USAID/Mongolia :: Updates

Enactment of corporate income, personal income, excise and value added tax legislation, prepared with technical inputs from the Economic Policy Reform & Competitiveness (EPRC) Project. These reforms helped to rationalize the tax structure, shifting the tax burden from production to consumption, and are encouraging private investment and economic growth.
Enactment of Mongolia’s 1st Anti-Corruption Law prepared with assistance of The Asia Foundation (TAF) under the Mongolian Anti-Corruption Support Project. TAF is now supporting GOM’s new Anti-Corruption Agency build its capacity to carry out its public communications mandate.
Adoption of four amendments to Parliamentary Procedures with support provided by the International Republican Institute (IRI). IRI was instrumental in establishing rules & procedures for three key Parliament committees, and is advocating that the remaining committees adopt the same. IRI also supported drafting of parliamentary ethics legislation which is under Parliamentary review.
The Ministry of Fuel & Energy to draft and advocate amendments to the existing energy law, and a new renewable energy law with assistance from the USAID-funded Economic Policy Reform and Competitiveness Project (EPRC). The latter is in the final stages of Parliamentary review; and the proposed amendments to the energy law to, among other things, expand the independence of the Energy Regulatory Agency are being hotly debated.
The banking system to establish the Mongolian Mortgage Corporation (MIK) with technical assistance provided by EPRC. The first swap (risk transfer) securitization transaction to increase public access to mortgage financing is scheduled for March 2007.
The GOM, as the 1st part of a two-phase process, to establish a Trade Analysis and Negotiations Unit with support provided by EPRC in partnership with two other donors (UNDP and GTZ).
The launching of a small & medium enterprise (SME) equity fund with targeted capitalization of $25M with expertise from EPRC. It is to be managed by a local bank with advisory services from an international SME fund manager.
Delivery of business development services to more than 6,200 micro-enterprises and $2.1M in bank loans accessed by over 1,500 enterprises. This was accomplished with technical assistance and training provided by USAID’s Gobi II Initiative and the Growing Entrepreneurs Rapidly Project.
Development of a vaccine for a strain of avian influenza (AI ) H5N1 by WHO based on samples from wild birds in Mongolia which were collected by the GOM and the Wildlife Conservation Society (WCS) under USAID’s Eastern Steppe Living Landscape Project and Global AI Network Surveillance. The WHO Director formally recognized the key role of WCS.

Political Update: The State Great Hural’s Fall session began on October 2nd. In September, the major political story was the conviction on corruption charges of former Customs head Kh. Baatar. On September 5, Baatar was convicted of bribery and abuse of authority, and was sentenced to eight years imprisonment. Nine other defendants also were convicted in the same trial and sentenced to lesser jail terms. Baatar was arrested on October 28, 2005. In statements at the trial, Baatar asserted that he had not taken any money for himself, and that the money had been used to make political donations to the MPRP. “It was my duty as a politician of MPRP,” Baatar told the court. Other defendants made similar statements. As part of his defense, Baatar presented a letter from MPRP Secretary Yo. Otgonbayar confirming that Baatar had made donations to the MPRP. Other senior MPRP officials, including Prime Minister Enkhbold, stated publicly that they were not aware Otgonbayar had written the letter.

Later in September, newspapers published what was purported to be a handwritten letter from Baatar to senior MPRP officials repeating that his actions had only been directed at helping the party, and requesting that they intervene to free him from prison.

During September, President Enkhbayar traveled to Havana for a Nonaligned Movement summit, and for a meeting of landlocked countries in the movement. Prime Minister Enkhbold traveled to the United States for the opening of the United Nations General Assembly, and participated in a meeting President Bush arranged in New York for democratic nations. Afterwards, the Prime Minister made a brief visit to Washington, DC, where he met with U.S. business and Congressional leaders.