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http://zgm.mn/post/767/

Policy-makers seek to lower mortgage rate

​41-60 square meter housings to have the highest demand in the next three years​

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http://zgm.mn/post/767/


Mongolian Mortgage Corporation HFC LLC, in cooperation with the Ministry of Construction and Urban Development, Ministry of Finance and Financial Regulatory Commission, organized the fifth Asian Fixed Income Summit (AFIS) in Ulaanbaatar yesterday. Total outstanding loans of mortgage loan program has reached MNT 4.2 trillion, involving over 93 thousand people. The Bank of Mongolia (BoM) informed that around 700 loaners received mortgage in May 2018, of which the Government financed 436 units with MNT 30.15 billion and BoM-248 units with MNT 16.3 billion. In total, the BoM plans to finance MNT 192 billion and the Government-MNT 120 billion for the program this year. According to Tenkhleg Zuuch LLC, the housing demand is expected to be 35-40 thousand household in the next three years despite the fact that mortgage program financing has been lowered. Also, 41-60 square meter accommodations are expected to have the highest demand for the next three years. At the forum, the Ministry of Finance disclosed that they have drafted a revision to the financing of mortgage loan program, which is expected to be presented to the Cabinet by September 30. The Government, instead of cooperating with the BoM, will be fully responsible for the program’s financing with the bill. In addition, the regulations of mortgage is also being revised, informed Minister of Construction and Urban Development Badelkhan Khavdislam. He remarked, “We have drafted a mortgage regulation and heard the suggestions of related ministries. It will be presented to the Cabinet in August. Key changes in the draft will mainly involve first-time accommodation buyers, reducing prepayment of mortgage to 25 percent.

Housing loans to expand as mortgage to GDP ratio results lower than average

We also conducted studies on lowering the interest rate to seven percent; however, the study suggested that it is not possible. Actions are being taken to reduce housing price gradually, seeking opportunities to domestically supplying cements and armatures. We will also support private sector initiatives on raising funds for mortgage financing.” Panelists at the AFIS highlighted that Mongolia’s outstanding mortgage to GDP ratio stands at 15.7 percent as of 2017, while the world average was 18.2 percent in 2016. Experts view that this demonstrates that the issuance of housing loans can be expanded further. Mongolian Mortgage Corporation HFC LLC is currently financing the eight percent mortgage program by issuing mortgage-backed securities, granting loans to 64,772 people as of the first quarter of this year. Gantulga Badamkhatan, CEO of the company, remarked, “We are aiming to create loan sources for the program by raising a bond from international banks and financial institutions. We are also studying opportunities to establish a green fund to reduce the prepayment of mortgage loans and support green construction.” As a suggestion, Andrei Milyutin, Senior Financial Sector Specialist at the World Bank Group, advised “Long-term interest rate insurance environment needs to improve. The key elements of estimating accessible housing must include household income, housing prices and sustainability of median household income. It is important to divide loaners into social stratification and hold policies for targeted income level; for instance, increasing loan issuance to low and middle income households.”

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President pays his first state visit of this year to China

President to attend the BRI summit on April 26-28

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The President of Mongolia Battulga Khaltmaa is paying his first state visit to China of this year at the invitation of his Chinese counterpart Xi Jinping. He is expected to visit the State Assembly on today and will take part in the high-level international meeting of Belt and Road Initiative (BRI) on April 26-28, reported the Ministry of Foreign Affairs.

The President is being accompanied by the Minister of Foreign Affairs of Mongolia TsogtbaatarDamdin, Ambassador Extraordinary and Plenipotentiary of Mongolia to China, Deputy Speaker of the Parliament, Speaker of the Mongolian-Chinese Parliamentary Group in the Parliament, Minister of Food, Agriculture and Light Industry, Minister for Road and Transportation, Head of the Office of the President of Mongolia Enkhbold Zandaakhuu, Secretary of the National Security Council, representatives and working groups, and press releases representatives.

During his tenure, President Battulga Khaltmaa participated in several high-level meetings, twice in the Eastern Economic Forum in Vladivostok, Shanghai Cooperation Summit last year, the Asia-Europe Summit in Belgium, and the World Investment Summit in Switzerland.

As a matter of fact, President Battulga addressed the issue of transit of natural gas pipeline connecting Russia and China at the East Asian Economic Forum in Vladivostok, Russia.

“The development of the relationship with the Shanghai Cooperation Organization will be a real challenge to the regional infrastructure,” he addressed when he previously participated in the Shanghai Cooperation Summit.


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Standing Committee discusses 2008 bill and postpones it

Working group established to revise bill on explosives

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The first discussion on the draft Law on the Supervision of Circulation of Explosives and Blasting Instruments submitted by Cabinet on December 04, 2008, and the draft Law on Allocation were held at the Standing Committees on Security and Foreign Policy yesterday.

As of today, there are 64 licensed entities importing, producing and selling explosives and blasting materials and the development of these products are likely to increase due to the need in the mining sector. However, the assessment on the consequences of the law does not specify the legal requirements for the licenses, or the professionally accredited bodies, and the functions of law enforcement agencies are not determined including the legal status of the law. It has a negative impact on the implementation of the law, the committee concluded.

Therefore, the majority of the members of the Standing Committee agreed to postpone the bill and decided to set up a working group.

At the standing Standing Committee meeting, the members also discussed the bilateral agreement between Mongolia and the Republic of Belarus on Friendly Relations and Cooperation.

The 2016-2020 Action Plan of the Mongolian Government states to extend traditional relations and cooperation with third neighbors and other countries. It also prioritizes the development of trade and economic relations. For this purpose, it is necessary to develop relations, cooperation, trade and economic partnerships with the Republic of Belarus, which is the main center of transit transportation that connects Mongolia with the countries of the Eurasian Economic Union, including our partnering countries in the region, the Ministry of Foreign Affairs emphasized.




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Upcoming bill prohibits underground water usage in mining

80 percent of Mongolia's water is supplied by 1.9 percent of the total reserves of groundwater

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The Parliament recently discussed the amendments to the Law on Water and other related bills. The draft specified the right to use water and prohibited the exploitation of underground freshwater for mining and industrial purposes.

Approximately 80 percent of Mongolia's water is supplied by 1.9 percent of the total reserves of groundwater and there are deficient legal and regulatory documents governing the use and protection of groundwater. Furthermore, the issue of regulating the relations between citizens, business entities, and organizations that are using underground water, as well as improving the monitoring and accountability of the groundwater is becoming a problem.

Also, it is important to prohibit the use of underground freshwater deposits in specific industries, to set abandoned bores, water use, and consumption priorities, to increase the right to the drinking water consumption of citizens, to increase the use of surface water and to define water scarcity levels. The draftsmen believe that there is a need for the socioeconomic necessity to create a legal environment for monitoring.

The draft law was postponed to proceed at the next session due to the failure to meet the quorum.


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Mongolian Foreign Policy: The story of seeking the third neighbor

After World War II, diplomatic relations between China and the Soviet Union was a major achievement for Mongolia.

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The sequel to No. 69 (1121)

The Third Neighbor initiative was continued after World War II. Although the Soviet Union from the north warned Mongolia to avoid having a third neighbor because of being a small country that was under the shadow of Russia. It was also possible to call on the approval of many other countries. It was seen at the end of Stalin's speech. He said:

When you are recognized internationally, your country is officially independent. There is nothing wrong with pursuing it. First of all, you should declare your independence from China. If your independence is accepted by China and is admitted by other countries, you will be able to attract the Inner Mongols, Tsakhar, and Barag. Then, they will know that Mongolia's true independence is in your hands.

You will be able to declare your independence from China when you are strong in the state. If so, imperialist nations such as Japan and England will try to accept you at your own initiative.

It should be noted that the Yalta Conference, also known as the Crimea Conference has played an important role in the third neighbor's policy of Mongolia. As a result of the following events, the People's Republic of Mongolia started to form an independent state as a de-jure in 1946. The Republic of China (ROC) recognized the independence of Mongolia on January 05, 1946 and established diplomatic relations on January 13, 1946. As for the Soviet Union, its de-facto approval was transformed into de-jure in 1945. It was the beginning of the Treaty of Friendship, Cooperation, and Mutual Assistance that two sides signed in Moscow on February 19, 1946.

From that point on, Mongolia returned to pursue its 1912 aspiration and began to seek diplomatic relations. It was an attempt to expand to a third neighbor.

The People's Republic of Mongolia has requested the Secretary-General of the United Nations to join the UN on April 19, 1946, and was invited to the UN Security Council meeting on August 28, 1945. At the meeting, British delegation Alexander George Montagu Cadogan made the following statement about Mongolia:

Mongolian People's Republic has diplomatic relations with only two countries, therefore, it does not have enough experience in international relations.

After a while, the Chief of Mongolia’s diplomatic office Tsedenbal Yumjaa opposed the statement at party activist meeting in Ulaanbaatar. He said:

The size of international relations is not a condition that can be considered to be a member of the United Nations or whether it is a necessity to be admitted membership in the UN.

The Mongolian People's Revolutionary Party (MPRP) meeting in 1948 discussed the issue of Mongolia's foreign relations in a wider frame for the first time. At that time, they noted that the party had the right direction of foreign policy. After World War II, the diplomatic relations between China and the Soviet Union was a major achievement for Mongolia. Afterward, it declared diplomatic relations with North Korea in 1948, and Albania in 1949. The number has increased to 12 after five years. It was a huge advance. For the number to reach two-digits, Mongolian politicians had suffered 40 years of torture, and at that time, they were thinking of a third neighbor.

Yalta Conference has played an important role in the third neighbor's policy of Mongolia

There was a speech at MPRP XII Congress (1954.11.19). "We are now marking peace, harmony and mutual respect all over the borders of the People's Republic." They considered the relationship with the Union of Soviet Socialist Republics (USSR), the People's Republic of China (PRC), and the DPRK and remarked,

The Mongolian People's Republic is a strong part of the composition of the powerful democratic camps, with the establishment of diplomatic relations with the People's Democratic Republics of the Europe, including People's Republic of Poland, People's Republic of Botany, Czech Republic, Uzbek Soviet Socialist Republic, Buryatia Republic, Roman Republic, Republic of Angola and the German Democratic Republic. We also maintain diplomatic relations with the Republic of Vietnam and focus on strengthening the relations.

In the mid-1950s, Mongolia had no idea of a diplomatic relationship beyond the socialist countries of the democracies, but in 1956, the Russian Social Democratic Labour Party (RSDLP) declared the possibility of peaceful coexistence with countries of diverse people. The Mongolian Government has  started to seek a third neighbor without any hesitation.

The fact that “more than half the population of the humanity” and “the four continents of the population” were read as part of the ruling party's congressional speeches shows that diplomacy was being considered intently. The practice of declaring diplomatic relations as an important developmental progression, as it was known for its importance, continued for 30 years and remained until the 19th Congress of the MPRP (1986).

1958.03.17 - Part 1 of the "International Situation and People's Republic of Mongolia" report of Damba Dash's speech on the MPRP's conference evaluated the development of friendly relations with 12 countries including Soviet Union, the People's Republic of China, Albania, Bulgaria, Hungary, Democratic Republic of Vietnam, Democratic Germany, DPRK, Poland, Romania, Czechoslovakia, Yugoslavia. It read,

We declared diplomatic relations with the Republic of India, Burma and the Republic of Korea, and the Republic of Indonesia, complying the Five Principles of Peaceful Coexistence, known as the Panchsheel Treaty, the base of the relationship between countries with different systems. Therefore, the People's Republic of Mongolia now has diplomatic relations with more than half the human population. The Mongolian People's Republic is ready to establish equal relations with other countries who are willing to maintain a further relationship with our country in order to ensure equality and mutual respect for the principle of peaceful coexistence without regard to social and political structures." However, the non-resident ambassadors were reported as diplomatic delegations. This is due to the lack of practice in international relations. In 1958, Mongolia began diplomatic relations with 15 countries.

Diplomacy in the principle of peaceful coexistence, regardless of social and political structures, has expanded considerably since the 1960s. In 1959, after the United Nations announced the 1960s as the "African Year," it established diplomatic relations with Guinea, Cambodia, and Cuba. In 1961.07.03, the MPRP congress said, "Now the People's Republic of Mongolia has diplomatic relations with 21 countries in the four continents."

To be continued...