Energy and Infrastructure Issues www.zgm.mn

Part 2: How the Asian countries manage the energy trilemma (energy security, energy equity, and environmental sustainability) to face to the growing huge energy demand?

Currently coal plays a major role for a wide range of Asian countries, and nuclear remains an important solution for de-carbonization. According to McKinsey, the 5 countries where LNG imports increased the most during H1 of 2018 are all in Asia and all experienced LNG import volume increased of at least 12% year-on-year

The Asian countries take various measures aiming to reducing carbon emission and have invested in the renewables energies, in energy storage and in E-vehicles.

National level

The current situation and the challenges on energy generation of some Asian countries will be described. The data of the World Energy Council are used.

Currently Chinese electricity generation is based on coal, oil and gas. In April 2015 China became the world’s largest oil importer and imported 356 million tons of oil, four times the import amount of the year 2000. The country is expected to become the world’s top LNG importer by 2030.

China’s 13th Five Year Plan for Economic and Social Development (2016-2020) includes a set of clean energy related objectives, with clear targets for energy consumption cap and a 15% goal for the share of nonfossil-based energy in the country’s primary energy mix.

In India over 80% of electricity generation is coal based. At the same time, India is also working to incorporate renewable energies into its supply mix. The country has a high renewable energy target 175 GW by 2022 and 275 GW by 2026-2027.

Japan continues to rebuild and rethink its energy plan post Fukushima. Of the 54 nuclear reactors that were either in operation or under construction in 2011, only five are currently in operation. Japan’s reliance on imported fossil fuel has increased to almost 90%. One of the main issues to be addressed in the near future will be the Japanese government’s concrete plan to rely on nuclear power to generate 20-22% of the country’s electricity by 2030.

In Malaysia 51% of electricity generation is entirely imported coal. The country is expecting big changes towards a much healthier, greener direction by 2030. Malaysia is well on its way to reaching the 50% Renewable Energy target by 2050, with current levels at 21.67% (7,271Mw). Malaysia has achieved about 33% reduction of carbon emission intensity per unit of GDP.

In Mongolia according to the Green development policy approved in 2014 renewables will account for 20 percent of its power capacity in 2020 and 30 percent by 2030. Mongolia’s renewable capacity nearly doubled in 2018, reaching 155 MW.

Regional and supra-regional level

a) Energy sector

In Asia there are a number of regional projects regarding energy and infrastructure, but we have selected only some of them.

Southeast Asian energy outlook

In the Southeast Asia with a total population of nearly 640 million, an estimated 65 million people remain without electricity.
Demand in the power sector in Southeast Asia countries is expected to tripling from 2013 to 2040. To this end the investments of USD 618 billion in generation and USD 690 billion in the transmission and distribution of power are needed. Southeast Asia remains an important producer of oil, gas and coal, but the domestic supply is decreasing and demand is increasing. Nevertheless these countries will have net imports of 6.9 mb/d of oil in 2040 require USD 280 billion in annual outlays by 2040. Apart from the mounting import bill, the region’s increasing dependence on imported energy raises significant energy security concerns.

The putting into place of the ASEAN Power Grid (APG), a flagship program set up in 1997 by the ASEAN Heads of States/ Governments, would help the regional economic growth and ensure regional energy security. The MOU of the APG was signed by Energy Ministers in July 2007.

By the mid-2020s the region as a whole turns into a net importer of gas. This situation has important implications for infrastructure development in the region. Various bilateral pipelines are in operation today, but an important task is integrating them into a harmonized regional pipeline network. The Trans-ASEAN Gas Pipeline project attempts to achieve this and could bring important energy security benefits for the region.

Northeast Asian Super grid

After the collapse of the Soviet Union in the early 1990s various proposals were suggested regarding oil, gas pipelines and power grid interconnections in Northeast Asia.

Russia and China initiated oil pipeline discussions in 1993. The Vostok gas pipeline was subject to the negotiation between Moscow and Seoul project in the early 1990s.

Regarding the power, the concept of the Asian Super Grid was announced in 2012 by Softbank CEO Son Masayoshi, a project of his Japan Renewable Energy Foundation (renamed as Renewable Energy Institute ), in the post-Fukushima shift in Japan toward renewable energy. Mongolia’s Gobi Desert would be the site of a giant wind farm that would feed a regional grid linking Mongolia with high voltage direct current (HVDC) transmission lines to Japan, South Korea, China and Russia.

At the September 2018 Eastern Economic Forum, Northeast Asian leaders from Russia, China, Japan, South Korea and Mongolia called for Northeast Asian regional energy cooperation but emphasized different priorities. Xi Jinping promoted the idea of transnational infrastructure and a regional energy regime. Japan and South Korea were interested in LNG from Russia which does not require cross-border infrastructure cooperation. Mongolia wanted a Russian gas pipeline that transited Mongolia to China. At this forum Mongolian President Khaltmaa Battulga called for starting construction on the North- East Asian Super Grid.

So currently it lacks a common understanding on how energy relations should be organized in Northeast Asia’s energy supply. Nevertheless, institutionalizing Northeast Asian Super grid continues to be a region-wide goal. During the April 2019 meeting with the Mongolian officials ESCAP expressed its intention to encourage the creation of the North East Asian Super Grid project.

b) Infrastructure sectors

Eurasian Initiative

In October 2013, South Korea proposed an ‘Eurasian Initiative’, designed to build geo-economic links that would start from Pusan to North Korea, then either through Russia or China to link up with Central Asia and Europe. The South Korea President expressed the hope that the Demilitarised Zone (DMZ) could be turned into a ‘Dream Making Zone’.

High-speed inter-continental link

Russia has a very ambitious plan to develop a high-speed inter-continental link between London and New York across Eurasia on land and through a proposed sea tunnel joining physically Siberia and Alaska. China has a similar plan to connect its rail lines to the Trans-Siberian Railway as part of the eventual London to New York route. This train line on earth is estimated to be 20,000km long.

Belt and road initiative (BRI)

Chinese national oil companies (NOCs), especially China National Petroleum Corp (CNPC) began going out in 1993 seeking oil and gas resources.

The going out strategy created four interconnected energy channels: the Kazakhstan-China oil pipeline, the Myanmar-China oil and gas pipelines, the Russia-China oil and gas pipelines, and the Central Asia-China gas pipeline. At present, Chinese NOCs have invested in equity oil and have purchased assets in the Middle East, North America, Latin America, Africa, and Asia. As it was noted by Gaye Christoffersen, these energy channels would become a basis for the economic corridors of BRI.

The Belt and Road Initiative (BRI) aims to strengthen infrastructure, trade, and investment links between China and some 65 other countries that account collectively for over 30 percent of global GDP, 62 percent of population, and 75 percent of known energy reserves. The BRI consists primarily of the Silk Road Economic Belt, and the New Maritime Silk Road. Six other economic corridors have been identified to link other countries to the Belt and the Road (BCIM economic corridor connecting Bangladesh, China, India, and Myanmar; China-Mongolia-Russia economic corridor; New Eurasian Continental Bridge;

China-Central Asia-West Asia economic corridor; China-Indochina economic corridor; and China-Pakistan economic corridor).

The BRI was ans is subject to a wide range of studies and comments, for this reason we will not stop on this issue any longer. Gerald Chan (University of Aukland) made the following synthesis relating to Asian countries responses related to the BRI:

China has played a leading role in launching the newly created financial organizations such as the New Development Bank (or the BRICS bank), the Asian Infrastructure Investment Bank, the Silk Road Fund, and Shanghai Cooperation Organisation’s Interbank Union.

I will be back home with belts of all professional boxing organizations www.montsame.mn

On June 7th, silver medalist of the Olympic Games and world championships, IBO world champion, Honored Athlete of Mongolia N.Tugstsogt held a press briefing about his forthcoming match and future goals. His bout this time will be for the WBC belt.

Huawei: 'We stand naked in front of the world' www.bbc.com

Huawei has denied that it has any links to the Chinese government.

Huawei's cyber-security chief John Suffolk told MPs on Monday that the tech giant had never been asked by China or any other government to "do anything untoward".

Mr Suffolk said Huawei welcomed outsiders to analyse its products and detect engineering or coding flaws.

"We stand naked in front of the world, but we would prefer to do that, because it enables us to improve our products."

He added: "We want people to find things, whether they find one or one thousand, we don't care. We are not embarrassed by what people find."

Huawei was invited to the Technology and Science Select Committee to answer questions from MPs on the security of its equipment, and its links to the Chinese government.

The US has encouraged allies to block Huawei - the world's largest maker of telecoms equipment - from their 5G networks, saying the Chinese government could use its products for surveillance.

Huawei's cyber-security chief John Suffolk said the tech giant has no access to mobile networks
"We've never had a request from the Chinese government to do anything untoward at all," said Mr Suffolk.

"We have never been asked by the Chinese government or any other government, I might add, to do anything that would weaken the security of a product."

MPs raised concerns about Chinese human rights abuses, such as reports that up to a million Muslims are in detention centres in Xinjiang province.

They asked whether Huawei was required to provide equipment to Xinjiang province, especially in light of the 2017 Chinese intelligence law, which requires individuals and associations to comply with Chinese intelligent agencies.

Mr Suffolk said: "We have had to go through a period of clarification with the Chinese government, that has come out and made it quite clear that that is not the requirement of any company.

"We've had that validated via our lawyers and revalidated by Clifford Chance...according to our legal advice, that does not require Huawei to undertake anything that weakens Huawei's position in terms of security."

Huawei said it would have no access to any data on a 5G mobile network
In reply, Mr Suffolk stressed that Huawei is a provider of telecommunications equipment to mobile network operators.

"We don't run networks, and because we don't run the network, we have no access to any of the data that is running across that network," he said.

He also explained that Huawei is only one of about 200 vendors who would be providing various different bits of equipment that would eventually make up a 5G network in the UK.

However, if an operator were to have a problem with Huawei equipment, a support centre based in Romania would be able to remotely access the equipment to fix the problem.

MPs wanted to know whether it would be possible for a 5G network to be used to track an individual user.

In response, Mr Suffolk explained that mobile phone technology requires the mobile operator to constantly track a user's phone, in order to be able to connect them to the mobile network.

By that logic, the operator is constantly tracking all of its customers, all the time.

He also told MPs that only about 30% of the the components in Huawei products are actually made by the company - the rest of the components are obtained from a global supply chain that Huawei closely monitors in order to prevent security breaches.

Asian markets cheer up as China’s 200% trade surplus defies effects of trade spat with US www.rt.com

Exceeding all the analysts expectations, exports of goods from China saw a dramatic surge in May as Chinese trade activity demonstrated stiff resistance against the ongoing trade battle with Washington.
China’s trade surplus last month totaled $41.65 billion, marking nearly a 200 percent monthly growth against $13.84 billion fixed in April, according to the latest data released by China’s General Administration of Customs.

Mongolia declares war against syphilis www.xinhuanet.com

ULAN BATOR, June 10 (Xinhua) -- Mongolian Health Minister Davaajantsan Sarangerel on Monday declared war against the sexually transmitted disease (STD) syphilis, a growing public health concern in the East Asian country.

China's foreign trade up 4.1% in the first five months www.chinadaily.com.cn

China's foreign trade of goods went up 4.1 percent year-on-year in the first five months to 12.1 trillion yuan, customs data showed on Monday.

Foreign Minister holds official talks with his Singaporean counterpart www.montsame.mn

Ulaanbaatar/MONTSAME/. Paying an official visit to the Republic of Singapore, Minister of Foreign Affairs D.Tsogtbaatar held official talks with his Singaporean counterpart Vivian Balakrishnan on June 6.

Stock Exchange weekly review /June 3-7/ www.montsame.mn

Ulaanbaatar /MONTSAME/. During the week of June 3, 2019 to June 7, 2019, MNT515,524,704.78 worth of securities were traded through 5 trading sessions on the MSE.

Mongolia’s economy needs diversification www.zgm.mn

Blog by O.Bayarkhuu:
Mongolia’s unique feature or a particular thing that differentiates the country from others? Our special feature is a democracy and freedom of the press. Indicators of democracy are great enough. On papers and international reports, Mongolia is a beautiful country like a rose, a brilliant star of democracy. In reality, it is completely different.

Democracy is being separated from real life. It has been 30 years without a “freedom of development.”

Let us continue with the corruption-filled series of poverty alleviation of Mongolians, the emergence of populism, the issues in the independence of the judiciary, the obstacles of public institutions, and the societal stresses. Poverty did not improve significantly since 1995. Discussions on necessary improvement began in the XXI century. There are still no results. I am writing to make a conclusion about it.

Our economy needs only a few important factors. Let us look at the economy at a macro level. Only the mining sector growth is visible, but it is accounting for a big part of the economy. However, it is not a good thing in the long term as a macroeconomy. Why does the mining growth affect the economy? The IMF has implemented six programs in our country. IMF recommends that more flexible, budget-free economy and more importantly, higher employment, and profitable businesses. In the 1990s, the transition program was successful. The “Stand by” program has helped a lot in 2008-2009 during the global economic crisis. The next program started in 2016-2017. There is a light. The debt burden equaled 100 percent of GDP, which now stands at 70 percent. Mongolia has a GDP of USD 11 billion. The IMF’s sustainable development program is worth 5.5 billion. The economic growth has fallen from 17 percent to negative 2 percent when the IMF’s sustainable development program started. What has saved us improved the economy is actually the growth of China’s coal imports.

Our economy is dependent on many things. The infrastructure is not developed enough. Until now, almost 3 percent of the 1000 km of the road had pavement, the only line of the north-south railway, which is dependent on Russia’s geopolitics. When we try to build another railway, we will have to deal with Russia’s geopolitical interest. As long as we have Ulaanbaatar Railway JV, there will be Russian interests. I do not want to blame it.

However, the multi-pillar foreign policy choice is invoking to be friendly with all countries around the world. There is no such relationship with all countries. Also, there is no noticeable economic relationship improvement with any country. Although it is the world’s least densely populated area, Mongolia is clumping in the capital. Huge social issues are created because of this.

The dissociation had already processed and different social conditions are growing rapidly. Social licensing issues are serious. Anti-mining conflicts and disputes tend to rise in mining-dependent countries, and civil movements trigger social disintegration. Even with 70 million livestock, agriculture does not strengthen social capital. Mining has also dominated other sectors, which is a negative impact. We only talk about a single line of cashmere to improve the non-mining sector. There is no ongoing activity in the development of rural areas and the overall turnover of agriculture. If our cashmere enters the world market, China will be our rival.

There is no coordination between mining and other economic sectors, so there is a war between mining and livestock. Disintegration is accompanied by populism. Populism has started to break the fundamental principles of democracy.

In addition, Mongolian politics is a restriction to economic and social development. The policy is unstable and uncertain. There are 140 development policies and programs to be followed. Most recently, the “National Program on Unemployment and Poverty Reduction” was adopted. It was supposed to promote economic growth, reduce unemployment, alleviate poverty, become an exportoriented country, and encourage other products, leading sectors, public-private partnerships, and implement the goal of reducing unemployment and poverty by human development and social protection policies. I hope these do not diverge and eventually be forgotten or changed by the next program.

There are 2000 draft documents, conventions, and recommendations. There is no mechanism to control the implementation of these documents. None at all

In fact, the economics of postcommunist countries that transcend Central and Inner Asia are even more profound. Mongolia is left behind by economic diversification. Mongolia has been marked as the country with the unspecified economy. Even worse than Tajikistan. When it comes to primary products, it does not go further than adding value to natural gas. That is why there is no diversity, just as President Battulga Khaltmaa said, it is simply an “inefficient economy.”

Those people who received loans from the SME Development Fund should diversify the economy. Government funds do not cover the SMEs, but international funding is effective. However, it does not reach the level of economic diversification. Having an export-oriented economy can save this country, and the government expects that poverty will be eradicated with an exportbased economy. They convince people to believe it. However, they do not go farther than talks.

Worcester couple preparing to take part in 4,000 mile Mongol Rally www.worcesternews.co.uk

A couple from Worcester will take on the challenge of a lifetime as they take on an epic 4,000 mile journey across Europe and Asia.

Francesca 'Frankie' Jones and her partner Jon Drinkwater decided to take on the challenge of completing the Mongol Rally, an annual endurance driving challenge which invites drivers to get to Mongolia in “The worst car they can find” which must be one litre or less.

The duo’s journey will begin in Prague in July before heading through Belarus, Latvia, Russia and into Mongolia before coming back into Russia for the final destination of Ulan-Ude in Siberia.

In total, the pair’s drive is expected to take around two months, and they have been preparing themselves for the journey and the difficulties they could face

Miss Jones, 23, said: “We have been preparing by driving the Mitsubishi Pajero that we will be using and getting used to it.

“We have got a tent in the roof which we will be sleeping in and we have got part of another Pajero which we will be using for spare parts when we need to make repairs.

“The journey will be interesting because the visa laws have changed meaning we only have 30 days to get across Russia so it will be a bit of a race against the clock.

"We will be taking it in turns behind the wheel and splitting it into shifts to make it easier.

“We aren’t quite sure what to expect climate-wise because in Mongolia we have been told it is extremely hot in the day and extremely cold at night.

"It is daunting because some of the areas we will be going can be pretty wild, but we are so excited for it we will just have to see for ourselves what it is like."

As part of the challenge, Miss Jones and Mr Drinkwater are raising money for two charities: Cool Earth, which is a rainforest charity, and The Ickle Pickles Children’s Charity, which provides incubators for babies.

One of the criteria for taking part in the Mongol Rally is that teams must raise at least £1,000 for charity, as well as being unsupported and ensuring their car is removed from Mongolia after the completion of the drive.

The Mongol Rally was first started in 2004 when six teams started and four finished the course.

Drivers are given a starting point, just outside of Prague, and an ending point in Russia, after that they can decide on their own route.

In 2015, the final destination was moved 500 km north from Ulaanbaatar in Mongolia to Ulan-Ude in Russia to save money on exporting the cars back home.

In the guide to the Mongol Rally, the organisers say that the adventure is not for the faint-hearted, saying: "If it's not dangerous and you aren't lost, you're not on an adventure.

"Any ‘Help! We’re broken down in Tajikistan,’ type phone calls to Rally HQ will be met with a snort of derision and a click of the receiver."

For more about Frankie and Jon's fund raising efforts, go tojustgiving.com/fundraising/frankie-jones8 andcoolearth.org/campaigns/25864/mongol-rally-2019-2/