Provincial Perspectives: Khentii and Dornod Aimags See

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000878

SIPDIS

SENSITIVE
SIPDIS

STATE PASS PEACE CORPS, OPIC, AND EXIMBANK
STATE FOR EAP/CM

E.O. 12958: N/A
TAGS: PREL EAID EMIN PGOV MG
SUBJECT: Provincial Perspectives: Khentii and Dornod Aimags See
Agribusiness and Mining in Their Futures

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION.


1. (SBU) SUMMARY: During a brief November 19-21 easterly swing
through Dornod and Khenti provinces, leaders there expressed concern
about growing unemployment pressures but were hopeful that
investments in mining, for the former, and agribusiness and tourism,
for the latter, would provide needed jobs and incomes. Both
solicited increased U.S. investment as well as more educational
opportunities for students from their regions. END SUMMARY.


2. (U) DCM, accompanied by FSN Commercial Specialist, paid brief
familiarization visits to the capitals of Khentii and Dornod Aimags
(provinces) capitals Undurkhaan and Choibalsan November 19-21.

KHENTII TO PURSUE AGRIBUSINESS, TOURISM OPPORTUNITIES
-------------- --------------


3. (SBU) Over dinner with Khentii Aimag Governor S.Jargal the
evening of November 19 as well as breakfast and an office call on
November 20, Governor Jargal repeatedly stressed his
administration's efforts to create jobs, encourage foreign
investment, especially in agribusiness and tourism, and reduce
corruption. Jargal noted that, as a Democratic Party Aimag
Governor, he was targeted for failure by the ruling Mongolian
Revolutionary People's Party (MPRP). He said he had succeeded in
attracting Japanese as well as Korean investors to consider
expansion of investments in both agribusiness as well as tourism,
adding that Khentii Aimag had some large Aimag-controlled land
holdings suitable for agribusiness investment to divvy up as well as
numerous historical points related Chinggis Khan (Genghis Khan) that
would be valuable from the tourist industry's perspective. He
solicited increased U.S. business interest as well as additional
educational opportunities for college students from his aimag.

4, (SBU) Among other plans, Jargal said he hopes to open a
"one-stop-shop" for all aimag services both to expedite and improve
services as well as to reduce the opportunities for corruption for
both the "giver" and "receiver" of bribes. He hopes to provide all
aimag residents early next year with waste disposal garbage cans to
encourage citizens to properly dispose of garbage and thereby
improve the cleanliness of the cities and towns as well as to
encourage secondary opportunities in recycling. (Note: Governor
Jargal had just spent the weekend out hunting wolves with the
British Ambassador. He emphasized the wolves routinely killed
numerous livestock and posed a serious threat to livelihoods as well
as residents.)

DORNOD LOOKS FORWARD TO
DEVELOPING MINING OPPORTUNITIES
--------------


5. (SBU) The Dornod Aimag Hural (parliament) Chairman Ts.Shinebayar
told the DCM November 20 that with some 40,000 residents of the
Aimag's 70,000 population, Choibalsan had become a magnet for
college students and unemployed workers in the vast eastern
province. This put considerable pressure on the aimag government to
produce jobs and provide services, and he hoped a number of
promising mining investments in uranium and other minerals as well
as oil would generate more jobs. He said two mining projects are
expected to commence operations in the near future and they would
reportedly create 1,000 and 400 jobs, respectively, but he admitted
this would only marginally reduce unemployment levels, which he put
at nearly 50%. (Note: Mr. Shinebayar owns the "Aduunchuluun" coal
mine in Dornod.) He claimed that local corruption was minimal, as
opportunities for big payoffs were largely to be found in
Ulaanbaatar, the nation's capital. He said the Hural numbers
heavily favored the MPRP and the DP had made few inroads over the
years.


5. (SBU) Shinebayar said the border with China was largely open, as
Mongolians and Chinese easily obtained visa-free access and
routinely traveled back and forth across the border for personal as
well as commercial purchases. He said the border with Russia was
much more problematic as both citizens and goods often experienced
unnecessary bureaucratic delays going and coming. (NOTE: The issue
of visa-free access was discussed during President Enkhbayar's
recent visits to Moscow (septel).) As a result, the number of

ULAANBAATA 00000878 002 OF 002


Russians to be found in the aimag stood at less than perhaps a few
hundred, while Chinese oil field and mining workers as well as
others amounted to a few thousand. He doubted these numbers would
drop off much as the Chinese were largely skilled workers for which
there were not Mongolian substitutes.

ARMY COMMANDER LAUDS U.S. MARINE EMBEDS AND SEEKS MORE
-------------- --------------


6. (SBU) In addition to calling on USAID-related project NGOs
representatives and meeting with Peace Corps Volunteers, the DCM
also called on COL. Nergui, the Commander of the 327th Mechanized
Regiment, and lunched with the Commander, his staff, and two U.S.
Marine training NCOs embedded with the unit. COL. Nergui lauded the
US Marines' work, training skills, work ethic, and high personal
standards, which served as examples for Mongolian NCOs. He sought
the USG's continuation of the embed program as well as additional
English language training to support the Regiment's modernization.

MINTON