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UNCLAS SECTION 01 OF 03 ULAANBAATAR 000174 
 
SIPDIS 
 
C O R R E C T E D  C O P Y  (ADDED SENSITIVE CAPTION) 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR EAP/CM, DRL AND INR/EAP 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON PHUM ENRG ECON KWMN MG
SUBJECT: MONGOLIA'S KHENTII PROVINCE: ONE FOR THE ROAD 
 
ULAANBAATA 00000174  001.2 OF 003 
 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION 
 
¶1. (SBU) SUMMARY: Mongolia's eastern Khentii province, proud 
birthplace of Chinggis Khan, is developing rapidly, with new hotels 
and restaurants, plans to become a tourist destination, and a 
soon-to-be-completed road linking the provincial capital, 
Undurhkaan, with Ulaanbaatar.  Electrification has reached all 17 of 
the province's counties, and Khentii's criminal justice system has 
made enormous progress in terms of infrastructure and information 
technology.  However, Khentii faces serious challenges, including 
soaring prices, chronic unemployment, and crime rates that remain 
among the nation's highest.  A lack of universities limits 
educational advancement, and Khentii has serious environmental 
problems.  Civil society is weak, and NGO development is still 
embryonic.  Churches report a wide degree of religious freedom.  Of 
Mongolia's 21 provinces, Khentii is one of only two whose Governor 
belongs to the Democratic Party.  Local relations between the 
Democrats and the nationally dominant Mongolian People's 
Revolutionary Party (MPRP) are as strained as elsewhere, but both 
agree that it is unclear which party, or parties, will win Khentii's 
three Parliament seats, up for grabs in the June 29 national 
elections.  Econ/Pol Chief visited Undurkhaan on April 14 and 15. 
END SUMMARY. 
 
¶2. (SBU) New homes, hotels and shops are springing up in the Khentii 
provincial capital of Undurkhaan, currently a five-hour drive east 
of Ulaanbaatar.  The squat and sprawling home of 25,000 people and 
countless packs of roaming dogs, Undurkhaan has until recent years 
taken more than 20 hours to reach by car from Ulaanbaatar.  But if 
the construction of a new road, financed with Japanese assistance, 
is completed as scheduled later this year, the trip will be cut to 
three and a half hours, likely bringing about an increase in trade, 
travel and other contacts between the two cities.  On a April 14 and 
15 visit to Undurkhaan by the Econ/Pol Chief and the Senior Pol 
Assistant, local officials and residents expressed optimism over 
Khentii's long-term development into a destination for domestic and 
international tourists.  Khentii's outspoken Governor Jargal said 
the road to UB will be key. "If you want to get to Khovsgol province 
(in northwestern Mongolia), you have to stay there a week.  There's 
no way to make a brief trip there," because of inadequate roads and 
a lack of direct flight services.  Khentii, Jargal said, is easily 
reached from Ulaanbaatar, and its appeal as the birthplace of the 
great Khan will draw large numbers of tourists, particularly 
Japanese and South Koreans.  (Note: Khentii is home to Blue Lake, 
where Chinggis Khan was coronated, and Deluun Boldog, the alleged 
site of his birth.  The Governor said UNESCO is planning to declare 
as a heritage site the Khentii county of Delgerkhaan, home to ruins 
of an ancient city.  End Note.) 
 
PROGRESS ON KEY ROAD, ELECTRIFICATION, WATER... 
--------------------------------------------- -- 
 
¶3. (SBU) The tourists might not be flooding in just yet, but 
Khentii's residents have clearly benefited from a number of recent 
developments, including partial completion of the UB-Undurkhaan 
road, electrification of the province, and improved access to fresh 
water.  Khentii's political players are quick to claim the credit. 
Gov. Jargal, of the Democratic Party (DP), said work on the road has 
moved forward quickly during his governorship, while Jargal's 
predecessor, Erdenebaatar, of the Mongolian People's Revolutionary 
Party (MPRP), told us that "the MPRP initiated the road, which has 
brought great economic benefits to Khentii."  The Chairman of 
Khentii's provincial assembly, Bayart-Od, who also serves as the 
DP's second highest official in Khentii, noted that until recently, 
the electricity needs of most the province's residents have been met 
only partially, with small diesel power stations typically providing 
power for two hours a day.  In March, Bayart-Od said, the last of 
Khentii's 17 counties was linked to the central provincial power 
station, yielding 24/7 access to electricity.  Former Gov. 
Erdenebaatar said Khentii residents are now enjoying access to 
high-quality fresh water delivered through pipes, rather than 
relying on less-healthy containerized water.  He said that in an 
ambitious project started by the MPRP, underground water pipes were 
laid to neighborhood water points.  Erdenebaatar also said that the 
proliferation of cell phones and relay points in recent years has 
dramatically improved telecommunications access in Khentii. 
 
... BUT UNEMPLOYMENT, EDUCATION PROBLEMS REMAIN 
 
ULAANBAATA 00000174  002.2 OF 003 
 
 
--------------------------------------------- -- 
 
¶4. (SBU) However, Khentii and its estimated 75,000 residents 
continue to face a number of challenges, not least of all soaring 
prices for food (septel) and fuel, as well as unemployment.  "More 
people in Khentii are doing better than before, but the success is 
not spread evenly across the board," said Coordinator Bat-Erdene of 
the USG-funded TAN project, which works with 14 Undurkhaan NGOs.  He 
said unemployment is a major problem, especially among educated 
women.  Khentii high-school graduates hoping to continue their 
education have to leave the province due to the absence of any 
colleges or universities.  Two to three thousand Khentii residents 
attend university in Ulaanbaatar, according to Gov. Jargal.  Jargal 
also criticized Mongolia's "vertical" education system.  (Note: In 
accordance with the Public Administration and Finance Law, the 
salaries of schoolteachers in Khentii, as elsewhere, are paid by the 
central government.  End Note.)  Jargal said this system puts 
Khentii's education system under the control of authorities in UB, 
adding, "I have no idea how the schools in my province are run." 
 
ENVIRONMENTAL WOES 
------------------ 
 
¶5. (SBU) Like many other Mongolian provinces, Khentii faces 
considerable environmental difficulties.  Desertification plagues 
some of the province's southern counties, and ongoing droughts are 
destroying pastures.  (Note: Nevertheless, the number of livestock 
is increasing, and currently stands at 2.2 million.  With more than 
350 residents owning 1,000 or more head of cattle, Khentii has the 
highest concentration of major herders in eastern Mongolia.  End 
Note.)  Governor Jargal said Khentii's top development goal is to 
develop its agribusiness sector, adding that this effort has 
involved widespread planting of new crops of vegetables (garlic and 
cabbage, among others).  He said Mongolia needs to reduce its 
reliance on imported Chinese food, adding that Mongolians are paying 
$770 million per year for Chinese food "of suspect quality."  (Note: 
Drought conditions in Khentii, Selenge and Tuv provinces last year 
reduced Mongolia's domestic wheat production, forcing greater 
reliance on imports to meet demand.  End Note.)  Jargal said Khentii 
authorities are also eager to harness the province's mineral 
resources, including fluorspar, but that Khentii insists on 
environmentally friendly mining.  (Note: According to provincial 
assembly Chairman Bayart-Od, most of the provincial government's 
revenues come from mining.  Chinese workers constitute much of the 
workforce at Khentii's mines, although a few Russians also work at 
mines.  In Galshar County, all of the miners are Chinese.  End 
Note.)  Gov. Jargal added that the central government has been 
"giving away Khentii land for oil exploration." 
 
HIGH CRIME RATES 
---------------- 
 
¶6. (SBU) Undurkhaan's chief justice, top prosecutor and senior-most 
court administrator noted on April 15 that Khentii continues to 
suffer from high rates of crime, including violent crime. 
Prosecutor Chibat, whose 12-prosecutor staff includes seven women, 
four currently on maternity leave, said three people were murdered 
in Undurkhaan last year, and that the suspects' legal proceedings 
are continuing.  He added that Khentii's crime rate "is in the top 
tier nationwide," and higher than that in the neighboring provinces 
of Dornod or Sukhbaatar.  Chief Justice Lkhagvadorj, Chibat and 
Administrator Ochir all agreed that the province's criminal-justice 
system has improved dramatically in recent years, thanks in large 
part to U.S. assistance through the USAID-supported Judicial Reform 
Project (JRP).  JRP has resulted in the significant expansion of 
Undurkhaan's courthouse; realization of computer connectivity within 
the courthouse; and provision of other material support, including 
reference materials for judges.  Consequently, said Ochir: "People 
have become more interested in working at the courthouse.  The 
technical support we've received has made our working conditions 
better."  The three officials said intimidation of judges and 
prosecutors occurs, but only rarely, sometimes taking the form of 
damage to vehicles or threats aimed at family members.  They said 
that no crimes involving foreigners were processed over the past 12 
months, and that no religion-related crimes had been reported over 
this period. 
 
CIVIL SOCIETY WEAK 
 
ULAANBAATA 00000174  003.2 OF 003 
 
 
------------------ 
 
¶7. (SBU) Bat-Erdene, the NGO coordinator, confirmed that civil 
society is weak and fractured in Khentii, as in many Mongolian 
provinces.  "Khentii's NGOs are still in their infancy, still 
fighting the Mongolian tendency to be extremely self-reliant - a 
result of our nomadic heritage."  Bat-Erdene, whose 14 partner NGOs 
include the Boy Scouts, Women For Social Progress, Supporting 
Children's Participation and a public broadcasters, said the fact 
that Khentii does not have any shelters for women and children 
victims of violence puts many at risk.  He added that a lack of 
high-quality hospitals and clinics results in higher-than-average 
rates of maternal deaths during childbirth.  Bat-Erdene said 
Undurkhaan does not have facilities in which children can spend 
their free time productively, so that many end up passing hours and 
computer game centers, "where some get addicted and many spend too 
much of their family's income." 
 
RELIGIOUS FREEDOM 
----------------- 
 
¶8. (SBU) According to two leaders of the evangelical Transformation 
Church of Khentii, who spoke with us on April 15, religious 
minorities in the province enjoy wide latitude in holding services 
and conducting public outreach.  Pastor Otgonbaatar and Dutch 
missionary Hanny Key said Undurkhaan is home to four churches, and 
that although individual Mongolian Christians are occasionally 
pressured or threatened, often by non-Christian family members, 
there had been no religion-motivated violence directed at Christians 
in recent memory.  Similarly, they said, Mongolian authorities did 
not obstruct churches' activities, and even allowed the churches to 
broadcast over the public FM radio station occasionally. 
 
ELECTIONS: TOO CLOSE TO CALL 
---------------------------- 
 
¶9. (SBU) The 76 seats in Mongolia's Parliament will be contested on 
June 29, and the three seats representing Khentii will be no 
exception.  Although Khentii's Governor, Jargal, is a DP member, all 
three of the province's Members of Parliament (MP) are from the 
MPRP.  (Note: Jargal and many other DP members accuse the MPRP of 
having committed election fraud in the 2004 Parliamentary elections. 
 MPRP officials, for their part, accuse the DP of plotting to "buy" 
the upcoming elections, saying local big businessmen affiliated with 
the DP might pass out gifts just before the elections.  End Note.) 
Local DP and MPRP reps agree that either of the two parties could 
win the Parliamentary elections in Khentii, despite the fact that 
one of the incumbent MPs, Khurelsukh, has been convicted of 
corruption.  (The conviction is under appeal.)  Provincial assembly 
Chairman Bayart-Od, of the DP, acknowledged that the DP has a 
perception problem of sorts because some of the DP candidates who 
will seek to represent Khentii are resident in Ulaanbaatar.  Jargal, 
also of the DP, calls the MPRP "communists" and "mobsters," and 
openly accuses the MPRP of trying to spend its way to victory.  "I 
predict that the MPRP will again get a lot of money from the 
Russians and the Chinese Communist Party," he said, adding that the 
MPRP-led central government was spending large amounts of money to 
buy gers (traditional Mongolian homes) to win the allegiance of 
prospective voters.  Former Gov. Erdenebaatar, of the MPRP, said 
that although "it's hard to predict who will win, I'm an optimist, 
and I think the MPRP will prevail... The people believe in us, and 
the current Prime Minister (Bayar) is from the MPRP." 
GOLDBECK