Unenbat: Government should not interfere with commercial banks’ activity www.zgm.mn

Executive Director of Mongolian Bankers Association, Unenbat Jigjid gave an interview to discuss the recent decision of the Government to repay pension loans up to MNT six billion and its effect on the economy. He also named the fiscal discipline as one of the main aspects that can define the 2020 outlook.

China remains top destination for Mongolia exports in 2019 www.xinhuanet.com

China remained the top export destination for Mongolia's goods in 2019, an economic statistician at the Mongolian National Statistics Office reported Thursday.

Facebook to open Mongolian ‘War Room’ www.news.mn

Social media giant Facebook will set up a ‘war room’ to counter misinformation and interference in in the upcoming Mongolian parliamentary election scheduled for June 2020.

Mongolia’s Free Economic Zone on China’s doorstep www.news.mn

An investment forum entitled ‘The Connection between the Free Economic Zone and the Economic Corridor’ was held today (16 January) at the Mongolian National Chamber of Commerce and Industry. At the event, Mongolia’s policies on transport and logistics and the role and significance of the free zones were discussed. To date, Mongolia has invested a total of USD 58.8 million on construction at the site of the Zamyn-Uud Free Economic Zone (FEZ). However, so far, the Mongolian parliament has still not yet approved an intergovernmental agreement for establishing this FEZ.

Mongolian carriers become able to make transport to 16 countries www.montsame.mn

Ulaanbaatar /MONTSAME/ As a result of active work of the Ministry of Road and Transport for developing international road transport relations with European Union member states, conditions created to make transport with 16 countries, exchanging a letter of consent on conducting transportation.

The countries are the Russian Federation, China, Kazakhstan, Kyrgyzstan, Ukraine, the Democratic People’s Republic of Korea, Belarus, Latvia, Hungary, Turkey, Lithuania, Poland, Germany, Czech Republic, Georgia and Slovak.

Thanks to the agreement, Mongolian carriers have conducted 13.3 percent of total TIR transport, which is being made from European countries to Mongolia, in 2018, which was just one percent in 2016. Moreover, Intergovernmental Agreement on International Road Transport along the Asian Highway Network was established in 2016 within a program on establishment of Mongolia-China-Russia Economic Corridor. The agreement came into effect from July, 2019.

“The agreement is very significant for our land-locked country and since it is the closest way of transit transport to be conducted between Asia and Europe, it will make huge contribution to the country’s economy,” said G.Gantulga, Acting Head of Road Transport Policy Implementation and Coordination Department of the Ministry of Road and Transport.

In frames of the agreement, Mongolian carriers began performing transport by road from the Russian Federation to Tianjin border crossing passing through the territory of China. In particular, ‘Montrans auto’ LLC has successfully made the first trial transport. In addition, four vehicles of ‘Tuushin’ LLC have successfully operated transportation using TIR carnage from Irkutsk, Russia to China’s Tianjin border crossing at the beginning of January this year.

“As reflected in the Intergovernmental Agreement on International Road Transport along the Asian Highway (AH) Network, it is possible to carry out transportation along AH-3 Asian Highway network or from Ulan-Ude city of the Russian Federation to China’s Tianjin border crossing passing through Ulaanbaatar city and along AH-4 or from Novosibirsk, Russia to Honqiraf border crossing of China passing through Bayan-Ulgii and Khovd aimags” said G.Dorjpalam, Head of Transport Coordination Department of National Road Transport Center. In other words, it enabled Mongolian carriers to make transit transport along two highways that connected with Asian Highway Network. Transportation along west corridor is expected to commence at the end of 2020.

Customs accredited carriers, who have vehicle that meet the Euro-4 and higher ecological standards in accordance with the requirements in the territory of China, are fully available to carry out transport within the agreement. Aside from the intergovernmental agreement, a protocol, which was established with the Chinese Ministry of Transport on implementation of Intergovernmental Agreement between Mongolia and China on road transport, was renewed in 2019 in order to facilitate international trade and transportation. The protocol entered into force from January 1, 2020 and it allows transporting oversized, dangerous loading, which are unavailable to translocate, by truck with trailer that was registered in China.

Rio Tinto’s full-year iron ore shipments drop on disruptions from cyclone and fire www.reuters.com

Rio Tinto on Friday posted a 3% drop in iron ore shipments in 2019 as the Anglo-Australian miner’s operations faced disruptions due to cyclone and a fire at a port facility.

Russian government resigns as Vladimir Putin plans future www.bbc.com

Russia's government has resigned, hours after President Vladimir Putin proposed sweeping constitutional changes that could prolong his stay in power.

If approved by the public, the proposals would transfer power from the presidency to parliament.

Mr Putin is due to step down in 2024 when his fourth term of office comes to an end.

But there is speculation he could seek a new role or hold on to power behind the scenes.

Mr Putin put forward his plans in his annual state of the nation address to lawmakers. Later, in an unexpected move, Prime Minister Dmitry Medvedev announced that the government was resigning to help facilitate the changes.

Russian government sources told the BBC that ministers did not know about the government's resignation ahead of the announcement.

"It was a complete surprise," one source said.

What is Mr Putin proposing?
The Russian leader said during a speech to both chambers of parliament that there would be a nationwide vote on changes that would shift power from the presidency to parliament.

Constitutional reforms included giving the lower house of parliament, the State Duma, "greater responsibility" for the appointment of the prime minister and the cabinet.

Vladimir Putin: Russia's action man president
Currently, the president appoints the prime minister, and the Duma approves the decision.

Mr Putin also suggested an increased role for an advisory body called the State Council. The council, which is currently chaired by Mr Putin, comprises the heads of Russia's federal regions. Mr Putin said it had proved to be "highly effective".

"These changes, when they are adopted... will introduce substantial changes not only to an entire range of articles of the constitution, but also to the entire balance of power, the power of the executive, the power of the legislature, the power of judiciary," Mr Medvedev said of Mr Putin's proposals.

"In this context... the government in its current form has resigned."

Mr Putin thanked Mr Medvedev for his work but said "not everything" had been accomplished.

He asked Mr Medvedev to become deputy head of the National Security Council, which is chaired by Mr Putin.

The president later nominated tax service chief Mikhail Mishustin to replace Mr Medvedev as prime minister.

Mr Medvedev has been prime minister for several years. He previously served as president from 2008-2012, switching roles with Mr Putin - a close ally - after the latter served his first two terms as president. Russia's constitution only allows presidents to serve two consecutive terms.

Even when he was prime minister, Mr Putin was widely seen as the power behind then President Medvedev.

Opposition leader and leading Kremlin critic Alexei Navalny said he believed that any referendum on the constitutional changes would be "fraudulent crap". He said Mr Putin's goal was to be "sole leader for life".

The last time Russia held a referendum was in 1993 when it adopted the constitution under President Boris Yeltsin, Mr Putin's predecessor.

Mr Putin became acting president following Mr Yeltsin's resignation in 1999 and was formally inaugurated a year later. He has held the reins of power - as president or prime minister - ever since.

Part of Putin's bigger plan?
President Putin likes stability. It's his thing. So the newsflash that the entire government had resigned was a big surprise. From the online chatter, it seems even the cabinet ministers didn't see it coming. For a moment it was like a flashback to Russia of the 1990s, when President Yeltsin changed prime ministers as readily as his socks. Vladimir Putin is no Yeltsin, though, and this move looks like part of some bigger plan that's all about consolidating - and extending - his hold on power.

Under the current rules, Mr Putin must step down as president in 2024 and it's never been clear what he'd do next. That's still true. But the constitutional tweaks he's proposed are hints at some options. He's bumped up the status of the little-known State Council, which he already heads. Or he could become PM again, now he's slightly weakened the powers of Russia's president.

If he is sticking around, perhaps he needs to make that palatable to people given all the social and economic problems he had to list once again in his annual address to the nation. If Mr Putin were to blame for their woes, Russians might well wonder why they should swallow him staying on, post-2024. Dmitry Medvedev - so often useful to Mr Putin - for now looks like a handy scapegoat.

What else did Mr Putin say?
In his address to parliament, the president unveiled a series of plans to increase the number of children being born in Russia. Like several Eastern European states, Russia has been struggling with a declining birth rate.

Last year Mr Putin promised tax breaks for bigger families.

On Wednesday he pledged state funding for new mothers in a bid to increase the number of children being born from an average of fewer than 1.5 per woman to 1.7 within four years.

So-called "maternity capital" has until now only been paid to families with at least two children.

Welfare benefits will also be paid for children aged three to seven in low-income families, and free school meals will be provided for the first four years of school.

Russia's population has struggled to recover from a dramatic decline in the 1990s.

Related Topics

Mongolia named as one of the places to go in 2020 www.montsame.mn

Ulaanbaatar /MONTSAME/ The New York Times made a list of 52 places to go in 2020. Mongolia has been named in the 47th of the list and it mentioned reasons for travel, landscape features and ongoing measures to boost tourism. It wrote:

Mongolia has Come a Long Way – What is Needed to Consolidate These Gains? www.worldbank.org

Victoria Kwakwa, World Bank Vice President for East Asia and Pacific UB Post
Sustained economic recovery requires sound economic management and improvements in the investment climate to diversify the economy.

When I last visited Mongolia in 2016, the country was on the brink of a deep economic crisis, with a large fiscal deficit and unsustainably high debt. The changes since then have been remarkable. Thanks to the government’s efforts under the Economic Recovery Program, supported by international partners, Mongolia’s economy has recovered strongly. Since 2017, economic growth has averaged 6.5 percent, the government turned a fiscal deficit of 15.3 percent of GDP in 2016 to a surplus of 2.6 percent last year and debt levels have come down, although they remain too high.

The World Bank has supported this progress with two budget support operations, aiming to close budget loopholes, improve the targeting of social spending and strengthen the investment climate to stimulate private sector job creation. Our colleagues at the International Finance Corporation and the Multilateral Investment Guarantee Agency have also contributed through engagements in the financial and mining sectors. Mongolia’s upcoming graduation from the International Development Association—the arm of the World Bank Group that provides concessional finance to low-income countries—is a sign of confidence in Mongolia’s development trajectory and reaffirms its middle-income country status.

As impressive as these gains are, there is still work to be done. In the face of an increasingly volatile and uncertain international outlook, Mongolia needs to remain vigilant to avoid policy reversals and ensure broad public support for necessary reforms. Three key risks stand out.

First, poverty remains stubbornly high. Preliminary calculations by the statistical agency suggest that urban poverty rates in particular have stagnated. While herders and rural workers have benefited from high meat prices, the robust economic performance of mining and manufacturing has not translated into sufficient income opportunities for the majority of the urban population. Creating more and better jobs remains an urgent priority.

Second, to create lasting improvements in people’s livelihoods ultimately will require improving governance and building stronger institutions. This is key to further improve confidence among private investors and to deliver better quality public services.

Lastly, weaknesses in the financial sector and the country’s external balances remain the Achilles’ heel of Mongolia’s economic stability.

What can policy makers do to address these risks and break the boom-and-bust cycle?

The government needs to maintain its course on reforms. It needs to focus on actions to create more private sector jobs and higher income opportunities while resisting pressures to go back to the practice of fiscal hand-outs. A transparent and predictable investment climate is key.

Poor and vulnerable households will need to be protected and supported. Social protection systems could be further strengthened, and social transfers better targeted. Looming fiscal liabilities in the country’s pension system need to be addressed. Bolder reforms are required.

Financial sector risks need to be urgently addressed. A successful recapitalization of the banking sector as agreed with the International Monetary Fund would provide critical financial resilience in case of negative external shocks. In the face of global uncertainty, Mongolia can ill-afford to let this issue linger. Addressing anti-money laundering issues to get Mongolia off the Grey List of the Financial Action Task Force (FATF) will ensure continued access to international bank lending.

Finally, the Bank of Mongolia can allow greater flexibility of the exchange rate and limit the volume of its interventions. It is now, when the economy is still performing relatively strongly, that it is the easiest to get savers and investors used to greater exchange rate volatility.

The international community is ready to support Mongolia in addressing these challenges, building on the gains achieved over the past three years. Since 1991, the World Bank has been a steadfast partner for Mongolia, providing over US$1billion in development financing to the country. We have invested in building infrastructure, strengthening education and health systems, and improving governance. We are proud of the progress made to date and look forward to further strengthening our partnership with Mongolia as a middle-income country with aspirations to improve living standards for all its citizens.

Mongolia has come a long way. Let’s consolidate these gains togethe

Late, but not last: Mongolia steps toward digital transformation www.zgm.mn

American Chamber of Commerce in Mongolia (AmCham) held its monthly meeting yesterday and touched upon digital transformation opportunities, highlighting recent developments Mongolian IT companies. Mongolian tech companies have already started penetrating Asian markets as New Media LLC, LendMN non-banking financial institute and iHotel were listed on the Top 100 startups of Asia.