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Viewing cable 06ULAANBAATAR137, Prime Minister Reviews Bilateral Relationship

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Reference ID Created Released Classification Origin
06ULAANBAATAR137 2006-02-26 23:35 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Ulaanbaatar
VZCZCXRO9117
PP RUEHLMC
DE RUEHUM #0137/01 0572335
ZNR UUUUU ZZH
P 262335Z FEB 06
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC PRIORITY 9502
INFO RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEHBJ/AMEMBASSY BEIJING 4761
RUEHUL/AMEMBASSY SEOUL 2033
RHHJJPI/PACOM HONOLULU HI
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0142
RUCPODC/USDOC WASHDC 0902
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 03 ULAANBAATAR 000137 
 
SIPDIS 
 
STATE PASS USTR FOR T. WINELAND 
STATE PASS PEACE CORPS 
STATE PASS TO USAID, ATTN CDOWNEY, ANE/EA 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL MOPS PHUM ETRD PGOV KMCA PTER PINR
MG, IQ 
SUBJECT: Prime Minister Reviews Bilateral Relationship 
 
 
SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET 
DISTRIBUTION. 
 
1.  (SBU) SUMMARY AND COMMENT:  Prime Minister Enkhbold 
reaffirmed his government's commitment to close 
relations with the United States during an hour-long 
initial call by the Ambassador on February 23. 
Enkhbold confirmed that the Cabinet had decided the 
previous day to approve a sixth rotation of troops to 
Iraq, and stated his government would continue its 
existing policies, including support for the war 
against terror.  In response to the Ambassador's 
warning that concerns over corruption could endanger 
Mongolia's Millennium Challenge Account eligibility, 
Enkhbold stated his government's commitment to taking 
strong anti-corruption steps, including passage of 
legislation in the next session of Parliament and 
punishing corrupt officials.  While Enkhbold lacks a 
foreign policy background, he appeared w|m-pregef nQ4hkzi&fheL8u>GQi-4k4> 
ikQd;~;,`uQQQQBJQll on 
Enkhbold after the formation of the new government in 
late January. 
 
Ambassador Reviews Bilateral Agenda 
----------------------------------- 
 
3.  (SBU) Drawing on talking points which she left 
behind, the Ambassador reviewed the bilateral agenda: 
 
-- Recalling President Bush's congratulatory note to 
Enkhbold, she stated that Enkhbold's return letter 
affirming the new government's commitment to work with 
the U.S. on a broad agenda, and to continue economic 
and democratic reforms and strengthen anti-corruption 
efforts, had been welcomed in Washington. 
 
-- The Ambassador expressed appreciation for the 
Cabinet's approval the previous day of a sixth rotation 
of Mongolian troops to support Coalition operations in 
Iraq. 
 
-- The Ambassador noted the busy schedule of meetings 
which demonstrated the continuity of close ties:  the 
Consultations on Bilateral, Regional and Global Issues 
(CBRGI) between MFA and the State Department this week; 
the Trade and Investment Framework Agreement (TIFA) 
discussions in early March; and the bilateral Executive 
Steering Council on Defense Reform meetings in 
Ulaanbaatar in early March. 
 
-- The Ambassador added that the U.S. military 
representatives would welcome a meeting with the Prime 
Minister, and could help clarify how and when funds 
allocated by the U.S. to Mongolia last year under the 
Global Peace Support Operations Initiative and the 
Coalition Solidarity Fund would be spent. 
 
-- The Ambassador reviewed the status of Mongolia's 
Millennium Challenge Account (MCA) proposals, noting 
that U.S. teams were visiting Mongolia now to undertake 
"due diligence."  If all went well, this phase might be 
finished in April, a compact concluded later in the 
year, and funds disbursed in early 2007.  She noted, 
however, that this is dependent on continuity in 
Mongolia's proposals, and commitment of sufficient GOM 
experts to finish work. 
 
-- The Ambassador also noted that an MCA compact also 
depends on Mongolia's continued eligibility, which is 
reviewed annually.  The most important test for 
Mongolia will be corruption, where the score has been 
declining; if it declines much further, Mongolia may 
well become ineligible.  She continued that there are 
 
ULAANBAATA 00000137  002 OF 003 
 
 
two other issues that could also force suspension of 
all or part of the MCA program for Mongolia.  Failure 
to correct the deficiencies and poor governance at the 
Bank of Mongolia and the Ministry of Finance as noted 
by the IMF and other donors is a major potential 
obstacle.  Another is the ongoing commercial dispute 
involving the Mongolian railroad and an American 
company; a breach of contract by the railroad would 
jeopardize MCA funding for the railroad project 
proposed by Mongolia. 
 
-- The Ambassador noted that the Embassy regularly 
meets with members of the State Great Hural (SGH) and 
GOM officials on legislation of interest to the U.S. 
because it affects our ability to work with Mongolia. 
She said she would send over briefing papers the 
Embassy is slated to draw up before the spring session 
in April, but wished to highlight three issues.  The 
first was pointed out by President Bush in Ulaanbaatar 
last November: We hope Mongolia will pass the necessary 
legislation to implement its commitments under the UN 
Convention Against Corruption.  Second, she urged, the 
State Secrets Act should be substantially repealed or 
revised; the secrecy it engenders is one reason 
corruption flourishes, and it creates a variety of 
other problems.  Finally, passage of the anti-money 
laundering law would improve our ability to work 
together with Mongolia. 
 
PRIME MINISTER REAFFIRMS COMMITMENT TO RELATIONSHIP 
--------------------------------------------- ------ 
 
3.  (SBU) Prime Minister Enkhbold, speaking in 
Mongolian without notes, responded by expressing 
appreciation for U.S. support of Mongolia's democratic 
and economic reforms since 1990.  He noted  that 
Mongolia seemed to have an increased profile in U.S. 
policy in recent years, which had created a favorable 
environment for improved bilateral relations under the 
"comprehensive partnership."  Last year had been a 
remarkable year, with first-ever visits by President 
Bush and Speaker Hastert giving significant additional 
impetus to relations.  President Bush's speech in 
Ulaanbaatar had been broadly welcomed by the Mongolian 
people, who had noted the praise for Mongolia's 
achievements since 1990, and were grateful that the 
President had reaffirmed that the United States is 
Mongolia's "third neighbor."  The Joint Statement 
issued by the two Presidents during the visit had 
enunciated the desirability of guiding principles for 
our bilateral relations.  In that regard, Mongolia 
looks forward to concluding a comprehensive partnership 
framework agreement, he said. 
 
4.  (SBU) Enkhbold stated his government's commitment 
to continue to develop bilateral relations, and to 
implement previous agreements.  His government would 
take strong action to fight against corruption, improve 
democracy, decrease red tape, and make the civil 
service more effective.  The PM commented that the 
international community had recognized that the recent 
change in government had been constitutional, and done 
in accordance with democratic principles.  President 
Bush's congratulatory note also had demonstrated the 
U.S. conviction that Mongolian democracy serves as a 
good example for other countries. 
 
5.  (SBU) The PM reiterated that his government would 
take strong action to create a corruption-free 
environment.  The government is working closely with 
the SGH, and planned to pass anti-corruption 
legislation in the spring session of the SGH.  Severe 
punishment would be imposed on officials who violate 
the law.  At the same time, media which falsely allege 
corruption would be regarded as having committed 
defamation.  The guilt or innocence of officials 
accused of corruption must be determined in court.  The 
government's efforts to improve pay and benefits for 
civil servants should be regarded as a main means to 
 
ULAANBAATA 00000137  003 OF 003 
 
 
fight corruption, since it would provide them the means 
to support their families without engaging in 
corruption.  Special attention would be paid to tax 
evasion, and ensuring businesses paid taxes, not 
bribes. 
 
6.  (SBU) With regard to the State Secrets Law, the PM 
said, he agreed with the Ambassador that it should be 
amended or reformed.  He stated that the government 
would ensure a favorable environment for domestic and 
foreign investors.  Like the previous governments, 
Mongolia would continue to support U.S. policy against 
international terrorism.  He confirmed that Mongolia 
had agreed to the U.S. request to send a sixth rotation 
of troops to Iraq. 
 
7.  (SBU) With regard to the Millennium Challenge 
Account, the PM said, Mongolia is very grateful to have 
qualified for the last three years, which he attributed 
to the progress made by Mongolia over 15 years of 
economic and political reform.  In his capacity as 
Prime Minister, he said, he would pay special attention 
to the new structure which would be required for MCA; 
the Ministry of Finance is working on this.  Mongolia 
would provide both the experts and the information 
needed by the MCC.  He expressed confidence that the 
work of the MCC experts would go smoothly, and a 
compact signed in the near future. 
 
8.  (SBU) The PM stated that Mongolia is keen to 
establish an FTA with the U.S.  The TIFA had provided a 
start toward an FTA.  An FTA, he said, is not just an 
economic matter, but also would demonstrate U.S. 
political support for Mongolia.  He noted that the 
bilateral Joint Statement last November had touched on 
the issue of more scholarships for Mongolian students 
in the United States.  He noted that the Ambassador had 
raised the contract problem between GE and the 
Mongolian railroad.  He stated that his government is 
paying attention to the issue.  The railroad is looking 
at how to fulfill the contract, he said, commenting 
that the problem had been the railroad's financial 
constraints. 
 
9.  (SBU) The Ambassador noted that, with regard to 
student scholarships, the U.S. had confirmed at the 
CBRGI discussions that it will increase Eisenhower and 
Fulbright scholarships.  Since the Federal Government 
did not run universities, it has no direct way of 
increasing university scholarships for Mongolian 
students.  However, she had talked with Ambassador Bold 
about ways he might encourage U.S. universities to 
grant more scholarships.  She noted that the Embassy 
supports a very active center in Ulaanbaatar to counsel 
Mongolians who wish to study in the U.S., including 
help in finding scholarships.  She added that many of 
the 92 Peace Corps Volunteers are also engaged in 
English language teaching or educational projects. 
 
SLUTZ