Mongolia joins the ADDIS Tax Initiative www.addistaxinitiative.net

The Addis Tax Initiative (ATI) is pleased to welcome the newest ATI member Mongolia and acknowledge their commitment to increasing domestic revenue mobilisation (DRM) towards sustainable development. The Addis Tax Initiative continues to grow, now including 25 partner countries, 20 development partners and 16 supporting organisations.

MoF introduces benchmark prices for mineral products www.zgm.mn

The Ministry of Finance (MoF) introduced the benchmark prices for mineral products to be exported in January. Particularly, the price of zinc per ton was estimated the same as the London Metal Exchange (LME)’s price of December, equalling USD 2,273.41. The price of copper stands at USD 6,062 per ton. Analysts at Goldman Sachs, Morgan Stanley, and Standard Chartered are optimistic about the outlook for 2020. The main consumer China’s demand may grow 2.6 percent this year, according to Citigroup. The Ministry of Finance estimates that in January the price of fluoride concentrate to be at USD 406-415 per ton and fluorite ore at USD 264-324. Mongolia is the third-largest exporter of fluorite in the world after China and Mexico. Demand is likely to continue to rise along with the price, reports Baylag Jonsh LLC, a fluorite exporter. The price for iron ore with a 60 percent concentration is estimated at USD 78.98. According to Bloomberg Intelligence, Iron ore prices are likely to drop in 2020. Experts predict an increase in supply of Brazil and Australia this year. Demand for steel is likely to decline following the slowdown in Chinese economic growth; analysts say that is a signal of reduced iron ore consumption. The price for raw coal is assumed to be USD 106.87 per ton, weak coking coal USD 76.95, and lignite coal USD 68.12. The price for processed coking coal comprises USD 114.55, according to the MoF. The supply of coking coal is projected to grow in 2020. Bloomberg Intelligence estimates that the extraction of large Australian deposits will increase and exports by 15 million tons by 2020-2022. Mongolia's coking coal export is expected to reach 39 million tons in 2020 and 44 million tons by 2021, analysts at Bloomberg Intelligence have anticipated.

Sweet beverage spending equals 70% of the health budget www.zgm.mn

Mongolians spend MNT 522 billion on 210 million liters of sweet beverages annually, which equals 70 percent of the Ministry of Health’s budget. During a panel discussion on the Consumption of soda: Health impact, data on the interdependence between sweet food and illness of Mongolians had been presented. According to a survey that included about 2,052 children in the country, the consumption of juice was higher among young children. As of today, 381 ml of sweet drink is consumed per capita, with 88 percent of total production being domestic and 12 percent of imported products. Domestic beverages, which are several times cheaper than imported ones, are encouraging consumption of so-called “liquid candy” to grow. Researchers concern over increasing obesity in children and adults due to sweet drinks in recent years. A survey conducted by the Mongolian National University of Medical Sciences (MNUMS) found that 90 percent of parents who provide sweet juices to their children know they are wrong. Of these, 83 percent of them said that they knowingly buy because of the advertisement.

Shadow economy fluctuates at 9.2-15.7 percent of GDP www.montsame.mn

Ulaanbaatar /MONTSAME/. The National Statistical Office of Mongolia released a report on research made on the informal economy of Mongolia between 2015 and 2018. The report shows that the share of shadow economy in the country’s GDP has been fluctuating at around 9.2 – 15.7 percent in the last decade.

FMO provides USD 100 Million syndicated loan to XacBank www.zgm.mn

The Dutch Entrepreneurial Development Bank (FMO) has arranged a USD 100 million syndicated loan to XacBank, one of Mongolia’s leading universal banks. The five-year tenor of the loan will strengthen XacBank’s long-term funding base and allow the bank to further grow and expand in its focus areas in retail, micro and small and medium enterprises (SMEs). XacBank is actively engaging with the MSME sector with a focus on the underbanked segment, which matches well with FMO’s strategy to support economic and diversified growth in the country. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a close to 50-year proven track-record of empowering people to employ their skills and improve their quality of life. Linda Broekhuizen, Chief Investment Officer of FMO said, “The financing signals FMO’s long-term commitment to the Mongolian market and we are proud to collaborate in this large syndicate with our international financing partners OFID and IBEC. XacBank fulfills an essential role in providing finance to the underserved micro and SME segments in Mongolia contributing significantly to job creation as well as diversification of the Mongolian economy.” FMO commits USD 65 million and in addition mobilizes funding from diverse international financing partners: The OPEC Fund for International Development (OFID) commits USD 25 million and The International Bank for Economic Co-operation (IBEC) commits USD 10 million. “XacBank has a strong focus on MSMEs, Green Finance and retail customers as a part of its mission to create sustainable growth in the banking and financial sector of Mongolia. As we expect Mongolian economic growth to slightly decrease from 6.9 percent to 6.3 percent and despite facing challenging macroeconomic conditions in 2020, USD 100 million syndication loan to XacBank shows FMO’s high confidence and commitment to Mongolia and XacBank,” commented Tsevegjav Gumenjav, CEO of XacBank.

World Bank East Asia Pacific Regional Vice President Visits Mongolia www.worldbank.org

The World Bank Vice President for East Asia and Pacific, Victoria Kwakwa, concluded a two-day official visit to Mongolia on January 14. During her visit, she highlighted the progress the country has made on implementing the economic recovery program since the economic crisis in 2016, and the need to sustain reforms to stay the course.

Australia fires: Smoke to make 'full circuit' around globe, Nasa says www.bbc.com

Smoke from the massive bushfires in Australia will soon circle the Earth back to the nation, says Nasa.

Copper price jumps to 8-month high www.mining.com

On Monday in New York, copper for delivery in March closed the day near $2.8640 a pound ($6,314 a tonne), an 8-month high and up 3% from 2019’s closing level.

Mongolia-U.S.-Japan trilateral meeting held in Washington, D.C www.montsame.mn

Ulaanbaatar /MONTSAME/. A trilateral meeting between Mongolia, the United States of America and Japan took place on January 10 in Washington, D.C, USA. The meeting was co-chaired by D.Davaasuren, State Secretary of the Mongolian Ministry of Foreign Affairs, D.Stilwell, Assistant Secretary of State for East Asian and Pacific Affairs and Sh.Takizaki, Director-General of the Japanese Foreign Ministry’s Asian and Oceanian Affairs Bureau.

At the meeting, the sides exchanged views on strengthening the strategic partnerships and tripartite cooperation of Mongolia, the USA and Japan as well as issues concerning regional affairs and the Korean Peninsula during the meeting and released the following Joint Statement.

Joint statement on the Mongolia-U.S.-Japan trilateral meeting

Mongolia, the United States, and Japan held a trilateral meeting in Washington on January 10, 2020. The United States and Japan reaffirmed their commitment to strengthening their bilateral relationships with Mongolia in line with Mongolia’s “third neighbor” policy and the three sides’ visions for a free and open Indo-Pacific.

Mongolia, the United States, and Japan shared their respective visions for regional development, including in the Indo-Pacific, and exchanged views on how to cooperate to ensure a prosperous and peaceful future for a region of sovereign, independent, and democratic states. The three sides noted with satisfaction that the United States joined Japan as a strategic partner of Mongolia in 2019 and intend to strengthen these strategic partnerships.

Mongolia, the United States, and Japan reiterated that the DPRK must cease provocations, including launches of ballistic missiles, abide by its obligations under UN Security Council Resolutions, and engage in sustained and substantive negotiations to do its part to fulfill the commitments made at the Singapore summit. The three sides underscored the need for the full implementation of the relevant UN Security Council resolutions towards the final, fully verified dismantlement of the DPRK’s weapons of mass destruction and ballistic missile programs in accordance with those resolutions. The three countries emphasized the importance of addressing humanitarian concerns, including the immediate resolution of the abductions issue.

The United States and Japan expressed their commitment to continue supporting Mongolia in strengthening its anti-money laundering capability in line with the recommendations of the Financial Action Task Force. All sides underscored their shared desire to deepen their economic partnership, including through enhanced collaboration in the areas of energy development, the digital economy, and cybersecurity. They also discussed the importance of developing Mongolia’s business climate and ability to attract investment, particularly from the United States and Japan, through improved transparency, predictability, and enforcement.

Mongolia, the United States, and Japan intend to hold the next round of the trilateral meeting in Mongolia.

Ministry of Foreign Affairs of Mongolia

EBRD to fund UB city heat supply project www.zgm.mn

The Government of Mongolia and the European Bank for Reconstruction and Development (EBRD) signed an agreement to implement the Ulaanbaatar heat supply project. The project is expected to increase the capacity of Ulaanbaatar’s central heating system. EBRD is providing USD 137 million for investments to double the throughput capacity of the 202-kilometer road between Mongolia’s capital Ulaanbaatar and the third-largest municipality of Darkhan. The investment will address the issue of road safety and will bring a number of economic benefits for the country and the region. In addition to employment opportunities, the improved road will offer better infrastructure, including rehabilitated bridges and flood protection installations, which will result in safer rides for the community and transit vehicles. “The construction work of Ulaanbaatar­Darkhan road had been guided from Mandaluyong, headquarter of the Asian Development Bank. However, the implementation of the project was assumed as disqualifying and not intensified. Based on the fact, we decided to manage the project from Ulaanbaatar last week,” addressed the Ministry of Finance, Khurelbaatar Chimed. The investment is supported by the Ministry of Road, Transport and Development of Mongolia and benefited from technical cooperation funds provided by the EBRD. The funds will assist in making the state road fund operational and help improve overall road maintenance in the country. The EBRD investment is complementing earlier works along the same transport corridor funded by the Asian Development Bank (ADB).