The monthly meeting for August was the first since Alain V. Fontaine took over as Chairman of the BCM Board. It also saw the guest presence of a German delegation which, coupled with members, enabled turnout to set a new record of 87.

After events for September had been announced and after Jim had given the names of the two latest members to join the BCM flock, The Nature Conservancy and Eermel LLC, raising its total strength to 107, the Ambassador of Turkey to Mongolia, Mr. Asim Arar, spoke about the long relationship of “reciprocal support” between the two countries. Mongolia is part of the “currently most dynamic Asia-Pacific region” but the volume of trade between it and Turkey is “very insignificant”. He hoped for an upturn after the visit of the Turkish Prime Minister and a large business contingent of over 200 in October.

US Ambassador Mark C. Minton said the US Under-Secretary of Commerce would be addressing the NAMBC Investors Conference in Ulaanbaatar in September, thus lending an official glow to a meeting primarily of Canadian and US investors and Mongolian counterparts. He also introduced some recent top official appointees to the US Embassy here, and hoped business visas for Mongolians would now be easier and faster to obtain.

German Ambassador Pius Fischer introduced the 25-member delegation from his country, which included representatives of big companies as well as SMEs and NGOs, who had been visiting several mining areas in Mongolia on what was basically a fact-finding mission. Their leader, Mr. Schneider, head of the Energy and Mining Department, Ministry of Economy and Technology, Federal Republic of Germany, thanked BCM for inviting them to the meeting. He said foreign investors could seriously consider “an engagement with the Mongolian economy” only after the long-talked-about amendment to the mining law is passed here.

Laurenz Melchers, Director of Mongolian Star Melchers and a BCM Board member, greeted the German delegation as a fellow German businessman and encouraged them to interact with BCM on relevant direct investment questions and to consider joining BCM as well.

A World Bank presentation was the highlight of the afternoon. Arshad Sayed, its Country Representative in Mongolia, said the Bank rated Mongolia 52nd among the 174 countries it surveyed for business-friendliness. Its economy is in good health, with profits from the mining sector spilling over to other areas. However, sustaining this growth is imperative, and so is curbing inflation, difficult in a country hat imports a very large part of its food needs. He mentioned the several advantages investors find here, but there are areas where official obstacles and bureaucratic bottlenecks lead to delay. The Bank has been urging the authorities to change the procedures that govern essential steps such as enforcing a contract, building a warehouse, firing an employee, access to credit information, payment of taxes, shipping goods in an out of the country, but, as Arshad Sayed said later in answer to a question, the Bank does not formulate any country’s fiscal policy, and can only offer suggestions on better macro-economic management.

The second part of the presentation was by Graeme Hancock, World Bank's Senior Mining Specialist, and concentrated on the mining sector. It showed that, perhaps contrary to popular perception, the growth in Mongolian GDP was not solely, or even largely, dependent on mining. However, if mining revenue does not increase, and if the present trend of Government spending persists, the budget deficit is likely to create problems.

The resources and deposits are very much here but proper, both economic and ecologic, exploitation demands modern exploration techniques which are expensive. The windfall profits tax has stymied fresh investment in copper and gold, but there has been “a surge of interest in other minerals”. Here, too, a clearer indication of what the Government wants would help change the face of the national economy.

Artisanal and small-scale mining is illegal and so receives no support from the Government and no control also. But a fact of life cannot be wished away, and instead of letting poverty continue as a persistent enemy of conservation, it might be better to give such people some protection as they are made to work under certain regulations.

Discussions in answer to questions emphasized that while commodity prices indeed had been very high for very long, they cannot forever remain so.  Costs of production have gone up too, and high market prices do not necessarily translate into high profits. It is for the Mongolian Government to devise the means to ensure higher tax revenue for the longest possible period.