Amazon to create over 5,000 jobs in Britain in 2017 www.reuters.com

Online retailer Amazon (AMZN.O) is set to create more than 5,000 jobs in Britain this year, the company said on Monday, boosting its investment in the country once more even as it prepares to leave the European Union.

IMF Reaches Staff-Level Agreement with Mongolia on Three-Year Extended Fund Facility www.imf.org

A staff team of the International Monetary Fund (IMF) led by Koshy Mathai visited Ulaanbaatar during February 1-19 to continue discussions with the Mongolian authorities on a set of economic policies that could be supported by IMF financial assistance. At the end of the visit, Mr. Mathai made the following statement:

“The Mongolian government and the IMF team have reached staff-level agreement on an economic and financial program to be supported by a three-year Extended Fund Facility (EFF) for SDR 314.505 million (435 percent of quota), or about $440 million. Other international partners also plan to support the government’s program: the Asian Development Bank (ADB), World Bank, and bilateral partners including Japan and Korea are together expected to provide up to $3 billion in budget and project support; and the People’s Bank of China is expected to extend its RMB 15 billion swap line with the Bank of Mongolia for at least another three years.

“The total external financing package will thus be around $5.5 billion and will support the authorities’ “Economic Stabilization Program,” which intends to restore economic stability and debt sustainability as well as to create the conditions for strong, sustainable, and inclusive growth, while protecting the most vulnerable citizens.

“This agreement is subject to the confirmation of financing assurances, the completion of prior actions by the authorities, and the approval of the IMF Executive Board. The Board is expected to consider Mongolia’s request in March.

“Mongolia is well endowed with mineral resources, strong potential in agriculture and tourism, and a young and dynamic population. Its long-run future is promising, but in recent years it has been hit hard by the sharp decline of commodity prices and a collapse in foreign direct investment (FDI). Attempts to stem the decline through expansionary policies proved ineffective after a few years, and the economy is now stagnating, weighed down by high debt and low foreign-exchange reserves.

“Fiscal consolidation is a key priority, as loose fiscal policy in the past was a major driver of Mongolia’s current economic difficulties and high debt. Budget deficits will be reduced steadily, while priority social spending will be maintained: for instance, the savings from better targeting the Child Money Program will be used entirely to increase spending on the food stamp program for the most vulnerable. Also, to boost revenue, the personal income tax will be made more progressive, with rates on only higher-income households increased.

“The Development Bank of Mongolia (DBM) will henceforth operate in an independent, purely commercial manner, as laid out in the recently passed DBM law, and the Bank of Mongolia (BOM) will not engage in additional quasifiscal activity, with the mortgage program now operating essentially as a revolving fund. In addition, the law on concession projects will be reformed, and the public investment program (PIP) will be rationalized and better aligned with national development priorities.

“The authorities will adopt a set of important fiscal reforms to ensure that budget discipline is maintained, building on the existing framework for fiscal responsibility. These include the creation of a Fiscal Council to provide independent budget forecasts and costings of new policy proposals, and provisions to give the government sole authority to determine the total amount of spending in the budget, as well as to require Ministry of Finance approval of any proposals to cabinet with a budgetary cost.

“Monetary policy will remain appropriately tight, given the objective of price stability. Over time, however, as the economy normalizes, it may be appropriate to cut the policy rate if external and inflation indicators permit. The exchange rate will continue to move flexibly, with intervention limited to smoothing excessive volatility and preventing disorderly market conditions. A major priority will be the adoption of a new BOM law to clarify its mandate, strengthen governance, and improve independence.

“Strengthening the banking system is a crucial part of the program, to ensure that the banks can support sustainable and inclusive economic growth. The authorities’ first priority is to undertake a comprehensive diagnosis of the banking system to assess institutions’ financial soundness and resilience. With the results of this diagnostic in hand, the BOM will engage banks to ensure appropriate restructuring and recapitalization, as necessary. The BOM will complement these actions by strengthening the regulatory and supervisory framework, and government is committed to improving the deposit insurance system. The authorities are also committed to strengthening the regime for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

“The authorities intend directly to boost economic activity and prospects by attracting new investment to major mines, and by implementing an array of structural reforms to promote economic diversification and improve competitiveness, especially in agriculture and tourism. The broad range of reforms envisaged under the program have been developed in close collaboration with the World Bank and ADB.

“The authorities’ adjustment and structural reform program, supported by the large package of external financing, is expected to stabilize the economy and lay the basis for sustainable, inclusive, long-run growth. By 2019, growth is projected to pick up to around 8 percent, as economic and financial conditions improve and key mining projects take off. Foreign exchange reserves should rise to a healthy $3.8 billion (above 6 months of imports) by the end of the program, similar to levels seen in 2012, before Mongolia was hit by external shocks. Fiscal consolidation will leave room for the banking sector, over time, to extend more credit to the private sector, consistent with projected growth. These policies would also put public debt on a declining path over the course of the program.

“The government’s recently announced plan to engage with its private external creditors to secure financing assurances for the program should help restore debt sustainability. Specifically, the financing parameters of the program assume that external private creditor exposure will be maintained at its current level over the program period, on terms consistent with debt sustainability, and gross financing needs will remain at prudent levels during the post-program period.

“On behalf of the staff team, I would like to thank the authorities for their warm welcome, and the constructive discussions and excellent collaboration we have had over recent months, bringing us to today’s successful conclusion.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: KEIKO UTSUNOMIYA
PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

IMF to Loan Mongolia $440 Million as Part of Bailout Package www.bloomberg.com

Mongolia reached an initial agreement with the International Monetary Fund for a three-year program that includes a $440 million loan package as part of a $5.5 billion bailout to help the north Asian country with looming debt repayments.

“The Asian Development Bank, the World Bank and bilateral partners including Japan and Korea are expected to provide up to another $3 billion in budget and project support, while the People’s Bank of China is expected to extend its 15 yuan billion ($2.2 billion) swap line with the Bank of Mongolia for at least another three years,” the IMF said in a statement on Sunday. “The total external financing package will thus be around $5.5 billion.”

Economic growth in Mongolia slowed to 1 percent last year as commodity prices fell and growth slowed in China, the main buyer of the nation’s copper and coal exports. The country also saw foreign investment collapse after a dispute with Rio Tinto Plc over the Oyu Tolgoi copper mine.

The Extended Fund Facility (EFF) will support the government’s plan to address balance-of-payment pressures and also help the government repay looming debts, including the Development Bank of Mongolia’s $580 million bond repayment due in March.

This marks the sixth time since 1990 that the IMF has bailed out Mongolia, the most recent a stand-by agreement in 2009-2010, according to an e-mail from IMF spokesman Keiko Utsunomiya.

Restore Stability

The financing will support a Mongolian program, “which intends to restore economic stability and debt sustainability as well as to create the conditions for strong, sustainable and inclusive growth,” according to the IMF statement. The agreement is subject to the confirmation of financing assurances, the completion of prior actions by the authorities, and the approval of the IMF Executive Board. The board is expected to consider Mongolia’s request in March.

This is “great news, the market will receive this positively,” Dale Choi, head of the research firm Mongolia Metals & Mining, said in an e-mail. It is the “bottom out everyone has been waiting for and the only way is up.”

Ahead of the agreement, parliament amended the development bank law, making changes recommended by the IMF. The amendments were designed to depoliticize the bank and include a rule that board members can’t have held political office in the past five years.

Central Bank

Mongolia’s central bank had $1.3 billion in foreign reserves at the end of December, well below the $4.1 billion it held at the same time in 2012, when money was pouring into Mongolia’s mining sector amid the commodities boom. The tugrik fell 20 percent last year, fifth-worst among exotic currencies tracked by Bloomberg.

“While many Mongolian businesses may feel the short-term pressure of a marginal increase in taxes, the successful implementation of the EFF arrangement in Mongolia will stabilize the domestic currency and boost confidence in the banking sector,” Bilguun Ankhbayar, Chief Executive Officer of the Mongolian Investment Banking Group, said by e-mail. “This will likely result in increased activity in those economic sectors that have the most competitive advantage.”
Foreign exchange reserves should rise to $3.8 billion by the end of the program, according to the IMF statement. By 2019, economic growth is projected to pick up to around 8 percent.

“Fiscal consolidation will leave room for the banking sector, over time, to extend more credit to the private sector, consistent with projected growth. These policies would also put public debt on a declining path over the course of the program,” the IMF said.

The country’s budget deficit at the end of 2016 tripled to 3.67 trillion tugrik ($1.5 billion), compared to a year earlier, while total external trade dropped 2.3 percent and non-performing loans in the banking system rose 25 percent.

“Attempts to stem the decline through expansionary policies proved ineffective after a few years, and the economy is now stagnating, weighed down by high debt and low foreign-exchange reserves,” according to the IMF.

China piles pressure on North Korea by banning coal imports www.bbc.com

Mongolian trade mission to Tel Aviv and Jerusalem, Israel for "Start up and business ecosystem development: Best practices" study visit and business program. www.mongolianbusinessdatabase.com

Mongolian Business Database (MBD) and ConSolWays, Israeli-Mongolian consultation, Solution and business development firm with support of Mongolian National University's Business school are hosting a Mongolian trade mission to Tel Aviv and Jerusalem, Israel for 4 days study visit and business program on "Start up and business ecosystem development: Best practices" between March 25-31.2017.
The study visit program includes the business subjects on Agriculture (Green houses, agriculture export ecosystem) , IT Sector ( international accelerators) , health, communication, banking security, fintec and visits to other related institutions.
Please visit to following link for information in details and contact at contact@mongolianbusinessdatabase.com e mail, 77109911, 99066062 for the registration and inquiry.
The registration will close in March 15, 2017.

National Council on Mongolian Studies meets www.en.montsame.mn

Huawei plans voice assistant for phones www.chinadaily.com.cn

EU parliament approves free trade pact with Canada www3.nhk.or.jp

Agreement on Partnership and Cooperation with EU approved www.montsame.mn

Ulaanbaatar /MONTSAME/ The European Parliament gave consent to the Framework Agreement on Partnership and Cooperation /PCA/ signed between Mongolia and the European Union in 2013 and adopted a resolution during its plenary session held on 15 February 2017.

Wool products handmade by herder women popular in France www.montsame.mn

Ulaanbaatar /MONTSAME/ Herder women of the “Friendly women” NGO in Zavkhan aimag started selling more than 30 types of handmade wool products in France in October 2016.