MONGOLIA – Weekly press review 26 July 2021

COVID-19

As of 26 July, total number of confirmed cases reached 157 986, the total number of recovered patients was 153 772 and total number of COVID-19 related deaths was 782.Ikon (In MNG). COVID-19 interactive dashboard is available in Mongolian and English.

Vaccination: As of 26 July 2 138 538 people have received the first dose of the vaccine and 1 929 954 people received the second dose. Ikon (In MNG)

Mongolia received 92,490 doses of the Pfizer vaccine: Up to date, 417,690 doses of the total of 2.5 million Pfizer vaccines arrived in Mongolia through the agreement signed by the Government of Mongolia and Pfizer Inc. 2.35 million doses are purchased through the grant funding of Japan. Montsame

EU - Mongolia

Labour Minister meets EU Ambassador: The Minister expressed her appreciation of the increase in investments from EU, underlining that the EU-funded 'Budget Support for employment reform in Mongolia' project. Ambassador Traian Hristea expressed his hope that the two sides will further work together in employment and pension reforms and many other efforts and expand their cooperation. Montsame

'Sustainable Resilient Ecosystem and Agriculture Management in Mongolia' project: to be implemented with EUR 4.2 million from EU. The project aims at increasing the capacity of Mongolian communities to implement innovative and sustainable long-term landscape management to address food system challenges and climate stresses and to achieve its objective, the STREAM project will work in two fields of action. FAO will focus its support on mainstreaming climate change adaptation into the agricultural landscape management to increase agricultural productivity, sustainability and value addition using EUR 1.65 million. Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH will concentrate its support on improving capacity for sustainable landscape management of forest resources and conservation of biodiversity using EUR 2.6 million. Montsame

Foreign Minister meets Ambassador of France: They discussed advances in relations between the two countries, outcomes of joint projects, and multilateral cooperation. Minister expressed gratitude to the French Ambassador for giving great focus to stepping up Mongolia-France economic relations and wished success in his endeavours. Montsame

Agricultural cooperation with France discussed: Minister of Food, Agriculture and Light Industry underscored that the micro loans from French food aid fund have been of great help to herder families in rural areas. Ambassador Philippe Merlin was awarded 'Leading Agricultural Worker' decoration in recognition of the efforts expanding cooperation in agriculture, and increasing bilateral trade. Montsame

Government of Hungary to supply medical equipment to Mongolia: 33 respirators worth MNT 4.6 billion (EUR 1.37 million) will be donated. Ikon (In MNG) Gogo (In MNG)

EBRD lends USD 13 million to Tavan Bogd: USD 10 million to Tavan Bogd LLC and USD 3 million to Tavan Bogd International LLC. Both companies are subsidiaries of the Tavan Bogd Group. EBRDEBRD

GMIT organizes summer course on 'Data assimilation, optimization, and applications': The course had over 50 participants from France, Italy, Institute of Mathematics and Digital Technology of the Mongolian Academy of Sciences, NUM, MUST, Mongolian State University of Education, and GMIT, of which 10 attended the course in person. Montsame

Political and Internal Developments

Working group established to improve Mongolia's rating in Corruption Perception Index: The anti-corruption working group, consisting of representatives from public organizations in charge of corruption reduction, will be working to stop the bureaucratic corruption activities, reduce burdens and corrupt acts encountered by businesspeople and entrepreneurs, maintain correspondence of government agencies, improve regulatory framework and intensify digital transition. Mongolia's rating lowered by five places comes following bribery and abuse of functions by public sector officials as well as increasing bureaucratic corruption faced by businesspeople to maintain their operations and establish contracts and agreements. Montsame

Prime Minister meets representatives from Transparency International Mongolia: The sides shared views on issues on amendments to the laws on minerals and political parties and development of bill for whistle-blowers, and improvement of anti-corruption civic education. Montsame

Winter preparations to be stepped up: TheMinister of Energy presented a report on 2021-2022 winter preparation plans of the Energy sector. The sector's winter preparations were 45.9% complete as of July 10 with the preparations of companies 47.6% complete and coal mines around 30% complete. Montsame

Foreign Policy

Charter flight arranged by IOM to arrive in Ulaanbaatar: In total, 108 IOM beneficiaries, including 20 children and 8 infants will be returning on this flight. Montsame

Mongolian, Japanese Prime Ministers hold talks: The sides agreed on the necessity to elevate the economic, trade and investment cooperation and to strengthen the public private partnership.. The sides also mentioned about Mongolia-Japan successful cooperation on international and regional fora and pledged for active cooperation further within the framework of the United Nations and other multilateral organizations. Montsame

Prime Minister of Mongolia pays courtesy call on Japan's Emperor Naruhito: Prime Minister invited the Emperor of Japan to visit Mongolia in 2022. During the event, Prime Minister met with Jill Biden, First Lady of the United States and Emmanuel Macron, President of France to talk about issues on Mongolia's bilateral ties with the U.S. and France and a wide range of issues of mutual concerns. Montsame

Prime Minister of Mongolia held a meeting with Japanese Minister Nishimura Yasutoshi:. The sides exchanged views on the current situation of the pandemic, measures taken by the government and health organizations, and the expansion of cooperation between the two countries in the fight against coronavirus. Montsame

Parliament Speaker receives visiting U.S. Deputy Secretary of State: Speaker Zandanshatar mentioned Mongolia is willing to seek more opportunities for economic investment and partnership in its large scale development projects. Mongolia Third Neighbour Trade Act, which will serve as a great support to Mongolia's cashmere and textile industry once approved, has been reintroduced to the U.S. Congress. Montsame

Wendy Sherman: The U.S. stands ready to help build Mongolian economy back better: In the course of her visit, Deputy Secretary Wendy Sherman has met with the Speaker of the State Great Hural (Parliament), Minister of Foreign Affairs, Deputy Minister of Foreign Affairs, Minister of Culture, Minister of Defense, members of the Mongolian Armed Forces and staff at Mongolia's LGBT center. USAID revitalized its presence in Mongolia last year and is already expanding its programming. USAID is already putting USD 50 million towards supporting SMEs in Mongolia and another USD 12 million in technical assistance for the energy sector. Moreover, Mongolia has received USD 350 million MCC to vastly increase the supply of fresh water to Ulaanbaatar. Montsame

Mongolian Deputy Foreign Minister, U.S. Deputy Secretary of State hold bilateral meeting: Deputy Secretary of State affirmed that the U.S. will continue to support Mongolia in strengthening its democracy and extended thanks to Mongolian troops for serving in the peacekeeping operation in Afghanistan and vowed to cooperate with Mongolia on increasing economic and trade partnership and implementing the Mongolian Water Compact and Transparency Agreement. Montsame

Mongolia-U.S. to expand cooperation in protection of cultural heritage: Minister of Culture emphasized that Mongolia has its own unique heritage in the world and the establishment of a separate Ministry of Culture is an indication of how Mongolians respect and value their culture. The two sides expressed satisfaction with the progress made in the protection and preservation of cultural heritage, especially in the transfer of illegally trafficked cultural properties to the Mongolian museums. Montsame

Mongolian Foreign Minister to pay official visit to China on 27 July.Montsame

China's Minister of Defense is paying an official visit to Mongolia on 26 July: During his visit, he will meet with Speaker of Parliament and pay a visit to the Mongolian Ministry of Defense. Parliament

Agriculture Minister meets Chinese Ambassador: The sides agreed on veterinary and sanitary requirements, building a meat factory in Mongolia, exporting meat and meat products and to expand veterinary cooperation, with Chinese soft loans. Montsame

ICC inducts Mongolia, Tajikistan and Switzerland as new members: Mongolia is the 22^nd member of the Asia region. ESPN Critic Info

Education Minister participates in 2021 Global Education Meeting: The Minister briefed on the measures taken by the Government of Mongolia to mitigate the negative impact of the COVID-19 pandemic in the education sector, particularly the projects implemented in this area with the support of UNESCO and other UN agencies and partner organizations.Montsame

Meeting of Standing Committee on Social and Cultural Affairs of APA held: Mr. Ts.Munkh-Orgil, Member Parliament, represented the State Great Hural of Mongolia at the meeting. The meeting aims to promote cultural diversity in Asia, protect cultural heritage, promote Asian integration through information and communication technologies, ensure health equality, improve the legal environment and cooperation in combating the smuggling of cultural items. Montsame

Labour Minister takes part in 2021 HLPF meeting and participated in a ministerial panel discussion giving information on the digital transformation being undertaken by the government of Mongolia, particularly the digitization of the labour and social protection sector in her remarks. Montsame

Economy

China tops list of Mongolia's foreign trade partners in H1: Bilateral trade between Mongolia and China amounted to USD 5 billion in the January-June period, accounting for 68% of Mongolia's total foreign trade. Xinhua

Minister of Finance reports on current economic conditions: The economy grew by 15% in the first quarter of this year, an increase of 3% compared to 2019. The economy is expected to grow by 6.5% by the end of the year. Despite the positive economic outlook, the minister said that risks remain for the state budget. News (In MNG)

Iron ore exports decrease while coal exports increase: From 1 January to 1 July 2021, coal exports increased by 9.8% compared to the same period in 2020. Exports of iron ore and concentrate decreased by 5.4% compared to the same period in 2020. News (In MNG)

Balance of payments surplus projected at USD 580 million this year following a surplus of 170 million USD in Q1 2021. If the balance of payments remains positive, Mongolia's foreign exchange reserves will increase, solvency will improve, and the MNT will appreciate against other currencies. News (In MNG)

Oyu Tolgoi announces 2021 second quarter performance results: The company paid USD 503 million in the form of taxes, fees and other payments to the Government of Mongolia in the second quarter of 2021. Since 2010, Oyu Tolgoi has paid USD 3.4 billion in taxes, fees and other payments, including VAT to Mongolian suppliers. Montsame

MNT 3 trillion (EUR 894 million) loaned as part of MNT 10 trillion (EUR 2.98 billion) Plan for Health Protection and Economic Recovery: MNT 183.5 billion (EUR 54,7 million) have been issued as part of the plan that was launched in March, saving 204,209 jobs. Exports have increased by 4.4% compared the same period of 2019 and by 45.1% compared to the same period of 2020. In imports, there has been a 8.5% increase compared to the same period of 2019 and 29.6% increase compared to the same period of 2020. Montsame

Financial Stability Council discusses macroeconomic situation, future prospects, and pressing issues. Information was exchanged on ensuring coordination between fiscal and monetary policy. It was also decided that a working group would be set up to draft legislation addressing financial stability issues. News (In MNG)

Commentary

Mongolia edges towards autocracy: The consolidation of power in the hands of the MPP is pushing the country towards a hybrid single-party regime. Former Prime Minister Ukhnaa Khürelsükh of the Mongolian People's Party won with 68% of the vote. Counting on the China-driven commodity super cycle to pull the Mongolian economy out of the crisis, the MPP also appears to be embracing the Chinese Communist Party's 'community of common destiny' narrative, which insists that a country does not have to be democratic in order to develop. Since 2016, the MPP leadership have been a frequent visitor of 'CCP in Dialogue with World Political Parties' conferences, through which CCP aims to win international support among foreign political parties and promote this narrative. In May 2021, US Senators Marco Rubio and Patrick Leahy highlighted this MPP-CCP relationship in a joint letter to Secretary of State Antony Blinken, specifically pointing a finger at MPP's Secretary-General Dashzeveg Amarbayasgalan. By following the CCP's narrative about undemocratic prosperity, the MPP seems to be taking Mongolia on a path towards authoritarianism. If the current trend continues, the government will transform into a textbook case of an electorally autocratic hybrid regime that suppresses dissent, supports a loyal elite through natural resource rents and 'pacifies' the populace with entertainment and pro-government propaganda.Al Jazeera

The China-Australia trade war is hurting Mongolia's environment: Since China began freezing out Australian supplies, the coal business has boomed. The Mongolia Energy Corporation recently announced last month that it has doubled its profits year-on-year, and the Mongolian Mining Corporation similarly announced it doubled its coal export volume. Though, few in Mongolia are celebrating this development. The nation's capital, Ulaanbaatar, consistently ranks atop lists of the world's most polluted cities, and since last October, coalmines perched on the city's fringes have been kicking up much more chemical and dust pollution than usual. In the summertime, air quality in Ulaanbaatar often hovers around safe levels but in the winter, it averages a pollution level 27 times worse than the safety benchmark. Ulaanbaatar sits at the bottom of a valley, which traps smog beneath a blanket of warm air. And there's plenty of smog around to get trapped, since residents of the city's 'ger' districts, who live in yurt tents without access to electricity, have traditionally had to burn sacks of cheap coal in order to cook and stay warm. On average, a ger household burns three tons of raw coal per year.Sup China

Mongolia left out of coal supply chain:The price of a ton of coking coal has risen to 1,800 CNY (280 USD). The price of coal has not reached such a high level in recent years, and the price of semi-soft coking coal has reached 1,300 CNY per ton. Mongolia's inability to supply coal has to some extent contributed to the rise in the price of 'black gold'. Three years ago, Mongolia accounted for about 40% (36 million tons) of China's coal imports, followed by Australia and other countries, which accounted for more than 10%.China has stopped importing coal from Mongolia, believing that Mongolia cannot reduce the risk of COVID-19 quickly. They warned that the loading points at the Tsagaan Khad settlement were poorly organized. Due to poor loading disinfectant, the Chinese side has already paid for the purchase but was not able to import about 10 million tons of coal piled up in Tsagaan Khad thus, Mongolian coal export decreased by 50% in 2020 and will continue to decline this year. This is due to infrastructure and poor border operations. However, coal shipment to China from the United States and Russia are continuing to grow. In other words, despite the spread of the pandemic, the coal shipment of other countries is rising.Industry experts believe that container transportation terminals should be built at the Shiveekhuren port as it's a cost efficient infrastructure. Due to the large volume of the coal and the use of many pieces of equipment by companies in this field, the cost of idle time is very high. Mongolia is lagging behind in coal exports, without being able to make use of its competitive edge. When the price of coal rises in China, Mongolia does not boost supply, which is a missed opportunity.UB Posts

Post Pandemic Development Plans: A total of MNT 600 million (EUR 178,800) is being budgeted as part of the 2022 Annual Development Plan with the funding to come from foreign loans and assistance. On 21 June, the Parliamentary Speaker received draft amendments to the Law on Investment. In generally, the amendments focus on making changes that would treat foreign investors same as domestic ones. Currently, foreign investors are required to contribute a minimum of USD 100,000 to enter the Mongolian market. This would permit foreign investors to make smaller initial investments that would gradually increase it over time. The 2022 Development Plan is the first one-year plan ever submitted by government and is seen as a positive step. The plan is part of a MNT 10 trillion (EUR 3 billion) investment. According to officials, the funding will come from a variety of sources. The plan's main goals for next year are industrial and infrastructure related projects. Among them are a start of construction on a copper smelter, a copper hydrometallurgical plant, an oil pipeline, and a steel plant. For the energy sector, Baganuur and Tavan Tolgoi power as set to start construction as well as a160MW energy storage facility. It also includes MNT 2.8 trillion (EUR 834.4 million) of private funding to stabilize petroleum product supply and increase the use of Euro-standard fuel. It is certain that next year will be a remarkable year for construction and development. The TT-Gashuunsukhait railway will be completed, and several new rail projects will be launched.Mongolian Mining Journal

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Prepared by Sodnomsambuu Gantuya

Delegation of the European Union to Mongolia

ICC Tower, 9^th floor, Jamiyan Gun Street 9

1st khoroo, Sukhbaatar district, Ulaanbaatar

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