ADB Opens a New Wastewater Treatment Plant in Arvaikheer, Mongolia www.agenparl.eu

ARVAIKHEER, MONGOLIA (16 November 2018) — The Asian Development Bank (ADB) and the Uvurkhangai Provincial Government of Mongolia today inaugurated a new wastewater treatment plant in the provincial capital Arvaikheer. The state-of-the-art plant was built under additional financing for the ADB-funded Southeast Gobi Urban and Border Town Development Project, and will ensure safe, reliable, and environmentally friendly wastewater treatment for over 28,000 residents.
“The new plant replaces an inefficient treatment system that was built more than 30 years ago,” said Uvurkhangai Provincial Governor Mr. Ganbold Gonchoo. “It is designed to meet current and future demand for the next 25 years and will play a significant role in the economic development and improved livability of Arvaikheer city. It is also an important milestone in the strategic partnership on urban development between ADB and the province.”
“The new plant is the first of ten similar facilities to be built in Mongolia with ADB support,” said ADB Country Director for Mongolia Mrs. Yolanda Fernandez Lommen. “It will facilitate the town’s ongoing growth and development and will ensure that domestic and commercial wastewater will no longer be discharged into the local river basin.”
The plant was opened ten months ahead of plan and has an operating capacity of 3,000 cubic meters per day. It features integrated fixed-film activated sludge technology designed by Mongolian engineers and produces high quality effluent through effective and energy-efficient treatment processes. The plant will reduce odor and adhere to strict environmental conditions and national effluent standards.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.

China to boost cooperation with India, Mongolia: defense minister www.globaltimes.cn

State Councilor and Minister of National Defense Wei Fenghe met with Indian Defense Secretary Sanjay Mitra and State Secretary of the Mongolin Ministry of Defense Khalzankhuu Batbileg in Beijing Thursday.

Death on Mongolia’s ‘Coal Road’ www.news.mn

Kh.Sugar, director of the Citizens’ Representative Assembly has held a press conference regarding the dangerous situation on the main coal transportation route to China.

Mongolia shaken by widening loan scandal www.asia.nikkei.com

ULAANBAATAR -- Braving subzero temperatures, hundreds of demonstrators gathered outside Mongolia's State Palace on Wednesday to demand prosecutions of officials caught in a widening loan scandal.

"I'm here to fight against the crooks who stole from the people, and I will fight until they face justice," said Munkhtsetseg Ulzii-togtokh, a shopkeeper in her 60s.

Her anger stems from years spent fruitlessly trying to expand her business with a government loan -- the Small and Medium Enterprises Development Fund extends loans with an interest rate of around 3% versus typical business bank rates of up to 20%.

The rage at Mongolia's biggest political demonstration of the year is over allegations that three members of Prime Minister Ukhnaa Khurelsukh's cabinet have benefited by getting the low-interest loans for business controlled by them or their family members. More than a dozen lawmakers and police officials have also been implicated.

The head of the fund has been arrested, and the state auditor and the minister overseeing the fund -- himself an alleged beneficiary -- have both been ousted. Others are under investigation.

The aspersions are tainting the premiership of Khurelsukh, who took office just last year after a separate scandal over officials getting favorable deals led to the ousting of his predecessor.

The Mongolian National Chamber of Commerce and Industry announced Wednesday that its more than 3,500 member companies would withhold tax payments until the lending scandal is resolved. The chamber is also demanding a constitutional amendment to public oversight of government finances.

"Over the past two years, the crisis in the Mongolian economy has been overwhelming," the chamber said in a statement. "Meantime, high-ranking officials are taking advantage of funds meant to support businesses and are using their power and privilege to benefit themselves."

Julian Dierkes, who heads the program on Inner Asia in the School of Public Policy and Global Affairs of the University of British Columbia, said the demonstrations could get much bigger.

"If officials and organizations neglect the deep-seated public frustration over corruption, we might expect massive protests for calling changes," Dierkes wrote in a blog post earlier this month.

In financial distress after years of slumping commodity prices, Mongolia last year began a $5.5 billion bailout program with the International Monetary Fund. At the same time, the country's politicians have sought to avoid becoming overly dependent on neighboring China for support and trade.

The loan scandal is sharpening a constitutional standoff between Khurelsukh and his Mongolian People's Party government and President Khaltmaagiin Battulga of the opposition Democratic Party.

Battulga, who has been pushing for the country to shift away from parliamentary government, late last month sought the dissolution of the legislature -- a demand rejected last week by a parliament dominated by the People's Party.

Khurelsukh has demanded that lawmakers who received SME Fund loans apologize and repay the money. The People's Party, however, has been split by the scandal, with some lawmakers calling for a no-confidence vote against their own cabinet.

"SME embezzlement is a result of too many businessmen holding political powers and making our society dirtier and more corrupted," said Tserendash Tsolmon, a senior politician and former minister.

"Powerful politicians like Khurelsukh must fight to declare justice at any cost," the lawmaker said. "I think its better for the MPP to provide political stability. It is not good for Mongolia in case of foreign investment when we have unstable governance, and cabinets changed in every one year or two."

Mongolia’s unemployment falls by 2.2 percent www.news.mn

According to the National Statistic Office of Mongolia, the number of people aged 15 and above, who are in work reached 1.3 million in the first 10 months of 2018; a total of 721.1 thousand of them are men and 610.2 thousand are women.

Meeting meat demand: Mongolia to trade 17.9 percent of livestock www.news.mn

Mongolia is planning to trade 17.9 percent or 15.1 million head of livestock nationwide from 2018-2019. According to provincial administrations, they have planned to use 5.5 million for local meat demands and to trade 9.6 million animals.

President vetoes 2019 State Budget www.zgm.mn

President of Mongolia Battulga Khaltmaa put a veto on the Law on 2019 State Budget and the accompanying legislation and parliamentary resolutions. President Battulga handed over an official letter to Parliament Speaker Enkhbold Miyegombo, requesting action in accordance with the corresponding laws and regulations yesterday.

The veto reads, “I have reviewed the Law on 2019 State Budget, which was adopted by the Parliament on November 2 and forwarded to the President’s Office on November 12.

I have no choice, but to veto the 2019 budget and remind the Parliament of the necessity to look back on its budget policy, adopt a tighter and more efficient budget that upholds the national interest and discipline, and fix the following issues that violate the law and contradict the national development policy and vision.”

The letter highlights several issues in the 2019 State Budget Law, including high budget deficit which is MNT 1.9 trillion or 5.4 percent of GDP, “MP’s money” amounting to MNT 8 billion and budget allocation for the construction of facilities without blueprint, and estimation of the mining revenue at MNT 3 trillion, which was concluded as unattainable by the National Audit Office. Furthermore, the President points out that the 2019 State Budget Law creates conditions for abrupt increase of public debt and that the projection of MNT 11.5 trillion budget expenditure is not compatible with the objective to maintain inflation within eight percent next year. In addition, President Battulga stresses that the lawmakers must create conditions for small businesses that are truly considered SMEs to be able to obtain loans with 3 percent annual interest from the SME Development Fund starting from January 1, 2019.

GOVERNMENT PLANS TO REDUCE INFLATION TO 6 PERCENT IN MID-TERM

Later on, the Parliament, at its plenary session, approved the 2019 Monetary Policy Guidelines. Officials highlighted that the monetary policy will focus on overall financial and economic stability, as well as creating legal regulations for consumer protection next year. According to the guidelines, the Bank of Mongolia (BoM) will implement policies to stabilize inflation measured by consumer price index at eight percent for the next two years and reduce it to six percent in the mid-term. “Since external demand and commodity price fluctuations remain high, the monetary policy will be directed towards overall employment in all sectors and preserve inflation within expectation,” said a spokesperson of the Parliament. BoM also viewed that the inflation can be stabilized under the target level in 2018-2019.

In order to reduce the impact of foreign economies, improve the country’s economic vulnerability, maintaining balance of external sectors and creating financial sources to repay foreign debts foreign exchange (FX) reserves must be raised, says the BoM and informed that the guidelines include objectives to increase FX reserves and necessary coordination between government bodies.

The BoM views that the financial market infrastructure and institutes must be strengthened to improve the effects of monetary policy and financial stability. Therefore, the guidelines included several objectives on protecting the rights of financial consumers, creating legal environment, adopting common internationally-approved practices of stable financing, identifying the standards of technology-based financial products and services, as well as ensuring the safety and reliability of customer information.

The monetary policy guidelines also reflected several objectives on improving assets of commercial banks and transparency of the BoM.

MP Javkhlan Bold addressed, “The monetary policy does not have to align with the budget. But the two policies should mutually support their respective objectives. Both revenue and expenditure of the 2019 budget are vastly expanded. The balance of payment and current account are expected to be under a deficit. Accordingly, there is a high possibility that inflation will rise next year; thus, we expect more tight monetary policy.”

Basic guideline on state monetary policy approved www.montsame.mn

During the plenary meeting of the parliament, basic guideline on State Monetary Policy for 2019 was approved with 66.7 percent votes.

Natural gas skyrockets as China pledges huge supply boost www.rt.com

With an eye on last winter’s natural gas supply debacle, Chinese state-owned energy giant CNOOC has pledged a 20 percent rise in gas supply, the company said on Tuesday.
The company, one of three state-run oil majors, said that it will supply 24.6 billion cubic meters (bcm) of natural gas during the heating season that kicks off this week, up 20 percent year-on-year, to meet rising natural gas demand in the country.

China is in the process of replacing over reliance on coal usage for both industrial and residential end users to offset rampant air pollution, particularly in its larger urban centers. By government mandate, at least 10 percent of the country’s energy mix needed for power generation by 2020 must be natural gas, with further earmarks set for 2030.

CNOOC, the country’s largest oil and gas producer, said 6.1 bcm of natural gas will be supplied to seven northern provinces and municipalities, up 63.5 percent from last year. The company added that most of the natural gas it’s supplying this year is from offshore fields, coal bed gas and imported liquefied natural gas (LNG).

According to reports, CNOOC has also been negotiating with LNG suppliers to ensure gas supply, including dealers from Australia, Indonesia, Malaysia, Qatar, Nigeria and Russia. However, due to the ongoing trade war between the US and China, CNOOC spot purchases of LNG is coming to a halt amid Beijing’s retaliatory tariff on US-LNG imports.

LNG tariffs will also come full circle, since other LNG producers will likely increase their spot prices in the mid-term to a point just under US LNG prices including a tariff, with Chinese firms being forced to pay the extra price. Yet, unlike last year when China relied more on spot purchases to fill supply gaps, the country's oil companies have largely been filling up storage more than last year’s levels. Also, putting downward pressure on LNG spot prices in Asia are forecasts for a warmer winter in the Northern hemisphere.

Warmer temperatures

El Nino, the warming in Pacific Ocean sea-surface temperatures, has emerged and there’s an increased chance of it continuing through the Northern Hemisphere spring, the Japan Meteorological Agency said on Friday. The weather pattern usually causes warmer temperatures during winters in Japan. “With warmer weather expected now, the demand pull from China would be even less,” Xizhou Zhou, an analyst at IHS Markit, told Bloomberg. “The kind of tightness in the market we had seen last year will unlikely repeat.”

Na Min, a senior analyst for oil and gas at Bloomberg New Energy Finance said "the chance of a ‘cold winter’ is quite small this year."

LNG prices have tumbled for the past seven weeks amid weaker demand from North Asia while companies in Japan, China and South Korea (the world’s three largest LNG importers) already nearing full storage capacity. LNG prices in Asia, which are either linked directly to an oil price formulation or the global oil price trajectory, are extending its longest losing streak since January 2016, when Brent crude prices dipped below the $30 per barrel price point.

Other Chinese oil companies are also gearing up for the winter season. Sinopec, the world's largest refiner by volume, said on Monday it would supply 18.17 billion cubic meters of natural gas during the heating season, up 17.7 percent year-on-year, with supplies to seven northern province-level regions set to increase by 29.1 percent. A report on Tuesday in the China Daily said that Sinopec has been speeding up the construction and operation of new pipelines in northern regions in addition to increasing its spot purchases of LNG. All of the company's three LNG terminals are expected to run at full capacity.

Mongolia's foreign trade up 24.4 pct in first 10 months www.xinhuanet.com

Mongolia's foreign trade went up 24.4 percent year on year to 10.8 billion U.S. dollars in the first 10 months of this year, data from the National Statistics Office (NSO) showed on Thursday.