 Good morning, Your Excellency. Honourable guests and ladies and gentlemen. Thank you very much for coming to the first Mongolia Update in Australia. Now I've got the honour of introducing our first speaker, Dr. Gangbald Davadorj. Dr. Gangbald is an economist. He received his doctoral degree from the Moscow State University. And then he was a lecturer at the Mongolian State University. Sometimes it's also called Mongolian National University. But from 1990 he has been more politician as he himself expressed. So he was one of the leading members of the democratic revolution in 1990. As we all know, in 1990 Mongolia had introduced the democratic political system. And that system actually was very much initiated by a number of young academicians. And that includes Dr. Gangbald. And he was the first deputy prime minister of the new political system. And then he also served as the deputy mayor of Olamator City. And so he has been in many important political positions and he has been constantly in the parliament. So he has a good knowledge to analyse the Mongolian economic policy and challenges Mongolia has been facing. Good morning everybody. It's a really great pleasure and an honour for me to have this opportunity to be here today. And to make some speech and maybe general introduction about the situation in Mongolia. I don't know whether how much do you know about our country but I couldn't get some direct internet. And if necessarily you can see in here just a general picture of Mongolia on the globe. This is Mongolia just located in between the two countries. We are landlocked. We don't have any direct access to the international goods and seaports. And how far Australia is unseen from here. Okay. First of all I also would like to thank our host Australian National University for their warm welcome and hospitality. There were times my country was not here beyond our borders. The times when the Mongolian economy was so dependent on the single market, the former Soviet Union. At the time the Soviet Union accounted for 85% on our foreign economic relations. And so named the Council for Mutual Economic Assistance. It's an international organisation for socialist countries excluding China. As a whole accounted for 97% of Mongolian economy. Since the transition from socialism the Mongolian economy has changed dramatically over the past 20 years both politically and socially. For 300 years before its transition to socialism in the early 20s. Mongolia had been one of the most backward countries in the world. Mongolia had an early feudal natural economy with a communist regime in its most rigid and most intolerant form. This line of totalitarianism with its economic analog central planning lasted for the lifetime of the three generations. And this could not be not but leave deep imprints in every sphere of our society. But these extremes of isolation and repression have only heightened the determination of Mongolia for change. Therefore during the past 20 years following the transition from socialism to democracy. Mongolia was able to establish a multi-party political system. Conducted six consecutive parliamentary elections in parallel with the inauguration of presidency. And has formed a parliament in its true meaning. It's very rare that the country has been isolated as Mongolia. Not only from the seas but also from all major international routes. Our only immediate neighbours are as I am trying to show you there. Neighbours are Russia in the north and China in the south. The two powers with the greatest physical parameters in the world. As a member of the WTO and as a trading partnering with the other countries of the region and beyond. Trading logistics is carried out only through the lands of our two neighbours and mainly via railway system. Because we don't have any other access to the international markets. During the past 20 years conferences about Mongolia were based on the transition of our country from communism to democracy. And discussing general macroeconomic reforms such as privatisation, maybe institutional reforms, legal reforms, political transitions and maybe sometimes some cultural and just general ethnographic aspects of our country. Today's topic on Mongolia have become more rich and diversified. And have allowed us to take more specific and sensitive issues concerning our economy. Maybe every day's political life. Every country has its own plan of development and ways of economic progress. The methodologies of development are based on the country's historical background, its land and climate condition, its culture and tradition. During the past 20 years based on the above characteristics of our nation and its economy. Mongolia has achieved and developed its short and long term objectives several times. And strategies for its economic growth. I would like to formulate some of the objectives of our country. As established in relation to foreign investment and the mining sector of Mongolia. There are first mineral exploration and mining. Use of large scale mineral deposits for export to generate profit. And in the long run explore and uncover new mineral deposits. Export finished products overseas rather than raw goods for more value added revenues. Secondly energy sector where in serious shortage of safe and secure domestic source of power necessary to carry out all the planned mining activities and further processing of the extracted minerals. All the major mineral deposits are located in the rural areas. Where new power sources and water supplies will have to be developed. Despite the way even today we are 100% depending on Russian import of oil products. Gasoline fuel and everything else. Third infrastructure and supply chain development. Additional support networks are required to sustain a secure supply chain. Extensive development of railway route, highway, networks and bridges are crucial for us. The supply chain networks must have access to the neighboring countries. Russia and China and main export ports. Unfortunately most of our raw materials cannot be exported via air transportation particularly. Maybe sometimes except gold and other very rare and very high valued products. Fourth human capital. To develop each sector we need an educated and knowledgeable workforce. This requires internationally qualified education system that facilitates specific fields of study. Such as vocational degrees, water supply in sector of water supply, engineering and others. Plus government management is required on all levels of this education system. Unfortunately today's situation is almost three quarters of all our students are students in the humanitarian sectors. Journalism, legal system, maybe economy, economics etc. Unfortunately in the sector of the real economy we are still facing very big shortage of the internationally accepted high educated people. Implantation of the above goals depends on certain factors therefore let me give a brief details on some of the most influential factors in implementing the above mentioned objectives. First of all the geopolitical factors. In terms of multinational company competition there are always supporting governments interests behind these companies and no country is an exception to this matter. Russia and China our direct neighboring countries interests are more feasible and direct in regards to Mongolia. While other third countries particularly Korea, Japan, US, maybe Australia are more undirect and sometimes even unvisible. About Chinese interests here. It is the interest of China to secure as much raw material sources as possible whether it is in Mongolia, Nigeria or in Chile. But more closely Mongolia is obviously a much closer target for China. So it is understandable that Chinese would like to see Mongolia develop its infrastructure. Due to the clear demand for raw materials in China for the next few decades it will desire everything that Mongolia can produce whether the products are raw, processed or value added in some cases. Russia has been a Mongolian traditional partner for many years both politically and economically. It has recently joined the APEC as a Pacific Economic Council since they would like to develop their resources in the regions where they are located. Far East, Siberia etc. Russian economy is based also on raw material exports. We have many similarities in this field with Russia. Therefore, recently Russia is becoming a competitor to Mongolia since both countries will be producing the same raw materials in the next few decades also. For instance, once Taiwan Tolge and OU Tolge starts products and initiates its supply to China, the future economics of Russian projects may start becoming less attractive than before. Hence there are hidden influences and perhaps interests by the Russians to delay and progress in relation to production in the mining sector of Mongolia. About the interests of the third countries. Undirect influences on Mongolia by particularly Japanese, Korean, American, maybe even Australian governments are largely driven by the interconnected interests between the parties involved and how the outcomes may affect Mongolia and the other parties. Therefore implementation of any large projects will be wrapped in various interests sometimes powerful of the countries involved. So let us not be naive to assume that end of the Cold War means the end of competition among the powerful countries. I would like to say certain words about the global economic conditions also. The chain reaction caused by the economic recession in the United States, European Union and the slowdown in Chinese economic growth is still having lingering and very real effects on the global economy. This is not exception to Mongolia as well. Cyclical nature of the global economy has taken effect also. East Asia and Pacific region has also been hit hard but the global recession and despite the environments and progress were still far from the highs we saw in 2008. China is mentioned had undergone a rapid decrease in its economic growth and since they are Mongolia's biggest consumer of raw materials and main revenue generators through mineral exports we are seeing the effects on this recession in Mongolia as well. Due to our small sized economy and high dependence on global commodity fluctuations we are left at the mercy of this large shift around the world. Therefore any large foreign company operating in Mongolia should take this matter into consideration. I'm sure Australia is very well informed about this different aspect of this problems and so I will not dwell upon this topic too much. Our domestic situation. Mongolia is a country that is still going through a post transition period from socialism. We have never had experience in implementing a globally significant projects in Mongolia since recently. Some maybe mentioned Erdenet the first and largest copper plant in Mongolia established in early 1978. But the company was developed under full supervision and control of the Russians during the communist time. Second is Ulaanbaatar Railway Company. It was also a major project in Mongolia but was also under the strict control of the Soviet Union. The company was established in 1949. Just a few years ago this company celebrates 60 years anniversary and now it is 62, 63 years anniversary. Therefore Mongolia had no say in the decision making processes and had no gain from the revenue allocating as the project was implemented right after World War II. Moreover Erdenet is a very opaque company with very specific and non-common interconnectedness with the global markets, its practices and experience. More recently Oyu Tolgoa and Taun Tolgoa the two largest copper and coal mining sites respectively have become one of the biggest projects we have had to tackle during the course of the last few years. Hence the general public is having strong reaction to this project as such undertaking concerning critical mineral deposits such as gold, copper, iron, coal and rare earth attracted a great deal of international and geopolitical interest in Mongolia. This is why Mongolian public is facing an undefined issue on whether natural exploitation under foreign investment is as beneficial for Mongolians as it is to their foreign investors. Secondly Mongolia is one of the few past communist countries that is attempting to implement multiple economic, political and social reforms. Hence very often the government has very poor records of maintaining consistent policies. Sometimes the reason for this is democracy itself because democracy brings opportunity for every single individual which means sometimes there are people of various backgrounds, education levels and beliefs in charge of important decision making stages of the country. In addition because Mongolia is such a young free market practitioner we have no precedence in establishing commercial relationships and we have not had time to develop and gain experience in these important matters. The roots of planned economic policies are also having lingering effects. For example many Mongolians including four top ranking politicians believe that obtaining a 51% ownership in any project is an ultimate goal and ultimate guarantee of success while there are so many other crucial factors that need to be taken into consideration. Perhaps these are the leftover effects of leftist thinking. This is why our country needs experience, management and ability to raise funds from foreign countries especially with an increasing rate of investors. As greater the number the more complicated the issue becomes. Also, although not a great issue, language barrier is a problem. Countries who speak English have no need to think about this matter particularly Australia. Many times language is seen as a technical issue and not necessarily an economic one. For a country like Mongolia and based on its population size it takes approximately five maybe six thousand individuals to make critical decision in regards to our country. And of the five six thousand people in Mongolia who make these important decisions only 20% are bilingual where the rest of the 90% knows only their mother tongue. For example in Hong Kong majority of the citizens speak Chinese language of one billion people. For example some maybe would mention the Switzerland with also very small population six seven million people. But 80% of the population of Switzerland speak German, French or Italian. This means that all these people have direct access to huge amounts of information from various kinds of sources. But for majority of Mongolian citizens they have limited access to various sources of information due to their language barrier. Plus information available in Mongolia is incomparable to that once written in English was in terms of quantity and quality. Therefore in order to make adequate and conscious decision in regards to numerous different issues concerning our country particularly mining and any other sectors. Mongolia needs more time and additional efforts. To sum up we need the citizens of Mongolia to be well educated and knowledgeable in order to balance the contradicting interests of both domestic and international parties. In addition it's important for foreign investors and venture capital looking to invest in our country pay a great deal of attention to all of these above mentioned factors. Thank you for your attention.