Mongolia imports MNT 150 billion worth glassware on average www.zgm.mn

According to the Customs General Administration, Mongolia is purchasing about MNT 150 billion worth glasswares. The import of glass and glassware is leading to a significant amount of currency outflow, causing a negative balance in trade and increasing USD rate.

30 thousand people participate in Ulaanbaatar Marathon www.montsame.mn

Ulaanbaatar /MONTSAME/. In the frameworks of the 380th anniversary of the establishment of Ulaanbaatar city, the annual international Ulaanbaatar Marathon took place on May 18.

Mongolian Meat Price Time Series Forecast www.medium.com

Since September 2018 the average price per kilogram of mutton in Ulaanbaatar has increased by 35% (beef increased 26%). News outlets have been buzzing with talk of these price increases and even meat shortages. Headlines from many news outlets make it seem as if the sky is falling (see below for a particularly sensational headline from Ikon.mn). I hope to explain the market forces at play here and hopefully better understand why prices are at record highs.

How Meat Works in Mongolia
In Mongolia, meat prices are highly seasonal, with meat prices rising in the Spring and then falling in the Fall. The meat supply itself comes from nomadic herders who make up roughly 30% of the population. But these herders do not operate with anything resembling a western mode of production. Their behavior has more to do with herd health and preparations for the various challenges of each season.

“The price of meat is skyrocketing and there is a shortage!”
Here is a rough generalization of the behavior of herders. This, of course, does not speak for all herders but from what I have observed this is relatively typical behavior. In the Fall before winter sets in herders will slaughter or sell those animals which are likely to die in the coming winter. Then in the Spring during breeding season herders often restrict the amount they sell so as not to limit their potential growth that year. In the Summer the productive animals are known and herders are more willing to sell or slaughter those animals that are not pregnant.

With this cycle, it is clear that seasonal prices are primarily being driven by the supply of meat. Prices go down in the Fall, hit the bottom in the Winter, and then rise dramatically in the Spring, reaching the peak in the Summer.

To ensure the supply of meat, the government purchases extra meat when prices are generally low and freeze it for use in times when supply is lower. This program has been going on for several years and the Minister of Food, Agriculture, and Light Industry recently stated they will increase the supply of this reserve meat on the market. However, based on available data it is not clear whether this program actually works or does not. This reserve meat is frozen for several months and, from what I have observed, is much less desirable in the market.

Are increasing exports causing record prices?

Now that we have a short introduction to how the market works in Mongolia, let’s take a look at the factor most are blaming for the price increases, exports. Recently I was interview on MNB World’s weekly news program. Through this, I learned of the concern that international traders (particularly from China) are being blamed for buying meat in bulk, thus causing a meat shortage and prices to rise.

To understand this better I wanted to see if meat prices correlated with exports. After all, meat exports are not a new thing in Mongolia. If these exports were causing a fluctuation in the price of meat we should see these correlations. So let’s take a look!

Please review the full article with graphics at https://medium.com/…/mongolian-meat-price-time-series-forec…

BY: Robert Ritz

Parliament discusses online license grants www.zgm.mn

At the parliamentary session on Friday, MPs discussed the bill on transparency and control of licenses. The draft regulated the granting and extensions of licenses via one-stop service centers or online.

Foreign Minister to pay visit to the Czech Republic www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Foreign Affairs of Mongolia D.Tsogtbaatar is to pay visit to the Czech Republic on May 20-21 at the invitation of his Czech counterpart Tomas Petricek.

ADB to raise private business loans www.montsame.mn

Mongolian private companies have possibility to borrow loans up to a combined USD1 billion from Asian Development Bank, underlines Finance Minister of Mongolia Ch.Khurelbaatar. The Finance Minister took part in the 52nd annual meeting of ADB Governors held on May 1-6, sharing Mongolia’s views and positions with representatives of ADB, its largest development partner, and other partners.

The significant amount of financing for Mongolia’s private sector is a reflection of ADB Strategy 2030’s target to expand its private sector operations. During the annual meeting, ADB Governors appreciated the target that one-third of its operations by number will be private sector operations by 2024. ADB also targets a substantial increase in commercial co-financing. ADB’s new lending, equity investments, and guarantees to private companies reached USD3.1 billion in 2018, a 37 percent increase from the previous year.

“The performance of ADB’s private sector operations is helping the region address many challenges including improving its infrastructure, creating jobs, and enhancing access to finance,” said ADB Vice-President for Private Sector Operations and Public-Private Partnerships Mr. Diwakar Gupta. “ADB will continue to expand private sector assistance by diversifying into new and frontier markets, scaling up financing for agribusiness, health, and education, and moving into emerging infrastructure sectors such as water, waste, and sanitation.”

The bank’s Development Effectiveness Report of Private Sector Operations 2018 was released at the annual meeting and according to the report, there were a record 32 new private sector projects committed in 2018, compared with 27 the previous year. Direct financing was complemented by a record $7.2 billion in commercial cofinancing last year, representing almost 50% of all cofinancing mobilized by ADB.

“There are huge opportunities to resolve many issues by attracting private sector investment instead of Government borrowing. Merely creating clear legal frameworks, it is possible to attract investment from private sector in all sectors. For example, civil aviation liberation can be achieved when government defines its policy for it. As a result, many airlines would enter the market, conducting more flights fostering tourism development. The motivation of private companies for making investments is naturally profit. Therefore, when government creates a favorable legal environment for it there will have sufficient financial sources for accelerating development of Mongolia”.

“Moreover, we agreed with ADB on issuing a bond to be denominated in national currency allowing only private companies to buy it. The bond will be denominated in national currency-Tugrig, as it will be more profitable to private companies. When a bond is denominated in foreign currency there is a risk of exchange rate variation. For example, the Chinngis bond was issued when exchange rate of USD was equal to MNT1300, but the USD rate grew up to MNT2600 when the bond should have been repaid. Under this arrangement, ADB would be responsible for bond risks. The bond will provide affordable financial sources needed for private companies. We have agreed on general issues and not defined the details yet.”

ADB’s active private sector operations have already contributed to the region’s economy, providing jobs for an additional 313,308 people and training 322,303 beneficiaries, mostly in financial literacy. Access to finance has been improved through active private sector projects for more than 6.8 million people and micro and small and medium-sized companies, while other projects have contributed to the education of 9,455 additional students. ADB’s private sector clients have achieved carbon emissions reductions of 11.4 million tons annually. Energy projects dominated the commitment portfolio of ADB’s Private Sector Operations Department in 2018, accounting for USD1.7 billion or around 54 percent of total commitments. The volume of financial intermediary projects committed last year almost doubled to over USD900 million, while Private Sector Operations Department’s Microfinance Risk Participation and Guarantee Program achieved record volumes by facilitating USD271 million in local currency loans to microfinance institutions.

Deputy Governor of Bank of Mongolia (Mongolbank) B.Lhagvasuren, who also attended the ADB annual meeting, highlighted that cooperation of Mongolbank with ADB is successful and productive, and mentioned the implementation of the Payment System Modernization Project as a good example.

This USD25 million project will upgrade the payment system infrastructure up to international standards. “Within the project the real time gross settlement system for high-value transactions, which means immediate transfer of big amount of money or more than USD3 million to the account when performing a transaction, has been modernized. We have a payment system for low value transactions which operates on a program developed by IT professionals of the Mongolbank. To modernize the program an international open bid had been announced and we are buying a ready-to-use program of Montran corporation of USA. This program is widely used in Latin America and the Middle East countries besides the USA. The program will be installed soon and put into operation later this year.

Moreover, within the project the card payment system is to be upgraded as well. Soon payment cards released by Mongolian commercial banks will have an international standard- Mongolian chip. “Chip card closes all the possibilities of stealing card information or misusing the card while it is possible for the card with magnetic stripe, which are commonly used in Mongolia today. As the chip card meets international standards the cards would be usable in other countries.”

Generally, the policies for ADB and the Mongolian government to support the private sector, diversify economy through developing agribusiness, food industry and tourism are closely aligned. Therefore, we will continue our partnership with ADB in the long term, noted Finance Minister Ch.Khurelbaatar.

Recently, framework financing agreement with ADB has been discussed at the Parliament of Mongolia, having major support.

Cabinet approves 7 new Mongolian Ambassadors www.news.mn

The cabinet approved the appointment of 7 new ambassadors on May 17. In accordance with procedure, the list must be approved by the president.

President meets The Hu band www.montsame.mn

Today, President Kh.Battulga has received producer and singer B. Dashdondog and members of The Hu, heavy metal band of Mongolia, which performs in a new genre so called Hunnu Rock.

Korean Air Carried out Global Planting Project in Mongolia www.etbtravelnews.global

This year was especially meaningful as employees from Delta Air Lines joined the green efforts to celebrate the one-year anniversary of the joint venture between the two airlines. Korean Air and Delta Air Lines aim to work together through not only the successful joint venture but also joint community services in the future, according to Korean Air. About 120 Korean Air employees and 30 Delta Air Lines employees worked with local residents and students to plant trees in Baganuur, Mongolia, a region undergoing rapid desertification. Korean Air has been growing the “Korean Air Forest” in the area by planting trees every year since 2004, with the aim to stop desertification and protect the environment. “We are very proud to contribute to ecological restoration efforts in Mongolia. For the last 16 years, the Korean Air Forest has grown to cover 44 hectare or 440,000 m² of land. After we planted 5,000 maple trees this year, the Korean Air Forest now has a total of 125,000 trees,” said Kwang Ho Ko, Head of Regional Headquarters, China. “We were also excited that our partner Delta Air Lines joined us this year. I hope together we can find more ways to give back to the environment and society in the future.” Korean Air is managing the forest through diverse, systematic efforts, by hiring local forestation experts and educating local residents on environmental awareness. “We were honored to be invited as part of the celebration of our joint venture’s one-year anniversary with Korean Air to participate with them for the first time in their annual tree planting event in Mongolia,” said Lisa H. Duval, Managing Director of Asia Pacific, Delta Air Lines, who participated in the project. “We had 30 employees from over a dozen locations in Asia and the Americas, including members of our internal employee organization ‘Green Up’, who came together with Korean Air employees for this important event. We strongly believe that what is good for the planet, is good for Delta and our partners worldwide.” Korean Air also regularly donates computers to public schools in Baganuur, Mongolia, contributing to relations between Korea and Mongolia. The airline plans to donate computers, desks and gym equipment to local schools this year as well. As a part of the Global Planting Project, Korean Air has been growing the “Korean Air Forest” in Kubuqi desert since 2007, in the Inner Mongolia region of China, where the yellow dust storm originates.

Mongolia bans burning low-grade coal for domestic use in capital www.xinnhuanet.com

ULAN BATOR, May 15 (Xinhua) -- A ban on burning of low-grade coal for domestic use in the Mongolian capital Ulan Bator came into force on Wednesday, with the aim of reducing air pollution.