European Union External Action

MONGOLIA – Weekly press review 22 February 2021

22/02/2021 - 05:19
Mongolia – Weekly press review

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. You can subscribe or unsubscribe through the form available on our website https://eeas.europa.eu/delegations/mongolia_en

COVID-19

Total number of confirmed cases reached 2693 and the total number of recovered patients was 1933 on 22 February. Montsame (In MNG)

Mongolia recorded two more COVID-19-related death, taking the total death toll to six. Xinhua

Mongolia received first COVID vaccine from India: 150 thousand of Covishield Astra Zeneca Vaccine granted by Government of India have arrived in Mongolia. Vaccination campaign will start from 23 February. Montsame

Mongolia to spend USD 79.3 million on COVID-19 vaccines: Mongolia is planning to vaccinate at least 60% of its population, or all adults in the country. Xinhua

Charter flights in February: 24 February to Istanbul and 26 February to Seoul. Montsame

Mongolia COVID-19 interactive dashboard is available in Mongolian and English.

EU - Mongolia  

Prime Minister L.Oyun-Erdene received EU Ambassador Traian Hristea who congratulated the Prime Minister on his appointment and expressed his appreciation regarding the Government’s MNT 10 trillion (EUR 2.9 billion) comprehensive plan aimed to protect citizens’ health and recover the economy. Prime Minister requested special attention to be given to economic cooperation, relations between businesses and private entities, and support for the processing industry. Montsame

The Prime Minister met German Ambassador: The parties expressed pleasure with the steady development of relations between the two countries with comprehensive partnership and undertook to make joint efforts to establish strategic partnership. Both sides discussed to expand bilateral cooperation in technology, mineral sectors, and in other areas of common interest. Montsame

Project to support economic activities of Czech companies in Mongolia launched: In Mongolia and other sixteen countries, a project to support the economic activities of Czech companies abroad (PROPEA) will be implemented this by the Ministry of Foreign Affairs of the Czech Republic, the Czech Chamber of Commerce and the Confederation of Industry and Transport of the Czech Republic. Services to Czech companies are provided in cooperation with the Czech Embassy by an expert entity familiar with the local business environment. Czech Embassy

E-vouchers worth MNT 100 000 (EUR 29) provided to 2,948 households: The Swiss Agency for Development and Cooperation launched the “Leaving No One Behind” project, partnering with the German Embassy in Mongolia, the Ministry of Labour and Social Protection, and People in Need NGO. The project aims to reach people most affected by the lockdown and provide around 3 000 vulnerable households e-vouchers, which can be used to purchase groceries and basic necessities from supermarkets and pharmacies. Ikon (In MNG).

Political and Internal Developments    

Government organizations ordered to work under cost-saving mode through 2021: All state and local government organizations and state-owned entities, excluding those organizations directly responding to COVID-19, shall take various cost-saving measures by cutting back on unnecessary expenses until the end of the year. Montsame

Mongolia ranked 61st in the Economist Intelligence Unit’s Democracy Index 2020: The democracy index, on a 0-10 scale, is based on the ratings for 60 indicators grouped in five categories. Mongolia gained 8.75 scores in electoral process and pluralism, 5.71 scores in functioning of government, 5.56 scores in political participation, 5.63 scores in political culture, 6.76 scores in civil liberties and classified as a “flawed democracy”. EIU

440 000 farm animals killed in Mongolia harsh winter: Dzud is a Mongolian term to describe the frigid winter that comes after a dry summer and causes numerous farm animals to die of starvation or cold. At least six of Mongolia's all 21 provinces have now been suffering dzud or near-dzud conditions. Xinhua

Foreign Policy

Prime Minister asked for U.S. support for access to COVID-19 vaccine: Prime Minister L.Oyun-Erdene held a meeting with U.S. Ambassador to Mongolia Michael S. Klecheski. The Prime Minster put forward a request for the U.S. support to access COVID-19 Pfizer vaccines within the framework of the COVAX Facility. Montsame

Feasibility study for gas pipeline project to be complete in the first quarter: Deputy Prime Minister S.Amarsaikhan met with the authority of Gazprom company and agreed to intensify the feasibility study for gas pipeline project. Gazprom plans to complete the feasibility study for gas pipeline construction through Mongolia in the first quarter of 2021. Montsame

Economy

Mongolia's virus-hit economy shrinks for first time since 2009: The economy amounted to MNT 37 trillion (EUR 10.7 billion) in 2020. The gross domestic product (GDP) fell by 5.3% in 2020 year on year. The drop was directly related to restrictive measures to contain COVID-19. Xinhua

Coal export increased by 21.6%: From 1 January to 7 February, Mongolia exported 3.1 million tonnes of coal, increased by 21.6% compared with the same period of the previous year. The country exported 138.4 thousand tonnes of copper concentrate, an increase of 11.8%. Montsame

China-Mongolia border port sees increase in China-Europe freight trains: The overall volume of goods transported by the freight trains via the Erenhot port during the period edged up 73.52% year on year to 268 800 tonnes, with the import and export values exceeding USD 673 million. Xinhua

Altanbulag border port to return to full operations on 23 February: The border crossing points will open for movement of freight vehicles of all types of goods. Foreign freight drivers will have to drop off their trailers at the clearance and inspection zone for pickup by domestic freight forwarders bound for the final destination. Montsame

Commentary

Governments from Mongolia to Mali seek to reopen mining deals: Some resource-rich developing countries are seeking to rewrite mining contracts and accelerate dividend payouts, which can take years to materialize under deals that experts said are tilted in companies’ favour. Any move to renegotiate agreements will trigger pushback by miners wary of threats to their profit margins and previous attempts have caused protracted disputes. Mongolia became the latest country to demand better terms, asking for more tax revenue from Rio Tinto’s Oyu Tolgoi copper-gold mine while it waits for dividends. Mongolia, which owns 34% of the Oyu Tolgoi mine, is unlikely to get dividends until 2051 based on Rio’s latest cost estimate for an underground expansion, a source familiar with negotiations said. Delays and rising costs have eroded the expected benefits of the project, the state argued. Rio, whose majority-owned Turquoise Hill Resources owns the rest of the mine, declined to comment. Reuters

Rio Tinto still committed to Oyu Tolgoi: CEO Jakob Stausholm said that Oyu Tolgoi was an “impressive mine” that would yield a “big win-win” for both the country and the miner. Mongolia’s government is said to be actively seeking to cancel the deal with Rio Tinto governing a USD 6.75 billion expansion of the copper mine, as it looks to replace it with a new agreement for beneficial to the country. “What it is about right now, is to have the right conversation and find the right solutions,” Stausholm said. Ulaanbaatar threatened in early January to halt construction at the mine, arguing that delays and higher-than-expected costs had eroded the economic benefits the country had hoped for. The mining giant has repeatedly said the Oyu Tolgoi underground expansion is its most important growth project. Once completed, Oyu Tolgoi will churn out 480 000 tonnes of copper a year from 2028 to 2036. Mining

Rio Tinto willing to negotiate new Mongolia mine agreement: Rio Tinto is willing to enter a new agreement with Mongolia to expand its Oyu Tolgoi mine as the government requested as both parties look to resolve an impasse over the multibillion-dollar project. Rio is open to replacing the underground development agreement with a new deal ratified by parliament, according to sources with direct knowledge. Discussions could include fees Rio gets for managing the project and interest rates on partner loans. Rio Chief Executive Jakob Stausholm told investors that he was convinced the miner would resolve the standoff. Yahoo Finance

Sulphur valley: Following the introduction of refined coal to replace raw coal last winter, the dark blue smog cleared up dramatically. This winter, however, thick grey smog fills the valley instead of the dark blue one. The above name was given because of the headache-inducing effect and the pungent odour. What is the reason behind this shift from carbon dioxide to sulphur dioxide? How can we ever get rid of the poison in our air? Despite claims of refined coal causing minimal damage to the environment, we face the need to study the effects of the briquette fuel on human health. It has become clear that the amount of sulphur dioxide in Ulaanbaatar’s air has surged even though the amount of PM2.5 and PM10 dust particles decreased since the launch of briquette fuel. The quantity of the 24-hour average exceeds the WHO’s health recommendation of a maximum of 20 micrograms by 20 times. All in all, unless we hire an independent professional organization to conduct a comprehensive, comparative study on the choice of heating solutions, assess, and then find an ultimate solution, there is no way to tell whether the taxpayer’s money is being used efficiently and whose business interests are being promoted. Jargal DeFacto

How to kick-start Mongolia’s net-zero carbon economy: Closer to Mongolia, northeast Asian countries relied on fossil fuels for 70% of electricity generation in 2018. Of those countries, the three largest – China, Japan and South Korea – have all pledged to reach net zero emissions by 2050 or 2060. In 2020, those three countries consumed 8815.7 terawatt-hours (TWh) of electricity, which means roughly 6000-6200 TWh will need to be converted to renewable sources in the next 30-40 years. Surely now is the time for Mongolia’s renewable energy sector to boom? In theory, yes. But in practice, a renewable boom won’t happen unless corporate boardrooms decide that projects are likely to be profitable. Renewable energy projects are disadvantaged from the start by the Mongolian government’s huge subsidies for coal-fired electricity. It will be difficult for Mongolia to tap into its vast renewable resources and improve its electricity grid without spending political capital on increasing the price of electricity. But if the framework and benefits of an increase are well communicated to the public, then perhaps the end of coal really is a possibility. And Mongolia can capture the accelerating opportunities created by a net-zero carbon world. Mongolia Weekly

Who benefits from transforming banks to joint-stock companies? At the beginning of this year, Mongolia is about to change laws to decrease the ownership concentration of commercial banks. Five systemically important banks (those accounting for more than 5% of combined bank assets) will become publicly traded banks by mid-2022. The remaining seven banks will become joint-stock banks by 2023 with shares of each owner not exceeding 20%. It is time that the public gains awareness and supports the reasoning behind its dramatic reform to “eliminate” the dominance of a few owners, and understand what challenges can arise, and why it is beneficial for the economy. Fair competition and low interest rates can be a reality only when commercial banks cease to serve a handful of owners and their businesses. Instead, they must have numerous owners, stay free of corruption, and maintain good governance and controlling that ensures transparency. Jargal DeFacto

Three Decades of Partnering for Prosperity: After thirty years of partnership with the World Bank Group, Mongolia has become a lower-middle-income country and its vision is to become by 2050 a high-income country with high levels of human development, better quality of life, a diversified economy, and good governance. This is an aspiration we will continue to support. To turn it into reality will be challenging. The first step will be to gradually phase out short-term relief measures and return to the important agenda of structural reforms which are needed to rekindle growth and make it sustainable and inclusive. Over the medium-term, Mongolia will have to contend with the growing risks associated with climate change, and the challenges this will bring to the structure of its economy. And it will need to offer its youth the perspective of productive, well-paying jobs, to retain the country’s talents at home. World Bank

Mongolia’s pitiless dzud: Following the dry summer of 2020, most herders, mainly in the central provinces, were not able to prepare hay in the autumn because of degraded grazing lands. Thus, many were forced to buy fodder at high prices. This was a heavy blow to a great number of herders, particularly those who, given the disruption caused to trading by the coronavirus crisis, were unable to sell their primary source of income, cashmere wool. As Mongolia’s latest winter loomed closer, the signs of it fast becoming severe were unmistakable. Herders in the central regions realised they had no time to lose in moving their livestock to the northern regions for more natural shelter and better grazing, but the accursed year of 2020 wasn't about to make things easy. Herders found their movements constrained as the nation went into a lockdown in November after officials recorded the first domestic transmissions of the coronavirus. bne Intellinews

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Prepared by Geser Ganbaatar

Delegation of the European Union to Mongolia

ICC Tower, 9th floor, Jamiyan Gun Street 9

1st khoroo, Sukhbaatar district, Ulaanbaatar

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