As for the cooperation between the International Monetary Fund (IMF) and Mongolian Government, Mr Masa Igata noted that the sides need to negotiate to further the terms to ease public frustration.

We held Mongolian investment forums in Hong Kong, London, Ulaanbaatar and Tokyo last year. The investors had positive approach for Mongolia.

He added, “In order to implement more efficient economic partnership with Japan, it is important for the Government to hear the suggestions of Mongolian and Japanese private sector. Although taxes on several import products have been reduced, business entities are facing more challenges. There is a risk in the legal environment due to fast approval of some bills. It is possible that the laws did not take certain stakeholders’ positions into account.

Law making process has to be complex and consider the interest of policy makers and business representatives. This can prevent possible loopholes. I think certain bills have been rushed; however, I do no think it is increasing risk for the investors. We held Mongolian investment forums in Hong Kong, London, Ulaanbaatar and Tokyo last year. The investors had positive approach for Mongolia.

MNT rate started to stabilize, so the financing cost has reduced. Furthermore, thanks to repaying foreign debts on time, foreign investors are still interested in Mongolia. Presently, the investors are waiting for the asset quality review (AQR) of Mongolian commercial banks. Although it was scheduled to be disclosed last year, it has not been disclosed yet. The investors’ trust will restore further with the transparency that follows the AQR.”

Baigal.G, Bilig.B

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At the meeting, Isabel Chatterton said that the World Bank and international banking and financial organizations highly recognize actions being taken by the Investment Protection Council established under the Government of Mongolia.

She also expressed a willingness to conduct joint projects and programs to enhance the Council’s activity.
Moreover, the IFC is interested in providing advisory service to a project on construction of new Central Wastewater Treatment Plant of Ulaanbaatar, which will be implemented with Chinese loans.

The IFC intends to cooperate in formulating plans and selecting contractor and in direction of operating the plant efficiently at lowest cost.

M.Unurzul

This mailbox subsidiary enjoyed a very low average effective tax rate of 4.19% over the past years, likely due to a beneficial tax ruling with Luxembourg’s tax authorities. As a result of this tax scheme, Rio Tinto’s subsidiary Movele has paid US$89 million in taxes in Luxembourg, which is US$470 million less than what would have been paid in Canada, if no tax avoidance scheme had been employed. The company reports that this arrangement was approved by Canadian authorities.

In addition, Rio Tinto and the other corporate investors behind Oyu Tolgoi achieved far-reaching concessions from the Mongolian government which severely limit the tax revenues Mongolia can hope to receive from the mine. Under pressure, the government of Mongolia facilitated Rio Tinto’s use of benefits enshrined in tax treaties with Luxembourg and the Netherlands;tax treaties which Mongolia unilaterally rescinded in 2013 due to concerns that they facilitated tax avoidance. Rio Tinto was able to negotiate an even lower tax rate in 2015, after a dispute over the distribution of Oyu Tolgoi’s revenues. As a result, the Mongolian government has missed out on approximately US$230 million in taxes over a five-year period.

Khurelbaatar Chimed, Minister of Finance, remarked “Since the International Monetary Fund (IMF) staff team’s arrival, we have been negotiating for 5 days. The personal income tax has been raising public frustration. Therefore, we reached a deal with the IMF to revert the marginal tax bracket to effective tax rates. The minimum retirement age has also been reverted for the elders to choose when to retire. We are now working on reforming the General Taxation Law, Laws on Corporate Tax and Income Tax. Business entities are the foundation of the tax system. We will prepare more understanding law for them.”

Prime Minister Khurelsukh Ukhnaa said “We are allowing the elders to choose retirement at the age of 60 for males and 55 for females. If the individual is working under difficult conditions, they can retire at the age of 55 for men and 50 for women. Secondly, tax brackets have been returned back to the previous rates and the taxes paid in January will be refunded. We chose to work with the IMF.

Accordingly, the economy has showed a sign of recovery and we have repaid the Development Bank of Mongolia’s USD 580 million and 5-year Chinggis bond’s USD 500 million debts on time. Mongolia’s economy falls when commodity prices drop due to the heavy reliance on the mining sector. The reputation of our neighbors in the international organizations also have negative impact. Therefore, we will focus on two objectives. First of all, to maintain financial discipline of public services; and secondly, to stop economic downturn. We will accomplish this by reducing budget expenditure and increasing the revenue I note that national producers’ roles are significant in repaying foreign and domestic debts.” According to the PM, Mongolia’s annual domestic consumption of gasoline is around 1.1 million tons, of which 98 percent is being imported from Russia and 2 percent from China. Therefore, the PM announced to start the construction of an oil refinery in 2018.

Furthermore, PM shared that he is planning to submit a bill on prohibiting the transportation of raw coal to Ulaanbaatar city starting from April 2019 and is estimating the bill will reduce air pollution by 50 percent.

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“In addition to the environment, these considerations also include the interests of other parties concerned, such as the shipping and tourism industries.”

Nord Stream 2 still needs to receive permission from other countries whose territorial waters will accommodate the pipeline. They include Finland, Sweden, and Denmark.

Running from Russia to Germany under the Baltic Sea, the Nord Stream 2 would double the existing pipeline’s capacity of 55 billion cubic meters per year. In Germany, it will connect with gas pipelines within the European Union for onwards transportation.

Initially, Russia’s Gazprom intended to have a 50 percent plus one share in the company, with the rest of the shares divided between Germany’s Uniper and Wintershall, Austrian OMV, France’s Engie, and Anglo-Dutch Shell. US sanctions against Russia and European red tape prevented the companies from participating in the project directly, but they have pledged to remain in the project and finance it anyway.

Gazprom recently said that construction of the pipeline was on course to be completed in 2019.

"There are huge trade opportunities in China that we want to help British businesses take advantage of," May said in a written statement ahead of the trip. "My visit will intensify the 'Golden Era' in U.K.-China relations."

Britain, the world's sixth largest economy, sends just 3% of its exports of goods and services to China. Meanwhile, just 7% of its imports are from China.

The total annual value of U.K.-China trade is about $84 billion, much less than the $211 billion in trade between Germany and China.

May, who will be joined by 50 representatives from businesses and trade groups, leads a government that hopes to strike new trade deals following its planned departure from the EU.

Analysts say there are ample opportunities for more trade with China. But a full, formalized trade deal could take five to 10 years to sign after Brexit.

"A post-Brexit China-U.K. trade deal could accelerate trade growth and benefit both economies -- but a deal would unlikely to be struck before 2025," said Ian Mitchell, a senior policy fellow at the Center for Global Development in Europe.

Britain's main exports to China are cars, petroleum products and tourism services, while it mostly imports Chinese manufactured goods, telecommunications equipment, clothing and electronics.

Experts say these imports have put pressure on domestic U.K. industries.

"Rising import competition from China is likely to have hastened the decline of U.K. manufacturing, particularly in those areas of the U.K. that specialized in the production of the same type of goods that we import from China," said researchers at the National Institute of Economic and Social Research.

In order to even out the relationship, experts hope May will focus on improving market access for Britain's vast professional and financial services industry. Language barriers and regulatory differences mean this is a largely undeveloped area.

Jon Geldart, a China expert at the tax and advisory services firm Grant Thornton International, said that May should also promote British design, technology, high-tech engineering, environmental services and craft beer.

"I hope we'll be able to attract further investment and showcase what Britain is good at," he said.

"China was interested in the U.K. as a sympathetic voice inside the EU. Brexit means the U.K. counts for far less," said Peter Holmes, a trade expert at the University of Sussex. The "Chinese [are] unlikely to brush May off, but she can't expect much."

Many governments around the world are making less information available about how they raise and spend public money, according to the results of the Open Budget Survey 2017.

After 10 years of steady progress by countries, the 2017 survey shows a modest decline in average global budget transparency scores, from 45 in 2015 to 43 in 2017 for the 102 countries that were surveyed in both rounds (scores are out of a possible 100). Mongolia evaluated by 46 scores.

This is in stark contrast to the average increase of roughly two points documented among comparable countries in each round of the survey between 2008 and 2015. The reversal of transparency gains is particularly discouraging given roughly three-quarters of the countries assessed do not publish sufficient budget information (a score of 61 or higher), seriously undermining the ability of citizens worldwide to hold their government accountable for using public funds efficiently and effectively.

Launched in 2006, the Open Budget Survey (OBS) is the world’s only independent, comparative assessment of the three pillars of public budget accountability: transparency, oversight and public participation. The sixth round of this biennial assessment, the 2017 survey evaluated 115 countries across six continents, adding 13 new countries to the survey since the last round in 2015.

At the meeting, the Minister pointed out the importance of participation of aimag governors in law enforcement and appealed them to spend financial sources of local budgets accumulated from royalties on conservation activities.

He cautioned the governors that it is too inadequate of using just 30 percent for conservation, even though about MNT60 billion is accumulated annually to local budgets from royalties. Therefore, the Minister expressed his hope to cooperate with the Governors in proper spending of the money.

“The Ministry will support technological modernization by means of disbursing long-term low-interest loans to entities that are recycling and consuming recycled water, and introduce insurance system to develop accountable mining. Issuance of licenses will be solved by open auctions,” Minister N.Tserenbat said.

Although the Ministry performs well its duties to formulate policies to protect nature and develop tourism and have laws adopted, it encounters a problem in implementing and monitoring the policies and laws; therefore the Minister seeks cooperation with Governors on this matter.

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M. Unurzul