VZCZCXRO1439
PP RUEHLMC
DE RUEHUM #0539/01 1990147
ZNR UUUUU ZZH
P 180147Z JUL 06
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC PRIORITY 0127
INFO RUCLRFA/USDA WASHINGTON DC PRIORITY
RUEHUL/AMEMBASSY SEOUL 2349
RUEHBJ/AMEMBASSY BEIJING 5115
RUEHOT/AMEMBASSY OTTAWA 0335
RUEHMO/AMEMBASSY MOSCOW 1547
RUCPODC/USDOC WASHDC 1068
RUEATRS/DEPT OF TREASURY WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0315
RHHMUNA/USPACOM HONOLULU HI
RUEKJCS/SECDEF WASHDC

UNCLAS SECTION 01 OF 03 ULAANBAATAR 000539 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL OVIP EAID MASS MG US JOHANNS MIKE
SUBJECT: Secretary Johanns' Visit Advances Relationship 
 
Sensitive But Unclassified - not for Internet 
distribution. 
 
¶1. (U) SUMMARY AND COMMENT: Secretary for Agriculture 
Mike Johanns headed a Presidential Delegation which 
visited Mongolia July 12-13.  During very cordial 
meetings with President Enkhbayar and Prime Minister 
Enkhbold, Johanns conveyed President Bush's 
congratulations on Mongolia's 800th anniversary and 
expressed appreciation for Mongolia's continued support 
in Iraq and Afghanistan. Johanns applauded Mongolia's 
economic and democratic progress and urged continued 
reforms.  Enkhbold expressed the hope that a Millennium 
Challenge Account Compact could be accelerated and that 
a Free Trade Agreement could be concluded.  The PM also 
reviewed a laundry list of his administration's 
achievements.  The rosy summation exhibited selective 
memory at the least, but evidently is the spin the PM 
is trotting out for visiting foreigners.  END SUMMARY 
AND COMMENT. 
 
Secretary's Program 
 
SIPDIS 
------------------- 
 
¶2.  (U) Secretary for Agriculture Johanns headed a 
Presidential Delegation which visited Mongolia July 12- 
¶13.  The U.S. Presidential Delegation was a late 
addition to the long list of high-level visitors during 
the Naadam period, but the GOM quickly arranged events 
which emphasized the importance they attach to the 
bilateral relationship: a last event of the day meeting 
with the President on July 12 which allowed additional 
time for informal exchange with Enkhbayar; a dinner 
hosted by the Foreign Minister on July 12; and a 
breakfast hosted by Prime Minister Enkhbold on July 13. 
After sitting next to Enkhbayar on July 13 to view a 
portion of the games, Secretary Johanns toured craft 
vendors assisted by the Ger Initiative and a herder 
aided by the Gobi Initiative.  Both programs are funded 
with a mixture of ESF and the monetized proceeds of 
wheat donated by the U.S. Department of Agriculture. 
 
Secretary Johanns Conveys President's Congratulations 
 
SIPDIS 
--------------------------------------------- -------- 
 
¶3. (U) During the meetings with President Enkhbayar and 
Prime Minister Enkhbold, Secretary Johanns noted that 
he met with President Bush on Monday, July 10.  He 
conveyed President Bush's personal regards and 
congratulations on Mongolia's 800th anniversary. 
Secretary Johanns expressed the USG's gratitude for 
 
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Mongolia's continued support for the war on terrorism 
and its troop contributions in Iraq and Afghanistan. 
He encouraged Mongolia to continue its economic reform 
and democratic transformation efforts.  The USG 
applauded these efforts and would continue to support 
them. 
 
Meeting With President Enkhbayar 
-------------------------------- 
 
¶3.  (U) The 40-minute session with President Enkhbayar 
-- held at a site near the horserace finish line -- was 
equally divided between a formal session inside the 
presidential ger and a period outside in which the 
President showed off his race horses.  During the 
meeting, Enkhbayar (who is also commander-in-chief) 
emphasized the importance of the bilateral relationship 
for Mongolia.  He expressed particular appreciation for 
"very good" military-military cooperation, and the very 
good support Mongolia has had from the United States, 
both to increase the Mongolian Armed Forces' 
peacekeeping capacity and to bolster defense reform. 
 
PM: GOM Grateful for US Support; Seeks MCC Compact, FTA 
--------------------------------------------- ---------- 
 
¶4. (U) Prime Minister Enkhbold hosted Agriculture 
Secretary Johanns for a 70-minute breakfast on July 13. 
 
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Minister for Agriculture and Food Terbishdagva 
attended, but was largely silent throughout, except for 
a few asides to the PM.  Secretary Johanns applauded 
 
ULAANBAATA 00000539  002 OF 003 
 
 
the Mongolian Parliament's recent passage of anti- 
corruption and anti-money-laundering legislation and 
encouraged their full and speedy implementation. 
Johanns noted USDA has several programs which have 
benefited Mongolia's people and the USG remains 
committed to their continuation. 
 
¶5.  (U) The PM responded that Mongolia was grateful to 
receive the President's delegation as well as the 
recent U.S. Congressional and UN resolutions 
congratulating Mongolia on its 800th anniversary.  He 
reiterated the Government of Mongolia's appreciation 
for President Bush's November 2005 visit and his 
affirmation of the U.S. as Mongolia's "third neighbor". 
He noted Mongolia had indeed benefited from U.S. 
assistance programs, including the USDA's, for which 
Mongolia was grateful.  The PM said that Mongolia is 
eager to conclude a Millennium Challenge Account 
compact soon, adding some had become discouraged by the 
lengthy period needed to conclude the compact; the PM 
hoped this process might be accelerated.  He noted the 
GOM seeks a Free Trade Agreement with the U.S. and 
hopes to increase agricultural cooperation as well. 
Secretary Johanns reviewed recent trends with regard to 
 
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MCC compacts and implementation, stressing the 
importance of making progress on corruption.  Johanns 
added his own visit underscored the USG's desire to 
increase economic and commercial ties as part of our 
comprehensive partnership, and he planned to brief the 
President about his visit to Mongolia upon returning to 
Washington. 
 
PM Lists His Administration's "Greatest Achievements" 
--------------------------------------------- -------- 
 
¶6. (U) The PM reviewed the "social challenges" his 
government has faced since assuming power in January. 
He ticked off a laundry list of his administration's 
achievements, including fulfillment of several 2004 
electoral campaign promises: 
-- a 30% increase in public sector salaries, raising 
average monthly salaries from Tugruk 92,000 to Tugruk 
129,000 ($76 and $107, respectively), an effort which 
he described later as vital to anti-corruption efforts; 
-- a pilot program for 110,000 Ulaanbaatar school 
children to begin having free school breakfasts, with a 
plan to implement the program nation-wide later this 
year; 
-- mothers over 55 would receive stipends, with those 
having more than five children receiving Tugruk 50,000 
per month and those having more than eight children 
receiving Tugruk 100,000 per month; 
-- newlyweds would receive Tugruk 500,000 and parents 
of newborn babies would receive Tugruk 100,000; 
-- all children will receive Tugruk 3,000 per month 
drawing upon the recently created stability fund 
created using funding gained through the law enacted in 
June covering windfall profits taxes on copper and 
gold, 
-- closure on a long-languishing 2003 US$300 million 
loan agreement with China; 
-- a soft loan ($27 million) from Japan to help fund 
and promote small and medium enterprise development had 
been concluded during the PM's April visit to Tokyo; 
-- greater GOM-donor coordination in the form of 
regular six-month Technical Meetings with donors (Note: 
These were initiated by the World Bank; the first was 
held in February 2006 and the second is scheduled for 
early October); and, 
-- Parliament had recently reduced corporate, personal, 
and value-added taxes, and had sought new sources of 
revenue. 
 
Comment: A Rosy and Selective Summation from the PM 
--------------------------------------------- ------ 
 
¶7.  (SBU) The PM's summation is evidently the 
presentation he used with the avalanche of visiting 
foreign dignitaries during Naadam.  ExIm Bank Senior 
Vice President McAdams heard largely the same list a 
few days before.  The PM has put the rosiest possible 
spin on his government's efforts, even applying some 
 
ULAANBAATA 00000539  003 OF 003 
 
 
selective memory.  The bulk of the domestic proposals 
were shared visions under the previous coalition 
government and are fiscally unsustainable.  The China 
loan is largely destined to "buy Chinese goods and 
services," and the Japanese concessional loan is 
largely unnecessary, as local banks are awash in funds 
but have difficulty finding worthy projects.  Over $200 
million of the loan is to be used to construct -- with 
Chinese equipment and labor -- a hydroelectric project 
on the Eg River in Khuvsgol province, a proposal 
previously proposed in 1998 by then PM (and now Deputy 
Prime Minister) Enkhsaikhan, but rejected by Parliament 
at the time for environmental and technical reasons. 
Paying mothers to have babies harkens back to the 
Soviet era, and fortunately is "self-righting," as 
Mongolians tend to scale back family size to two or 
three children as their wealth increases.  End comment. 
 
¶8.  (U) Secretary Johanns did not have an opportunity 
to clear this cable prior to departing. 
 
Slutz