VZCZCXRO8387
RR RUEHLMC
DE RUEHUM #0022/01 0160835
ZNR UUUUU ZZH
R 160835Z JAN 07
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 0664
INFO RUEHBJ/AMEMBASSY BEIJING 5353
RUEHUL/AMEMBASSY SEOUL 2576
RUEHMO/AMEMBASSY MOSCOW 1658
RUEHWR/AMEMBASSY WARSAW 0029
RUEHBK/AMEMBASSY BANGKOK 1393
RUEHRC/USDA FAS WASHDC
RUCPODC/USDOC WASHDC 1147
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0436
RUEKJCS/SECDEF WASHDC

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000022 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
USDA N. SAKHLEH 
 
E.O. 12958: N/A 
TAGS: PREL PGOVEAID ECON MG
SUBJECT: Ambassador, Mongolian FM Discuss Bilateral Issues. 
 
 
SENSITIVIE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) SUMMARY: The Ambassador and Foreign Minister Enkhbold 
exchanged views on a wide range of bilateral and regional issues 
over lunch on January 4.  Topics included the North Korean refugee 
situation in Mongolia, U.S efforts to help Mongolia develop its 
military peace-keeping capacity, the prospects for Mongolia's next 
rotation of troops to Iraq, Mongolia's relations with China and 
Russia, and recent hiccups with USDA wheat sales which fund 
development assistance programs.  The Ambassador also previewed some 
of post's plans for celebrating the 20th anniversary of U.S. 
Mongolian diplomatic relations this year. END SUMMARY 
 
¶2. (U) The Ambassador hosted lunch January 4 for Mongolian Foreign 
Minister N. Enkhbold, MFA State Secretary Kh. Bekhbat, Ts. 
Jambaldorj, and R. Mounkhou, Director and Deputy Director, 
respectively, of MFA's Americas, Africa, and Middle East Department. 
 DCM, USAID Mission Director, and Econ/Coml Chief (Notetaker) also 
attended the cordial, 90-minute luncheon. 
 
¶3. (SBU) The Ambassador thanked the FM for the Government of 
Mongolia's (GOM) assistance with North Korean refugees in Mongolia. 
He noted the U.S. is prepared to receive DPRK refugees wishing to 
resettle in the U.S.  The FM reiterated he had told EAP A/S Hill 
that Mongolia would be supportive.  He assured the Ambassador the 
GOM would continue to supply the embassy with all relevant 
information on future cases. 
 
¶4. (SBU) When asked about the prospects for Mongolia's eighth 
rotation of troops to Iraq later this year, FM Enkhbold said the GOM 
had only recently conveyed its current position in a diplomatic note 
reflecting the decision taken by the Cabinet last July to shrink its 
military presence in the next rotation from the current 100 soldier 
level down to just a handful of advisors.   The Ambassador praised 
the contribution of Mongolia's forces in Iraq and hoped that 
Poland's recent decision to extend its deployment there for several 
more months might lead the GOM to consider maintaining current 
troops levels. (Note: the Mongolian contingent in Iraq primarily 
guards Camp Echo, base of operations for Polish forces)  (Comment: 
While the FM stuck to the current policy line, his body language and 
separate comments by others suggest the GOM may be open to 
reconsidering the issue.) 
 
¶5. (SBU) The Ambassador noted that Thailand was scheduled to host 
this year's major regional peace-keeping training exercise but that 
was being reconsidered in the wake of the military coup, which 
replaced the elected government there.  As a result, and following 
Mongolia's successful hosting of last year's exercise, KhanQuest06, 
consideration was being given to holding this year's exercise in 
Mongolia.  The Ambassador stressed that Washington continues to 
support Mongolia's efforts to build its peace-keeping capacity.  The 
Ambassasdor, in separate discussions with his Russian and Chinese 
counterparts, had told them that Russia and China, as UNSC PERMREPS, 
should actively support Mongolia's efforts to build UN peace-keeping 
capabilities. 
 
¶6. (SBU) The Ambassador stressed the USG's desire to see Mongolia 
maintain good relations with its two powerful neighbors,  and he 
pointed out that important bi-lateral projects, such as Mongolia's 
Millennium Challenge Account proposal to upgrade Mongolia's railway, 
would advance the needs of and require the cooperation of all 
involved - Mongolia, Russia and China.  FM Enkhbold said recent high 
level GOM visits to Russia and China had been fruitful.  PM 
Enkhbold's visit to Beijing in November shored up an agreement from 
the Chinese to focus its US$300 million soft loan funding on one 
project (a dam project in northern Mongolia), instead of dispersing 
monies to several smaller projects.  Pres. Enkhbayar's Moscow 
meeting with President Putin allowed the two leaders to discuss a 
wide range of bi-lateral issues face-to-face, improving 
understanding by reducing distortions and filtering by 
intermediaries. (Note:  From what post has heard, although lots of 
promises of assistance and increased trade were made at the Beijing 
and Moscow talks, no concrete agreements were signed and similar 
official pronouncements in the past have so far failed to generate 
any breakthrough in bilateral relations.) 
 
¶7. (SBU) The Ambassador overviewed concerns regarding recent 
difficulties with the U.S. Department of Agriculture's commodities 
sales programs. (Note:  USDA wheat is monetized and the proceeds 
used for development assistance programs.) A controversy over a 
 
ULAANBAATA 00000022  002 OF 002 
 
 
recent wheat tender managed by World Vision of USDA wheat had become 
a court case but was just resolved last week.  Meanwhile, and 
separately, a GOM audit of the use of local currency proceeds under 
an agreement between Mercy Corps and the GOM contained a number of 
criticisms and recommendations mostly directed at the GOM's role in 
the process.  The Ambassador expressed hope that the USG and GOM 
could resolve their differences on this issue, but he cautioned that 
these problems jeopardized future USDA funded assistance programs. 
FM Enkhbold said he was aware of the report but could not speculate 
what course of action the GOM would take.  (Note and comment: USAID 
has sought to correct the report's inaccuracies and is awaiting 
indications of whether and how the GOM will act on the report's 
recommendations.  Post believes this audit will likely go unnoticed 
and the recommendations forgotten or not acted upon.) 
 
Minton