges to the country. Mongolia has had to maintain good relations with Beijing to keep its economy afloat, while preventing the pandemic from spreading within its territory.

At the same time, Mongolia enjoys traditionally close relations with Russia to the north, dating back all the way to the Communist era. Cross-border trade, energy cooperation and a largely favourable view of Russia among Mongolians are the pillars for the bilateral relationship.

Sheep diplomacy

When COVID-19 started spreading in Wuhan, the Mongolian government took drastic measures to contain the coronavirus that causes the disease. Well before the first imported case of COVID-19 was confirmed, the government shut the border with China, cancelled international flights, closed all educational facilities and even cancelled the Tsagaan Sar (Lunar New Year) national holiday.

When President Battulga Khaltmaa announced a sudden visit to China in late February, a number of people opposed it initially for fear of coronavirus infection. However, during his five-hour visit, the President was warmly welcomed by his Chinese counterpart Xi Jinping as the first foreign head of state to visit China since the outbreak of COVID-19. The Chinese public expressed particular gratitude for his donation of 30,000 sheep as a neighbourly gift from a strategic partner.

President Battulga’s so-called sheep diplomacy received overwhelming positive comments on Chinese social media. The topic “Mongolian President donated 30,000 sheep to China” received more than 100 million views on Sina Weibo. International affairs expert and former diplomat Dashdorj Bayarkhuu considers this visit as a “diplomatic victory for a small state” and a “smart move to promote Mongolia’s positive image to the Chinese people”. Luguusharav Byambakhand, an independent researcher focusing on international affairs, sees this visit as a “soft power policy success for Mongolia in winning over the hearts and minds of the Chinese”. Dr. Jamsran Bayasakh, prominent sinologist and former director of the Institute of International Affairs at the Mongolian Academy of Sciences, shares a similar view on the importance of this visit amid the current crisis, but he is somewhat critical of the Ministry of Foreign Affairs for not being sufficiently proactive, letting the president take up the reins instead.

Though the livestock will not actually make the trip until the autumn, when they are in best physical condition, the sheep diplomacy move has certainly helped to improve the Mongolian president’s image in China. Back in 2017, he won the presidential election on the back of anti-China rhetoric, with Beijing’s Global Times at the time voicing concern over “narrow-minded nationalism”. Moreover, it has greatly helped to solidify the strategic partnership between the two countries, to improve political and economic relations and to deepen mutual understanding between the Chinese and Mongolian people.

Economic challenges on all fronts

When the Mongolian State Emergency Commission decided as early as January to close schools as well as restrict public gatherings and visits of bars and restaurants, the impact was felt quickly. According to officials figures, over 70 percent of companies operating in Mongolia are small and medium enterprises in the service industry. Due to quarantine measures and fall in foreign trade levels 60,000 companies have reported a decrease in business revenue. These are facing challenges in servicing bank loans, tax obligations, and staff salaries, resulting in staff lay-offs or leave without pay.

The export of commodities to China, Mongolia’s main source of revenue, was also severely disrupted for some weeks but was recently resumed with additional precautionary measures for ensuring the health of Mongolian truck drivers entering China. At the same time, commodity exporters like Mongolia, continue to feel the pain resulting from the oil price war between Russia and Saudi Arabia and collapse the oil price.

The poverty level in Mongolia has decreased but remains at 28.4 percent as of the end of 2018, according to the National Statistics Office. An additional 15 percent of the population are considered vulnerable to falling into poverty. Those parts of the population will suffer the hardest from an economic decline that is sure to materialize.

Rolling out the government’s rescue package

Prime Minister Ukhnaagiin Khurelsukh announced in the beginning of April the government’s package of measures to overcome the economic difficulties and support for businesses and households.

This package of measures is estimated to cost MNT 5.1 billion (USD 1.9 million), subject to further debates in the parliament. These measures include the following:

Employers and employees of private companies as well as voluntary contributors to the Social Insurance Fund will be exempt from contribution obligations for the upcoming six months;
Companies with a taxable income less last year of less than MNT 1.5 billion (approx. 270,000 USD) will be exempt from corporate income tax for the upcoming six months;
Employees of companies who lost revenue because of quarantine will receive wage support of MNT 200,000 (approx. 75 USD) per month for the next three months for each employee retained on the payroll;
Child money received by each child (MNT 20,000 per month per child aged 0-18 years) will be increased by MNT 10,000 (approx. 4 USD) for the next three months;
Low-income households who are unable to pay electricity bills will not be subjected to electricity restrictions.

United in resilience

It remains to be seen whether these measures will be sufficient to provide a safety net for Mongolia’s fragile economy. What is certain though is that Mongolians have weathered many storms and hardships throughout their proud history. Up until today, more than 300,000 herders continue to cherish the traditions of a nomadic lifestyle, under some of the harshest climatic conditions on the planet. Resilience is probably the biggest asset of Mongolia’s people.

Oyunsuren Damdinsuren is a senior lecturer at the School of International Relations and Public Administration, National University of Mongolia.

Enkhbayar Namjildorj is a lecturer at the National Academy of Governance, Mongolia.