P 150858Z MAY 09
FM AMEMBASSY ULAANBAATAR
TO SECSTATE WASHDC PRIORITY 2846
INFO AMEMBASSY BEIJING 
AMEMBASSY SEOUL 
AMEMBASSY TOKYO 
AMEMBASSY MOSCOW 
AMEMBASSY OTTAWA 
AMEMBASSY MANILA 
AMEMBASSY NEW DELHI 
AMEMBASSY BANGKOK 
DEPT OF COMMERCE WASHINGTON DC
MILLENNIUM CHALLENGE CORP WASHINGTON DC
SECDEF WASHINGTON DC
NSC WASHINGTON DC
USMISSION GENEVA 
USMISSION USUN NEW YORK

UNCLAS ULAANBAATAR 000132 
 
 
STATE FOR EAP/CM, EAP/PD, DRL, IO AND INR/EAP 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON PHUM KCOR KMCA SOCI MG
SUBJECT:  RUSSIAN PRIME MINISTER VISITS MONGOLIA 
 
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SUMMARY 
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¶1.  (SBU) SUMMARY:  Russian Prime Minister Vladimir Putin arrived in 
Ulaanbaatar on the afternoon of May 13 for a half-day of meetings 
with Mongolian government officials.  In addition to Putin's 
hour-long private meeting with Mongolian Prime Minister S. Bayar, 
Mongolian and Russian officials held a series of separate 
consultations that resulted in agreements on railroad modernization, 
agriculture, and nuclear energy.  Some Democratic Party (DP) members 
were concerned that Putin's visit - just a week and a half before 
Mongolia's presidential election - would boost President Enkhbayar's 
re-election bid, but the public reaction to Putin's visit was mild; 
neither significant excitement nor protest was observed. 
 
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PUTIN ARRIVES IN MONGOLIA; PMS MEET PRIVATELY 
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¶2.  (SBU) Russian Prime Minister Vladimir Putin arrived in 
Ulaanbaatar on the afternoon of May 13 for a half-day of meetings 
with counterpart S. Bayar and other Mongolian government officials. 
An hour-long private meeting between Bayar and Putin was conducted 
in Russian without translators, unusual for high-level meetings 
(NOTE:  Bayar, who studied in Russia and served as Ambassador to the 
country from 2001-2005, is fluent in Russian. END NOTE).  In a joint 
press conference with Bayar afterward, Putin emphasized 
collaboration on issues including mining, military cooperation, 
railway expansion, education, nuclear technology and uranium.  The 
two prime ministers agreed to expand cooperation along the 
Russian-Mongolian border and discussed cooperation in the 
agriculture sector; Russia also agreed to supply Mongolia with 
agricultural machinery as part of a previously-proposed $300 million 
loan and to expand its import of Mongolian meat products. 
 
¶3.  (SBU) Putin also had a courtesy call with President Enkhbayar; 
during their public meeting, Enkhbayar presented Putin with the 
order of Erdeniin Ochir (Precious Thunderbold), which is presented 
to foreign officials who pursue stronger ties with Mongolia and 
adhere to the principles of justice and democracy.  Enkhbayar also 
met with Russian Railways Chief Vladimir Yakunin. 
 
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BILATERAL MEETINGS 
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¶4.  (SBU) Putin, Bayar, and their ministers held a number of other 
meetings Wednesday afternoon, many of which resulted in bilateral 
agreements.  Russian Railways Chief Vladimir Yakunin told reporters 
the joint projects agreed upon during the meetings were worth an 
estimated seven billion dollars. 
 
¶5.  (SBU) Minister of Roads, Transportation, Construction, and Urban 
Development Kh. Battulga met with Russian railway officials in a 
closed meeting.  Mongolian-owned Ulaanbaatar Railway received 1000 
cargo train cars as part of a bilateral agreement signed by Vladimir 
Yakunin, head of the state-run Russian Railways Company and Kh. 
Battulga; the trains were purchased by Mongolian Trans Logistic from 
the Russian Railways Association at the discounted price of $7 
million.  In a memorandum of understanding, Russia agreed to invest 
a total of $250 million in railway modernization; in a separate 
agreement, representatives of the countries' state-run railway 
industries agreed to set up a joint venture intended to upgrade 
railway infrastructure.  When a Mongolian journalist asked Yakunin 
about the rejection of the MCC railway grant, he said "We Russians 
have a saying that you only find free cheese in a mousetrap.  Things 
that are free come with a higher price...I personally never get free 
presents." 
 
¶6.  (SBU) In Putin's meeting with Parliamentary Speaker D. Demberel, 
Demberel advocated continued cooperation at border checkpoints and 
requested that the Russian Government lower taxes on Mongolian 
imports.  Putin stressed the importance of strengthening ties 
between Mongolia and Russia, including more interaction between the 
political parties of the two countries. 
 
¶7.  (SBU) Prime Minister Bayar and Russian Agriculture Minister 
Yelena Skrynnik exchanged views on bilateral cooperation in the 
agriculture sector.  Skrynnik also met with T. Badamjunai, 
Mongolia's Minister of Food, Agriculture, and Light Industry; the 
two issued a joint statement renewing the 1992 cooperation 
agreement.  A contact at the Ministry of Food, Agriculture, and 
Light Industry told us that the ministries also signed a memorandum 
of understanding clarifying the terms of the proposed $300 million 
agricultural loan, including interest rates, implementation, and 
disbursement mechanisms, but the contact was unable to provide 
further details. 
 
¶8.  (SBU) Bayar told reporters that Mongolia hopes to speed up the 
creation of a joint venture in uranium mining and increase military 
cooperation with Russia, and Putin said the joint venture would be 
created within a few weeks.  Russian Energy Minister Sergei Shmatko 
said separately that the two countries had agreed on the documents 
"in principle" and that "there are no issues." 
 
¶9.  (SBU) A memorandum of understanding was signed by Mongolia's 
Nuclear Energy Agency and Russia's Rosatom State Nuclear Energy 
Corporation; the two sides agreed to arrange for ten Mongolian 
students and five experts to study in Russia.  Russia and Mongolia 
also inked other deals, including preliminary cooperation agreements 
between Aeroflot and Mongolian Airlines that will increase the 
number of flights between Mongolia and Russia and standardize ticket 
prices. 
 
¶10.  (SBU) After three and a half hours of meetings in the 
Government House, the two Prime Ministers walked out onto Sukhbaatar 
Square, where they spent a few minutes talking to journalists and 
examining Russian-made farm machinery that symbolized the 
agricultural agreements made between the two Prime Ministers.  Putin 
then made stops at the local Russian Orthodox Church and a monument 
for Russian Marshal Zhukov before an official dinner hosted by Prime 
Minister Bayar at Ikh Tenger, the leadership complex outside 
Ulaanbaatar where the Prime Minister, President, and Speaker 
reside. 
 
¶11.  (SBU) Throughout the visit, Mongolian and Russian officials 
emphasized the importance of key anniversaries in Mongolian-Russian 
relations, including the 70th anniversary of the Battle of Khalkhin 
Gol in August, which provided a decisive victory against the 
Japanese on the Mongolian-Manchurian border. 
 
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LOCALS UNFAZED BY VISIT; DP QUESTIONS TIMING 
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¶12.  (SBU) Aside from short road closures and blocked access to the 
north end of Sukhbaatar Square, life went on as usual in Ulaanbaatar 
during Putin's visit.  Public reaction to Putin's visit was markedly 
different from his previous visit to Mongolia in 2000, early in his 
tenure as Russia's president.  His first visit, which focused on 
restoring friendly relations between Russia and Mongolia, was 
greeted with enthusiasm by Ulaanbaatar residents who came in large 
numbers to see the Russian president.  Poloff observed about 1500 
people on the south side of Suhkhbaatar Square when the Prime 
Ministers exited the government building around 7:40 pm on May 13, 
but the onlookers were calm and did not cheer for Putin as they did 
nearly a decade ago.  Several had cameras, but no flags or signs 
were observed. 
 
¶13.  (SBU) Many Democratic Party (DP) activists have questioned the 
timing of Putin's visit, which fell just eleven days before 
Mongolia's presidential election.  DP campaign representatives said 
publically prior to the visit that they were concerned that Prime 
Minister Putin might try to assist President Enkhbayar in his 
re-election campaign, but the DP told us on May 13 that the DP had 
tried to prevent protests, since Russia is an important neighbor and 
the two Mongolian political parties share a common approach to 
foreign policy.  A senior DP campaign official, however, told us he 
was annoyed with the fact that Putin praised Enkhbayar during the 
visit for strengthening Mongolia's foreign policy. 
 
MINTON