Identifier
Created
Classification
Origin
09ULAANBAATAR236
2009-08-13 09:57:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ulaanbaatar
Cable title:  

Summary of High-Level Meetings during CODEL Boehner

Tags:  OREP OVIP PGOV PREL ECON ETRD AMGT ASEC AFIN MG 
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FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 2984
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHUL/AMEMBASSY SEOUL 3761
RUEHKO/AMEMBASSY TOKYO 3414
RUEHMO/AMEMBASSY MOSCOW 2585
RUEHTA/AMEMBASSY ASTANA 0107
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
UNCLAS SECTION 01 OF 03 ULAANBAATAR 000236 

SENSITIVE
SIPDIS

STATE FOR EAP/CM
STATE PASS USTR

E.O. 12958: N/A
TAGS: OREP OVIP PGOV PREL ECON ETRD AMGT ASEC AFIN MG
SUBJECT: Summary of High-Level Meetings during CODEL Boehner

ULAANBAATA 00000236 001.2 OF 003


Sensitive but Unclassified - Not for Internet Distribution

UNCLAS SECTION 01 OF 03 ULAANBAATAR 000236

SENSITIVE
SIPDIS

STATE FOR EAP/CM
STATE PASS USTR

E.O. 12958: N/A
TAGS: OREP OVIP PGOV PREL ECON ETRD AMGT ASEC AFIN MG
SUBJECT: Summary of High-Level Meetings during CODEL Boehner

ULAANBAATA 00000236 001.2 OF 003


Sensitive but Unclassified - Not for Internet Distribution


1. (SBU) Summary: On August 9 and 10, Members of the Congressional
Delegation headed by House Minority Leader John Boehner of Ohio met
with Prime Minister S. Bayar and President Ts. Elbegdorj during the
course their visit to Mongolia to review the impact of the current
economic crisis and issues related to energy security in the Central
and Northeast Asian regions. The discussion with the PM
concentrated on trade and commercial issues, while that with the
President focused on advances in Mongolia's democracy. The
delegation also visited nomadic herders who have received support
from a USAID sponsored project and attended dinner with leaders of
the U.S. business community in Mongolia. End Summary.


2. (SBU) On August 9 and 10, Members of the Congressional Delegation
headed by House Minority Leader John Boehner of Ohio visited
Mongolia to review the impacts of the current economic crises and
issues related to energy security in the Central and Northeast Asian
regions. Rep. Boehner was joined by Representatives Dan Boren of
Oklahoma, Jo Bonner of Alabama, Dave Camp of Michigan, Tom Latham of
Iowa, and Greg Walden of Oregon.

CODEL Sees Rural Economy
--------------


3. (SBU) CODEL Boehner's first stop was to review the economic
challenges faced by a traditional herder family located about 30
miles southwest of the capital Ulaanbaatar and to discuss ways that
USAID assistance had aided the family's livestock enterprise. The
family of eight shared how the current economic crisis had affected
their nomadic lifestyle including cattle, sheep, and goat herding,
milking horses, and cheese production. The family also shared how
business skills training provided by CHF International and funded by
USAID had improved its standard of living. The delegation also

reviewed traditional handicrafts and spoke to the craftsman about
their economic challenges and how USAID-funded assistance is
benefiting them.

CODEL Meets American Business People
--------------


4. (SBU) Upon return to Ulaanbaatar, the CODEL joined leading
American business people (including representatives from Peabody
Energy and Ivanhoe Mines) and one Mongolian who owns a political
survey and polling business for dinner at Khan Bank, Mongolia's
leading financial institution. The subject on everyone's mind was
the likelihood of Parliament accepting the latest terms for the
world class Oyu Tolgoi (OT) copper-gold mine investment agreement,
recently agreed upon between the Bayar government and Rio Tinto and
Ivanhoe Mines of Canada and now under parliamentary debate. All the
business people agreed that passing the agreement would be seen as
unambiguous signal that Mongolia was ready to do business
transparently and according to the rule of law with its western
"third neighbor" countries. Generally, the group was positive about
chances for passage in the upcoming weeks, but expressed concern
that failure to agree to an OT deal (or to at least vote on the
package) would send a message that Mongolia was not ready to join
the international economy and not serious about doing business with
world-class Western firms. (NOTE: Post's DATT invited members of
Mongolia's National Security Council, Mongolian military
counterparts, and personnel from the Mongolian National Emergency
Management Agency to an exchange views on security issues affecting
Mongolia with CODEL Boehner staffers and military support staff.
End Note.)

CODEL Meets Senior Mongolian Leaders
--------------


5. (SBU) CODEL Boehner then participated in back-to-back meetings
with Prime Minister S. Bayar and President Ts. Elbegdorj (see para
15 for a list of attendees at both meetings). The meeting with
Bayar stuck to economic issues, with a focus on mineral wealth as
both the key to national development and the focal point of
Mongolia's relations with its neighbors and other partners. Bayar
noted that it was essential for deals to be struck on OT, the coal
mine at Tavan Tolgoi (TT),and on uranium projects as soon as
possible, but acknowledged that internal political disputes needed
to be handled first, especially on the OT deal. He hoped Parliament
would approve the OT deal during a special session to be called in

ULAANBAATA 00000236 002.2 OF 003


the latter half of August.


6. (SBU) Bayar also noted that the resource sector faced a major
transportation problem due to inadequate infrastructure and to
Mongolia's landlocked status between China and Russia. He
specifically referred to the recent troubles with the cancelled MCC
rail program. Mongolia had proposed the rail program to deal with
critical shipping deficiencies but Russian intransigence had wrecked
the program. He hoped that attempts to reprogram the USD 188
million in September would be successful.


7. (SBU) Bayar also praised the high level of U.S. Mongolian
bi-lateral relations, noting the many senior-level visits,
delegations, and events that have occurred over the last year. He
gave special attention to improving the commercial dimensions of the
relationship, noting that Peabody Energy's participation at TT would
clearly enhance U.S.-Mongolian ties. In addition, he repeated the
call for a Free Trade Agreement; but he recognized the difficulty in
reaching such an agreement in the near term, accepting that the
Transparency Agreement (currently being worked on between USTR and
the Mongolian Ministry of Foreign Affairs and Trade) offered the
best long-run opportunity to reach an FTA.


8. (SBU) Representative Boehner and company recognized the
importance and depth of relations with Mongolia, attributing much of
the high-level U.S. attention to Mongolia's peacekeeping
contributions in Iraq and Afghanistan, shared democratic values, and
potential investment and trade ties. After hearing Bayar's extended
analyses of OT, coal, and uranium projects, the CODEL agreed that
Mongolia's mineral resources were key to its development,
acknowledged that such issues were politically difficult to manage,
and averred that American firms would be eager to bring their
dedication to transparency, rule of law, and world-class practices
to Mongolia.


9. (SBU) The key themes of the delegation's meeting with President
Elbegdorj were the positive tone and constructive nature of the
bilateral relationship, the state of Mongolian democracy, mining
laws and Oyu Tolgoi, and development challenges Mongolia faces.


10. (SBU) Elbegdorj said that Mongolia greatly values its
relationship with the United States and appreciates the support the
USG has offered since the beginning of Mongolia's democratic
opening. He expressed particular thanks for Senate Resolution 192
on the U.S.-Mongolia relationship passed in June, and for ongoing
efforts to reprogram funds for the Millennium Challenge Account in
Mongolia. Elbegdorj said the GOM supports U.S. strategy in
Afghanistan and Pakistan.


11. (SBU) In response to a question from Rep. Boehner about the
state of democracy in Mongolia, Elbegdorj stated that Mongolians are
proud that the transition from the socialist area was peaceful. He
also noted that Mongolia has undertaken simultaneous economic and
political reforms, breaking what some see as the standard regional
progression of economic liberalization followed by political reform.
Elbegdorj said Mongolia may be small, but it serves as a model for
others in the region, adding that eighty percent of Mongolia's GDP
now derives from private sector activity.


12. (SBU) In response to a question from Rep. Bonner, Elbegdorj
said Mongolia's future lies in educating its young population, of
which educational exchange abroad must be a key element. He said
Mongolia must pay careful attention to desertification,
deforestation, and pollution so that the current generation leaves a
beautiful country for the next.


13. (SBU) Rep. Walden asked about the state of the mining law. The
president explained that the Mongolian MPs and the public do not
want to make a mistake and have therefore proceeded cautiously. He
said the opinions of all must be weighed carefully and that resource
nationalism was now a factor with which Mongolia must reckon.
Elbegdorj described the process of drafting the law as learning by
doing.


14. (SBU) In response to a question from Rep. Boren about
opportunities in rural areas, Elbegdorj said he had seen a reduction
in the numbers of those moving to urban areas, but that this was due
largely to unemployment, crime, and pollution in urban centers
resulting from the absorption of many rural migrants in recent

ULAANBAATA 00000236 003.2 OF 003


years. Elbegdorj suggested that if Mongolia can raise its median
GDP from $2,000 to $5,000 per year, then the rural-to-urban and
urban-to-abroad migration flows will be largely eliminated. He
closed the meeting by reiterating his gratitude for U.S. support of
Mongolia's democratic transition.


15. (SBU) List of Attendees at High-Level Meetings:

--CODEL Boehner Meeting with Prime Minister S. Bayar

GOM:
Prime Minister Bayar
MP Saikhanbileg (DP Caucus Leader)
MP Sukhbaatar (MPRP)
Mr. Och, PM's Foreign Policy Advisor
Mr. Mounkhou, Acting Director of the Department for Middle East,
Americas, and African Affairs (MFAT)
Mr. Anand, U.S. Desk Officer (MFAT)
Ms. Ninjjamts, Head of PM's Press Office

USG:
Ambassador Minton
Representative John Boehner
Representative Dan Boren
Representative Jo Bonner
Representative Dave Camp
Representative Tom Latham
Representative Greg Walden
Senior Commercial Specialist Richmond
Staff Member Stewart


--CODEL Boehner Meeting with President Ts. Elbegdorj

GOM:
President Elbegdorj
MP Saikhanbileg (DP Caucus Leader)
Foreign Policy Advisor Sukhbaatar
Middle East, Americas, and African Affairs Department Acting
Director Mr. Mounkhou (MFAT)
U.S. Desk Officer Mr. Anand (MFAT)
One unnamed assistant

USG:
Ambassador Minton
Representative John Boehner
Representative Dan Boren
Representative Jo Bonner
Representative Dave Camp
Representative Tom Latham
Representative Greg Walden
Political Officer Covington
Staff Member Stewart

MINTON