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ZNR UUUUU ZZH
R 130957Z AUG 09
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 2984
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHUL/AMEMBASSY SEOUL 3761
RUEHKO/AMEMBASSY TOKYO 3414
RUEHMO/AMEMBASSY MOSCOW 2585
RUEHTA/AMEMBASSY ASTANA 0107
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 03 ULAANBAATAR 000236 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: OREP OVIP PGOV PREL ECON ETRD AMGT ASEC AFIN MG
SUBJECT: Summary of High-Level Meetings during CODEL Boehner 
 
ULAANBAATA 00000236  001.2 OF 003 
 
 
Sensitive but Unclassified - Not for Internet Distribution 
 
¶1. (SBU) Summary: On August 9 and 10, Members of the Congressional 
Delegation headed by House Minority Leader John Boehner of Ohio met 
with Prime Minister S. Bayar and President Ts. Elbegdorj during the 
course their visit to Mongolia to review the impact of the current 
economic crisis and issues related to energy security in the Central 
and Northeast Asian regions.  The discussion with the PM 
concentrated on trade and commercial issues, while that with the 
President focused on advances in Mongolia's democracy.  The 
delegation also visited nomadic herders who have received support 
from a USAID sponsored project and attended dinner with leaders of 
the U.S. business community in Mongolia.  End Summary. 
 
¶2. (SBU) On August 9 and 10, Members of the Congressional Delegation 
headed by House Minority Leader John Boehner of Ohio visited 
Mongolia to review the impacts of the current economic crises and 
issues related to energy security in the Central and Northeast Asian 
regions.  Rep. Boehner was joined by Representatives Dan Boren of 
Oklahoma, Jo Bonner of Alabama, Dave Camp of Michigan, Tom Latham of 
Iowa, and Greg Walden of Oregon. 
 
CODEL Sees Rural Economy 
------------------------ 
 
¶3. (SBU) CODEL Boehner's first stop was to review the economic 
challenges faced by a traditional herder family located about 30 
miles southwest of the capital Ulaanbaatar and to discuss ways that 
USAID assistance had aided the family's livestock enterprise.  The 
family of eight shared how the current economic crisis had affected 
their nomadic lifestyle including cattle, sheep, and goat herding, 
milking horses, and cheese production.  The family also shared how 
business skills training provided by CHF International and funded by 
USAID had improved its standard of living.  The delegation also 
reviewed traditional handicrafts and spoke to the craftsman about 
their economic challenges and how USAID-funded assistance is 
benefiting them. 
 
CODEL Meets American Business People 
------------------------------------ 
 
¶4. (SBU) Upon return to Ulaanbaatar, the CODEL joined leading 
American business people (including representatives from Peabody 
Energy and Ivanhoe Mines) and one Mongolian who owns a political 
survey and polling business for dinner at Khan Bank, Mongolia's 
leading financial institution.  The subject on everyone's mind was 
the likelihood of Parliament accepting the latest terms for the 
world class Oyu Tolgoi (OT) copper-gold mine investment agreement, 
recently agreed upon between the Bayar government and Rio Tinto and 
Ivanhoe Mines of Canada and now under parliamentary debate.  All the 
business people agreed that passing the agreement would be seen as 
unambiguous signal that Mongolia was ready to do business 
transparently and according to the rule of law with its western 
"third neighbor" countries.  Generally, the group was positive about 
chances for passage in the upcoming weeks, but expressed concern 
that failure to agree to an OT deal (or to at least vote on the 
package) would send a message that Mongolia was not ready to join 
the international economy and not serious about doing business with 
world-class Western firms. (NOTE: Post's DATT invited members of 
Mongolia's National Security Council, Mongolian military 
counterparts, and personnel from the Mongolian National Emergency 
Management Agency to an exchange views on security issues affecting 
Mongolia with CODEL Boehner staffers and military support staff. 
End Note.) 
 
CODEL Meets Senior Mongolian Leaders 
------------------------------------ 
 
¶5. (SBU) CODEL Boehner then participated in back-to-back meetings 
with Prime Minister S. Bayar and President Ts. Elbegdorj (see para 
15 for a list of attendees at both meetings).  The meeting with 
Bayar stuck to economic issues, with a focus on mineral wealth as 
both the key to national development and the focal point of 
Mongolia's relations with its neighbors and other partners.  Bayar 
noted that it was essential for deals to be struck on OT, the coal 
mine at Tavan Tolgoi (TT), and on uranium projects as soon as 
possible, but acknowledged that internal political disputes needed 
to be handled first, especially on the OT deal.  He hoped Parliament 
would approve the OT deal during a special session to be called in 
 
ULAANBAATA 00000236  002.2 OF 003 
 
 
the latter half of August. 
 
¶6. (SBU) Bayar also noted that the resource sector faced a major 
transportation problem due to inadequate infrastructure and to 
Mongolia's landlocked status between China and Russia.  He 
specifically referred to the recent troubles with the cancelled MCC 
rail program.  Mongolia had proposed the rail program to deal with 
critical shipping deficiencies but Russian intransigence had wrecked 
the program.  He hoped that attempts to reprogram the USD 188 
million in September would be successful. 
 
¶7. (SBU) Bayar also praised the high level of U.S. Mongolian 
bi-lateral relations, noting the many senior-level visits, 
delegations, and events that have occurred over the last year.  He 
gave special attention to improving the commercial dimensions of the 
relationship, noting that Peabody Energy's participation at TT would 
clearly enhance U.S.-Mongolian ties.  In addition, he repeated the 
call for a Free Trade Agreement; but he recognized the difficulty in 
reaching such an agreement in the near term, accepting that the 
Transparency Agreement (currently being worked on between USTR and 
the Mongolian Ministry of Foreign Affairs and Trade) offered the 
best long-run opportunity to reach an FTA. 
 
¶8. (SBU) Representative Boehner and company recognized the 
importance and depth of relations with Mongolia, attributing much of 
the high-level U.S. attention to Mongolia's peacekeeping 
contributions in Iraq and Afghanistan, shared democratic values, and 
potential investment and trade ties.  After hearing Bayar's extended 
analyses of OT, coal, and uranium projects, the CODEL agreed that 
Mongolia's mineral resources were key to its development, 
acknowledged that such issues were politically difficult to manage, 
and averred that American firms would be eager to bring their 
dedication to transparency, rule of law, and world-class practices 
to Mongolia. 
 
¶9. (SBU) The key themes of the delegation's meeting with President 
Elbegdorj were the positive tone and constructive nature of the 
bilateral relationship, the state of Mongolian democracy, mining 
laws and Oyu Tolgoi, and development challenges Mongolia faces. 
 
¶10. (SBU) Elbegdorj said that Mongolia greatly values its 
relationship with the United States and appreciates the support the 
USG has offered since the beginning of Mongolia's democratic 
opening.  He expressed particular thanks for Senate Resolution 192 
on the U.S.-Mongolia relationship passed in June, and for ongoing 
efforts to reprogram funds for the Millennium Challenge Account in 
Mongolia.  Elbegdorj said the GOM supports U.S. strategy in 
Afghanistan and Pakistan. 
 
¶11. (SBU) In response to a question from Rep. Boehner about the 
state of democracy in Mongolia, Elbegdorj stated that Mongolians are 
proud that the transition from the socialist area was peaceful.  He 
also noted that Mongolia has undertaken simultaneous economic and 
political reforms, breaking what some see as the standard regional 
progression of economic liberalization followed by political reform. 
 Elbegdorj said Mongolia may be small, but it serves as a model for 
others in the region, adding that eighty percent of Mongolia's GDP 
now derives from private sector activity. 
 
¶12.  (SBU) In response to a question from Rep. Bonner, Elbegdorj 
said Mongolia's future lies in educating its young population, of 
which educational exchange abroad must be a key element.  He said 
Mongolia must pay careful attention to desertification, 
deforestation, and pollution so that the current generation leaves a 
beautiful country for the next. 
 
¶13. (SBU) Rep. Walden asked about the state of the mining law.  The 
president explained that the Mongolian MPs and the public do not 
want to make a mistake and have therefore proceeded cautiously.  He 
said the opinions of all must be weighed carefully and that resource 
nationalism was now a factor with which Mongolia must reckon. 
Elbegdorj described the process of drafting the law as learning by 
doing. 
 
¶14. (SBU) In response to a question from Rep. Boren about 
opportunities in rural areas, Elbegdorj said he had seen a reduction 
in the numbers of those moving to urban areas, but that this was due 
largely to unemployment, crime, and pollution in urban centers 
resulting from the absorption of many rural migrants in recent 
 
ULAANBAATA 00000236  003.2 OF 003 
 
 
years.  Elbegdorj suggested that if Mongolia can raise its median 
GDP from $2,000 to $5,000 per year, then the rural-to-urban and 
urban-to-abroad migration flows will be largely eliminated.  He 
closed the meeting by reiterating his gratitude for U.S. support of 
Mongolia's democratic transition. 
 
¶15. (SBU) List of Attendees at High-Level Meetings: 
 
--CODEL Boehner Meeting with Prime Minister S. Bayar 
 
GOM: 
Prime Minister Bayar 
MP Saikhanbileg (DP Caucus Leader) 
MP Sukhbaatar (MPRP) 
Mr. Och, PM's Foreign Policy Advisor 
Mr. Mounkhou, Acting Director of the Department for Middle East, 
Americas, and African Affairs (MFAT) 
Mr. Anand, U.S. Desk Officer (MFAT) 
Ms. Ninjjamts, Head of PM's Press Office 
 
USG: 
Ambassador Minton 
Representative John Boehner 
Representative Dan Boren 
Representative Jo Bonner 
Representative Dave Camp 
Representative Tom Latham 
Representative Greg Walden 
Senior Commercial Specialist Richmond 
Staff Member Stewart 
 
 
--CODEL Boehner Meeting with President Ts. Elbegdorj 
 
GOM: 
President Elbegdorj 
MP Saikhanbileg (DP Caucus Leader) 
Foreign Policy Advisor Sukhbaatar 
Middle East, Americas, and African Affairs Department Acting 
Director Mr. Mounkhou (MFAT) 
U.S. Desk Officer Mr. Anand (MFAT) 
One unnamed assistant 
 
USG: 
Ambassador Minton 
Representative John Boehner 
Representative Dan Boren 
Representative Jo Bonner 
Representative Dave Camp 
Representative Tom Latham 
Representative Greg Walden 
Political Officer Covington 
Staff Member Stewart 
 
MINTON