Ministry of Finance estimates budget deficit at MNT 1.9 trillion in 2019 www.zgm.mn

Minister of Finance Khurelbaatar Chimed submitted the bill on 2019 State Budget to the Parliament for approval last Friday. The bill estimated budget balance to be MNT 1.9 trillion in deficit with MNT 9.7 trillion revenue and MNT 11.6 trillion expense. The deficit equals 5.2 percent of total GDP. The 2018 budget balance was estimated at MNT 2.4 trillion in deficit. The minister noted that next year’s budget revenue did not include two income sources from Stabilization fund and Future Heritage Fund. If added, the budget balance may total MNT 11.1 trillion in surplus for the first time. “In preparing the budget, we evaluated Mongolia’s economic growth to be 8 percent in 2019. The package bills on taxes were prepared this year and submitted to the Parliament. These taxes will take effect starting from January 1, 2019. We expect the new taxes will have significant impact in increasing economic activity, supporting the operations of small and medium enterprises and attracting foreign investors,” remarked Mr. Khurelbaatar. He added, “For instance, the corporate income tax will be 1 percent for entities with an annual revenue of less than MNT 1.5 billion. Private entities were previously required to submit four tax reports every year. They are now required to submit 1-4 reports depending on their income with the revision. Secondly, an extensive inspection involving over 10 government agencies was co-conducted in tavan tolgoi and border checkpoints. There were some cases were certain amount of coal that were being transported through Gashuunsukhait border checkpoint was lost due to lack of monitoring, as well as quality issues.

Ministry of Finance expects external debt to equal 55 percent of GDP in 2019
Therefore, the Government decided to allocate budget to create comprehensive system to improve monitoring, install x-ray equipment and cameras, which will be government by a single agency. Also starting from 2019, oil products that are being imported through four border checkpoints will be examined by cutting-edge technology. The budget included the necessary financing to install the equipment.” Within the frames of the package bills on taxes, customs databases are expected to be merged and will be commissioned in 2019. The Ministry of Finance expects the unified database will allow taxes to be fully collected and stop tax evasions. According to the budget bill, foreign loans and aids will account for MNT 1.3 trillion of the revenue and remaining will be built up from domestic sources. The ministry estimates the external debt to equal 55 percent of GDP, which is 26.2 percent lower than 2017. “We are increasing the number of projects to be implemented with foreign loans and aids. Prime Minister Khurelsukh Ukhnaa signed an agreement worth USD 350 million to increase the drinking water supply in Ulaanbaatar. Considering the cost of establishing a wastewater facility in Ulaanbaatar, the total expense on water will total USD 650 million. The amount of investment from the state budget totals MNT 1.36 trillion, which doubles the amount of this year,” informed Mr. Khurelsukh. Additionally, MNT 720 billion was allocated a for increasing salary, pension and welfare, while MNT 200 billion has been allocated for air pollution reduction in 2019 Budget.

Scientists weigh call for much deeper cuts to coal pollution www.bloomberg.com

A panel of the world’s top climate scientists is preparing to recommend much deeper cuts in fossil-fuel pollution than currently suggested as a pathway to stave off a dangerous increase in global temperatures.

Utilities by 2030 would have to consume just a third of the coal they burn now to hold global warming since the start of the industrial era to 1.5 degrees Celsius (2.7 Fahrenheit), according to a draft of the findings that the group will consider when it meets starting Monday in Incheon, South Korea. The cut is more than twice as steep as the boldest scenario outlined by the International Energy Agency.

The recommendations due for release on Oct. 8 are meant to build on the the three-year-old call to action in the Paris Agreement on climate change. While President Donald Trump has called the issue a hoax and vowed to pull out of the deal, governments across Europe and Asia are working to restrain emissions, and the scientists suggest they must move faster.

“It’s certainly a very ambitious target,” said Tim Buckley, director of energy studies at the Institute for Energy Economics and Financial Analysis. “Will we see it happen by 2030? Probably not — not in any models we’re seeing at the moment. But thanks to technology, the markets are moving away from coal really fast.”

The report by the United Nations’ Intergovernmental Panel on Climate Change draws together hundreds of climate scientists from 195 nations. They’re distilling thousands of academic papers into digestible advice for policymakers. Top officials from the panel will weigh every word of the report starting Monday and deliver a final version next week.

The world has warmed almost 1 degree Celsius since the start of the industrial revolution in the early 1800s, and previous reports from the group focused on holding the increase to 2 degrees. Even that level would represent the quickest shift in the climate since the last ice age ended about 10,000 years ago.

This report, commissioned after the Paris deal, stemmed from concerns that island nations would be swamped by rising seas and more violent storms associated with global warming. Scientists link global warming with increasing concentrations of carbon dioxide in the atmosphere, a byproduct of burning fossil fuels, especially coal.

Coal industry officials say that slashing access to their fuel will slow economic growth and leave millions of people trapped in poverty, unable to access affordable electricity.

“It seems to me very unlikely that we will want to use substantially less energy in the future,” said Brian Ricketts, secretary-general of the European Association for Coal and Lignite. “Using energy has allowed us to progress. Using more energy is necessary to create a better world for everyone.”

Carbon dioxide emissions from energy use climbed 1.6 percent in 2017 after three years of little change, according to data from BP Plc. Seventeen of the 18 warmest years during the last 136 have all happened since 2001 with 2016 ranking as the warmest on record, the U.S. space agency NASA has concluded.

Coal currently feeds about 27 percent of the world’s energy demand. That proportion is likely to drop to about 22 percent in 2040 as governments move toward cleaner energy policy, according to the IEA, the Paris-based institution that advises governments on energy.

Under a bolder outlook that assumes quicker action to protect the atmosphere, coal use would fall to 13 percent of the energy market by 2040 — almost double the proportion that the IPCC is weighing as a recommendation. Bloomberg NEF forecasts that global coal generation will peak around 2027 before falling to 11 percent of world electricity by 2050.

Both the IEA and the World Coal Association declined to comment on the draft ahead of publication.

For now, some governments are pressing ahead with meeting commitments under the Paris agreement even though Trump is working to boost the coal industry. China is scaling back its program to expand coal power, and Europe is working to phase it out completely. In Germany, Chancellor Angela Merkel nominated a panel to advise her when the nation can close all its coal plants. The U.K. has vowed to scrap coal by 2025.

Trump’s reluctance to embrace climate science has slowed momentum at the UN talks that produced the Paris Agreement. Envoys at those discussions floundered over the details of a rulebook on how to implement the 2015 accord. They hope to endorse those guidelines at the end of this year at a meeting in Poland, spelling out both how $100 billion in climate-related aid will be delivered and market mechanisms that would spur further emissions cuts.

Delegates at the IPCC meeting go through their findings line-by-line this week in South Korea then sign off on a summary document to be formally released by the gathering on Oct. 8. The envoys are likely to amend parts of the draft before it’s released.

2019 State Budget Bill submitted to Parliament www.montsame.mn

Ulaanbaatar /MONTSAME/. The Minister of Finance Ch.Khurelbaatar submitted the bill on the 2019 State Budget which was approved by the Government.The budget revenue is calculated to be MNT9 trillion and 676.5 billion or 27.4 percent of the GDP and the expenditure as MNT11 trillion 589.8 billion or 32.8 percent with a deficit of MNT1 trillion 913.3 billion or 5.4 percent of the GDP.

Mongolia’s first official digital currency now in circulation www.montsame.mn

Ulaanbaatar /MONTSAME/. The ceremony for ‘Digital currency’--a new method of payment has taken place at the Bank of Mongolia today.

Foreign Minister meets with OSCE Secretary-General Thomas Greminger www.montsame.mn

Ulaanbaatar /MONTSAME/ On September 27, Minister of Foreign Affairs of Mongolia D.Tsogtbaatar met with Secretary-General of the Organization for Security and Co-operation in Europe (OSCE) Thomas Greminger and exchanged opinions on bilateral cooperation.

UN highly appreciates Mongolia’s contribution to maintaining nuclear-free Korean peninsula www.montsame.mn

Ulaanbaatar /MONTSAME/ During the 73rd Session of the United Nations General Assembly Prime Minister of Mongolia U.Khurelsukh met with the UN Secretary-General Antonio Guterres on September 27. The parties exchanged views on relations and cooperation between Mongolia and the UN.

Tavan Tolgoi coal to be transported to third markets through Taman port www.zgm.mn

A delegation led by the Minister of Mining and Heavy Industry of Mongolia Sumiyabazar Dolgorsuren paid a working visit to the Russian Federation on September 23-25. During his visit, Mr. Sumiyabazar held bilateral meetings with Igor Sechin, CEO, Chairman of the Management Board, Deputy Chairman of the Board of Directors of Rosneft, and Igor Levitin, Aide to the President of Russia. During the fourth Eastern Economic Forum, President of Mongolia Battulga Khaltmaa and his Russian counterpart Vladimir Putin discussed issues, such as the construction of natural gas pipes, economic corridor and the celebration of the 80th anniversary of the victory at the Battle of Khalkha River together. Mining Minister Sumiyabazar and Rosneft President Igor Sechin exchanged views on wide range of issues including conducting joint research on oil exploration in Mongolia, construction of oil refinery, studying possibilities of building gas pipe through Mongolia at the site and celebrating the 80th anniversary of the victory at the Battle of Khalkha River. In addition, Rosneft agreed to provide fuel for the new airport in the Khushig Valley. “Fuel is an important strategic product for Mongolia. Therefore, it is necessary for us to maintain its supply and increase the capacity of warehouse at the border.

First meeting of Mongolia-China joint research team held www.montsame.mn

Ulaanbaatar/MONTSAME/ The first meeting of the joint research team in charge of studying possibilities to establish free trade agreement between Mongolia and the People’s Republic of China, was held in Ulaanbaatar, Mongolia on September 26-27.

Mongolia, Russia to enhance cooperation in mining www.xinhuanet.com

ULAN BATOR, Sept. 27 (Xinhua) -- Mongolia and Russia will enhance cooperation in the mining sector, especially on the exploration of a coal mine in southern Mongolia, a statement from the Mongolian Mining and Heavy Industry Ministry said Thursday.

This Singaporean Fintech Startup Introduced Mobile-based Microlending to Mongolia www.entrepreneur.com/

In Mongolia, where the average monthly income is $400, getting credit and small bank loans is difficult. So the citizens turn to friends or family members for financial help.

Anar Chinbaatar and his friends Boldbaatar Ochirsuren and Bayarsaikhan Volodya got so tired of friends asking to borrow money, that they established AND Global in 2015 to provide non-collateralized instant consumer, micro and micro business. “The endless queues and paperwork requirements of traditional banks are time consuming, and people often are forced to risk their valuables as collateral for pawnshops or other non-traditional lenders. The lending industry in Mongolia is fractured,” says Chinbaatar, the chief executive officer of the Singapore-registered fintech startup.

AND Global started off in microlending in Mongolia. It raised $1 million in seed funding in April 2016, and later received $4 million with a $30.8 million valuation from influential backers in Mongolia and Japan including former Japanese parliament member Takami Yuichi, investor Satoshi Matsumoto and his wife Yasuyo Matsumoto.

“We've developed a suite of digital financial solutions from micro-lending all the way to p2p money transfers for the people in emerging countries,” says Chinbaatar, who, along with his co-founders, has now expanded to other countries in Asia. At present, the company has 220,000 registered users and 63,000 active borrowers. The company has seen 45 per cent month-on-month growth rate for new customers, and the app has a 4.6 star rating in the Google Play Store.

In an interview, we asked Chinbaatar about his business model, work strategy and future plans. Edited excerpts:

What's the idea behind AND Global?

The idea arose from the concept of having a better form of lending since informal lending is common in emerging markets like Mongolia. This is because access to capital is very difficult in emerging markets, particularly for people without a long financial history. Most people have the “willingness and ability” to pay back what they borrow. So the only challenge is to assess potential customers using non-traditional methods and provide them with tailored financial products that fit their needs and ability to repay.

Why AND Global?

“AND” means best friend in Mongolian. We treat our customers like our “best friends”. The way we do this is to use the latest AI technology, combined with non-conventional data, to help identify how much our customers can afford to borrow.

How does LendMN work?

LendMN is the Mongolian consumer face of AND Global. Customers download the LendMNapp, fill in the application, and get approved for a specific credit amount. We use machine learning to offer collateral-free loans to individuals and micro businesses: this technology allows us to issue personal loans in less than 5 minutes. It’s a convenient, speedy and collateral-free service, all carried out through a mobile app. None of these features are offered by traditional finance companies in Mongolia.

How does AND address the issue of loan sharks?

Loans sharks take advantage of people’s desperate situation by taking valuables as collateral, and charging weekly interest rates up to 10 per cent. The approach doesn’t help people in the long run, but instead, they end up losing their collateralized valuables because they cannot repay the loan on time.

We not only charge lower fees for loans, but we don’t take valuables as collateral. Additionally, we are more focused on educating people about financial discipline by providing them a smaller loan that can be repaid without a heavy financial burden, and gradually increasing to the level where the customer is able to repay. Once they have the basics, they become eligible for larger and more official financial services provided by traditional institutions like banks. In July and August, we issued a total of US$9.5 million in loans, and have a repayment rate of 98.5 per cent.

How much money did you initially invest in the venture?

The first $1 million took six months to raise. There aren’t any VCs in Mongolia. There’s no startup ecosystem: people don’t know about startups. So we started at the bottom, showing people a one-pager about our “crazy idea”: lending money with no collateral. People really thought we were crazy. All of the angel investors were actually traditional investors. We had to explain why there wouldn’t be personal responsibility for bankruptcy. But it goes beyond that. It’s an opportunity to create a Mongolian brand from our Singapore international headquarters. An opportunity for the new generation. Different investors respond to different pitches.

After meeting almost 100 investors, we were finally successful in raising $1 million from three angel investors: Oyungerel Janchiv and Idermaa Garavsuren from Mongolia, and Japanese investor Takami Yuichi.

What is your interest rate?

We offer tailored loan products with variable rates for each individual. This varies somewhere between 3-6 per cent a month of the total loan, including all transfer and processing fees. Customers can decrease their fee and increase the loan amount by demonstrating reliable, on-time repayment behaviour.

Did you face any backlash for financial institutions?

Initially, all banks and traditional institutions did see us as a threat, which is natural. Being the first non-bank financial institution was a big challenge for us in Mongolia. They thought it was phishing or hacking or money laundering.

To overcome such challenges, we took LendM public on the Mongolian stock exchange in March, raising $2.1 million. The initial stock price was 25 Mongolian Tugrik. However, in less than four months, it’s reached 69 Mongolian Tugrik and the market capitalization of the local company is valued at $20 million. The whole purpose was not only to raise money, but also to get social license and to prove the valuation of our business model. Imagine that we have such valuation in our first pilot small market, what the valuation would be after we entered 100 times bigger market in South-East Asia. That is the opportunity we tell our partners and investors to realize.

Future plans for AND Global?

We are replicating our lending solutions across new geographies in Southeast Asia, especially in markets like the Philippines and Myanmar. Once we have the proper licensing, we'll be in a good position to go into production in these markets. We have official teams and offices in Singapore, the Philippines and Myanmar to help expedite the expansion process.

We are also trying a new franchising model: we are building our fintech platform on a cloud system to make it available for every country in the world to use. It will be available as a free software trial, and we’ll provide complete support to those who become paying customers.

Vertically, we are introducing newer financial services beyond microlending. With our existing app, customers will now be able to pay their bills, send money to their friends, and make payments using QR technologies.