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http://zgm.mn/post/956/

Baabar: I am ready to take responsibility for my articles

​State has so much money but lacks the wisdom to spend it​

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http://zgm.mn/post/956/

-You published 10 articles under the Adventures of Foreign Investment. Is the series finished now, or will you continue it further?

-Although there are many things I want to say, I will not write such articles again. I am not a decision maker. I am just an independent person. I am just telling you my opinion. I just want to say how this nouveau riche disease is causing a harm to the future development of this country. Let the ones, who can understand this, understand this. Poor countries are developed by foreign investment. It is because they do not have start-up capital. Today’s developed countries such as Japan, Korea and Taiwan are all developed because of the U.S investment. Japanese Prime Minister Yoshida was a pro-American and made political compromise through 1952 agreement and in return, attracted investment. Korea was one of the poorest countries of the world in 1962 when Park Chung Hee took power. He sent Korean troops to Vietnam and gained the Americans’ trust and attracted investment. Taiwanese also attracted investment when they used Mao as a threat and stood by the U.S side. War ravaged in Europe developed quickly because of the U.S investment known as the “Marshall Plan”. When asked the soviets if they wanted to be involved in the Marshall plan, they refused and did not allow Eastern Europe to join this plan. Everybody knows what happened. 1978’s open door policy of Deng was a struggle to attract investment. After 20 years, Taiwanese invested about USD 150 billion in China only. America became the global superpower because of investment. Its liberal market, freedom, equal opportunity and democratic system attracted global investment and brain. Now, the US still leads the world in terms of foreign investment for over a 100 years. Recently, China began to be ranked after the U.S. Each country is competing with each other for foreign investment.

-Can countries be able to develop using foreign investment?

-Everybody can live happy if they earn enough money. What is harder than earning money is how to spend it. Norway is a country with enormous wealth of natural resources. They set up a fund using revenue surplus and expanded it further and created much capital. This country with 4 million population can withstand a crisis of 40 years without any problem. It has the lowest corruption index. Nigeria has more than 10 times the wealth than This country. Any party that takes power through election or state coup attempt to rob and plunder as much as possible from the wealth generated by the natural resources and then run away. Here is one example: during the 1973 crisis, oil price suddenly skyrocketed. When military took power, they immediately decided to build a new capital and placed a massive cement order all over Europe and Soviet Union for construction and infrastructure development of a dream town, which is 600 km away from Lagos. Cement demand per capita was estimated to be several times larger than the U.S. Until today, there has been no new capital and no construction and no road. It was just another way of the authorities to plunder and rob newly found wealth.

-Is Mongolia now on the same path as the Dark Continent?

-From those people who spoke about that, how many of them actually went to Africa and/or saw their statistics? I believe those are the people who cannot even tell where Africa is on the map. Almost all countries of Africa are new; therefore, lacks experience. On the other hand, these countries are made up of many tribes and ethnic groups; thus, they have too much internal conflicts. They do earn huge sum of money; however, they spend it on war, conflicts, corruption and bribery. However, not all African countries are like that. Botswana is one of the fine examples of a developing country. Rwanda lost almost 1 million people during the 1990 civil war. This became an important lesson for them and now, they have become the leading example of development. In 1979, 25 out of the 50 countries of Africa had state coups and today, there are no such phenomena and majority of these countries have democratically elected governments. Compared to this, we have 2222 years of statehood and ancient culture and left our legacy in the world history.There are three countries that are homogenous. These are Japan, Poland and Mongolia. Although there are such advantages, the others are developing and we are deteriorating.

If Rio leaves Mongolia, it would mean the entire world will leave us

-They say a global economic crisis has begun. What is your take on this?

-We all know what crisis and poverty are. When political system that relied on debt for existence has collapsed, we ended up with nothing but salt in shops. State leaders begged over 200 times for investment; however, nobody noticed and we were starving. There were many media talks about leasing South Gobi to Japan for 99 years. Inflation reached 360 percent and the currency notes became empty papers. Politicians competed with each other on how many US Dollars they brought in by organizing consultation meeting with the donors. We begged around the world talking about Dzud (heavy wintering) disasters. One of the example was during 2008 global crisis, where all economic activities were halted and merchants in the market were complaining “there is no one to buy our products even when we offer discounts far below the prices we purchased”. It was not that long ago.

-People are saying foreign investments have stopped in our country. Is that true?

-Within the last decade, Mongolia became rich for the first time in its history. From the poorest country of the world, we instantly reached the “average” level and led the economic development indicators during the last few years. Did we suddenly became a hard-working people? No. This is the benefit of the rapid development of China, and foreign investment. Copper price surged and coal also became expensive. Thanks to this, the coal revenue far exceeded the Erdenet Mining Corporation. Within one decade, the GDP increased by almost 10 times. Oyu Tolgoi, which is not yet fully commissioned, makes up around one third of the entire revenue of this country. With this money, they really had a good time organizing parties. Just imagine! The budget of Ulaanbaatar increased by 15 times during the last decade. Many dog statues have been erected in the city. Vodka money distributed to the public already exceeded the GDP. “National corruption sector” grew astronomically high. it is probably inevitable because the state has so much money and lacks the wisdom to spend it. We lost a historic opportunity. Individuals and countries does not always have such opportunities. The parliament has blocked foreign investment. It covered all sectors ranging from minerals to communication to construction and regulated the corrupt officials to give permits. Corrupt officials that chase away investors and demand bribery are being elected and becoming key decision-makers. Investors anywhere are very sensitive. They are taking a risk with their huge capital. Those who were about to invest escaped and those who invested abandoned their investment. and those who already made significant investment stayed behind as a collateral. We ended up with several holes that have dug manually and geologists became unemployed. An acquaintance of mine has a drilling company and employs about 70 people and paid about MNT 2 billion taxes to the state. Now, he is working with his employees, cleaning up the streets of Ulaanbaatar and plucking out weeds in order to not dismiss his employees. They should be drilling in field by now and paying taxes to the state. We have a good examples of Kazakhstan and Kyrgyzstan. Although Kazakhstan is not a democratic country, they are quite open in terms of foreign investment. This agricultural land of frontier area of Soviet Union has become one of the potential development zones of Asia today. The Kyrgyz people fought in small gold mine of Kumtor for almost 20 years and staged an overthrow of several governments that claimed lives of many people. Each time a new government is formed, they put new strange demand to the investors. Those who invested in such place, suffers so much and those who observe this, try to stay away from this place. Specialists say, much bigger deposits can be found; however, who will invest here in this scary place?

-Then, what do we do now?

-We have a parliamentary governance. However, foreigners does not always understand this. They think the president decides everything. They are now waiting for the next election. They know very well who pledged and promised to chase out, demolish, destruct, review, cancel and change. We talk about Rio Tinto; however, 50 large shareholders of this giant company are largest global companies and banks. If they go away from Mongolia, it would mean the whole world will leave us. It was said once that we are going to be one of the richest countries of the world; however, it changed to we may end up becoming a beggar soon. I am not trying to scare anyone. This is the reality. We are fighting with each other over a huge wealth, which more than enough enough for all of us. Shale was ignored until today. But now, there is a new technology that uses shale for energy production. High quality shale has been found in Mongolia. This is another source for new war in our country. There are already articles appeared in newspapers that say shale is dangerous, toxic and may lead to corruption and bribery. Now, the whole country will talk about shale. This is the next target for those patriots who do not even know what shale is. The environment is destroyed by us, rather than foreigners. Who is polluting the Orkhon river? Who is polluting Yuruu and Kharaa rivers? Who dug throughout the country looking for gold and made it polluted and fragile in the first place?

-You touched many uncovered issues and opened up many cases with criminal nature in your series. However, you did not name anyone. Why?

-The majority of our authorities are corrupt and thus, they cannot talk about these fearing their corruption will be discovered by other corrupt officials. I am not a maniac of eating or getting a bribery. I did not do anything illegal. I am able to take care of myself without having to steal. Therefore, I am not afraid of anyone. Those who do not like me, may stab me in the back. Now, if I say “for the sake of motherland and public”, I may look like those so-called patriots. However, I truly love this country without having to announce it superficially. Also, I am not a backstabber. I will not lodge complaint to court and police. In this series of articles, I mentioned about 10 large cases with a criminal nature. I am ready to take any responsibility if these are proven false. However, there are many organizations responsible for inspecting crimes or at the very least, compensate for the public.

Interviewed by Orkhon.J 2013.6.9

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MPP caucus plucks out their chair: Speaker may be next

​Caucus calls board meeting once again as discussion on ousting Speaker may violate Constitution​

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Mongolian People’s Party (MPP) caucus in the Parliament held a meeting yesterday to discuss the board decisions, specifically the appointment of the next Minister of Food, Agriculture and Light Industry and ousting of Mayor of Ulaanbaatar Batbold Sundui and Head of MPP caucus Khayankhyarvaa Damdin, and approved both. The MPP board convened on Monday and the majority of members had agreed to dismiss Mayor Batbold Sundui and Speaker Enkhbold Miyegombo. The board went into a heated discussion over Small and Medium-sized Enterprise Development Fund sandal, during which potential ousting of Prime Minister Khurelsukh Ukhnaa and head of MPP caucus Khayankhyarvaa were brought up. Yesterday, the caucus approved the appointment of MP Ulaan Chultem as the Minister of Food, Agriculture and Light Industry regardless of the fact that MP Ulaan expressed to turn down the position before the meeting. Later on, the caucus held secret vote on ousting Khayankhyarvaa and ended in a 29:29 tie, which forced second ballot. After taking a break for 30 minutes, the caucus members proceeded with the second voting and approved the dismissal of Khayankhyarvaa with 32:27 vote. As for the ousting of Parliament Speaker Enkhbold, the caucus viewed that the discussion of the matter will violate the Constitution and called the MPP board meeting once again.

PETROLEUM PRICE TO DESCEND IN DECEMBER

Before the caucus meeting, Prime Minister Khurelsukh received public representatives of protest with vehicles at their request and heard their thoughts on petroleum price increase and other social issues. PM addressed, “There are many things Mongolia cannot control related to oil products, which is completely import-dependent. The Government is taking necessary actions to maintain petroleum price, such as annulling excise tax on petroleum. Artificially sustaining petroleum price by printing money will not have effects in the long term and can fundamentally harm the economy.”

• Caucus approves appointment of MP Ulaan Chultem as Minister of Food, Agriculture and Light Industry.

• Khayankhyarvaa Damdin ousted from Head of MPP caucus seat.

• The cheaper oil will be distributed in December, lowering petroleum price, says Minsiter of Finance Khurelbaatar Chimed.

Minister of Finance Khurelbaatar Chimed explained, “Oil price has been falling for several weeks; however, it will take time for petroleum price to decrease as oil importers collected their reserves for higher price. The cheaper oil will be distributed in December, lowering petroleum price. Key driver for price raise was the U.S sanction on Iran, which affected global oil price.” After the meeting, the demonstrators announced to call off the protest.

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MPP board approves to oust Mayor of UB Batbold Sundui

​MPP board appoints Ulaan Chultem as Minsiter of Food​

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Mongolian People’s Party (MPP) board held a meeting yesterday and decided to oust Mayor of Ulaanbaatar city and Governor of Capital City Batbold Sundui and approved the appointment of MP Ulaan Chultem as the Minister of Food, Agriculture and Light Industry. At the forum, Prime Minister announced that he will dismiss several key officials related to alleged MNT 60 billion sell-off of public service positions. Several policy makers, including Parliament Speaker Enkhbold Miyegombo, Mayor Batbold Sundui and Head of MPP caucus Khayankhyarvaa Damdin were reportedly related to the case. The case began during the 2016 Parliamentary elections when a voice recording of three high-profile officials of the MPP went viral on social media. In the recordings, more than 8,000 jobs in Mongolia’s government and stateowned enterprises were being offered by the MPP if they won the elections, in return for the money required for their campaign.

MPP caucus request Congress to be held within November 20

Majority of the MPP board members were in favor of ousting the Parliament Speaker and Mayor of Ulaanbaatar city. After the voting, MPP board decided to remove Mayor Batbold Sundui. The decision will be discussed by the Citizens’ Representative Khural soon. Respecting the decision, Mayor Batbold expressed that he is ready to dismiss from the position. Regarding the ministerial position opened after the ousting of Batzorig Batjargal, who got involved in the Small and Medium-sized Enterprise (SME) Development Fund scandal, the board of MPP agreed on appointing MP Ulaan Chultem. Additionally, Head of MPP caucus Khayankhyarvaa delivered a notice to Prime Minister on holding certain Parliament members involved in the SME Development Fund scandal accountable for. He demanded to dismiss those MPs if proven to have embezzled the loans received from the fund through non-banking financial institutions, which is currently under investigation, and hold the MPP Congress within November 20 to discharge MPP board members involved in the embezzlement. He further criticized the PM Khurelsukh for his attempt to dissolve the Parliament, deeming it irresponsible, and held discussion on ousting the PM.

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Second neighbor and her “enemies” Part-1

​Mongolia's independence remained intact as China survived tension with Soviets​

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PART ONE. FROM SINGLE NEIGHBOR TO SECOND NEIGHBOR

Rumors and slogans about China’s threat to Mongolia’s independence and their invasion are nothing new. History proves that one of our neighbors used others to install fear and threat to establish full political control over Mongolia. People’s Republic of China as we know of today got established in 1949. I believe it was called the 25th dynasty that was established in former Nangiad area. Continuing the policy of Chiang Kai-shek, who approved the independence of the People’s Republic of Mongolia, China established an embassy in Ulaanbaatar. As such, Mongolia, who made enemies with every country in 1928 and had no foreign partners except from the Soviet Union, expanded their foreign relations. Inherently, it is hard to call the relations dictated by the Soviet Union as a “foreign relation”. Because the Soviet Union’s law has went into force in Mongolia, which ultimately resulted in beheading of several people including the then head of state Genden Peljid and Prime Minister Amar Anand under the Soviet laws. Even in 1945, it was not Mongolians who initiated to expand foreign relations, instead the Soviet approved Ulaanbaatar to develop relations in the socialist camp within the Soviet zone. It simply means that the Soviets allowed Mongolia to have relations with Mao’s China, who decided to establish communism same as them. At the time, Choibalsan Khorloo signified the fact that China approved Mongolia’ independence in a perspective that Mongolia’s independence now has support from two countries instead of one.

Proving this point, Baabar wrote, “If China was not there, Mongolia would have faced the same fate as the Buryats. If the Soviet was not there, Mongolia would have faced the same fate as the Inner Mongolians.” Choibalsan, who understood the process as the actualization of Mongolia’s independence, widely celebrated the 1946 Naadam, marking the “25th anniversary of People’s Revolution”. He invited several high-profile guests from the Soviet and China, celebrating with the public and even personally participating in archery. Because the anniversary was truly the celebration for Mongolia’s independence and for Choibalsan’s group, it was the celebration for their GREAT STRUGGLE that sailed through the bloods of monks and royals… It was the celebration for our independence. Numerous evidence proves that the Marshal General Choibalsan gave great significance to the celebration and was very excited for it. However, he may have been troubled by many other things that did not go as he expected. Even the morning began with a misfortune. A picture of him scolding his successor Tsedenbal Yumjaa for being hungover after a long night of drinking was archived. He was planning to organize a parade like the one organized at the Red Square in 1945 and receive a report from a parade commander; however, General Mijid, who played the role of General Georgy Zhukov that handed out the report at Red Square, fell of his horse during the Parade.

Because he got humiliated in front of the public during an actual parade after becoming an “actual” country, the Marshal presumably chased after Mijid at dinner in an attempt to slash him with a sword. It got worse when a guest from Tuva Togoo Salchig brought up the issue of the remaining territory of Tuva. He slapped across the face of President of Tuva Togoo and chased him off. He did realize that Salchak Kalbakkhorekovich, officially known as Toka will sell him off to Kremlin. As such, he began disregarding Stalin since he accomplished his goal. He may have thought, “We did what the comintern told us, killing our friends and family just for this day. Enough is enough. Comintern happened already, we no longer need them.” He deemed it unnecessary to pay his respect to the great leader of the world revolution Joseph Stalin’s 70th birthday. Although his dream was fulfilled, his desire was far from over. Soviets, who predicted Choibalsan’s actions beforehand, already prepared a new leader for the Mongolian People's Republic since 1930. It is said that he was surprised when Moscow introduced the new prince of Mongolia Tsedenbal Yumjaa to him. Not only was he surprised, he was mortified to hear his new successor talk about dissolving the country and merging it with the Soviet Union, telling his partisan friend Bumantsend, “We have failed to prepare our new generation” in both anger and sorrow.

PART TWO. "FOE" FRIEND

Choibalsan, who made an assumption too early, got called to Moscow for a therapy and passed away on a surgery table in 1952 during a fasting on the eve of Mongolia’s traditional celebration of lunar month. It is strange how a marxist leader at the time Tsedenbal was better than Marshal when it comes to trusting Mao’s China. At his order, the Mongolian People's Republic dismantled border troops in 1950-1960, leaving the border unguarded. Hundreds of households migrated to Bayan-Ulgii aimag from Xinjiang as a result.

• Marshal General Choibalsan disregarded Stalin after accomplishing his goal.

• Tsedenbal was better than Marshal when it comes to trusting Mao’s China.

• An atrocious legacy from this period was the groundless hate towards China.

Tsedenbal may have thought integrating countries do not need borders as China’s adoption of communism means to join the Soviet Union. Maybe his thoughts did not play a part, instead it may have been the Soviets that told him so, or he understood it that way when they said something else. In response to Marshal Choibalsan’s caution towards China’s presumptuous migration, he explained that there is nothing to fear since they too were installing communism. The relations between the Soviet and China got tense shortly after. Chinese leader Mao Zedong started to express that although China was establishing communism, he is not someone who would serve Kremlin and be controlled by Moscow. As a matter of fact, three volumes on the history of Republic of Mongolia were published a few years apart in 1960’s. Ideologically distorted conclusions aside, it was the first modern scientific history ever published in the XX century. Not many people know about the Mongolia-Soviet-China science academies were planning to co-publish this history book. However, not to mention that the co-publishing was cancelled, the history book included hate towards the southern neighbor due to the tension. Initially, Chinese Prime Minister at the time Zhou Enlai, who negotiated with Tsedenbal on setting borders in 1962, once warned that a tension will rise with the relations with the Soviet, expressing that the relations between Mongolia and China should not have to tarnish because of it and that Mongolia can hold a neutral policy. At least the Mongolian side did not say “scram” in response. Because he had received a command to cut ties with Beijing from the north. Since then, he ended the cold war as a notorious hater of China, getting complimented by the Soviets.

PART THREE. "FRIEND" FOE

The loathsome rumors about Chinese invasion was surfaced at this exact moment. For the Republic of Mongolia, who cut ties with China, the Soviet was now the only ally. They no longer had the guts to defy their only partner. If they did, the Soviets would simply threaten China’s invasion. The public already had the fear that a “monster” will invade if they offended Soviets in any way, bearing everything the Soviets threw at them. A hideous condemnation of “tarnishing Mongolia-Soviet friendly relations” or “attempting to deteriorate” was added to the official sentence of the state. Many state or party figures were victimized because of it. An atrocious legacy from this period was the groundless hate towards China and practices of making everything right by simply taunting them and on the contrary, humiliating everyone who were logical towards the attitude as Chinese half-breed and/or spy. But the independence of the Mongolian People's Republic remained intact because China survived the tension between Zhongnanhai palace and Kremlin. Soviet-China relations began to improve since the mid-1980’s and Moscow made several attempts involving the Mongolian People's Republic to confirm their interest in strengthening ties with China. Due to the inability to understand the new international environment, Tsedenbal, who thought that “being against China will satisfy the Soviets”, was dragged into these attempts. It is said that, because of his old beliefs, he chased off Chinese people in Ulaanbaatar in 1983, tainting Beijing-Moscow relations, which was just beginning to improve.

Beijing immediately sent a messenger to Moscow (not Ulaanbaatar) and demanded them to refrain from two-faced friendship talks while threatening through Tsedenbal. After receiving the protest note from Beijing, Moscow sent a special mission to Ulaanbaatar. The mission consisted of newly appointed Ambassador Sergei Pavlov and new advisor from KGB Vsevolod Radchengo. Mr. Radchenko, in his book “главная профессия-Разведка” or “Main profession-Intelligence”, wrote about how “The whole procedure of removing Tsedenbal from his position and personnel changes in leadership were highly appreciated by political analysts and senior management, both in Ulaanbaatar and Moscow.” As such, Kremlin, in an attempt to set things straight with Beijing, ripped Tsedenbal from his authority in 1984 for offending China by chasing them off. With an aim to begin a new era of Soviet-China relations, the Soviets decided to withdraw 100,000 soldiers that were stationed in the Republic of Mongolia. According to the same old rules, everything was decided in Moscow and was informed to Mongolians afterwards. Some officials of the Mongolian People's Republic, who heard the news about removing Tsedenbal, were nervous to inform him. They heard about the news only when Mikhail Gorbachev made an announcement about the withdrawal of Russian troops in 1989. Mongolia had two neighbors once again after the mid-1980’s and managed to create third neighbors in connection to the collapse of global socialist system, dissolution of the Soviet Union and temporarily weakened monitoring of Kremlin.

Second part of the article will be published on November 19, Monday.

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Policy-makers warn mineral price drop in 2019

​Budget Stability Council suggests Govt to select small number of projects next year ​

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Bank of Mongolia has informed of a potential risk of weaker foreign trade conditions following a likely chance of slump in prices of Mongolia’s main export goods, namely copper, iron ore and coal. On the contrary, Mongolia's main import commodity, oil price is set to further increase in 2019. National Budget Stability Council explains that this could create unsatisfactory situation for budget revenue, which is the main risk for the economy. Davaasambuu Dalrai, Head of the council, warned that the lesser revenue will limit expenditure, ultimately obstructing planned projects. “In order to avoid potential risk of deadlock in multiple projects, the Government should choose a small number of reliable and necessary project,” suggested Mr. Davaasambuu. Ministry of Finance, on the other hand, determined price swing as the key potential risk in the budget revenue. For instance, the trade war between the U.S and China, the U.S sanction on Iran, economic crisis in Turkey and China’s policy on reducing iron production within the frame of reducing air pollution in Beijing caused instability in mineral prices since July.

Economist Enkhbayar Namjildorj remarked, “On the external side, the market demand of purchasing country, coupled with weak commodity prices remain are the key risks, while the internal risk is the domestic capabilities of developing the infrastructure.” The 2019 State Budget states to raise one-third of budget revenue from mining industry. Around 86 percent of mining revenue is expected to account for copper and coal exports. Specifically, balanced price of coal was estimated at USD 75.9 per ton and copper - USD 6,222 per ton. Additionally, the experts of International Monetary Fund, World Bank, National Reserve System of Australia and Bloomberg forecasted coal price to remain stable at 2018 level of USD 202 per ton. Amar Lkhagvasuren, Economics Officer at the Asian Development Bank Mongolia, highlighted, “Investments on Oyu Tolgoi is one of the key support for the economy. In the first half of this year, OT investments made up 12 percent of economic growth. Delay in schedule or obstruction of any kind will obviously have significant impact on the economy.”