🗳️ DEMOCRACY IN MONGOLIA | TRQ | E-MONEY MARKET

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📌 DID YOU KNOW?

Red listed animals that live in Mongolia:

• Mongolia is the home of the last truly wild horse in the world known as Przewalski's Horse which has 66 chromosomes - 2 more than that of domestic horses.

• The argali, known as the mountain sheep, is a wild sheep that roams the highlands of the Altai Mountains. Adult argali eats as much as 16–19 kilos of food a day.

• Saiga is a critically endangered antelope that has a unique-looking nose that helps filter out dust and cools the animal's blood. There are about 5,000 Saigas in Mongolia.

• We have the second largest population of snow leopards. It is listed as vulnerable because the number of mature individuals is fewer than 10,000 and is expected to decline by about 10% by 2040.

🗳️ DEMOCRACY IN MONGOLIA

Mongolia’s democracy

Mongolia is considered the only country in Asia and outside of Eastern Europe to have successfully transitioned from communism to democracy. 2022 marks Mongolia’s 33 years of commitment to democratic values, such as freedom of speech, equality, and human rights.

Growing concerns

While the pandemic was a cause of many problems, it also effectively brought many issues to the surface. It unveiled the ineffective government decisions that were at times brutal, such as the 21 days of mandatory quarantine unheard of anywhere, and the transfer of newborn mother and baby with only a hospital gown in the middle of harsh winter to quarantine facilities that further escalated to the resignation of Prime Minister U.Khurelsukh, who is now the President of Mongolia, and his cabinet members. This resignation was met with mixed reactions from citizens, whereas some supported it, others believed it was the easy way out of responsibility.

Four Pillars of Democracy

Democracy rests on four pillars, the legislature, executive, judiciary, and the press. Today, there is continued civil unrest due to dissatisfaction with the government’s handling of COVID 19 and the soaring inflation. According to the National Statistics Office’s annual study on citizens' confidence in the democratic governance of Mongolia, the percentage of people who trust the president (29.3%) and the government (29.5%) decreased by 5.9% and 3.9% each, and distrust increased by 8.3% on average in 2021. On one hand, citizens expressed higher distrust in executive agents such as customs, tax, and social welfare organizations. On another hand, there was an 11-point jump in high court from 49 to 60, overall elevated confidence in judicial systems.

Freedom of speech

The fourth pillar of democracy, the press, is to be politically and financially independent to work effectively as a watchdog of society to keep the government more accountable. However, there were times the government shunned the civilians, forcefully shut down peaceful assemblies and protests, and justified their actions with pandemic restrictions. This only fanned the flames of anger and increased demands for press freedom and the right to assembly, since there were many election campaigns happening regardless. People expressed their waning confidence in the media's independence from politics, rating 23 out of 100, dropping 3 points from 2020.

📢 ​​MONGOLIA-JAPAN BUSINESS EXPO

The Japan-Mongolian Chamber of Commerce is organizing the “Golden Week” business expo, marking the 50th anniversary of diplomatic relations between Mongolia and Japan. The event will be dedicated to not only promoting business relations between the two countries but also presenting both large and small-scale Japanese projects operating in Mongolia. Information about travel, education, and work opportunities in Japan are also to be presented there.

Participants include:

• Companies with investments from Japan

• Entrepreneurs who lead businesses between Mongolia and Japan

• Organizations promoting the Japanese culture in the country

• Other institutions that work towards promoting cooperation between the two nations

Expo details:

• Location: Misheel Expo, Ulaanbaatar, Mongolia

• Duration: May 13-15, 2022

⛏️ LATEST UPDATES ON OYU

Two weeks ago, TRQ announced Q1 2022 production and provided an Oyu Tolgoi (OT) LLC mine and corporate update. Turquoise Hill Resources (TRQ) exhibited strong Q1 performance despite the reduction in copper and gold output. Let’s look at what has happened so far.

About TRQ: For those of you that don’t know, TRQ is an international mining company that owns 66% of the OT copper-gold mine in southern Mongolia. OT is one of the largest known copper and gold deposits in the world and is a significant contributor to the Mongolian economy.

TRQ’s strong Q1

TRQ’s copper and gold production from the OT mine during Q1 2022 was lower than both the first and last quarters of last year. This was a planned reduction due to lower throughput and a reduction in both copper and gold head grades. Copper concentrate production from the combined open pit and underground operation decreased by 33% from Q1 2021 and 22% from Q4 2021 to 30,300 tonnes. Gold in concentrate was down 60% and 25% from Q1 2021 and Q4 2021, respectively, at 59,000 oz.

TRQ’s copper production guidance for 2022 remains within the range of 110,000-150,000 tonnes. However, its gold production guidance was raised from a range of 115,000-165,000 oz. to 135,000-165,000 oz. and is trending toward the higher end of that range.

Continued Force Majeure

COVID-19 related Mongolia/Chinese border restrictions resulted in force majeure being declared in March last year. These restrictions continued in Q1 2022 despite the improvements experienced during the quarter. Going forward, the force majeure is expected to remain in place until concentrate shipments to customers and on-site concentrate inventory levels return to target levels.

Rio Tinto buy-out offer

Back in March, Rio Tinto (RIO), one of the top five metal and mining corporations in the world, offered to buy out its remaining 49% stake in TRQ for $2.7 Billion. This meant that RIO would become the majority shareholder in OT through TRQ’s 66% stake. The remaining 34% of OT is owned by the Government of Mongolia. So far, TRQ has formed a special committee to consider the offer but an agreement hasn’t been reached yet.

The Global Race for Copper

As governments all over the world are pushing for a greener future, with promises to drastically cut emissions, copper demand is outstripping supply. Over the next decade, we will need more copper for EVs and battery metal products. Hence, this creates an incredible opportunity for copper mining companies, like TRQ.

💸 DATA STORY

The “Law on National Payment System”, which set the legal environment for the e-money market, was approved in May 2017 and came into force in January 2018. Since then, 7 fintech companies, specializing in electronic payments and financial services, have been authorized to issue e-money. Today, $3.7 million of e-money circulated in Q4 2021 with 1.3 million registered users.

🚶‍♂️ WHEN COMMUTING BECOMES AN ISSUE

If your way to work, school, or any other daily destination doesn’t include a long, muddy, rugged path between fenced plots that aren’t built in a very structured manner, consider yourself lucky. That’s what many people who live in ger areas of Ulaanbaatar have to go through every day.

You might be thinking, “why not just hop on a bus?”, but it’s not that easy. The way to the bus stop itself is a craggy mazy challenge.

How about cars?

Indeed, according to the research survey of the Ulaanbaatar Accessibility Appraisal (UNAA) project aimed at understanding how ger area residents travel, 84% of respondents believe a private car would significantly improve their life by solving the commuting issue. However, this approach is flawed - more people owning private vehicles could exacerbate the already depressing traffic congestion.

Is there a way out?

Essentially, the fundamental issue we’re touching upon here is access, which we can tackle either by helping people get to their destinations trouble-free, or by decentralizing basic services and creating community space, which can contribute to job creations in ger areas. These are the exact solutions that the two initiatives highlighted by the UNAA project have come up with.

• A group of informal taxis has started offering services in some areas that lack access to public transportation. Thanks to their efforts residents can now opt out from walking long distances through the muddy terrains of ger areas.

• A park was built in the middle of another ger area in order to provide the community with healthy entertainment and education, for which people don’t have to travel to the center of the city. The park is a community space, which is almost non-existent in UB, that not only runs various educational programs, but also has a small pond which turns into an ice rink in winter.

If you’re interested in finding out more about the access and mobility issues in ger areas, read the preliminary findings of the UNAA project’s research mentioned above. The project is funded by a UCL-GCRF Small grant and brings together a diverse group of specialists from University College London, University of Melbourne, GerHub, and Public Lab Mongolia, so the research is definitely worth a read.

*This article was prepared in partnership with GerHub.

🏃 QUICK STORIES

📌 Mongolia signs its Country Program Framework (CPF) with IAEA. A CPF is the frame of reference for the planning of technical cooperation between a country and the International Atomic Energy Agency, which identifies priority areas of collaboration. The 2022–2027 CPF between Mongolia and the IAEA identifies 7 priority areas.

📌 Burgastai-Laoemyao border checkpoint reopened. The autoroad checkpoint resumed operations on April 28, 2022, after having been closed for more than a year. The decision was made during a telephone conversation between Minister of Foreign Affairs B.Battsetseg and her Chinese counterpart Wang Yi on April 7.

📌 Mongolia set to export cooking oil. The Mongolian factory named “Selenge” has recently signed an agreement with a South Korean company to export 800 tons of rapeseed oil. The factory, which has an annual capacity of producing at least 30,000 tons of rapeseed oil, will be the first Mongolian company to export the product.

📌 Turkish Cooperation and Coordination Agency (TIKA) visits Mongolia. The organization started operating in the country 30 years ago, and has since implemented around 770 development projects in various sectors, such as healthcare, education, industrial production, livestock and crop farming.

📷 A GLIMPSE OF MONGOLIA

About: Shagai is the Mongolian word for ankle bone, which refers to the astragalus of the ankle of a sheep or goat. Mongolians have been using shagai for a long time throughout history. Symbolically, shagai represents being inseparable, because it is connected to the two limbs.

Shagai games

Mongolians collect shagais and use them for over 120 kinds of traditional games. Depending on the game, the shagais may be tossed like dice, flicked like marbles, and shot at with arrows. Such games develop children’s various abilities such as counting, eyesight, muscle control, teamwork, and agility. There are even public tournaments held during the traditional Naadam festival.

Good to know: 

• When a shagai is rolled, it lands on one of four sides - horse, camel, sheep, or goat - as illustrated in the picture above.

• Shagai archery was inscribed on the list of UNESCO Intangible Cultural Heritage in 2014.

• On the eve of Lunar New Year, people play particular shagai games to see the good fortune of the coming year.

• Friends may exchange one shagai for another as a sign of their friendship.

ESSENTIAL LINKS

• Isaac Schwartz at Asian Investing Summit 2022 on Mongolia. (MOI Global)

• Curious about Mongolia's food and culture? Check this YouTube channel with 444K subscribers! (ARTGER)

• What Genghis Khan's Mongolian sounded like? (NativLang)

• Risks UK businesses may face in Mongolia. (GOV.UK)