Policy on sustainable investment to keep economic growth stable www.montsame.mn

Ulaanbaatar /MONTSAME/. The importance of a clear, consistent policy on investment was highlighted at the international conference held under the theme, ‘Investment Climate: Stability’, on October 22. The conference was co-organized by the Bank of Mongolia, International Finance Corporation, and the National Development Agency.

While foreign investment in Mongolia was USD 1.5 billion in 2016, it reached USD 2.7 billion, with an increase of 80 percent in 2018. Furthermore, entities with foreign investment made up 23 percent of the total tax revenue in 2018. However, as there is a potential risk of economic difficulties due to the fluctuating rate of export commodities, officials highlighted the possibility to overcome the difficulties with direct foreign investment and increase in exports.

Head of the Cabinet Secretariat L.Oyun-Erdene said, “Foreign-invested entities making 23 percent of our country’s total tax revenue shows the impact of foreign investment in the economy. Specific goals and objectives on regaining investors' confidence and attracting investment have been reflected in the Government’s plan for 2016-2020. In order to implement these goals, we are currently working on creating a favorable environment for new investors, protecting their rights, and introducing the best international practices.”

Governor of the Bank of Mongolia N.Bayartsaikhan said, “The macroeconomy of Mongolia has stabilized since 2017. As of the first half of 2019, GDP grew by 7.3 percent. Despite this, the fluctuating rate of raw commodities and foreign debt risks continue to be problematic. Thus, to attract investment and find additional sources for programs on increasing the competitiveness of export products, and diversifying the economy, creation of a favorable investment environment is currently the most important issue.”

Head of the National Development Agency of Mongolia B.Bayarsaikhan said, “In partnership with the International Financial Corporation of the World Bank, the National Development Agency has developed a report on the investment reform of Mongolia. The policy paper on attracting investment is currently being developed based on the report. It is highly important to define the vision for the sectors that will serve as a pillar of development, foreign investment, and human resource and personnel 20-30 years into the future. In this framework, the National Development Agency has begun to work on defining the vision for up to 2051.”

IFC’s Resident Representative in Mongolia Rufat Alimardanov said, “Alongside foreign investment and localization of know-how, it will be crucial to have a policy on investing in increasing domestic business opportunities. Our research showed that Mongolia is able to benefit the most from investments in sectors, such as mining, tourism, services, and agriculture. We eager to give support in creating opportunities in the sectors, and realizing possible opportunities.”

Central bank and Financial regulatory commission blamed for fail in duties www.montsame.mn

Ulaanbaatar /MONTSAME/. Last week, Financial Action Task Force (FATF), intergovernmental organization on combating money laundering and tourist financing worldwide, identified Mongolia as a jurisdiction with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies for which they have developed an action plan with the FATF, or included Mongolia in so-called ‘Grey List’.

Italy installs bumper car track in Ulaanbaatar www.news.mn

C and S, an Italy-based manufacturer of bumper cars for adults and juniors, have installed an indoor bumper car track in Mongolia.

Mongolia-EEC working group meets for the third time www.montsame.mn

Ulaanbaatar /MONTSAME/. On October 21, a third meeting of the joint working group of the Government of Mongolia and the Eurasian Economic Commission (EEC - supranational governing body of the Eurasian Economic Union) was held in Moscow, Russia.

The Russian pipeline that could derail China's LNG boom www.rt.com

China’s booming natural gas and liquefied natural gas (LNG) demand is set to cool off, with both demand growth and LNG import growth slowing down from the dizzy growth rates of the past few years.
A major natural gas pipeline designed to ship gas from Russia’s eastern natural gas fields to China could further eat some of the growth in Chinese LNG imports in a few years, when the pipeline starts operations at full capacity, according to an S&P Global Platts analysis.

Earlier this month, Russia’s gas giant Gazprom said that the Power of Siberia pipeline to China is being filled up with gas as scheduled, with operations slated to begin in December.

While the initial volumes of Russian gas shipments to China will be low and unlikely to have a major impact on this coming winter’s LNG market in China, at full capacity in 2023, the pipeline from Russia is set to provide as much as 9.5 percent of China’s expected gas supply, possibly denting LNG import growth, S&P Global Platts has estimated.

“We have many city gas supply projects in the northeast, so the startup of the China-Russia gas pipeline is expected to ease our supply pressure in the winter peak season,” a source at a Chinese city gas supplier told S&P Global Platts, noting that the supplier could mull over reducing imports of LNG when the Russian pipeline gas starts flowing.

Russia will start shipping gas into China at a time when Chinese natural gas and LNG demand growth is slowing down amid weakening economic growth. Still, analysts don’t see China’s gas and LNG demand starting to fall in the coming years and decades.

Demand for natural gas in China will continue to grow in the coming years as Beijing favors increased use of cleaner-burning natural gas to clamp down on stifling pollution levels. Even at its slower pace, LNG import growth could help China outstrip Japan to become the world’s top LNG importer as soon as in 2022. While analysts see no end to LNG import growth in the foreseeable future, experts and the Chinese government itself admit that growth it set to slow over the coming years, with a first such slowdown as early as this year.

The slowing economic growth in China is taking a toll on gas demand growth. The Chinese government has recently admitted that this year’s gas demand growth would slow down from last year’s growth pace—to 10 percent from 17.5-percent growth in 2018. State-run Sinopec Gas Company chimed in with a similar forecast last week, saying that demand for natural gas is forecast to rise by 10 percent this year, at a slower growth rate than in previous years, due to slowing economic growth.

Slowing growth pace, trade disputes undermining investor confidence and industrial output, and China’s pragmatic policy position to manage the pace of coal-to-gas switching inevitably led to a slower rate of Chinese gas demand growth, Gavin Thompson, Vice Chairman, Energy – Asia Pacific at Wood Mackenzie, said earlier this month.

Chinese gas demand is set to grow by 9 percent annually this year—“hardly a poor performance, but not matching the 17 percent increase seen in 2018,” Thompson said, but noted that he disagrees with commentators who have started talking about cracks emerging in China’s LNG demand. China will continue with the coal-to-gas switching to reduce air pollution, but it will also look to avoid LNG price spikes seen in the winters of 2017 and 2018, said Thompson, who remains optimistic about China’s natural gas and LNG demand growth in the long term.

Commenting on the impact of more pipeline gas to China, Miaoru Huang, Senior Consulting Manager – China, APAC Gas and LNG at WoodMac, said last month:

“Despite higher flows of pipeline imports, LNG will be crucial to meeting China’s gasification ambitions. LNG is more flexible than piped imports to counter demand and production uncertainty.

Rights groups report exposes mining’s serious threats to defenders, local communities and environment www.forum-asia.org

Mining operations, regardless of their scale and nature, are posing a series of concrete threats to the environment and local communities of the districts (soums) of Binder, Batnorov, and Tsagaan-Ovoo, in north-eastern Mongolia.

Mongolia's capital bans extraction of black earth www.xinhuanet.com

The municipal government of Ulan Bator has announced a ban on the extraction of black earth in the Mongolian capital.

Loro Piana Explores The Origins Of Cashmere In Mongolia (With The Help Of Some Frolicking Goats) www.vogue.co.uk

It’s Friday night in Shanghai and Loro Piana, the world’s most esteemed wool and cashmere brand, has invited an eclectic assortment of editors, film stars and goat herders from around the world to attend the brand’s first film premiere. It’s a curious mix – an assemblage of Chinese superstars wearing cashmere gowns alongside Mongolian farmers dressed in traditional garb – but, when the lights go down and a 33-piece orchestra raises their instruments to begin scoring the screening, even the most quizzical appear momentarily quelled. After all, you’d have to be fairly hardy not to melt at the Luc Jacquet short that followed: a remarkably charming exploration of the origin of the brand’s finest cashmere and the lives of those who farm it, complete with endless scenes of lovely animals doing lovely things, the frothy tendrils of their precious coats catching on wooden pens and floating in the breeze.

At one point, a tiny baby goat is born and then dressed in a makeshift checked jacket to protect it from the weather; later, two Mongolian toddlers stagger towards it clutching bottles of milk to feed it with. There are goats who nimbly ascend icy mountains (the harsher the climes, the softer the cashmere). A year in the life of a goat and a goat herder is turned into a picture-perfect 20-minute documentary – and it’s captivating. But why?

“I think as a brand we’re lucky enough to have fantastic stories and fantastic heritage to tell to our customers. I think we also have the privilege of very interesting customers,” explains the brand CEO Fabio d'Angelantonio. “Loro Piana is a brand that attracts customers who are quality seekers. They look for beauty, they look for quality. They’re interested in understanding why this jacket is better than another jacket, and understanding the process behind it.” What better way, then, to showcase the quality of the products the brand manufactures than to invite an Academy Award-winning documentary maker to spend as much time as he pleases embedded among Mongolian herdsmen, observing and capturing the earliest stages in the lifecycle of a cashmere jumper? How better to prove the value of its final manifestation than through an exploration of its origin?

After all, the very essence of Loro Piana is found in the raw materials for its products: the brand’s designs aren’t flashy, its logo never prominent – the fabrics are simply the best. Over recent years, the label has dedicated much of its efforts to ensuring that sentiment can be sustained, working alongside the University of Camerino and the Agricultural University of Jilin to develop practices to help farmers to improve the quality of fibres harvested from their flock. While there are plenty of cut-price cashmere and fast-fashion brands who are happy to take huge quantities of lesser variants of goat hair, the better the fibres, the more money Loro Piana can pay for them – and thus less farming need actually ever take place.

“All this makes an entire cycle sustainable for the region and the nature,” explains d'Angelantonio. “Because you can have communities that are economically sustained without putting the land at risk.” Essentially: if your flock is good enough to supply Loro Piana, you can get paid more for less farming, which puts less pressure on the farmers and the land alike. It makes a convincing case for the idea that less is more.

That idea is, in fact, what inspired Jacquet to embark on this project. After winning an Oscar for The March Of The Penguins in 2006, “For me, it was very obvious that I had to do something… So, I did a lot of movies around the relationship with nature. I set up an NGO, but I was, at the same time, absolutely convinced that nothing would be possible without economical connection with the big brands and the big companies.” Then, he met Loro Piana for the first time and “for them, being sustainable was pure economic realism: it was a way to secure the fibres, to secure the relationship with the breeders. I really like that, because for me it was an example that shows that you can make money, you can have a successful economic model, and you can be sustainable.”

The idea that sustainability can be seen as a financially savvy future, is perhaps the best way of looking at how a capitalist world can navigate away from the climate crisis; rather than assuming that nobody is going to buy anything again, or trying to coerce people against investing in fashion, encouraging transparent supply chains and environmentally friendly profitability seems like the only way forward. “It’s not sustainable because it’s fashionable today to be involved in this,” says d'Angelantonio. “I think this company has sustainability in its DNA, by definition, because our business starts from nature, and it would be crazy not to be respectful towards nature when managing such a business.” He certainly makes a good case for it. And, if you need any further convincing that a Loro Piana scarf comes from absolutely charming beginnings, then watch the film. Or, if you’d just like to see some frolicking goats. Both are on offer here.

Mineral and raw material processing laboratory set up www.montsame.mn

Ulaanbaatar /MONTSAME/ A Mongolia-China joint mineral and raw material processing laboratory has been established at the Institute of Chemistry and Chemical Technology of the Mongolian Academy of Sciences (MAS).

Bear shot and killed in Mongolia after destroying ger www.news.mn

A black bear has been shot and killed in Bat-Shireet Soum of Khentii Province after destroying a ger (yurt). Fortunately, the ger was empty when the animal attacked.