Ambassador Calls on Chief Cabinet Secretary N. Enkhbold

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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

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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

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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