With membership now standing at 126 entities, some 35% more than the number last year, it was no surprise that attendance at the monthly meeting on February 22 was an almost record 90. After BCM Chairman Laurenz Melchers had welcomed them, Executive Director Jim Dwyer introduced the two newest members – B Television, and Master Properties. He also gave a brief report on the work of BCM’s 6 Working Groups which include approximately 70 individual volunteers. An Environmental Working Group has been formed comprising mining company environmental experts and environmental NGOs. Another on Entrepreneurship was being put in place.
An update on the work of BCM’s Legislative Working Group was provided by its Chairman, Mr. Bayar Budragchaa. The WG’s efforts led by B. Enkhbat of Eznis Airways presented recommendations for the Concession Law to the Parliamentary Working Group headed by Mr Ts. Munkh-Orgil. The Law was recently adopted by Parliament to take effect on March 1 and does reflect BCM’s comments and is mostly if not 100% reflective of best international practice.
The evening featured two presentations. In the first, Mr. Ya. Sodbaatar, Director of the State Specialized Inspection Agency (SSIA), detailed the reforms introduced and planned in the agency. The goal is to make its work business-friendly and not obstructive. Parliament will soon consider amendments to the law and regulations that govern the way the agency and its staff work. Reaching the targeted international standards will require “a total u-turn in the mindset of many who are stuck in the 1930s”, he said, adding that this is not going to be easy for the 3,000 workers at the agency, 1,700 of them employed as inspectors. However, he was confident that “positive and tangible results” will be achieved by the steps being taken. He called for cooperation from BCM members and urged them for suggestions based on their international expertise and Mongolian experience.
The proposed overhaul, with assistance from the UN and the World Bank, will streamline and expedite procedures. Revealing that the present system in Mongolia calls for inspections at more levels than in most other countries in Central Asia, Mr. Sodbaatar said, “Inspection without results is ridiculous.” Inspectors with the agency are often seen as flexing their muscles and throwing their weight around, “and they do at times abuse their rights and privileges, but they also have to follow a system which has 327 norms”. There will now be transparency, better accessibility, more decentralization, drastic cuts in the number of stages, rationalization and simplification of procedures, and, most important, there will be “human reform”.
The agency does not see its work as insisting on finding fault, and will focus on helping the business environment. “Clear boundaries will be established”, more and more work will be done online, one-stop windows will minimize delays, and there will be fast-track resolution of disputes. “These are coming late, but they are finally coming,” he said, and assured the audience that mistrust will be replaced by collaboration. The civil society will be given a role, and inspectors’ performance will be monitored and evaluated. From next year, the agency will pay for all samples collected for testing.
South Gobi sands Executive Director David Bartel gave an overview of the company, mining coal at Ovoot Tolgoi and other deposits. Asserting that they are a “good corporate citizen”, Mr. Bartel talked about the jobs the company has created and about the expected multiplier effects of its expansion plans. Expressing his appreciation of and admiration for the Mongolian work force, Mr. Bartel said their thirst for learning seems insatiable. |
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The first monthly meeting of the new year on January 25 was a full house with 82 in attendance. Membership is also flourishing, standing presently at 111, a 30% increase over last January, raising hopes it should reach the year’s target of 150 in the months ahead. As Executive Director Jim Dwyer pointed out, this indicated a faith not just in BCM and what it does, but also in Mongolia and what it is set to achieve.
The four new members since the last meeting are BD Sec, brokers and underwriters; Chandman Tal, which works in construction, drilling and exploration; Nomin Insurance; and SM Container Bag, manufacturers of industrial bags.
U.S. Ambassador Jonathan Addleton, who had served as the USAID Director here not so long ago –- “Great to be back,” he said -- noted that while “the challenges facing resource rich economies with relatively small populations are huge”, he found many “positive indications” in the business environment in Mongolia to be optimistic. U.S. development assistance has been increasing, with the 2009 amount being the largest in any single year so far, and the USD285 million from the MCC, to be spent over just five years, exceeding the approximately USD200 million in total USAID funds provided to Mongolia since 1991.
Noting that “decisions Mongolia makes now will shape the economic and political future of the country for years to come”, Mr. Addleton said BCM and its members can make “a useful contribution in the extent to which we highlight international experience and provide ‘lessons learned’ in other countries and contexts around the world”.
He stressed that “work at the development end becomes simply a foundation or platform for bringing about the kind of change that truly brings about lasting economic change – specifically, the promotion of entrepreneurship and the establishment of enterprises that are needed to generate employment, promote economic diversity and generate the revenues needed to advance Mongolia’s other objectives, including those related to health, education and cultural development”. He then detailed U.S. Embassy programs that “have an important development dimension with business implications”.
As American Ambassador, he wanted American firms to participate in all MCC programs in a big way but Mr. Addleton affirmed that “the intent of MCC is to procure the best possible contractors and technical advisors from around the world, wherever they may be found”. He urged the audience to consult the recent investment climate statement produced by the U.S. Embassy.
The next speaker was also one who has come back. Mr. B. Bold has returned home to take over as CEO of the Newcom Group after 13 years of working in senior positions in banks and financial institutions abroad. He outlined the ways in which Newcom planned to expand and diversify in the coming years. He noted they will be helped along by other professionally-qualified Mongolians coming back from foreign countries -- whom Mr. Bold has named “re-pats” -- a development BCM Chairman Laurenz Melchers found to be of significance, as indicating the changing perceptions of Mongolia’s economic future.
Mr. Mandar Jayawant, Chairman of BCM’s Capital Markets Working Group, gave an update of their work. This focused on three major areas. The first was to provide assistance to the Financial Regulatory Committee and the group was now clear about what the FRC would need to do improve its oversight of the Mongolian Stock Exchange (MSE) and non-banking financial institutions. The second was to help the MSE grow and the group was finalizing its draft recommendations. GTZ was expected to play an important role in funding international experts’ advisory input to enhance the management and technical capabilities of the MSE to enable it to be privatized. The third was to help the National Development and Innovation Committee (NDIC) in investment planning, especially in the present capital markets downturn.
Mr. Barry Evans, head of the BCM Food & Beverage Working Group, gave what he called his “monthly pitch”, and described a few blatant anomalies in the VAT regulations that make things difficult for businesses.
The NDIC reports directly to the Prime Minister and thus has the standing of a Ministry. Its Chairman, Dr. Ch. Khashchuluun, said its recommendations on a 5-year program for the national economy were almost ready to be submitted. These included reforms in the business environment to help achieve more competitiveness. Infrastructure development was hamstrung by the difficulties in raising the huge sums needed, and so was setting up heavy industry units, even though the availability of locally produced raw material was a help.
There still was no national consensus on finally setting up the Development Bank of Mongolia (DBM), but the NDIC has completed its assignment of preparing a blueprint for this institution, after detailed and extensive consultation with the Japanese international development agency, JICA. The Government was willing to be a minority shareholder to make the work of the DBM transparent and efficient. A lively question and answer session concluded this presentation and the business part of the meeting.
One question was about development of a legal system with unambiguous laws to protect investors against interpretations, and Mr. Khashchuluun said work on this was going on. He told another questioner that a very large share of FDI was already from China and so Mongolia is being “very careful” in taking a decision on how to use USD3 billion offered by China “for investment in any project”. The IT sector is being modernized, with a planned uplink with satellites. The Government was trying to help SMEs, and “doing something must not be seen as interfering”. He corrected the perception that the State employed too many people. Only 2,400 people worked directly for the Government and with serious efforts being made to improve human resources, including encouraging expatriate Mongolians to return home, skills will rise, he said. |
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Tuesday, 19 January 2010 11:37 |
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The Business Council of Mongolia’s monthly meeting on December 7 was attended by 65 members and began with BCM Chair Laurenz Melchers review of future Conferences planned with BCM sponsorship involvement – Asian Financial Forum on January 20-21 in Hong Kong, Euromoney Mongolia Investment Forum, late March, in Beijing, and U.S. Franchising, April, in Washington, DC. Laurenz updated as to the growth of the registrants on the Mining Supply Chain Database, now at 1,300 entities with improvements underway and exciting future expansion prospects.
Executive Director Jim Dwyer reported that membership has increased to 138 and introduced BCM’s three new members – Across Solutions Mongolia, Ilinx Express, and WebGuru. The 2010 Membership Drive is in full swing with 85 members renewed. All other 2009 members were urged to do so before the next monthly meeting on January 25, 2010 which will be for 2010 members only. Jim then reviewed the current efforts of BCM working groups. He highlighted the Tax Working Group’s efforts in connection with the recent Tax Workshop with PricewaterhouseCoopers attended by 105. Recommendations based on the issues presented will be sent by BCM to the Minister of Finance and the Tax Authority.
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Monday, 02 November 2009 11:41 |
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The BCM monthly meeting on October 26, with Mr. Laurenz Melchers in the chair and 61 members in attendance, featured two presentations: the first by Mr. Sergey Gromov on “Investment Opportunities with Chinggis Khaan Bank”, of which he is CEO, and the second by Mr. B.Batbayar, CEO, National Life, on “High-end Health Care Products and Services”.
Mr. Gromov said his bank was not a retail bank and did not accept deposits from customers. It was a direct investment bank, with its MNT60 billion in capital coming from abroad and total assets approximating MNT150 billion. It also arranges syndicated loans. He gave details of several Mongolia-based companies whose financial needs the bank had helped meet.
Mr. Batbayar said National Life’s insurance schemes were meant to provide services to Mongolians who spend a relatively enormous amount of money in seeking medical care abroad. The company has various options, some with an overall annual limit as high as USD1,000,000 and covering all countries of the world, and some others for Asia-only with a limit of USD300,000. Group plans offer better terms than individual policies and he hoped companies would be interested in them.
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The monthly meeting on September 28, attended by 80 members, began with BCM Chair Laurenz Melchers announcing the completion of the work on the first phase of the mining supply chain database project, which offers a comprehensive list of almost 1,200 local suppliers. Its formal launch will take place over a three week period immediately after the signing of the Oyu Tolgoi agreement. The AIESEC has asked companies in Mongolia to use its list of 4,000 internship candidates from several countries. Mr. Melchers also gave a summary of the mostly “encouraging” responses received so far from members to the recent BCM questionnaire. Initial responses indicate 100% satisfaction with BCM visibility through its actions, website and public participation and 96% plan to continue BCM membership. Some 23% of the members have said they have little idea of what the various BCM working groups are doing. Mr. Melchers said the groups comprised people who offered their services free. All of them had a regular job and so were sometimes pressed for time. They were not “exclusive clubs” and he asked more members to express interest in joining a group of their choice.
Executive Director Jim Dwyer reported membership now stood at 131, a healthy increase, especially as the past business year has been “a difficult one”. The three new members since the last meeting are New Juulchin Tours, Chinggis Khaan Bank and Geotrass. Mr. Dwyer then outlined plans for the 2010 BCM Membership Drive.
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Monthly Meeting Recap