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monGoLia INTRODUCTION • president supports Free-market economy, Democracy • rich natural and Cultural heritage, high-potential economy • ministry of Foreign affairs Forging productive Global ties • ambassador to eu highlights strong Bilateral ties • uK ambassador Cites investment opportunities • russia and mongolia: a Long-term partnership

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AGRICULTURE & FOOD INDUSTRY • high-potential agriculture and industry • investment to add Value to agriculture • Khatansuikh impex LLC • agmarco LLC

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TRANSPORT & LOGISTICS • transport projects Keeping mongolia on the move

INTERNATIONAL ORGANISATIONS • World Bank making Long-term Commitment to mongolia • Long-term Commitment by the un

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CONSTRUCTION & URBAN DEVELOPMENT • improving infrastructure and Building a sustainable Future • strong performance by Construction industry

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GOVERNMENT • Democratic Government promoting Free-market principles

HEALTH • master plan upgrading healthcare services • Bringing World-Class medical Lab equipment to healthcare system

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EDUCATION • Developing the talents of mongolia’s Youth • mongolian state university of education • improving the Quality of education

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TOURISM • the right Kind of tourism Growth • the Corporate hotels • tourism Visitor numbers Continue to rise • Chinggis Khaan hotel • mongolia’s top sites for Visitors • Flower hotel ulaanbaatar • urgoo Boutique hotel

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BUSINESS & INVESTMENT OPPORTUNITIES • economy ministry Focussing on sustainable Growth • positive reforms in Legal system and investment Laws • eLC LLp advocates • ministry Working to upgrade social services • new investment Law set to Boost FDi • Dynamic Business Chamber a strong advocate for the private sector • Business Council promoting private-sector Growth

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FINANCE • minister of Finance highlights Double-Digit GDp Growth • Focus on Financial-sector stability

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MINING • promoting Long-term mining sector partnerships • Bringing investors Back to resource-rich mining sector • Geomandal Group • mining association Welcomes new members • mining and energy Group meets highest international standards

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ENERGY • new ministry promoting sustainable, Green Development • many projects underway in high-potential energy sector • energy-sector Leader Welcomes european partnerships • urgent need to Boost energy Capacity • petrovis

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president supports Free-market economy, Democracy

Tsakhiagiin Elbegdorj, President of Mongolia, is committed to improving the quality of

life of the Mongolian people while also developing a strong, democratic, free-market

economy. The president is known for his support for freedom, responsible government and basic human rights.

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the president was born in Zereg sum, in mongolia’s Khovd province, in 1963. he and his wife Bolormaa Khajidsuren have ﬁve children and are foster parents to 20 orphans. president elbegdorj holds a master of public administration degree from harvard university’s John F. Kennedy school of Government and a Bachelor’s Degree in Journalism from Land Forces military academy, Lviv, in the former ussr. in a speech he gave in myanmar recently, president elbegdorj commented, “mongolia is a country respecting human rights and freedoms, upholding the rule of law and pursuing open policies. mongolia holds dear the fundamental human rights - freedom of expression, right to assembly and the right to live by his or her own choice. i believe in the power of freedom. Freedom is an asset bestowed upon every single man and woman. Freedom enables every human to discover and realise his or her opportunities and chances for development. this leads a human society to progress and prosperity. Free people look for solutions in themselves. and those without freedom search for the sources of their miseries from outside. mongols say, ‘Better to live by your own choice however bitter it is, than to live by another’s choice, however sweet’.” in 2011, when mongolia assumed the Chairmanship of the Community for Democracies, president elbegdorj said, “God has planted in every heart the desire to live free. even if tyranny crushed that desire, that desire will rise again. in the mountains of afghanistan, in the sandy homes of the middle east, in the streets of havana, in the jungles of Burma, in the steppes of asia and africa, there are many people who are still dreaming of greater freedom and peace. i hope that dream will come true and we will help them make it happen.” the president was awarded the new York Democracy Forum presidential medal by the national endowment for Democracy in 2011.

Long history of government service tsakhiagiin elbegdorj has a long history of service to his country. in 1990, he led the peaceful democratic revolution

that ended 70 years of communist rule in mongolia. he was elected a member of parliament in Mongolia’s first free elections and was one of the members involved in drafting Mongolia’s first post-communist constitution. Before he was elected president in may 2009, tsakhiagiin elbegdorj served two terms as his country’s prime minister and was Deputy speaker and majority Leader in mongolia’s parliament. Criticising the soviet union’s KGB system in 1994, he was forced to resign his post as a member of parliament. as chairman of the Democratic Party, he led the party to its first victory in parliamentary elections in 1996. as majority Leader of parliament between 1996 and 2000, he launched fundamental social and economic reforms through which a free-market system and new democratic institutions replaced the old communist structures. in 1998, at age 35, tsakhiagiin elbegdorj became the youngest prime minister in mongolia’s history. as prime minister, he initiated land reforms and a new law guaranteeing freedom of the press as well as reforms of the financial sector. he also continued his fight against corruption and, as Chairman of the Democratic party from 2006 to 2008, he introduced a flat-tax system known as “Four tens” (10% corporate income, 10% individual income, 10% Vat and 10% social-insurance contributions). the president’s priorities are to promote the rule of law, foster social justice, fight poverty, combat corruption and support direct participatory democracy. Born into a traditional nomadic family, he is also a strong advocate for environmental conservation and has been awarded the “Champion of the earth” award from the united nations environment programme (unep). president elbegdorj implemented mongolia’s first comprehensive judicial reform in 2011, which ensures open, fair and transparent trials and promotes the role of citizens in judicial procedures. as the chairman of the Community of Democracies, president elbegdorj

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has launched a number of initiatives, including “Zero tolerance for Corruption” and “education for Democracy”. as part of his effort to position mongolia as a force for peace and democracy in the region, president elbegdorj established the “asian partnership for Democracy” initiative. Furthermore, as part of the Community of Democracies initiative, the president has developed a special agenda on strengthening civil society and advocating women’s rights, particularly their participation in all levels of government and social institutions. he also strongly supports international exchanges in education, for example through mongolia’s participation in the eu programmes “erasmus for all” and “marie sklodowskaCurie”. president elbegdorj established the Democratic transition assistance Foundation of mongolia in 2012 to support democratic transitions in Kyrgyzstan and afghanistan as well as economic reforms in countries such as north Korea, myanmar and others.

strong private sector and free-market economy the president has long promoted a free-market economy and strong private sector in mongolia. in 1991, he founded and led mongolia’s first entrepreneurs association, which helped to privatise livestock on socialist collective farms and offer the animals free to their herders. this livestock was the first private property for almost half of mongolia’s total population. since 1992 president elbegdorj has served as the permanent member of the steering Council of the Young Leader Foundation and since 2003 he has been the honorary president of the mongolian Democratic union. a recent initiative for the president is the smart Government project, a reform measure for the public sector which the president presented to parliament in november 2013. the measure, approved by parliament

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on December 13, 2013, aims to build a modern and competitive government for mongolia by making sure that democratic, free-market principles are upheld; ensuring the integrity and cohesion of state policies and actions; instituting accountability mechanisms at every level of the government; improving the capacities and efficiency of public services; eliminating government participation in business activities; keeping political programmes independent from business influences; intensifying the fight against corruption; supporting domestic industries; securing property rights and supporting the private sector; creating government structures based on rule of law; honouring contracts; supporting direct democracy, the sovereignty of local governments and local development funds; setting long-term national development strategies; improving election legislation; and implementing new iCt systems in government. tsakhiagyn elbegdorj has been praised by government and private-sector leaders throughout the world. in november 2013, Jose manuel Barroso, president of the european Commission, visited mongolia and held talks with the president and with prime minister norovyn altankhuyag. Both sides agreed that 2013 was an important year in the development of mongoliaeu relations with the signature of the partnership and Cooperation agreement in april and various high-level exchanges concerning trade, development cooperation, agriculture, research and innovation, and political dialogue. the president noted that mongolia seeks market economy status with the eu and would like to benefit from the new Gsp+ scheme. Jose manuel Barroso expressed the eu’s willingness to continue to provide support for mongolia’s economic reforms and noted that the eu’s development assistance for mongolia would double during the period 2014-2020, a strong sign of confidence in president tsakhiagiin elbegdorj and his administration.

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rich natural and Cultural heritage, high-potential economy Mongolia, strategically located in northern Asia between China and Russia, has been ruled by many diﬀerent groups over the centuries

but has retained its unique culture and language. In recent years Mongolia has earned a reputation as a high-potential target for foreign investors thanks to the countryʼs vast natural resources and impressive GDP growth, which totalled over 12% in 2012 and grew by around 12.5% in 2013.

Long history and rich cultural heritage mongolia won independence from China in 1921 with soviet backing and a communist regime was installed in the country in 1924. soviet investment and assistance to mongolia accounted at its height for around one-third of the country’s GDp, but in 1990 and 1991, when the soviet union dissolved, mongolia lost this support and had to begin the difficult transition to a true free-market economy. now mongolia’s leaders are steadily building on the country’s natural resources, including exceptional minerals resources, to establish a sustainable modern economy and higher quality of life for the mongolian people. a high point of mongolia’s history was in the 13th century when, under leader Chinggis Khaan (Genghis Khan), mongols established a huge eurasian empire. after the leader’s death the empire was divided into several powerful mongol states, but these broke apart in the 14th century and most mongols returned to their original homelands on the steppes, where they lived a nomadic life. China took control of mongolia in the 17th century and ruled until the country achieved its independence.

a proud people working to protect their heritage National Museum in Ulaanbaatar

today’s mongolia represents only part of the historical mongolian homeland, and more ethnic mongolians live in

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©Simone Matteo Giuseppe Manzoni|Dreamstime.com

Ulaanbaatar

China’s inner mongolia autonomous Region than within Mongolia’s ofﬁcial borders. nevertheless, mongolians are very proud of their history and culture and are working to preserve it as the country continues to modernise. mongolia’s population is around 3.26 million, of which the mongol (mostly Khalkha) ethnic group makes up around 94.9%, while turkic (mostly Kazakh) people make up around 5% of the total and others, including

Chinese and russian, make up the rest. Mongolia’s ofﬁcial language is Khalkha mongol but turkish and russian are also widely spoken. the country’s main religion is Buddhism. around 68.5% of mongolia’s population lives in urban areas, and urbanisation is growing at the rate of around 2.8% per year. the population of mongolia’s capital city, ulaanbaatar, is around 950,000. Just over half of mongolia’s total labour force is employed in the services sector.

Diverse minerals resources With a land area of around 1.5 million sq km (about the size of the us state of alaska), mongolia has varied geography that ranges from semi-desert and desert plains to grassy steppe, mountains in the western and south-western parts of the country, and the Gobi Desert in south-central mongolia. several parts of the country have only limited fresh water. mongolia’s natural resources include oil, coal,

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copper, molybdenum, tungsten, phosphates, tin, nickel, zinc, ﬂuorspar, gold, silver and iron.

Cleaning up the land policies of former regimes, responding to soviet influence, led to rapid urbanisation and industrial growth as soviet investment targeted mongolia’s rich minerals and oil deposits. in the rush to get the mongolian economy off the ground, many mines were developed without environmental-protection measures and soft coal was burned in power plants without environmental laws being enforced. in addition, virgin land was converted to large agricultural operations without adequate measures to protect the land. the result was deforestation, severe air pollution in mongolia’s capital, ulaanbaatar, overgrazing, soil erosion from wind and rain, and desertification. today, mongolia’s leaders are working hard to clean up the environment and have launched many measures to enforce stringent environmental-protection standards in mining, farming and power projects. in addition, many parts of the country are being designated as nature preserves.

peace and democracy While Mongolia faced a difﬁcult transition following the collapse of the soviet union and another set of problems as a result of the global ﬁnancial crisis in 2008, the country has managed to maintain economic growth as well as peace and a democratic government. mongolia adopted a constitution in 1992 and has established a civil-law system based on soviet and romanoGermanic legal systems.

in 1990 and 1992, following a peaceful democratic revolution, mongolia’s ex-communist mongolian people’s revolutionary party (mprp) won general elections, but it was defeated by the Democratic union Coalition (DuC) party in the 1996 parliamentary elections. the mprp won an overwhelming majority in the 2000 parliamentary elections, but lost seats in the 2004 election and shared power with democratic coalition parties from 2004 to 2008. the mprp changed its name to the mongolian people’s party (mpp) in 2010 while a new party adopted the mprp name. in the 2012 parliamentary elections, a coalition of four political parties, led by the Democratic party, gained control of parliament.

“the new law will spur more Chinese investment in mongolia,” says alisher ali, managing partner of silk road management, an investment firm focussing on frontier markets. mongolia has planned over €37 billion in major infrastructure projects over the coming decade, according to the country’s minister of roads and transport, amarjargal Gansukh. he says, “We are looking for investors in mining, energy and transport infrastructure.”

new investment law, progress on oyu tolgoi

the government has also said it is determined to resolve a dispute with global mining group rio tinto over the oyu tolgoi mine. this dispute contributed to the significant slowdown in FDi into mongolia in late 2012 and 2013. turquoise hill resources, the rio tinto unit which holds 66% of the mine, was unable to obtain long-term financing for the project due to uncertainty over negotiations with the government, and to repay loans that would have been covered by project financing, turquoise hill recently announced that it would sell shares. rio tinto halted development of the mine’s underground expansion and laid off about 1,700 workers until discussions with the government on funding and other issues are resolved. the share offering suggests that rio tinto has not abandoned the project.

mongolia’s government has recently demonstrated its commitment to improving conditions for foreign investors. in october 2013, the mongolian parliament approved an investment law that will level the playing field for domestic and foreign private investors and lessen government approval requirements. the new regulations, which went into effect on november 1, 2013, are expected to step up the pace of FDi flowing into the country.

the new investment law, along with new, more favourable taxation regulations, should help bring foreign investors back to mongolia. “i think it is a great first step,” says travis hamilton, managing Director of Khan investment management, which offers a single-country mongolia fund. he adds, “mongolia is doing all of the right things in terms of the new legislation. it is recognising that it needs foreign investment.”

mongolia’s current president and Chief of state is tsakhiagiin elbegdorj, elected by popular vote in June 2009, while the head of Government is prime minister norovyn altankhuyag, who took ofﬁce in August 2012. He is assisted by Deputy prime minister Dendev terbishdagva, who also assumed his post in august 2012. mongolia’s parliament is the state Great hural.

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ministry of Foreign affairs Forging productive Global ties Luvsanvandan Bold, Minister of Foreign Aﬀairs

On a recent visit to China, Luvsanvandan Bold, Mongoliaʼs Minister of Foreign Affairs, commented that developing relations with China is a priority in Mongoliaʼs foreign policy. The minister has made many visits to other countries in recent months, including India and Japan, to express Mongoliaʼs commitment to establishing mutually beneficial bilateral cooperation with partners worldwide. the ministry of Foreign affairs implements mongolia’s foreign policy based on its national interests as defined in its Constitution, national security and Foreign policy Concepts; the country’s external and internal situation constitutes the basis for determining its foreign policy objectives, principles and priorities.

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mongolia’s foreign policy objectives reside in ensuring its independence and sovereignty by maintaining friendly relations with all countries in the world, developing relations and cooperation in political, economic and other areas, strengthening its position in the international community and accelerating development and progress. mongolia pursues a peace-loving, open, independent and multi-pillar foreign policy. in developing its relations with other countries, mongolia is guided by universally recognised principles and norms of international law as defined in the Charter of the united nations, including mutual respect for each other’s sovereignty, territorial integrity and unviolability of frontiers, non-interference in internal affairs, settlement of disputes by peaceful means, respect for human rights and freedoms, equal and mutually beneficial cooperation as well as other principles defined in the basic documents governing the bilateral relations with other countries. the foreign policy of mongolia aims at the protection of interests and rights of its citizens residing abroad, promotion of the country abroad and public relations policy. a priority for mongolia’s foreign policy is to maintain friendly relations with mongolia’s neighbours, russia and China, treating both equally. meanwhile, mongolia pursues a “third neighbor” policy which means a group of Western and eastern democracies and international organisations, mongolia’s partners in a broader sense which support democratic nation-building and have vested interests in mongolia. so, the “third neighbor” policy is aimed at devel-

oping friendly relations and cooperation with global and regional inﬂuential states as well as the countries supporting mongolia’s democracy and reforms such as the united states, Japan, the european union, india, the republic of Korea, and turkey. Furthermore, mongolia is aiming to develop close cooperation with the eu and its member states. today the eu is mongolia’s 3rd largest foreign trade partner and the largest investor. the signing of the partnership and Cooperation agreement between mongolia and the eu witnesses a shared commitment to further develop their bilateral ties. mongolia attaches great importance to osCe and its membership of the organisation as one of the realisations of mongolia’s “third neighbor” foreign policy.

strengthening role in the region and beyond as part of its drive to enhance mongolia’s economic and political role in north-east and Central asia, the ministry is working to achieve mongolia’s membership in the Asia-Paciﬁc economic Cooperation Forum (apeC). mongolia has a vested interest in taking a constructive part in integration processes in the Asia-Paciﬁc region. mongolia is currently a member of the asia-europe meeting (asem) and asean regional Forum (arF). our regional agenda is centred on becoming a dialogue partner of asean and joining the east asia summit process.

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ambassador to eu highlights strong Bilateral ties By signing a “Partnership and Cooperation Agreement” (PCA)

with the EU in 2013, Mongolia demonstrated its commitment to

Khishigdelger Davaadorj, Mongoliaʼs Ambassador to the EU

strengthening its ties to the EU. At a seminar on EU-Mongolia Relations organised by the European Institute for Asian Studies in Brussels in October 2013, Khishigdelger Davaadorj, Mongoliaʼs

Ambassador to the EU, commented, “We have been witnessing a growing interest (in both the EU and Mongolia) to elevate our ties to new heights.” He added, “EU projects and programmes

that have been implemented in Mongolia contributed and are still contributing immensely to the development of our country.”

the eu is mongolia’s third-biggest trade partner, accounting for 8.1% of the country’s total foreign trade, or a total €446 million in 2012. the eu is also one of the top foreign investors in mongolia; over 730 eu companies from 25 eu member states have projects in the country. 2013 has marked important developments in mongolia and the eu relations with the signature of the partnership and Cooperation Agreement and the ﬁrst ever highlevel visits from the eu side by eC president Jose manuel Barroso and eu high representative Catherine ashton to mongolia since the eu established diplomatic relations with the country in 1989. ambassador Khishigdelger Davaadorj says, “the visits and the signing of the pCa are a sign of the importance the eu attaches to its relationship with mongolia and the desire of both sides to expand bilateral ties and promote

mutually beneﬁcial cooperation in every possible ﬁeld.” The Ambassador also noted the importance of the existing mechanism – mongolia and the eu Joint Committee – in strengthening relations and cooperation.

planning for more bilateral cooperation

grateful that the eu has been supporting mongolia since the beginning of our transitional period. Further improvement of mongolia’s political relationship and economic partnership with the eu is an important factor in the development and a strong assurance of national security of our country.”

the eu Country strategy paper for mongolia 2007-2013 outlined both sides’ priorities for ongoing bilateral relations and built on the 1993 eu-mongolia trade and Cooperation agreement. as of october 2013, the eu had provided a total of around €100 million in support for mongolia since 1993. according to the Joint statement issued during the visit of european Commission president Barroso to mongolia the eu development assistance would double during the period 2014-2020, compared to 2007-2013. ambassador Khishigdelger Davaadorj points out, “We are

as mongolia’s free-market economy develops, the country’s relationship with the eu has evolved to include cooperation in speciﬁc ﬁelds, including agriculture, rural development, science and technology, energy and transport, education and culture, environment, research and innovation, natural resources, health and social affairs, media, foreign policy and security, and the introduction of eu principles, norms and standards. the pCa opens the doors to even more cooperation between mongolia and the eu in the future.

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uK ambassador Cites investment opportunities Christopher

Ambassador

Stuart,

nations in green economy and climate and disaster risk reduction.

Mongolia,

European Times: Which sectors do you believe have the most potential to contribute to Mongolia’s predicted GDP growth?

discusses ties between the two countries.

European Times: Can you describe the relationship between the UK and Mongolia? Christopher Stuart: the uK and mongolia have had a good relationship for 50 years and we are now taking it to the next level. We are supporting the mongolian government in opening up opportunities for inward investment. British companies in many sectors are interested in investment prospects offered by mongolia; not only in mining but in energy, for example, which will help the country diversify its economy. European Times: How has Mongolia’s peaceful change in government in 2012 affected the economy? Christopher Stuart: mongolia’s foreign-investment law and handling of investor relations undoubtedly slowed the country’s economic development. recent repeal of this law and a new commitment to create an attractive investment climate has however created a new opportunity to achieve growth rates seen in previous years. the key for the government will be to put into effect their commitment through examples and sound evidence of how this new

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approach will resolve outstanding issues as well as provide a platform for new activity. European Times: Is the British embassy working with other international organisations in Mongolia? Christopher Stuart: We work with many organisations and we focus on coordination of different programmes in an effort to achieve synergies. We are currently involved in green development, capacity-building, knowledgesharing and other types of projects, including working closely with the asian Development Bank in areas of health and education and with united

Christopher Stuart: all sectors are developing rapidly and represent investment opportunities. mongolia needs technical innovation and the uK has a lot to offer in that regard. a major part of the uK embassy’s job here is to generate knowledge of mongolia and bring it closer to the international community. British investors must not be seen as coming here to exploit the country but rather as coming to support and develop Mongolia. There are deﬁnitely signs that the government is moving in the right direction and i look forward once more to a climate of burgeoning foreign investment in support of mongolia’s development. European Times: What is your personal message? Christopher Stuart: mongolia is a frontier market. it has its challenges and risks but it also has huge potential opportunities. When entering this market companies must undertake their due diligence. they must be well informed and realistic concerning their ability to enter this market and, if so, they can achieve their goals, have good returns on their investments, and contribute to the overall development of the mongolian economy.

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russia and mongolia: a Long-term partnership railroad and has steadily improved it. it is essential for transporting mongolia’s mining products and for railway transit between China and europe. there are also strong cultural ties between mongolia and russia and mongolians learn russian in school. russian, in fact, has been a window into the world culture and science for mongols, and many of the best mongolian artists, politicians, engineers, doctors and scientists have studied in russia. the mongolian people feel close to the russian people and vice versa. European Times: Do you advise Russian investors to target Mongolia?

Victor V. Samoilenko, the Russian Federationʼs Ambassador

Mongolia,

discusses

Mongolia and Russia are working together.

how

Victor V. Samoilenko: mongolia is one of the richest countries in asia concerning mineral resources. about ten years ago the mongolian government was struggling to attract foreign investors, but FDi started to pour in beginning 2009. Many foreign companies, first of all mining companies, have invested in mongolia since then, stimulating the country’s strong GDP growth rates. Faced with a flood of investment from China, the government instituted new measures in 2012 to place more controls on FDi, particularly in natural resources, banking and finance, and ICT, which are the country’s fastest-growing sectors. this caused sharp reduction of FDi. recently these rules were amended to encourage private investment. What mongolia needs most is profitable projects with foreign investors that can pull the economy forward. the new investment law is a positive sign for mongolia and the investment community.

European Times: How would you describe relations between Russia and Mongolia?

European Times: What is your personal message to potential investors?

Victor V. Samoilenko: russia and mongolia signed their ﬁrst friendship treaty in 1912, and Russia was instrumental in helping mongolia achieve independence from China in 1921. ever since then we have had very close relations with mongolia, and russia has made major contributions to developing this country and her economy. one example is erdenet enterprise, in which russia has a 49% share, and another is the ulaanbaatar railroad, built by russia in 1949. the russian government still owns 50% of this

Victor V. Samoilenko: mongolia has many advantages, including its incredible natural resources and its relatively well-educated human resources. investors should be more aware of mongolia’s investment opportunities. they should also keep in mind that nothing happens overnight. Great patience is required by anyone doing business here. personal relationships are very important. mongolia has vast growth potential for investors who are prepared to take a risk and have a long-term view.

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• Long-Term Commitment by the UN

international oganisations

“The long-term prospects of the country are bright. It will be a long-distance horse race, with its share of excitement, to get there.” Coralie Gevers, Country Manager and Resident Representative of the World Bank

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World Bank making Long-term Commitment to mongolia Coralie Gevers, Country Manager and Resident Representative of the World Bank, discusses the development partnership between the Bank and the Mongolian government.

European Times: How has the World Bank been involved in Mongolia’s economic development? Coralie Gevers: mongolia joined the World Bank Group in 1991. initially, the World Bank supported the country in its transition to a market economy. For the past eight years, the mongolian government has been using World Bank assistance and advice to manage mining development – and its associated revenues – in a way that is effective, transparent and sustainable from an economic, social and environmental perspective. as the government is also thinking about how to diversify the country’s economic base and trying to find sources of growth other than mining, the World Bank Group is supporting projects to develop the high-potential agriculture sector and providing advice on how to improve the business and investment environment, based on other countries’ good practices. Last but not least, we are also concentrating on improving people’s lives, particularly the lives of the most vulnerable ones living in the countryside and in ulaanbaatar, through better health, education, water, energy and telecom services. European Times: How much financial support does the World Bank provide each year? Coralie Gevers: the support that we provide takes the form of analysis, advice, and financial support. In light of Mongolia’s middle-income status, they can now access concessional loans from iDa, our fund for the poorest and non-concessional loans from iBrD. in recent years, we have provided around €28 million per year to mongolia. We also provide some grant money which international donors have entrusted to the World Bank. European Times: Can you describe some specific projects? Coralie Gevers: the World Bank has launched projects in mongolia’s infrastructure, energy, education and water sectors. For example, we helped the government set up an incentive

mechanism so that private telecom companies would provide mobile-telephone services in rural areas. today, every village has mobile reception. We also supported the government in rolling out its 100,000 solar gers program. almost all nomadic families have now a solar home system on their ger (i.e. traditional mongolian tent) and they can turn on the light, listen to radio and watch tV, and re-charge their cell phone. European Times: What are some of the challenges for Mongolia’s development? Coralie Gevers: one big challenge is that mining revenues are being spent before they have been realised. there are great needs for building up the infrastructure of the country and the government has the hard task of prioritizing those investments and financing them in the most effective ways – through their own budget resources, debt financing, or partnerships with the private sector. the current expansionary policies could lead to economic difficulties. European Times: Can you single out some good FDI opportunities? Coralie Gevers: mongolia currently needs infrastructure investments more than mining investments. For example, massive infrastructure investments – equivalent to mongolia’s current GDp – are needed in the south Gobi before the area’s mining potential can be realised. mongolia needs to attract private and public partners to fund railway, power and other industrial opportunities. the long-term prospects of the country are bright. it will be a long-distance horse race, with its share of excitement, to get there.

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Long-term Commitment by the un Sezin Sinanoglu, the United Nations Resident Coordinator and Resident Representative for

the United Nations Development Programme in Mongolia, discusses the UNDPʼs programmes in the country.

European Times: What is the history of the UN in Mongolia? Sezin Sinanoglu: the united nations has been in mongolia since the 1970s, implementing programmes in many areas by different un agencies in support of mongolia’s social and economic development. mongolia has in turn supported the un, for example through participating in peace-keeping operations worldwide, including sending a large contingent to south sudan. mongolia’s contribution is very valuable. European Times: What are some of the UNDP’s recent projects? Sezin Sinanoglu: unDp’s three focus areas are inclusive economic development; including bringing its mining beneﬁts to all the country’s people; governance and human rights; and environmental sustainability. We have projects in all three areas. one governance programme, for example, aims to empower women, especially by bringing them into the political realm and helping them gain the conﬁdence to take leadership positions. the number of women in parliament rose from three to 11 in the last parliamentary elections. in environment, we are working with the mongolian government on a programme to expand protected areas to help preserve endangered species. in another project, we support national and local authorities prepare for natural disasters. We have also been very active in poverty reduction, especially in generating alternative livelihoods and ideas for the business sector in collaboration with the mongolian national Chamber of Commerce and industry. We partner with many organisations in the mongolian public and private sectors and work very closely with local authorities. unDp’s programme resource envelope for mongolia is us$28 million between 2012 and 2016.

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European Times: What are some of the challenges Mongolia faces? Sezin Sinanoglu: mongolia is a young democracy which is still establishing its institutions. the country needs time and investment to upgrade its infrastructure, improve its human resources, and modernise its systems. mongolia also needs to focus on bringing the benefits of growth to the entire population and on encouraging and empowering all citizens to participate in its development. the country also faces environmental challenges. While there has been an increase of around 0.7 degrees Celsius in global temperatures, mongolia is experiencing an increase of over 2 degrees, having a significant impact on desertification. European Times: What is your personal message to potential investors? Sezin Sinanoglu: mongolia is a land of opportunity and has a lot to offer. mining is only one of the many areas that have business potential. its people are open and educated but the country needs knowledge transfer and continued investments in national capacities to ensure its growth is inclusive and sustainable.

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â&#x20AC;˘ Democratic Government Promoting Free-Market Principles

Government

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Democratic Government promoting Free-market principles type of Government mongolia is a republic whose government is a parliamentary democracy. mongolia achieved its independence from China in July 1921 and celebrates independence Day on July 11 every year. mongolia has had several constitutions since its independence. the current one was adopted in January 1992 and amended in 1999, 2001 and 2011.

Government organisation Executive Branch mongolia’s government is led by the president and Chief of state, who heads mongolia’s armed forces and has the power of veto in Parliament. The Prime Minister is Mongolia’s ofﬁcial head of Government. the prime minister is seconded by the Deputy prime minister. the Cabinet of ministers is nominated by the prime minister in consultation with the president and is conﬁrmed by the State Great Hural (Mongolia’s Parliament). Legislative Branch the unicameral state Great hural (parliament) has 76 members, of which 48 are directly elected from 26 electoral districts, while 28 members are proportionally elected based on a party’s share of the total votes; all serve four-year terms.

Judicial branch the highest court is the supreme Court, made up of the Chief Justice and 16 judges organised into civil, criminal, and administrative chambers. the Constitutional Court, or tsets, is made up of a chairman and eight members.

the supreme Court Chief Justice and judges are appointed for life by the president upon recommendation to the state Great hural by the General Council of Courts. the Chairman of the Constitutional Court is elected from among its members. members of the Constitutional Court are appointed by the state Great hural based on nominations (three each by the president, the state Great hural, and the supreme Court). they serve six years and the Chairman can serve an additional three years. Lower courts are the aimag (provincial) and capital-city appellate courts; sum, inter-sum, and district courts; and administrative Cases Courts (established in 2004).

Key Leaders Tsakhiagiin Elbegdorj, President and Chief of State since 2009. president elbegdorj, who represents the free-marketoriented Democratic party, was born in 1963 in Zereg, mongolia. he earned a Bachelor’s degree in Journalism at Lvov military university, ussr, in 1988 and in 2002 he earned a master’s degree in public administration from harvard university’s Kennedy school of Government. he began his professional life as an employee of erdenet mining company in 1981 and then spent several years as a reporter and editor, helping to launch and editing the newspaper “Democracy” in 1990. he began his political career in 1990 when he was elected a member of the people’s ikh Khural and a member of the state Baga Khural of mongolia in the country’s ﬁrst open multiparty elections. He served as a member of the national security Council from 1994 to 1996 and as a member of parliament from 1996 to 2000, when he also served as Vice Chairman of parliament and as prime minister two times. he was an advisor for the un

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“Millennium Development Goals” project from 2002 to 2003 and served on the Governing Board of the Free Press project in Washington, DC. Tsakhiagiin Elbegdorj has long been actively involved in promoting mongolia’s private sector, free-market economy and civil institutions. He helped to launch the Mongolian-US joint television station, eagle tV, in 1995 and in 2000 he founded Liberty Centre, a non-government organisation which he still heads. he is the author of two books – Footstep of the Truth is White and The Years of Bearing Weight – and has published many articles and essays. he has delivered lectures and speeches at the mongolian national university, the university of nevada, the heritage Foundation, the institute of World Politics, Stanford University’s Hoover Institute and Georgetown university on topics including international affairs, new challenges in international security, freedom and development. He is ﬂuent in English and Russian. President Elbegdorj’s government pursues a “resource nationalist” approach, which aims to give mongolia a bigger say in how its assets are exploited.

elections

Norovyn Altankhuyag, Prime Minister and ofﬁcial Head of Government since August 2012. Norovyn Altankhuyag was born in Uvs, Mongolia in 1958. he obtained a bachelor’s degree from the Faculty of physics and mathematics of national university of mongolia and served as a professor at the university after his graduation. During the 1990 democratic revolution in mongolia, he was a pioneer in the youth movement and helped to found the Democratic socialist movement. he served as a member of parliament for the social Democratic party and for its successor the Democratic party. he also served as minister of agriculture and industry from 1998 to 1999, and as minister of Finance from 2004 to 2006. In 2008, he succeeded future president Tsakhiagiin Elbegdorj as leader of the Democratic party in 2008, after the party’s poor showing in parliamentary elections. he was also appointed Deputy prime minister. the parliamentary elections of 2012 saw the Democratic Party take the lead again, and Norovyn Altankhuyag reconstituted a political coalition with the mongolian people’s revolutionary party, with himself as prime minister. the people’s revolutionary party quit the coalition in December 2012 over disputes concerning how to manage mongolia’s natural resources. the prime minister helped to launch the Democratic party’s “mongolian people 2020” action plan, which is designed to promote democracy and civil society in mongolia.

Minister of the Cabinet Ofﬁce of the Government of Mongolia: Chimed Saikhanbileg

The Deputy Prime Minister is Dendev Terbishdagva (since August 2012). He is Deputy Head of the MPRP party. as Deputy prime minister, he often represents mongolia abroad.

presidential candidates are nominated by political parties represented in the state Great hural. the president is elected by popular vote for a four-year term and is eligible for a second term. Presidential elections were last held in June 2013, when current President Tsakhiagiin Elbegdorj received 50.2% of the total votes. presidential elections will next be held in June 2017. Legislative elections were last held in June 2012 and the next will be in June 2016. Following legislative elections, leaders of the majority party or a majority coalition usually elect the prime minister of the state Great hural. Leading political parties are the Civil Will-Green Party (CWGP), the Democratic Party (DP), the Mongolian National Democratic Party (MNDP), the Mongolian People’s Revolutionary Party (MPRP), the Mongolian People’s Party (MPP), and the Justice Coalition (made up of the MNDP and the MPRP).

Cabinet Ministers, 2012-2016

minister of Foreign affairs: Luvsanvandan Bold Minister of Justice: Khishigdemberel Temuujin minister of Construction and urban Development: Tsevelmaa Bayarsaikhan minister of Defense: Dashdemberel Bat-erdene minister of roads and transportation: Amarjargal Gansukh minister for Culture, sport and tourism: tsedevdamba oyungerel Minister of Mining: Davaajav Gankhuyag minister of industry and agriculture: Khaltmaa Battulga Minister of Labour: Yadamsuren Sanjmyatav Minister of Population Development and Social Welfare: sodnomzundui erdene Minister of Economic Development: Nyamjav Batbayar minister of education and science: Luvsannyam Gantumur minister of health: natsag udval minister of Finance: Chultem ulaan minister of energy: mishig sonompil minister of environment and Green Development: Sanjaasuren Oyun

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• Positive Reforms in Legal System and Investment Laws • Ministry Working to Upgrade Social Services • New Investment Law Set to Boost FDI • Dynamic Business Chamber a Strong Advocate for the Private Sector • Business Council Promoting Private-Sector Growth

Business & investment opportunities

“Investors understand the risks of an emerging economy and know how to manage those risks. If you have a business idea, come to Mongolia.” B. Byambasaikhan, Chairman, Business Council of Mongolia, Managing Partner, NovaTerra LLC

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economy ministry Focussing on sustainable Growth Ochirbat Chuluunbat, Vice Minister for Economic

Development, discusses Mongoliaʼs long-term development strategies.

European Times: What are the main goals of the Ministry of Economy? Ochirbat Chuluunbat: the main goal of the ministry of economy is to sustain GDp growth. in order to do that, we need a favourable business and investment environment. the image of mongolia has become a bit less favourable because of some choices we made in the mining industry, so we are correcting the situation. our new investment law sends a clear message to the global business community that mongolia now offers a safe, stable, high-potential investment climate which we will continue to improve. European Times: Do you expect FDI in Mongolia to grow? Ochirbat Chuluunbat: We believe FDi will continue to increase over the coming two decades as long as we offer a favourable environment for investors. mongolia is set between russia and China, two huge markets, and our GDp growth is mainly due to demand from China, the largest consumer market in the world.

“We are allocating a big part of the state budget to education as part of our effort to improve the standard of living.” European Times: What role do international funders, including the EU and the EBRD, play in Mongolia’s economy? Ochirbat Chuluunbat: We appreciate the partnership cooperation that the eu has extended to mongolia for 20

years, including eu assistance in the mongolian government’s efforts to strengthen democracy and improve our economic situation. even today we have programmes and projects underway with the eu and with eu members such as Germany, France and the uK. We will be happy to continue to work with the eu and to serve as a bridge between europe and asia. European Times: What is your ministry doing to diversify the economy? Ochirbat Chuluunbat: We want to diversify the economy but we expect the mining industry to continue to be the key driver for mongolia’s economy and GDp growth for the next 10 to 15 years. We will rely on the mining industry to provide revenues we can use to develop other sectors, including social services, banking, tourism and construction. if everything goes according to our plans, we expect to see a highly improved quality of life in mongolia. We are allocating a big part of the state budget to education as part of our effort to improve the standard of living. European Times: What is your personal message to investors? Ochirbat Chuluunbat: as one of the most genuine democracies in the region, mongolia will become a preferred business destination. take this into consideration when planning your next investment.

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positive reforms in Legal system and investment Laws

Erdenebileg Erdenejamiyan, Vice Minister of Justice, discusses recent reforms in Mongoliaʼs legal system, including a new foreign-investment law.

European Times: What are the main tasks of the Ministry of Justice? Erdenebileg Erdenejamiyan: our main role is to upgrade mongolia’s legislation, review and amend new laws presented by ministries, and review draft laws presented by parliament. We review all draft laws before they are ratiﬁed. As Vice Minister, I support the Minister and am responsible for certain projects, including drafting new laws, organising the construction of the new court and some archives’ buildings, and contributing to a number of development projects. Current projects of the ministry include mongolia’s criminal reform and drafting of other new laws. along with changes in the legal system we are also changing our court system and related infrastructure.

We have recently reorganised our court system so that courts will cover larger areas. We have already reformed mongolia’s association of attorneys, which corresponds to the us Bar association. this ministry’s overall goal is to ensure justice. European Times: As an attorney yourself, how would you describe Mongolia’s legal system today? Erdenebileg Erdenejamiyan: i think that our country has a very good record in criminal law, but we lack enough attorneys specialising in civil and business issues, including in the prosecutor’s ofﬁce. We need more high-quality attorneys to serve the corporate sector. in other words, we need more than just good laws to attract investors to mongolia.

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European Times: Do you involve the private sector in your ministry’s ratiﬁcation of new laws? Erdenebileg Erdenejamiyan: We always survey leaders and companies in a particular sector before we ﬁnalise legislation that applies to that sector. We listen to knowledgeable people in the private sector in order to make sure our new laws are business-friendly. European Times: What legal protection does Mongolia offer foreign investors? Erdenebileg Erdenejamiyan: We are currently drafting a new law on foreign investment and a new investment-fund law, and the ministry is working on making these new laws ones which will attract foreign investors. We are also establishing a one-stop shop service for foreign investors as well as a new agency dealing with foreign investments. European Times: How will the new law protect investors from corruption in the local legal system or business sector? Erdenebileg Erdenejamiyan: What is most important is for our foreign-investment laws to be transparent, stable and corruption-free. We have raised salaries of judges and introduced new regulations designed to make sure that our court system is not plagued by corruption. all our new regulations will help enhance mongolia’s attraction for foreign investors. there is a common misconception among our parliament members that we only need one law to attract foreign investors but i believe other laws are necessary as well, and we hope that all our new laws will result in a better business environment. European Times: What are the main challenges for investors in Mongolia? Erdenebileg Erdenejamiyan: one challenge is a certain opposition to foreign companies taking over work that could be handled by mongolian companies, for example in the oyu tolgoi project. also, foreign companies and foreign workers are paid much more

than mongolian companies for doing the same job, and mongolian managers do not climb the corporate ladder as quickly as foreign managers do. the government is working to deal with these problems and also to make sure that mongolia attracts the right kind of foreign investors. We have already reduced costs of licenses as an impetus to investment.

“The new law on foreign investment creates added protection and incentives for investors, whether they are foreign or local.” European Times: What is your personal message to potential investors in Mongolia? Erdenebileg Erdenejamiyan: the mongolian government now understands that it cannot change its laws every day and is clearer about its priorities. the new law on foreign investment creates added protection and incentives for investors, whether they are foreign or local. the main points of the new investment law are that foreign and local investors will be treated equally, special permits will be issued by the new investment agency, the new law applies to investment in any economic sector, a new investment fund valued at €74.2 million will be created, only state-owned companies that wish to obtain a majority amount of shares in the company must apply for the government approval, and the mongolian government will sign a special stability agreement with any investor who invests us$10 million or more and if the activity lasts a certain period. this is a very good time to invest in mongolia.

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reliable Legal support for investors ELC LLP Advocates, founded in 2000, has positioned itself as the ideal legal partner for investors in Mongolia. The ﬁrm provides

a wide range of services, including support

for investors starting a business. Managing Partner Bayar Budragchaa explains, “We do not specialise in any one ﬁeld. We oﬀer every kind of

legal service. Most of our clients are involved in the mining, construction and ﬁnancial services industries, although we have experience in

all sectors. We served many multinationals, including Samsung and Boeing. Many of our customers are from Hong Kong.”

The ﬁrm has a very strong reputation in Mongolia and attracts most of its clients through word-of-mouth recommendations, a testament to its outstanding customer service and legal expertise. “We offer services of 21 lawyers including our bilingual staff and 14 years of in-depth experience in the mongolian economy. our main focus is on satisfying our clients,” Bayar Budragchaa points out.

Commitment to ethics and transparency Bayar Budragchaa is also involved in improving mongolia’s business climate. he worked with other attorneys to develop a code of ethics for the legal sector and is committed to maintaining ethical practices at eLC. he says, “mongolian attorneys debated a new code of ethics through our Facebook page. i have always been committed to ethical practices in my law ofﬁce and we continue to focus on transparency, honesty and reliability.” in an effort to support the development of mongolia’s economy, Bayar Budragchaa provides advice to the mongolian Government concerning ways to improve conditions for the country’s rapidly developing private sector, including new investment laws

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Bayar Budragchaa, Managing Partner

as well as business-friendly tax legislation. he is also a strong promoter of mongolia as a target for international investors. “mongolia is stuck between the Dragon (China) and the Bear (russia). this country is not a priority for the West, and yet mongolia is working hard to support an open market and democracy and offers many high-potential investment opportunities, as russian investors are aware. We would like to see more investors from europe,” Bayar Budragchaa says. Thanks to ELC, foreign investors will find the legal support they need in mongolia. as Bayar Budragchaa points out, “mongolia has made rapid progress over the past two decades but we still need help in the economic, political and social spheres. We welcome the chance to learn from european companies and investors, and at eLC we are ready to help them make a success of their ventures here.” ELC LLP Advocates Suite 62, Grand Office Center Sukhbaatar District, 1st khoroo Jamiyan Gun Street 12, Olympic Street 3, Ulaanbaatar 14253 Phone: +976 77 118193, +976 77 118194 info@elclawoffice.mn - www.elclawoffice.mn

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ministry Working to upgrade social services with many international organisations. Currently, for instance, we are already collaborating with the World Bank and the asian Development Bank in projects to identify targeted groups in need of social welfare and to establish a data base.

Sodnomzundui Erdene, Minister

of Population Development and Social Welfare, discusses the Ministryʼs goals for Mongoliaʼs social services.

”Social insurance is a lifetime service for each person from birth to death, while social welfare means assistance for people in need.”

European Times: What are your main responsibilities as Minister of Population Development and Social Welfare? Sodnomzundui Erdene: i have two main responsibilities: to develop, improve and implement mongolia’s population policies, and to formulate policies and implement programmes which will provide social insurance and social welfare for our people. social insurance is a lifetime service for each person from birth to death, while social welfare means assistance for people in need. European Times: What are the main challenges you face? Sodnomzundui Erdene: We have introduced social insurance for employees in both the public and private sectors. While unemployment in mongolia is relatively low, around 36% of the population needs social welfare because incomes are below the poverty line.

investors and the mongolian government need to take responsibility for making sure investments are appropriately handled and productive. as for mongolia’s unemployment rate, our economy is different from europe’s. We have many people living a nomadic lifestyle who support themselves through their efforts although they do not hold ofﬁcial jobs. unemployment in the industrial sector is high, while in the construction sector, we do not have enough qualiﬁed workers.

European Times: How does FDI affect the unemployment rate?

European Times: Does your Ministry work with international organisations?

Sodnomzundui Erdene: FDi contributes to reducing unemployment but we need to control projects more carefully to make sure that the mongolian people actually derive beneﬁts from them. Both

Sodnomzundui Erdene: all social programmes are funded by the state budget but we are thinking of strengthening our relations with international organisations. We have been cooperating

European Times: What do you believe are the priorities for improving quality of life in Mongolia? Sodnomzundui Erdene: mongolia is a vast territory and we are rich in natural resources. instead of exporting our raw materials, we should process them and export them as value-added products or processed materials at a much higher price. in order to do that we need industrial growth, which would mean more jobs. European Times: What is your personal message to potential investors and partners? Sodnomzundui Erdene: We only have one world and we should all help each other. every country and every citizen should contribute to improving this planet.

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Sukhbaatar Square in Ulaanbaatar

new investment Law set to Boost FDi

Mongoliaʼs

economy

has

weathered

many

shocks to become one of the fastest-growing economies in the world in recent years; in fact, Mongolia achieved GDP growth of 6.4% in 2010, 17.5% in 2011, 12.3% in 2012 and around

12.5% in 2013. This success has been based

largely on the strength of commodity exports to

nearby countries and high government spending domestically. Plagued by deep recession and

natural disasters after the fall of the Soviet Union,

which had been providing assistance to Mongolia totalling around one-third of the countryʼs GDP, Mongolia has clearly bounced back.

Beginning in the 1990s, mongolia steadily built a market-based economy, opened a stock exchange, privatised state-owned companies, initiated a number of reforms, joined the World trade organisation, and stepped up its regional and global trade. mongolia began to attract major FDi, most of it in exploiting the country’s extensive minerals deposits.

emerging stronger after global crisis GDp growth averaged 9% per year between 2004 and 2008, but then the global economic crisis hit mongolia hard and the economy contracted by 1.3% in 2009. thanks to around €220 million in support from the imF in a stand-by arrangement, mongolia emerged from the crisis with better regulations, closer supervision and a stronger banking sector. While Mongolia’s GDP growth has intensiﬁed, some challenges remain. many of these centre on the country’s oyu tolgoi mine, which contains one of the world’s biggest

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Business & investment sector opportunities

untapped copper deposits. the government’s decision to renegotiate an investment agreement for the mine’s exploitation has made international investors wary and signiﬁcantly slowed FDi into mongolia over the past 18 months, but rio tinto, the main investor in the mine, seems determined to continue with the project. mongolia’s government has announced that it expects the rio tinto dispute to be fully resolved in 2014.

new investment law to step up the pace of FDi a new investment enacted in november 2013 is expected to go a long way towards solving some of these problems and reassuring investors. “the new investment law is one of the first steps in reversing the current slowdown of Mongolia’s economy and increasing the inflow of FDI,” says Zandaakhuugiin enkhbold, speaker of parliament. the new law eliminates current restrictions on private foreign investment, narrows mongolian governmentapproval requirements for state-owned foreign investment, offers a simpler and more open investment process, establishes a new agency, invest mongolia, to serve as a one-stop shop for investors, and provides an array of investment incentives. invest mongolia is tasked with implementing the law, issuing tax-stabilisation certificates to investors, and making determinations about investments by foreign stateowned enterprises. in addition, the agency is mandated to help investors plan their investments and to protect investors’ interests and rights. under the new investment law, any domestic or foreign investor may invest in any sector in mongolia without any limitation or government approval, except that any foreign state-owned enterprise investing in more than 33% of an entity in the minerals, communication or financial sectors must obtain approval from invest mongolia. the investment law eliminates the much broader restrictions on private foreign investment in the minerals, com-

munication and financial sectors that previously existed, removes the parliament from the approval process where foreign state-owned enterprises are involved, and ends the distinction between foreign and domestic investors. in addition, any investment tax-stabilisation agreements made prior to the effective date of the new law will still be valid. Javkhlanbaatar sereeter, acting Director General of invest mongolia, noted at a recent investment summit on mongolia held in hong Kong that Chinese companies are particularly interested in investing in railway and highway projects in mongolia. he said, “Chinese companies are very competitive in terms of price. i expect Chinese investment volume will increase in the next two years.” Chinese companies are negotiating to invest in a €1.7 billion highway connecting russia, mongolia and China.

resolving oyu tolgoi dispute resolution of the oyu tolgoi dispute is key to mongolia’s development, since the project potentially represents about a third of the country’s GDp. moreover, in this resourcerich country, “oyu tolgoi is only one of 50 more potential projects,” says Chimed saikhanbileg, minister of the Cabinet Ofﬁce of the Mongolian government. The US-educated cabinet minister adds, “oyu tolgoi needs to be resolved purely on business decisions, not political ones.” the minister also wants to step up mongolia’s communications with the world to help counteract recent bad press and encourage investors to seek out opportunities in the country. he says, “the new agency, invest mongolia, is designed so that everyone can get information about mongolia and its investment potential.” travis hamilton, managing Director of Khan investment management, which offers a single-country mongolia fund, predicts, “mongolia is going to see huge money flows; it is going to see infrastructure being built. the new investment law will inevitably bring a significant multiplier effect across the entire economy.”

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Dynamic Business Chamber a strong advocate for the private sector Sambuu Sambuu Demberel, Demberel, Chairman Chairman Mongolian Mongolian National National Chamber Chamber of of Commerce Commerce and and Industry Industry

The Mongolian National Chamber of Commerce and Industry (MNCCI), founded in 1960, has been a main driver of Mongoliaʼs private-sector

development since the country adopted a free-market system in 1990. The MNCCI now

has 19 branches around the country and actively cooperates with more than 40 international Chambers of Commerce and trade-promotion organisations worldwide.

the mnCCi houses the mongolian national arbitration Centre and regulates and issues Certiﬁcates of Origin, which are essential for Mongolia’s exporters to beneﬁt from the country’s preferential treatment concerning trade and customs tariffs in 35 developed countries. the mnCCi also hosts and organises international trade missions to mongolia.

Forging global business ties sambuuu Demberel, Chairman and Ceo, explains that the mnCCi’s mission is to develop and promote a competitive private sector in mongolia; to cement its position as a capable and inﬂuential advocacy organisation for the mongolian business community and private sector through dialogue with government leaders; to assist companies and investors in mongolia through providing business research, promotion and other services; and to continue to serve as a productive member of the international business community. the mnCCi is an active member of the international Chamber of Commerce (iCC), the Confederation of Asia-Paciﬁc Chambers of Commerce and Industry (CaCCi), the World Business Council for sustainable Development (WBsCsD), the international trade Centre (itC), and the organisation for economic Cooperation and Development (oeCD).

“Like all Chambers of Commerce around the world, the mnCCi focuses on what i call the ‘two ps’, protection and promotion, including through policy advocacy,” sambuu Demberel says. he adds, “We protect the interests of the mongolian business sector in relation to government bureaucracy, regulations and intervention. Concerning promotion, we serve as a support for businesses of all kinds, from microenterprises and smes to multinationals, both foreign and domestic. the mnCCi also functions as a kind of think

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tank to bring the latest global business trends to mongolia’s private sector, such as corporate social responsibility, e-business, clean development and more. there are real changes occurring in business worldwide and we are making sure that mongolia keeps pace with these changes.”

“The new government is strongly promoting an open, free-market, ‘green’ economy in Mongolia and we need to get this message to investors all over the world.” ensuring sustainable development one of the Chamber’s goals is to ensure that mongolia’s economic development is sustainable. the mnCCi’s sustainable production and Consumption Department is working to promote the development of environmentally friendly and economically efficient industries and services by implementing “Cleaner production” principles. the mnCCi is partnering with the mongolian government and international organisations to create a national Cleaner production programme, which includes conducting energy audits to identify potential energy savings, offering specialised training on energy efficiency and energy-service-company services, introducing energy-management systems to companies, developing and implementing projects focussed on increasing energy efficiencies, and raising awareness of energy-service-company services. another priority for the mnCCi is to improve mongolia’s ranking by transparency international. sambuu Demberel explains, “We are trying to push the government, advise the government, and work together with the government to promote transparency. many reforms have already been

launched, including on environmental protection, reducing red tape for business, simplifying licensing and other processes, and reducing excessive regulations. although the results are not yet fully satisfactory, we are working with the government to make more progress.”

Promoting private-sector diversification The MNCCI is also promoting the diversification of Mongolia’s private sector, including fostering the development of non-minerals exports through a new strategy document on “non-minerals export promotion”. “mongolia’s business sector is mainly smes but there is little diversity. in addition, the economy is mainly ‘brown’ and we want to make it mainly ‘green’ as soon as possible,” sambuu Demberel says. Cutting the cost of loans for private enterprises is another key goal for the Chamber, which is dedicated to bringing interest rates down. sambuu Demberel points out, “the new government understands that there should be affordable tools for businesses to develop. the government has established an sme fund and is issuing bonds for certain products, including cashmere, wool, meat and construction materials.” While many challenges for the private sector remain, sambuu Demberel is encouraged by the progress being made under the new government, including the implementation of new regulations concerning foreign investment and the stock exchange. the government is also considering environmental targets, including a 10% rise in mongolia’s energy efficiency by 2020 along with a rise to 20% of the percentage of energy produced from renewable resources and a 20% reduction in Co2 emissions. sambuu Demberel says, “the new government is strongly promoting an open, free-market, ‘green’ economy in mongolia and we need to get this message to investors all over the world. We are trying to diversify our economy and increase our exports, including to the eu. We want to export all kinds of products to our neighbours and beyond. the mnCCi will continue to serve as an advocate and support system for domestic and foreign companies in mongolia.”

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Business Council promoting private-sector Growth B. Byambasaikhan, Chairman, Business Council of Mongolia, and Managing Partner, NovaTerra LLC discusses the organisationʼs goals.

European Times: What are the priorities of the Business Council? B. Byambasaikhan: BCm has 270 members, among them mongolian and international companies, ranging from smes to large corporations, that are doing business in mongolia. my company novaterra is a member of BCm. We all promote more business for our members, and share a vision of ensuring a positive business climate here in mongolia. We interact with the government and the private sector in a transparent way to represent the interests of mongolia’s business community. For example, if there is a draft law that would impact the business environment, our members study it, discuss it and provide feedback to parliament. We also produce email newsletters and organise training programmes, trade shows, conferences and other events. BCm started in 2007 with 35 members, and our goal is to reach 500 in the next few years. We voice our members’ concerns and ideas to government leaders. We want our government to be efﬁcient and transparent. We will take care of the rest. European Times: How would you describe the Mongolian economy today?

B. Byambasaikhan, Chairman Business Council of Mongolia and Managing Partner NovaTerra LLC

B. Byambasaikhan: the mongolian economy has grown 10 times in the past 10 years and is expected to achieve doubledigit growth beyond 2020. With democracy, every mongolian has the chance to be successful in business. there is still a lot of investment needed in mongolia, and if we can attract this investment, jobs will be created and people’s lives will improve. the economy will continue to grow. For example, everyone in mongolia now has a cell phone, and it will be the same for every new high-tech product offered here. energy is another sector in mongolia that will be booming soon. it is facing a crisis at the moment and therefore it is a huge opportunity for investors. We have many resources that are underexploited, so there are many opportunities for development. We need to transform our challenges into assets.

European Times: Why should investors choose Mongolia?

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B. Byambasaikhan: mongolia offers access to a market of more than two billion people, so it is a great location for business. We offer a favourable tax system and excellent human resources thanks to our young, well-educated and multilingual population. mongolia also has a wide range of high-potential opportunities in many sectors, and the country welcomes international investors who will bring in new technologies and know-how and create more jobs. investors understand the risks of an emerging economy and know-whow to manage those risks. if you have a business idea, come to mongolia.

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• Minister of Finance Highlights Double-Digit GDP Growth • Focus on Financial-Sector Stability

Finance

“Mongolia has all the right conditions for fast-paced development.” Chultem Ulaan, Minister of Finance

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master reGio monGoLia

minister of Finance highlights Double-Digit GDp Growth Chultem Ulaan, Minister of Finance, discusses Mongoliaʼs exceptional economic growth and investment potential.

European Times: Mongolia aims to triple its government revenues over the next five years and build a sustainable economy with lines of credit for investors. How is the Ministry of Finance contributing to this effort? Chultem Ulaan: mongolia’s economy is expected to grow by 14% this year and to continue with double digit growth in the medium term. the ministry of Finance has three main tasks in securing this growth: establishing a favourable environment for business, stimulating growth, and ensuring macroeconomic stability. our focus at the moment is to finance infrastructure and economic projects through budget investment and Chinggis bonds. our most important projects are oyu tolgoi and tawan tolgoi. European Times: What are your main challenges? Chultem Ulaan: some of the challenges are external: the global economic crisis and the economic slowdown in our neighbours in the region. Because of these problems, our export earnings have dropped, for example for our minerals exports. On the other hand, we have reduced our inflation rate from 14% to 10%. European Times: Are you partnering with EU institutions? Chultem Ulaan: the european Bank for regional Development (eBrD) and Bank of mongolia have been working well together for some time and their partnership has resulted in around 56 private-sector projects to date. We will continue to encourage EBRD to finance privatesector projects, particularly in the mining and manufacturing sectors.

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Chultem Ulaan, Minister of Finance

European Times: What is your message to the international community concerning investing in Mongolia? Chultem Ulaan: First, mongolia is a country with an exceptional natural resource: our land, which covers an area three times that of France. in fact, mongolia is number one in the world in land per capita. secondly, mongolia has vast minerals resources, including all the elements on the periodic table, and is number one in the world in coal per capita. Last but not least, our country has spectacular scenery as well as our famous horses, making mongolia very attractive for tourism. mongolia has all the right conditions for fast-paced development. the World Bank has estimated that the mongolian economy will achieve double-digit growth in the coming decade. Foreign investors are protected by law and tax rates are business-friendly. i invite all international investors to come to mongolia and see for themselves all the many opportunities awaiting them here.

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sector Finance

Focus on Financial-sector stability Mongoliaʼs economy continues on

the path of very rapid long-term growth,

and

the

countryʼs

ﬁnancial sector continues to get stronger every year. Despite the

banking crisis in 2008 and 2009, Mongoliaʼs ﬁnancial-sector assets nearly tripled between 2007 and

2012. Meanwhile, the countryʼs very young insurance sector grew by an average 26.7% per year

between 2008 and 2012, even

though Mongoliaʼs ﬁrst insurance company, National Life Insurance, was established in 2008 at the height of the crisis.

this strong and rapid recovery was the result of the decisions made by the government and the Bank of mongolia (Bom, the country’s central bank) to restructure ailing banks, privatise major state-owned banks, improve the Bank of mongolia’s ability to enforce compliance with prudential regulations, and strengthen market discipline and incentives for sound bank management. The Mongolian ﬁnancial sector, which is dominated by banking, now includes 14 commercial banks, 188 nonbank ﬁnancial institutions and about 207 savings and credit cooperatives. the sector is overseen by the Bank of mongolia, the Financial stability Council and the Financial regulatory Commission as well as by the ministry of Finance.

the central bank is responsible for supervising banks while the Financial regulatory Commission is responsible for supervising other financial institutions, including insurance companies, security companies, credit and savings unions, and non-banking financial institutions. the Financial stability Council aims to contribute to sustainable economic growth by developing sound and competitive financial infrastructure and improving financial services.

swift response to collapse of savings Bank

Bank) was formally declared insolvent and taken over by the government. Formerly the country’s fifth-largest bank, savings Bank had an 8% share of mongolia’s banking-sector assets and around 55% of government financial services through the disbursement of pensions and receiving payments for state utilities. the move on savings Bank was the first time in four years that the state had intervened in such a way. ratings agency Fitch issued a report saying that the collapse of savings Bank highlighted weaknesses in

The strength of the ﬁnancial sector was tested in July 2013 when a leading mongolian bank collapsed. savings Bank (known locally as Khadgalamj

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corporate governance and regulation of the mongolian banking sector and raised concerns regarding the country’s business environment. the report said that the failure underscored the banking system’s reliance on the mining and construction sectors, both of which have slowed. another risk for the mongolian banking sector noted in the report is that nearly 30% of all loans in the country are in foreign currency. the mongolian banking authorities’ swift response to the savings Bank problem has been praised by many observers. Japanese investment bank nomura noted that since the mongolian banking system’s assets are equivalent to around 77% of GDp, the state has the capacity to bail out any private bank that falls into difﬁculty, including savings Bank.

sustainable funding framework in november 2013, mongolia’s 14 commercial banks signed a joint statement promising to introduce a sustainable funding framework in the mongolian banking and

monGoLia

financial systems. all Ceos of the banks involved indicated that the mongolian banking sector had an important role to play in promoting sustainable development through loans and project financing. Bold magvan, president of the mongolia Bankers association, commented, “this is an important day for mongolia. Banks are beginning to realise that they can be agents of change to encourage their clients to invest in projects that minimise damage to the mongolian environment and protect the wellbeing of its people. the signing of the joint statement of declaration is one more positive step in that direction.” the initiative to jointly develop the mongolian sustainable Finance initiative was introduced by the Dutch Development Bank, trade and Development Bank of mongolia, the international Finance Corporation (iFC), the mongolian Bankers association and the Banking and Finance academy. tuyen nguyen, resident representative in mongolia for iFC, says, “We are working with mongolian partners to tap into new opportunities such as climate-friendly projects.”

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World Bank predicts continued double-digit growth in november 2013, the World Bank issued an economic update on mongolia which predicts that the mongolian economy will maintain double-digit growth and expansionary policies. the report also noted that the Mongolian economy is facing a significant challenge from growing balanceof-payments pressures linked to the recent decline in FDi and mineral exports. the report goes on to say that mongolia faces risks from an uncertain global economic environment, including in the minerals market. the World Bank praises the government’s efforts during 2013 to address these challenges, citing mongolia’s new investment law, the announcement of a fiscal consolidation plan, and tightened budget spending as big steps in the right direction. the World Bank advises mongolia’s government and financial-sector leaders to step up efforts to ensure macroeconomic stability in the face of unpredictable global economic and market evolutions.

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• Promoting Long-Term Mining Sector Partnerships • Bringing Investors Back to Resource-Rich Mining Sector • Mining Association Welcomes New Members

Mining

“We are working hard to establish a transparent framework of laws and standards that everybody involved can understand and respect.” Oyun Erdenebulgan, Vice Minister of Mining

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master monGoLia reGio

promoting Long-term mining sector partnerships Oyun Erdenebulgan, Vice Minister of Mining, discusses Mongoliaʼs mining-sector potential.

European Times: How important is the mining sector for Mongolia’s economy? Oyun Erdenebulgan: the mining sector accounts for around 20% of mongolia’s GDp, 70% of its industrial production, 40% of the national budget and 89% of our exports. it has also attracted 70% of mongolia’s FDi. European Times: What are the ministry’s main goals? Oyun Erdenebulgan: our main goal is simple: to create a better environment for foreign investors in order to secure long-term mutual partnerships. We want to develop responsible, eco-friendly, professional mining and attract high-quality companies. We also want to diversify mongolia’s export markets; 93% of our exports go to China. as a ministry, we want to be transparent, less bureaucratic, free of corruption and easy to work with. European Times: What are the main challenges for the mining sector? Oyun Erdenebulgan: the global economic slowdown has hurt mongolia’s mining industry. secondly, mongolia has been ﬁghting corruption, but we are making progress with this. We also need to build our human and institutional capacity and ensure that the mining industry does not have negative effects on mongolia’s environment. our plan is to develop a few large mines to limit environmental impact. European Times: Can you outline opportunities for EU investors? Oyun Erdenebulgan: mongolia needs to add value. We are currently exporting mainly raw or semi-processed products. We want to develop the entire minerals value chain. We welcome investors from the eu since europe offers the best know-how and technologies. upcoming projects of

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interest to investors include our planned oil reﬁnery, which we hope will make mongolia an oil exporter by 2016. We recently signed a contract with a us company to develop oil-shale processing, and France’s total is partnering with the ministry concerning oil-shale exploration. We plan to build several metal-processing plants in northern mongolia, and i recently met with German investors interested in power and water projects here. so, there are many opportunities and our new investment law is a great incentive. European Times: What is your personal message to investors? Oyun Erdenebulgan: We are working hard to establish a transparent framework of laws and standards that everybody involved can understand and respect. We are pushing for better regulation because we understand how crucial this is for long-term success. We are committed to making progress in the oyu tolgoi, tavan tolgoi and other mining projects. mongolia offers opportunities investors should not miss.

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mining

Bringing investors Back to resource-rich mining sector Oyu Tolgoi project - Copper and Gold Mine in South Gobi

Mongoliaʼs minerals boom is expected to more than double the countryʼs GDP within a decade. Mongolia is rich in copper, gold, coal, molybdenum, ﬂuorspar,

uranium, tin, tungsten and other minerals, and most of these resources have just begun to be tapped. Mining has transformed Mongoliaʼs economy and will continue to do so. Mongoliaʼs GDP growth of more than 17% in 2011 – nearly twice Chinaʼs growth rate that year – was mainly due to the mining industry.

oyu tolgoi one of world’s biggest copper reserves much of the focus these days is on oyu tolgoi, a mega-mine in mongolia’s south Gobi province, about 50 miles north of the Chinese border. its name means “turquoise hill”, for the colour copper turns when exposed to oxygen. oyu tolgoi, estimated to have some of the biggest unexploited copper reserves on the planet, illustrates mongolia’s spectacular mining potential.

Jointly owned by international mining group rio tinto’s turquoise hill resources and the mongolian government, which has a 34% share, the mine is expected to be the world’s third-largest copper and gold mine. at full output, oyu tolgoi is set to produce an average of 450,000 tonnes of copper and 330,000 ounces of gold a year, as well as silver and molybdenum. the international monetary Fund estimates that the mine will generate up to one third of mongolia’s GDp by 2021.

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the mining venture has been stalled by disputes between rio tinto and the government, but both sides are committed to moving the project forward. head of communications for oyu tolgoi, houston spencer, commented at the recent mongolian mining summit in perth, australia, that rio Tinto and Turquoise Hill are determined to ﬁnd a solution for the problems with the project. he said, “speed cannot drive this process. We have to resolve these issues properly, creating solutions that last.” on november 26, 2013, turquoise hill resources announced that it would proceed with a €1.76 billion rights offer to repay credit facilities for the oyu tolgoi project. the Vancouver-based subsidiary says that in the offer, which was open for 27 days through January 7, 2014, investors were Oyu Tolgoi project

entitled to purchase an additional share at a 42% discount to november 25, 2013 closing prices in new York and toronto. According to earlier filings from Turquoise Hill relating to the offer, London-based rio tinto, which has a 51% in the company, is set to buy any stock not taken up by other shareholders. turquoise hill expects to double the number of outstanding common shares with the offer, using the proceeds to repay an interim credit facility and a bridging facility. While problems with the oyu tolgoi project and other issues with mining-sector licenses have significantly slowed the flow of FDI into mongolia’s mining sector over the past 18 months, the government’s new investment law of november 2013 is designed to help turn all this around. in addition to creating a level playing field for local and foreign investors, the new law includes tax-

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Mining

stabilisation and other provisions that will help to prevent future changes to the legislation. it will also eliminate the need for the government to negotiate every investment into mongolia.

Vast long-term potential Most observers agree that in spite of the current difficulties, mongolia’s mining reserves are so rich that the country’s mining industry is bound to thrive over the long term. Batsukh Galsan, Chairman of oyu tolgoi and mongolia’s trade and Foreign affairs ambassador at Large, recently commented, “i have seen excitement about mongolia reach fever pitch and drop off a cliff multiple times. examples include the passage of the 2006 minerals law, adoption and repeal of the windfall profits tax, and recently of course the delay in developing the underground mine at oyu tolgoi. in spite of the ups and downs, the trend has been a steady march forward as more and more investors discover the long-term prospects of the country and the potential rewards for patience and commitment.” mongolia’s coal-mining industry also has fantastic potential as well as current problems. mongolia exports most of its coal to China, but mongolia’s total coal exports have dropped significantly over the past year thanks to increased competition. in addition, mongolia’s coal sold through state-owned erdenes tavan tolgoi is priced at less than a third of the going rate for high-quality metallurgical coal because of an agreement with aluminum Corporation of China (Chalco). on the positive side, the western block of mongolia’s tavan tolgoi deposit in the south Gobi desert is considered to be the world’s largest deposit of high-quality coking coal, with some 6.4 billion tonnes. erdenes tt controls the main block, which has been mined since the 1960s. the tsankhi section, which is being offered to foreigners, holds some 1.2 billion tonnes. With resources like these, mongolia is certain to draw more mining-sector FDi.

essential mining services and much more Geomandal provides essential services for mining and other enterprises operating in Mongolia. The

company specialises in remote-site catering, camp construction, engineering, maintenance, and

logistical

support.

Bayarsaikhan,

founder, explains, “A keystone of our service

is to ensure a genuine partnership between our

employees,

our

customers

and

local

communities based on integrity, cooperation and mutual value-creation.”

n. Bayarsaikhan points out that Geomandal has steadily expanded from its initial focus on catering services and now has subsidiaries in the agriculture, tourism, construction, vehicle-maintenance and trading sectors. he says, “We are a pioneer in our sector. i saw that foreign companies needed logistical and other support and created Geomandal to fill this gap.” the company continues to launch new projects, including the construction of greenhouses which will be used to grow vegetables year-round. Geomandal also operates a resort around 60 km from Ulaanbaatar. Defining Geomandal’s competitive edge, n. Bayarsaikhan says, “We have extensive experience in our field and we are growing steadily in the right direction. our clients, among which is the biggest copper-mining venture in southern mongolia, are happy with our services, and that is our main strength. We welcome more foreign investors to mongolia and we are ready to serve them.” Geomandal Group Suite 306, NG Company Bldg Jamiyan Gunii Street 7 SB District, Ulaanbaatar 210648 Tel: +976 11 310714 geomandal@magicnet.com www.geomandal.com

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mining association Welcomes new members N. Algaa, Executive Director, Mongolian

Association,

National

Mining

discusses

organisationʼs activities.

the

European Times: What is the history of the Mongolian National Mining Association? N. Algaa: the association was established in 1994 when there were few private companies in mongolia’s mining sector. it was a perfect time to try to attract investors coming to mongolia. the primary objectives of the Association are to reﬂect members’ opinions and suggestions to national mineral resource-development policy, to protect the common rights of our members, and to operate transparently. We are also trying to establish ties with similar organisations, both local and foreign. European Times: Who are your members? N. Algaa: We have more than 160 members, including mining, exploration, service providers, national companies, joint ventures, and foreign invested companies. there are few member companies that are listed on the international stock exchange. We report weekly to our members regarding our activities and our plans for the near future, or if draft laws are in progress. We are open to suggestions from our members. We do not have any european exploration companies among our members but we have european service providers and service-equipment producers.

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European Times: What does Mongolia’s mining sector need in order to continue to grow? N. Algaa: the mongolian mining industry is still very young from the private investors’ view. Development is needed in exploration and mining production, depending on market demands, especially in China. since mongolia’s lack of infrastructure increases the cost of our commodities, China is the best market for us. Later we could export to other markets, like Korea and Japan, but we need more investment to do this. We need more research, a scientiﬁc approach, and more market analyses. to expand our export markets, we need to produce quality products continuously. We need more public-private partnerships to hasten development as well as a lot of capital.

European Times: What is the Mongolian Mining Association doing to spur on investment in the mining sector? N. Algaa: We are concentrating on promoting a better business environment, including a stable legal structure; competitive taxes; and a less bureaucratic business climate. We are also focussing on improving human resources. European Times: What is your personal message to potential investors? N. Algaa: mongolia offers many business opportunities, most of them in mining but many in other sectors. mongolia is trying to establish a favourable and legal environment for businesses, and our new investment law is a big plus for investors.

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master reGio

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mining

mining and energy Group meets highest international standards involved in the ﬁnancial-services, transport, ICT and construction sectors. tardai Gantumur has ambitious goals for the group. he says, “mongolia’s construction sector is not yet developed, and the ﬁnancial sector is only half developed, so i want our group to grow more in the mining and construction sectors, and i would like to build a chemical factory to produce explosives.” The Ochir Undraa Group is playing a major role in Mongoliaʼs rapidly developing economy.

Founder, owner and chairman Tardai Gantumur,

a mechanical and electrical engineer with mining and trade expertise, established the enterprise in 2000 when Mongolia began to

privatise energy-sector operations. Today, the group has 12 companies and 845 employees.

one of the group’s most successful companies is miningsector leader mera, named one of mongolia’s top 150 companies by the mongolian government and by the mongolian Chamber of Commerce and industry. mera is involved in blasting; blast-hole drilling; explosives-manufacturing; imports, sales, transport and storage of explosives; consulting; production and preparation of stemming materials; and the design and construction of explosives magazines. the company has won many awards, including the “Best technology Know-how entrepreneur” citation in 2011. Mera operates Mongolia’s ﬁrst explosives factory, which opened in 2006. it contains a state-of-the-art anFo production line and has anFo charging trucks for loading us-made blast holes and other equipment. mera also operates an emulsion plant employing australian processes and australian-russian joint technology. the fully automated plant opened in 2011 and produces emulsion explosives which meet international standards. mining and energy-sector activities contribute 47% of the ochir undraa group’s total revenues, but the group is also

open to international partnerships the ochir undraa Group focuses on serving international companies, mainly in the mining sector, and tardai Gantumur is open to international partnerships. he says, “my principle in working with investors is to take a stepby-step approach. if i decide to move forward with some planned projects in the mining sector starting in January 2014, i will be open to meeting with international partners to see if we have compatible goals.” ochir undraa stands out from its competitors in the mongolian mining sector through its commitment to western technologies and management techniques and its in-depth knowledge of the local market as the only Mongolian company in its ﬁeld. Tardai Gantumur says, “our technology and equipment meet european standards, including environmental and safety standards. We are an excellent choice as a partner for european companies and investors.”

Ochir Undraa Group Bayangol district, 2nd sub-district Law Street 24, Rokmon Building, 3rd ﬂoor Ulaanbaatar Tel: +976 11 324248 info@ochir-undraa.mn, www.ochir-undraa.mn

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• Many Projects Underway in High-Potential Energy Sector • Urgent Need to Boost Energy Capacity

energy

“Mongolia offers exceptional resources and investment potential, and our new investment law is creating even more opportunities.” Dulamsuren Dorjpurev, Vice Minister of Energy

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master reGio

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energy

new ministry promoting sustainable, Green Development Mongoliaʼs Minister of Environment and Green

Development, Sanjaasuren Oyun, discusses her countryʼs commitment to environmentally friendly practices.

European Times: What are your ministry’s main goals? Sanjaasuren Oyun: the ministry was created by the new government almost a year ago to strengthen mongolia’s environmental protection. mongolia has a long nomadic tradition and its people know how to live in harmony with nature. i believe that this traditional lifestyle can be complemented by new, clean, renewable energy. the government recently created a number of incentives for companies investing in clean technology, renewable-energy or water-management projects, and we have set penalties for companies which pollute. We are also promoting water-recycling in the south Gobi mining areas, and we are creating more national parks. European Times: Why is Mongolia focussing so much on environmental protection? Sanjaasuren Oyun: During the transition years mongolia was concentrating on building a free-market economy and did not implement strong environmental standards. the result was that many mines have caused environmental problems. We believe growth and environmental protection can work together. our goal is to promote a clean-energy mindset. Mongolia’s ﬁrst wind farm recently went into production and this is an important step forward for the country. along with wind energy, solar energy has huge potential here. mongolia’s current government has the political will to support renewable energy. European Times: Are you concerned that new environmental regulations will slow down mining investment? Sanjaasuren Oyun: many exploration projects are continuing in the mining sector. in any case, we want to

Sanjaasuren Oyun, Minister of Environment and Green Development

diversify the economy so that it is not too dependent on mining, which now accounts for 90% of mongolia’s exports. We see a lot of export potential in the agriculture and energy sectors. European Times: What are some of your ministry’s current projects? Sanjaasuren Oyun: We are trying to ﬁnd solutions to ulaanbaatar’s air pollution, much of which is caused by the Ger district 200,000 household stoves that use raw coal. We are replacing polluting systems with clean ones. We are also dealing with the city’s water pollution and want to form a public-private partnership for a waste-water treatment facility. the tuul river-cleanup project is under way and we started investing in rehabilitating the abandoned mining sites. We have signed bilateral agreements to reduce Co2 emissions and we seek international cooperation in managing our forests. We intend for mongolia to maintain the highest environmental standards.

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many projects underway in high-potential energy sector European Times: What progress have you made on making Mongolia energy-self-sufficient? Dulamsuren Dorjpurev: the ministry of energy is now in the final stage of preparing a master plan for the energy sector with the support of the asian Development Bank. a number of challenges have already been overcome, including the 50mW expansion of plant number three in ulaanbaatar. We expect mongolia to be producing 4000 mW of power by 2025. our current output is 825 mW and we import 175 mW from russia and 150 mW from China. Domestic demand is set to rise to 1500 mW by 2020 and 3000 mW by 2025. Our goals are to make Mongolia energy-self-sufficient, to export energy, and to provide the region’s lowest energy prices. to support energy exports, mongolia is building new power infrastructure, including three power lines to russia and China. European Times: What kinds of power resources are your priorities?

Dulamsuren

Dorjpurev,

Vice

Minister

Energy, discusses Mongoliaʼs plans for the energy sector.

European Times: What are the responsibilities of the Ministry of Energy and what are some of your current projects? Dulamsuren Dorjpurev: this ministry was established in 2012 to formulate development strategies for the energy sector. We have many projects underway but three important ones are upgrading thermal plants three and four, as well as building a new combined heat power plant ﬁve in ulaanbaatar, also at tavan tolgoi. For example, in 2014 the ministry will invest an additional 103 mW of capacity at plant number four.

Dulamsuren Dorjpurev: our biggest energy resource is brown coal, but we aim for 20% of mongolia’s power to come from renewable resources by 2020. mongolia has extensive coal-based methane, so we are researching this, and we are considering building hydropower plants and more renewable-energy plants. the World Bank supported mongolia’s 50 mW slakhit wind farm and a 30 mW solar plant by a German investment is under discussion. other priorities are to reduce air pollution in the capital caused by coal-burning and to build energy infrastructure in rural areas. We have already made a number of technological advances at ulaanbaatar’s power plant to reduce harmful emissions. European Times: What is your personal message to investors in Europe? Dulamsuren Dorjpurev: mongolia offers exceptional resources and investment potential, and our new investment law is creating even more opportunities. We aim to meet european standards in everything we do so it will be easy for european investors to enter the mongolian market.

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energy

energy-sector Leader Welcomes european partnerships studied in Germany to learn international standards and who are now teaching what they have learned. our company will have the professionals it needs to succeed in international markets.” around 550 students will graduate from the institute every year, including around 400 professional welders, 100 thermal-power-plant operators and maintenance personnel, and 50 welding engineers and technical personnel. metallurgy, materials science and non-destructive testing are other ﬁelds in which the institute will offer training. Hasu Megawatt is a leader in Mongoliaʼs energy, mining and other sectors and has a strong record

Cutting-edge new factory

companies. Hasu Megawatt works with Canadaʼs

tumen ayush is trying to convince other mongolian companies to focus on the kinds of high standards that the German mongolian professional training industrial lnstitute promotes. he says, “in the last couple of years people have started realising that mongolia can produce high-quality products which justify the initially higher cost. that is why we opened a new factory in september 2012 where we utilise qualiﬁed and experienced personnel and world-class technology to produce high-quality products.”

of serving as a reliable partner for international biggest mining enterprises and is the oﬃcial

representative in Mongolia of Canadaʼs Mine

Steel LLC. Hasu Megawatt also serves as the oﬃcial distributor for Sibenergomash (Russia), Vietz (Germany) and Prysmian (Germany).

hasu megawatt prides itself on maintaining the highest international standards and has won a number of awards. Ceo tumen ayush says, “We are committed to supporting mongolia’s development and we play a key role in improving the quality of mongolia’s human resources.”

professional training institute along with a German partner, hasu megawatt has established the German mongolian professional training industrial lnstitute to train world-class professionals for mongolia’s growing business and industrial activities. the facility, which opened in a former factory last year, has been equipped with the latest technologies, including German-made GtaW and smaW welding simulators. tumen ayush explains, “our German partner has promised to bring this training centre to an international level in two years and we are working together to reach that goal. our training centre has eight teachers who have

hasu megawatt’s factory has 60 employees, including 14 high-pressure-vessel-qualified welders as well as engineers and technical personnel. tumen ayush says, “We provide services such as pressure-vessels fabrication and installation, engineering design, technical solutions, quality-assurance controls and all types of welding.” With the new factory, hasu megawatt has strengthened its role as a major industrial-services provider for mongolia’s energy and mining sectors. to european investors, tumen ayush concludes, “have faith in Mongolia, where you will find exceptional opportunities. mongolia’s economic growth is just starting and now is the time to come here and find the right partner. Hasu Megawatt welcomes you to join us on a path of mutual growth.” Megawatt Group Chinggis Ave. Khan-Uul District Company headquarter, Ulaanbaatar Tel: +976 11 343301 Info@megawatt.mn, www.megawatt.mn

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monGoLia master reGio

urgent need to Boost energy Capacity Khushuut coking coal site

Mongoliaʼs Ministry of Energy has ambitious plans to develop the countryʼs energy sector to fuel economic growth. The ministryʼs priorities are to create an independent, safe, reliable and integrated energy system which includes strategic

energy reserves; to provide ﬁnancial and economic opportunities (including incentives and favourable energy prices and tariﬀs) for investment in developing

Mongoliaʼs energy resources and building new energy-supply networks; to

establish public-private partnerships in the energy sector; to build high-voltage transmission lines; to step up energy conservation and eﬃciency; to bring the

energy sector up to international standards; and to promote renewable energy, including wind and solar power.

mongolia urgently needs investment in its energy sector. according to the asian Development Bank, the country’s current installed capacity is 840 mW, but only 650mW (or 77%) of this energy is available because mongolia’s power plants, all coal-ﬁred, are outdated, poorly maintained and inefﬁcient. Similarly, transmission and distribution losses total around 30% due to aging infrastructure.

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Demand to reach 1600 KW by 2015 Mongolia’s inefﬁcient energy network is increasingly under pressure as power demand, led by the mining sector, has risen exponentially in recent years and is expected to hit 1600 KW by 2015, with supply only expected to be 800 KW, according to the energy international Corporation. adding to the chal-

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energy

lenges, mongolia is 90% dependent on fuel imports from russia and therefore very vulnerable to price hikes. Limited state financing and uneconomical electricity tariffs have combined to hinder energy investment in mongolia for many years. to cope with these problems, mongolia’s government is counting on revenues from the mining sector to help it finance energy-infrastructure upgrades. the private sector also has a crucial role to play.

new power plant in ulaanbaatar Foreign investors are already targeting mongolia’s energy sector. in august 2013, the government announced that it had selected French energy giant GDF suez sa to lead a consortium to build an €883 billion coal-ﬁred heat and power plant in ulaanbaatar. sojitz Corp., posco energy Corp. and mongolia’s newcom Group will join GDF in the project. ulaanbaatar’s population has doubled over the past 15 years to reach 1.2 million people and the city’s current power infrastructure is unable to cope with demands in winter. the new plant is expected to go into service in 2017. another leader in the energy sector is mongolia energy Corporation, an energy and resources developer with operations throughout mongolia and in Xinjiang in north-western China. the company acquired 34,000 hectares of concession areas in Khushuut and Darvi, Western mongolia, in 2007 and began transporting coal products to Xinjiang customers in 2011.

stepping up coal production mongolia continues to step up its coal production. the mongolian Coal association predicts that coal-export volumes will reach 50 million tonnes by 2015 and 100 million tonnes by 2025. the growth in coal exports will accelerate exponentially as the vast tavan tolgoi coking coal mine – the largest in the world – comes online in 2014, with output of around 20 million tonnes of coal expected annually. the mongolian government has also announced that it plans to build an oil refinery that would go into service in 2015. mongolia aims to supply its future energy needs through developments that meet global standards.

PETROVIS

innovative energysector Leader open to partnerships Petrovis, Mongoliaʼs ﬁrst wholesale fuel distributor,

built on its success to acquire state-owned supplier NIK and is now the leader in its ﬁeld with a market share of nearly 45%.

Ceo Davaanyam enkhmaa says, “We are not only the biggest fuel supplier in mongolia; we also have the widest coverage in terms of petrol stations, storage facilities and logistics infrastructure which contributes to our reputation for highest reliability.” now petrovis is playing a key role in enhancing mongolia’s energy security through promoting domestic production of fuels based on the country’s oil and coal resources. While the company’s core activity remains downstream fuel distribution, petrovis has formed a subsidiary, petro matad, which is involved in oil exploration. petrovis also works with a Japanese partner to supply LpG to the mongolian market and is involved in research on new forms of coal-based energy as well as environmentally friendly energy sources. Davaanyam enkhmaa explains, “We are focussing on becoming a vertically integrated energy company. We are open to strategic partners on all fronts, including ones who are experts in unconventional fuels.” For any international partner, petrovis offers in-depth knowledge of mongolia’s energy sector, a strong track record, an average 20% annual sales growth, innovation and the latest technologies, and a dominant market position. as Davaanyam enkhmaa puts it, “petrovis is the local partner of choice in mongolia.” Petrovis Prime Minister Amarʼs Street 7, Sukhbaatar District Ulaanbaatar 210646, Tel: +976 11 310921 d.enkhmaa@petrovis.net, www.petrovis.mn

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monGoLia

• Investment to Add Value to Agriculture

agriculture & Food industry

“We have high expectations that Mongolia’s new investment law will draw more foreign investors. We are seeking investors in light and heavy industry, agriculture and food-processing.” Tuvaan Tsevegdorj, Vice Minister of Industry and Agriculture

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agriculture & Food industry

high-potential agriculture and industry support for this project. a lot of our current projects are fairly small and we are partnering with european companies in many of these initiatives. European Times: What are you doing to foster more ties between Mongolia’s farmers and partners around the world?

Tuvaan Tsevegdorj, Vice Minister of Industry and Agriculture, discusses his ministryʼs key goals.

European Times: Can you describe some of your current projects? Tuvaan Tsevegdorj: We have issued a bond to support the development of our cashmere, wool, lumber, milk and winter-crops segments. We are also promoting meat production through public-sector funding. agriculture accounts for 21% of mongolia’s GDp and 40% of total jobs. We aim to expand our agriculture sector to provide food for our population and for export. We are also promoting organic agriculture and developing around 20 hectares of greenhouses to produce food products year-round. We are granting low-interest loans and other

Tuvaan Tsevegdorj: We have established a commodities exchange and have formed links between our cashmere producers and italian companies concerning technology transfer. We have high expectations that mongolia’s new investment law will draw more foreign investors. We are seeking investors in light and heavy industry, agriculture and food-processing. We would like to form partnerships with France concerning livestock production; spain and turkey for leather; the netherlands and Germany concerning greenhouse agriculture and wheat; and more partnerships with italy concerning our cashmere. mongolia has around 122 million hectares of unused agricultural land just waiting to be developed but we need the right technologies. our goal is to combine food-processing and agriculture to create value-added products. mongolia’s mining sector also offers strong investment potential and we are working on a project to produce crude steel from coke and to melt copper at one of our factories. in the light-industry sector, we are focusing on leather, of which we produce 10 million units per year; cashmere, of which we produce 6,000 tonnes per year or 40% of global production; and wood products, of which we produce 18,000 tonnes per year. our dairy industry is another opportunity; mongolia currently produces around 600,000 litres of milk per year. European Times: What are your main goals for the agriculture sector in the coming ﬁve years? Tuvaan Tsevegdorj: i would like mongolia to be self-sufﬁcient in vegetables, milk and wheat, and we want to step up our exports of grains, milk, meat and cheese. i also want the mongolian brand to be associated with our cashmere and leather products.

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monGoLia

investment to add Value to agriculture

Although Mongoliaʼs mining sector attracts most of the attention of international

investors, the countryʼs agriculture sector has signiﬁcant growth prospects as well. Mongolia, one of the most sparsely populated countries in the world,

has almost one million hectares of available agricultural land. Agricultural activities employ around 35% of the countryʼs total workforce and animals

outnumber people in Mongolia by almost ten to one. With around 41 million head of cattle, horses, yaks, goats and camels, most herding households are

self-suﬃcient in meat and milk products and earn an income from selling live animals, milk, meat, skins and hides, wool and cashmere.

“usually, the money coming into mongolia is for mining. there is never much interest in the agricultural sector. But we see great potential,” says Duursakh Luvsandorj, a department director at the ministry of industry and agriculture. he adds, “With additional capital investment, the sector can move from merely exporting raw materials such as milk, cashmere and meat to processing value-added agricultural products as well.”

according to the ministry, mongolia’s livestock is worth around €6 billion. mongolia also supplies 21% of the world’s unprocessed cashmere and in fact cashmere was the country’s top exportearner until the mining sector began to play the leading role. Developing food-processing operations is a top priority since mongolia currently processes only around 10% of its agricultural products. most of the rest is exported to russia and

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agriculturesector & Food industry

China for processing and then, in some cases, shipped back to mongolia to be sold in processed form.

incentives for investors in spite of the challenges, the agriculture sector clearly has great promise, and to attract international investment the government has implemented a number of incentives. these include rent-free land leases and tax breaks on the construction of farms and processing operations as well as on the purchase of agricultural equipment and machinery.

environmentally friendly agricultural development With the right investment, including FDi, according to the ministry, locally sourced and processed hides, cashmere clothing and other animal products could create an industry worth over €80 billion. the ministry aims to build on mongolia’s long nomadic culture based on animal husbandry and living in harmony with the land. since mongolia’s meat and other agricultural products have always been produced organically, organic agriculture has especially strong potential. “the ministry wants to focus on the export of organic produce. For centuries, our lifestyle has been natural,” Duursakh Luvsandorj points out. the ministry is targeting China, russia, south Korea and Japan as promising markets for mongolia’s high-quality agricultural products. the country’s biggest potential market could be China, which has the world’s largest population and has been plagued by health concerns in its local food industry.

Challenges to be faced mongolia’s agriculture sector faces a number of challenges. one is the lack of efﬁcient transport infrastructure, the same problem affecting the country’s mining sector. increasing investment from the government and outside investors and international funding organisations aims to solve this problem. another challenge is the country’s harsh climate, including severe winter storms called dzud. in the winter of 2009 to 2010, such a storm killed an estimated eight

million animals, or 17% of the country’s livestock. Temperatures can fluctuate from as low as minus 50°C in the steppe in winter to 40°C in the Gobi desert in the summer. investment is needed in the construction of modern animal barns, greenhouses and dairies to protect animals and crops from the weather. mongolia’s arid climate and fragile topsoil in many areas pose additional challenges. in some areas, pastoral herding involving moving small herds to different areas regularly, as has been the practice in mongolia for centuries, is the only viable approach. overgrazing such areas through attempting large-scale livestock production would result in soil degradation and sandstorms. most crop-raising is limited to mongolia’s northern river valleys where irrigation is possible. the harsh winters mean a short growing season of around 100 days. mongolia’s main crops are wheat, barley, potatoes, cabbages and carrots, with some small-scale fruit-growing, often in urban areas. mongolia also has a smallscale fishing industry, but the freshwater fish that inhabit the lakes and rivers are limited. Forest reserves are also under pressure.

During the communist years, mongolia’s agriculture sector was dominated by state-owned collective farms and the country was self-sufﬁcient in wheat, milk and meat products. When the soviet union collapsed, most of mongolia’s herders went back to their nomadic traditions, relying once again only on natural pastures. animal-fodder production fell from around one million tonnes in 1989 to 40,000 tonnes in 2002. Wells, once maintained collectively, were allowed to deteriorate. With the help of foreign investment, the government of mongolia has made good progress in getting the agriculture sector healthy again, only this time with a focus on practices that take mongolia’s cultural heritage and fragile natural resources into account.

Spirit Bal Buram Building Chinggis Avenue 1, Khan-Uul District Ulaanbaatar -210644 Tel: +976 11 345555 Fax: +976 11 345228 e-mail: info@monbev.mn

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monGoLia

Agmarco high-Quality meat products for international markets

top Food-products Distributor Welcomes partnerships

Khatansuikh Impex demonstrates the potential of

Agmarco brings high-quality food products to

Mongoliaʼs private sector.

customers throughout Mongolia. Founded in 2006

the award-winning enterprise manufactures meat products and operates a restaurant and a brand-name grocery store. ulziijargal namijil, Chairman of the Board, explains, “since the company’s beginnings we have focussed on implementing international practices to guarantee high-quality meat products for mongolian and international markets.”

it in Mongolia, the company has grown rapidly and

to import chicken meat from the US and distribute achieved more than €2 million in turnover in 2012.

the company exports its beef, mutton and horsemeat products to Korea, russia and iran and exports its pet food to Japan. Khatansuikh impex’s latest product is a bone extract made using a traditional Korean process which preserves the product’s collagen, calcium and magnesium.

Looking for partners Khatansuikh impex is looking for international partners. ulziijargal namijil says, “We realised that a family-owned company is not competitive globally, so we are interested in new investors and we want to enter the european market. We are ready to share our knowledge with partners interested in establishing a bone-processing plant in europe. We can also export our pet-food products to europe until our HACCP-certiﬁcation process is complete.”

agmarco distributes products to more than 300 supermarkets, restaurants and fast-food chains all over the country. Ganbaatar Khukhuu, Ceo and owner, says, “We aim to be one of the biggest distribution companies in mongolia in the near future, and, thanks to Agmarco’s ISO certiﬁcation, we can distribute in eu markets as well.”

For partners, Khatansuikh impex offers a solid track record in mongolia and in its export markets as well as highly trained employees and well-developed manufacturing facilities. ulziijargal namijil adds, “most importantly, our products are natural, pure and organic, without any concentrates or additives.”

the company now imports a variety of food products from many countries, including chicken from the us, pork from Canada, frozen French fries from the netherlands, and wine from Chile and France. agmarco also distributes local lamb meat. Ganbaatar Khukhuu is always looking for new food products and markets, and he welcomes the chance to work with international partners. he says, “We have in-depth knowledge of the mongolian market and have already signed contracts with some of the country’s biggest fast-food chains and supermarkets. our customers know they can rely on agmarco for quality products. agmarco has positioned itself as a very desirable partner for international investors.”

Khatansuikh Impex LLC 6-r khoroo, Baga toiruu 35 Sukhbaatar District, Ulaanbaatar, Tel: +976 11 310305 info@khatansuikh.mn, www.khatansuikh.mn

Agmarco LLC UlaanbaatarSuite 704, Bold Tower Ulaanbaatar 36 Tel: +976 99112524 info@agmarco.com, www.agmarco.com

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â&#x20AC;˘ Transport Projects Keeping Mongolia on the Move

transport & Logistics

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master reGio monGoLia

transport projects Keeping mongolia on the move Huge investments in transport-infrastructure

projects

over the coming decade are set to enhance Mongoliaʼs

investment appeal and help

support the growth of the countryʼs mining, agriculture and other sectors. According to

Amarjargal Gansukh, Minister of Roads and Transportation, Mongolia

plans

over

€42

billion in large-scale transport-infrastructure initiatives.

new investment law to step up transport-infrastructure development Construction has already begun on around 1,800 km of new rail lines, which will make up around one-third of the country’s planned rail network, and Chinese companies are currently negotiating to invest in a new highway connecting russia, mongolia and China. “We are looking for investors in mining, energy and transport infrastructure,” amarjargal Gansukh says. mongolia’s new investment law is expected to signiﬁcantly increase FDI in the country’s much-needed transportinfrastructure projects.

connecting sainshand in mongolia’s Dornogovi province and Zamyn-uud on mongolia’s border with China. this stretch of road was the last project to be completed in a series of projects linking ulaanbaatar and Dornogovi province with a paved road. a 176-km road from Choir to sainshand was opened in september 2013.

new paved road to China

these road-development projects were ﬁnanced by the government of mongolia, the asian Development Bank’s regional auto road Development project, and the millennium Challenge account in mongolia. mongolia has added 1,800 km of new roads to its road network in 2013 alone and now has almost 5,000 km of paved roads.

one major initiative inaugurated in november 2013 is a new 116-km road

in november, a dedicated cargo-transport road between China’s erenhot and mon-

154

golia’s Zamyn-uud opened in an effort to eliminate bottlenecks. erenhot is China’s biggest land port handling trade to and from mongolia, and it was served by only one road for both passenger and cargo transport. the new road will separate cargo and passenger trafﬁc and can serve trucks carrying up to 30 tonnes. since the fall of the soviet union, road passenger and freight transport, urban passenger transport and aviation services in mongolia have either been privatised or include private operators in competition with state-owned ones. neither the public nor the private sector is keeping up with mongolia’s rapidly growing transport-sector demands, especially as the mining industry continues to grow and as trade with China and russia increases. a challenge for mongolia’s road network is the country’s harsh winter climate, which requires constant

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transport & Logistics sector

Ulaanbaatar city

maintenance of road surfaces, and many of the country’s roads are in poor condition. new transport projects are expected to alleviate these problems.

use Chinggis Khan (Genghis Khan) international airport in ulaanbaatar, while the domestic aviation network includes 17 airports with runways suitable for unpressurised turbo-prop aircraft.

rail network set for expansion

the international airport faces frequent closures because of strong winds, sand or snow storms, or unacceptable visibility because of excessive air pollution. mongolia is currently planning to build a new international airport with longer runways and more services for both passenger and cargo trafﬁc.

the mongolian rail network carried 93% of mongolian freight and 43% of passenger turnover in 2007. the national operator is uBtZ (ulaanbataar railway). the trans-mongolian railway (1,100 km) connects the transsiberian railway from ulan ude in russia to erenhot and Beijing in China through ulaanbaatar. mongolia also has several spur lines, mainly to mining areas. a programme of repairs and track upgrading, including the installation of heavier rail and concrete sleepers, is now underway. Rail trafﬁc is set to remain the chief transport system for getting mongolia’s products to domestic and international markets. air transport also plays an important role in the mongolian economy. more than 98% of international air-transport services

upgrading transport in ulaanbaatar transportation remains a critical issue in ulaanbaatar, the mongolian capital. existing mass-transit systems are underﬁnanced and ill-equipped to handle over 3.4 million trips per day, nearly one-third of which are made by bus. individual car use has grown rapidly (with over 210,000 cars now in regular use in the city) and trafﬁc congestion is worsening every year.

as part of the government’s “compact city” strategy for the capital, two lines of a rail-based public transportation system are to be developed, running north-south and east-west. The ﬁrst of these two lines will run along peace avenue, the city’s central transport artery. it will extend over 27 km, connecting to the new Knowledge City in the west. the second, 20-km line will run from the northernmost edge of the central business district, via peace-bridge, to the proposed science and technology town to the south. there is also potential to extend this line to Chinggis Khan international airport. sections of both lines will run underground within the centre of the city and will include an interchange near sukhbaatar square. the new light-rail stations are expected to form hubs around which commercial, service and business centres will grow.

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monGoLia

• Strong Performance by Construction Industry

Construction & urban Development

“We welcome foreign companies that are specialised in advanced technologies, construction-materials supply and urban planning to partner with us in developing Mongolia’s infrastructure.” Ravjikh Erdeneburen, State Secretary, Ministry of Construction and Urban Development

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master reGio

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Construction & urban Development

improving infrastructure and Building a sustainable Future Finally, we are making sure that mongolia has the infrastructure to support all these projects. European Times: Why should foreign investors and companies get involved in Mongolia’s construction and infrastructure development? Ravjikh Erdeneburen: We welcome foreign companies that are specialised in advanced technologies, constructionmaterials supply and urban planning to partner with us in developing mongolia’s infrastructure. We offer loans with favourable interest rates for companies which import construction materials, and we are also providing loans to property developers. We recently passed a law to offer mortgages at 8% for 20 years to encourage people to buy homes. We are also creating a government fund to ﬁnance 30% of a mortgage for young buyers. We are working day and night to eliminate air pollution in ulaanbaatar and to develop high-quality residential properties in the suburbs by 2016. Ravjikh Erdeneburen, State Secretary, Ministry of Construction and Urban Development, discusses

the

governmentʼs

eﬀorts

upgrade Mongoliaʼs infrastructure.

European Times: What are your ministry’s main goals? Ravjikh Erdeneburen: the ministry of Construction and urban Development (mCuD) is working to achieve four major goals. First, we are reforming the legal framework for the construction sector. in the soviet system, the government was responsible for construction quality. our new regulatory environment will be based on an insurance system in which safety and security are ensured by the private sector. our second goal is to develop mortgage services to help balance housing supply and demand. thirdly, we are establishing modern development programmes which meet international standards.

European Times: What else is the government doing to attract international investors in Mongolia’s construction and infrastructure projects? Ravjikh Erdeneburen: We are streamlining licensing procedures for investment projects and we are working intensively to ﬁght corruption and cut down on bureaucracy. We hope that the business climate will continue to improve every day. We are already cooperating with foreign companies specialised in urban planning, and we welcome property developers. many of mongolia’s private companies are growing rapidly and are already partnering with strong foreign companies. European Times: What is your personal message to investors? Ravjikh Erdeneburen: mongolia has achieved prosperity thanks to the mining boom and now offers a democratic government, skilled human resources, and a commitment to ﬁghting corruption and ensuring sustainable growth. We have dynamic young leaders and we are eager to partner with investors and companies all over the world as we build our country’s future.

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master monGoLia reGio

strong performance by Construction industry Mongoliaʼs construction sector grew by 36% in 2012 compared

to 2011, a 120% increase since 2010. This growth is expected to continue as Mongoliaʼs Master Plan 2020 creates vast opportunities for construction enterprises and for investors in construction projects.

in contrast to the usual pattern, the construction industry saw an upsurge in 2012 even though mongolia’s GDp growth slowed. this was mainly the result of large-scale infrastructure projects launched by the government, and more of these projects are in the works. mongolia’s construction sector was privatised in 1990 and the transition to a free market hit the industry hard. as recently as 2000, mongolian construction ﬁrms built only a handful of buildings. then the government initiated the “40,000 homes” programme to provide low-cost housing to families living below the poverty line, mainly in ulaanbaatar’s outlying slums, or ger. since the inception of this project, around 2,500 new construction companies have been created in mongolia.

Construction in Ulaanbaatar

158

While foreign investors have entered the construction market (mainly companies from Korea, Japan and russia), most of mongolia’s biggest construction enterprises today are mongolian. the economic crisis stalled many projects in 2008 and 2009, but by 2011 recovery was clear. During the ﬁrst quarter of 2011 the residential-construction segment in mongolia tripled in value compared to the previous year, and 10,747 new apartments in 101 new developments were completed in ulaanbaatar alone that year. In the ﬁrst six months of 2012, 4,186 units were completed in 60 developments.

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Construction &sector urban Development

the Development Bank of mongolia (DBm), a state-owned bank, was created by the government to provide financing for infrastructure and housing projects. It is financing the new “100,000 homes” programme as well as the €12 billion sainshand industrial Complex. in 2012, the bank offered a more-than-€500 million, five-year, sovereign-guaranteed note for international investors through the euro mediumterm note programme. the note, rated B1 by moody’s and BB- by standard & poor’s, was reportedly oversubscribed tenfold. the government of mongolia, through the DBm, will continue to offer investors fixed-income opportunities, including mortgage-backed securities. mongolia’s capital will be the focus of much future construction. the ulaanbaatar master plan 2020 is based around five core goals: to ensure that the city will have a vibrant economy, be a world-class business centre, and gain a competitive position in education, information, science and technology; to base the city’s growth on sound urban planning, including adequate infrastructure and well-defined land and housing policies; to improve the city’s quality of life; to develop a responsive and efficient public administration that involves the local community and private sector; and to position ulaanbaatar as a tourism destination.

providing basic infrastructure in slum areas in 2012, only around 55% of the population of ulaanbaatar had reliable access to heating, water and sewerage infrastructure because the city’s infrastructure development has not kept up with population growth, particularly in the slum areas around the city. solving this crisis is a top priority in the master plan and massive infrastructure projects have been outlined, including 75,000 new housing units to be built in ulaanbaatar city and a further 25,000 to be built outside the city. the centre of ulaanbaatar is to be developed according to the “compact city” model to improve efﬁciency of services as well as energy use. ulaanbaatar is considered a low-density city with most development spreading farther and farther from the centre and mainly involving low-standard housing for the poor. the master plan calls for upping population

Construction Sector Contribution to GDP - Billion MNT 200 160 Billion MNT

Development Bank of mongolia

120 80 40

2010

2011

2012e

■ Contribution to GDp - (Billion mnt) source: nsom

density in the city centre from the current 6,000 people per sq km to around 13,700 per sq km.

new towns for 100,000 people the plan also includes developing the nearby towns of songino, tuul, ulzit, Khonkhor, Gatsuurt, Jargalant and terelj as well as creating new towns (with a total population of around 100,000) in Jargalant, rashaant, Bayanzurkh and Bayangol. a free-trade zone around the satellite town of nalaikh is also planned and will position the town as a logistics hub on a spur rail line connecting the new ulaanbaatar international airport with north-south railways and road links. another project is to build “knowledge cities” focussing on science, technology and knowledge-oriented activities, and mongolian national university will be moved from central ulaanbaatar to these new areas. a Korean company has been chosen to develop the new national university campus. the plan also calls for developing industrial zones to draw industry away from the city centre and away from the tuul river in an effort to diminish air and water pollution. an ambitious project involves the construction of underground malls at railway stations near sukhbaatar square and the nomin “state” Department store to create social and commercial spaces viable even in severe winter conditions. Greenbelt areas will also be built to separate existing urbanised areas from new towns. mongolia’s construction industry has a bright future as these projects come on stream.

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monGoLia

â&#x20AC;˘ Bringing World-Class Medical Lab Equipment to Healthcare System

health

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health

master plan upgrading healthcare services most patients in mongolia use public healthcare facilities rather than private ones, although the number of private healthcare providers has increased in recent years from 683 private hospitals and clinics in 2005 to 1,184 in 2011. most are small hospitals and outpatient clinics. according to the World health organisation, mongolia has more than twice the average number of hospitals than most eu and other transition countries. many wealthier patients seek advanced care abroad, commonly in China and Korea. mongolia’s health Law, revised in 2011, provides the right to primary healthcare, maternal and child care and some publichealth services regardless of socio-economic status and healthinsurance coverage. through the Citizen’s health insurance Law, the Ministry of Health is responsible for deﬁning beneﬁt packages, payment methods and tariffs. mongolian citizens are required by law to register with local healthcare systems and to have annual check-ups. healthcare services in mongolia are subsidised by the national health insurance Fund, with required copayments by patients of 10% to 15%. mongolia is divided into 21 aimag (provincial) governments, and soum (district) governments within the aimag. the national healthcare system has been decentralised to the level of the aimag. The government of Mongolia devised a Health Sector Master Plan covering the period 2005 to 2015 which focuses on improving the quality of the countryʼs healthcare sector. The plan covers primary

healthcare,

family

health

centres,

hospitals, the private sector, health-workforce capacity, health ﬁnancing and quality controls.

Key goals are to increase healthcare coverage, access and utilisation, especially for mothers

and children, the poor and other vulnerable groups; to strengthen primary healthcare;

and to strengthen specialised, advanced and emergency care.

meeting international pharmaceuticals standards in the pharmaceuticals sector, the government is working to upgrade quality to meet eu and international standards and to support the development of domestic pharmaceuticals manufacturing. mongolia currently imports around 97% of its pharmaceuticals, mainly from russia, hungary and Germany as well as from France, indonesia and the uK. use of pharmaceuticals products is growing. a study by the ministry of health in 2012 estimates that ulaanbaatar has over 500 pharmacies and that mongolia’s drug consumption increased by 28.5% between 2000 and 2012. mongolia has around 160 registered pharmaceuticals enterprises. monos Company provides around 65% of the imported drugs and pills sold on the mongolian market and has interests in over half of the country’s pharmacies. in addition to the legal pharmaceuticals sector, there is a major black market for pharmaceuticals.

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master monGoLia reGio

Bringing World-Class medical Lab equipment to healthcare system Monolab LLC plays a key role in upgrading Mongoliaʼs

healthcare

system

supplying

top-quality equipment and instruments to medical laboratories throughout the country. Founded in

1996, Monolab has established partnerships with leading

international

manufacturers,

including

Human GMbH (Germany), Woodley Laboratory (US), Mitra (Russia) and Sang Li (China).

Dr. namid munkhtuvshin, owner and president, explains, “We have more than 100 customers, from state hospitals to private laboratories, and we have more than 120 end users. We supply medical laboratory instruments and reagents, including clinical biochemistry analyser readers, haematology-system analysers, coagulation analysers, urine analysers, fully automated systems for hospitals, and more. We aim to deliver high-quality products to the mongolian market rather than the low-cost, poor-quality products often found here.”

mission: to be the best in its specialised ﬁeld unlike many other mongolian companies which handle a wide range of activities in order to compete in the marketplace, monolab puts the focus on its chosen niche. Dr. namid munkhtuvshin says, “Companies in mongolia often get involved in many different things but we decided to specialise and be the best in our ﬁeld, which is to provide superior products to medical laboratories.” monolab also performs sophisticated tests in its own laboratory, serving hospitals which are not capable of handling these tests themselves. “We collect samples from different hospitals and perform services such as hormone testing, among others,” Dr. namid munkhtuvshin explains. the combination of the advanced technologies and market expertise of monolab’s German partner along with Dr. namid munkhtuvshin’s own specialisation in diagnostics helps to give monolab its competitive edge. he says, “our

162

focus on our speciality and on high quality makes us a reliable partner. products we sold 15 years ago are still working well and we also provide after-sales services.”

manufacturing products in mongolia oyundelger munkhtuvshin, the Ceo of monolab, stresses that the goal for the future is for the company to manufacture its own products, for example test tubes for laboratory samples as well as sophisticated lab equipment. she explains, “By becoming a producer rather than just an importer and distributor, we will be able to export our products to markets beyond mongolia, such as russia.” to achieve this goal, monolab is currently seeking investors and partners. as an investment target and reliable partner in mongolia, monolab is an excellent choice. Dr. namid munkhtuvshin concludes, “our strengths are our integrity, discipline and scientiﬁc expertise. We want to improve the health of the Mongolian people, not just make a proﬁt.” Monolab LLC Bayangol District 5 khoroo, 10 khoroolol, Peace Avenue 115 P.O.B 48/47 210648 Ulaanbaatar, Tel: +976 70 1878068 info@monolab.mn, www.monolab.mn

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• Developing the Talents of Mongolia’s Youth • Improving the Quality of Education

education

“We are steadily improving our educational system, focussing on developing our children’s natural talents, and helping every child make the most of his or her abilities.” Luvsannyam Gantumur, Minister of Education and Science

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monGoLia

Developing the talents of mongolia’s Youth Luvsannyam Gantumur, Minister of Education and Science

Luvsannyam Gantumur, Minister of Education

and Science, discusses priority projects in Mongoliaʼs education sector.

European Times: What are your main tasks as minister? Luvsannyam Gantumur: this ministry determines mongolia’s educational policies and implements them, encourages the government and the people of mongolia to support education, and promotes investments and projects concerning science and technology. overall, the role of the minister of education and science is to ensure a brighter future for mongolia. European Times: What are some recent developments in the education sector? Luvsannyam Gantumur: We are establishing new legislation which will improve our schools and the working environment of our teachers. We have also received government approval for our “Good mongolian Child” programme aimed at improving the quality of education for our children, helping each child make the most of his or her talents, and providing high-quality books for our children. European Times: How many students are enrolled in school in Mongolia today? Luvsannyam Gantumur: mongolia has around 700,000 students. primary and secondary education is free, and around 99% of our children are in school. We also have a high percentage of students who enrol in universities or specialised training and vocational institutions. every citizen in the country is registered in an online system and we can track all school-age children, including those coming from nomadic families. mongolian children sometimes work at home or during vacations but they attend school. European Times: What are your goals for Mongolia’s education system? Luvsannyam Gantumur: We are working hard to

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improve higher education in this country. We also want to stress practical experiences for our students to help them ﬁnd good jobs and to improve mongolia’s human resources. We are eager to partner with local and international companies concerning creating internships for our students to allow them to gain practical experience in different ﬁelds. We want to foster a new generation of mongolian youth who make the most of their individual talents and get involved in research, business and other activities which will support the country’s ongoing development. We believe that foreign companies in mongolia can play an important role in this effort. European Times: What is your personal message about education in Mongolia? Luvsannyam Gantumur: We are steadily improving our educational system, focussing on developing our children’s natural talents, and helping every child make the most of his or her abilities. We welcome international partnerships in the education sector.

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education

Leading university Welcomes international students Mongolian

State

University

benchmark

Mongoliaʼs

Education

serves

education sector. Founded in 1923 with only two teachers and

around

students,

the university was the ﬁrst higher-education in the country.

institution

today, mongolian state university of education has 13,000 students and 500 faculty members, and operates two branches in ulaanbaatar and one in the countryside. it is ranked one of the top universities in the country. in fact, more than 10% of mongolia’s higher-education students are enrolled in mongolian state university of education, and the university also has around 50 international students from all over the world enrolled in its programmes. mongolian state university of education offers undergraduate, graduate and postgraduate programmes as well as special certiﬁcate and associate programmes.

an international perspective mongolian state university of education is very active internationally. Badrakh Jambadaa, former president, explains that the university partners with 42 sister universities throughout the world and participates in interna-

Badrakh Jambadaa, former President

tional exchange programmes for both students and professors. he says, “We also publish joint research journals and implement projects together with our sister universities. mongolian state university of education has also implemented many projects with the eu.” the university regularly hosts international conferences and participates in professional meetings all over the globe. mongolian state university of education has developed programmes for both local and international students as well as a special programme in mongolian studies for international students. this programme includes classes in the mongolian language and in mongolian traditions and culture. to make its offerings even more accessible, the university has created a range of online learning programmes. to complete its offerings for students, the university gives classes in several sports as well as in chess,

and recently won top prizes at mongolia’s national sports Competition. mongolian state university of education not only aims to educate the next generation of mongolia’s educators and leaders but also to promote the country globally. to potential students all over the world, Badrakh Jadambaa explains, “mongolia is internationally known due to Genghis Khan and because we have a strong culture and traditions. the foundation of development is found in mongolia’s culture and traditional values. so, come to mongolia for an international experience and to study mongolian culture at mongolian state university of education.” Mongolian State University of Education Peace Avenue, Baga Toiruu 14 Ulaanbaatar 210648 Tel: +976 11 326010 www.msue.edu.mn

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monGoLia

improving the Quality of education

The government of Mongolia has recently

introduced a number of programmes to

improve the countryʼs education system. One challenge is to serve residents of rural areas, many of whom are nomadic. Most

nomadic families remain in the same area

during school months however, and the

Mongolian people are known for their strong commitment to educating their children,

one reason the country has skilled human

resources in spite of the many challenges for the education system.

the World Bank-supported rural education and Development (reaD) project (2006-2013) is designed to upgrade rural mongolia’s primary-education system. as the World Bank points out in its report on the programme, with the discovery of vast mineral resources, mongolia has experienced unprecedented growth, and rural education institutions must help children develop the reading skills they need to tackle new challenges.

innovative project for rural primary schools Before 2006, rural primary schools in mongolia had almost no books. through the reaD initiative, classroom libraries have been set up in all primary schools in rural mongolia. in the murun county primary school, n. enkhpurev, a teacher, comments, “students who never liked to read now sit in the library all day. they have now developed a habit of reading books!” These library books are intentionally ﬁlled with references to local culture, helping educate children about mongolia’s cultural heritage. to stimulate story-telling beyond the classroom, reaD also introduced “book bags”, a project which enables students to take books home and share stories with their families. after

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education sector

they ﬁnish reading one bag of books, they return it to school to exchange for another bag. “mongolia, which is almost half of the size of india, is the least densely populated country in the world, so the project helped build a voucher system to allow communities to buy additional books through mail,” says prateek tandon, who leads the World Bank’s support to the project. in addition to making books available, reaD provides training for teachers on how to use these books and integrate reading into the curriculum. “teachers report an increase in general aptitude. students are making less spelling mistakes. they show greater ease in self-expression,” says D. Khishigbuyan, coordinator for the reaD project in mongolia. the programme has been so successful that it is being extended to schools in urban areas. in another effort to improve education in mongolia, the government recently provided funding for the “new soum” development project in Zamyn-uud. the project will build new schools as well as kindergartens, hospitals, and sports, cultural and other facilities. mongolia’s prime minister n. altankhuyag recently visited the construction sites to inspect the progress of the project, which is being built by developer Front Gate and is now around 40% complete. During the soviet area, mongolia’s traditional Buddhist educational

system was transformed to the soviet model and included a transition from the traditional mongolian script to the Cyrillic alphabet. Literacy was greatly expanded through a free primaryschool system. the education sector has been transformed again with mongolia’s shift to a free-market system, which has included a proliferation in the number of private educational institutions. the country’s education sector is overseen by the ministry of education, Culture, and science.

Well-developed highereducation sector Concerning higher education, mongolia’s main university is the national university of mongolia in ulaanbaatar, which was founded in 1942. mongolia’s higher-education sector also includes the institute of medicine, the institute of agriculture, the institute of economics, the state pedagogical institute, the polytechnic institute, the institute of russian Language, and the institute of physical Culture. the mongolian national Council for education accreditation has been playing a key role in upgrading the quality of mongolia’s education system for the past decade. the organisation has now accredited 87 universities, institutions, colleges and technical vocational-

training centres in mongolia based on these institutions’ quality standards.

promoting independent scientific research mongolia has stepped up its efforts to promote independent education and research in the sciences. mongolia celebrated its scientists’ Day on november 27, 2013, and minister of education, Culture and science L. Gantumur commented that day, “a science sector that waits for funding from the state, and does nothing except actions that are guided by the state, is proven to be unproductive and disadvantageous. now it is time for scientists to manage their works independently. We will abolish the state’s interference in scientific organisations. This interference is preventing independent operation and creative development of businesses.” the minister reported that a national science database, www.science.gov. mn, dedicated to mongolian scientists, has been launched. he also called for international investors and partners in mongolia’s education and research institutions. he said, “to increase the productivity of our scientists, we must link them to international investors. Science will flourish and the skill and ability of mongolian scientists will improve only if the public can make use of their discoveries and studies.”

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monGoLia

• Tourism Visitor Numbers Continue to Rise

tourism

“Our goal is to make sure that Mongolia’s tourism sector brings beneﬁts for visitors and locals alike and that our tourism development goes hand-in-hand with protecting our natural and cultural heritage.” Tsedevdamba Oyungerel, Minister for Culture, Sport and Tourism

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master reGio tourism

the right Kind of tourism Growth ments and the environment, and it will give local councils the authority to plan local tourism developments. We are also working to make the mongolian people aware of the benefits of tourism. another of the ministry’s goals is to redefine the image of mongolia. people do not realise that ulaanbaatar is a modern city, for example. mongolia is rich in natural beauty, history and archaeology. We have thousands of historic sites as well as opportunities for hiking, horseback riding, ecotourism, religious tourism and more. European Times: What kinds of tourism investments are you looking for?

Tsedevdamba Mongoliaʼs

Oyungerel,

Minister

for

Culture, Sport and Tourism, discusses her ministryʼs goals for the tourism sector.

European Times: What are your ministry’s current priorities? Tsedevdamba Oyungerel: We are drafting a new tourism law to change the regulatory environment for the tourism sector. this will develop a clear strategy for tourism development as well as establish regulations which will protect invest-

Tsedevdamba Oyungerel: mongolia has great potential for winter tourism and we are looking for investors who can establish environmentally friendly winter-tourism facilities. We also need investment in improving tourism infrastructure, particularly concerning waste management. We need to improve our infrastructure before we can welcome huge numbers of tourism visitors, and the government of mongolia is ready to partner with investors who can help us reach these goals. European Times: What are the challenges facing the tourism sector? Tsedevdamba Oyungerel: a current challenge is the lack of a proper local planning for tourism development. We need zoning laws and rules. We do not want to destroy our tourism potential through uncontrolled construction and development.

unregulated investment is bad for tourism. European Times: What are some positive examples of recent developments in the tourism sector? Tsedevdamba Oyungerel: With the support of the netherlands, 11 mongolian tourism companies are promoting their services to the european market. one example is DmD, a mongolian ecotourism company, which lets visitors experience the nomadic lifestyle in a very environmentally friendly way. another project is a rural tourism facility fully staffed by locals; it is ideal for observing bird and animal life and it also benefits the local community. We want to showcase mongolia’s nomadic culture, which involves close ties to the natural world. our goal is to make sure that mongolia’s tourism sector brings benefits for visitors and locals alike and that our tourism development goes hand-in-hand with protecting our natural and cultural heritage.

ar_mongol_travel@magicnet.mn www.armongoltravel.com

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monGoLia

mongolian hotel Chain exceeds Guests’ expectations Corporate

Hotels,

one

Mongoliaʼs ﬁrst hotel groups,

is leading the way in bringing world-class hotel services to

the country. The group now includes three properties, each oﬀering

unique

attractions

for guests. Ms. Otgondulam

Sambuu, Executive Director of the Corporate Hotels Group, explains, “My vision as the CEO

of all three Corporate Hotels is for our group to become a world-standard

hotel

chain

by exceeding our customersʼ expectations. My aim is to take

this Mongolian hotel chain to the

same level as international hotel chains present in Ulaanbaatar.”

The ﬁrst Corporate Hotel, which opened in 2007, is strategically located in the centre of ulaanbaatar and has 55 guestrooms. the group’s second property, Corporate hotel and resort, is an upscale boutique hotel with only 24 guestrooms; it opened in 2010. the third, newest and largest member of the group, Corporate hotel and Convention Centre, opened in July 2013 and has 94 guestrooms and a variety of services geared to business as well as leisure travellers, including stateof-the-art meeting facilities.

World-class facilities for miCe tourism the Corporate hotel and Convention Centre offers guests a wide choice of rooms, from standard guestrooms to suites and three executive-deluxe rooms. the hotel also provides a range of amenities which include Chairman restaurant, with seating for 250 guests. the restaurant is known for its gourmet mongolian and international cuisine and

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is the ideal choice for banquets, business gatherings and other special events. another dining and events option within the hotel is View Lounge, located on the 16th ﬂoor with panoramic views of the city centre. View Lounge serves asian and Western cuisine and can seat 180 guests. in all its restaurants, the Corporate hotels group adheres to the highest standards of food safety and even produces much of the food it uses in its kitchens to guarantee high quality. other amenities at the Corporate hotel and Convention Centre include the health Club, which has dry and steam saunas, a gym open around the clock, and an indoor swimming pool. the hotel’s Chairman Vip Club, open only to members, gives free access to the health Club. For business travellers, the Corporate hotel and Convention Centre contains a fully equipped business centre and a large conference room with seating for 200 people. all meeting rooms in the hotel

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tourism

are equipped with the latest technologies, including Wi-Fi internet connections, projectors and screens, headphones, printers and translation equipment. adding to the hotel’s options for the meetings, incentives, Conferences and events (miCe) tourism market, the Corporate hotel and Convention Centre has a concert hall which is one of the biggest events spaces in the city, accommodating up to 1,200 guests. as an added convenience, the hotel offers a free shuttle service to the city centre and to the two other properties in the Corporate hotels group.

Focus on customer service otgondulam sambuu says that what sets the Corporate hotels group apart from

its competitors is a focus on customer service. she says, “i am proud of all our hotels, and we are always trying to improve them in order to satisfy our customers’ needs. our goal is to gain a well-established place in the ulaanbaatar hotel market. in order to do that, we need to rise up to international standards, and that is our mission.” she notes that the Corporate hotel and Convention Centre and the two other hotels in the group mainly serve executive travellers, especially in winter, but that she hopes that the hotels will soon be welcoming more leisure travellers as mongolia’s tourism industry develops. Corporate hotels is helping to upgrade human resources in mongolia’s hospitality sector. otgondulam sambuu explains, “Finding reliable human resources has always been a challenge in mongolia’s tourism sector. We train all our staff members to meet the highest international standards.”

Growing demand for meeting space in ulaanbaatar otgondulam sambuu expects to see even higher occupancy rates at all three Corporate hotels properties in the future. she says that during the winter season, the hotels will focus on hosting events in the restaurants and meeting facilities in all three hotels. she explains, “Demand

from the corporate sector for high-quality events and meeting space is growing fast, and we hope to organise even more events in our restaurants and in our new convention centre.” the Corporate hotels aims to strengthen its brand recognition in mongolia as well as expand internationally in the near future. in all its properties, Corporate hotels will continue to concentrate on pleasing guests and making them feel at home. inviting international business and leisure travellers to let Corporate hotels be their home away from home on their next trip to mongolia, otgondulam sambuu says, “We will continue to offer superior services and warm hospitality to our guests. Let us all work together to make mongolia better.” The Corporate Hotels Mahatma Gandhi 39 Khan-Uul district 15 Ulaanbaatar 17011 Tel: +976 70 002030 ext-1127 mail@corporatehotel.mn www.corporatehotel.mn

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master reGio monGoLia

tourism Visitor numbers Continue to rise and more trained hospitality-sector human resources. “investment is needed to create a productive tourism sector. instead of just talking, we must start taking action. the government must create a favourable environment for the private sector to operate,” says ts. orgodol, the head of tourism at the ministry of nature, environment and tourism. mongolia lacks adequate museums and research centres to help the country share its rich history with visitors, as well as translators, guides and administrators for tourism projects. the mining industry has been attracting the lion’s share of mongolia’s skilled workers, and tourism ofﬁcials would like to draw more of these human resources into tourism. Mongoliaʼs tourism sector continues to grow. Visitor numbers rose 11% between 2009 and 2012, with tourism revenues increasing

32.5% over the same period. Tourism accounted for 5.7% of Mongoliaʼs GDP in 2102, still low but higher than in 2011. Domestic tourism has also increased, particularly concerning business travel within the country by Mongolian entrepreneurs. The countryʼs

tourism authorities have set a target of one million tourism visitors for Mongolia in 2015.

tourism officials are calling on the mongolian government to channel investment into the country’s tourism industry and take specific steps to encourage greater private-sector participation. mongolia’s new investment law is expected to help achieve this goal.

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investment needed in many areas mongolia’s tourism sector needs investment in transport infrastructure, internet and other communications connections, high-quality hotel accommodations, more ﬂights, more and better tourism services,

indraa Bold, the director of the mongolian national tourism organisation, calls for mongolia’s government to protect the country’s natural and cultural heritage and to prevent industrial development – particularly in the mining sector – from threatening this heritage. “it is sad to see the landscape and culture in many areas of mongolia irreversibly changing because of mining,” she says. Other tourism ofﬁcials point to the fact that mining development can actually boost mongolia’s tourism sector through providing the investment needed to improve the country’s infrastructure. mongolia has already used mining revenues to partially ﬁnance building the new Khushigiin Khundii international airport, which is expected to be a key component in driving tourism growth. one recent investment in the tourism

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sector

implementation and Coordination at the ministry of sports, Culture and tourism. a few companies have been trying to extend the tourist season by collaborating with local communities to organise winter events. these have included the Golden eagle Festival in the western altai mountains, the Khovsgol ice Festival, the thousand Camels Festival in the southern Gobi Desert, and a camel-polo tournament near ulaanbaatar. infrastructure remains a stumbling block. “people come prepared to face the cold. But when you include bad roads and rough travel conditions, it becomes more difﬁcult,” says Enkhbaatar Batbayar, general manger of active adventures and tours, co-organisers of the Khovsgol ice Festival. sector is by hong Kong-based shangri-La Group, which, in partnership with mCs holdingmongolia, opened a 273-room hotel in ulaanbaatar. hyatt regency is building a 259-room facility in the city which is scheduled for completion in 2014. to encourage more tourism investment, the mongolian government has not only been changing legislation to promote a more favourable and transparent business environment. it has also supported initiatives to develop and market mongolia’s unique nomadic cultural heritage and tourist attractions.

niche tourism has potential One focus for tourism ofﬁcials is to develop tourism opportunities in the winter months. mongolia’s vast steppe and nomadic heritage attract thousands of tourists from around the world each summer, but winter visitors are mostly passengers on the trans-siberian railway on a three-day layover in ulaanbaatar – ranked the world’s coldest capital – between trains. “if we want to try sustainable tourism, we need to have income coming in during all four seasons,” says Khoshartsaga saraal, head of the Department of tourism policy

Joel rauzy, a French outdoor guide and musher, started offering dog sledding tours in 2003 through his company, Wind of Mongolia, and now the ﬁve-to-nine-day specialised trips are so popular that the company often has to turn away prospective clients. Joel rauzy notes that mongolia’s wintertime conditions are not as severe as people might think. he says, “it is almost always sunny here and it is a dry cold that is very easy to bear. You could organise cross-country skiing tours, pull-cart treks across ice, guided snow treks and more.” ecotourism and health-and-wellness tourism are other niche areas for growth in the tourism sector. Capitalising on mongolia’s numerous natural hot and cold springs, as well as its traditional nomadic culture and vast and pristine landscape; more and more tour operators are offering specialised ecotourism and health-tourism travel activities and tour packages. the web site www.mongoliatourism.org serves as a public portal on mongolian tourism for potential visitors and investors. the site is sponsored by the mongolian responsible tourism Development Fund. mongolia’s tourism industry deﬁnitely has growth potential.

Turkish Airlines (TK)`s Istanbul (IST)-Ulaanbaatar(ULN) v.v. ﬂights are already being operated as 3 ﬂights per week. TK Flights` schedule: Flight No tK342 tK343

Start 30mar2014 30mar2014

End 25oct2014 25oct2014

Days 1.3.5. 2.4.6.

Dep. ist uLn

Time 19:05 11:05

Arr. uLn ist

Time 10:05*1 17:20

tK342 26oct2014 tK343 26oct2014 *1 means; arrival is one day later. all times are in Local times.

28mar2015 28mar2015

1.3.5. 2.4.6.

ist uLn

18:10 11:40

uLn ist

10:25*1 17:00

the european times

monGoLia

Luxury and Comfort in authentic mongolian style The

preferred

royalty,

heads

government

lodging of

delegations

for

state,

and

leaders across the public and

private sectors, the Chinggis Khaan Hotel has become the ďŹ rst choice for international and local

businesspeople and tourists as well.

Located in the heart of ulaanbaatar, mongoliaâ&#x20AC;&#x2122;s capital city, the Chinggis Khaan hotel is a 30-minute ride from the international airport, 15 minutes from the central railway station, and just 10 minutes from the city centre, where the government building at sukhbaatar square, museums and temples are located.

providing all the comfort and modern conveniences world travellers have come to expect in premier hotels worldwide, along with an authentic taste and feel of mongoliaâ&#x20AC;&#x2122;s rich history and culture, the Chinggis Khaan hotel offers all its guest an extensive range of facilities and services. its 196 luxury rooms include 2 presidential suites and 32 semi-deluxe rooms, as well as standard singles and doubles. a conference hall, meeting rooms and Vip rooms, along with a business centre provide business travellers and other groups all the facilities and services they need. a DhL international post office is

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tourism

First choice for international and local business people and tourists located on-site, providing a convenient means of sending and receiving documents and packages around the world, while a Korean air ticketing office makes booking flights easy and convenient. the Chinggis Khaan hotel also strives to see to all its guests’ entertainment and recreational needs. Guests can exercise in the hotel’s fitness centre, swim in its pool, reinvigorate themselves in the hotel’s sauna and massage centre, or spruce up in the beauty salon. they can also entertain themselves at the hotel’s

bar and karaoke lounge, or do some shopping at the sky department store. When it comes to food, asian, european and north american food and dining options are on offer, as is a breakfast buffet and coffee shops. more and more travellers from the americas, as well as europe and the Asia-Paciﬁc, are coming to Mongolia. it’s a trend that the hotel manage-

ment would like to see continue, and they are doing their part to assure that guests are warmly received, cared for and offered every opportunity to experience a unique country and culture. Tokyo Street 10, Ulaanbaatar Tel: +976 70 000099 reservation@chinggis-hotel.com marketing@chinggis-hotel.com www.chinggis-hotel.com

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the european times

master monGoLia reGio

mongolia’s top sites for Visitors Mongolia is an ideal destination for travellers

seeking unique, oﬀ-the-beaten-track tourism attractions. As one of the worldʼs least-populated countries,

Mongolia

oﬀers

vast

expanses

of unspoiled steppe, mountains and desert

where nature-lovers can practice a variety of

sports, from hiking to animal-watching and

mountain-biking. Mongolia also has a rich cultural heritage based on a nomadic lifestyle

that has endured for centuries. The country

is well known for its picturesque landscapes

and herds of horses, but it is much more than this. Mongolia has a welcoming population, an

international airport, an increasingly multicultural capital city, Ulaanbaatar, and many things to see

and do. Visitors can choose spa holidays making use of the countryʼs many natural springs, go on

an ecotourism tour, or try mountain-climbing, among many other options.

altai tavan Bogd national park, Bayan-ulgii aimag (province) the altai mountain range stretches for 900 km across russia, mongolia and China. the highest peak in the range, Khuiten Uul at 4,374 m, is flanked by four other peaks and the group is commonly known as the tavan Bogd, or “Five saints”. all are along the potanin river, the source of a massive glacier. The Altai region is filled with significant archaeological sites dating back to the Paleolithic era, with some areas showing signs of human habitation as far back as 40,000 to 12,000 years ago. Bayan-ulgii aimag is also the home of mongolia’s second-largest ethnic group, the Kazakhs.

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Orkhon river near Kharkorin

ikh Bogd mountain, Bayankhongor aimag snow-capped, 3,900-m-tall ikh (“Great”) Bogd is the highest peak in the Govi-altai sub range. it has long been regarded as a sacred site. a salt-water lake, orog, is on the mountain’s slopes, as is a 100-km-long gorge formed by a 1957 earthquake. other notable attractions include Bichigt Khad, whose rock paintings date back to the Bronze age. tsagaan Agui (“White Cave”) in the area is believed to be the ﬁrst place in mongolia to be inhabited, with evidence of a human presence 700,000 years ago.

Bayan Zag, umnugovi aimag an ancient seabed, Bayan Zag, whose name means “Flaming Cliffs” because of the orange and red colours of its rock formations, is known for its exceptional fossils, including traces of dinosaurs. in 1921, american palaeontologist roy Chapman andrews found many dinosaur eggs and fossils in the area.

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tourism sector

We will provide you with a memorable stay, true hospitality and excellent services. Khorgo-terkh national park, arkhangai aimag one of mongolia’s national parks designed to preserve the country’s exceptional natural heritage, Khorgoterkh national park is the home of terkhiin tsagaan Lake, which covers 61 sq km and is surrounded by extinct volcanoes. it is set at an altitude of 2,060 m. in the middle of the lake is a volcanic island covered with bird nests made of the fragrant grass called “samkhan”. the park also contains the crater of Khorgo volcano, which has dozens of small caverns with stalactites hanging from ceilings and walls.

eighth Lake, uvurkhangai aimag naiman nuur, or “eighth Lake”, is located 70 km southwest of the orkhon waterfall. the lake and others in the group were created by volcanic eruptions and are a part of the 11,500-hectare Khuisiin naiman nuur natural reserve.

Khuvsgul Lake, Khuvsgul aimag Khuvsgul Lake, known as “the Blue pearl of mongolia”, is surrounded by lush green hills, high mountains and dense alpine forests of taiga. A total of 96 rivers and streams ﬂow into the clear lake, which was formed around three million years ago. Khuvsgul Lake contains 65% of all the fresh water found in mongolia and an impressive 1% of the world’s fresh-water supply. Khuvsgul is the home of the tsaatan reindeer herdsmen, a branch of the turkic-speaking tuvinian or Dukha ethnic group.

orkhon Valley, arkhangai, uvurkhangai aimags the orkhon Valley covers 1,220 sq km and is one of the most important regions in the world for its cultural heritage. the area is an ofﬁcial UNESCO World Heritage cultural landscape. It includes extensive pastures on both sides of the orkhon river and numerous archaeological sites dating back to the 6th century. top sites in the orkhon Valley include Kharkhorin, tuvkhun monastery and Khar Balgas, dating from the uyghur empire.

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monGoLia

Boutique hotel offers World-Class amenities special rooms and suites for executive travelers urgoo hotel offers a choice of guestrooms, from standard rooms (some with kitchenettes) to exceptionally comfortable and spacious business suites and deluxe rooms. all rooms and suites are equipped with the latest technologies, including hDtV, WiFi internet connections, minibars, tea- and coffee-making facilities, in-room safes and more. every business suite and deluxe room also has a spacious work desk, a glass rainfall shower and luxurious bath items. Buyannemekh Orgoi, CEO

Urgoo boutique Hotel in the heart of Ulaanbaatar, Mongoliaʼs

capitol, features elegant Italian decor and an ideal location just steps from the cityʼs top business, cultural and entertainment

venues. Guests can walk from the hotel to the Natural History Museum, the National Museum of Mongolia, Sukhbaatar Square,

Parliament House, the Central Cultural Palace and many more attractions. The hotel was fully renovated in 2010 to meet the

highest international standards, and with only 10 guestrooms and suites, Urgoo Hotel specialises in providing exceptional personal service for each of its guests.

General manager tserendoljin Yunden explains that the hotel’s amenities include renaissance restaurant, which was opened in 2010 and has already become the choice in Ulaanbaatar for ﬁne dining. She says, “We serve excellent european and mongolian specialities with exceptional wine choices in a com-

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fortable setting. our menu items are prepared by our master chef using the freshest and highest-quality ingredients available, including fresh ﬁsh from the purest lake in the world, Lake huvsgul. We also offer an extensive breakfast menu every day.” the restaurant can seat up to 75 people and has its own Vip rooms.

tserendoljin Yunden has assembled a team of dedicated professionals who put the emphasis on customer service and on making every guest feel at home. she says, “the biggest advantage of staying in a boutique hotel instead of an international hotel chain is that we can truly tailor services for each of our guests.” urgoo hotel mainly welcomes executive travellers, but expects to see more and more tourism visitors as mongolia’s tourism industry begins to develop. tserendoljin Yunden would like more travellers around the world to come to mongolia and see what the country has to offer. to future guests at urgoo hotel, she adds, “We will offer you a very high level of service and we will be sure to make you feel welcome.” Urgoo Boutique Hotel 1th Khoroo, M100 Building #6 Tourist Street, Chingeltei District Ulaanbaatar city Tel.: +976 70116044 info@urgoohotel.com www.urgoohotel.com

the european times

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