VZCZCXRO9419
RR RUEHLMC RUEHVK
DE RUEHUM #0878/01 3540215
ZNR UUUUU ZZH
R 200215Z DEC 06
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 0614
INFO RUEHUL/AMEMBASSY SEOUL 2563
RUEHBJ/AMEMBASSY BEIJING 5336
RUEHKO/AMEMBASSY TOKYO 2318
RUEHMO/AMEMBASSY MOSCOW 1650
RUEHSH/AMCONSUL SHENYANG 0234
RUEHVK/AMCONSUL VLADIVOSTOK 0061
RUEKJCS/SECDEF WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPODC/USDOC WASHDC 1144
RUEHRC/USDA FAS WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0427

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000878 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS PEACE CORPS, OPIC, AND EXIMBANK 
STATE FOR EAP/CM 
 
E.O. 12958: N/A 
TAGS: PREL EAID EMIN PGOV MG
SUBJECT: Provincial Perspectives: Khentii and Dornod Aimags See 
Agribusiness and Mining in Their Futures 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) SUMMARY: During a brief November 19-21 easterly swing 
through Dornod and Khenti provinces, leaders there expressed concern 
about growing unemployment pressures but were hopeful that 
investments in mining, for the former, and agribusiness and tourism, 
for the latter, would provide needed jobs and incomes.  Both 
solicited increased U.S. investment as well as more educational 
opportunities for students from their regions. END SUMMARY. 
 
¶2. (U)  DCM, accompanied by FSN Commercial Specialist, paid brief 
familiarization visits to the capitals of Khentii and Dornod Aimags 
(provinces) capitals Undurkhaan and Choibalsan November 19-21. 
 
KHENTII TO PURSUE AGRIBUSINESS, TOURISM OPPORTUNITIES 
--------------------------------------------- ------- 
 
¶3. (SBU)  Over dinner with Khentii Aimag Governor S.Jargal the 
evening of November 19 as well as breakfast and an office call on 
November 20, Governor Jargal repeatedly stressed his 
administration's efforts to create jobs, encourage foreign 
investment, especially in agribusiness and  tourism, and reduce 
corruption.  Jargal noted that, as a Democratic Party Aimag 
Governor, he was targeted for failure by the ruling Mongolian 
Revolutionary People's Party (MPRP).  He said he had succeeded in 
attracting Japanese as well as Korean investors to consider 
expansion of investments in both agribusiness as well as tourism, 
adding that Khentii Aimag had some large Aimag-controlled land 
holdings suitable for agribusiness investment to divvy up as well as 
numerous historical points related Chinggis Khan (Genghis Khan) that 
would be valuable from the tourist industry's perspective.  He 
solicited increased U.S. business interest as well as additional 
educational opportunities for college students from his aimag. 
 
4, (SBU)  Among other plans, Jargal said he hopes to open a 
"one-stop-shop" for all aimag services both to expedite and improve 
services as well as to reduce the opportunities for corruption for 
both the "giver" and "receiver" of bribes.  He hopes to provide all 
aimag residents early next year with waste disposal garbage cans to 
encourage citizens to properly dispose of garbage and thereby 
improve the cleanliness of the cities and towns as well as to 
encourage secondary opportunities in recycling.  (Note:  Governor 
Jargal had just spent the weekend out hunting wolves with the 
British Ambassador.  He emphasized the wolves routinely killed 
numerous livestock and posed a serious threat to livelihoods as well 
as residents.) 
 
DORNOD LOOKS FORWARD TO 
DEVELOPING MINING OPPORTUNITIES 
------------------------------- 
 
¶5. (SBU)  The Dornod Aimag Hural (parliament) Chairman Ts.Shinebayar 
told the DCM November 20 that with some 40,000 residents of the 
Aimag's 70,000 population, Choibalsan had become a magnet for 
college students and unemployed workers in the vast eastern 
province.  This put considerable pressure on the aimag government to 
produce jobs and provide services, and he hoped a number of 
promising mining investments in uranium and other minerals as well 
as oil would generate more jobs.  He said two mining projects are 
expected to commence operations in the near future and they would 
reportedly create 1,000 and 400 jobs, respectively, but he admitted 
this would only marginally reduce unemployment levels, which he put 
at nearly 50%.  (Note: Mr. Shinebayar owns the "Aduunchuluun" coal 
mine in Dornod.)  He claimed that local corruption was minimal, as 
opportunities for big payoffs were largely to be found in 
Ulaanbaatar, the nation's capital.  He said the Hural numbers 
heavily favored the MPRP and the DP had made few inroads over the 
years. 
 
¶5. (SBU)  Shinebayar said the border with China was largely open, as 
Mongolians and Chinese easily obtained visa-free access and 
routinely traveled back and forth across the border for personal as 
well as commercial purchases.  He said the border with Russia was 
much more problematic as both citizens and goods often experienced 
unnecessary bureaucratic delays going and coming.  (NOTE:  The issue 
of visa-free access was discussed during President Enkhbayar's 
recent visits to Moscow (septel).) As a result, the number of 
 
ULAANBAATA 00000878  002 OF 002 
 
 
Russians to be found in the aimag stood at less than perhaps a few 
hundred, while Chinese oil field and mining workers as well as 
others amounted to a few thousand.  He doubted these numbers would 
drop off much as the Chinese were largely skilled workers for which 
there were not Mongolian substitutes. 
 
ARMY COMMANDER LAUDS U.S. MARINE EMBEDS AND SEEKS MORE 
--------------------------------------------- --------- 
 
¶6. (SBU)  In addition to calling on USAID-related project NGOs 
representatives and meeting with  Peace Corps Volunteers, the DCM 
also called on COL. Nergui, the Commander of the 327th Mechanized 
Regiment, and lunched with the Commander, his staff, and two U.S. 
Marine training NCOs embedded with the unit. COL. Nergui lauded the 
US Marines' work, training skills, work ethic, and high personal 
standards, which served as examples for Mongolian NCOs.  He sought 
the USG's continuation of the embed program as well as additional 
English language training to support the Regiment's modernization. 
 
MINTON