Ambassador, Mongolian FM Discuss Bilateral Issues.

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000022 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/CM USDA N. SAKHLEH E.O. 12958: N/A TAGS: PREL PGOVEAID ECON MG SUBJECT: Ambassador, Mongolian FM Discuss Bilateral Issues. SENSITIVIE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. ¶1. (SBU) SUMMARY: The Ambassador and Foreign Minister Enkhbold exchanged views on a wide range of bilateral and regional issues over lunch on January 4. Topics included the North Korean refugee situation in Mongolia, U.S efforts to help Mongolia develop its military peace-keeping capacity, the prospects for Mongolia's next rotation of troops to Iraq, Mongolia's relations with China and Russia, and recent hiccups with USDA wheat sales which fund development assistance programs. The Ambassador also previewed some of post's plans for celebrating the 20th anniversary of U.S. Mongolian diplomatic relations this year. END SUMMARY ¶2. (U) The Ambassador hosted lunch January 4 for Mongolian Foreign Minister N. Enkhbold, MFA State Secretary Kh. Bekhbat, Ts. Jambaldorj, and R. Mounkhou, Director and Deputy Director, respectively, of MFA's Americas, Africa, and Middle East Department. DCM, USAID Mission Director, and Econ/Coml Chief (Notetaker) also attended the cordial, 90-minute luncheon. ¶3. (SBU) The Ambassador thanked the FM for the Government of Mongolia's (GOM) assistance with North Korean refugees in Mongolia. He noted the U.S. is prepared to receive DPRK refugees wishing to resettle in the U.S. The FM reiterated he had told EAP A/S Hill that Mongolia would be supportive. He assured the Ambassador the GOM would continue to supply the embassy with all relevant information on future cases. ¶4. (SBU) When asked about the prospects for Mongolia's eighth rotation of troops to Iraq later this year, FM Enkhbold said the GOM had only recently conveyed its current position in a diplomatic note reflecting the decision taken by the Cabinet last July to shrink its military presence in the next rotation from the current 100 soldier level down to just a handful of advisors. The Ambassador praised the contribution of Mongolia's forces in Iraq and hoped that Poland's recent decision to extend its deployment there for several more months might lead the GOM to consider maintaining current troops levels. (Note: the Mongolian contingent in Iraq primarily guards Camp Echo, base of operations for Polish forces) (Comment: While the FM stuck to the current policy line, his body language and separate comments by others suggest the GOM may be open to 
reconsidering the issue.) ¶5. (SBU) The Ambassador noted that Thailand was scheduled to host this year's major regional peace-keeping training exercise but that was being reconsidered in the wake of the military coup, which replaced the elected government there. As a result, and following Mongolia's successful hosting of last year's exercise, KhanQuest06, consideration was being given to holding this year's exercise in Mongolia. The Ambassador stressed that Washington continues to support Mongolia's efforts to build its peace-keeping capacity. The Ambassasdor, in separate discussions with his Russian and Chinese counterparts, had told them that Russia and China, as UNSC PERMREPS, should actively support Mongolia's efforts to build UN peace-keeping capabilities. ¶6. (SBU) The Ambassador stressed the USG's desire to see Mongolia maintain good relations with its two powerful neighbors, and he pointed out that important bi-lateral projects, such as Mongolia's Millennium Challenge Account proposal to upgrade Mongolia's railway, would advance the needs of and require the cooperation of all involved - Mongolia, Russia and China. FM Enkhbold said recent high level GOM visits to Russia and China had been fruitful. PM Enkhbold's visit to Beijing in November shored up an agreement from the Chinese to focus its US$300 million soft loan funding on one project (a dam project in northern Mongolia),instead of dispersing monies to several smaller projects. Pres. Enkhbayar's Moscow meeting with President Putin allowed the two leaders to discuss a wide range of bi-lateral issues face-to-face, improving understanding by reducing distortions and filtering by intermediaries. (Note: From what post has heard, although lots of promises of assistance and increased trade were made at the Beijing and Moscow talks, no concrete agreements were signed and similar official pronouncements in the past have so far failed to generate any breakthrough in bilateral relations.) ¶7. (SBU) The Ambassador overviewed concerns regarding recent difficulties with the U.S. Department of Agriculture's commodities sales programs. (Note: USDA wheat is monetized and the proceeds used for development assistance programs.) A controversy over a ULAANBAATA 00000022 002 OF 002 recent wheat tender managed by World Vision of USDA wheat had become a court case but was just resolved last week. Meanwhile, and separately, a GOM audit of the use of local currency proceeds under an agreement between Mercy Corps and the GOM contained a number of criticisms and recommendations mostly directed at the GOM's role in the process. The Ambassador expressed hope that the USG and GOM could resolve their differences on this issue, but he cautioned that these problems jeopardized future USDA funded assistance programs. FM Enkhbold said he was aware of the report but could not speculate what course of action the GOM would take. (Note and comment: USAID has sought to correct the report's inaccuracies and is awaiting indications of whether and how the GOM will act on the report's recommendations. Post believes this audit will likely go unnoticed and the recommendations forgotten or not acted upon.) Minton