NEWS HIGHLIGHTS:
Business: Trade and Development Bank puts off bond sale; India’s Jindal Steel buys Mongolian uranium sites; Tiger Beer roars on first anniversary; Petro Matad’s 2007 financial results; Workers protest and get bread price raised again
Economy: Fitch revises Khan Bank outlook; Seize every opportunity, exhorts Chinese leader; Forum to attract Chinese investment; Swiss firm to develop bank payment system in Mongolia
Politics: Leaders explain their stand on “wealth sharing”; 66 women among 401 final candidates; Canada to open embassy in Mongolia; Russian ambitions in Mongolia and possible U.S. antidotes; Mongolian judicial officials training in Texas

LEADERS EXPLAIN THEIR STAND ON “WEALTH SHARING”

Mongolia elects a new Parliament on June 29. Popular expectations are running high with both principal parties promising all Mongolians a share in the country’s natural resources. This might well be the deciding factor in the election and the chairmen of both parties spoke to media to explain why theirs is a viable plan, and just what it offered to the individual citizen. Excerpts follow from two interviews. First, Prime Minister S. Bayar, also head of the Mongolian People’s Revolutionary Party (MPRP), talks to TV5 channel, and then Ts. Elbegdorj, opposition leader and Chairman of the Democratic Party, tells the daily newspaper, Ardiin Erkh, what it is all about.

DP promises Tg one million as “Treasure share”, MPRP counters with Tg 1.5 million as “Wealth share” - people wonder if either party, when it forms the new Government, will really give them the share. How do you convince them? Did you actually think of “Wealth share” earlier? Is your figure a result of research and calculation?
Actually there is nothing sudden about the proposal. Both MPRP and DP have had such plans for long. In 1998 I traveled to Kuwait with President N. Bagabandi. That country has a Kuwait Foundation, run on lines similar to what we propose in “Wealth share”. The Government there distributes among the people the huge income the country makes from selling oil.

In the last 3-4 years we have realized how rich Mongolia is in its mining wealth. We started thinking big, exploring deposits in areas like Oyu Tolgoi and Tavan Tolgoi.

When I was appointed Prime Minister I settled on 5 absolute principles of State policy. One of them related to sharing the mining income. We could not pinpoint the exact figure that would be every Mongolian’s share. Estimates varied from Tg 500,000 to Tg 3 million.

Then last March Mr. Elbegdorj and I made a joint announcement that our parties would together approve a new law on mining that would see 51 percent Mongolian ownership of all natural resources, no matter who the partner was. We discussed the matter and agreed not to announce any specific figure to represent the possible share of every Mongolian citizen.

The DP platform surprised us by suddenly talking about Tg one million for every citizen. We did not think it was fair to make an arbitrary promise not supported by calculation. So we sat down with all the figures, and found that each Mongolian citizen would be entitled to Tg 1.5 million worth shares in the country’s mineral resources.

There is widespread suspicion that the promise and the counter-promise are nothing but election propaganda. As Prime Minister, do you think the next government will actually be able to give such shares?
Why not? But nothing will or can be done by issuing an order. First, we have to adopt the new law on mining. After that, on the basis of the provisions of the new law, we shall begin talks with foreign investors and these negotiations will decide the Mongolian share of the profits or income.

Say, for example, the law is adopted and a fresh agreement is signed on Oyu Tolgoi. Mongolia then could earn Tg 4 billion per day. This means Mongolia will have Tg 1.4 trillion for investment per year. Our present state budget is for Tg 2.4 trillion.

How do you evaluate the election campaign so far?
People from both the city and the countryside have watched with dismay how dirty the present campaign is turning out to be. They are concerned that money power will badly influence the poll results. The real danger however is in the source of the money that is being used. Are foreigners using money to help people of their choice get elected, so that they can then dictate policy making? This is a serious threat to our independence. We have to be careful. I really hope this is our last dirty election and things change next time

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TRADE AND DEVELOPMENT BANK PUTS OFF BOND SALE

"We were trying to price with expectations to do so at a certain level about the Treasury, but now that Treasuries have widened so much, we've decided to hold off. It's more of an unfortunate timing," said the source, who declined to be identified talking about the transaction.

TDBM, the only issuer from Mongolia to ever issue offshore debt, had met global bond investors in Asia and Europe, and last week had set guidance for its bond sale at a yield of 11.5-11.75 percent.

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