The majority of respondents in a survey carried out by Sant Maral Foundation in April said unemployment is the main problem in Mongolia today.

While 38.6 percent held this view, 21.1 percent said the standard of living is the main problem, while 8 percent believe inflation is the key issue. The representative sample of 1,200 respondents from Ulaanbaatar and from Dornogobi, Dundgobi, Zavkhan, Khentii and Arkhangai aimags was collected from April 16 to April 23. The survey is sponsored by the Konrad Adenauer Foundation of Germany.

Asked about the present economic situation in the country, 42.8 percent of the respondents said it was “bad”, 36.3 percent “not good, nor bad”, 3.8 percent answered “good” and 6 percent said “very good”. While 29.5 percent consider the economic situation to be “in decline”, 47.5 percent said it is “in stagnation”, while 14.3 percent said it is “improving”.  In five years, the economic situation will be “slightly better”, said 40.2 percent, “much better” according to 4.4 percent and 20.2 percent thought it will remain “the same”.

To the question “How satisfied are you with democracy and the present political system?”, 18.8 percent said they are “satisfied”, 39.4 percent “rather satisfied”, 22.2 percent “rather not satisfied” and 16.7 percent were “not satisfied”.
Replying to a question on which party they would you vote for if parliament elections were held tomorrow, 35.1 percent favored the MPRP, 39.5 percent the DP, 4.5 percent the Civil Will Party and 5 percent the New National Party.

Asked to choose a country as the best partner for Mongolia, 75.7 percent favored Russia, 18.8 percent China, 27.4 percent the USA, 10.6 percent the European Union, 15.8 percent Japan, and 11.4 percent South Korea.

Source: Montsame; highlighted in the BCM Newswire by Business Council of Mongolia (BCM). For the complete Sant Maral Foundation April 2010 survey, see Mongolia Reports within Resources section of the BCM website.

Mr. B. Enhhuyag, First Deputy Governor of Bank of Mongolia, “Views on Current Macro-Economics and Mongolia’s Banking Sector” “PART ONE of BCM Meeting Highlights”

On Monday, December 7, 2009, Business Council of Mongolia (BCM) held its last meeting of the year.  Guest speakers Mr. B. Enhhuyag, First Deputy Governor of Bank of Mongolia and Mr. Eric De SEZE, General Director & CEO of Areva Mongolia discussed “Views on Current Macro-Economics and Mongolia’s Banking Sector” and “Nuclear Energy and Uranium”, respectively.

Rather than spit out their presentations verbatim, I will highlight points that I found interesting.

Please note these highlights are written NOT written verbatim; they are written in my own words and, in some cases, there may be quite big errors.  Personally, I did not even anticipate that I might post some highlights online for view of the public at large.  Please bear with me.

Mr. B. Enhhuyag, First Deputy Governor of Bank of Mongolia, “Views on Current Macro-Economics and Mongolia’s Banking Sector”

• Inflation in 2008, 2009 YTD, 2009 Estim, and 2010 Estim are as follows: 34%, 2%, 3.5%, and 6%
• Looking into questionable Mongol Gazar loans by Banks
• Savings Bank and Post Bank merger evaluation pending (this was originally proposed as a three-way bank merger along with Zoos Bank)
• Economic crisis revealed deficiencies in banking: over lending, fraudulent activities, and obscure ownership
• Golomt Bank and Trade and Development Bank of Mongolia are in compliance with Central Bank regulations.   Khan Bank is currently under evaluation, but so far its portfolio is looking OK.
• These three large banks account for 70-75% of deposits and/or lending activities in Mongolia
• There are, in total, 16 banks in Mongolia.  This is far too many.  We need fewer but stronger banks.  As such, we hope this trend of consolidation in the banking industry will continue.
• 2010 budget spending as per Ministry of Finance is looking to remain high, especially in the first half of the year.  As such, Central Bank of Mongolia may need to tighten its monetary policy.
• When alluding to reasons for some of the banking/lending woes, Mr. Enhhuyag mentioned Goldman Sachs for its lending of 187 billion tugrugs (roughly 128 million USD) into the Mongolian economy/banking/mining (? Sorry, this was not quite real clear, but the focus was on the amount of money loaned by Goldman).
• When addressing questions for expected GDP for 2009, Mr. Enhhuyag mentioned that essentially Mongolian economy is a 6 billion tugrug (meant USD, I believe) economy.

Seabuckthorn prices have increased by 1500-2500 tugrugs per kilo in Mongoolia

Due to the outbreak of H1N1, there is increased demand for food products that enhance body’s immune system and help fight against the flu.  As a result, pricing for garlic, sea-buckthorn, “aarts”, and horse meat have seen inflationary pricing over the last few weeks.  News coverage has been high as locals have been quite upset and have demanded price controls.

Within one week, pricing of seabuckthorne had increased from 4500 tugrugs per kg to 6000-7000 tugrugs as of November 7th at a popular food market (Bumbugur).  Garlic pricing had increased the most; what cost about 150 tugrugs is now basically double at 250-300 tugrugs.  Price of “aarts”, a traditional Mongolian dairy product, has increased by 500-700 tugrugs to 1800-2000.  And, pricing of horse meat has increased by 300 tugrugs to 2500 tugrugs per kilo, when most other meats have been declining in pricing.

As a result, local Mongolians have been very unhappy for the increased prices and have requested price controls.  Locals believe that the monopolies are manipulating pricing of key food items in the current “swine flu” season.  Pregnant women and elderly are people who at most risk and some cannot afford the increased pricing.

Storeowners, on the other hand, note that these food items have literally been flying off the shelves.  Many stores, including the State Department and small neighborhood grocery stores, have all been out of garlic come evening quite frequently.

The capitalist in me thinks that the increased pricing is probably due to this sudden increase in demand with limited available supply.  However, in Mongolia and in developing countries in general, it is always possible to manipulate and act rather “cleverly” when the anti-competitive and consumer protection laws are not as well created and enforced.

Mongol Bank rate for tugrug as of November 12, 2009 is 1,425 tugrugs to the US Dollar.

Sources:

• news.gogo.mn http://news.gogo.mn/r/61909
• TV news