MONGOLIAN PRESIDENT URGES ACTION ON MINING AS PARLIAMENT

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SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM
USAID FOR ANE DEIDRA WINSTON

E.O. 12958: N/A
TAGS: PREL PGOV ECON KCOR KNNP KDEM MG
SUBJECT: MONGOLIAN PRESIDENT URGES ACTION ON MINING AS PARLIAMENT
OPENS SESSION

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION


1. (SBU) SUMMARY: In an April 7 address to Mongolia's Parliament on
the opening day of its spring session, President N. Enkhbayar called
on lawmakers to act swiftly on mining legislation, and said
indecision is costing the country opportunities for investment and
development. In a 25-minute speech to the 76 Members of Parliament,
Prime Minister S. Bayar and around a dozen Ambassadors and
international organizations representatives, the President also
noted that Transparency International ranks Mongolia 99th in its
global corruption-perceptions index, adding that a 2005 USAID report
found corruption "at all levels of our government." Speaker
Lundeejantsan said Parliament would debate 40 laws this session,
starting with controversial amendments to the Law on Mineral
Resources. He announced that Parliamentary members of the ruling
Mongolian People's Revolutionary Party (MPRP) and the opposition
Democratic Party (DP) would meet separately later in the day to
"finalize" their positions on the mining amendments. Lundeejantsan
also indicated that because of growing Government revenues,
Parliament will review the 2008 state budget during this session.
The Speaker did not identify constituencies that might benefit from
new Government spending, but with all Members of Parliament facing
re-election on June 29, fiscal restraint will likely be strained.
END SUMMARY.

PARLIAMENT URGED TO MOVE QUICKLY ON MINING LAW
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2. (SBU) President Enkhbayar addressed Parliament on April 7, the
opening day of the spring session, and called on Members of
Parliament (MPs) to move quickly on controversial amendments to the
Law on Mineral Resources. "With every minute of indecision and
inaction, we are losing opportunities for investment and
development, so I call on Parliament to use every minute to make
important decisions," he said. The President noted research by the
Fraser Institute, an independent Canadian research organization that
ranked Mongolia 10th out of 68 countries in terms of mining
resources, but eighth from last in terms of regulations. (Note:
Speaker Lundeejantsan said that later on April 7, MPRP and DP MPs
would hold separate discussions to "finalize" their positions on the
mining amendments. In their current form, the amendments would give
the state no less than a 51% stake in any deposit Parliament
considers "strategic." End Note.)

USAID CORRUPTION REPORT CITED;
CONFLICT OF INTEREST NOTED AT EVERY LEVEL
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3. (SBU) President Enkhbayar referred to Mongolia's entrenched
corruption problem, noting that the most recent corruption
perceptions index produced by Transparency International ranks
Mongolia 99th worldwide. Describing conflict of interest as "the
worst problem our politicians face," the President said senior
government officials must follow the law at all times and resist
pressure from friends and family members to engage in corrupt
practices. Enkhbayar noted that a 2005 USAID report on corruption
in Mongolia had found the problem present "at all levels of our
government." He added that a recent survey by the Academy of
Management, a training center affiliated with the Mongolian
Government, found conflicts of interest at "every level of
government." The President indicated that the public's expectations
for cleaner public service had not been fulfilled. He said the
problem is not a lack of laws, but insufficient implementation of
these laws.

SPEAKER LAYS OUT AGENDA
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4. (U) Speaker Lundeejantsan said 40 laws will be discussed in the

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current session, with priority given to the Law on Mineral
Resources. He said considerable attention would also be paid to the
law on land privatization; its legal term is ending in May and needs
to be extended. The Speaker said MPs would discuss and likely amend
the Education Law to add a 12th year of compulsory education.
(Note: If passed, students would likely start school a year
earlier, at six years of age. Until two or three years ago,
Mongolian youngsters only had to start school at the age of eight.
End Note.) Lundeejantsan said MPs will also debate legislation on
alcohol, freedom of information, MP ethics, the civil service and
parliamentary procedures.

MID-YEAR BUDGET REVIEW: RESTRAINT OR
PRE-ELECTION LARGESSE?
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5. (SBU) Lundeejantsan said that during the current session,
Parliament will hold a mid-year review of the 2008 state budget,
"because we have the financial resources to do so." (Comment:
Budget legislation is debated and passed each December. If there is
extra GOM revenue or a pressing need -- like pleasing the electorate
before upcoming elections -- Parliament can hold a mid-year meeting
to review the state budget. The Speaker did not indicate what the
money is likely to be spent on. End Comment.)

PM ATTENDS, TRAVELS SOON TO MOSCOW AND VIENNA
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6. (SBU) Following the GOM's tradition, Prime Minister Bayar was
present at the opening of Parliament but did not deliver an address.
(Note: Bayar is to travel to Moscow on April 10, along with his
ministers for Foreign Affairs, Transport, and Trade and Industry.
Thereafter, Bayar is to travel to Vienna for working meetings with
the International Atomic Energy Agency. End Note.) Also present at
the opening of Parliament were Ambassadors or other officials of
China, Cuba, the Czech Republic, Germany, India, Kazakhstan, Laos,
North Korea, Poland, Turkey, the United States (E/P Chief),Vietnam
and other countries.


7. (U) A list of issues expected to be addressed during the current
Parliamentary session has been sent to EAP/CM.

MINTON