Takenori Shimizu Ambassador of Japan to Mongolia

Mongol Invasions of Japan: 1274, 1281

Battle of Khalkha River : 1939

Japanese prisoners of war : 1945-1947

Establishment of Diplomatic relationship: 1972

First ODA; Gobi cashmere plant : 1977 Democratization of Mongolia: 1990

Current Relationship: Strategic Partnership

Directions of the Assistance to Mongolia (2013) - Priority Areas of the Assistance –

1. Sustainable development of the mining sector and enhancement of governance

2. Assisting Inclusive Growth 3. Enhancement of the capacity and function of

Ulaanbaatar as urban center

Commitment & Disbursed Amount -since 1977 –

- Grant base : approx. JPY 105 billion including General culture Grant JPY 2.9 billion Grassroots Grant JPY 2.6 billion - Loan base : approx. JPY 77 billion - TA base : approx. JPY 40 billion TOTAL JPY 222 billion 2.2Billion US$ (1$=100yen)

Major Performance & Activities

[General] Mongolia assistant meeting [Grant Base]

- Installation of the border cargo transit system - Primary Education Development(New 55 schools) and Supporting Study Abroad (JDS: 209 Students)

- Construction of Trunk Road and Bridges - Renovation of Hospitals and Medical Equipments - Rehabilitation of Railways and Power Stations - Improvement of Public Transport Services - Trunk Communication Networks - Water Supply and Sanitations - Human Security & Grassroots Grant Aid, etc.

[JPN Loan Base] - Rehabilitation of Power Stations and Mining Plants - Two Step Loan for supporting Small-Medium Enterprises

- Financial Support to the Government in the 2008’s Monetary Crisis, etc.

[TA Base] - Project Types - Dispatch of Japanese Specialists - Training Program in JICA

[Others] - Government Scholarship Program (approx. 1000 Students)

○Economic ties

◇Total Japan-Mongolia trade in 2012

US$366.65mil (US$315.09 surplus in Japan’s favor)

Export to Mongolia: US$340.58mil.

Import from Mongolia: US$ 25.49mil. a source: Trade Statistics of Japan

◇Japanese direct Investment in Mongolia (as of end-2011)

US$163mil (11th largest amount, 1.63% of the total) a source: FIFTA of Mongolia

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2005 2006 2007 2008 2009 2010 2011

DFI by Japanese companies thou US$

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2005 2006 2007 2008 2009 2010 2011 2012

Total Trade Turnover JP-Mn thou yen

JP Gov’s action

○Executing Strategy of Global Outreach under the Japan Revitalization Strategy

◇Establish strategic commercial relations (e.g. TPP, RCEP)

◇Tap into global market (e.g. infrastructure export, Cool Japan)

◇Promote domestic globalization (e.g. FDI in Japan, global talents)

○Executing ERCH Initiative

◇Development of investment/business environment

◇Cooperation for Mongolia’s sustainable economic development

Facing difficulties in Mongolia

◇ambiguities of legislative system and a legislation.

◇trend of growing nationalism against FDI (e.g. SEFIL, amendment on mineral law)

◇poor infrastructure (e.g. limited capacity of railroad, non paved road)

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● 3rd round of negotiations for “Japan-Mongolia Economic Partnership Agreement (EPA)” will be held in

Ulaanbaatar on April 2-5, 2013. Bath sides will vigorously negotiate toward early conclusion.

● 6th meeting of ”Japan-Mongolia Public and Private Sector Joint Committee on Trade and Investment

Promotion and on Mineral Resources Development”, a framework of public- and private-sector

dialogue for discussing promotion of trade, investment, and resource development, will be held in

Ulaanbaatar on May 5, 2013. Japan expects the participation of Mongolian Chamber of Commerce and

Industry as private-sector chair. Both sides share the views to enhance this committee through such

measure as discussions on specific projects, etc.

● JETRO, in cooperation with Mongolian chamber of commerce and Industry, will hold “Japan Business

Fair in Mongolia” in Ulaanbaatar on May 3-4, 2013 for the first time.

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ERCH Initiative

～Japan-Mongolia Cooperative Initiative for Vibrant Economy～

Development of investment/business environment ● Japan-Mongolia Economic Partnership Agreement (EPA)

● Japan-Mongolia Public and Private Sector Joint Committee on Trade & Investment Promotion ● Japan Business Fair in Mongolia

Cooperation for Mongolia’s sustainable economic development （１）Environment （２）Fostering human resources （３）Improvement of infrastructure basis for development

Outline

Development of investment/business environment

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（１）Environment

● Japan decided to provide approximately 4.2 billion yen in yen loan to build and renew facilities related to “4th

thermal power plant” with Mongolia’s biggest power generation capacity (580MW) in order to improve generating

efficiency and stabilize power supply (loan assistance).

● Hold joint committee meeting between Japanese and Mongolian governments on April 11, 2013, based on Bilateral

Offset Credit Mechanism singed by Japan and Mongolia on Jan. 8, 2013, to start its full implementation by providing

related regulations, etc., and indentify concrete projects under the mechanism.

● Examining specific ways of cooperation, based on preliminary survey, for construction of “Ajilchin flyover” (with total

length of 2,250 m including roads linked to it) aimed at improving urban environment by forming arterial road network

in Ulaanbaatar to ease traffic congestion (loan assistance).

● Undertaking preparatory survey for cooperation regarding construction of subway lines (Ulaanbaatar Metro)

designed to improve comprehensive urban public transport network in Ulaanbaatar (public- and private-sector joint

infrastructure project).

● Decide additional technical cooperation concerning measures against air pollution in Ulaanbaatar (measurement of

pollutants, car exhaust regulations, etc.).

● Contribute to improving air pollution in Mongolia through bilateral policy dialogue and other approaches in addition

to above-mentioned cooperation that contribute to anti-pollution measures. Also, contribute to establishing measures

against air pollution in Asian Region.

2 Cooperation for Mongolia’s sustainable economic development

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（２）Human Resources Development ● Launch preliminary survey to foster human resources for Mongol’s industry through reinforcement of functions of

higher engineering education institutions and acceptance of students for study in Japan (loan assistance).

● Build Japan-Mongolia teaching hospital having educational function to develop human resources in medical area (grant aid). Start preliminary survey to develop medical personnel for local medical care and improve quality of medical services (technical cooperation).

（３）Improvement of infrastructure Basis for Development

● Build a new airport in Ulaanbaatar suburb to improve convenience as international airport by utilizing Japan’s

advanced technology and know-how. This project will improve reliability and safety of air transportation by

introducing latest airport security system. Japan is ready to provide additional official loan (loan assistance).

● Acceleration of necessary procedures by Mongolia toward establishing JBIC export credit line for Mongolian

companies’ purchase of equipment (such as construction machinery for development of mineral resources) and

services from Japan.

● Acceleration of necessary procedures by Mongolia for JBIC/private-sector coordinated loan for construction of oil

refinery in Darkhan with annual production capacity of 2 million tons.

● Japan hopes Mongolia will adopt policy of ensuring Japan’s participation in Tavan Tolgoi coalfield development

project based on agreement between Japanese and Mongolian leaders in March last year.

● Promote coordination toward conclusion of MOU for joint project using Japanese-made satellites in view of

Mongolian Interest in launching communication and earth observation satellites.