Mongolia Brief April 2, 2014
Democrats
Recommence Monthly Meetings with Journalists
Ulaanbaatar,
April 2 (MONTSAME) Members of the Democratic Party (DP) will hold a so-called
"4:11" meeting with journalists Thursday.
It will run at
the party's headquarters under a theme of "Smart city". Present will
be DP Secretary-General Ts.Oyundari, DP Secretary O.Chuluunbileg, the Capital
city Citizens Representatives Khural Chairperson D.Battulga and others.
Before some
break, this meeting used to run on first Thursday of every month.
Redraft
of Law on Accounting Submitted
Ulaanbaatar,
April 2 (MONTSAME) The Finance Minister Ch.Ulaan submitted Tuesday to the
parliament Speaker a new wording of the law on accounting.
This law has
been amended several times--in 2002, 2003, 2006 and 2011--since it was passed
by parliament in 1993.
The amendments
aim at leveling-up of accounting and financial reporting of public entities and
small and medium enterprises to international standards. Thus, great results
will be achieved in financial activities, such as improved investments and
financial attractiveness of enterprises, reduced risks to domestic investors
and creditors, enhanced capital and financial markets and strengthened national
economy, the Minister considers.
Deputy
PM Submits Bills to Parliament
Ulaanbaatar,
April 2 (MONTSAME) The Deputy Prime Minister D.Terbishdagva Tuesday submitted
to the Speaker Z.Enkhbold draft laws on implementation of the 2012-2016 action
programme of the government and on monitoring.
By the end of
the previous year, the action programme’s realization showed 46.2 percent; in
the first year of its term, the cabinet launched legal reforms and ran several
works to refine a legal environment of some sectors and worked out designs,
plans and feasibilities of great construction works, he said. Other works have
been done in several phases to run procurement and to implement goals of
renewing norms and standards, Terbishdagva added.
In addition,
achievements are gained in constructing auto roads, providing people with
apartments, supporting local authorities, creating jobs, regularizing prices of
consumer goods, developing small- and middle-sized productions and in
supporting vulnerable strata.
The bill on
monitoring reflects a legal basis for controlling activities of citizens and
legal persons, their common principles and grounds. It also regulates the
relations regarding rules of running examination and protecting examinees,
Terbishdagva said.
DP
Secretary-General Receives Burmese Journalists
Ulaanbaatar,
April 2 (MONTSAME) On Tuesday, the Democratic party's (DP) secretary-general
and secretary Ts.Oyundari and O.Chuluunbileg received the Burmese
journalists who are being trained here at invitation of the Presidential
Office.
Ms Oyundari
spoke about Mongolia’s democratic revolution and the party's history. Then the
visitors asked her about finance mechanism of political forces, political
elections procedure, and expressed their views.
As we sad
before, the Burmese media are involved here in a five-day training, initiated
by Mongolian President's Office and run by EBI Think-Tank institute.
Citizenship
and Migration General Authority of Mongolia Now Operational under New Structure
April 2
(infomongolia.com) At the plenary session of the State Great Khural
(Parliament) held on December 26, 2013, the new bill on Border Checkpoints was
approved, which is effective from April 01, 2014.
In the
frameworks of the newly ratified law, the Border Ports Divisions are now
administered by Mongolia Immigration Office and in the scope of enlarging its
function; the Office has been running under new structure as the Citizenship
and Migration General Authority of Mongolia (CMGAM) from April 01, 2014.
Before, the Border Ports Divisions were authorized by General Authority for
Border Protection.
The
inauguration ceremony of new organ was held at the Chinggis Khaan International
Airport on April 01, 2014, where State Secretary at the Ministry of Justice
J.Bayartsetseg, Chairman of CMGAM B.Purevdorj and other officials were present.
According to
official estimation, over 4.5 million foreign and domestic travelers cross
Mongolian border annually and under the new law implementation, it enables to
enhance and aggrandize border checkpoints’ operation into the business
development centralized region and run under general policy and guidance.
Moreover, the CMGAM will now be cooperating closely with Mongolian Diplomatic
Offices overseas to assist Mongolian citizens residing abroad and protect their
rights, besides to monitor foreign nationals visiting Mongolia from the day
entering until departure.
The new organ
has been expanded with over 600 employees serving in western, eastern, southern
and northern regions of Mongolia; in addition the office is also running at the
Chinggis Khaan International Airport, Selenge and Dornogovi Aimags.
Citizenship and
Migration General Authority of Mongolia is operating in the following
locations:
- Headquarter
(former Mongolia Immigration Office facility)
- Buyant Ukhaa
(Chinggis Khaan International Airport)
- Dornogovi
Aimag
- Selenge Aimag
(Darkhan-Uul Aimag)
- Eastern
region (Dornod, Sukhbaatar and Khentii Aimags)
- Southern
region (Umnugovi, Dundgovi, Uvurkhangai, Bayankhongor and Govisumber Aimags)
- Western
region (Khovd, Bayan-Ulgii, Uvs, Zavkhan and Govi-Altai Aimags)
- Northern
region (Khuvsgul, Orkhon, Arkhangai and Bulgan Aimags)
Related:
Mongolia
to Participate in Vietnam Trade Fair
Ulaanbaatar,
April 2 (MONTSAME) For the first time Mongolia is to take part in the 24th
Vietnam international trade fair which will run in Hanoi city April 16-19.
The decision to
participate in this action has been made in a view of the 60th anniversary of
the diplomatic relations between Mongolia and Vietnam marked this year.
Our country
will be represented by the National Chamber of Commerce and Industry /MNCCI/
and business delegates.
During the
event, international business and experience exchange meetings will run
themed "Vietnam-Cooperation and Development".
The Vietnam
Expo fair is considered as the biggest exhibition in its region in terms of
number of participants and the trade turnover. The last year's action brought
together 400 participants from 17 countries who displayed products in 520
pavilions for 22 thousand guests from 40 countries.
BH
Gains Toehold in Mongolia Hospital
Ulaanbaatar,
April 2 (MONTSAME) Health Horizons Enterprises (HHE) was set up last month in
Singapore with registered capital of US$20,000. HHE, in which Bumrungrad
Hospital /BH/, Thailand's second-largest listed hospital operator, holds an 80%
stake, last Friday acquired a controlling interest in Ulaanbaatar Songdo
Hospital (UBSD).
It was
published on bangkokpost.com website April 1. HHE owns 100% of the common
shares of Bumrungrad Mongolia LLC (BML), which holds 51% of the common shares
of Seoul Seniors Tower LLC (SST). SST owns and operates Ulaanbaatar Songdo
Hospital.
BML issued
share capital of 4.08 billion Mongolian tugrug (about 74.5 million baht) at a
par value of 1,000 tugrug per share.
BH set capital
expenditures this year at 1.2 billion baht excluding mergers and acquisitions.
"Hospitals
in South Korea and Singapore have targeted it for referrals," said Dennis
Brown, Bumrungrad's corporate chief executive. "Most Mongolians with serious
medical problems who can afford overseas treatment would be seen at UBSD. This
gives us an excellent opportunity to work with UB Songdo Hospital to expand
their diagnostic and treatment services and coordinate tertiary referrals at
the source."
Mongolia has
one of the world's fastest-growing economies. For several years Bumrungrad has
been one of the main destinations for Mongolians seeking overseas
treatment.
Mongolian
Dinosaur Exhibition Opens in Japan
Ulaanbaatar,
April 2 (MONTSAME) Mongolian dinosaurs exhibition named “Mongolian Gobi:
Amazing Country of Dinosaurs” has opened in Japanese Nagoya city's Science
Museum.
It has been
organized in frames of the 40th anniversary of diplomatic relations between
Mongolia and Japan and the 20th anniversary of joint paleontology expedition of
the two countries, with a support of the Japanese national daily "Yomiuri
Shimbun", “Nippon Express" air cargo service company and scientists
and researchers of Mongolia and Hayshibara museum.
The exhibition
displays 130 kinds of items from Mongolia and European countries, including
found by the joint team the tarbosaurus, also known as the Asian tyrannosaurus;
a primitive ceratopsian protoceratops, 'baby dinosaur fossil', preserved in
unprecedentedly good condition, and a fighting dinosaur', instantly fossilized
while fighting.
At the same
time, the exhibition introduces achievements of the Mongolian geology research
being conducted jointly by the Nagoya's Science and University museums.
Present at the
opening ceremony were Kh.Tsogtbaatar, a director of Paleontological Centre of
the Mongolian Academy of Sciences, Mr Tsuneo Ishimaru, a director of the
Science Museum, Mr Hiroto Kusama, a head of department for supporting culture
and sport of Yomiuri.
The exhibition,
already displayed in Tokyo and Osaka cities, will be on show until June 8.
State
Academic Drama Theatre 2014 April Program
April 2
(infomongolia.com) The State Academic Drama Theatre has been implementing the
“Playlet” project from April 2014 and under the program seven drama plays will
be staged by seven different directors.
The plays are:
1.
"Innocent Guilt" by A.Ochirbat, produced by State Merit Servant (SMS)
B.Baatar
2. "Sorry,
Wrong Number" by Violet Lucille Fletcher, produced by Frontier Cultural
Servant (FCS)
Ch.Tuvshin
3. "Crow
Grove" by Alexander Vampilov produced by SMS, People's Artist
B.Muknkhdorj
4.
"Yesterday" by G.Pinter, produced by State Prize Laureate
N.Naranbaatar
5.
"Lullaby" by N.Gankhuyag, produced by PhD, SMS, Prof. N.Gankhuyag
6. “The Open
Couple” by Dario Fo, produced by SMS Ch.Naidandorj
7.
"Model" by Nikolai Kolyada, produced by Ts.Batnairamdal
Three of above
seven plays are included in the State Academic Drama Theatre 2014 April Program
April 02 and
20, 11:00 & 14:00, "Norovyn Namtar" (Biography of Norov) children
play by D.Sodnomdorj
April 03-04,
14:00, "Norovyn Namtar" (Biography of Norov) children play by
D.Sodnomdorj
April 09-13,
19:00, "Crow Grove" tragic-comedy play by Alexander Vampilov
April 12,
11:00, "Oedipus the King" Athenian tragedy by Sophocles
April 19 at
18:00 and April 20 at 19:00, "Hamlet" tragedy play by William
Shakespeare
April 23-27,
19:00, "Lullaby" three-act drama play by N.Gankhuyag
April 30,
19:00, "Sorry, Wrong Number" tragedy dram play by Violet Lucille
Fletcher
Related:
Mongolian State Academic
Drama Theatre presents new play project – news.mn, April 2
Deputy
Minister for Justice E.Erdenejamyan has been suspended of working in the government
April 2
(business-mongolia.com) Deputy Minister for Justice E.Erdenejamyan, a member of
MPRP led by the former President, Prime Minister, and Speaker N.Enkhbayar found
guilty on charges of obstructing justice and ongoing investigation by the district
court. The investigation begun last year by the IAAC when the Deputy Minister
sent a letter to Interpol requesting to take off 2 persons name from the wanted
list. One of them was N.Enkhtuya which is the elder sister of N.Enkhbayar.
In addition to
the suspension, E.Erdenejamyan faces a fine 60 times of minimum wage which is
around USD5000. E.Erdenejamyan’s lawyer stated that he will appeal the
decision.
Mongolian
President’s Surgery in Japan Underwent Successfully
April 2
(infomongolia.com) On March 24, 2014, President of Mongolia Ts.Elbegdorj
departed for Japan to undergo surgery for a herniated disc there.
Accordingly,
physician to the President, Associate Professor PhD U.Tsolmon called a brief
press statement today and clarified, “Back surgery is described one of the
difficult surgeries in its category and the President’s diagnose is listed as
the disease can be treated only abroad and must undergo for surgery, therefore
President decided to undergo for treatment in Japan. The surgery was conducted
on March 31 and underwent successfully, now President Ts.Elbegdorj feels well
and First Lady Kh.Bolormaa and President’s brothers are with him.
However it was
diagnosed earlier during his participation in the UN General Assembly meeting
last autumn, but due to coincidences with Mongolian traditional Tsagaan Sar
Festival, followed by Sochi Winter Olympics opening ceremony and other not to
delaying issues, President had to postpone to date”.
Currently, when
to return home is not informed yet.
April 1 (Oxford
Business Group) With demand for electricity on the rise, and a national drive
to boost renewable power production gathering strength, investor interest in
Mongolia’s fledgling wind energy industry looks set to grow.
The government
aims for renewable sources to account for at least 20% of power generation
capacity by 2020, up from 3% today. It is also keen to export renewable energy,
although significant investment will be required if Mongolia is to achieve its
objectives.
Second wind farm deal sealed
On February 19,
the German firm, Ferrostaal Industrial Projects, announced plans to invest
$120m in the Sainshand wind farm project, which is located in Mongolia’s Gobi
Desert. Managing director Klaus Lesker said the company would take on the role
of project developer, while working with local partners to boost foreign
investment. A power purchase agreement and operating licences have already been
signed. Once completed, the 52-MW facility will provide power for the national
distributor.
Operations at
the wind farm, Mongolia’s second such venture, are expected to begin in late
2015. The country’s first wind energy facility, a 50-MW farm located to the
south of the capital in Salkhit, is run by Clean Energy, a renewable energy company
jointly owned by Mongolian conglomerate Newcom, General Electric Pacific, the
European Bank for Reconstruction and Development, and the Netherlands
Development Finance Company. The $120m venture began operating in mid-2013 and
feeds into the national grid.
Wind and solar
combined account for around 5% of Mongolia’s 955-MW installed capacity,
Ministry of Energy figures show. With the ministry forecasting peak demand to
reach 2321 MW by 2020, the country will require significant investments in
generation capacity over the coming several years.
While
coal-fired plants – which account for the vast majority of capacity – are being
upgraded and expanded, one alternative is to build additional wind farms. In an
interview given to OBG, B. Unenbat, the CEO of Newcom, described local wind
resources as “good-to-excellent, equivalent to 1100 GW of wind electric
potential”.
Further
government incentives may be necessary to boost investment, however. The state
has already introduced initiatives such as feed-in tariffs for producers at
above-market rates over extended terms. Last year also saw an easing of
restrictions on foreign investment.
According to
Unenbat, an increase in public-private partnerships (PPPs) in the energy sector
could help the country secure its energy independence. “Mongolia’s private and
public sectors need to increase cooperation and collaboration to ensure we are
all on the same page, with clear and defined roles for each project, creating a
win-win scenario for all parties,” he commented.
Looking east
Mongolia has,
in addition, set its sights on carving a niche as a distribution centre for
renewable energy. President Elbegdorj last year mapped out plans to utilise the
country’s wind energy resources as a means of exporting power to China and elsewhere
in Asia.
Taiwan is also
keen to tap the industry’s potential, signing a memorandum of understanding
with Mongolia on renewable energy development in February, which set out terms
for establishing strategic partnerships in the sector, building links and
promoting greater use of wind and solar power.
While Taiwan
will be providing training to Mongolian officials in energy sector management,
Taipei is also focusing on the investment and business opportunities that are
opening up. Taiwan’s Ministry of Economic Affairs said in a statement that the
agreement would allow local companies greater access to an “extensive market”
with vast renewable energy sources.
Addressing pollution
Mongolia’s
drive to diversify its energy sources stems from both rising demand and an
awareness of the damage inflicted on the country’s ecosystem by fossil fuels.
Many Mongolians
use coal for household heating, which exacerbates the problem. The World Bank
estimates that pollution rates in the capital of Ulaanbaatar are among the
highest in the world.
The knock-on
effects of Mongolia’s pollution problems are evident. According to the UN
Environment Programme, average temperatures have risen by 2.1°C over the past
six or seven decades, approximately three times faster than the global average.
Concerns are growing that higher temperatures could, in the future, lead to a
loss of pastureland, a permafrost thaw and glacial melting.
A drive to
boost growth across Mongolia’s renewable energy sector will help address these
issues, while providing opportunities for companies along the supply and
management chain.
Montsame
to Cooperate with City’s Tourism Department
Ulaanbaatar,
April 2 (MONTSAME) The MONTSAME national news agency will cooperate with the
City’s Tourism Department (CTD) in a way of propagandizing through its network
the products and information released by the CTD, publishing books, and making
tourism-dedicated products.
The cooperation
memorandum was signed Wednesday by A.Baatarkhuyag, the Director-general of the
MONTSAME agency, and by E.Battulga, the head of the CTD.
Our agency’s
main function is to propagandize Mongolia to the world, "so we can
cooperate in all spheres," said Mr Baatarkhuyag.
A tourism is
one of the factors to express a nation’s development, "and we are pleased
to cooperate with the national news agency in attracting tourists to the
capital city and to boost this sector,” Mr Battulga said.
A first step
will be a release of pocketbooks about UB tourism routes. The MONTSAME will
also broadcast a short documentary about Ulaanbaatar through the Organization
of Asia-Pacific News Agencies’ (OANA) network. It will be placed on the
oananews.org website.
The agency
cooperates with some 40 news agencies of 33 countries, exchanging information
and news, and prepares news in six languages, publishing them online and in
daily brochures and weekly newspapers.
Speaker
Meets APO Secretary-General
Ulaanbaatar,
April 2 (MONTSAME) The Parliament Speaker Z.Enkhbold Wednesday met with the
Asian Productivity Organization (APO) Secretary-General Mr Mari Amano.
The Speaker
thanked Mr Amano for joint projects that have been carried out between Mongolia
and APO in twenty year time after Mongolia’s joining the APO. Aware of the
importance productivity improvement practices, the Mongolian Government has
been supporting all these projects, noted Mr Enkhbold.
He also
highlighted a significance of benchmarking and error deterrence processes in
productivity enhancement. The Parliament Office has been conducting a so-called
"re-engineering" study to improve productivity at workplaces, he
said.
Pleased to hear
about the ongoing project in the Parliament Office, Mr Amano urged the
Mongolian part to study experiences of other countries and to actively attend
relevant meetings and forums organized by the APO. The ongoing project is very
similar to what the APO is striving efforts for, except for its name,
highlighted the Secretary-General.
Finance
Minister Works in “11 11” Center
Ulaanbaatar,
April 2 (MONTSAME) The Minister of Finance Ch.Ulaan Wednesday worked in the “11
11” center at the cabinet for reforms. Some 3,500 people obtained information
that day through phones and the Internet.
Mongolian
economics is facing challenges, for example, the end of first quarter shows
that the state budgetary revenue did not reach a targeted volume, he said.
"It happened due to price fall of mining products at the world market, a
level-off condition of investments, non-ordered activities of related
enterprises and some mistakes in policies which have been implemented from the
previous year," he explained.
He also
reported that a law has been adopted to spend 200 billion togrog for salaries
and pensions rise. The pensions rose in a first quarter, whereas salaries are
being increased in several steps, he added.
By the first
three months of this year, the inflation rate is a two-digit number but it is
possible to cut down it to one-digit of to realizing the macroeconomic policy
and state fiscal policy. He went on that a centralization of budgets is
expected to decline thanks to authorizing the aimags to independently spend
their budgets. Thus, people should to put a tough control over spending of the
budget money, he said.
Governor
Meets US Embassy Delegation
Ulaanbaatar,
April 2 (MONTSAME) The governor of Omnogobi province B.Badraa received a
delegation of the US embassy to Mongolia on Tuesday.
At the meeting,
the Economic and Commercial Section Chief Mr David Wyche said that their
working visit is starting from a key province of Mongolian economy and noted
that the aimag changed since their visit in 2012.
He also said
that the U.S. investment companies are interested in collaborating with the
locality in mining and environment spheres.
In response,
the governor Badraa spoke about his aimag's present and future and expressed a
readiness to cooperate with the U.S. companies. The sides focused on the
matters concerning the local budget and inhabitants' health.
B.
Boldbaatar Receives Turkish Ambassador
Ulaanbaatar,
April 2 (MONTSAME) The Secretary-General of the Parliament Office B.Boldbaatar
met Wednesday with the Ambassador of Turkey to Mongolia Mr Murat Karagoz.
Pleased with
the high-level relationship and cooperation between the two countries, the
Turkish Ambassador highlighted that this year marks the 45th anniversary of the
diplomatic relations between Mongolia and Turkey, with varied activities
planned ahead. One of those activities would an official visit of Mr Cemil
Cicek, the Speaker of the Grand National Assembly of Turkey, he noted. After
this, the sides shared opinions on ways of organizing this visit.
Mongolia
to Import Grain Seeds from Russian Buryatia
Ulaanbaatar,
April 2 (MONTSAME) Mongolian farmers are planning to plant wheat and vegetables
late April.
This year, the
nation will sow grain in 315 thousand ha, wheat in 304 thousand ha, potato in
15.4 thousand ha, and other vegetables in 8.3 thousand ha, says B.Odonkhuu, an
officer responsible for grain production at the Industry and Agriculture
Ministry.
Within goals of
upgraded quality and improved reserves of grain seeds, authorities intend to
import seeds from Russian Altai Krai and Buryatia Republic without customs tax,
he added; however, the amount of imports has not been determined yet.
The nation
harvested 370 thousand ton of wheat, 198 thousand ton of potato and 106
thousand ton of other vegetables last year--amounts measured less than those of
previous years, due to weather conditions.
Nursing
School Gets Mobility Rehab Equipment
Ulaanbaatar,
April 2 (MONTSAME) A nursing school under the Health Sciences University has
acquired 40 thousand USD worth mobility rehabilitation equipment.
These
facilities have been given in frames of the "Global Grant" project of
Mongolian "Bayanzurkh" Rotary together with the Japanese
"Maebashi" Rotary club with aims to create better training
environment for medical staff and new alumni and to deliver quality health
services.
Coal
Prices to Be Set by Contract
Ulaanbaatar,
April 2 (MONTSAME) Commencing from April 1, exported coal prices will be set
according to contracts concluded between the buyer and the supplier.
Prior to that,
Mongolian miners would sell coal to its only buyer China at lower, standard
prices rather than global market prices.
In order to
reduce loss of the mining companies and to revive coal exports, the Mining
Ministry decided to regulate coal prices with contracts established between
buyer and supplier. The decision has come into force since April 1, together
with the new law on border ports.
Today, five
Mongolian companies are supplying coal to China.
Five
more patients diagnosed with HIV
April 2
(news.mn) A new patient has been diagnosed with HIV on March 31st. This patient
is the 158th person diagnosed with HIV in Mongolia.
The National
Centre for Communicable Diseases revealed five more HIV cases found in people
aged between 20-40 years as result of research among high risk groups of HIV
conducted by the center last month. Currently the patients diagnosed with AIDS
are in a good health condition under medical specialists control taking
antiretroviral drugs to control infection.
Clinical
professor of the National Centre for Communicable Diseases Ch.Urtnasan said
that “this is the first time that five patients have been diagnosed with HIV in
a month in Mongolia.” According to a study by WHO, in Mongolia over 500
people might carry the HIV virus.
Foot
and mouth quarantine to be lifted
April 2
(news.mn) The quarantine set in Khentii, Dornod and Sukhbaatar provinces to
curb the spread of foot-and-mouth disease is to be lifted. The State
Emergency Commission of Mongolia organized a meeting on the foot-and-mouth
disease situation in the eastern provinces, to discuss the results of measures
taken against the spreading of the disease and to decide any further actions on
the issue on Wednesday April 2nd.
Since the
foot-and-mouth livestock infectious disease was discovered in Ongon sum in
Sukhbaatar province on January 27th, it spread through a total of 13 sums in
three provinces including six sums in Sukhbaatar, one sum in Khentii province
and six provinces in Dornogovi province. So far 3454 cattle have been destroyed
and 4.5 million livestock have been vaccinated due to spread of infectious
disease.
No more cattle
have been found to have the disease in the past 11-41 days. Thus the quarantine
and restriction that had been in place in Khentii, Sukhbaatar and Dornod are to
be lifted while Ikhkhet and Dalanjargalan sums in Dornogovi province are still
under control by Provincial Emergency Commission.
Any domestic
migration is prohibited for at least two months and the transportation of
animal related products will be allowed on the basis of disinfection and
decontamination.
Asian
Development Bank: Mongolia’s Economic Growth Forecast at 9.5% in 2014
April 2
(infomongolia.com) On April 01, 2014, the Asian Development Bank (ADB)
introduced Asian Development Outlook 2014: Fiscal Policy for Inclusive Growth
and the Report highlights that Developing Asia is expected to extend its steady
growth. The region’s gross domestic product (GDP) expanded steadily by 6.1% in
2013, the same pace as in the previous year and to reach 6.2% in 2014 and 6.4%
in 2015.
In this regard,
the ADB Mongolia officials held a press conference today regarding Asian Development
Outlook 2014 at the Mongolian Press Institute in Ulaanbaatar, where Senior
Financial Specialist of ADB with resident mission in Mongolia, Mr. Jan Hansen
and Economist L.Amar were present.
According to
Outlook, Mongolia is challenged by significant external imbalances because
foreign direct investment has declined rapidly and some mineral exports remain
weak. Growth is forecast to moderate in 2014 and remain broadly stable in 2015,
inflation to decline, and the current account balance to improve over the next
2 years, assuming appropriate policies. The major policy priority is to address
pressures on the balance of payments and foreign exchange reserves.
Mongolia’s
economic prospects
Medium-term
prospects remain promising, with growth expected in the double digits after a
dip in 2014, given Mongolia’s potential to develop its natural resources.
Economic growth is forecast at 9.5% in 2014, driven in particular by the start
of copper production at the Oyu Tolgoi open pit in June of last year. Growth in
non-mineral output is expected to be held back by the tighter economic policy,
which will be needed to reduce high domestic demand and so relieve
balance-of-payment (BOP) pressures. In particular, the overall budgetary deficit
including off-budget outlays is expected to be lower than in 2013, as the
Development Bank of Mongolia (DBM) curtails investment expenditure and as Bank
of Mongolia (BOM) liquidity injections are expected to begin their phase-out
this year.
Economic growth
is expected to pick up slightly to 10% in 2015, spurred by further development
in mining, including the possible development of the Oyu Tolgoi underground
mine and an expansion of coal production from the Tavan Tolgoi mine (Figure
3.12.8). Non-mining growth is expected to accelerate as restrictive economic
policies are eased and foreign direct investment (FDI) flows are assumed to
partly recover. Inflation in 2014 is expected to increase to 11%, driven by the
lagged effect of expansionary monetary policy in 2013 and the recent
depreciation of the Tugrug (MNT).
Inflationary
pressure in 2015 is expected to ease, assuming a tightening of economic policy
in 2014 and a more stable exchange rate, with inflation falling to 8% consistent
with Bank of Mongolia monetary policy (Figure 3.12.9).
The current
account deficit is forecast to fall to 20% of GDP in 2014 and 15% in 2015 as the
trade balance improves. Exports are expected to grow following the start of Oyu
Tolgoi production last year, and as new mining projects come on-stream. The
recent exchange rate depreciation and the expected tightening of economic policy
will further constrain domestic absorption and dampen imports. The new
investment law and the planned second phase of Oyu Tolgoi development are
expected to support a recovery in FDI inflows, further stabilizing the BOP.
Mongolia’s
economic prospects are subject to downside risks from an uncertain external
environment and the continuation of expansionary economic policies at a time
when the BOP is under pressure. The People’s Republic of China (PRC) is the
main destination for Mongolia’s exports, accepting about 87% of them in 2013.
Mongolia is thus highly vulnerable as the PRC rebalances from investment-led
growth toward greater reliance of consumption, which may initially dampen
demand for Mongolia’s exports. Environmental concerns in the PRC may also
reduce coal consumption. Further, substantial increase in global supplies and
growing competition are putting Mongolia’s mineral exports on an uncertain
growth trajectory. Future trends in Mongolia’s major export prices are also
uncertain (Figure 3.12.10). On the domestic front, the continuation of current monetary
and fiscal policies will inevitably perpetuate BOP and inflationary pressures,
requiring significant real economic adjustments that may curtail growth.
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