Mongolia Brief August 28, 2014 Part I
Energy
Minister Meets China’s Inner Mongolian Delegation
By B. Khuder
Ulaanbaatar,
August 28 (MONTSAME) The Minister of Energy M.Sonompil Wednesday received a
delegation headed by Mr Wang Yuching, a director of energy company of Chinese
Inner Mongolia.
The Minister
noted that "this meeting is held after the state visit of China’s
President Xi Jinping to Mongolia", during which the leaders of the two
states exchanged views on the cooperation in the energy field and concurred to
focus attention on establishing a long-term contract for this sector. "It
definitely will contribute to our cooperation,” Mr Sonompil underlined.
After this the
sides shared views on expanding the collaboration between our Ministry of
Energy and the Chinese Inner Mongolian energy company, and consolidated their
positions over several issues.
General
Customs Authority to Cooperate with USAID
By B. Khuder
Ulaanbaatar,
August 28 (MONTSAME) The General Customs Authority (GCA) will cooperate with
the United States Agency for International Development (USAID) in modernizing
activities for easing the external trade of Mongolia.
A related to it
memorandum of understanding was signed Thursday by O.Ganbat, the head of the
GCA, and by Mr Richard Chen, the acting USAID Representative to Mongolia.
A realization
of the document is to allow the GCA to reduce a pressure over businessmen, to
carry out the audit after customs formalities, to implement the risk management
and to utilize information technology.
In addition,
the USAID will refine an automatic information system of customs, provide the
GCA with an opportunity to use a module of customs tariff, give technical assistance
to the GCA’s after-formalities audit inspection department, to section of risk
management and the IT center. Staffers of the authority will be involved in
mid-career training as well.
With an aim to
facilitate the external trade through this document, the USAID will also back
the private sector’s participation in all reform activities being run in order
to make the customs bodies and actions more effective and transparent, to
augment the revenue of state budget, and to save businessmen' time in performing
the customs formalities.
Natural
Studies Labs to Open at Schools
By B.
Amarsaikhan
Ulaanbaatar,
August 28 (MONTSAME) A 700 million togrog worth equipment of laboratories used
for natural studies subjects in secondary schools presented to the Ministry of
Education and Science by the Government of Japan in a scope of non-refundable
aid.
In a scope of
our government's last year programme “Innovation policy for improving quality
of primary and secondary education”, such labs were given to 100 schools. In
future, all schools will receive the latest laboratories, as the Ministry of
Education claims.
As known, the
Japanese government had decided to grant JPY 200 million (over two million US
dollars) of non-project non-refundable aid to our government, and then the
parties signed an official note, by which the Mongolians aimed to purchase
medical and educational equipment.
This aid
promotes developing countries' structural reform policies, reduces a deficit of
payment balance, and lets import substantially important products. Since 1991,
Mongolia received this aid ten times, which eased our transition to market
economy, improved economic structure and decreased foreign trade deficit.
Niigata
Mayor Visits Khovsgol Province
By B.
Amarsaikhan
Ulaanbaatar,
August 27 (MONTSAME) Delegates led by the Mayor of Niigata prefecture of Japan
made a working visit in Khuvsgul August 27.
During the
visit, the two parties signed a memorandum of cooperation. The delegates also
visited a local museum and an archeological site–Deer stones of Uushig in Tuya
baga, Burentogtokh soum, and were introduced to the life of a Mongolian
herdsman household.
Khuvsgul aims
to cooperate and to share experiences with Niigata of Japan in foreign
relations, tourism, health, and education spheres.
Benches
Installed in City Streets
By B. Khuder
Ulaanbaatar,
August 28 (MONTSAME) The city administration Thursday reported that 1,000
benches costing MNT 350 million have been installed in streets of the capital
city.
"This will
improve the city's appearance and will create a comfort for people, all this
work is dedicated to the 375th anniversary of Ulaanbaatar," the city
officials say.
Out of these
1,000 benches, differently-styled 400 ones were bought from the domestic
producers to support their business and have been located together with garbage
bins in the streets such as the Tourists’, the Great circle, the Square of
Chingis Khaan and the Ard Ayush street.
German
Mongolist Arrives
By B.
Amarsaikhan
Ulaanbaatar,
August 28 (MONTSAME) Mongol studies scholar and an administrator of a website,
which provides the German with reliable information about Mongolia, Eike
Andreas Seidel is here to make some tours and run talks.
He studies here
an impact of globalization, mainly writes about how an exploitation of minerals
and uranium affects Mongolia’s population and animals. He has visited Mongolia
eight times since 1989, in 2008 started collaborating with Mongolian civil
society involved in environment protection.
The scholar had
once donated 1,500 euros, collected on the occasion of his 65th birthday, to an
NGO of "Medical doctors against nuclear weapon". In the UB city he
intends to discuss nuclear issues with related people.
Intellectual
Sports Athletes to Partake in Open Tournament
By B.
Amarsaikhan
Ulaanbaatar,
August 28 (MONTSAME) Mongolian Intellectual Sports team has headed to Mumbai
city of India to partake in Intellectual sports open tournament which will run
on August 31.
The 3-people
team has been headed by a director of Intellectual Academy of Mongolia,
international 2nd class intellectual umpire Kh.Khatanbaatar.
The tournament
is supposed to gather some 67 intellectual athletes to have them compete in
ten categories of visual and hearing memory tests.
In previous
events in Manila of Philippines in June, the team members E.Enkhmunkh won two
gold, five silver and two bronze medals, T.Enkhjin--three gold, one silver and
three bronze medals, and S.Tsogbadrakh--three gold and one bronze medal. They
had won 19 of possible 30 medals, by the team total score they had taken a
second place. By memorizing 1,408 ciphers in the category of “Number Marathon”,
Tsogbadrakh had broken the world record.
Mongolia-China-Russia
economic forum held
August 28
(news.mn) The Mongolia-China-Russia Economy and Trade Partnership Forum and
Exhibition was held in Erenhot, Inner Mongolia Autonomous Region, from August
19-24, 2014.
The event was
carried out to expand economic and trade cooperation and create new markets and
partnerships between the neighboring countries.
The Forum and
Exhibition was held with theme of “Broad Trust, Innovation Development and
Cooperation", with a focus on national manufacturing, an import goods
exhibition, project promotion, and a trade fair.
Senior expert
from the Infrastructure and Improvement division of the Khan-Uul District
Governor's Office D.Baasangarav, Economy and Planning Division expert U.Namuun
and expert from the Small and Medium Enterprise Support Center N.Odontungalag
attended the forum and exhibition.
First
phase of the Auto Trade Complex construction begins
August 28
(news.mn) The foundation stone laying ceremony of the first phase construction
of the Auto Trade Complex in the 32ndkhoroo in Songinokhairkhan district was
held on August 27th.
Sales centers
for used cars, parts, and equipment in 34 locations in Ulaanbaatar will be
moved out of the city when the parking lot is finished in the first phase of
construction. The Auto Trade Complex is part of the Ulaanbaatar Master Plan
through 2020 and urban-redevelopment. Officials believe such a move will
be effective for the reduction of air and soil contamination and traffic
congestion in the city.
The Auto Trade
Complex will feature sales of vehicles, spare parts, tires, oil and
lubrication, car insurance services, vehicle diagnostics, license plate number
services, tax payment services, leasing services, auto repair, car wash
facilities, and advanced driving courses, a driving safety center and a vehicle
testing range.
The residential
“New City Center” being built for a population of 10,000 will be built near the
Auto Trade Complex to encourage residency in the area.
As project
operator of the parking and road construction, Eko Togtol LLC, Anandiin Zam LLC,
Bat Cubic LLC, and Tegsh Plant LLC were selected and have begun
the first phase of the construction. According to the contract, the
project operators will complete the first phase of construction by October 1,
2014.
14
mining fields ready for selection
By B. Az
August 28
(Mongolian Economy) The Mineral Resource Authority is ready to announce the
first 14 mining areas ready for development in an attempt to overturn last
year’s controversial cancellation of 106 mining licenses. Approved areas
include six fields in Baynkhongor, three in Dornogovi, one in Dundgovi,
Umnogovi, Khovd and Ulaanbaatar. The fields range between 94.49 to 56.098.52
hectares.
From 2009-2010
the Mineral Resource Authority annulled 106 illegal mining licenses of which
some companies have expressed they were honest owners. Now, foreign and
domestic investors eagerly await for the Government to make decisions on the
relativeterritories for each license. According to the 24 companies possessing
illegal licenses, they have invested a total of about MNT 25 billion in early
phase development and exploration.
The Law of
Mineral Resources has 5 resolutions to annul licenses, while Company Law has
2-3 resolutions that can effect the granting and cancelling of mining licenses.
There are no other laws that can have an effect on mining licenses.
“The Mineral
Resources Law of 2009 states if a special license has been terminated,
cancelled, returned or requested to be reassigned, selection has to be
announced,” said Batkhuu B., Director of Department of Policy Regulation and
Implementation, the Ministry of Mining.
“However, the
associated companies have neglected that enactment. Thus, the court has decided
to announce reselection. Of course, the companies suffered a certain amount of
losses. Regulations are being made.”
According to
the regulation, the companies working in the fields must hand in their
financial expenses through official statements to an official working group
appointed by the Mineral Resource Authority.
Once verified,
selection will be announced where previously involved companies will have
superior rights, which means they won’t be charged. Other companies can
participate in the selection. However, they have to pay no less than 30 percent
of the actual charge. The charge prices will vary depending on the size of the
fields. The minimum is about MNT 20 million, while the maximum is MNT 410
million.
Mongolia
trading up
August 19
(Oxford Business Group) In a bid to lower trade barriers and eliminate Customs
duties, Mongolia has struck its first major trade deal with Japan, which could
pave the way for a broader network of free trade agreements (FTAs) while also
boosting its chances of becoming a trade and logistics hub in the years to
come.
At the end of
July, Mongolia and Japan signed an economic partnership agreement (EPA), which
will lift almost all tariffs on goods and services traded between the two
countries, according to a joint statement. When the agreement comes into force
next year, all Mongolian exports to Japan will be exempt from duties, while
Customs will be levied on just 4% of Japanese products coming into the country.
The EPA is
Mongolia’s first FTA and should prompt an expansion in mutual imports and
exports. Last year, Japan imported just $21m worth of products from Mongolia
while exporting $288m, but this is expected to change in the coming years.
“The Economic
Partnership Agreement will create a favourable business and investment
environment and establish a stable legal framework. I do believe that our two
parties can sign and ratify the agreement in the first quarter of 2015,” said
Mongolian President Ts. Elbegdorj.
Pole position
One key element
of the agreement is the development of an investor-state dispute settlement
(ISDS) framework, which sets out mechanisms for foreign firms operating in
Mongolia to seek redress if they believe their business has been unfairly
impacted by state policies. In establishing the ISDS scheme, Mongolia hopes
that Japanese firms will feel more secure in investing in the country.
There have been
concerns in the past that shifts in state policy can leave overseas companies
exposed, with changes in the terms governing mining leases being an example
often cited. Recent amendments to licensing laws reinforcing the rights of
lease holders, along with the ISDS clause in Mongolia’s EPA, suggest it is
working to strengthen the country’s appeal as a stable investment destination.
Having been the
first to formally reach out to Mongolia with an EPA, the agreement could also
propel Japan towards favoured partner status, at least in some fields. With
disposable incomes set to grow over the coming years as Mongolia continues to
develop its mineral resources, demand for consumer goods, electronics, vehicles
and other products should rise sharply.
The EPA could
place Japan in pole position to take advantage of any increase in personal
spending, while domestically retailers and franchise operators dealing in
Japanese goods should also benefit from the lowering of the tax barriers. The
advantage gained by Japan could well prompt other countries to step up efforts
to open trade ties with Mongolia.
More FTAs?
While the
agreement with Japan has been sealed, more such deals could be in the pipeline.
In late May, Mongolian and Russian officials held talks in Moscow to discuss
trade ties, according to an online statement by Russian's Economic Development
Ministry.
The focus of
discussions was the possibility of Mongolia joining the Russian-led Customs
Union that has brought down trade barriers between Russia, Kazakhstan and
Belarus, with Armenia and Kyrgyzstan also expected to join the fledgling bloc.
According to
Alexei Ulyukayev, Russia’s minister for economic development, increased
investments by his country in the Mongolian economy, in particular in transport
infrastructure, would help facilitate the creation of a free trade zone amongst
the countries.
The union, which
came into being in 2010 and is seen as a rival to the European Union, has also
seen interest from other countries. Ulyukayev said he discussed possible forms
of cooperation with the Turkish Economy Minister, Nihat Zeybekci, at the G20
trade ministers meeting in Sydney, in July, with talks focusing on the
formation of a free trade zone.
Corridors of trade
The move
towards freeing up trade relations with Russia has been seen as part of
Ulaanbaatar’s ongoing strategy to diversify its export markets and maximise
trade and business opportunities.
By
strengthening ties with Russia, Mongolia would be able to open up a new export
corridor to the north as well as boost access to other countries within
Moscow’s orbit. This corridor would allow Mongolia to access markets in the
booming Asia region and beyond more directly via Russia’s Pacific ports.
Such a corridor
could also facilitate imports needed to sustain Mongolia’s development,
including the technology and heavy equipment needed to underpin the mining
sector, as well as to support the diversification of the economy.
In addition, by
reinforcing its own domestic rail network, Mongolia will position itself to be
a conduit for trade between Russia and China. This would allow it to benefit
from the increasingly close links between the two countries, while also
strengthening Mongolia’s own access to expanding markets.
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