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http://zgm.mn/post/2452/

Mongolia’s Foreign Policy: Russia’s interest in Mongolia

The real interest of Russia is nuclear energy

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http://zgm.mn/post/2452/


I assume the readers will receive it as a personal point of view. Both Mongolian and Russian researchers should read this.

Mongolians have been struggling to handle the relation with Russia since the establishment of democracy. Mongolia tends to impose its position or change foreign policy when working with Russia and other counterparts. Russians are patient and they know us well. It is definitely true.

There is a commission on the cooperation of Mongolia-Russia named Intergovernmental Commission. The decision of the committee is extremely challenging for the Mongolian side. If we fail to fulfill the plan, then the authority of departments in charge of Russia's relations often change.

In 2014, Russian President Vladimir Putin visited Mongolia on the occasion of the 75th anniversary of the victory of the Khalkha River. It has been five years since then. I wanted to briefly summarize the progress of projects between Mongolia and Russia.

At that time, the heads of the two countries have agreed on strengthening the military-technical cooperation of both countries. It is important to note that the traditional cooperation of the Mongolian Armed Forces and modernization of the Armed Forces and the preparation of military personnel remain effective.

The goal of intensifying relations between the two countries and creating a balanced development has not achieved yet. The pledge to negotiate a legal basis for Mongolian agricultural products, including meat, meat products, wool, cashmere, leather, sheepskin articles and Mongolian yurts in the Russian market did not implement. Where is the issue of RUB 50-100 billion soft loans to build trade in national currencies, establish related documents, and create the necessary RUB resource in Mongolia? There is also no implementation on the construction of the "Ulaanbaatar Railroad" infrastructure to complete the construction of dual and electrified railroads by 2020. The full potential of Mongolia's railroads would increase the amount of transit transportation between Russia and China.

Mongolia’s railway has clearly defined its policy in 2012 by the Government. At least one-kilometer road remains unfinished today due to the government instability. It has been 10 years since we started discussing the construction of a new railway due to the disruptions in state policy.

Mongolia is the shortest route between Russia-China and Asia-Europe. It is important to note that the Mongolian transit transportation route in the regional network has a great significance. It is also a pleasure to build a two-way electrified dual-lane road between Sukhbaatar, Sainshand, and Zamiin-Uud, which is capable of passing 100m tons of mining goods per year. I hope the feasibility study will be completed.

One of the important results of Putin's visit was the establishment of the "Intergovernmental Agreement between the Governments of Mongolia and the Russian Federation". Both Mongolian and Russian citizens became able to travel without a visa for a certain period of time, and it was a huge boost to Mongolia's business demand in Russia. However, it is only supporting the import of food and tourists. Mongolian businesses are open to East Siberia, at least Buryatia and Irkutsk.

Relations with Russia's organization, companies, and border-regions will develop long-term partnerships. Mongolians must pay attention to it. The talks on exporting some meat and agricultural products to Russia have been the subject to many years of rumors. The Russian ban stopped the meat supply from New Zealand, so the authorities discussed importing meat from Mongolia, and it was our livestock farming. New Zealand has over 40 million sheep and 8 million heads of livestock, and Mongolians were excited about their 60 million livestock in economic trade. Whenever there is a desire to be exported to the Russian market, there must be permission of origin. In the past five years, what kind of cooperation has been made with Russia?

We have to change our mindset and culture of Russia. Mongolians are trying to simplify their traditional approaches as the "brother state", which was only existed during the socialist era and try to solve the problem easily. We do not understand that modern Russians have shifted to market relations since Russia was different from Soviet times.

How do you see Russia at the state level? There is a poor mindset to get help, to resolve Mongolia-Russia relations in Mongolia’s domestic problems, and to put Russia into a state of poverty and unemployment, in particular.

• One of the important results of Putin's visit was the establishment of the “Intergovernmental Agreement between the Governments of Mongolia and the Russian Federation”.

• All the working conditions for quality education, good health and dignity will start from atoms and uranium. 

• Russia's equity interest in Oyu Tolgoi and Tavan Tolgoi will not cross the border and even reject Erdenet.

There was an agreement on improving the level of relations between Mongolia and Russia, deepening political mutual trust, and negotiating a number of important issues at high levels, such as developing the mutual trust of bilateral economics, transportation, infrastructure, finance, border, culture, and humanity. I have a suspicion that the Mongolian side, our organizations, and citizens are not taking it seriously.

Economically, there is no direct investment from Russia to Mongolia. Mongolia needs to think bigger when comes to Russian investment. Here is a description of the so-called propriety of our wealth in the third-country market (such as China) as I went to Atomexpo International Forum in Sochi on the invitation of Russia's Atomic Energy Corporation ROSATOM.

I have heard and believed that the world is interested in atomic energy and that interest is growing because of its profitability. This is a technology that will earn USD 3 from every one dollar and the foundation for development is the atomic generation. About 3500 delegates from more than 70 countries attended the two-day meeting, representing one-third of the globe. Many of the countries do not relate to uranium or atomic assemblies, who had not participated in previous meetings sent their delegates.

The Mongolians think atoms, uranium, and nuclear are destructive. The forum’s main theme was the “Nuclear for a Better Life” and I deeply explored it. In general, nuclear technology can be used to eliminate poverty, hunger, the supply of clean water, and air pollution. Do not be afraid of atoms and uranium. Furthermore, the delegates said all the working conditions for quality education, good health and dignity will start from atoms and uranium.

Our country is ranked 10th in the world for its uranium reserves and accounts for about 141.500 tons out of 5.7 million tons of total reserves in the world. However, we did not do anything in the first round of a radioactive mineral in economic circulation, while Canada, Australia, the United States, Russia, and Kazakhstan are leading the socio-economic development. Interestingly, the French nuclear company AREVA started operations with Mongolia and Kazakhstan. This would mean increased foreign direct investment. I will not talk about what our readers know what happened to AREVA. Kazakhstan is now the world's largest player, the first in the top 5 in nuclear power and uranium. Therefore, we need to use our capital and get into economic circulation. We also need to focus on world outlook. The eternal use of mankind is energy, and we have the potential to use that energy and become one of the big players in the world.

The countries that are building their new nuclear power stations are real examples to us. There is a list including, Belarus, Lithuania, Turkey, Vietnam, Jordan, Poland, Bangladesh, Malaysia, and Indonesia. Their representatives are invited to Sochi and are interested in Russian nuclear technology. The Russian President said Russia is leading the nuclear energy sector. It has 35 nuclear reactors which provide 18.59 percent of the country’s total energy production and 8 new reactors. In the future, there are plans to build 25 reactors and add 23 reactors to make nuclear energy account for 23 percent in 2020 and 25 percent in 2030. In addition, foreign countries are in the process of tackling Russia in the same way that China is established in India.

I believe that nuclear-energy cooperation in Mongolia-Russia can be a new page in our country's history. What will be the real interest in Russia in the nuclear energy sector? Understandably, when we come to rivals, copper, coal, gold, and other natural resources to other foreign investors, it is clear that Mongolia will be more interested in Russia. Russia's equity interest in Oyu Tolgoi and Tavan Tolgoi will not cross the border and even reject Erdenet. Our priority is the railway, infrastructure, gas and oil pipelines, but these are the only real interests of Russia in Mongolia. The real interest of it is nuclear energy.

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Amartuvshin: Mongolia’s economy is smaller

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The Boao Forum for Asia was held in Ulaanbaatar on August 19- 21, discussing several crucial issues in the region. Amartuvshin Otgondavaa, President of Mongolian National Chamber Of Commerce and Industry (MNCCI) gave a brief interview to talk about the significance of the forum and planned projects of the chamber.

-What was the chamber’s main role in the forum? What are the chances to enhance trade and economic cooperation in the region?

-In terms of population and increasing consumption, Asia is one of the important regions in the world. We should focus more on Mongolia’s participation in the region’s integration. Mongolia’s economy is smaller than the other countries in Asia. It’s important to invest in the mining industry effectively. Also, Mongolia can benefit from economical integration through developing the other sectors, including, education, health, IT, and agriculture.

-Recently, some mining companies’ licenses were revoked. What is your opinion on this?

-It’s about lacking connectivity between the government and local entities. And investment needs time. Instead of interfering with mining companies, the government should improve its connectivity with middle-level administrations of the provinces. Private entities are not responsible for the order that has been made already. On the other hand, it’s not right to blame the entire business sector for the illegal activities of a few companies.


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Market value up 4.83 percent in H1

Government securities trading 8.76 percent of the total trade

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Market value increased by 4.83 percent, to MNT 2.6 trillion in the first half of 2019. Total of 376.9 million shares worth MNT 82.3 billion was traded at the primary and secondary market in the reporting period. 79,800 government securities worth MNT 7.9 billion were traded Trade at the Mongolian Stock Exchange (MSE) totaled MNT 90.2 billion, increasing by MNT 12.1 billion or 16.1 percent compared to the same period of last year. Stock trading accounts for 91.24 percent or MNT 82.3 billion, government securities trading 8.76 percent or MNT 7.9 billion of the total trade.

The MSE has registered 4 new securities companies in the reporting period, and trading in the primary market totaled MNT 42.5 billion, three times higher than the same period of last year. In order to ensure compliance with the obligations of registered companies, MSE excluded 22 companies from registration due to non-performance of their obligations under the law.

Even though the primary market trade for Government securities was not active, MNT 994.4 million of income was generated and cost reached MNT 716.9 million, totaling the net income at MNT 277.4. In its financial statements, the deficit of MNT 204.6 million has been confirmed as a pre-tax loss. Compared to the same period of the previous year, total revenue increased by 25.3 percent, trading fee income sore by 34.6 percent and fee service fee grew by 24.6 percent respectively. A total of MNT 274.9 million were spent on the state budget which is 25.1 percent higher than the previous year.

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Petro Matad caps permitting progress for Mongolia wells

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Mongolian oil explorer Petro Matad Ltd has completed all processes for obtaining the land permits for the Heron and Gazelle well sites. The company is now waiting for the final signature from the local governor to allow the permits to be issued.

In the meantime, operations are continuing as normal at the Heron well site and based on current performance the drilling and logging of Heron-1 are forecast to be completed around 9 September, Petro Matad said.

The company’s operations at Red Deer are proceeding as planned, with the well reaching its intermediate casing point and preparations underway to drill the next section.

The Heron, Gazelle and Red Deer wells are all situated in block XX in eastern Mongolia. Shares in Petro Matad were up 4.5 percent at 7.52 pence on Tuesday in London.

Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds 100 percent working interests and the operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,367 square kilometers in the far eastern part of the country, and Blocks IV and V have an area of 29,062 square kilometers and 21,143 square kilometers, respectively, in the central-western part of the country.

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Service sector spurs economic growth

Competition in the trade and services sector has been rising rapidly

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Mongolia’s GDP growth is showing good performance in 2019, as the service sector improves. Competition in the trade and services sector has been rising rapidly, and demand for human resources in the field is increasing. As the players grow, new management, quality of service and standard is approaching the world standard step by step. Public service, hotel, and domestic trade that are included in the service sector have increased, according to the National Statistics Office (NSO).

Trade revenue totaled MNT 10.8 trillion in the first half of 2019

In particular, trade revenue totaled MNT 10.8 trillion in the first half of this year, up 23.1 percent over the same period of last year. The retail sector, particularly, online retailing is expanding its scale in the market.

Following the downturn in mining commodity prices, the hospitality industry, especially the foodservice revenue drops. However, it increases as coal prices improve. For example, in the first half of this year, the catering industry’s income reached MNT 217.3 billion, up by 15.6 percent compared to the same period of the previous year. Also, the restaurant revenue grew by MNT 22.6 billion in the reporting period, triggering the GDP to increase.

The industry revenue for hotels rose 40.7 percent, to MNT 66.4 billion in the second quarter of 2019. The number of visitors reached 372,000, up by 70,000 over the previous year. There has been a growth in the hospitality industry in 2018, and this has also shown an increase, supporting the economy.