#1NATIONAL MONGOLIAN OF COMMERCE AND TRY CHAMBER OF C COUNTRY PRESENTATION, MONGOLIA SPEAKER: S.DEMBEREL, CHAIRMAN & CEO OF MNCCI ASIA-PACIFIC TRADE FACILITATION FORUM 25-26 NOV, BANGKOK, THAILAND#2The needs for trade facilitation in Mongolia ▸ According to the following: It needs to be facilitate the foreign trade procedure in national and regional level and implement some activities....#3Business confidence index and macro economic parameters 2004 2005 2006 2007 2008 % quantit % y quantit y % quantit % quantit % quantity y y 1. Expectation on consumer price increase Increase 66.3 504 81.7 512 89.6 690 70.0 560 71.6 1521 No change 25.3 192 12.3 77 2.6 20 8 64 17.4 394 Decrease 8.4 64 6.0 39 7.8 60 22 176 11.0 265 Total 100.0 760 100.0 628 100.0 770 100.0 800 100.0 2180 2. Wage & salary and income increase expectation Increase 53.2 404 53.1 334 63.6 490 61.6 488 62.0 1359 No change 26.0 107 26.0 167 31.2 240 22.3 184 38.0 821 Decrease 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 expectation Increase/depreciation 44.8 340 65.0 408 54.5 420 61.0 488 56.0 1221 No change or stable 40.9 310 23.3 146 22.7 175 20.0 160 15.0 335 Decrease/appreciation 19.7 110 11.7 74 22.7 175 19.0 152 29.0 624 Total 100.0 760 100.0 628 100.0 770 100.0 800 100.0 2180 4. Inflation parameters - CPI Inflation rate, /by end of period/ % 11.0 9.5 6.0 15.1 22.1 Inflation rate / 2005-12-100 %/ 91.4 100.0 106.0 122.0 144.1 Inflation rate, annual average, % 8.2 12.7 5.1 9.0 27.9 Inflation target level 7.0 5.0 6.0 Difference between targeted and actual inflation rate/levels -1.0 +10.1 +16.1#45. Foreign exchange parameters : ¥ USD Nominal exchange rate 1209.0 1221.0 1165.0 1169.75 1267.5 ¥ USD Annual average exchange 1185.9 1205.2 1179.5 1170.4 1169.2 rate ¥: USD NEER 83.38 85.35 86.00 80.55 /2000=1097 Tugrug =100 % / ¥ USD REER 83.97 87.88 86.01 81.73 /2000=1097 Tugrug =100 % / Dollarization 33.9 % 38.5 % 39.4 % 32.6 % 37.6% Foreign net reserve /Mill USD/ 163.6 298.0 687.6 972.4 606.3 Policy rate of Bank of Mongolia 8.4 9.75 Inflation 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 GDP growth rate /nominal/ Ì2/GDP ratio Expenditure/GDP ratio GDP per capita Loan outstanding /Billion tugrug/ and its increase Poverty ratio Foreign trade balance, Million USD 6. The main macro economic parameters 10.6 % 7.3 % 8.4 % 0.39 0.41 0.41 9.9 % 0.52 8.9 % 0.38 34.9 % 27.5 % 33.2 % 38.4 % 40.1 % 480 710 690 880 1290 606.8 859.8 1223.3 2056.1 2635.6 100 % 141.7 % 201.6 % 338.8 % 434.3 % 32.2 % - 151.4 - 119.4 57.2 - 220.9 - 1076.5#5Copper concentrate average price per ton/based on custom's statistics/ 505.37 Copper concentrate price 444.75 estimated by 8. Consumer price movement 555.28 603.28 1059.90 1335.21 1433.58 1196.67 1273.89 1242.30 Copper grade A /ton/ Grude oil/barrel/ Petrol À92/per liter, tugrug 2866.0 USD 3679.0 USD 6722.0 USD 7118.0 USD 6956.0 USD 37.7 USD 53.39 USD 64.29 USD 71.12 USD 96.99 USD 577 751 870 952 990 Diesel per liter, tugrug 955 976 1210 Food price increase 86.0 % 100.0 % 103.3 % 128.7 % 152.7 % Beef, kg, tugrug 1724 2348 2500 3035 3263 Ìutton, kg, tugrug 1596 2124 2273 2753 2993 Flour, highest grade, kg, tugrug 496 491 493 716 858 Flour, 1 grade, kg, tugrug 455 417 405 660 764 Rice, kg, tugrug 595 707 681 739 1208 Sugar, kg, tugrug 578 630 897 837 908 Vegetable oil, litre, tugrug 1484 1600 1543 2456 3060 9. The government servants' salary increase Public salary fund /Billion tugrug/ and its increase 128.8 142.7 196.6 307.2 559.8 100.0 % 110.8 % 137.8 % 156.2 % 182.2 % Salary fund/GDP ratio 3.4 7.5 6.4 5.9 5.4 Salary increase / compared with last year/ 25 % 17.5 % 30 % 50 % 20.0 %#6Doing business report 2009 by World Bank Ease of... Doing Business 2008 rank Doing Business 2009 rank /forecast/ Doing business 2010 rank Doing Business 55 58 60 Starting a Business 53 59 Dealing with 109 103 Construction Permits Employing Workers 70 71 Registering Property 17 Getting Credit 61 28 20 68 Protecting Investors 19 24 Paying Taxes 84 79 Trading Across 149 156 155 Borders Enforcing Contracts 36 38 Closing a Business 118 108#7Mongolian ranking comparing to the other countries-2009 ▸ Mongolia 156 ▸ China 44 ▸ Russian Federation 162 ▸ Singapore 1 ▸ Korean Republic 8 ▸ Taiwan, China 33 ▸ Kazakhstan 182#8Mongolia's ranking compared with other countries Country LPI Cus toms ructure Infrast Internatio Logistics Tracking Domestic Time nal competen & tracing Logistics liness shipments ce costs Mongolia 136 131 129 91 144 136 70 142 Singapore 1 3 2 2 2 1 113 1 Korean 25 28 25 24 22 25 110 30 Republic Japan 6 11 6 9 5 10 7 148 6 Taiwan, 21 25 21 17 23 24 42 14 China China 30 35 30 28 27 31 72 36 Russian 99 136 93 94 83 119 131 87 Federation Kazakhstan 133 139 138 129 126 117 96 96 120#9Trade Facilitation Initiatives and projects in Mongolia ▸ Transit transportation Initiation and implementation of SEW and "Transit Mongolia" program#10TRANSIT TRANSPORTATION ▸ 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.#11Legal acts ▸ 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.#12Members of NCTTF Chairman: Minister of Road, Transport, Construction and Urban Development /MRTCUD/ Vice Chairman: - State Secretary of Minister of Foreign Affairs and Trade - Chairman of MNCCI Secretary: - Deputy director of Transport Department of MRTCUD + 22 members (Ministries, Government Agencies and NGOs)#13"Transit Mongolia” National Program 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#14Objectives: ▸ 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#15MNCCI position and recommendation for the mission: 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#164000 3500 3000 2500 2000 1500 1000 500 RAILWAY TRANSPORT 0 Domestic Export Import Transit Total CARRIED FREIGHT/thous.ton/ 2007 1884 439.3 262 1074.1 3659.3 2008 2132.4 525.4 383.5 732.5 3773.7 2009 1.800.9 497.2 241.4 505.8 3145.3#17CARRIED FREIGHT /thous.ton/ 2009 2008 2007 AUTO ROAD 925.9 1202.2 1166.1 500 1000 1500#18ROAD NETWORK Asian Highway Routes in Mongolia Khankh Borshoo ULAANGOM UVS ⚫ Naranbulag AH-4 Ulgii BAYAN-ULGIL KHOVD AH-4 Khatgal HUYSGUL MURUN Baga-llbenh Altanbulag SELENGE DARKHAN AH-32 ATT ZAVKHAN BULGAN ERDENET AH-3 ARHANGAI BULGAN Jargalant ULIASTAI Tsahir Baltsengel AH-32 ALTAI Yarantai Uench GOVY-ALTAI Burgastai Asian highway corridors AH-3 1041.0 km AH-4 743.0 AH-32 2325.1 km Ereentsav Havirga ULAANBAATAR OIBALSAN KHENTII AH-32 DORNOD Matad ZUUN MOD TSETSERLEG TUV UNDURKHAAN Khar-Khorin BAYANHONGOR ARVAIHEER CHOIR MANDALCOVY UVURHANGAI BAYANHONGOR Shivee huren DALANZADGAD DUNDGOVY Tsogt Ovoo⚫ Tavantolgoi UMNUGOVY Oyutolgoi Khanbogd AH-3 SAINSHAND DORNOGOVY BARUUN-URT SUKHBAATAR OTsagaan suvarga Zamyn-Uud Gashuun Suhait Bichigt Tamsagbulag#19Actions to be taken from the MNCCI on TCD ▸ 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.#20Purpose of the project... ▸ 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#21CAREC TRANSPORT CORRIDOR (Mongolian railway line) RUSSIAN FEDERATION CAREC-4a Tashenta Ulaanbaishint Olgiy Hovd CAREC-4b Sukhbaatar Naushki Takeshiken Yarant ULAANBAATAR MONGOLIA Zamyn-Uud Erenhot Urumqi XINJIANG UYGUR AUTONOMOUS REGION PEOPLE'S REPUBLIC OF CHINA N Tianjin#22By using the TCD methodoly: Cont... 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#23Cont... 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...#24Initiation and implementation procedure of SEW in Mongolia ▸ 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#25Reason of the negative performance 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#26Cont... ▸ 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...#27Cont... ➤ Letter to the Prime Minister submitted by the & MCGA to improve the MNCCI 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.#28Objectives: о Action Plan of SEW 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#29Workshop on SEW 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.#30Cont... ➤ 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#31Future demand ▸ To take support the implementation of projects from the ADB, ESCAP and other international donor institutions on the following; . • Implementation on SEW • Cooperation on renovation of equipment • Raising of public awareness • Improve the capacity of participating parties etc....#32Training of trainers workshop ▸ 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#33Cont... ▸ 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.