DE RUEHUM #0572/01 2082329
ZNR UUUUU ZZH
R 272329Z JUL 06
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 0165
INFO RUEHBJ/AMEMBASSY BEIJING 5137
RUEHUL/AMEMBASSY SEOUL 2368
RUEHKO/AMEMBASSY TOKYO 2170
RUEATRS/DEPT OF TREASURY WASHDC
RUCPODC/USDOC WASHDC 1073
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0326 UNCLAS SECTION 01 OF 02 ULAANBAATAR 000572
STATE PLEASE PASS TO OPIC AND EXIMBANK TALAAT RAHMAN
E.O. 12958: N/A
SUBJECT: Exim's First Visit to Mongolia: Transactions in Aircraft
and Rail Likely
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET
1. (SBU) SUMMARY: Export-Import Bank of the United States (Ex-Im
Bank) Export Finance Group Senior Vice President (SVP) John McAdams
visited Mongolia July 6 to 11 to explain Ex-Im Bank's programs.
Prime Minister Enkhbold gave McAdams an overview of the Mongolian
situation and desired projects, while McAdams encouraged the PM to
prioritize these possibilities. Minister for Industry and Trade
Jargalsaikhan had his preferred bank for transactions and urged
excluding the U.S. Embassy from communications; McAdams pushed back
on both points. The Ministry of Roads, Transportation and Tourism
brought together an unprecedented group of stakeholders in the
sectors of rail and air to explain future plans and learn of Ex-Im
opportunities. Ex-Im met with a wide array of Mongolian businesses
which do not currently import much product from the U.S. due to
transportation costs, but were greatly interested in increasing
U.S.-sourced purchases. In addition, McAdams attended opening
events celebrating Naadam and Mongolia's 800th Anniversary. End
2. (SBU) This first trip by Ex-Im to Mongolia was an important
educational opportunity for both the GOM and private sector, as
there has been no presence in Mongolia by any of the similar major
export import banks. The Chinese export import bank has been active
here and they offer soft loans, something Ex-Im does not do. There
was great local interest in utilizing Ex-Im's financing
opportunities for some short-term goods exports, while major
projects may not develop for a few years, there is a bright future
here for Ex-Im involvement as Mongolia's economy continues to grow.
The visit was also covered widely in the media. END COMMENT.
Mongolian Government Meetings
3. (SBU) Ex-Im's meetings with the Government of Mongolia (GOM) were
primarily to introduce how Ex-Im functions and to look for possible
projects idea for financing. Ms. Talaat Rahman, Ex-Im Bank's
Regional Director for Asia and the Middle East accompanied McAdams
during his visit. Prime Minister Enkhbold gave an overview of the
Mongolian situation and desired projects, while McAdams encouraged
the PM to prioritize these different project possibilities. While
no immediate projects are on tap, there are strong possibilities in
the next few years exist for U.S exports, particularly in the
transportation sector. Although Ex-Im met with Minister of Health
Gundalai, who is interested in acquiring large amounts of U.S.
equipment, there appears to be no funding available for health
sector U.S. exports at this time. If the health diagnostic center
proposed by the GOM to the Millennium Challenge Corporation (MCC)
comes to fruition, there may be increased opportunities.
4. (SBU) Of particular interest was the meeting with Minister of
Industry and Trade Jargalsaikhan, who invited McAdams to Mongolia
while in Washington earlier this spring. Jargalsaikhan included
Commerz Bank representatives in his meeting with McAdams.
Jargalsaikhan has designated Commerz Bank as his intermediary to
deal with Ex-Im. McAdams explained Ex-Im operations, including that
they will work with any qualified bank, not just Commerz Bank.
Jargalsaikhan did not have any immediate projects, although he
suggested that several large mining projects (including properties
now in private hands) might be proposed by the GOM. Jargalsaikhan
expressed concern over the role of the U.S. Embassy as an
intermediary as he and Ex-Im should "talk straight business" and
avoid politics. McAdams reiterated that the U.S. Embassy is Ex-Im's
intermediary in Mongolia and that communication should flow through
5. (SBU) The Ministry of Roads, Transportation and Tourism's (MRTT)
new State Secretary Bat-Enkh brought together an unprecedented group
of stakeholders in the sectors of rail and air to explain future
plans and learn of Ex-Im opportunities. (NOTE: The different
agencies responsible for these two sectors experience frequent
infighting so the expression of solidarity indicates growing
strength on the part of the MRTT in its oversight role) The most
likely U.S. exports in the next several years would include a
purchase of Boeing planes, ADS Mode B radar and General Electric
rail kits. None of these projects are certain at this time, but
McAdams encouraged the GOM to contact Ex-Im for possible financing
if the projects come to fruition. McAdams also encouraged the MRTT
to explore USTDA assistance in learning more about how to attract
ULAANBAATA 00000572 002 OF 002
U.S. companies to tenders for roads projects.
Mongolian and U.S. Private Sector Interests
6. (SBU) Ex-Im met with a wide array of Mongolian businesses which
do not currently import much product from the U.S. due to
transportation costs. However, there is great interest in the
possibility of increasing their U.S.-sourced purchases in the future
through financing assistance from Ex-Im. Larger Mongolian
conglomerates that already purchase some U.S. exports provided a
more focused picture of projects, both small and large scale that
could qualify for Ex-Im financing. For example, a Mongolian company
entering the domestic aviation market is looking at purchasing Bell
helicopters and a meat importer would like to bring in frozen
chicken several times a year.
Participation in 800th Anniversary Celebrations
7. (SBU) The Ex-Im delegation represented the USG at several of the
opening events for Mongolia's 800th anniversary celebrations,
including the dedication of a new statue Chinggis Khan memorial hall
on the main square and a wreath-laying at the Sukhbaatar statue.
The GOM greatly appreciated the presence of this VIP delegation as
an expression of the continued strengthening of bilateral
8. (U) The Ex-Im delegation cleared this cable.
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