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BUSINESS COUNCIL of MONGOLIA NewsWire
www.bcmongolia.org info@bcmongolia.org
Issue 418 – March 11, 2016
BCM NewsWire provides short summaries of news collected from around the world. Each article is
kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full
article.
NEWS HIGHLIGHTS:
Business:
Ferrostaal and Outotec to build modern copper plant;
Mongolia ends fight with Khan Resources over USD100 mn mining license arbitration;
Mongolian group wins contract for Uvs power plant;
Erdenet Mining Corporation reports MNT 9 bn profits for 2015;
Parliament ratifies ADB loan to improve credit guarantee system;
PM backs locally-produced heating unit producer;
State Bank partners with Hungarian trade house for expanded trade;
Khan Bank cards now accepted in Inner Mongolia;
University of Humanities and 10 Asian foreign language universities form network;
Construction Ulaanbaatar 2016 trade exhibition;
60 students complete Oyu Tolgoi Youth Development Programme;
Robbers jack bank for love and money;
“I know who started the fire,” says Narantuul boss;
Rio Tinto chief executive Sam Walsh received smaller remuneration package.
Economy:
Mongol Bank: currency auctions, swaps, 1-week bills, T-bills;
Mongolian bonds bounce to 4-week high as copper extends rally;
80% of all company shares on MSE owned by less than 5 individuals;
Unemployment rate increases to 8.3% at start of 2016;
Transport minister expects freight volume to double;
Cost and time for obtaining an electricity connection will be reduced;
Government set to cut cost and time for electricity delivery;
Extreme weather alert: NEMA rescues 638 from freezing;
Nearly 250,000 livestock lost in dzud;
Air service agreement inked with Cambodia;
Registration initiative claims 84% of all firearms;
Azerbaijan cedes only to Mongolia in growth of HNWIs;
For Mongolians, climate change is as personal as it gets;
Drexel researcher proves Mongolian herders right in climate research;
UB property auction attracts just two bidders;
60 percent of all motor vehicles registered in UB;
Subsidized apartment rentals to be chosen by lottery;
Copper bears turn into bulls before prices rally most since 2011;
Metallurgical coal prices may do the unexpected: rise;
Iron ore jumps by record 19% on China stimulus hopes.
Politics:
Enkhbold faces petitions for his dismissal;
ASEP9 organizing committee calls first meeting;
CW-GP leaders refuse to support merger with Democrats;
National Labor Party (KhUN) divided;
Former MP, minister, central banker dies;
Polish Embassy to re-open in UB;
Mongolia's coal exporters could face fallout from latest U.N. sanctions on N. Korea;
N. Korean diplomats smuggling luxury goods through Mongolia;
Camel race in Umnugobi sets new Guinness record;
Mongolia suspects nabbed in Taipei NTD1 mn theft;
The most dangerous music in the world is—surprise—made by angry young men;
Silk Road initiative no 'Monroe Doctrine': China;
Mongolia and the new Russian petrol diplomacy—EDITORIAL.
BCM Updates:
Announcements;
BCM BGI Q4-2015;
Knowledge Sharing Sessions;
Advocacy Notes;
Working Groups News
BCM in the University Classroom Series;
Cooperation & Member discounts;
Websites Update - Presentations, Mongolia Reports, Interviews;
Social Networks;
Member Vacancies.
Economic Indicators:
Inflation;
Central Bank Policy Rate;
Currency Rates.
*Click on titles above to link to articles.
SPONSORS
Khan Bank Invest Mongolia Agency
Mongolian Business Database
BUSINESS
FERROSTAAL AND OUTOTEC TO BUILD MODERN COPPER PLANT
Germany's Ferrostaal Group and Finland's Outotec will be lead contractors in the construction of a
copper smelting plant to launch in May. Zes Erdeniin Khuvi JSC has hired Ferrostaal as general
contractor to build the plant for an estimated USD45 million, while Outotec will run equipment
procurement. Plans include production of grade A copper, as per the London Metals Exchange
designation, and 99.95% purity copper cathode for export.
The plant would recuperate costs within four years, according to plans, while paying MNT7.084
billion in taxes annually.
Source: News.mn
MONGOLIA ENDS FIGHT WITH KHAN RESOURCES OVER USD100 MN MINING LICENSE ARBITRATION
Mongolia has settled a dispute over an arbitration award that required it to pay more than USD100
million last year to a Canadian miner for revoking a uranium mining license, just as it launches a
push this week to attract new exploration interest. Khan Resources Ltd. said in a statement that
the government agreed to pay it USD70 million by May 15 and to withdraw efforts to annul the
award in a French court. In exchange, Khan said it would stop pursuing court certification of its
award in the United States, which may allow it to seize Mongolian commercial assets there.
The agreement was seen helping investment in Mongolia. "I think it helps the foreign investment
case for Canadians and any foreign investor," said Jim Dwyer, executive director of the Business
Council of Mongolia.
Source: Reuters
MONGOLIAN GROUP WINS CONTRACT FOR UVS POWER PLANT
Baruun Mongol LLC will lead the development of a new power plant to provide energy to some of
Mongolia's most remote provinces in the west as the country looks to expand its energy grid
nationwide. The Cabinet Secretariat on 7 March approved a concession contract with Baruun Mongol
to lead development and construction of the power plant at Uvs Aimag, under its ownership for
some years before transferring it to the government [Source does not include length of ownership
before transfer -ed]
Source: Montsame
ERDENET MINING CORPORATION REPORTS MNT9 BN PROFITS FOR 2015
Erdenet Mining Corp. has reported MNT9 billion in profits after raking in total revenue of MNT1.05
trillion. Erdenet Mining last year launched a cost-savings strategy amid declining prices for copper
products. By cutting down production costs it saved USD100 million last year.
Profits between 2012 and 2015 totaled MNT26 billion, it reported.
Source: Zuunii Medee
PARLIAMENT RATIFIES ADB LOAN TO IMPROVE CREDIT GUARANTEE SYSTEM
Parliament has ratified a loan agreement with the Asian Development Bank (ADB) for a project to
improve the credit guarantee system. “The project will help Mongolian small- and medium-sized
enterprises (SMEs) get more access to finance from commercial banks which will help diversify the
economy, which in recent years has been dominated by the mining sector,” said Robert
Schoellhammer, ADB Country Director in Mongolia.
The assistance will help SMEs access the collateral they need—but often lack—to obtain loans
through commercial banks by offering the businesses an alternative to the use of real estate. The
project is funded by a USD60 million loan from ADB, with an initial portion of USD6 million expected
to be made available in March 2016. Accompanying the loan, a technical assistance project will be
financed with an USD800,000 ADB grant.
Source: Asian Development Bank
PM BACKS LOCALLY PRODUCED HEATING UNIT PRODUCER
Prime Minister Chimed Saikhanbileg has thrown government support behind a start-up producing
more efficient heaters for ger residents. The energy-efficient heater by Best Energy Savings is four
times more efficient than stoves, says company head N. Davaa, consuming MNT50 of energy an hour
to heat up spaces to 75 Celsius. Seen as a device that can help reduce air pollution in Mongolia from
the heavy concentration of smoke from ger stoves, Saikhanbileg has ordered Development Bank of
Mongolia Director N. Munkhbat to deliver financing to the company so that it can produce 45,000
heaters by September. Mayor Erdene-Bat-Uul also received orders to help with sales and
distribution.
Source: Unuudur
STATE BANK PARTNERS WITH HUNGARIAN TRADE HOUSE FOR EXPANDED TRADE
Turiin Bank (State Bank) LLC has inked a cooperation agreement with Hungary's Magyar Trade House
LLC to open up international business partnership opportunities between their two countries.
Hungary is a supplier of agriculture products, foods, architecture, IT and more.
Source: Montsame
KHAN BANK CARDS NOW ACCEPTED IN INNER MONGOLIA
Khan Bank LLC's UnionPay-backed debit cards can now retrieve cash from banks in the China Inner
Mongolia Autonomous Region.
Source: Khan Bank
UNIVERSITY OF HUMANITIES AND 10 ASIAN FOREIGN LANGUAGE UNIVERSITIES FORM NETWORK
The University of Humanities and 10 other foreign language universities in Asia have formed a
consultative body to step up cooperation and exchanges. Leaders of the 11 universities launched
the body during the Presidential Forum for Universities of Foreign Studies in Asia at Westin Chosun
Seoul on 9 March, where ambassadors of China, Japan, Mongolia and Vietnam gave congratulatory
speeches at the forum.
The 10 other universities are Hankuk University of Foreign Studies (HUFS), Cyber Hankuk University
of Foreign Studies, Busan University of Foreign Studies, Daegu University of Foreign Studies, Tokyo
University of Foreign Studies, Kyoto University of Foreign Studies, Beijing Foreign Studies
University, Shanghai International Studies University, Samarkand State Institute of Foreign
Languages and University of Languages and International Studies-Vietnam National University.
Source: Korea Times
CONSTRUCTION ULAANBAATAR 2016 TRADE EXHIBITION
The 10-day Construction Ulaanbaatar expo opened with over 100 exhibiting construction companies
on 4 March at the Misheel expo center. The expo is held to promote the products of Mongolian
building material manufacturers and suppliers, while expanding cooperation between industries and
introducing the latest technologies to the public.
Source: Mongolia.GoGo.mn
60 STUDENTS COMPLETE OYU TOLGOI YOUTH DEVELOPMENT PROGRAMME
Sixty young people from 44 Ulaanbaatar schools on 7 March graduated from the Oyu Tolgoi LLC’s
Youth Development Programme, a three-month-long intensive leadership and capacity development
course. The graduates on 7 March received their certificates, with a small group of high-performing
participants receiving scholarships to study at university. “The program taught us to be team
players and showed the importance of each individual contribution to team successes,” said G.
Enkhzaya, student from 24th school in her speech.
This year, 239 applications arrived from 36 public and 8 private schools in Ulaanbaatar, with 60
students selected to take part in the program. It is jointly organized with the Mongolia chapter of
AIESEC, an international independent, not-for-profit organization run by students and recent
graduates of institutions of higher education.
Source: Oyu Tolgoi LLC
ROBBERS JACK BANK FOR LOVE AND MONEY
Police apprehended two love-struck gunmen attempting to rob a branch of Toriin Bank (State Bank)
LLC in Bayanzurkh District during the International Women's Day holiday. During the heist, police
almost immediately encircled and captured the suspects, who said they needed the money to buy
gifts for their sweethearts on the holiday. “To celebrate the Women’s Day, we decided to rob. With
our robbed money we were intending to make gifts for our girlfriends.”
The heist is one of a series hitting the capital this year, as well as the nation. On 6 March, five
young men who robbed a gasoline station in Argalant Soum, Tuv Aimag were later caught in
Erdenebulgan Soum, Arkhangai Aimag. They, too, said that they wanted to give gifts to girlfriends.
Two suspects are still at large after robbing a non-banking organization and pawnshop in Bayangol
district on 5 March.
Source: Udriin Sonin
“I KNOW WHO STARTED THE FIRE,” SAYS NARANTUUL BOSS
The head of the so-called “black market” for cheap clothing, electronics and more in Ulaanbaatar
said he will not pay any compensation to the vendors who lost their goods in a recent fire. Last
week's fire at Narantuul market was the fourth in recent years, putting its owner Sh. Saikhansambuu
on edge about what he said are arsonists trying to intimidate him with fires while costing him and
his tenants billions of tugrug. Vendors' reports suggest the total loss of goods from the fire could be
as much as MNT40 billion worth of goods. “I have never made any contracts with a renter. I have
always said to traders not to leave your goods outside,” he said.
On Twitter, Saikhansambuu wrote that the fire was deliberate, and that “I know who started the
fire.” He added, “If you want to attack me, just face me directly. Don’t play with the people, who
are laboring to make a living to support their children and families.”
Source: News.mn, 2
RIO TINTO CHIEF EXECUTIVE SAM WALSH RECEIVED SMALLER REMUNERATION PACKAGE
The crash in commodity prices has claimed a new victim: the remuneration package afforded to Rio
Tinto Group chief executive Sam Walsh. Walsh took home a total package of USD10.41 million for
the 2014 calendar year, but had to make do with USD9.12 million in the 2015 calendar year. But the
12 percent slide in the size of his package was better than Rio's Australian shares fared during the
2015 calendar year; the stock declined by 23 percent over the year.
Walsh's base salary was higher in 2015 than in 2014, but the commodities rout ensured his short-
term incentives and long-term incentives were lower than the previous year. The "other benefits"
segment of Walsh's remuneration package, which covers his car allowance, his house rental in
London and his personal tax costs, amounted to USD1.2 million. Rio's chief financial officer Chris
Lynch's remuneration package also declined, and was lower in both 2014 and 2015.
Source: Sydney Morning Herald
ECONOMY
MONGOL BANK: CURRENCY AUCTIONS, SWAPS, 1-WEEK BILLS, T-BILLS
The Bank of Mongolia on 10 March sold USD20.1 million and CNY30.4 million to commercial banks in
currency auctions for closing exchange rates of MNT2,048 and MNT314.05, respectively. Also that
day, it accepted tugrug swaps with commercial banks for an equivalent of USD6.65 million. It
rejected U.S. dollar swaps totaling USD20 million.
The Bank of Mongolia on 9 March issued 1-week bills worth MNT216 billion at a weighted interest
rate of 12 percent. Also that day, the central bank canceled auctions for treasury 39-week and two-
year treasury bills with face values of MNT25 billion and MNT15 billion, respectively, because of a
lack of bids.
Source: Bank of Mongolia
MONGOLIAN BONDS BOUNCE TO 4-WEEK HIGH AS COPPER EXTENDS RALLY
Mongolia’s dollar bond prices rose to the highest level in four weeks, extending their recovery from
a record low, as copper rallied and investors looked for bargains. The securities gained for a fifth
day as copper prices advanced for a third session. A rebound in commodities has boosted optimism
in an economy that relies on minerals for more than 75 percent of exports. “The recent selloff in
Mongolian sovereign debt and yield curve inversion was pricing in a chance for default in 2017,
which is simply not going to happen,’’ Nick Cousyn, chief operating officer for BDSec, Mongolia’s
largest brokerage, wrote in an e-mail from Ulaanbaatar. Despite the recent rally, bond yields
remain attractive, he wrote.
Source: Cover Mongolia, Bloomberg
80% OF ALL COMPANY SHARES ON MSE OWNED BY LESS THAN 5 INDIVIDUALS
Over 80 percent of all company shares on the Mongolian Stock Exchange are in just a few
individuals' hands, according to a report from the Mongolian Securities Clearing House and Central
Depository Co., Ltd. (MSCHCD). A majority of the 300 company shares listed on the local bourse is
held by 1,000 people, while 80 percent belong to up to 4 individuals, according to the report.
Source: Unuudur
UNEMPLOYMENT RATE INCREASES TO 8.3% AT START OF 2016
Unemployment in Mongolia was up to 8.3%, a 1.8 percent increase in February from the year
before, according to government statistics, despite some 3,000 jobs reportedly available.
Unemployment is usually highest in the first two months of the year, just before seasonal
construction launches for the year, according to the national employment center. Construction is
the largest sector for employment, surpassing mining in 2015 where the number of jobs fell 22
percent.
Source: Montsame
TRANSPORT MINISTER EXPECTS FREIGHT VOLUME TO DOUBLE
Mongolia will more than double its total freight volume to China this year as it seeks to earn higher
revenue from the facilitation of trade between Russia and China, said Road and Transportation
Minister M. Zorigt. “We negotiated to increase the freight amount in transit by 2.1 times. Total
freight amount in transit from Russia through Mongolia to China is set at 4.102 million tons,” he
said.
The facilitation of trains could bring an extra MNT150 million worth of government revenue.
Mongolia plans to send more than 6 million tons of freight to China in 2016, including 1.574 million
tons of freight from Russia to China and 875,000 from China to Russia.
Source: Undesnii Shuudan
GOVERNMENT SET TO CUT COST AND TIME FOR ELECTRICITY DELIVERY
Power outages and a lack of access to energy are one of the biggest obstacles facing the country,
according to a World Bank report. Building new power plants has been planned for decades,
although none of the projects including Combined Heat and Thermal Plant No. 5 has even broken
ground. Mongolia ranked 56th out of 189 countries on the World Bank’s annual ease of doing
business measurement which uses ten methodologies. It ranked 134th in Getting Electricity
methodology, which means the electricity is the most serious obstacle to business in Mongolia.
City officials have promised to reduce costs for transmitting energy by 20 percent on 15 April, which
will be transferred over to residents' energy bills.
Source: Mongolia.GoGo.mn
EXTREME WEATHER ALERT: NEMA RESCUES 638 FROM FREEZING
Emergency officials are now acting to save people from freezing winter conditions. The National
Emergency Management Agency (NEMA) is on full alert after nearly 200,000 animals were reported
dead in February from the harsh winter conditions known locally as a “dzud” natural disaster.
Approximately 150 rescue officers have saved 638 people and dragged 152 cars out of snow drifts.
Source: News.mn
NEARLY 250,000 LIVESTOCK LOST IN DZUD
The death toll of livestock succumbing to harsh winter conditions has climbed to nearly 250,000 as
of 1 March, according to the National Emergency Management Association (NEMA). Mongolia has
asked international groups to help manage the delivery of supplies to prevent a dzud, a national
disaster unique to Mongolia where animals die from harsh winter conditions. The 2015-2016 winter
has so far seen the loss of 34,764 horses, cows and camels and 214,146 sheep and goats. The death
impact is far lighter than 2010, when more than 9 million livestock died, although some individuals’
livelihoods are no better off.
Over 70 percent of the country’s territory is covered with snow, causing white-dzud conditions
throughout 18 provinces. At the moment, 113 counties in those provinces are in critical wintering
conditions, NEMA reported.
Source: Montsame
AIR SERVICE AGREEMENT INKED WITH CAMBODIA
Cambodia has signed a bilateral air service agreement with Mongolia that could pave the way for
direct flights and increased tourist traffic between the two Asian countries, and open opportunities
for investment, a government official said on Thursday. Sinn Chanserey Vutha, spokesman for the
State Civil Aviation Secretariat, said the agreement was an international obligation for bilateral air
service and creates more opportunity for investors and tourists. “If an investor sees this as a
potential investment on both sides, they can take advantage of it,” Vutha said. “The agreement
would also attract more Mongolian tourists to visit Angkor Wat and our beaches, as Mongolia has no
coastline.”
The number of Mongolians visiting Cambodia remains extremely low, with less than 500 visiting the
Kingdom last year, according to Tourism Ministry statistics.
Source: Phnompenh Post
REGISTRATION INITIATIVE CLAIMS 84% OF ALL FIREARMS
Mongolia closed its so-call Weapon-2015 initiative this week to register all unclaimed guns. As of
last December, the country had registered 84.2% of all guns known to be in the country, although
2,204 remain undeclared. In January, officials launched a second phase to register the remaining
fire arms, which closed on 10 March.
Source: News.mn
AZERBAIJAN CEDES ONLY TO MONGOLIA IN GROWTH OF HNWIS
Azerbaijan cedes only to Mongolia in the growth of ultra-high-net-worth individuals—holders of
wealth of USD30 million or more. The Wealth Report 2016, published by Knight Franc, says that
from 2005 to 2015 the number of HNWIs in Azerbaijan rose by 444 percent, while in Mongolia the
increase amounted to 475 percent.
Source: ABC.az
FOR MONGOLIANS, CLIMATE CHANGE IS AS PERSONAL AS IT GETS
The newest climate agreement reached during the United Nations climate change conference—or
COP21—in Paris, France, last December, sounded an urgent warning: The effects of climate change
will only worsen if nothing is done to address the problem. It included restrictions on the global
temperature increases, targeting 1.5 degrees Celsius as the limit; climate financing needs may top
USD100 billion per year by 2020; and countries are now required to create detailed plans towards
an emission-free future, among other key points in the 31-page document.
The effects of climate change have been severe in Mongolia. Since November 2015, large parts of
the country have been experiencing very low temperatures of up to minus 40 degrees Celsius,
followed by heavy snowfall covering about 90 percent of Mongolia's territory. “Herders and livestock
were used to warmer winters … so now with colder winters, it makes it hard to cope with the
temperature,” said Tsedensednom, governor of Ulziit Soum.
Source: DEVEX
DREXEL RESEARCHER PROVES MONGOLIAN HERDERS RIGHT IN CLIMATE RESEARCH
Scientists are well aware that a 1 degree Celsius increase in temperature is having enormous
impacts on the globe, but Clyde Goulden, PhD, director of the Asia Center at the Academy of
Natural Sciences of Drexel University, decided he could glean from those outside the scientific
community in Mongolia: the nomadic herders. “It was very, very clear talking to the herders that
they’re very sensitive to their environment and changes to it,” Goulden said. “We knew they would
be able to tell us a lot about it.”
Herders told Goulden that they had seen intense, new rainstorms that were rare when they were
young, called aadar, but scientists had somehow missed them. The problem, Goulden said, was they
only measured rain for four-hour periods, mostly manually. But when they began automatically
recording rain in five minute intervals, the data revealed an increase in the short, damaging rains
and a decrease in more benevolent forms of rain.
Source: Drexel University
UB PROPERTY AUCTION ATTRACTS JUST TWO BIDDERS
Ulaanbaatar's City Property Authority saw a dismal turnout for its latest property auction, with only
two bidders. Ulaanbaatar is privatizing some of its land to raise MNT46 billion this year along with
larger national efforts to sell off state assets during this period of continued economic slowdown
and dwindling government revenue. Last year, Ulaanbaatar failed to sell enough properties to raise
MNT93 billion from auctions, and has put up the unsold land for auction again this year.
Source: News.mn
60 PERCENT OF ALL MOTOR VEHICLES REGISTERED IN UB
Sixty percent of Mongolia's less than a million cars are in the capital, bringing in some revenue from
the tax put on by the city, according to data from the National Auto Vehicles Center. Ulaanbaatar
has 469,335 of Mongolia's total 795,754 registered vehicles, according to data from 29 February.
Over the last four years, the owners of 95,770 registered vehicles have failed to pay the tax.
Source: Montsame
SUBSIDIZED APARTMENT RENTAL SCHEME: TENANTS TO BE CHOSEN BY LOTTERY
A state agency is enrolling 27,000 individuals into a lottery for low-cost rental apartments. The
hitch? There are only 350 units available.
On 7 March, the State Apartment Cooperation will announce winners of the subsidized rental
apartments over 14 days. The winners will be able to rent for 5 years before they are rotated to a
new family. They will also be subject to annual review where the agency is able to evict anyone
who fails to comply with the regulations it sets.
Source: News.mn
COPPER BEARS TURN INTO BULLS BEFORE PRICES RALLY MOST SINCE 2011
Copper investors turned bullish for the first time in four months on optimism that a stabilizing
global economy will help demand recover. Stockpiles of copper, Mongolia's number-one commodity
for trade, are shrinking, signaling tighter supplies at a time when a robust U.S. labor market is
helping to support the consumption outlook. In January, copper futures were trading at the lowest
since 2009 as growth weakened in China, the world’s biggest user. Since then, prices have
rebounded 17 percent on optimism that mine owners have announced enough cutbacks to help
erode a global production surplus.
“The market is not too worried about surpluses, but we are very worried about the Chinese macro
story,” said Harish Sundaresh, a portfolio manager and commodities analyst in Boston for the
Loomis Sayles Alpha Strategies team. “I am actually fairly bullish on copper with a two-to-three
year outlook. But in the near term, there will be a very wide-range trade, just driven by Chinese
sentiment.’’
Source: Bloomberg
METALLURGICAL COAL PRICES MAY DO THE UNEXPECTED: RISE
Potential supply cuts have the price of metallurgical coal—the kind used to make steel—poised to do
something it hasn’t done since October 2013: rise. Coal is an important minerals commodity for
Mongolia, despite a steep fall in prices. The benchmark contract for the coal may gain by a few
dollars in the second quarter amid speculation that China is curtailing supply amid high costs, Mark
Levin, a coal analyst at BB&T Capital Markets in Richmond, Virginia, said.
Metallurgical coal prices have plunged due to a global oversupply and slowing demand out of China.
Levin said a “significant” amount of Chinese metallurgical coal is expected to come out of the
market because of high costs and the government’s push to close up to 150 million metric tons of
annual crude-steel production capacity by 2020. If the prices don’t rise, they’ll at least “end up
being no worse than flat,” he said.
Source: Economic Times
IRON ORE JUMPS BY RECORD 19% ON CHINA STIMULUS HOPES
Prices for Mongolia's number-five export commodity, iron ore, surged by a record 19 percent
Monday, marking a dramatic turnaround in sentiment amid hopes that China’s government will
further stimulate the economy. The price for physical iron ore for delivery to China rose to
USD62.60 a ton on Monday, according to the Steel Index, the biggest one-day rise since the index
began in 2009. The bounce came after China’s Premier Li Keqiang announced a growth target range
for this year of 6.5 to 7 percent, higher than many international economists have forecast.
Monday’s rise reflected real customer demand for shipments of iron ore, as well as speculation
activity. But analysts cautioned that the long-term picture of China’s steel demand has not
changed, meaning the rally could prove fleeting.
Source: Financial Times
POLITICS
ENKHBOLD FACES PETITIONS FOR HIS DISMISSAL
Parliament Speaker Zandaakhuu Enkhbold's interference with other branches of government may
have gotten him into hot water as he now faces two petitions before the Constitutional Court
calling for his resignation. The legislative head has not been hesitant to block the decisions from
the executive and judicial branches of government, including that of Prime Minister Chimed
Saikhanbileg when he tried to broker an investment agreement for the Tavan Tolgoi coking coal
mine. The Constitutional Court this month has received two petitions from citizens B. Enkhbayar
and D. Lkhamjav for Enkhbold's dismissal after leading an initiative to relieve former Constitutional
Court justice J. Amarsanaa of his position. Amarsanaa was removed by Parliament after a court
ruling suspended the government's 8 percent mortgage program for about a month earlier this year.
If the judges rule in favor of the petitions, Amarsanaa may return to the court while Enkhbold
would be ousted as Parliament speaker.
Source: Undesnii Shuudan
ASEP9 ORGANIZING COMMITTEE CALLS FIRST MEETING
Mongolia will host the ninth Asia-Europe Parliament Partnership (ASEP9) from 21 to 23 April as a
precursor to the Asia-Europe Meeting summit in July. Leading the committee for the event is MP R.
Gonchigdorj.
Source: Montsame
CW-GP LEADERS REFUSE TO SUPPORT MERGER WITH DEMOCRATS
Lead officials from the Civil Will-Green Party (CW-GP) have blocked an attempt by members to
merge with the Democratic Party. The Democrats are consolidating their ranks ahead of the 29 June
election, where they will face stiff competition from the opposition Mongolian People's Party after
four years of slowing economic growth and dwindling foreign investment.
“All units (in Ulaanbaatar) made the conclusion that we will not support the merger,” said a party
spokesperson in Ulaanbaatar, adding that a majority of leaders outside the city also rejected the
merger.
Source: Unuudur
NATIONAL LABOR PARTY (KHUN) DIVIDED
The National Labor Party (KhUN), though young, has not proven immune to the fracturing elements
that have hurt the country's two major parties. KhUN has split into two factions over the selection
of a party leader, after some at a 2 March meeting demanded current head, Sainkhuu Ganbaatar,
be replaced while facing some scandal over his resume. The reformists have suggested Party
Chairman B. Naidalaa as the replacement, while others have strongly objected.
Last month, reporters confronted Ganbaatar with information that he did not attend a university in
London as his resume stated.
Source: Unuudur
FORMER MP, MINISTER, CENTRAL BANKER DIES
Former central banker and parliamentarian Ochirbat Chuluunbat
died on 6 March while in Japan receiving medical treatment.
Chuluunbat was deputy minister of economic development from
2012 to 2014 and then chief economic advisor to Prime Minister
Chimed Saikhanbileg. He was also a regularly featured speaker at
global conferences where he would pitch Mongolia as an
investment destination. In addition to his time served as an
elected official from 2008 to 2012, he worked as the president of
the Bank of Mongolia from 2000 to 2006.
“Chuka (Chuluunbat) was an exceptionally smart, experienced
and candid speaker with respect to the financial markets and the
Mongolian economy,” said Business Council of Mongolia Executive
Director Jim Dwyer.
Source: Ikon.mn, BCM
POLISH EMBASSY TO RE-OPEN IN UB
Poland has promised to re-open an embassy in Ulaanbaatar as it prepares to attend the Asia-Europe
Summit in Ulaanbaatar in July. Poland's top diplomat Witold Waszczykowski at the U.N. office in
Geneva promised to re-open the embassy during a meeting with his Mongolian counterpart L.
Purevsuren in a meeting at the U.N. office in Geneva.
Mongolia and Poland first established diplomatic relations in 1950, but Poland closed its embassy in
2009 after 49 years of operation.
Source: Montsame
MONGOLIA'S COAL EXPORTERS COULD FACE FALLOUT FROM LATEST U.N. SANCTIONS ON N.
KOREA
New sanctions on North Korea imposed by the U.N. Security Council are the toughest in two decades
and could impact Mongolia and Russia's use of the Rajin port for coal shipments. Sharyn Gol JSC last
year announced plans to begin coal shipments to overseas buyers through the port, opening the
door for others to act similarly. But now the United Nations is introducing sanctions in response to
the North's recent nuclear test and rocket launch, chipping away at its limited trade and economic
ties, to the extent they are implemented.
The ban on North Korean exports of coal, iron and iron ore, mainly to China, will hit one of the
country's major sources of revenue. An exception was made for coal transshipments through the
port of Rajin, mostly from Mongolia to Russia.
Source: Newsmax
N. KOREAN DIPLOMATS SMUGGLING LUXURY GOODS THROUGH MONGOLIA
North Korean diplomats in charge of smuggling sanctioned goods into the country are using a route
via Mongolia to transport the items. The route is being used to send banned luxury goods to
Pyongyang, and operates mostly under the international radar, Radio Free Asia reported Friday. The
United Nations Security Council sanctions resolution that passed Wednesday targets non-weapons
trade, and provisions include bans on North Korean imports of luxury watches, jet skis and
snowmobiles valued at more than USD2,000.
The goods are sometimes listed under a third-party firm or individual to cross into Mongolia from
China, and the illegal goods movement is concealed by legitimate businesses. North Korea illicit
trade in other parts of the world, however, is taking a blow ahead of sanctions implementation.
Last October, two North Korean diplomats in Sao Paulo were arrested for attempting to smuggle
3,800 Cuban cigars into Brazil, Yonhap reported.
Source: UPI
CAMEL RACE IN UMNUGOBI SETS NEW GUINNESS RECORD
Mongolia has set another Guinness World Record by organizing the largest-ever camel race. A total
of 1,108 camels arrived at the finish line in Dalanzadgad, Umnugobi on 6 and 7 March. Umnugobi
has Mongolia’s and the world's largest population of Bactrian camels, with herders bringing together
2,000 of them for the event.
The previous record for the largest camel race belonged to Inner Mongolia, China, where 550
camels raced.
Source: Montsame
MONGOLIA SUSPECTS NABBED IN TAIPEI NTD1 MN THEFT
Six Mongolians who entered Taiwan as tourists earlier this month were arrested Tuesday on
suspicion of stealing mobile phones and other products worth about NTD1 million (USD30,447) from
shopping centers around Taipei, police said Wednesday. Police at the Zhongxiao W. Rd. police
station received a tip-off on Monday that a cellphone store in the Taipei Main Station Underground
Mall had fallen victim to phone theft and discovered based on a surveillance video that three young
men and three young women were suspected of having stolen the phones, according to Taipei City
Police Department's Zhongzheng First Precinct.
A task force formed by the police station then launched an investigation and found that the
burglary ring of six 20-somethings were staying at a hotel on Nanjing West Road. They were
arrested during a raid at the hotel at around 03:00 on 8 March as they were preparing to check out,
according to the police.
Source: China Post
THE MOST DANGEROUS MUSIC IN THE WORLD IS—SURPRISE—MADE BY ANGRY YOUNG MEN
The rap scene in Mongolia offers an example of how intense social conflict can transform music
from subversive to hateful. After the collapse of the Mongolian People's Republic in 1990, rock and
rap groups sprouted up across the country. By the 2000s, however, friction with China created a
market for artists with xenophobic messages. In a 2012 interview with U.S. filmmaker Lauren
Knapp, the popular Mongolian rapper Gee explained his position. "I’m not racist toward anybody…
except the Chinese," said Gee. "I hate the Chinese."
This kind of anti-Chinese and anti-foreigner sentiment taints an otherwise remarkable musical
renaissance in the country, says Peter Marsh, a musicologist at Cal State-East Bay and longtime
Mongolia music scene-watcher. Not exclusively, but mostly, turbo-folk has been dominated by
women, and Knapp, the filmmaker, spent time with a trailblazing female rapper in Mongolia.
Source: Atlas Obscura
SILK ROAD INITIATIVE NO 'MONROE DOCTRINE,' SAYS CHINA
Refuting criticism that the mega-Silk Road initiative is aimed at expanding China's interests abroad,
Beijing today said its multi-billion dollar project is an “open initiative” and not a form of “Monroe
Doctrine” to expand its dominance. Beijing is denying comparisons of the Silk Road initiative to link
China with Europe to the Monroe Doctrine, which was a U.S. foreign policy regarding domination of
the American continent in 1823. The Silk Road initiative which is officially termed as Belt and Road
projects is “an open initiative, not some form of Monroe Doctrine or expansionism,” Chinese
Foreign Minister Wang Yi said in Beijing.
A connectivity network has taken shape, most notably the CPEC and the China-Mongolia-Russia
Economic Corridor, Wang said. A freight train now links China with Europe. All-round progress has
been made in industrial capacity cooperation.
Source: Economic Times
MONGOLIA AND THE NEW RUSSIAN PETROL DIPLOMACY—EDITORIAL
Russia signed an inter-governmental agreement in early late January 2016 that would resettle
Mongolia’s debt to Russia which totaled USD172 million, 97 percent of Mongolia’s total debt. The
debt forgiveness signals Moscow is moving closer to Ulaanbaatar as it slowly loses its grip on other
former Soviet Union Republics economically. Mongolia also presents an increased market
opportunity for Russia and its petrol products. The use of financial instruments and debts to bring
countries closer to Russia and to gain political concessions are a mainstay in Russia’s diplomatic
toolkit.
The crashing oil market impacted Russia’s economy by shrinking Russia’s GDP and the regional
economy causing many former Soviet Republics to rethink their economic policies and alliances.
Internally, the resettlement of the debt favors Mongolia’s government. Debt forgiveness may be a
way to lure Mongolia to import more energy from Russia. Mongolia, to avoid energy dependence,
needs to expand the “third neighbor policy” to avoid over-dependence.
Samantha Brletich specializes in Central Asia Affairs with a focus on regional security, terrorism,
economics, and culture. She possesses a Master’s Degree in Peace Operations Policy from George
Mason University in the United States.
Source: Diplomatic Intelligence
BCM UPDATES:
BCM BGI Q4-2015
The BCM Business Growth Index is a regular Centigrade thermometer of business climate in Mongolia
which tracks movements in business confidence quarterly. This is a third release of the Business
Growth Index which relates to the Fourth Quarter of 2015. The overall BCM Business Growth Index
Temperature for Q4-2015 is -3C. It is 3 degrees warmer than the previous quarter. The highest
temperature is shown for the “Expectation of your business investment plan for the next year” to
be +6C, which increased by 4C from Q3. The lowest temperature is shown for the “Business
situation in your enterprise compared to last year” to be -15C, which is exactly the same as in Q3.
The total sample size of BCM BGI Q4-2015 is 80. All respondents are BCM member organizations.
More detailed information about methodology and results of BCM BGI Q4-2015 are available in the
report here. The pie charts for each indicator results compared to the BCM BGI Q3-2015 are
available here in Mongolian and English.
ANNOUNCEMENTS
ASEM FUNDRAISING RECEPTION, 16 MARCH
Prime Minister Chimed Saikhanbileg initiated a fundraising reception to be held on March 16 to
request the participation and assistance of the community and the public for the organization of
the 11th high-level ASEM meetings. "Mongolia has been given the privilege and responsible duty to
host and organize the 11th high-level Asia-Europe Meetings in 2016,” said the Prime Minister
Chimed Saikhanbileg. “Organizing this event successfully would have positive implications on
Mongolia’s reputation on the world stage and has a broad range of benefits."
Click here for more information.
_________________________________________
BCM KNOWLEDGE SHARING SESSION, 21 MARCH
The BCM Knowledge Sharing Session will be held at 17:00 on Monday, 21 March 2016, organized in
partnership with BCM member, the Corporate Governance Development Center (CGDC), to present
"Methods for analyzing current organizational strategy and identifying strategic vision." The session
will be led by Enkhbold Chuluunbaatar, Ph.D., a consultant at CGDC and a senior lecturer in the
Department of Business Administration at the Institute of Finance and Economics. His research
interests include entrepreneurship, culture and creativity, and strategy management. The CGDC is a
non-governmental and non-profit organization, providing teaching, consultancy, research and
advocacy services to clients, members and partners since 2009.
The Corporate Governance Development Center offers 20 percent discounts to BCM members for its
training activities.
_________________________________________
1ST ANNUAL BCM SUMMIT, 21 APRIL, BLUE SKY HOTEL
The Business Council of Mongolia (BCM) will host its 1st Annual BCM Summit on 21 April at Blue Sky
Hotel and Tower in Ulaanbaatar. The forum will provide a venue for a wide spectrum of
informative, meaningful and innovative topics important to Mongolia's business community. The
focus will be on business strategies to cope with survival in an economic downturn, mining and
industrial supply, capital markets, innovative business trends, the elections and issues and
recommendations targeted to political parties, and more.
BCM continues to maintain a strong membership base consisting of nearly 240 business
stakeholders—both national and international—including international financial institutions,
embassies and educational institutions. BCM has more than 350 member volunteers in its 8 working
groups lending their wealth of experience in recommendations used by BCM to advocate for a better
business climate.
Registration is MNT100,000 per head for members, compared with the regular fee of MNT120,000.
Save money with the early bird rate of MNT80,000 for members and MNT100,000 for non-members
by registering before 21 March. For more information, email Saruul at saruul@bcmongolia.org.
_________________________________________
MONGOLIA ECONOMIC FORUM 2016, 30-31 MARCH, GOVERNMENT PALACE
Over 1,000 guests are expected for the 2016 Mongolia Economic Forum to be held at the
Government Palace on 30-31 March.
This year's two-day event will be held under the theme “Lessons learned, Facing challenges and
Solutions pending,” where participants will seek to define the country’s current national and global
context, as well as outline alternatives for the promotion of future economic and social prosperity
in Mongolia.
BCM members will have a 30 percent discount on registration. Register here, and send an email to
info@meforum.mn mentioning your BCM membership to receive your discount. For more
information email the same address or call 11 321051.
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MONGOLIA MINING 2016, 6-8 APRIL, BUYANT UKHAA SPORT COMPLEX
The 2016 Mongolia Mining International Mining & Oil Expo will be held for the 6th consecutive year
from 6 to 8 April 2016 at the Buyant Ukhaa Sports Palace in Ulaanbaatar. This year's expo will
feature traditional mining and emerging oil industries of Mongolia with exhibitors and visitors
representing the industry's major companies. Guest speakers from the government, universities, and
companies will lead seminars of the government policy for mineral resources and new laws focused
on mining and infrastructure in Mongolia.
For more information, contact Munkh-Erdene via email at munkh@minex.mn or call at 344488.
_________________________________________
7TH ANNUAL NATIONAL FORUM FOR RENEWABLE ENERGY, 6 APRIL, CORPORATE HOTEL AND
CONVENTION CENTER
The National Renewable Energy Forum, Mongolia's premier conference on the renewable energy
sector since 2008, will open on 6 April at the Hotel and Convention Center in Ulaanbaatar. At the
forum, speakers will review the initiatives and activities that address key issues for the renewable
energy sector.
Registration is MNT35,000, and there is no limit to the number of registrations. For more
information, email Myagmardorj at e.myagmardorj@gmail.com.
‘BCM IN THE UNIVERSITY CLASSROOM’ SERIES
Guest Speakers: Anthony Willoughby and Josephine Stoker, Nomadic School of Business
Presentation topic: "Organizational Leadership"
Where & When: University of the Humanities, 25 February 2016
Anthony Willoughby and Josephine Stoker, Nomadic School of Business co-delivered a presentation
titled "Organizational Leadership" at the University of the Humanities (UH) on 25 February. The
lecture, which consisted of an individual exercise of mapping one's life journey, was attended by
138 students.
Both Anthony and Josie began the lecture by sharing their own life journeys, which fascinated many
students in the audience. Students were asked to share their life journey map with neighbors, as
said by many students was the highlight of the lecture.
For more information about the lecture, please contact Khulangoo P, Working Group Coordinator at
khulangoo@bcmongolia.org
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Guest Speaker: Gerelt-Od Ts, Ministry of Environment, Green Development and Tourism (MoEGDT)
Presentation topic: "Climate Change of Mongolia & COP21"
Where & When: National University of Mongolia, 23 February 2016
Mr. Gerelt-Od Ts, MoEGDT, delivered a presentation titled "Climate Change of Mongolia & COP21".
Over 50 students attended the lecture.
Mr. Gerelt-Od was one of the three representatives from Mongolia to enter into the negotiations at
the 2015 United Nations Climate Change Conference, COP 21 held in Paris, France, from 30
November to 12 December 2015. Mr. Gerelt-Od's comprehensive presentation covered Mongolia's
historic engagement in the global movement against climate change to recent highlight of
Mongolia's pledge of 50'000 US dollar to the Green Climate Fund. The presentation is available here.
_________________________________________
Guest Speaker: Amartuvshin Sh, CEO-AFAcademy
Presentation topic: "Personal development: New season"
Where & When: The Institute of Finance and Economics, 18 February 2016
Amartuvshin Sh, CEO of AFAcademy, delivered a presentation titled "Personal Development: New
season" at the Institute of Finance and Economics (IFE) on 18 February. Over 60 senior students
attended the lecture.
Mr. Amartuvshin, an experienced motivational speaker and family counselor, shared a success
formula, which he has been using for his lectures to CEOs of key businesses in Mongolia. Students
expressed their gratitude to Mr. Amartuvshin and expressed their interest in various tools that can
be used for personal development.
For more information about the lectures, please contact Khulangoo, Working Group Coordinator at
khulangoo@bcmongolia.org
KNOWLEDGE SHARING SESSIONS
A BCM Knowledge Sharing Session was organized on 24 February in partnership with our member,
The Nomadic School of Business LLC, on the topic "Exploring your career, purpose, and the leader
within you". A total of 42 people attended the training session representing 26 member
organizations. The directors of The Nomadic School of Business - Anthony Willoughby, who first
visited Ulan Bator in 1975, has over 30 years of experience pioneering leadership development in
Asia, working with executives in Google, Coca Cola, Morgan Stanley and many other frontier
thinking companies – and Josephine Stoker, who has worked in one of the leading strategic
consultancy companies in Singapore, guided the participants through a unique process of
development. Included were a new way of looking at your career; exploring your life plan, purpose
and motivation; working out where you want to focus and the skills you need to develop; and
understanding a simple and creative tool, which you can use to gain insights into your priorities.
BCM ADVOCACY NOTES
Latest draft of Labor Law bill - Government working group
An open discussion was held between the Ministry of Labor and the private sector on the draft Labor
Law on 16 February. The December draft is reflective of many of the recommendations proposed by
the BCM's Legislative Working Group. Labor Minister G. Bayarsaikhan reported that the draft will be
submitted in April for the autumn Parliamentary session. New Working Group members assigned by
the Labor Minister to draft the bill were introduced and promised to review further comments from
the private sector.
For more information, please contact Working Group Coordinator at khulangoo@bcmongolia.org.
Click here to read the latest draft of the bill.
BCM WORKING GROUP NEWS
Risk Working Group
BCM’s Risk Working Group’s meeting was held on Wednesday, 9 March at Suite 101, 12th floor
Express Tower, with 9 members in attendance, representing Mandal General Insurance, MIG
Insurance, XacBank, Wagner Asia, Bagatumurch LLC, State-owned Agricultural Reinsurance JSC and
National Emergency Management Agency.
Agenda of the meeting:
16:00-16:10 Introduction and Opening remarks by Risk WG Co-Chairs
16:10-16:50 Status Report on dzud condition in the countryside, Tuya Ch., Specialist, National
Emergency Management Authority of Mongolia/NEMA/
16:50-17:20 "Index-based livestock insurance scheme and Introduction of state-owned Agricultural
Reinsurance JSC", Enkhtaivan G., CEO of Agricultural Reinsurance JSC
Captain Tuya Ch., NEMA, gave the members a comprehensive overview of the dzud and dzud-like
situation in 18 aimags and 98 soums of Mongolia. As of 9 March 2016, the total tally of perished
livestock is 360,000. While this number is incomparable to the 2010’s record high loss of 6,310,800
livestock, Captain Tuya emphasized that at any dzud situation, it is the herders that are afflicted
the most as they are faced with enduring long cold days without basic medical assistance and the
ever-increasing need to tend after their cattle, their main source of income. Captain Tuya’s
presentation was complimented with a weather assessment presentation, which can be found here.
Specialist Oyunbat N., Agricultural Reinsurance JSC, presented the index-based livestock insurance
scheme and how it evolved into laying the very foundation of the state-owned Agricultural
Reinsurance JSC. Members were interested in knowing the reason behind the decline in the number
of policyholders, if the Agricultural Reinsurance JSC is exploring the bloodline insurance and the
JCS’s global reinsurers. Members in attendance were distributed “Mongolia: Dzud Emergency
Response Preparedness” snapshot by OCHA (Office for the Coordination of Humanitarian Affairs)
For more information about this meeting, please contact Khulangoo Purevjav, Working Group
Coordinator of BCM at khulangoo@bcmongolia.org.
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Tax Working Group
BCM’s Tax Working Group’s 2016 kick-off meeting was held on Wednesday, 2 March at Suite 101,
12th floor Express Tower, with 16 members in attendance, representing Oyu Tolgoi, PwC, Deloitte
Onch Audit, Sumitomo Corporation Mongolia office, International SOS, WCS, MahoneyLiotta, Lehman
Lee & Xu and PATC.
Agenda of the meeting: 16:00 - 16:10 Opening remarks (Chair, Tsendmaa Choijamts, PwC) 16:10 -
17:00 Introducing new VAT law (Altankhorol O, Senior state tax inspector, Revenue department of
the General Department of Customs and Taxation) 17:00-17:30 Q&A session and discussion on TWG
plans for 2016 (Members, state tax inspector)
Ms. Altankhorol, General Department of Customs and Taxation of Mongolia, reviewed the newly
adopted Value-Added Tax (VAT) law of Mongolia, which took effect on 1 January 2016. The
presentation covered key policy changes, changes in the other related regulations and frequently
asked questions from businesses. Members in attendance were interested in the procedural changes
in the new VAT law, such as the registration and de-registration as a VAT payer, VAT-exempt goods
and services and VAT zero-rated goods and services.
Ms. Tsendmaa Ch, Tax Executive Director of PwC Mongolia, shared with the members Tax Working
Group’s draft plan for 2016. As Chair of Tax Working Group, MS Tsendmaa, informed the members
of the intent of engaging representatives from the government entities to the WG meetings in order
to learn more about legal and procedural changes and to exchange expert views with
representatives from government bodies.
Next meeting is scheduled for May. For more information about this meeting, please contact
Khulangoo Purevjav, Working Group Coordinator of BCM at khulangoo@bcmongolia.org.
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Business Ethics Working Group
Business Ethics Working Group meeting was held on 1 March at Express Tower from 16:00 to 17:30
with 12 members in attendance representing Atlas Copco, Transparency International, Mandal
General Insurance, US Embassy, Wagner Asia, Deloitte Onch Audit, Asia Foundation, Valliant Art and
Interiors, World Vision and the Institute of Finance and Economics.
Agenda of the meeting: - Introduction of members and guests (Anders Berglund, Atlas Copco) -
Recap from the last meeting (Christine Hudetz, TI Mongolia) - Insurance sector transparency (Zaya
Bolorbold, Mandal Insurance) - Discussion on topics and plan for 2016 (Christine Hudetz, TI
Mongolia).
The meeting begun with recap of the last meeting: development of the draft plan for 2016 and
collective agreement on the need to reach-out for more local companies as members of the
Working Group. Given the delicacy of the issues the WG intends to cover at its meetings and the
subsequent low interest from BCM members to sign-up for this WG, nonetheless members have
agreed to continue with its meetings and aim to draw more attention from local companies.
Ms. Zaya, Mandal Insurance, presented an overview of the insurance industry and Mandal fight
against kickbacks and the adverse effects of kick-back culture within the industry. Attendees were
highly impressed with Mandal’s meticulous top-down approach against kick-backs, from its
philosophy to its hiring procedure. During the discussion time on plan for 2016, Wagner Asia has
volunteered for a presentation in November and Asia Foundation offered to share its study findings
on corruption in Mongolia.
Co-Chair reminded the members of the next meeting topic item: Gift giving policy on Tuesday, first
week of May. For more information about this event, please contact Khulangoo Purevjav, Working
Group Coordinator of BCM at khulangoo@bcmongolia.org.
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Energy & Environment Working Group
BCM’s Energy and Environment Working Group’s kick-off meeting was held on Thursday, 25 February
at the Open Society Forum’s meeting room with 17 members in attendance. Represented were
GGGI, US Embassy, XacBank, Mongolian Bankers’ Association, Arig Bank, Invest Mongolia, Wildlife
Conservation Society, Techenomics, Mongolian National Mining Association, Mongolian Wind
Association, Newcom Group, Economic Development Center and the newest addition to the Working
Group, the Institute of Energy Economics.
The meeting was organized under the theme of: "Green credit - private and public initiatives".
Agenda of the meeting:
- Sustainable Finance Initiative: Latest developments, progress towards private fund establishment,
Mr. Tumurkhuu, Head of Sustainable Finance Initiative Steering Committee and CEO of Arig Bank
- National concessions list: Latest developments, quick look at near-term projects, Mr. Ts.
Batbayar, Head of Concessions Division, Invest Mongolia
- Facilitated discussion on business implications of green finance and concessions opportunities in
Mongolia, Mr. Tumurkhuu, CEO of Arig Bank.
Mr. Tumurkhuu emphasized that the Sustainable Finance Initiative is in full swing with initial loans
being issued at 14 commercial banks of Mongolia since 2015. Mr. Batbayar, Division Head at Invest
Mongolia, shared latest developments on concession and the Agency’s efforts in improving the legal
environment for regulating concession issues in Mongolia. Mr. Jon Lyons, co-chair of the Energy &
Environment WG (EEWG,) facilitated the discussion on green finance and concessions opportunities
in Mongolia. Working Group members were mostly interest in the government’s guarantee to the
concessionaire and the updates of the Water Treatment Facility and CHP-ͷ concessions. As part of
BCM’s effort in increasing stakeholders from the government entities, Mr. Amarsanaa, Head of the
Institute of Energy Economics (IEE), an institute under the Ministry of Energy, attended the meeting
and agreed to introduce the IEE at the next Working Group meeting. For more information about
this meeting, please contact Khulangoo Purevjav, Working Group Coordinator of BCM at
khulangoo@bcmongolia.org.
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Capital Markets Working Group
BCM’s Capital Markets Working Group’s meeting was held on Friday, 22 January at Suite 101, 12th
floor Express Tower, with 12 members in attendance, representing BDSec, ING Bank Mongolia, Khan
Bank, Golomt Bank, Oyu Tolgoi, Ernst & Young Mongolia Audit, Mahoney Liotta, Asian Real Estate
Capital Ltd and Mongolian Bankers’ Association.
Purpose of the meeting was to introduce the new meeting format, soft ideas on core themes
proposed by Co-Chairs, including ideas from members and brainstorm on Capital Markets WG
(CMWG) mission and objectives. It was agreed in the meeting on a common theme of ‘working
towards increased foreign investment in Mongolia’. It was suggested by members to include more
emerging players in the capital markets such as the insurance industry and most importantly engage
other stakeholders from government entities with the Working Group. Updates were given on the
development of ‘custodian banking’ and how the WG can leverage its efforts towards sound
regulations for custodian banks.
On the next scheduled Capital Markets Working Group meeting, Dorjpalam Kh, Office of the
Treasury, Oyu Tolgoi will deliver a presentation on project financing.
For more information about this meeting, please contact Khulangoo Purevjav, Working Group
Coordinator of BCM at khulangoo@bcmongolia.org.
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BCM’s Logistics Working Group
BCM’s Logistics Working Group (LoWG) met on Tuesday, 8 December at MonEx office, 6F Vista Office
Building with 7 people in attendance representing Monex, Representative Office of Mitsui & Co.,
Ltd. in Ulaanbaatar, Khaan Shorgoolj LLC and KGB TEGBE-Dolgoon Delgerekh LLC.
Agenda of the meeting:
• Featured guest speaker: Bayarbat – “From Hand to Hand; Challenges Faced”
• Discuss and plan WG’s 2016 activities
Upon introducing new members, Enkhbat D.-Logistics WG Chair, invited the featured speaker, Mr.
Bayarbat, to deliver a presentation about KGB TEGBE-delivery services. Other than introducing the
company, Bayarbat’s presentation touched on wider aspects such as the culture of delivery service
in Mongolia at large, challenges his new up-and-coming company is facing and possible solutions in
the delivery logistics within Ulaanbaatar.
Meeting participants were interested in the expansion plans of the company, such as delivery
services within Mongolia, cargo service between USA and Mongolia, to which Bayarbat gave
comprehensive answers about the company’s plan for establishing cargo service between South
Korea and Mongolia initially and delving into other markets.
Enkhbat D., Chair of the Logistics WG (LoWG), presented his plan for reviving WG activities in 2016.
He again encouraged our members to read through the soft ideas laid out and provide comments.
Since logistics fosters many elements, it was decided to focus on a certain theme for each meeting,
so that members interested or operating in that topic area can actively participate and bring in
more insight.
The meeting was concluded with an action item for the BCM WG Coordinator to follow-up the
questionnaire and request customers to provide comments on the 2016 plan by COB 28 December.
For more information about this meeting, please contact Khulangoo Purevjav, Working Group
Coordinator of BCM, at khulangoo@bcmongolia.org.
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BCM Education Working Group
BCM’s Education Working Group was held on 26 November at the Executive Excellence International
Business Center, 10F Galaxy Tower from 16:00 to 18:00. Fifteen people attended the event
representing foreign mission in Mongolia, private sector, universities and consultants of donor
funded projects:
Foreign Mission: Canadian Embassy;
Universities: National University of Mongolia, Mongolian University of Science and Technology
Private sector: PwC, Minter Ellison
Donor organizations: Save the Children, Support to Mongolia’s Technical and Vocational Education
and Training Sector-EU, Cooperative Vocational Training in the Mineral Resource Sector-GIZ, The
Global Fund;
Meeting minutes summary:
Opening remarks by Education Working Group Chair - Saha Meyanathan. Saha related information
about being selected as the best Working Group of the year 2015.
Status update by Manlaibaatar Z., Deputy Director of IRIM on the pilot project results of the ADB
funded Higher Education Reform Project (HERP). The dissemination workshop for the Universities
will be organized first week of December.
During the Q&A session, Professor Purevdorj of MUST highly emphasized on the importance of
building the capacity of the professors, as they are the ultimate knowledge givers to the students.
The WG members were given a matrix developed by Dr. Saha, on three draft laws: TVET, Higher
education and Labor law. During a Q&A session, participants made remarks related to the Matrix, to
highlight a few:
For more information about this event, please contact Khulangoo Purevjav, Working Group
Coordinator of BCM at khulangoo@bcmongolia.org.
COOPERATION & MEMBER DISCOUNTS:
- Corporate Governance Development Center (CGDC) offers 20% discount on all of its trainings to
BCM members
- News.mn offers 20% discount of its products and services for BCM members
- Mongolian Economy offers 50% discount for its advertisements & paid articles on website and 55%
subscription discount on its online magazine for BCM members
- NPC&Mandal offers 20% discount to BCM members
- Birches Group offers 10% discount on Mongolia Compensation and Benefits Survey for BCM
members
- New Media offers 25-50% discounts to BCM members on its online accounting software, E-
commerce platform, web & mobile application development and job searching software.
For more information about announcements and discounts, click here or contact Otgongerel,
Partnership Manager at otgongerel@bcmongolia.org.
WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS, INTERVIEWS
Presentations:
BCM Monthly Meeting, 22 February:
- A. Baatarpurev, Director of Markets Development Department, Financial Regulatory Commission -
"Financial Market Developments in Mongolia"
- Jennifer Bielman, Country Director, MercyCorps Mongolia - "Mercy Corps: Building Resilience in
Mongolia"
- D. Uuriintuya, Chairman, Mineral Resources Authority of Mongolia - "Mongolian Events during PDAC
2016 in Toronto"
- N. Munkhnasan, General Director, Monpolyment - "Overview of Monpolyment"
_________________________________________
BCM Monthly Meeting, 25 January:
- Sodontogos Erdenetsogt , Chief/National Coordinator of National Secretariat for Development of
the Second Compact agreement between Government of Mongolia and the USA Millennium
Challenge Corporation -
“Development process of the second compact agreement between government of Mongolia and USA
Millennium Challenge Corporation”
- Gantugs D, CEO, Mongolian Mortgage Corporation - “MIK Holding IPO and RMBS Issuance”
_________________________________________
BCM Monthly meeting on December 7:
- Mergen Chuluun, Managing Director, Nomadic Expeditions - “YPO Mongolia: Building Better
Leaders Through Education & Idea Exchange”
- Meloney C Lindberg, Country Representative, The Asia Foundation and L. Sumati, Director, Sant
Maral Foundation - “Introduction and Key Findings of Private Sector Corruption Perception Survey –
STOPP”
- S. Galbadrakh, Specialist at Prevention and Education Department, Independent Authority Against
Corruption (IAAC) of Mongolia - “Introduction of IAAC”
- Terrence Edwards, Editor-in-Chief, BCM NewsWire - “Overview of the BCM NewsWire”
_________________________________________
Mongolia Projects & Investment Summit Hong Kong, 16-17 November:
- Zoljargal Naidansuren, Governor, Bank of Mongolia, “The new equilibrium: reforms to sustainable
growth and savings"
- Narantuya Zagdkhuu, Chair, Financial Regulatory Commission of Mongolia, "Making Mongolia a
frontier again: financial market developments"
- Norihiko Kato, CEO, Khan Bank, "Where does the banking sector fit it?"
- Munkhsukh Sukhbaatar, Rio Tinto, "The way forward for Oyu Tolgoi underground"
- Bat-Uul Erdene, Mayor of Ulaanbaatar city, "City of Ulaanbaatar-2030"
- Matthieu Le Blan, EBRD Head office in Mongolia, "The importance of economic diversification and
import replacement opportunities EBRD's role in enabling progress"
- Tuvshintugs Batdelger, Economic Research Institute, "Transaction Cost of Conducting Business in
Mongolia: SME perspective"
- Oliver Thirlwall, Asian Real Estate Capital, "Distressed opportunities-banking and real estate"
- Kevin Trzcinski, Vice President Corporate Development at Worldwide Power & Technology (HK)
Ltd., "Mongolia as a destination for Scientific Research & Development"
- Randolph Koppa, President, Trade and Development Bank, "Challenges and Opportunities for
Growth"
_________________________________________
Mongolian Annual Risk Management Forum, 11 November:
- “A Practical Case Of Implementing A Risk Management Strategy In Corporate Governance” -
Garrett Wilson Director, Risk Management, Compliance & Outsourced Services Wagner Asia Group
- “Public Buildings And Disaster Risk Management” - Sam Sallam, President, Best Western
International Mongolia
- "Organization Psychological Management" - Delgermend.Ts, Organizational Psychologist,
NPC&Mandal LLC
- "New macroeconomic balance A shift from consumption to saving" - Munkhbayar Tedevsuren, Head
Of The Coordination And Analytic Unit Under Financial Stability Council Advisor To The Governor
- "Macro-Economic Outlook 2016" - Ankhbayar Chuluunbat, Senior economist, Mandal General
Insurance
- "Global Perspective On Risk Management During Economic Slowdown" - Matthew Pottle, PwC
Mongolia
- "Corporate Crises Management" - G.Odbayar, Mining National Operator
_________________________________________
BCM Monthly Meeting on 2 November:
- Andrew Woodley, CEO, Oyu Tolgoi LLC -“Oyu Tolgoi: Delivering globally competitive copper
business”
- Susan Cote-Freeman, Program Manager Private Sector Team, Transparency International -
“Introduction to Transparency International’s Business Principles for Countering Bribery”
- Elisabeth Ellis, Partner, Minter Ellison LLP - “Impact on your business of the proposed new Labor
Law”
_________________________________________
Mongolia Reports:
- IMF, “World Economic Outlook, October 2015: Adjusting to Lower Commodity Prices”
- ADB, Financial Systems of Financially Less Developed Asian Economies: Key Features and Reform
Priorities (Sep 2015)
- Hogan Lovells, "Legislative update: 2015 Spring session of the Parliament of Mongolia"
- Oyu Tolgoi, "Scorecard July 2015 - Monitoring Our Performance"
- Sant Maral Foundation, "Survey on Perceptions and Knowledge of Corruption"
- Jim Dwyer, Executive Director, BCM, Rumsfeld Foundation’s, CAMCA Regional Forum, UB, June 20,
2015, “FDI Environment in Mongolia”
- Hogan Lovells, “Law on State Registration of Legal Entities”
_________________________________________
Interviews:
- Mongolian Economy Magazine, November 2015 issue - "In Order to Make the Labor Law More
Effective"
- Mongolia President Ts. Elbegdorj: Charlie Rose Show (PBS/Bloomberg TV-New York)
- BCM Monthly Meeting news coverage on Bloomberg TV, August 24, 2015;
- Jim Dwyer, Executive Director, BCM, Interview re BCM Business Growth Index, on Star TV News,
August 20, 2015;
- Jim Dwyer, Executive Director, BCM, Interview re BCM Business Growth Index, on Bloomberg TV
News, August 20, 2015;
- B.Byambasaikhan, CEO, Erdenes Mongol and Chairman, Business Council of Mongolia, INS interview
_________________________________________
Website:
According to Google Analytics report, as of 24 February, the daily web traffic to BCM website was
65 visitors with 93 sessions. 83% were from Mongolia, 4% from Japan and 2% from Hong Kong and
United States each.
SOCIAL NETWORKS
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the BCM NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
https://twitter.com/bcmongolia.
The bulk of the content on BCM’s new LinkedIn page is Mongolian language to better cater to BCM's
Mongolian-speaking audience and members. Please click on the below link to follow us on our new
LinkedIn page.
http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo.
Social stats: BCM now has 11,439 fans on our Facebook fans page, 1,982 connections on
LinkedIn network, and 2,003 followers on Twitter.
_________________________________________
MEMBERS’ VACANCIES
- Transwest Mongolia LLC is hiring a Service Manager, Warehouse Supervisor and Welding Supervisor:
Deadline for application is 5:00pm, 16 March 2016. For more information, contact:
edorjragchaa@transwest.mn
- World Vision is hiring an Advocacy Officer: Deadline for application is 5:00pm, 23 March 2016. For
more information, contact70155323 (Ext: 124, 125 & 128)
- SD Guard at U.S. Mission in Ulaanbaatar: Deadline for applications is 16 March 2016
For more information about vacancies, click here. To post your vacancy on BCM website, contact
Dolgorsuren at dolgorsuren@bcmongolia.org.
_________________________________________
BCM’s column in the Mongolian Economy Magazine began in Edition 12, May 2015. The first column
featured an interview with Mr. I. Ser-Od: "Times like these demand that we be more creative and
proactive." The second column was published in Edition 15, July 2015: “Entrepreneurs Set Up Study
Tours of Businesses.” The third column was in the edition, September 2015: "Wagner Asia
Technology Innovations."
Elisabeth Ellis, a partner at Minter Ellison LLP was featured in November 2015 edition in the article
titled "In Order to Make the Labour Law More Effective."
_________________________________________
BCM now has a profile page at VIP76, one of the major online information networks in Mongolia.
From January 2013 to February 2016 we posted a total of 110 news items related to BCM activities,
economic and business related updates.
_________________________________________
The "Photo Gallery" in Knowledge Hub section of the new BCM website has the most recent photos
from BCM events.
As a BCM member you can now visit the official BCM website at http://bcmongolia.org to enjoy
newly introduced interactive features such as: edit your organization's profile information; post
vacancy notices from your organization; post cooperation proposals with other members or deals
you would like to offer to other BCM members; and start a forum and ask questions directly on the
web platform. Of course you can also visit our website for news information, interviews, event
photos, videos and announcements regarding BCM.
ECONOMIC INDICATORS
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
January 31, 2016 *1.7% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 1.0% y-o-y, 4.0% Core - Ulaanbaatar City, January 31, 2016
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
July 30, 2014 12.00% {source: Mongol Bank}
January 14, 2015 13.00% {source: Mongol Bank}
January 14, 2016 12.00% [source: Mongol Bank]
CURRENCY RATES – 10 March 2016
Currency
US dollar USD 2,047.00
Euro EUR 2,244.13
Japanese yen JPY 18.20
British pound GBP 2,904.28
Hong Kong dollar HKD 263.61
Chinese Yuan CNY 314.17
Russian Ruble RUB 28.24
South Korean won KRW 1.69
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