VZCZCXRO6438
RR RUEHLMC
DE RUEHUM #0008/01 0080035
ZNR UUUUU ZZH
R 080035Z JAN 08
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 1789
INFO RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUEHBJ/AMEMBASSY BEIJING 5930
RUEHMO/AMEMBASSY MOSCOW 2049
RUEHKO/AMEMBASSY TOKYO 2815
RUEHUL/AMEMBASSY SEOUL 3119
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000008 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR, OPIC, AND EXIMBANK 
STATE FOR EAP/CM AND and INR/B 
USAID FOR ANE FOR D. WINSTON 
 
E.O. 12958: N/A 
TAGS: PREL MARR ETRD SOCI MG
SUBJECT: Ambassador Calls on Chief Cabinet Secretary N. Enkhbold 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) SUMMARY: The Ambassador paid an initial  courtesy call 
January 7 on Chief Cabinet Secretary N. Enkhbold, who, until 
recently, served as Mongolia's Foreign Minister. The Ambassador 
thanked Enkhbold for the Government of Mongolia's (GOM) recent 
decision to send a 9th full troop rotation to Iraq.  Enkhbold 
expressed his intentions to facilitate the speedy implementation of 
the Millennium Challenge Account (MCA) Compact and the Ambassador 
encouraged the early signing of procurement and fiscal agent 
contracts.  The Ambassador noted upcoming policy and trade talks set 
for early February, and he urged the GOM to seriously consider 
USTR's offer to negotiate a bilateral transparency agreement (TA). 
The Ambassador described USG plans to provide technical advice on 
Mongolia's energy system as well as to provide in March an energy 
crisis-related emergency preparedness exercise. END SUMMARY. 
 
¶2. (SBU) The DCM and Acting E/P Chief (notetaker)  also attended the 
cordial 40-minute January 7 meeting at State House where the 
Ambassador began by presenting Enkhbold with a Christmas Card from 
the White House, a letter from Secretary Rice and official White 
House photos of the presidential summit in October 2007. 
 
Appreciation for 9th Iraq Rotation 
---------------------------------- 
 
¶3. (SBU) After congratulating Minister Enkhbold on his new position 
and thanking him for his previous support and cooperation as Foreign 
Minister, the Ambassador conveyed the USG's appreciation for the 
GOM's decision to continue its participation in coalition efforts in 
Iraq by sending its 9th full rotation of forces. 
 
MCC Implementation 
-------------------- 
 
¶4. (SBU) Turning to the MCA Compact, the Ambassador urged the GOM to 
act quickly to begin implementing the MCA compact.  He remarked that 
during his recent meeting with Minister of Roads, Transportation and 
Tourism Rash, (septel) the Minister implored him to facilitate quick 
delivery of badly needed locomotives to keep the railway running. 
The Ambassador assured Rash of our desire to help but said that 
action awaited the official establishment of MCA-Mongolia.  He said 
the MCA Procurement Agent Agreement (PAA) and Fiscal Agent Agreement 
(FAA) could be signed by either the Prime Minister, as the Chairman 
of MCA-Mongolia's Board, or the Minister of Finance in advance of 
parliamentary ratification of the compact, formation of the 
MCA-Mongolia Board or the selection of a CEO.  The Ambassador 
worried that if the GOM waited until all of these actions were 
sequentially completed (mostly likely not until February) Mongolia's 
high inflation rate would likely eat away at some of the funding. 
 
¶5. (SBU) Enkhbold said he considered the signing of the MCA Compact 
to be the most notable achievement during his tenure as Foreign 
Minister.  He expected Parliament to ratify the compact before 
week's end and he had earlier arranged an informal meeting of the 
MCA-Mongolia Board to consider MCA-Mongolia's rules and regulations; 
questions or comments were due later that day. The MCA-Mongolia 
Board, he promised, would be officially established and registered 
with the Ministry of Justice within the next few days. He assured 
the Ambassador that having either the Minister of Finance or the 
Prime Minister sign the PAA and FAA should present no problems.  The 
aim, he admitted, was to have the Minister of Finance sign, but, in 
principle, the Prime Minister can also sign. 
 
¶6. (SBU) Enkhbold asked what was causing the delay in appointing a 
CEO for MCA Mongolia.  The DCM responded that he understood that 
there were not enough candidates in the first recruitment drive and 
that the deadline for new applications was set for January 11. 
Applications would then need to be vetted to prepare them for review 
and decision by MCA Mongolia's Board. Responding to concerns voiced 
by Enkhbold that the former head of the now defunct MCA Mongolia 
National Committee, Ms. O. Enkhtuya and her assistant, were carrying 
the heavy MCC workload without any compensation while awaiting the 
formation of the MCA-Mongolia Board, the DCM said that once the PAA 
and the FAA were signed, MCC's pre-implementation funding could be 
released.  The DCM further stressed the need to have national board 
members transfer their institutional knowledge of MCC to the new 
 
ULAANBAATA 00000008  002 OF 002 
 
 
MCA-Mongolia Board.  The Ambassador concurred and cited this as yet 
another reason why it was vital to have these agreements signed as 
quickly as possible. 
 
CBRGI, TIFA and the Transparency Agreement 
------------------------------------------ 
 
¶7. (SBU) The Ambassador informed Enkhbold that the annual policy 
talks (Comprehensive Bilateral, Regional, and Global or CBRGI) and 
trade (Trade Investment Framework Agreement or TIFA) meetings were 
scheduled to take place back-to-back in early February in 
Washington, DC.  He hoped that by the TIFA talks in February the GOM 
would agree to enter into discussions for a Transparency Agreement 
(TA) as proposed by USTR after last year's TIFA.  The Ambassador 
noted that this was the first time the USG had offered to negotiate 
a TA with another country (outside of a full-blown FTA) and this 
corresponded with President Bush's words to President Enkhbayar 
during the presidential summit that we develop our trade relations 
"incrementally."  He assured Enkhbold that the TA would not be a 
document plucked wholesale from the recently negotiated Korean FTA, 
but rather something that will be negotiated between our two 
countries and reflect Mongolia-specific needs.   He noted that a TA, 
which is a component of all FTAs, was achievable and would lay the 
groundwork that the incoming US administration could pick up on. 
Enkhbold promised to do everything in his power to promote the 
process of TIFA and CBRGI within the GOM. 
 
Energy Issues and the APCSS 
Emergency Preparedness Exercise 
-------------------------------- 
 
¶8. (SBU) The Ambassador mentioned that he had recently met with the 
new Minister of Fuel and Energy Khurelbaatar (whom he knew well as 
the former head of the MCC working group and Ministry of Finance 
State Secretary), and said the Minister was eager to discuss power 
generation and pollution issues with consultants working under a 
USAID program.  Enkhbold encouraged the Ambassador to continue his 
communications with Minister Khurelbaatar regarding energy issues. 
 
 
¶9. (SBU) Noting that Ulaanbaatar city had just about reached its 
energy capacity limit, the Ambassador segued into a discussion of 
the upcoming emergency preparedness exercise , sponsored by the 
Asia-Pacific Center for Security Studies (APCSS) in coordination 
with the GOM's National Emergency Management Agency (NEMA), which 
centered on the government's response to a massive failure of one of 
UB's two major power plants (which provides 70% of UB's heat and 
electricity).  Enkhbold agreed that the emergency exercise would be 
a useful tool for Mongolia and asked the Ambassador to let him know 
if there is anything he could do to make it a success. 
 
Good Cooperation, Good Third Neighbors 
-------------------------------------- 
 
¶10. (SBU) Before ending the meeting, Chief Cabinet Minister Enkhbold 
thanked the Ambassador and the staff of the US Embassy for their 
close cooperation during his time as Foreign Minister.  "As someone 
who has worked closely with your embassy", he said, "I am willing to 
do what I can to promote bilateral relations.  We are serious about 
our third neighbor policies and this is why our relations with the 
US are so important to us".  The Ambassador responded that it had 
been a personal pleasure to work with Enkhbold as Foreign Minister, 
during which our two countries achieved so much. 
 
Minton