Mongolian PM U.Khurelsukh’s rating falls www.news.mn

The ‘Mongolian Poll’ Research Centre has conducted its politicians’ barometer survey between 2018 and 2019. The center has been conducting its politicians’ barometer survey monthly since 2013.

China, Russia Pursue Mongolia Gas Project www.rfa.org

Less than a week after opening its first natural gas pipeline to China, Russia has mounted a new push for a second route through Mongolia to replace earlier plans for a line through Xinjiang.

On Dec. 5, Russia and Mongolia signed a memorandum of understanding (MoU) on a joint assessment for a feasibility study to pipe Russian gas through Mongolia to China, reports from the three countries said.

Although the steps are preliminary, they have received high-level attention with a commitment to an accelerated time frame.

The MoU followed meetings in Russia between President Vladimir Putin, Prime Minister Dmitry Medvedev, and Mongolian Prime Minister Ukhnaagiin Khurelsukh.

The document was signed by Ulziisaikhan Enkhtuvshin, Mongolia's deputy prime minister, and Alexei Miller, CEO of Russian monopoly Gazprom, M2 Presswire reported.

The feasibility of the new route will be determined by experts from the three countries within six months, Russian Deputy Prime Minister Alexei Gordeyev said.

"The deadline is tight," said Gordeyev, according to the Itar-Tass news agency.

"The schedule... is to calculate within half a year and send the proposals to the countries' presidents," Interfax quoted him as saying.

The cross-border route plan was previously discussed by Presidents Putin and Khaltmaagiin Battulga in September during a meeting in the Mongolian capital Ulaanbaatar, said Russia's Sputnik News.

Following those talks, Putin tasked Miller with considering the option of supplying China with yet-to-be-developed Siberian resources from the Irkutsk and Yamal regions on a western route through Mongolia.

"I know the route there isn't easy, but a preliminary consideration of this matter showed that it's absolutely realistic, and our Chinese partners tend to agree," Putin said, according to Interfax. "I ask that you study this issue and report to me."

An accelerated push

The latest movement on the Mongolian option comes just days after Russia opened its massive 3,000-kilometer (1,864-mile) Power of Siberia pipeline, known as the eastern route, on Dec. 2 to supply gas to northeast China and as far south as Shanghai.

The Power of Siberia route is expected to pump 5 billion cubic meters (176.5 billion cubic feet) of gas into China in 2020 and reach full capacity of 38 billion cubic meters (bcm) annually by 2025.

Russia's accelerated push for the Mongolian route represents a doubling down on China's economic growth despite recent "headwinds," relying on its plans to shift more of its energy consumption to cleaner but more costly gas from cheap but high-polluting domestic coal.

But perhaps equally significant is that Russia's embrace of the Mongolian plan appears to spell the end of its earlier drive for a direct western route on a narrow corridor into China through Xinjiang after failing to sell Beijing on the idea for the past 14 years.

Long before starting the Power of Siberia project or considering Mongolia as a second route choice, Putin and Miller argued that it would be quicker, shorter, and cheaper to build a high-altitude pipeline across the remote Altai Mountains, mainly because it would use Russian resources already developed in Western Siberia.

Never mind that the Altai route would pass through a nature reserve and a UNESCO World Heritage Site at an elevation of 2,650 meters (8,690 feet).

Russia also turned a deaf ear to China's arguments that Xinjiang was already well supplied with petroleum resources, as well as pipelines from Central Asia.

For nearly a decade before the Power of Siberia project started in 2014, the Altai route remained Russia's first choice to supply China with 30 bcm of gas annually.

If, as it appears, Russia has finally thrown in the towel on the Altai option, the question is why now?

One possible answer is that the worldwide focus on China's suppression of the Uyghurs in Xinjiang has persuaded Moscow that another big energy import project in the region will never be considered secure.

Never China's choice

Edward Chow, senior associate for energy and national security at the Center for Strategic and International Studies in Washington, said the Altai plan had plenty of problems before the most recent abuses of the Uyghurs came to light.

"The Altai route was never the Chinese choice even before the current Uyghur issues for simple reasons of geography, existing supply from Central Asia, and where the Chinese demand centers are," Chow said.

"It made sense for Russia since it is a short distance on the Russian side and allows Gazprom to direct West Siberian gas to China," he said.

Russia's embrace of the Mongolian route appears to indicate that its calculation of the advantages and disadvantages have changed.

"So, maybe the Russians have given up on the Chinese ever agreeing to the Altai route. Responding to Mongolia's proposal is a nice face-saving way for both sides to move on," said Chow.

In another possible sign of energy security worries about Xinjiang, China has said nothing in the past year about its stalled plan to build a fourth gas pipeline from Turkmenistan on a new Central Asian route to the Xinjiang border.

When the "Line D" route through Uzbekistan, Tajikistan, and Kyrgyzstan was announced with a series of intergovernmental agreements six years ago, the project was expected to be completed in 2016. The target date has since been pushed back to the end of 2022.

Russia's initiative on the Mongolian route suggests that Moscow plans not only to compete with Central Asian gas but also to displace further expansion of supplies from Turkmenistan, taking advantage of energy security fears over Xinjiang.

Russia's push for a second pipeline route may add another layer of competition with China's imports of liquefied natural gas (LNG) at a time when bullish forecasts are being reconsidered due to declining growth in the economy and gas demand.

Transit security risks

But even if worries over Xinjiang have become a determining factor in regional energy route choices, it remains unclear whether they exist in China's strategic planning or only in Russia's perceptions of security risks.

Transit risks are generally considered to increase with each additional border crossing, giving rise to Russia's campaign for direct pipeline routes, such as the controversial Nord Stream 2 pipeline across the Baltic Sea to Germany, which bypasses transit countries including Poland and Ukraine.

One interpretation of Russia's new plan for China is that the addition of a border crossing through Mongolia may now be considered less of a risk than a direct route through Xinjiang.

On the plus side for the Mongolia project, it offers more favorable terrain than the Altai plan. On the minus side, it may require more investment in new Siberian resources than Altai. The relative weight of those factors may become clearer in the coming months.

While China was unlikely to ever accept the Altai proposal, an Interfax report on Dec. 3 appeared to take an apologetic approach to explaining Russia's support for the Mongolia plan in light of Chinese sensitivities.

"The history of the gas industry in the post-Soviet world knows many examples of transit disputes. For that reason, Gazprom has been trying to carry out non-transit (direct) projects for the delivery of gas to major consumers, such as Nord Stream and Blue Stream (across the Black Sea to Turkey)," it said.

The report emphasized that the route choice was initially all Mongolia's idea.

"Mongolia has been proposing that Russia use its territory for the transit of gas to China for years, arguing that this would ensure safety. a short route and convenient geography," Interfax said.

Malaysia May Reopen Mongolia Murder Case as Najib Vows Innocence www.bloombergquint.com

(Bloomberg) -- Malaysia’s top prosecutor will look into reopening the case of a murdered Mongolian woman allegedly linked to former premier Najib Razak, as the victim’s father says he’s pinning his hopes on the country’s new government to find justice. Two former police guards for Najib had been convicted of the 2006 murder of Altantuya Shaariibuu. “Everybody knew that it just did not make sense for the two of them to be solely culpable,” Attorney-General Tommy Thomas said in a Friday interview. “So we knew that the story was incomplete.”

The courts that sentenced the two men to death had grappled with their lack of motive, while Azilah’s recent statement indicates there may in fact be a reason for the murder, Thomas said. “It’s more for the police to investigate and we will look into it,” he said, when asked if he will reopen the case. One of the convicted men, Azilah Hadri, is seeking a retrial after penning a sworn statement accusing the former prime minister of ordering him to covertly arrest and destroy her because she was a foreign spy and a threat to national security. Najib has denied any involvement. On Friday, he made a religious oath that he didn’t give the order and had never met her.

Death Penalty
The prosecutor’s stance will be a relief to Shaariibuu Setev, who has spent more than a decade seeking closure over his daughter’s death. He is campaigning for Malaysia to commute the men’s sentences via a plea deal so that Australia, where one of the men had fled to seek asylum from the death penalty, would agree to bring them together to tell what he says could be the true story behind the murder.

Shaariibuu said he doesn’t wish the death penalty on them. “Executing these officers is an awkward way to eliminate evidence,” he said in an interview in Ulaanbaatar on Oct. 3. Australia’s Department of Home Affairs declined to comment on individual cases in an email on Nov. 15. Altantuya was a linguist who spoke Russian and Chinese, as she grew up studying in Russia and Mongolia, before traveling to China to study economics, Shaariibuu said. Witnesses in the murder trial in 2007 said Altantuya worked as a translator and was privy to the government’s purchase of Scorpene-class submarines, which is now the subject of investigations by the Malaysian Anti-Corruption Commission and French authorities.

Civil Suit Altantuya died in Malaysia after being led to a secluded spot in the jungle by the two convicted men. Police reports show she was shot and then blown up using C-4 explosives, which her father believes was used to hide evidence, he said in the interview. Najib’s former adviser Abdul Razak Baginda, who admitted to an affair with her, was acquitted of abetting the killing due to lack of evidence.

Shaariibuu has filed a civil suit against Malaysia to seek damages for her family. That’s proving difficult as local courts refused to use evidence presented in the criminal trial for the civil case, requiring him to seek funds to fly in witnesses from Mongolia, the U.S. and Australia to testify. A retired university teacher, he has sought donations to help pay for his legal fees and the costs of reconstructing evidence presented in the criminal case. “It’s up to Malaysia to resolve this,” Shaariibuu said. “It’s their reputation, and the reputation of their court system.”

Belarus' Development Bank to finance Belarusian export to Mongolia www.eng.belta.by

MINSK, 23 December (BelTA) – The Development Bank of the Republic of Belarus (DBRB) will grant Mongolia an export loan to purchase Belarusian fire-fighting equipment and vehicles. The relevant export loan agreement between the DBRB and the Ministry of Finance of Mongolia was signed in Ulaanbaatar, BelTA learned from the DBRB. Under the agreement, the DBRB will give an export loan to supply fire equipment and vehicles made by Belarus' Pozhsnab company to the National Emergency Management Agency of Mongolia. “This is the first individual loan agreement as part of the general export loan agreement signed by the governments of Belarus and Mongolia in April 2019. It is designed to enhance trade relations between Belarusian and Mongolian enterprises,” the DBRB noted. The DBRB is implementing an export promotion program and aims to help Belarusian exporters get access to new markets and make export loans affordable for private business, DBRB Deputy Chairman of the Board Ivan Varenitsa noted. “This loan agreement is the result of effective interaction between the two countries and we hope to maintain fruitful cooperation in the future,” Ivan Varenitsa stressed.

Invest in Mongolia 2019 takes place in Tokyo www.montsame.mn

Ulaanbaatar /MONTSAME/ On December 20, ‘Invest in Mongolia 2019’ Mongolia-Japan Business Forum was held in Tokyo, Japan.

Sample collection from Asgat silver deposit wraps up www.montsame.mn

Bayan-Ulgii /MONTSAME/. Upon the Government resolution to transfer the special license for the Asgat silver deposit to the full ownership of Erdenes Mongol LLC state owned company and put under economic circulation, Mongolian emergency rescue officers and Asgat Kent Company worked at the deposit to open the deposit and collect technological sampling from November 1 to December 18.

Cutting air pollution: VAT exemption for briquettes www.news.mn

Ulaanbaatar is one of the most air-polluted cities of the world. This year, the government introduced a ban on burning coal in the Mongolian capital where the winter temperature falls to as low as -40 Celsius. In the light of the ban, the government has put an alternative product on the market made from semi-coke, a by-product of coal. While more expensive, these fuel-efficient briquettes are said to burn twice as long and emit far fewer fumes. The government has ruled that a ton of coal briquettes would be cost MNT 150,000. However, the coal briquettes currently have been selling for MNT 165,000 per ton; this is due to value added tax. As a result, the Tavan Tolgoi Company has requested the cabinet to exempt coal briquettes from VAT. There is currently public dissatisfaction over the shortage of coal briquettes in Ulaanbaatar.

Mining company constructs kindergarten in South Gobi www.news.mn

A new kindergarten, which can take 100 children, has been opened in the Manla Soum in Mongolia’s South Gobi (Umnugobi) Province. The construction of the kindergarten has been fully financed by the Gobi Oyu Development Support Fund (DSF), sponsored by Oyu Tolgoi LLC. This is the fifth kindergarten building financed by the foundation.

Boeing chief fired but 737 concerns persist www.bbc.com

Boeing has fired its chief executive, Dennis Muilenburg, in a bid to restore confidence in the firm after two deadly crashes involving its 737 Max plane.

More than 340 people died in the disasters, prompting accusations that Boeing put profit before safety.

Families of the victims welcomed Mr Muilenberg's resignation as overdue.

But they said Boeing's decision to replace him with a long-time board member raised questions about its commitment to change.

Boeing named David Calhoun, who has served on the firm's board since 2009 and is its current chairman, as chief executive and president.

"While the resignation of Mr Muilenburg is a step in the right direction, it is clear that the Boeing Company needs a revamp of its corporate governance," said Paul Njoroge, who lost his wife, three children and mother-in-law when Ethiopian Airlines Flight 302 crashed in March.

Mr Calhoun "is not the right person for the job", he added.

Zipporah Kuria, whose father was also killed on the Ethiopian Airlines flight, said Mr Muilenburg should have been replaced "a long time ago" but responsibility for the crashes is shared.

"I feel as though a lot more people should have resigned including the person who's becoming CEO," she told the BBC.

'Necessary' change
Boeing has been under intense scrutiny since two 737 Max planes crashed within five months of each other, first in Indonesia and then in Ethiopia.

The 737 Max fleet has been grounded worldwide since March.

While the company had been hoping to have the best-selling jet back in the air by the end of this year, US regulators have made it clear that it would not be certified to return to the skies that quickly.

Then on Friday, the company's reputation took another hit when its Starliner spacecraft suffered technical problems that prevented it from taking the right path to the International Space Station.

Boeing's board said it had "decided that a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders".

Mr Calhoun, a private equity executive, will take over from 13 January.

Lawrence Kellner, a board member since 2011, is to become non-executive chairman immediately.

"Under the company's new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA [Federal Aviation Administration], other global regulators and its customers," it said.

Despite the ouster, some of the firm's harshest critics in Washington said they still had questions about the firm's commitment to change.

Senator Richard Bumenthal said: "The company needs new leadership across the board who will take safety seriously."

Michael Stumo, who lost his daughter Samya Rose on the Ethiopian Airlines flight and has organised victims' families against Boeing, called the resignation a "good first step toward restoring Boeing to a company that focuses on safety and innovation".

"The next step is for several board members who are underperforming or unqualified to resign," he said.

'Software problem'
Air safety officials investigating the tragedies have identified an automated control system in the plane, known as MCAS, as a factor in both crashes.

Boeing has said the MCAS software system, which relied on a single sensor, received erroneous data, which led it to override pilot commands and push the aircraft downwards.

It has said it is fixing the software and has overhauled its review procedures.

But US lawmakers, who are investigating the company, have said the firm was aware that the software system could be unreliable. They have accused the company of trying to hide the risks and rush the plane back into service.

Congressman Peter DeFazio, who leads a committee investigating Boeing, had called for Mr Muilenburg's resignation in an interview with the New York Times, published over the weekend.

In a statement on Monday, he said the shake-up was "long overdue".

Mr Muilenburg first joined Boeing in 1985. He led the company's defence, space and security division prior to his appointment as chief executive in 2015.

He was stripped of his role as chairman of Boeing's board of directors in October and later agreed to give up his bonus. However, Boeing, including Mr Calhoun, had continued to express confidence in him.

Dennis Muilenburg's departure was inevitable, although the timing was unexpected.

Since the two accidents, he has faced intense criticism over the corporate culture that existed at Boeing on his watch, and over the company's relationship with regulators.

Questions have been asked about how a seemingly flawed aircraft was allowed into service in the first place, and why it was allowed to continue flying after the first accident. There have been claims - emphatically denied by the company - that it prioritised profits and speed of production over safety.

His response to the crisis has also come under fire. Although he insisted that Boeing "owned" its failures, he also repeatedly said that the crashes were the result of a chain of events. This was seen by some as an attempt to divert blame away from the aerospace giant.

The final humiliation came last week, when Boeing announced it would have to suspend production of the 737 Max, because regulators had yet to clear the aircraft as safe to fly again. For months, Mr Muilenburg had insisted the plane would be back in the air by the end of the year.

Japanese meat dealer hungers for fresh start in Mongolia www.asia.nikkei.com

SHIZUOKA, Japan -- Meat dealer Aono Freshmeat is aggressively expanding its business in Mongolia, from machine leasing to farming, as small to midsize Japanese companies try their fortunes elsewhere to offset shrinking domestic market.

An aging and shrinking population has hit Japanese companies, particularly those in the countryside. Aono is based in Shizuoka, an area close to Mount Fuji. But unlike many other Japanese companies that have sought business opportunities overseas by moving or expanding away, Aono is investing in Mongolia in areas that have little relation to its main business, such as the leasing of heavy machinery for mining, greenhouse cultivation of vegetables and dairy farming.

The leasing service will start in 2020. It plans to rent five Japanese-made used power shovels and lease them to coal mining companies. Aono is also developing a gold mine in Mongolia and will use the machinery for excavation and will lease them out during the winter when the mine shuts down.

In the summer of 2019, Aono Group, which was already a producer of wheat and rapeseed, started greenhouse cultivation of leafy vegetables as well as the production of milk. It aims to ensure stable profit by adding greenhouse cultivation and dairy farming, which is less vulnerable to weather.

Aono Group already has five subsidiaries in Mongolia, with a total of 300 employees. It grows wheat and corn on its own land of 8 million sq. meters and breeds 3,000 mutton sheep. It also offers financing services. Combined sales from its various businesses in Mongolia will be 300 million yen ($2.7 million) in fiscal 2019 and are targeted to rise to 500 million to 1 billion yen in five years.

Apart from Aono Freshmeat, Aono Group has other companies in the city of Shizuoka, including Aono Farm, a hog farming operation, and Shizuoka Meat, a wholesaler of unprocessed and processed meat for commercial use. The whole group saw sales of 20 billion yen in fiscal 2018.

Aono Group began its foray into Mongolia in 2015. "If we want to survive, we must make inroads into overseas markets," said President Hiroshi Aono then. He saw potential in the Mongolia, having worked with a Mongolian.

He toured Mongolia with the friend in around 2009, making a business plan together and established a local subsidiary in 2015. Mongolia "has a large population of young people as well as a market that has not matured yet," he said then.

Mongolia depends heavily on agriculture and mining, and natural resources such as copper and coal account for a large share of exports. This makes Mongolia particularly vulnerable to fluctuations in the prices of natural resources.

The country missed repayments of its foreign debt from 2016 to 2017 due partly to restrictions on foreign capital inflow implemented by the government. It got out of the crisis in 2017 with the aid of the International Monetary Fund, the Asian Development Bank, the World Bank, as well as countries such as Japan, South Korea and China.

The economy has been stable since then. The economy grew 6.8% in 2018 and that rate is expected to hit 7.2% in 2019, according to World Bank data.