European Union External Action

MONGOLIA – Weekly press review 18 May 2020

18/05/2020 - 10:41
News stories

DELEGATION OF THE EUROPEAN UNION TO MONGOLIA This information is based on media reports found in the open sources/via subscription, and can in no way be taken to reflect the views of the European Union.

Coronavirus

Total number of confirmed cases reached 140 while 24 patients have recovered. Montsame

The State Emergency Commission (SEC) plans to allow entry of Mongolian citizens from Irkutsk and Ulan Ude through the Altanbulag border check-point. The SEC is also discussing the repatriation of Mongolian nationals from Japan and Kazakhstan. Chartered flights will continue to be organized based on the availability of quarantine places for evacuees. Montsame

EU – Mongolia  

The Delegation of the European Union to Mongolia launches the Online European Film Festival. Viewers will have free access to European movies with both English and Mongolian dubbing and subtitles from 18 May until 18 June at Festivalscope (link is external)

EU Ambassador met the Governor of Central Bank on 14 May: Ambassador Traian Hristea stressed that the European Union does not issue a "black and grey list" of third countries, but a list of countries that lack a strategy to combat money laundering. The European Union will not impose any financial or economic sanctions on Mongolia, and development cooperation programs implemented in Mongolia will be carried out as normal, only the control over the identification of customers in transactions will be improved. The Governor of the BoM B. Lhagvasuren said that Mongolia intends to be removed from the FATF list within this year. Montsame

Bank of Mongolia statement on the EU list of high-risk third countries: Based on the 2015 Mutual Evaluation, Mongolia successfully fulfilled 50% of the tasks since its inclusion in the FATF (Financial Action Task Force)’s grey list in October 2019. Mongolia is currently reporting on the remaining work to the Asia Pacific Group, which will allow the country to be removed from the list of strategically deficient countries by October 2020. The FATF's activities, actions, rules, procedures, policy decision-making processes, and oversight activities are independent from the European Commission. ZGM

EU-funded project to empower women and intensify organic vegetable farming in Arkhangai: 'Ensuring gender equality for rural economic growth’ project is to be implemented by Mongolian Women’s Fund and Agronomes et Vétérinaires Sans Frontières Mongolia in Khentii aimag and four soums of Arkhangai aimag until 2022 with funding from the European Union. The project aims to empower women and improve their participation in national and local policy-making, and support local production of value added sustainable cashmere, that costs 15-30% more than regular cashmere on international markets, and organic vegetable farming. To promote sustainable cashmere, the project will introduce advanced technology for improved cashmere yield and quality. The project is also expected to improve food safety by intensifying organic vegetable farming. Montsame

Financing agreement on cable car project approved: the Parliament ratified the financial agreement to be established between the Governments of France and Mongolia. Within the framework to introduce a new type of public transport service in Ulaanbaatar and reduce traffic and air pollution, the Municipality of Ulaanbaatar is collaborating with the French Poma Company to implement the cable car transport project. To be funded by the Government of France, the amount of the loan is USD 60 million, the repayment term is 40 years, with a grace period of 12 years. Under the project, a 4.9-km Bayankhoshuu traffic circle - Khanyn Material - Trauma Hospital air route with three stations as well as a 5.4-km air route linking Doloon Buudal – Dari Ekh – Sansar traffic circle with three stations will be built. Montsame

The German development agency, GIZ’s Energy Efficiency Project (EEP) hands over new training equipment to the Mongolian Energy Training Center. Commissioned by Germany’s Federal Ministry of Economic Cooperation and Development, the Energy Efficiency Project is funded by the governments of Germany, Switzerland and the Municipality of Ulaanbaatar. Montsame

Political and internal developments

Parliament approved amendments to the Law on the Government of Mongolia: The Prime Minister, in consultation with the President, will have the authority to submit a proposal on the structure and composition of the Cabinet to the Parliament. The amendments state that no more than four members of the Cabinet and the Prime Minister will be allowed to be members of Parliament. The Parliament will provide regulations on the appointment, resignation and dismissal of a Cabinet member, based on the Prime Minister’s proposal to the Parliament and the President. The Parliament will also develop regulations for the dismissal of the Prime Minister, as well as on the dissolution of the entire Cabinet upon the resignation of the Prime Minister. The amendments also include provisions stating that the Prime Minister will be required to submit to the Parliament a draft resolution on the state budget and related policy, requesting a vote of confidence. If the Parliament approves the draft resolution, that vote will be considered a vote of confidence. AmCham

General Election Commission receives documents from candidates: The receipt of documents from parties, coalitions, and independent candidates participating in the 2020 Parliamentary Elections started on 17 May. Currently 17 independent candidates have submitted their documents and the General Election Commission (GEC) approved applications of 13 independent candidates. The GEC will be receiving documents until 21 May. Ikon

Political parties and coalitions receive certificate of confirmation: The General Election Commission handed over the certificate of confirmation to 15 political parties and four coalitions that were registered to participate in the June election. Montsame 

Election Committee members take oath: During its plenary session on 30 April, the Parliament approved the appointment of new members of the GEC. Commissioner General of the General Police Department of Mongolia S. Baatarjav and Chairman of General Authority for Intellectual Property and State Registration B. Baasandorj were appointed as members of the GEC. The UB Post 

Police arrests 100 peaceful demonstrators: Wearing white gowns, the young Mongolians demonstrated while standing two meters apart from each other in accordance with social distancing rules. They were demonstrating against: drug trafficking, murder cases in ministry and local administration buildings, increase of the national debt and the increase of seven taxes. News

​Mongolia to regulate bank ownership: The Government is in the process of drafting a new bill on the ownership of banks to improve corporate governance. By restricting shareholders from owning more than 20% of a commercial bank, the new bill aims to improve banking governance, reduce risks such as conflict of interest, and ensure stable operations of banks. The adoption of this bill would mean that each bank operating in Mongolia will be required to have a minimum of five shareholders. The UB Post 

Bill on legal status of human rights defenders: Minister of Foreign Affairs D. Tsogtbaatar submitted the bill on the legal status of human rights defenders to the Speaker of the Parliament. In Mongolia, human rights defenders are often attacked and threatened for their activities, but there is no legal environment to protect and support them. The bill defines “human rights defenders” in the legal context to ensure their legal status by law. The bill was developed to ensure the security of human rights defenders. The UB Post

President Battulga visits railroad construction sites: construction of the 416 km railway connecting Zuunbayan with Tavantolgoi, and 240km railway connecting Tavan Tolgoi with Gashuunsukhait border checkpoint has progressed regardless of the circumstances surrounding COVID-19 pandemic. Office of the President 

Parliament approved a draft resolution on the establishment of two new cities, ‘New Zuunmod’ and ‘Maidar’, near the new international airport of Ulaanbaatar with the aim to reduce environmental pollution caused by the over-densification in the capital. Montsame

Foreign Policy

Mongolia will chair the 76th session of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The session will be held via online conference on 21 May. UN ESCAP  News

Mongolian peacekeepers in Afghanistan take part in COVID-19 prevention training: The 11th  batch of Mongolian peacekeepers, serving jointly with the German Armed Forces in the NATO-led 'Resolute Support Mission' in Afghanistan, organized a training in cooperation with military trainers from Germany and Belgium on survival and COVID-19 prevention. Montsame

Mongolia receives more medical supplies from China's Inner Mongolia Autonomous Region: the government and the Red Cross Society of the autonomous region donated a negative pressure ambulance and 5,000 N95 masks. Xinhuanet  

Mongolians arriving on Russian military transport planes: 347 Mongolian cadets and military officers who study at universities and colleges returned home from Russia with three Russian military planes. Montsame News 

The Asian Development Bank (ADB) approved a USD 100 million loan to mitigate the severe health and economic impact of the COVID-19 pandemic in Mongolia. The current turmoil in the global economy and commodity markets has reduced revenues, increased balance of payment pressures, and accentuated financial sector risks. Women and small businesses are particularly vulnerable. The economy, with its dependence on mining, which accounts for almost a quarter of gross domestic product and 90% of exports, remains vulnerable. Bloomberg TV

The IMF's Rapid Financing Instrument proposed as an option for state budget financing: The International Monetary Fund's (IMF) Resident Representative in Mongolia, Seok Hyun Yoon noted, "One of the possible options is to provide budget funding to the Government of Mongolia through the Rapid Financing Instrument." Available to all IMF member countries, the instrument provides rapid and low-access financial assistance when an urgent balance of payments is needed. Currently, the IMF is discussing the issue with the Government of Mongolia and the tool can finance budget expenditures related to essential health services during a pandemic. Bloomberg TV/ AmCham 

Parliament ratifies Inter-American Convention on Serving Criminal Sentences Abroad: By joining the convention on serving criminal sentences abroad, it becomes possible to establish the reflected relations with 21 countries. With 19 articles, the convention reflects on conditions for the transfer and information about the sentenced person, transfer request and requirements, refusal of transfer request, transit, and remaining sentence. Montsame

FATF grey listing update: Mongolia needs to implement four out of 40 FATF recommendations to be removed from the FATF greylist. The recommendations include preventing recidivism in cases of anti-money laundering and anti-terrorist financing; to intensify investigations and judicial proceedings; the confiscation and sealing of undeclared and falsely declared banknotes; effective sanction measures; and improving cooperation and coordination between state authorities. AmCham 

 Economy

Mongolia's external debt two times higher than GDP:  Mongolia's sovereign debt is less than 70% of the nation's GDP, but its total external debt is more than double of the size of the economy. Mongolia's foreign debt has reached USD 30.7 billion, of which the state's debt is USD 7.8 billion. Bloomberg TV

Mongolia's foreign trade turnover declined by 30.8% year on year in the first quarter of 2020. Mongolia's foreign trade totalled USD 3 billion in the first four months of this year, exports fell by 45.3% while imports dropped by 10.2%. China maintained its position as Mongolia's biggest trade partner taking up 56.5% of Mongolia's total foreign trade. Xinhuanet

Mongolia Import – Export Balance May: As of May 2020, Mongolia imported USD 1.8 billion in goods, down by USD 248 million compared to the same period last year. The Customs Administration Office reported that food imports increased by USD 12 million, while mineral imports decreased by USD 130 million during the reporting period. Ikon / AmCham

Turquoise Hill expects Oyu Tolgoi blowout to top $1.8bn: The Rio Tinto-controlled company and mine operator had expected the underground expansion to cost $5.3 billion when it was approved in 2015. Last year, however, Turquoise Hill flagged stability risks associated with the original project design, adding that amendments to it could increase costs by as much as an additional $1.9 billion. The Vancouver-based miner also warned at the time of further delays of up to two and a half years, noting it wouldn’t know the exact scale of schedule and costs blowouts until mid-2020. Oyu Tolgoi’s operator now says the expansion will need an estimated $1.5 billion, in a range of $1.3 billion to $1.8 billion. In terms of project completion, Turquoise anticipates it would take two extra years than originally planned for the project to begin production, with a 21 to 29 months range. Mining.com

Moody’s changes Mongolia’s outlook from stable to negative: Moody’s Investors Service revised the issuer ratings of Mongolia from stable to negative. The decision to change the rating outlook to negative reflects rising external vulnerability risks related to a sharp fall in export revenue, widening the current account deficit to about 15% to 20% of the GDP in 2020 amid declined demand for commodities. The government’s borrowing requirements are expected to increase, in part to fund a large stimulus package, which raises liquidity risks. Government spending during the coronavirus outbreak is estimated to widen the fiscal deficit to 8.5% of the GDP in 2020. ZGM

Parliament approves cashmere subsidies: herders will be given a subsidy of MNT 20 000 per kg of cashmere (app. EUR 7), with an estimated budget expenditure of over MNT 200 billion. Montsame

Steppe Gold sells gold and silver worth USD 8.5 million to the Bank of Mongolia: The company said it had delivered 5,233 ounces of gold and 1,372 ounces of silver to BoM. Steppe Gold started processing ore at the Altan Tsagaan Ovoo deposit in March and plans to produce 60 000 ounces of gold in 2020 and to expand its open pit and processing plants to bring its annual gold output to 150 000 ounces. Bloomberg TV  Mining-Journal

Coal export declined by nearly three times year-on-year according to the General Customs Administration. Since the beginning of the year a total of 4.6 million tons of coal were exported worth USD 374.5 million. 470 trucks exported coal at Gashuunsukhait port and 233 trucks at Shiveekhuren port last Friday. Despite the increase in coal exports, the CEO of Tavan Tolgoi JSC said that it would return to normal only if more than 500 trucks produce coal at the Gashuunsukhait port daily. Erdenes Tavan Tolgoi is expecting a 30% drop in coal exports. ZGM

Commentary

Mongolia cancels USD 3 billion coal IPO: The cancellation of a stake sale in the country’s flagship coal mining company comes as economic growth and ratings agencies cast a shadow on the economy. In a blow both to the country and its capital markets, the Mongolian government has once again scrapped its up to USD 3 billion initial public offering plans in Hong Kong for the central Asian republic's flagship coal mining company Erdenes Tavan Tolgoi. A 30% sale of the shares of the state-owned company has been expected since at least 2012 and this is the country’s third attempt to raise money for Erdenes Tavan Tolgoi to have failed. A previous IPO plan in 2012 was pulled after the government changed its plans for the mine and, three years later, a stake sale to a Chinese-Japanese consortium also fell flat after political interference. Erdenes Tavan Tolgoi is one of the largest miners in the country and holds the licence for one of the world's largest untapped coking and thermal coal deposits. Finance Asia

Regionalization, Internationalisms, and Mongolia’s Almost Century-Old Mining Sector by Marissa J. Smith: In English-language scholarship, Mongolia’s political-economic system has often been characterized as democratic and market-driven. Though not untrue, this characterization casts Mongolia as a unified entity, which redirects attention from how Mongolia is also regionalized, with an economy, political system, and broader society consisting of distinct networks. This may sound like a level of detail only relevant to those interested in hyper-local kinds of particularity. However, in fact recognizing Mongolian regionalization is also important for understanding Mongolia’s international roles, as well as the workings of its national government and economy, which as we ramp up for the next parliamentary elections, we would do well to remember are very complex. Mongolia Focus 

Historical Memories: Contemporary Perspectives on Choibalsan by Julian Dierkes, Kenny Linden and Marissa Smith: The biggest question that we’re asking ourselves is: how come that individuals like Kh.Choibalsan are still celebrated to some extent in contemporary Mongolia when his responsibility for some heinous crimes against fellow Mongolians is undisputed? A common refrain suggests that Choibalsan had no choice but to oversee the execution of 40 000 people, despite the counterexamples of Genden and Amar, who resisted the Stalinist era purges, which ultimately led to their deaths. Genden’s house was turned into a museum of political persecution, though this historical house was removed in the recent destruction of historical buildings in Ulaanbaatar. So, is this kind of historical commemoration a true blind spot in contemporary Mongolia? Mongolia Focus 

Cashmere piles up in Mongolia as coronavirus cripples trading: Mongolia produces around 40% of the world's cashmere fiber, but the country's herders, traders and processors depend on Chinese buyers who purchase more than 80% of their wool for further processing into yarn that can woven into sweaters, scarves and other clothes. Cashmere is Mongolia's top non-mineral export and more than a third of the country's population of 3 million is involved in its production. The herders usually generate two-thirds of their annual income through spring sales of the hair their goats accumulate during the frigid winter, using the proceeds in part to repay grocers and vendors who sold them supplies on credit. But with international travel and many factories worldwide shut down by the COVID-19 outbreak, the Chinese just aren't buying this year. Nikkei Asian Review

Welcome to the yurt-opolis! How Mongolia is helping its nomads adapt to big city life by Oliver Wainwright: Scattered around the Soviet-era urban centre are hundreds of thousands of tiny white dots. It is as if someone has emptied an enormous bag of confetti across the landscape, the white specks clustering in the folds of the valleys, extending outwards for miles in long, snaking tendrils. For thousands of years, these transportable tents, made of wooden latticework wrapped with insulating felt and canvas, have been the house type of choice for the Mongolian herders on the plains. But the nomadic tent-based mindset is not something easily given up when herders move to the city – with problematic results. The Guardian

Mongolia: How Nalaikh’s Youth See Democracy by Claire Casher, Samantha Coronel, Rasmus Dilling-Hansen, and Cassandra Jeffery: A Canadian research team shares their findings from a Mongolia youth engagement study. Youth in Nalaikh, Mongolia are eager to engage with their local government and participate in community-driven social initiatives, but a disconnect between democracy in theory and democracy in practice may be impeding their ability to do so. With Mongolia’s 2020 election around the corner, it is essential for leaders to note that Nalaikh’s youth view democracy in a positive light but are unclear on the role they play within it. Proactive, youth-specific outreach is required to capitalize on their enthusiasm and increase civic engagement among young Mongolians (especially if COVID-19 containment measures create barriers to election participation). The Diplomat

 

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Prepared by Edina Bartalová

Delegation of the European Union to Mongolia

ICC Tower, 6th floor, Jamiyan Gun Street 9

1st khoroo, Sukhbaatar district, Ulaanbaatar

https://eeas.europa.eu/delegations/mongolia_en

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