COUNTRY PRESENTATION, MONGOLIASPEAKER: S.DEMBEREL, CHAIRMAN & CEO OF MNCCI

ASIA-PACIFIC TRADE FACILITATION FORUM

25-26 NOV, BANGKOK, THAILAND

According to the following:

It needs to be facilitate the foreign trade procedure in national and regional level and implement some activities….

2004 2005 2006 2007 2008% quantit

y% quantit

y% quantit

y% quantit

y% quantity

1. Expectation on consumer price increaseIncrease 66.3 504 81.7 512 89.6 690 70.0 560 71.6 1521No change 25.3 192 12.3 77 2.6 20 8 64 17.4 394Decrease 8.4 64 6.0 39 7.8 60 22 176 11.0 265Total 100.0 760 100.0 628 100.0 770 100.0 800 100.0 2180

2. Wage & salary and income increase expectationIncrease 53.2 404 53.1 334 63.6 490 61.6 488 62.0 1359No change 26.0 107 26.0 167 31.2 240 22.3 184 38.0 821Decrease 20.8 159 20.9 127 5.2 40 16.1 132 - -Total 100.0 760 100.0 628 100.0 770 100.0 800 100.0 2180

3. Foreign exchange expectationIncrease/depreciation 44.8 340 65.0 408 54.5 420 61.0 488 56.0 1221No change or stable 40.9 310 23.3 146 22.7 175 20.0 160 15.0 335Decrease/appreciation 19.7 110 11.7 74 22.7 175 19.0 152 29.0 624Total 100.0 760 100.0 628 100.0 770 100.0 800 100.0 2180

4. Inflation parameters - CPIInflation rate, /by end of period/ % 11.0 9.5 6.0 15.1 22.1Inflation rate / 2005-12=100 %/ 91.4 100.0 106.0 122.0 144.1Inflation rate, annual average, % 8.2 12.7 5.1 9.0 27.9Inflation target level - - 7.0 5.0 6.0Difference between targeted and actual inflation rate/levels

- - -1.0 +10.1 +16.1

5. Foreign exchange parameters ¥ : USD Nominal exchange rate 1209.0 1221.0 1165.0 1169.75 1267.5¥ : USD Annual average exchange rate

1185.9 1205.2 1179.5 1170.4 1169.2

¥ : USD NEER /2000=1097 Tugrug =100 % /

83.38 85.35 86.00 80.55 -

¥ : USD REER /2000=1097 Tugrug =100 % /

83.97 87.88 86.01 81.73 -

Dollarization 33.9 % 38.5 % 39.4 % 32.6 % 37.6 %Foreign net reserve /Mill USD/ 163.6 298.0 687.6 972.4 606.3Policy rate of Bank of Mongolia - - - 8.4 9.75Inflation and exchange rate growth ratio

11.0 : 3.5 9.5 : 0.9 6.0 : - 4.5 15.1 : 0.4 22.1 : 8.3

6. The main macro economic parametersGDP growth rate /nominal/ 10.6 % 7.3 % 8.4 % 9.9 % 8.9 %Ì2/GDP ratio 0.39 0.41 0.41 0.52 0.38Expenditure/GDP ratio 34.9 % 27.5 % 33.2 % 38.4 % 40.1 %GDP per capita 480 710 690 880 1290Loan outstanding /Billion tugrug/ and its increase

606.8100 %

859.8141.7 %

1223.3201.6 %

2056.1338.8 %

2635.6434.3 %

Poverty ratio 32.2 %Foreign trade balance, Million USD

- 151.4 - 119.4 57.2 - 220.9 - 1076.5

8. Consumer price movement Copper concentrate average price per ton /based on custom’s statistics/

505.37 555.28 1059.90 1335.21 1433.58

Copper concentrate price / estimated by

444.75 603.28 1196.67 1273.89 1242.30

Copper grade A /ton/ 2866.0 USD 3679.0 USD 6722.0 USD 7118.0 USD 6956.0 USDGrude oil /barrel/ 37.7 USD 53.39 USD 64.29 USD 71.12 USD 96.99 USDPetrol À92 / per liter, tugrug 577 751 870 952 990Diesel / per liter, tugrug - - 955 976 1210Food price increase 86.0 % 100.0 % 103.3 % 128.7 % 152.7 %Beef, kg, tugrugÌutton, kg, tugrugFlour, highest grade, kg, tugrugFlour, 1 grade, kg, tugrugRice, kg, tugrugSugar, kg, tugrugVegetable oil, litre, tugrug

172415964964555955781484

234821244914177076301600

250022734934056818971543

303527537166607398372456

3263299385876412089083060

9. The government servants’ salary increasePublic salary fund /Billion tugrug/ and its increase

128.8100.0 %

142.7110.8 %

196.6137.8 %

307.2156.2 %

559.8182.2 %

Salary fund/GDP ratio 3.4 7.5 6.4 5.9 5.4Salary increase / compared with last year/

25 % 17.5 % 30 % 50 % 20.0 %

Ease of... Doing Business 2008 rank

Doing Business 2009 rank /forecast/

Doing business

2010 rankDoing Business 55 58 60

Starting a Business 53 59

Dealing with Construction Permits 109 103

Employing Workers 70 71

Registering Property 17 20

Getting Credit 61 68

Protecting Investors 19 24

Paying Taxes 84 79

Trading Across Borders

149 156 155

Enforcing Contracts 36 38

Closing a Business 118 108

Mongolia 156China 44Russian Federation 162Singapore 1Korean Republic 8Taiwan, China 33Kazakhstan 182

Country LPI Customs

Infrastructure

International

shipments

Logistics competen

ce

Tracking & tracing

Domestic Logistics

costs

Timeliness

Mongolia 136 131 129 91 144 136 70 142Singapore 1 3 2 2 2 1 113 1Korean Republic

25 28 25 24 22 25 110 30

Japan 6 11 6 9 5 7 148 6Taiwan, China

21 25 21 17 23 24 42 14

China 30 35 30 28 27 31 72 36Russian Federation

99 136 93 94 83 119 131 87

Kazakhstan 133 139 138 129 126 117 96 120

Trade Facilitation Initiatives and projects in Mongolia

Transit transportation

Initiation and implementation of SEW and “Transit Mongolia” program

NATIONAL COMMITTEE FOR TRADE AND TRANSPORT FACILITATION (NCTTF)

Vision: To accelerate the coordination of activities determining the purpose and action areas to facilitate international trade and transit transport of Mongolia, and to make Mongolia a land-linking transit country by supporting trade, transport and logistics sector.

Recommendation by UNESCAP, NCTTF was established by the Government Resolution No. 245 of Oct 11, 2006

Working group /member/ of NCTTF was adopted by the Minister of Road, Transport and Tourism order No 10 of Jan 10, 2007.

WG of NCTTF was renewed by the Minister of Road, Transport, Construction and Urban Development, order no 63 of March 11, 2009

The website was created in 2007, however it still has only in Mongolian version.

Chairman: Minister of Road, Transport, Construction and Urban Development /MRTCUD/

Vice Chairman: - State Secretary of Minister of Foreign Affairs and Trade

- Chairman of MNCCISecretary: - Deputy director of Transport

Department of MRTCUD

+ 22 members (Ministries, Government Agencies and NGOs)

Adoption by Government Resolution No. 183, on May 14, 2008

The purpose: The primary purpose of the Program is to formulate the policy, strategy and action guidelines on the basis of demand–driven development of transit transport and logistics sector, and to identify the ways of implementation and financing. The implementation strategy will assure Mongolia to use its geopolitical advantages, and be led by an active participation of private sector and foreign investors

to improve a legal environment for foreign trade, international transportation and logistics service

to promote and develop trade, transport and logistics services, to support international transit transport

to extend national road and transport and connect to international transport system

to simplify the process of customs, border and professional inspection and control

To apply ICT for trade, transport and logistics service facilitation

to improve institutional and human resource capacities

MNCCI has been paid an attention to the followings:

To promote and support private sector involvement in the implementation of the national program

To conduct trainings and workshops for capacity building of private sector in the field of transport and logistics

To intend to implement pilot projects with international organizations

To build up close working relation between secretariat and MRTCUD

MNCCI position and recommendation for the mission:

Tamsagbulag

Altanbulag

Jargalant

ULAANBAATAR

Borshoo

DARKHAN

DALANZADGAD

Khanbogd

Tsogt Ovoo

Gashuun Suhait

DORNOGOVY

TUV

DUNDGOVY

MANDALGOVY

SUKHBAATAR

Matad

Bichigt

Havirga

DORNOD

Ereentsav

Yarantai

ULGIIUlgii

Uench

UMNUGOVY

ZAVKHAN

GOVY-ALTAI

Burgastai

ALTAI

Naranbulag

CHOIR

MURUN

Khatgal

BAYANHONGOR

UVURHANGAIBAYANHONGOR

Khankh

ERDENET

Tsahir Battsengel

TSETSERLEG

ARVAIHEER

ARHANGAI

HUVSGUL

Khar-Khorin

BAYAN-ULGII

ULAANGOM

ULIASTAIKHOVD

UVS

BULGAN

SAINSHAND

CHOIBALSAN

BARUUN- URT

UNDURKHAANZUUN MOD

KHENTII

SELENGE

BULGAN

Baga-Ilbenh

Oyutolgoi

Tavantolgoi

Tsagaan suvarga

Shivee hurenAsian highway corridors

AH-4AH-4

AH-4AH-4

AH-32AH-32

AH-32AH-32 AH-32AH-32

AH-3AH-3

AH-3AH-3

AH-3AH-3

AH-4AH-4

AH-32AH-32

1041.0 km

743.0 km

2325.1 km

Zamyn-Uud

In 2008, Organized National workshop on the “Use of the UNESCAP Time/Cost/Distance methodology” with ESCAP in Ulaanbaatar, Mongolia

In 2009, Implementing the project of “CAREC Transport and Trade Corridors performance measurement and Monitoring” with ADB.

To study and gather data to eliminate the border trade bottleneck and identify barriers to trade and transit impediment along the route.

Collecting the information by using the methodology of Time/cost/distance alone the corridor of CAREC 4b/Altanbulag-Darkhan-UB-Choir-Sainshand-Zamiin uud-Erlian-Tianjin

MONGOLIA

PEOPLE'S REPUBLIC OF CHINA

RUSSIAN FEDERATION

ULAANBAATAR

XINJIANG UYGUR AUTONOMOUS REGION

N

CAREC-4a

Tashenta

N

UlaanbaishintOlgiy

Hovd

YarantTakeshikenTianjin

CA

REC-4b

Zamyn-Uud

Sukhbaatar

Erenhot

Naushki

Urumqi

By using the TCD methodoly:

1. Did the study along the main destination from UB to permanent border points like Gashuun Suhait, Altanbulag, Shiveekhuren etc and published map of Mongolian transport and logistics.

2. Did the study at the terminal yards

The objectives are:◦ To determine and eliminate barriers during

the internal transportation

◦ To calculate the cost-time to do export, import and internal transport and also at the some agencies issuing the permission and license etc.

◦ To calculate the related costs etc…

Translation of UN/CEFACT recommendation No:33 submitted to the Government of Mongolia from the MNCCI, 2006

WG for SEW establishment by government resolution No:251, 18, Oct 2006

National Program on SEW approved by the Government resolution No:131, 2007

Since the establishment of WG already passed 2 years but there no activity has been done till today on the following reasons:

Committee secretary did not show the potential effort.Lack of coordination mechanism and relation among the interested parties.Communication link between administration, secretariat and WG members is not clear or not systematically stabled

Establishment of WG of MNCCI and MCGA to improve the activities and power the implementation program, March 2009.

Also through the Customs and Business Consolidating committee and MONPRO council at the Chamber of Commerce

They take a place once a quarter and discuss some problems regarding border trade barriers and difficulties etc…

Letter to the Prime Minister submitted by the MNCCI & MCGA to improve the participation of other governmental parties or public institutions and business entity etc.

To establish WG or committee under the direct control of Prime Minister on basis of PPP principle.

Objectives: ◦ Raising public awareness and legal framework

review◦ Improve IT infrastructure ◦ Technical and feasibility study of SEW

implementation◦Define organization structure of the PPP based

legal entity, investors, strategic partners◦Official launch of the PPP based company◦ To intend to implement pilot projects with

international organizations

The national workshop on Establishing “SEW” in Mongolia was jointly organized by the MNCCI in collaboration with UNESCAP and UNECE on 29, Sep 2009.

The objective of this workshop was to enhance institutional and human capacities of landlocked and transit developing country, to develop and implement SW facility for electronic trade data exchange.

At the end of this workshop, the experts approved recommendations including on SEW and sent to the Prime Minister and other related government agencies.

In Dec, MNCCI will organize training on development of SEW implementation master plan with the assistance of ESCAP

To take support the implementation of projects from the ADB, ESCAP and other international donor institutions on the following;

Implementation on SEWCooperation on renovation of equipmentRaising of public awarenessImprove the capacity of participating parties etc….

According to the request of MNCCI, 5-day training on Multimodal transport and logistics for trainers and enterprises in collaboration with the UNESCAP

Some trainers participated the regional Training of Trainers workshop on 16-19, Nov 2009.

Second round training will be in UB on 2-4 Dec 2009

The objectives of these workshops:

Strengthen the understanding of trainers on training fundamentals

Enhance the knowledge of trainers on the principles and practice of multimodal transport, logistics and supply chain management etc.