Ambassador Calls on Chief Cabinet Secretary N. Enkhbold

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000008 SIPDIS SENSITIVE SIPDIS STATE PASS USTR, OPIC, AND EXIMBANK STATE FOR EAP/CM AND and INR/B USAID FOR ANE FOR D. WINSTON E.O. 12958: N/A TAGS: PREL MARR ETRD SOCI MG SUBJECT: Ambassador Calls on Chief Cabinet Secretary N. Enkhbold SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. ¶1. (SBU) SUMMARY: The Ambassador paid an initial courtesy call January 7 on Chief Cabinet Secretary N. Enkhbold, who, until recently, served as Mongolia's Foreign Minister. The Ambassador thanked Enkhbold for the Government of Mongolia's (GOM) recent decision to send a 9th full troop rotation to Iraq. Enkhbold expressed his intentions to facilitate the speedy implementation of the Millennium Challenge Account (MCA) Compact and the Ambassador encouraged the early signing of procurement and fiscal agent contracts. The Ambassador noted upcoming policy and trade talks set for early February, and he urged the GOM to seriously consider USTR's offer to negotiate a bilateral transparency agreement (TA). The Ambassador described USG plans to provide technical advice on Mongolia's energy system as well as to provide in March an energy crisis-related emergency preparedness exercise. END SUMMARY. ¶2. (SBU) The DCM and Acting E/P Chief (notetaker) also attended the cordial 40-minute January 7 meeting at State House where the Ambassador began by presenting Enkhbold with a Christmas Card from the White House, a letter from Secretary Rice and official White House photos of the presidential summit in October 2007. Appreciation for 9th Iraq Rotation -------------- ¶3. (SBU) After congratulating Minister Enkhbold on his new position and thanking him for his previous support and cooperation as Foreign Minister, the Ambassador conveyed the USG's appreciation for the GOM's decision to continue its participation in coalition efforts in Iraq by sending its 9th full rotation of forces. MCC Implementation -------------- ¶4. (SBU) Turning to the MCA Compact, the Ambassador urged the GOM to act quickly to begin implementing the MCA compact. He remarked that during his recent meeting with Minister of Roads, Transportation and Tourism Rash, (septel) the Minister implored him to facilitate quick delivery of badly needed locomotives to keep the railway running. The Ambassador assured Rash of our desire to help but said that action awaited the official establishment of MCA-Mongolia. He said the MCA Procurement Agent Agreement (PAA) and Fiscal Agent Agreement (FAA) could be signed by either the Prime Minister, as the Chairman of MCA-Mongolia's Board, or the Minister of Finance in advance of parliamentary ratification of the compact, formation of the MCA-Mongolia Board or the selection of a CEO. The Ambassador worried that if the GOM waited until all of these actions were sequentially completed (mostly likely not until February) Mongolia's high inflation rate would likely eat away at some of the funding. ¶5. (SBU) Enkhbold said he considered the signing of the MCA Compact to be the most notable achievement during his tenure as Foreign Minister. He expected Parliament to ratify the compact before week's end and he had earlier arranged an informal meeting of the MCA-Mongolia Board to consider MCA-Mongolia's rules and regulations; questions or comments were due later that day. The MCA-Mongolia Board, he promised, would be officially established and registered with the Ministry of Justice within the next few days. He assured the Ambassador that having either the Minister of Finance or the Prime Minister sign the PAA and FAA should present no problems. The aim, he admitted, was to have the Minister of Finance sign, but, in principle, the Prime Minister can also sign. ¶6. (SBU) Enkhbold asked what was causing the delay in appointing a CEO for MCA Mongolia. The DCM responded that he understood that there were not enough candidates in the first recruitment drive and that the deadline for new applications was set for January 11. Applications would then need to be vetted to prepare them for review and decision by MCA Mongolia's Board. Responding to concerns voiced by Enkhbold that the former head of the now defunct MCA Mongolia National Committee, Ms. O. Enkhtuya and her assistant, were carrying the heavy MCC workload without any compensation while awaiting the formation of the MCA-Mongolia Board, the DCM said that once the PAA and the FAA were signed, MCC's pre-implementation funding could be released. The DCM further stressed the need to have national board members transfer their institutional knowledge of MCC to the new ULAANBAATA 00000008 002 OF 002 MCA-Mongolia Board. The Ambassador concurred and cited this as yet another reason why it was vital to have these agreements signed as quickly as possible. CBRGI, TIFA and the Transparency Agreement -------------- ¶7. (SBU) The Ambassador informed Enkhbold that the annual policy talks (Comprehensive Bilateral, Regional, and Global or CBRGI) and trade (Trade Investment Framework Agreement or TIFA) meetings were scheduled to take place back-to-back in early February in Washington, DC. He hoped that by the TIFA talks in February the GOM would agree to enter into discussions for a Transparency Agreement (TA) as proposed by USTR after last year's TIFA. The Ambassador noted that this was the first time the USG had offered to negotiate a TA with another country (outside of a full-blown FTA) and this corresponded with President Bush's words to President Enkhbayar during the presidential summit that we develop our trade relations "incrementally." He assured Enkhbold that the TA would not be a document plucked wholesale from the recently negotiated Korean FTA, but rather something that will be negotiated between our two countries and reflect Mongolia-specific needs. He noted that a TA, which is a component of all FTAs, was achievable and would lay the groundwork that the incoming US administration could pick up on. Enkhbold promised to do everything in his power to promote the process of TIFA and CBRGI within the GOM. Energy Issues and the APCSS Emergency Preparedness Exercise -------------- ¶8. (SBU) The Ambassador mentioned that he had recently met with the new Minister of Fuel and Energy Khurelbaatar (whom he knew well as the former head of the MCC working group and Ministry of Finance State Secretary),and said the Minister was eager to discuss power generation and pollution issues with consultants working under a USAID program. Enkhbold encouraged the Ambassador to continue his communications with Minister Khurelbaatar regarding energy issues. ¶9. (SBU) Noting that Ulaanbaatar city had just about reached its energy capacity limit, the Ambassador segued into a discussion of the upcoming emergency preparedness exercise , sponsored by the Asia-Pacific Center for Security Studies (APCSS) in coordination with the GOM's National Emergency Management Agency (NEMA),which centered on the government's response to a massive failure of one of UB's two major power plants (which provides 70% of UB's heat and electricity). Enkhbold agreed that the emergency exercise would be a useful tool for Mongolia and asked the Ambassador to let him know if there is anything he could do to make it a success. Good Cooperation, Good Third Neighbors -------------- ¶10. (SBU) Before ending the meeting, Chief Cabinet Minister Enkhbold thanked the Ambassador and the staff of the US Embassy for their close cooperation during his time as Foreign Minister. "As someone who has worked closely with your embassy", he said, "I am willing to do what I can to promote bilateral relations. We are serious about our third neighbor policies and this is why our relations with the US are so important to us". The Ambassador responded that it had been a personal pleasure to work with Enkhbold as Foreign Minister, during which our two countries achieved so much. Minton