A

Жижиг

A

Дунд

A

Том
http://zgm.mn/post/3328/

Private entities raise concern over business environment

 0 сэтгэгдэл

A

Жижиг

A

Дунд

A

Том
http://zgm.mn/post/3328/
  • Mongolian Economic Fo­rum aimed to define sustainable economic develop­ment policy

Mongolian economic forum 2019 under the theme National In­terest kicked off on october 30, at the Mongolian National Chamber of Commerce and Industry (MNCCI). The annual forum aimed to build consensus for defining sustainable economic development policies and addressing challenges key sectors of Mongolia are facing, among poli­cymakers, the business community, academia, and civil society. This is the first economic forum held during the time that the 2020 State Budget is being discussed. President of MNCCI, Amartu­vshin otgondavaa said in his open­ing speech “This year, the Mon­golian economic forum is being organized by private sectors under the theme of National Interest. Al­though the economy is growing, poverty remains high and many social issues have not been resolved.”The forum was co­organized by non­governmental organizations working to protects businesses and their interests, namely, MNC­CI, Mongolian economic forum (Mef) Ngo, Mongolian Business Council, Ceo Club, without any government involvement. “Business owners gathered here to discuss what they are facing and to make recommendations to government and policymakers. There­fore, panelists of today’s forum do not have high positions, but just business owners who express their concerns on behalf of civil society,” highlighted one of the panelists According to the National Sta­tistical office, only about 50 per­cent of the total registered 180,000 enterprises are currently operating.


Accountability mechanism plays a key role in improving the business environment

The World Bank’s survey on Doing Business has also shown that there is no improvement in Mongolia’s business environment. The country was ranked at 81st place out of 190 countries.Panelist of the discussion noted that since all the negative indica­tors of the business environment of Mongolia are related to irrespon­sibility, accountability mechanism at all levels plays a key role in improving the business environment of Mongolia. Also during the event, MNCCI, economic Policy and Competitive­ness Research Center, Mongolian Business Council and Ceo Club established a memorandum of understanding to maintain active economic and business coopera­tion.










A

Жижиг

A

Дунд

A

Том

ACM annuls former PM decree on Dubai agreement

Oyu Tolgoi, a copper-gold mine in the South Gobi region of Mongolia, holds one of the largest undeveloped high-grade copper deposits in the world.

 0 сэтгэгдэл


Administrative Court of Mongolia (ACM) annulled Former Prime Minister Saikhanbileg Chimed’s order No.27, 99 and 123 on the 2015 Dubai Agreement. The document covers the costly and several times delayed underground expansion of Oyu Tolgoi (OT). Darkhan Mongol Nogoon Negdel NGO had requested ACM to invalidate Saikhanbileg’s order, considering it violated the law. The court decision confirms that the deal was signed illegally and the Dubai agreement has become invalid. However, the Government of Mongolia has the right to appeal to the ACM decision. Erdenes Oyu Tolgoi LLC, the 34 percent shareholder of OT declined to give specific information on the matter. Amongst Mongolians, the Dubai deal refers to an agreement on the pathway forward for starting development of the underground mine, which was signed by representatives of the government of Mongolia, Rio Tinto and Turquoise Hill Resources at a meeting held in Dubai in May 2015. Oyu Tolgoi was launched in 2009 after an investment agreement granted Mongolia its share and the rest to Canada’s Ivanhoe Mines, now the Rio Tinto-controlled Turquoise Hill Resources. Oyu Tolgoi, a copper-gold mine in the South Gobi region of Mongolia, approximately 550 km south of the capital Ulaanbaatar, holds one of the largest undeveloped high-grade copper deposits in the world. Between 2010 and the third quarter of 2019, OT spent over USD three billion on national procurement, of which USD 523 million was spent on procurement from Umnugovi province. The company signed MNT 2.7 billion contract to purchase 5,000 locally made standard leather safety boots from Khos Az LLC for the next three years. Following the opening of the two new factories in Manlai soum, 64 new jobs were created.







A

Жижиг

A

Дунд

A

Том

Economy grows 6.3 percent as service sector increases

Service sector accounted for 2.9 percentage points or 40 percent of the growth, while mining sector growth made about 1.5 percentage points or 24 percent of the GDP rise.

 0 сэтгэгдэл


THE MINING SECTOR GROWTH MADE ABOUT 1.5 PERCENTAGE POINTS OR 24 PERCENT OF THE GDP RISE. SERVICE SECTOR INCLUDES TRADE, TRANSPORTATION, AND COMMUNICATION SECTORS, WHICH DEPEND ON THE MINING SECTOR, SHOWING THAT MONGOLIA’S ECONOMY IS STILL ENCOURAGED BY THE GROWTH IN MINING.

As of first nine months of 2019, Mongolia’s GDP at 2010 constant price increased 6.5 percent, to MNT 13.7 trillion, according to the National Statistical Office (NSO). This was mainly due to increases in the service sector which accounted for 2.9 percentage points or 40 percent of the growth.

The mining sector growth made about 1.5 percentage points or 24 percent of the GDP rise. Service sector includes trade, transportation, and communication sectors, which depend on the mining sector, showing that Mongolia’s economy is still encouraged by the growth in mining. In terms of the largest mining companies’ performance, Erdenes Tavan Tolgoi JSC exported 12.6 million tons of coal in the first 10 months and Energy Resource LLC 4.2 million tons of coal. Coal exports have reached 32.3 million tons, a 5 percent increase from the same period of last year.Thus, 524 national companies have supplied their products and services to Oyu Tolgoi (OT) LLC during the reporting period. OT spent USD 329 million on national procurement and the construction of Shaft 2 at the Oyu Tolgoi mine has been declared complete.The World Bank highlighted in its report in October, “In Mongolia, growth momentum has continued in the first half of 2019, as GDP rose to 7.3 percent from 6.8 percent in 2018. This robust performance has largely been supported by a strong coal sector and increased private investment. However, the report cautions of the risks including political uncertainty, commodity price shocks, cross border bottlenecks, implementation delay mega projects and slower implementation of banking sector reforms.”In addition to the main economic indicators, inflation has also declined. Consumer price index (CPI) at the national level, which increased 9 percent in September, rose 7.6 percent in October. In October 2019, a 5.1 percent increase in CPI from the end of the previous year was mainly due to increases in prices for meat and meat products by 27.4 percent and clothing, cloth and footwear for each group by 5.4 percent and alcoholic beverages, tobacco group by 2.7 percent, respectively.Meat prices have risen by 30 percent year on year, but have dropped by about 4 percent in October, compared to the previous month. However, the inflation rate in Ulaanbaatar is 8.5 percent, which exceeds the Bank of Mongolia (BoM)’s target.

A

Жижиг

A

Дунд

A

Том

Coal export reaches 76 percent of target

Mongolia exported a total of 32.3 million tons of coal earning USD 2.75 billion in the first ten months of 2019

 0 сэтгэгдэл


Mongolia exported a total of 32.3 million tons of coal earning USD 2.75 billion in the first ten months of 2019, which is only equal to 76 percent of the 2019 export target of 42 million tons, according to the General Customs Administration of Mongolia. The coal export in the third quarter rose 1.4 tons or USD 309.2 million compared to the same period of the previous year. Mongolia exported 98.2 percent of the total coal to its southern neighbor. The country’s coal export remained less than 80 percent behind plan. In other words, Mongolia needs to export 9.7 tons of coal to meet the target plan. According to the Bloomberg report, China’s coal import is expected to stand between 200-300 million tons, posing risk to the coal export of its neighbor.In the same period of 2018, the average border price of coal stood at USD 78.8 per ton and increased to USD 85.0 this year.

A

Жижиг

A

Дунд

A

Том

Job availability expectationdecreases among consumers

Consumers’ expectation of Mongolia’s economic situation in the next six months has deteriorated

 0 сэтгэгдэл


Current Situation Index (CSI) was the main driver of this growth. In particular, the CSI has increased by 7.3 percentage points to 60.7. However, the Expectation Index has decreased slightly by 1.8 percentage points and reached 98.7.

Consumers’ expectation of Mon­golia’s economic situation in the next six months has deteriorated, even though the current situation index has improved significantly. Consumers are less optimistic about job availability and income from a year earlier, decreasing the expectation index. In the third quarter of 2019, the Consumer Confidence Index (CCI) in Mongolia is 83.5 at a similar level compared to the same period in the previous year. It has increased only by 1.8 percentage points. A significant increase in the Current Situation Index (CSI) was the main driver of this growth. In particular, the CSI has increased by 7.3 percentage points to 60.7. However, the Expectation Index has decreased slightly by 1.8 per­centage points and reached 98.7.CCI in Ulaanbaatar was 94.1 in the reporting period while CSI reached 68.1, and Expectation In­dex stood at 111.5. Consumers in rural areas are less optimistic than in Ulaanbaatar with average CCI of 77.1. CCI survey collects data on con­sumers’ expectation price levels. In the third quarter of 2019, 61 per­cent of individuals have the ex­pectation of an “increase in price level” in the next six months and this response is lower by 11 per­cent compared to 2018. A quarter of consumers expects “no change in price level” in half a year. In the next year, consumers are expecting the annual inflation rate to be around 6 percent and the exchange rate of USD to be around MNT 2,706.