VZCZCXRO5847
RR RUEHLMC RUEHVC
DE RUEHUM #0153/01 0990622
ZNR UUUUU ZZH
R 080622Z APR 08
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 2033
INFO RUEHBJ/AMEMBASSY BEIJING 6074
RUEHMO/AMEMBASSY MOSCOW 2169
RUEHUL/AMEMBASSY SEOUL 3269
RUEHOT/AMEMBASSY OTTAWA 0603
RUEHKO/AMEMBASSY TOKYO 2951
RUEHBY/AMEMBASSY CANBERRA 0257
RUEHVI/AMEMBASSY VIENNA 0016
RUEHVC/AMCONSUL VANCOUVER 0136
RUEHDN/AMCONSUL SYDNEY 0043
RUEHUNV/USMISSION UNVIE VIENNA
RHMFIUU/NRC WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0583
RUEKJCS/SECDEF WASHINGTON DC
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000153 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
USAID FOR ANE DEIDRA WINSTON 
 
E.O. 12958:  N/A 
TAGS: PREL PGOV ECON KCOR KNNP KDEM MG
SUBJECT: MONGOLIAN PRESIDENT URGES ACTION ON MINING AS PARLIAMENT 
OPENS SESSION 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION 
 
¶1. (SBU) SUMMARY: In an April 7 address to Mongolia's Parliament on 
the opening day of its spring session, President N. Enkhbayar called 
on lawmakers to act swiftly on mining legislation, and said 
indecision is costing the country opportunities for investment and 
development.  In a 25-minute speech to the 76 Members of Parliament, 
Prime Minister S. Bayar and around a dozen Ambassadors and 
international organizations representatives, the President also 
noted that Transparency International ranks Mongolia 99th in its 
global corruption-perceptions index, adding that a 2005 USAID report 
found corruption "at all levels of our government."  Speaker 
Lundeejantsan said Parliament would debate 40 laws this session, 
starting with controversial amendments to the Law on Mineral 
Resources.  He announced that Parliamentary members of the ruling 
Mongolian People's Revolutionary Party (MPRP) and the opposition 
Democratic Party (DP) would meet separately later in the day to 
"finalize" their positions on the mining amendments.  Lundeejantsan 
also indicated that because of growing Government revenues, 
Parliament will review the 2008 state budget during this session. 
The Speaker did not identify constituencies that might benefit from 
new Government spending, but with all Members of Parliament facing 
re-election on June 29, fiscal restraint will likely be strained. 
END SUMMARY. 
 
PARLIAMENT URGED TO MOVE QUICKLY ON MINING LAW 
--------------------------------------------- - 
 
¶2. (SBU) President Enkhbayar addressed Parliament on April 7, the 
opening day of the spring session, and called on Members of 
Parliament (MPs) to move quickly on controversial amendments to the 
Law on Mineral Resources.  "With every minute of indecision and 
inaction, we are losing opportunities for investment and 
development, so I call on Parliament to use every minute to make 
important decisions," he said.  The President noted research by the 
Fraser Institute, an independent Canadian research organization that 
ranked Mongolia 10th out of 68 countries in terms of mining 
resources, but eighth from last in terms of regulations.  (Note: 
Speaker Lundeejantsan said that later on April 7, MPRP and DP MPs 
would hold separate discussions to "finalize" their positions on the 
mining amendments.  In their current form, the amendments would give 
the state no less than a 51% stake in any deposit Parliament 
considers "strategic."  End Note.) 
 
USAID CORRUPTION REPORT CITED; 
CONFLICT OF INTEREST NOTED AT EVERY LEVEL 
----------------------------------------- 
 
¶3. (SBU) President Enkhbayar referred to Mongolia's entrenched 
corruption problem, noting that the most recent corruption 
perceptions index produced by Transparency International ranks 
Mongolia 99th worldwide.  Describing conflict of interest as "the 
worst problem our politicians face," the President said senior 
government officials must follow the law at all times and resist 
pressure from friends and family members to engage in corrupt 
practices.  Enkhbayar noted that a 2005 USAID report on corruption 
in Mongolia had found the problem present "at all levels of our 
government."  He added that a recent survey by the Academy of 
Management, a training center affiliated with the Mongolian 
Government, found conflicts of interest at "every level of 
government."  The President indicated that the public's expectations 
for cleaner public service had not been fulfilled.  He said the 
problem is not a lack of laws, but insufficient implementation of 
these laws. 
 
SPEAKER LAYS OUT AGENDA 
----------------------- 
 
¶4. (U) Speaker Lundeejantsan said 40 laws will be discussed in the 
 
ULAANBAATA 00000153  002 OF 002 
 
 
current session, with priority given to the Law on Mineral 
Resources.  He said considerable attention would also be paid to the 
law on land privatization; its legal term is ending in May and needs 
to be extended.  The Speaker said MPs would discuss and likely amend 
the Education Law to add a 12th year of compulsory education. 
(Note:  If passed, students would likely start school a year 
earlier, at six years of age.  Until two or three years ago, 
Mongolian youngsters only had to start school at the age of eight. 
End Note.)  Lundeejantsan said MPs will also debate legislation on 
alcohol, freedom of information, MP ethics, the civil service and 
parliamentary procedures. 
 
MID-YEAR BUDGET REVIEW: RESTRAINT OR 
PRE-ELECTION LARGESSE? 
------------------------------------ 
 
¶5. (SBU) Lundeejantsan said that during the current session, 
Parliament will hold a mid-year review of the 2008 state budget, 
"because we have the financial resources to do so."  (Comment: 
Budget legislation is debated and passed each December.  If there is 
extra GOM revenue or a pressing need -- like pleasing the electorate 
before upcoming elections -- Parliament can hold a mid-year meeting 
to review the state budget.  The Speaker did not indicate what the 
money is likely to be spent on.  End Comment.) 
 
PM ATTENDS, TRAVELS SOON TO MOSCOW AND VIENNA 
--------------------------------------------- 
 
¶6. (SBU) Following the GOM's tradition, Prime Minister Bayar was 
present at the opening of Parliament but did not deliver an address. 
 (Note: Bayar is to travel to Moscow on April 10, along with his 
ministers for Foreign Affairs, Transport, and Trade and Industry. 
Thereafter, Bayar is to travel to Vienna for working meetings with 
the International Atomic Energy Agency.  End Note.)  Also present at 
the opening of Parliament were Ambassadors or other officials of 
China, Cuba, the Czech Republic, Germany, India, Kazakhstan, Laos, 
North Korea, Poland, Turkey, the United States (E/P Chief), Vietnam 
and other countries. 
 
¶7. (U) A list of issues expected to be addressed during the current 
Parliamentary session has been sent to EAP/CM. 
 
MINTON