Mongolia makes proposal for silk road redevelopment www.ubinfo.mn

Minister of Froeign Affairs Tsogtbaatar Damdin and Member of the Parliament Enkhbayar Jadamba are attending the first international conference of the silk road support group in the Parliamentary Assembly of the Organization for Security and Cooperation in Europe (OSCE). Under the theme "the Role of Parliamentarians in Boosting Economic Cooperation and Cultural Ties along the Silk Road", the conferece took place on March 13-14. Mr Tsogtbaatar delivered a speech at the plenary session which was held on the first day. In his speech, he highlighted the historical role of the Mongol Empire in the silk road development and noted that Mongolia supports latest initiatives designed for redevelopment of the silk road, especially in line with the China’s Belt and Road initiative. “Initiatives for redevelopment of the silk road have a great significance not only for the development of trade and economy, but also for development of cultural, humanitarian and person-to-person relations,” he added. Moreover, Mr. Tsogtbaatar made a proposal to launch scholarship for ambitious young diplomats who have offered new proposals and initiatives within the frame of the initiatives for the silk road redevelopment. In 2012, Mongolia became a full member of the OSCE. Since then, it has been taking part in its Parliament Assembly which is the main mechanism for inter-parliamentarian talks for its member countries.

Mongolia to expand cooperation with Qatar www.news.mn

A Mongolian delegation led by Defence Minister N.Enkhbold, has paid an official visit to Qatar at invitation of his counterpart Halid bin Muhammed al Attiyah. In Doha, the minister attended a two-day maritime defence and security expo, DIMDEX 2018, organized by the Qatar Armed Forces. About 180 companies from more than 60 countries took part in the annual event.

Building Ethics into Mongolia’s Business Ethos www.asiafoundation.org

Last week, The Asia Foundation and the Sant Maral Foundation released the eighth biannual survey of private sector perceptions of corruption, revealing a pivotal time in Mongolia’s business environment.

During Mongolia’s transition in the 1990s from a centrally planned to a free market economy, the country underwent the privatization of its government property such as factories, apartments, and even livestock. These changes led people to enthusiastically jump on opportunities to build their own businesses within the new framework of a competitive and open market. These new business opportunities ranged from thousands of people re-selling goods from China to Mongolia and Russia while traveling on trains for weeks, to buying and operating old socialist-era factories and plants.

After nearly two decades, the country’s economy has expanded considerably, and today, Mongolia’s leading businesses have passed through the initial hurdles of learning how to operate in a free market economy. This latest round of the survey shows that businesses are now feeling the tangible effects that corruption is having on their bottom line: 80 percent of the businesses reported “a lot” of corruption in the government, and at least 20 percent of them said that they observe corrupt acts on a monthly or quarterly basis. This growing recognition of corruption and its negative impact on the economy is both a marker of the maturation of the private sector as businesses start to call for improvements in the business environment, as well as an indication that corruption remains one of the major constraints on economic growth in Mongolia.

Although the blame for corruption is mostly placed on the government, respondents in fact acknowledged their own culpability in corruption by not taking proactive measures to combat it. The survey reveals that only 14 percent of the businesses that responded have rules to prevent corruption and only six percent of them had reported corruption, a surprisingly low number given how many reported observing lot of incidents of corruption.

On March 2, The Asia Foundation and the Economic Club of Ulaanbaatar brought together 30 members of the business community to discuss the survey findings, as well as the importance of fairness and ethics in business and how it should help the businesses succeed in the long run and better serve society.

One well-known local business woman who leads an association of construction companies recalled that while many business people in Mongolia operate large successful companies today, they still run them under behaviors learned during the early transition years when the idea of business ethics was largely a foreign concept. This may be why only nine percent of the businesses think that doing business in an ethical way is a part of their corporate social responsibility, according to a study on corporate social responsibility by the Corporate Governance Development Center in Ulaanbaatar.

A CEO of local company “Nuudelchin” or “Nomads” in Mongolian, told the group that he witnesses acts of corruption in his daily life as a business leader. “We encounter cases where a seller cheats a customer not telling that them that a product was made in China and poor quality. This demonstrates that the nature of our businesses, regardless of their size that has short run motivation to make profit,” he said.

Another local businessman attending said that “many of our large companies are split into two groups that support two political parties. Some even serve both major parties at the same time. There are those ‘middle men’ whose businesses exist only on paper yet consistently win government tenders, whereas real business people with skills and equipment are getting hurt and going bankrupt.”

Despite these bleak observations, there is hope. Over the last few years, many business leaders in the country are starting to take the lead in combatting corruption, and the concept of a “business ethic” is starting to emerge. For example, The Business Council of Mongolia (BCM), a local business association established a Business Ethics Working group two years ago and created an anti-bribery e-learning course tool last year (supported by The Asia Foundation’s Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project). The tool enables anyone in the business community to log on and complete tests aimed at improving their knowledge about corruption and relevant legislation. Recently, XAC Bank made this online course mandatory for their new employees during their induction sessions. Another BCM member who owns a local electronics retail company responded extremely positively to the anti-corruption training, requiring that his 30-plus managers take part in the training.

As the business community begins to realize the need for change, and public pressure grows, the government is also taking positive steps. On July 1, 2017, Mongolia’s Parliament passed a revision of the Criminal code, introducing legislation that for the first time, makes a legal entity responsible for an act of corruption and abuse of power; any embezzlement from the executives and managers of private companies is now a criminal act.

There is no doubt that corruption presents a big challenge in Mongolia. Yet there is a growing confidence in and hope that ongoing collective efforts such as improving corporate governance, corporate social responsibility, and improving ethics will take Mongolian businesses to the next stage of development.

The survey launch event was an initiative of The Asia Foundation under its Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project funded by Global Affairs Canada. The “Study of Private Sector Perceptions of Corruption” is conducted under The Foundation’s Global Affairs Canada funded Strengthening Democratic Participation and Transparency in the Public Sector in Mongolia Project (STEPS).

Bayanmunkh Ariunbold is a project manager for The Asia Foundation in Mongolia. The views and opinions expressed here are those of the author and not those of The Asia Foundation or its funders.

Number of HIV-infections in Mongolia rises to 252 www.xinhuanet.com

ULAN BATOR, March 14 (Xinhua) -- The number of people infected with HIV in Mongolia rose to 252 after one case was registered in February, the country's National Statistical Office said in a report Wednesday.

Mongolia anti-graft body probes 2009 Oyu Tolgoi deal www.reuters.com

ULAANBAATAR (Reuters) - Anti-graft authorities in Mongolia are investigating a 2009 investment pact that kickstarted development at the Oyu Tolgoi copper-gold mine now run by Rio Tinto, which helped open Mongolia to foreign investors.

Central Wastewater Treatment Plant’s silt to be cleaned www.montsame.mn

Ulaanbaatar /MONTSAME/ At its regular meeting on March 14, the Cabinet instructed the Minister of Construction and Urban Planning to purchase equipment to make silt of the Central Wastewater Treatment Plant odorless, dry and be burned within this quarter, sign a contract, and commence installation directly.

China’s sanction on DPRK to determine Mongolia’s coking coal export www.ubinfo.mn

Coking coal formed around 70 percent of Mongolia's total coal export last year. While coal exports was 18.2 million tons in 2010, the number increased to 33.4 million tons in 2017. As for this year, the Mineral Resources and Petroleum Agency of Mongolia (MRPAM) estimates to export 52.5 million tons of coking coal in 2018 and 51.5 million tons in 2020. Coking coal mined from major deposits, such as Tavantolgoi, Ukhaakhudag, Nariin Sukhait, Ovoot Tolgoi and Khuren Tolgoi, are exported to a single market, to People’s Republic of China (PRC) mainly for steel production. The authorities of the PRC has set a goal to reduce air pollution, steel production and close old factories. Within the frame, the PRC plans to reduce steel production by 100- 150 million tons by 2020. The policy immediately took effect as the PRC cut its steel production by 50 million tons and coal by 150 million tons last year. As for this year, the initial plan is to diminish steel output by 50 million tons. Exports highlighted that this will shrink coking coal imports and escalate competition for coal China’s sanction on DPRK to determine Mongolia’s coking coal export exporters. Furthermore, the main coal importing ports have started increasing their inventories.

Accordingly, experts expect the coking coal demand to shrink in the following years due to the PRC’s policy. However, MRPAM informed that it will not directly affect Mongolia’s coking coal export. The coal export increased by 7.6 thousand tons last year, regardless of PRC’s reduction to steel production. The main reason to the increase was the U.N sanction on the nuclear test of the Democratic People’s Republic of Korea (DPRK). China imported a total of 20 million tons of coal from DPRK in 2016; however, the sanction on DPRK ceased coal imports in April 2017. Therefore, Mongolia’s export will According to the Study of Private Sector Perceptions of Corruption Survey 2017 of the Asia Foundation, around 60 percent of Mongolian private entities are dissatisfied with the business environment due to corruption. While the satisfied entities were 27.2 percent in 2012, the number drastically reduced by 2.5 On March 9, Entree Resources LL C, a TSE listed Canadian company, announced its 2017 fiscal year results and reviewed corporate highlights. According to the updated technical report of the Entree Resources and Oyu Tolgoi joint venture project that was released in January of this year, it is estimated that Entree Resources expects to gain within its investment US D 2.1 billion in undiscounted before-tax cash flow just from the Hugo North extension over the first 33 years of production. In 2017, Entree Resources closed a non-brokered private placement of 18.5 million units of the company for gross proceeds of CAD 7.6 million. The company’s operating loss was US D 3.1 million, 3 percent higher than the comparative period in 2016. In addition, the report demonstrated that at December end of 2017, cash on hand was US D 7.1 million. For 2018, the company plans The number of individuals and entities opening new deposit accounts at the Mongolian Central Securities Depository (MCSD) increased by 2.5 percent compared to the previous month, exceeding 10 thousand. This is highest indicator since 2016, informed the MCSD. In terms of structures, around 99.8 percent of remain stable unless the PRC removes sanction on DPRK, noted MRPAM. In addition, the PRC’s policy creates M&A opportunities among the major steel producers and allow them to operate at full capacity, stabilizing the coking coal demand. Nonetheless, experts expect the PRC’s steel production to decline in the long-term.

‘Dzud’ winter freeze kills 700,000 livestock in Mongolia www.asahi.com

ULAANBAATAR--Mongolia's harsh winter has killed more than 700,000 head of livestock this year, the highest toll since 2011, according to the country's statistics bureau, with extreme weather freezing animals dead in their tracks.

NSO reports on socio-economic conditions in January and February 2018 www.gogo.mn

According to a report from the National Statistics Office (NSO) on socio-economic data for the first two months of 2018, the total balanced income of the state budget and foreign aid was 1.2 trillion MNT; expenditure and debt were a combined 1.1 trillion MNT; and the state's balance of payments saw a surplus of 73.1 billion MNT.

Mongolia’s coal exports drop a third in February www.brecorder.com

ULAANBAATAR: Mongolian coal exports fell by a third in February, the country’s statistics bureau said on Tuesday, with bottlenecks at the border with China continuing to drag on trade.