Examining Mongolia's Debt

Speaker of Parliament Z. Enkhbold recently provided another tweet worth examining in detail. He posted a graph showing "Total debt-to-GDP ratios in select countries." Mongolia was not one of the select countries in the graph, and the Speaker facetiously noted that "It seems we have no debt." At least I hope he was being facetious, because the truth is quite the opposite.

Read more...

Final Verdict: 'UB Cold' or 'Winter-Schminter'?

In January I examined whether winter temperatures to that point were above or below average (see here). I compared this winter's temperatures to the historical averages, as well as the first winter I spent in Mongolia in 2002-03.1 The verdict at that time was this winter was above average and hardly representative of what one might call "Ulaanbaatar cold." Enduring that kind of cold allows one to claim a level of badassery usually reserved for mountain men or Arctic explorers. It's a pride thing, so knowing where a winter fits into the historical record is extremely important. Now that winter is finally over, I have gone back to the data to see if this winter was able to turn things around in the miserably cold department.

Read more...

The Jenga Economy

JengaThe domestic economy is more complex than it was just a few years ago. It is more integrated with international markets and more layered with wealth generating opportunities. It has broadened substantially, and as a result, it has taken longer than in the past for problems to be widely felt in the economy. It has also taken longer for a sense of urgency to take hold at the political and policy-making level about the need to fix the problems. Still, the signs have been there, and for those watching the indicators closely, it has been like watching an economic game of Jenga.

Read more...

The Tugrik is Following Its Own Path

Speaker of Parliament Z. Enkhbold recently tweeted an observation (see original tweet below) that seemed like an attempt to put the continuing depreciation of the Tugrik against the US Dollar in perspective. He posted a link to a Wall Street Journal article (here) about the Chinese Yuan experiencing a 0.9 percent decline in value against the Dollar since the beginning of the year. He then noted that "the Tugrik is not alone in its fall." The subtext of the tweet seemed to be that recent, sustained declines in the value of the Tugrik have been due to outside economic forces, which are also affecting the Chinese currency, rather than the result of domestic politics or economic policy over the last 12-18 months. But, there is a significant problem with his observation: magnitude.

Read more...

'Samurai' Bonds Lack Clarity

According to local news reports, the Development Bank of Mongolia (DBM) received just over JY24 billion (USD230 million) in "Samurai" Bond proceeds from the Japanese Bank for International Cooperation (JBIC) in the first week of January.1 The face value of the 10 year bonds was JY30 billion with an annual interest rate of 1.52 percent.2,3 The "Samurai" Bond has been a topic of conversation in Mongolia since the Prime Minister announced an agreement between the Mongolian and Japanese governments to issue the bonds back in September.4 Although there has been a lot of conversation, it has been difficult to get clarity about the terms and conditions of the agreement between the DBM and JBIC and how the proceeds from the bonds will actually be used.

Read more...