MONGOLIA

The use of Russian gift projects. The Mongolian and Russian nations have centuries-old links. Soviet financial aid and material assistance were prominent as a greater part of Mongolia's present-day economic potential was formed. Apart from government loans, the Soviet Union was granting disinterested help to Mongolia with political and humanitarian goals in view during the years of large-scale bilateral contacts. Certain debts to the USSR were written off. In November 1998, the Unen daily carried a detailed list of projects which Mongolia had received as gifts. This aid "was far more than a mere humanitarian action. Through it, the Russian nation was opening its generous heart to Mongolians," the daily wrote.

Each particular gift was formalised in pertinent intergovernmental agreement focused on housing, schools, hospitals, cultural and communication facilities and other social projects.

Between 1970 and 1990 alone, the Soviet Union allocate for gift project construction a rough total of 1.15 billion "transferable roubles"—approximately 10% of Mongolia's overall debt of 10.5 billion. Apart from basic expenditures, the cost of gift projects included design, material purchases in the local market, equipment, etc. The humanitarian purport of those gifts also found expression in personnel training and job creation, as well as in the fact that Soviet free aid reached the most remote Mongolian aimaks.

In conformity with intergovernmental agreements, the Soviet side built and fitted out many crucial projects, in particular, five hospital centres, 600 beds each, with affiliated outpatient clinics designed for a daily thousand patients; quality housing for over 30,000 in several towns with a total floor space of 168,600 sq m; ten school complexes for a total 10,700 students; 11,900 kilometres of radio relay lines for the radio and television to reach a major part of the country; museum premises in Altan Bulag and Khalkhin Gol; several monuments to Soviet soldiers; a Wedding Palace in Ulan Bator; housing construction integrated works in Ulan Bator and Darhan with a total annual output of 210,000 sq m; a Research, Technological and Cultural Centre in Ulan Bator; a dairy factory and several baby food factories; a trade union social centre and a driving school in Ulan Bator. As it offered soft construction credits, the Soviet government was assuming a major part of expenditures on Soviet expert work in Mongolia.

An overwhelming part of gift projects remain state property, and are used according to their initial functions and to full capacity. House building integrated works are the only exception, with housing construction drastically shrinking in Mongolia in recent years. Privatisation made them shift to private housing. Most schools, hospitals and other projects need thorough repairs, and Mongolia is requesting Russian monetary and other material aid to update them.

Gift schools are actively working, and teachers and students remain grateful to the builders and donors. Nevertheless, English is ousting Russian apace from their language curricula thanks to US Peace Corps teachers. The Ministry of Education is enthusiastic about Western and international agencies' donation projects to upgrade classrooms and introduce American, British, French and other Western tuition patterns, so the school complexes are evolving from the material expression of Russian-Mongolian friendship into Mongolian-based American colleges, complete with educational standards, customs, emblems and all.

It would be advisable for Russia to rely more on the experience of Japan, which insists on all projects built in Mongolia with its economic aid and technological assistance not to change function or be denationalised without Japanese consent.

High school cooperation. Regulating these contacts are an intergovernmental agreement of April 5, 1995, on cultural and research cooperation; a cooperation agreement of the same date between Russia's State Committee for Higher Education and Mongolia's Ministry of Science and Education; an agreement between Russia's State Committee of Higher Education and Mongolia's Ministry of Science and Education, October 23, 1995, on Mongolian postgraduate personnel training in Russia with outlays completely covered, and an agreement between the same ministries on educational cooperation, October 31, 1995.

The Mongolian Ministry of Secondary Education maintains close contacts with central educational departments of many parts of Russia, in particular, the Altai Territory and the respective ministries of the Buryat and Tuva republics. Links between higher educational establishments are among the basic forms of bilateral contacts in that field. A number of major universities, e.g., Mongolian State University, Technical, Agricultural, Medical, Teacher Training, Ulan Bator, and Culture and Art universities are cooperating with many Russian institutions, for instance, of Irkutsk (State University, Agricultural, Teacher Training and Medical universities) and Buryatia (State University, Teacher Training University and Agricultural Academy). Timed to Irkutsk Days in Ulan Bator in October 1998 was a visit by a representative delegation of Irkutsk university and college heads, led by S.B. Leonov, their Council president. Many of the 4,000 Mongolian graduates of Irkutsk higher educational establishments took part in a get-together. Understanding was reached to set up their association. Eight Ulan Bator-based universities and institutes made or updated cooperation agreements with Irkutsk colleagues.

Close contacts are maintained with Moscow (State University, Agricultural Academy, 1st and 2nd Medical academies, State Teacher Training University, and the Pushkin Russian Language Institute), St. Petersburg (University and Mining Academy), Tomsk (State University), Chita (State Technical University), Novosibirsk and other cities.

Prominent in bilateral contacts are student exchanges, postgraduate training, advance teacher training. Though Russian education has lately become more popular, the number of Mongolian government-financed and paying students has fell several-fold since the 1970s and 80s, point out experts of Mongolia's Ministry of Education. A mere 300 are presently studying in Russia under an intergovernmental arrangement, while statistics on persons studying at corporate and their own expense are not available, some 900 students receive training in Moscow and Irkutsk alone. The trend works reciprocal, too: there are slightly over 120 Russians studying in Mongolian institutions on government arrangements, and 30 on a commercial basis.

Fifteen to twenty Mongolians go to Russia for postgraduate studies every year. Three defended doctoral theses and 16 candidate's in 1998. Russian scholars defended in Mongolia three doctoral theses on traditional Oriental medicine, and three candidate's. The Ulan Bator and Buryat teacher training universities have a joint academic council for doctoral theses.

Closer attention than before is paid to joint commercial project in the field of higher learning. A Russian-Mongolian Institute, affiliated to the Ulan Bator University, was established over two years ago. The Moscow State Teacher Training University is its founder on the Russian side. Russian professors teach at its two departments to account for its prestige. Other Russian educational establishments are intending similar partnership, in particular, the Plekhanov Economic Academy. Its Ulan Bator branch is to open in 1999. The Moscow-based Youth Institute is also planning to start a branch in Mongolia. Talks are underway with top functionaries of the Ikh Zasag private institute of law.

Representatives of Russian colleges and universities are advertising them in Mongolia and recruiting applicants, these are the Irkutsk Polytechnical and State universities, the Buryat Agricultural University, and the Russian Friendship University.

Interregional links. Two Mongolian delegations visited Yekaterinburg and Barnaul in mid-December 1998, to extend interregional contacts with Ural and Siberian administrations and business circles.

The Yekaterinburg meeting was held as a follow-up on the agreement on bilateral contacts, signed during the region's governor Eduard Rossel's visit to Mongolia in 1996. Prominent in the Mongolian delegation were the Ambassador, the Counsellor for Commerce and Economic Affairs, other officers of the Mongolian Embassy in Russia, and representatives of industrial companies globally known and oriented to exports, in particular, to the Urals and Siberia, such as Erdenet Co., leather and cashmere garment factories Gobi, Buyan and Mongol Savkhi, and the Makhimpex export-oriented meatpackers.

Imports of Mongolian meat, to be bartered for Ural-made consumer goods, metals, chemicals and other commodities, aroused the greatest interest of the Russian side.

The association Siberian Accord convened an extraordinary session of its coordination council for external contacts in Barnaul to discuss Siberia's trade and other economic links with Mongolia. Attending it were vice-governors, international relations managers and business people from the Altai, Buryat and Tuva republics, the Altai Territory, and Irkutsk, Omsk, Tomsk and Tyumen regions; experts of the Russian Ministry of Trade and the Roszarubezhtsentr, a Foreign Ministry officer in charge of the Altai Territory; and regional customs, veterinary and sanitary experts. Representing Mongolia were the governor of the Bayan-olgiy aimak, bordering on Russia, and the Counsellor for Trade and Economic Affairs of the Mongolian Embassy in Russia.

As was to be expected, the most heated debates rose round Siberia's limited imports of Mongolian meat. Local leaders saw the main obstacle to their extension in a ban of the federal veterinary service on fresh and deep-frozen Mongolian meat. Imports were authorised only for thorough reprocession. Before 1990, Mongolia was exporting to Russia an annual average exceeding 40,000 tons of meat (dressed weight) and several tens of thousand heads of live cattle for slaughter and procession by nearby meat-packing companies in Barnaul, Biisk, Irkutsk, Ulan-Udeh and elsewhere. Russia resumed Mongolian meat imports in 1994, and they now amount to an annual average 5,000 tons.

Russia could not afford sanitary limitations with dire meat shortages in its market, which created price rises and so aroused social tensions, pointed out regional spokesmen. Counsellor Enhbayar of the Mongolian Embassy, in his turn, described the above ban as encroachment on Mongolia's interest on the Russian market. Several Russian conferees assumed a financial background to the stance of the federal veterinary service as it was lobbying companies oriented on Western meat exporters. In fact, Mongolia was charging US,300 for a ton, no more than Western companies, and even less than some of them.

The conference discussed prospects to upgrade frontier checkpoints, in particular, the Tashanta, oriented on West Siberia; to establish a Siberian trade company in Mongolia, and start a network of Savings Bank and other Russian banks' branches.

A municipal delegation of Krasnoyarsk, led by vice-mayor V.A. Rychkov, in charge of food resources, trade and consumer services, visited Mongolia in March 1998. Formerly a "closed" city, Krasnoyarsk was stranded in trade and cultural contacts. Now that this status is gone, the major Siberian centre has the chance of direct links with other countries. Mongolia, with its ample raw material resources, developed animal husbandry, and opportunities for contacts with other Asian countries, is the city's closest neighbour.

The Krasnoyarsk delegation had talks at the top of the ministries of Foreign Affairs, Agriculture and Industry, and Infrastructural Development. Siberian industrial companies' specific initiatives were passed to the president of Mongolia's Chamber of Industry and Commerce. Cooperation prospects were discussed at Ulan Bator's mayoral office.

Aman Tuleyev, governor of the Kemerovo Region, was in Ulan Bator on an official visit, March 11-12, 1999, on a governmental invitation. The visit was closely following a conference of the Siberian Accord Association in Kemerovo, January 1999. Barnaul hosted a session of the association coordination council for external relations, in December 1998, which analysed the present state, problems and prospects of trade and other economic contacts of Siberia and Mongolia.

Receiving governor Tuleyev were President Bagabandi and Prime Minister Narantsatsralt. He also met with Bathu, Minister for Infrastructural Development, and Byamba, Secretary of State for the Ministry of Agriculture. The negotiators highlighted priorities for joint ventures—meat-packing, hide tanning, wool procession, and garment and footwear industries. Of great importance is cooperated exploration and development of coalfields and deposits of gold, silver, tungsten and other ores. Some projects imply road building to connect Siberia with Mongolia's western aimaks. The negotiators agreed to establish a network of trading companies and retail outlets in those aimaks to encourage frontier trade. There are also prospects for contacts in tourism, sport and culture.

The parties deemed it necessary to extend contacts on a subcommission for regional and frontier cooperation under the Russo-Mongolian intergovernmental commission; thoroughly encourage the signing of an intergovernmental framework agreement on the cooperation of frontier Russian regions and Mongolian aimaks; and speed up the coordination and signing of an intergovernmental agreement for economic and frontier contacts between Mongolia and the Kemerovo Region.

The region's businessmen who were accompanying the governor met their Mongolian counterparts. The host country's Chamber of Industry and Commerce arranged a business round table. Contracts were signed under an earlier cooperation agreement between the Bayan-olgiy aimak and the Kemerovo Region.

An initiative found approval for the establishment in Ulan Bator of a Kemerovo regional representation, to be headed by a person of vice-governor competences, who will be active in the launching and maintenance of partnership relations between the Kuznetsk coal basin and Mongolia. A similar Buryat republican representation is active.

V.A. Semyonov, Minister of Agriculture and Food Industry, and co-chairman for Russia of the bilateral intergovernmental commission for trade and economic, research and technological cooperation, paid a business visit to Mongolia, on March 3-7, 1999, on the Mongolian government's invitation.

He was received by President Bagabandi and Prime Minister Narantsatsralt; had negotiations with G. Bathu, Minister of Infrastructural Development, co-chairman of the intergovernmental commission on the Mongolian side; and met N. Tyaa, Minister of Foreign Affairs, and C. Sodnomtseren, Minister of Agriculture and Industry. They discussed a wide range of issues, in particular, the implementation of resolutions and compliance with recommendations made by the commission at its 6th session. They made preliminary analyses of a draft intergovernmental protocol on trade and economic contacts in 1999, and agreed to sign it at the next, 7th commission session in Moscow on March 29-31, 1999.

The parties agreed for an early meeting, under the aegis of the two Finance ministries, of a bilateral commission on Mongolia's debt of 10.5 billion transferable roubles under earlier Soviet loans.

The Russian minister visited Russian-Mongolian joint ventures, the Mongolrostsvetmet and the Ulan Bator Rail. A summing-up protocol and a protocol on extended veterinary service partnership were signed, with emphasis on stepped-up Mongolian meat exports to Russia. As the Mongolian top see it, the barriers need to be removed by both sides in order to eventually form uniform veterinary rules, organisational and financial support for cooperation in this field.

The Russian side came out with several specific projects for a joint-venture network of Mongolian-based slaughter-houses and meat-packing factories, and offered to invest in the deliveries of latest Russian-manufactured equipment and supply effective veterinary medicines to animal farms to be bartered for Mongolian meat. Thus, the Forera trade and industrial corporation, Biisk meatpackers' stockholder, intends to establish joint ventures in Mongolia's five western aimaks with 100% Russian capital of five million US dollars.

The non-ferrous metal combine Erdenet, a major joint venture, is in dire straits through no fault of its own, after world copper prices plummeted to ,690 per ton within ten months in 1998. November ushered in another crush to ,450 by the year's end. February 1999 dropped them to ,360, at which the prices were holding for several months. So Erdenet has been working at a loss for over a year, total losses for 1998 amounting to 22.5 billion tughriks. Sale proceeds do not cover production costs.

US dollar portions of the Russian and other CIS personnel's wages have been frozen, and total arrears by March 20, 1999, amounted to million, or eight months' remuneration. Production is going despite all, and 1998 mining and ore-dressing targets were exceeded with a surplus of 3,002 tons of copper and 145 tons of molybdenum in respective concentrates.

An eventual production stoppage due to the crisis will play into many hands while Russia stands to lose huge investments made in the joint venture, including its Mongolian share, which have not been recovered to this day. Ural-based copper-smelters will be robbed of a vast amount of ore concentrate in favour of prosperous Chinese competitors and such formidable rivals as the Samsung, Mark Ritch and Capital Resource. Many Russians will stay out of job, and Russo-Mongolian contacts will lose an essential part. Last but not least, Russia will be robbed of the most important reason for its presence in Mongolia and the surrounding region.

The role and prospects for bilateral trade and other economic links are gradually revised. Partnership with Mongolian dealers steeled in transnational business reveals their mounting interest in stable contacts with Russia. This is natural as Russia is a more likely purchaser of established Mongolian exports than developed countries, which is specially true of animal farm produce. There are good chances to set up new joint ventures in that latter field.

It is expedient to pace up the construction of an international automobile frontier checkpoint in Kyakhta-Altan Bulag. The Selenge aimak governor intends to apply to the Mongolian government for amending the Russo-Mongolian agreement on frontier checkpoints to encourage frontier interregional economic contacts in a changing situation.