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http://zgm.mn/post/5381/

Coronavirus changes the world (2)

Coronavirus changes the world (2)
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http://zgm.mn/post/5381/
  • If coronavirus spreads widely, Mongolia will collapse
  • Some countries in the region, including Thailand, have tightened regulations on the import of medical products and removed the excise tax on medical alcohol

Please find the previous part from May 13th issue of ZGM Daily

The recession is just beginning, but revenues have already fallen or plunged in all sectors. If no action is taken now, small and medium enterprises and the shadow economy will be more hard on almost every country (especially in Mongolia). However, there will be extra demand for the Internet-based economy - e-commerce, e-education, and e-health services - so that employees do not lose income. When it comes to making a profit, I could say nothing. China, Asia’s largest economy, has been hit the most but has not collapsed. Instead, the government of the country has supported small If coronavirus spreads widely, Mongolia will collapseand medium-sized enterprises by delaying social security contributions, ground leases, and real estate taxes. Japan has imposed curfews in all provinces but continued to support SMEs through wage comfort and advisory services. The UN commission also noted the good news that Hong Kong, Singapore, and Taiwan have set up special investment funds to subsidize retail, food, transportation, and tourism, and support low-income households.

Countries in the region need to completely reform the import and export policies. Everyone is looking for ways to import cheap, reliable medicines and important medical products promptly. In this regard, countries are reviewing their tariff and non-tariff trade regulations.Some countries in the region, including Thailand, have tightened regulations on the import of medical products and removed the excise tax on medical alcohol. At the same time, many countries are banning or putting restrictions on the export of medical devices and drugs. It is ridiculous that the United States banned the export of masks because it believes that the interests of its citizens must come first. It has been criticized as inhumane action, denying the livelihoods of vulnerable countries facing infectious diseases. Furthermore, some people are acting as if there are no other diseases than corona. Many of these activities connect with finances. It seems like health comes with wealth. In the absence of wealth, there is a call to rely on oneself, a healthy life, and sports.

If coronavirus spreads widely, Mongolia will collapse. Therefore, in addition to mechanically increasing the number of doctors, the State Emergency Commission (SEC) should always encourage people to stay healthy, at least to resist alcohol and smoking, to lead a healthy life and to be athletic. The UN Subcommittee estimated that by 2030, the entire health care system in our region will need to be strengthened, with an annual investment of USD 880 million in emergency preparedness, risk management, and response. Such investments are aimed at overcoming the current situation, compensating the economy, and most importantly, saving lives. Currently, it is more about people, since investment in people is an essential support for economic recovery. Eventually, only humans can run the economy. The world is moving to stop the spread of the virus, to treat those who are infected, and to develop vaccines. It also requires financial resources. Therefore, East Asia will establish a Public Health Emergency Fund in the region, mobilize financial resources, and provide targeted assistance to the countries most affected by the virus. 

India, for example, has offered to set up an emergency fund against COVID-19 under the South Asian Association for Regional Cooperation (SAARC) with an investment of USD 10 million. The UN and the regional commission are managing the emergency fund, bringing together member states, regional intergovernmental organizations, the Multilateral Development Bank, the private sector, and civil society.Most importantly, the coronavirus does not discriminate between rich and poor people or wealthy and small countries. The disease spread regardless of the level and boundaries of socio-economic development. Outbreaks appear to be exacerbated by fears, riots, discrimination, and hatred. This means that there is enough reason for political instability. Stigmatization of certain groups in society increases the risk of people hiding their disease and further outbreak. The UN commission called for a message of tolerance, optimism, and partnership in Asia and the Pacific. If we are going to spread something, let’s spread goodness, said the UN Secretary-General.All of the above is very important to us!

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Iron ore price rises to USD 68.4 per ton

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In the first three months, Mongolia’s industrial sector produced 895,700 tons of iron ore, 668,400 tons of iron ore concentrate, and 19,900 tons of zinc concentrate respectively. According to the current statistics, iron ore decreased by 348.300 tons or 28 percent, iron ore concentrate by 86.300 tons or 11.4 percent, fluorspar ore by 500,000 tons or 2.0 percent, and zinc concentrate by 4.0 thousand tons or 16.8 percent.In the first three months of 2020, iron ore exports reached 2.1 million tons or USD 141.1 million. Compared to the same period of the previous year, it decreased by 9,900 tons or 0.5 percent in volume and increased by USD 34.5 million or 32.4 percent in the monetary terms. The average price of iron ore was USD 51.4 per ton in the first three months of 2019, reached USD 68.4 in the same period of 2020, increasing by USD 17.0 or 33.1 percent compared to the earlier year. Iron ore prices on the world market are also rising amid reports that the Chinese economy is recovering. Currently, the Dalian Commodity Exchange (DCE) has risen iron ore price by 0.6 percent to 710 yuan per ton, while the Singapore Stock Exchange has risen 0.8 percent to USD 92.5. Since the beginning of the year, Mongolia had exported coal worth USD 513 million or 6.3 million tons, which decreased by 2.4 times compared to the same period of the previous year. The country has exported 671,000 barrels of oil, showing a fourfold decrease. Fluorspar export increased slightly by 15,000 tons, to 237,000 tons.

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Trade deficit of petroleum totals USD 248 million as of May

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Mongolia exported crude oil worth USD 24.8 million and imported USD 273 million of petroleum products in the first five months of 2020, which means the oil industry deficit reached USD 248 million. Fuel import contracted by 7 percent to 206,000 tons compared to the same period of the previous year. It plummetted by 20 percent to USD 101.8 million in price. Diesel fuel import decreased by 20 percent to 335,300 tons from a year ago, financially dwindled by 34 percent to USD 171 million. Domestic crude oil consumptions have been lowered predom-inantly due to the pandemic. Specifically, oil consumption has been deteriorated as a result of the suspension of export and obstacles in the mining industry, according to the fuel importers. Rosneft Oil Company decreased its border price of oil products supplied to Mongolia. On this subject, the retail price of AI-92 gasoline has been reduced by MNT 475 per liter, AI-80 by MNT 380, AI-95 by MNT 440, and diesel fuel by MNT 590 since March. PetroChina Daqing Tamsag LLC exports oil through the Bayankhoshuu border checkpoint, while Donshin Oil LLC exports by railway. Railway export has not been disrupted in the last few months. However, exports from the Bayankhoshuu border resumed after a period of disruption. Currently, there is no hindrance to exports, said the Mineral Resources and Petroleum Authority of Mongolia (MRPAM).

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Mongolia's SMI shows upward tend in may

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  • This was mainly due to the rapid recovery in the Business Confidence Index last month

Mongolia’s Sales Managers’ Index (SMI) is moving upward to a positive trend in May, according to the World Economics. This was due to the rapid recovery in the Business Confidence Index last month. However, the index remains below 50 points. Other key indicators show a slight improvement in the Sales Growth Index, while the Jobs Index shows weak demand. Mongolia’s economy has been hit hard by the pandemic, which was triggered by a temporary stagnation in China’s economy. As China opens up its economy, and many factories become more able to produce at nearly full capacity, the economy of Mongolia is following suit and responding positively. There is some way to go before the trend lines indicate renewed growth, but all indexes suggest the economy is moving in a positive direction, highlighted the World Economics. Mongolia is ranked 81 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Mongolia deteriorated to 81 in 2019 from 74 in 2018.

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BoP deficit reaches USD 665.4 million

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The foreign direct investment totaled USD 491.4 million, decreased by more than 20 percent year on year. The Bank of Mongolia (BoM) emphasized that the Oyu Tolgoi project made up more than 90 percent of the foreign direct investment as of the first quarter of the year.

In the first four months of 2020, the balance of payments (BoP) showed a deficit of USD 665.4 million. The BoP deteriorated by USD 988 million compared to a surplus of USD 322.9 million in the same period last year. As the balance of payments deteriorates, the current account balance deficits USD 389.6 million. At the end of April last year, the current account surplus was USD 689.3 million. Major exports fell sharply due to border restrictions imposed to prevent COVID-19 during the period. Specifically, coal exports at the end of May shrunk 2.6 times than the previous year. In terms of inflows, foreign direct investment totaled USD 491.4 million, which decreased by more than 20 percent year on year. The Bank of Mongolia (BoM) emphasized that the Oyu Tolgoi project made up more than 90 percent of the foreign direct investment as of the first quarter of the year.