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Quest Means Business
Day Two From Ulaanbaatar; Dow Hits Session Lows As Bond Yields Rise; Mongolia's Economy Dwarfed By Neighbors; Giuliani Asks Trump For Monetary Help; Mongolian Stock Exchange CEO Says We Need To Attract China; Call To Earth: Cascade Valley Metro Park; Nomadic Life In Mongolia's Harsh Conditions. Aired 3-4p ET
Aired August 17, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:29]
RICHARD QUEST, CNN INTERNATIONAL HOST: Day Two of our coverage live from Mongolia's Ulaanbaatar. I'm Richard Quest.
Look at the markets, and we will be talking about how democracy is facing this country. Let's look at the markets, and you'll see what's happening
there.
Things are down, I'll go into great explanation, but as the program wears on, we're off over 234 points. It has been a strong decline over the course
of the afternoon. We have an hour left to trade and it will be interesting to see how that progresses.
What we will be talking about here in Ulaanbaatar, we'll have a one-on-one with the Mongolia house speaker, we will discuss managing the internal
problems and making the democracy less fragile.
The budget conscious consumers are turning to Walmart, the world's largest retailer, as we have results. We'll talk about that. Grocery sales, e-
commerce is all driving growth, and it is called the Ger, no not yurt Don't call it that. I'll explain why. But it is called a Ger. It's the
traditional national dwelling. It's still popular. I take a look inside these residences to see how comfortable they actually are.
It is Thursday, it is August the 17th. I'm Richard Quest in Ulaanbaatar, where of course, you better believe it. I mean business.
A warm welcome to our day to coverage from Mongolia, a special series that we have here, that was last night, tonight, and we'll be here tomorrow
night as well, talking to the decision makers and finding out this extraordinary resource rich country, which finds itself slap, bang wallop
in the sandwich between Russia and China and yet sitting on vast amounts of resources.
But tonight, we're going to focus -- we did the economy and the resources last night. Tonight, we focus on the country's role in the world, the
strategic significance of Mongolia, which is greater than you think when you realize just the potential of the country, the challenges within on
beyond are truly a tremendous way.
If you've got the bear to the north and the dragon to the south, as you can see from this map, then you end up with the wolf economy in the middle.
It's a young democracy that is trying to build institutions with a government that came to power in 2021 and faces an election next year.
But because it's surrounded by these non-democratic countries, the internal challenges are tremendous. The protests last year were over a corruption
scandal, when around 400,000 tons of coal went missing. Well, the source of the export revenue that they did generate, and obviously it didn't really
go missing, but it was sold and the money went somewhere else. It was the money that went missing until they found it, and then they found those
people who had taken it.
Anyway, you can imagine. Eight people were arrested, eight officials were arrested and it rocked the government because the people basically said
that democracy at the moment isn't working for us.
So I spoke to the chair of the Mongolian Parliament who joined me earlier today. He told me even without Russia to the north, China to the south, he
is most concerned about the internal problems that are making this democracy perhaps too fragile.
(BEGIN VIDEOTAPE)
GOMBOJAVYN ZANDANSHATAR, CHAIR, MONGOLIAN PARLIAMENT: They feel re- energized in Mongolia, so in my humble opinion, Mongolia is energetic Mongolia. So, it is a very rich country, Mongolia is considered one of the
10 richest countries in terms of variety and volume of mineral resources.
QUEST: It's quite easy to be a democracy in Western Europe where you're surrounded by like-minded, all right, some are liberal, some are right
wing, but they're all -- but you are a democracy surrounded by a communist state and Russia which is -- I mean, one wouldn't describe it as a
functioning democracy at the moment.
[15:05:09]
Is that difficult? Does that put Mongolia in a difficult position?
ZANDANSHATAR: So Mongolia's democracy is young and fragile. In 1992, we adopted our first democratic constitution and established the democratic
institutions and parliament, elected parliament, but of course democracy can be fragile, influenced and impacted by the external and internal
factors.
So far, for us, poverty, corruption, internal -- our internal problems are making our democracy more fragile. So Mongolia is geographically neutral
country, so we don't interfere, don't comment about internal affairs of other states.
QUEST: Well, you've got an election coming up next year.
ZANDANSHATAR: Yes.
QUEST: Now we saw in the UK, at the last election, we've seen in the US the disinformation, both internal and external. Do you worry that social
media could be used next year for disinformation in your election campaign, and that you need to guard against it?
ZANDANSHATAR: That's very good question. So worldwide, the internet, social media, artificial intelligence, and fourth industrial revolution,
positively and negatively impacting to the democracy, democratic institutions, and the elections as well.
So we are very much worried about this artificial intelligence, social media, and external influence. So that is why we want to protect civil
rights, and internet and social media.
QUEST: Right. But on this corruption question, you've had a particularly nasty scandal over coal recently. Do you think that the public can be
confident that you've rooted it out, that the lessons have been learned?
There will always be some corruption, but the judicial and legal system has worked as it was intended.
ZANDANSHATAR: I trust the people and democracy, the strength of democracy. So transparency is the key for fighting corruption, and in order to
consolidate our democracy, to fight corruption, to ensure human rights, to strengthen our democratic institutions, we amended our Constitution. We
improved and expanded representatives of the people, so it will create more transparency, more check and balance, and it will ensure and encourage real
fight of corruption.
So transparency, people will control. Why I'm talking about by the people and for the people, so transparency will help us to fight corruption in
broader terms.
QUEST: Final question, sir.
You know, in Britain, in the Houses of Parliament, I'm sure you're familiar, the Speaker always calls order. "Order, order." What's your
equivalent when you want to get their attention? What do you say?
ZANDANSHATAR: Usually, I call all the members by family members -- family names.
QUEST: Yes.
ZANDANSHATAR: To attract attention, to show respect.
Another, also, I call "Distinguished members." And also I --
QUEST: You have the gavel.
ZANDANSHATAR: I have the gavel.
QUEST: But, what do you do if they get unruly? What do you do if they get out of hand? Do you kick them out?
ZANDANSHATAR: I can't kick them out. They're representatives of the people, so I just turn off the microphone.
(END VIDEOTAPE)
QUEST: That is the speaker of the Mongolian Parliament with the serious issue of how to handle the question of democracy. And now the country is
trying to strengthen it, having just been at it for about three decades.
When the current prime minister was in Washington, DC earlier this year, just last month, he called the United States the North Star for democratic
values. And he refers to it and others like Japan and South Korea, but particularly the United States as the third neighbor.
He says they must work with next door neighbors, of course, the North and the South, Russia and China and to that extent, in June, the Prime Minister
was in Beijing to meet with Xi Jinping. They discussed respect for different development paths.
It is, to use that quaint American phrase, the third rail of Mongolian politics, which is this third neighbor strategy.
So grasping the third rail for us tonight is the US Ambassador to Mongolia, Ambassador Richard Buangan. Thank you, Ambassador.
RICHARD BUANGAN, US AMBASSADOR TO MONGOLIA: Thank you.
QUEST: Ten past three -- and we'll have coffee for you somewhere -- in the morning.
Mongolia finds itself in a very difficult position. How do you juggle between these three very different systems?
BUANGAN: Well, Mongolia is in a tough neighborhood, but we're very proud of Mongolia's democracy. We're proud of Mongolia's democratic transition in
the last three decades, and our interest is obviously is preserving and strengthening Mongolia's democracy, ensuring it has open market economy
access to the outside world.
QUEST: You see, that's the problem. It doesn't have access to the outside world. All the power or much of the power comes from China. They can switch
it off if they want to. All the exports go out via China. They can switch that off if they want to, and they have done and to the north with Russia,
well, I mean, that's a difficult situation.
BUANGAN: So I think that's where economic resiliency and economic diversity come into play, and those were the topic of discussions in the
Prime Minister's visit to Washington, DC a few weeks ago, where we talked about realizing that Mongolia is in a geopolitical situation. It has
permanent borders with China and Russia, but at the same time, it can diversify its economy.
QUEST: Right. Do you see it now as a strategic country for the United States?
BUANGAN: Yes. It has always been a strategic country, because of its democracy, because of its commitment to open market economy and its
commitment to its people and its human rights and its values.
QUEST: And the sort of -- even the military relationship is strong and deepening and could deepen further in the future, which would arguably
really for countries in the region.
BUANGAN: Well, you know, for Mongolia's military, we're particularly proud of its commitment to peacekeeping. It plays an oversized role in the global
peacekeeping operations. It's been in Iraq and Afghanistan. It is sort of shoulder-to-shoulder with American soldiers. They were one of the last
countries to leave in Afghanistan with us. They are playing an important role in global peacekeeping.
QUEST: So what do they need to do to open up? I know that when you live in somebody else's house, you don't go around criticizing the world. I
understand that.
However, the US does have some strong views on what could be done to strengthen democracy here.
BUANGAN: Yes.
QUEST: And I don't just mean changing the constitution here, they are everywhere.
BUANGAN: Yes, yes, it's true, and I think part of it is empowering its people, part of it is ensuring that Mongolia's commitment to tackling
corruption, making sure that its rules, its rule system continue to strengthen.
I talk about diversifying its economy, not just critical minerals, but the digital economy as well. Things that don't need actual borders for it to be
prosperous.
These are things that we want to see Mongolia invest in, and these are the things that the United States of America are committed to helping Mongolia
achieve.
QUEST: One of the interesting things, of course, is that the Mongolian government has changed peacefully after elections. So they've had the
experience unlike other neighboring countries, or other countries in the region, where change of government comes at great pain.
There is going to be an election next year. Clearly, you're not going to involve yourself in the domestic politics of the country, but is the US
confident of a free and fair election here next year?
BUANGAN: We are very confident. We're very hopeful that Mongolia has commitment to achieving its democratic reforms of continuous democratic
transition, and you know, look at Mongolia this way, it is the strongest, if not one of the strongest democracies on the Asian continent.
QUEST: Ambassador, you've been here a few months. Have you tried these?
BUANGAN: I have. Yes.
QUEST: These are curds, cheese curds, which are then covered in blueberry or some sort of deliciously -- do have another. Help yourself.
BUANGAN: Thank you.
QUEST: It is three o'clock in the morning.
BUANGAN: Thank you. Thank you. Yes.
QUEST: Thank you very much. Very wise. Thank you, my sir.
BUANGAN: Thank you.
QUEST: Nice to see you.
BUANGAN: Thank you very much.
QUEST: QUEST MEANS BUSINESS live from Ulaanbaatar. Yes, it is Ulaanbaatar. I promise you, enough people have told me, not Ulaanbaatar, and I'll talk
about the traffic later, maybe in the profitable moment.
We'll talk about all of that later.
After the break, we'll talk about Walmart, very strong numbers, but those strong numbers could indicate further -- or a recession on the way.
And here in this country, well, as I've said, it's the wolf between the bear and the dragon. We will show you exactly what that means.
Ulaanbaatar, thank you.
(COMMERCIAL BREAK)
[15:17:44]
QUEST: So there you have the markets, down 300 on the Dow. It is only one percent, I say only one percent, but I think the important point to note is
the speed. It's the trajectory that the market has fallen and it has happened in the afternoon.
There is no -- it is bond yields, it is mortgage rates. The 30-year has risen sharply, so we are expecting now potentially higher rates from the
Fed.
We'll talk about it in just a moment, but related to that, arguably is the strong second quarter earnings from Walmart, the US' largest retailer.
Now same store sales were up from six-and-a-half percentage points, four percent, if we are being pedantic. Online sales, this is remarkable, up 24
percent and perhaps a reflection of times, gain market share in groceries where the profits were up strongly.
Nathaniel Meyersohn is with me in New York.
Walmart is always a strong performer, but I'm looking at these numbers and trying to work out what it is telling me about the wider economy. What do
you see in it?
NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: So Richard, as you say, Walmart is a bellwether of the economy. You want to understand the state of
US consumers, you look at Walmart.
And I think it's telling us a few things. First of all, more people are spending on groceries, that's the core of Walmart's business over half of
its sales. Shoppers are a little bit squeezed right now, so they are pulling back on some of the general merchandise that Walmart sells home
goods, clothing, some of these more expensive items.
So I think that strength in groceries online, really strong. Online really strong, a real competitor to Amazon right now. This is kind of Walmart's
sweet spot.
QUEST: Okay, so there are two fascinating aspects of that that you talked about being a rival to Amazon, although Amazon still has a soul in its
grasp, if you have Prime and the ease with which Amazon can be done, but that's something we'll talk about if we have a second or two after.
Back to this idea, if the economy gets harder and harsher, is it likely Walmart is one of the main beneficiaries?
[15:20:10]
MEYERSOHN: So in the past, I think that is true. Historically, Walmart's customers have been lower income and middle income and Walmart has
benefited as those household budgets get squeezed and more shoppers turn to Walmart.
But Walmart over the past several years has really changed its strategy. It's winning a broader swath of customers, higher income customers,
wealthier customers. So I think that Walmart's strength is broad based.
And if Walmart says, well, when times are a little bit tougher, but even when times are stronger, people are still going to Walmart.
QUEST: Nathaniel, when I'm back in New York in the next week or two, together, let us compare the online experience of buying from Walmart and
buying from Amazon, because I've tried one and I've tried the other and we'll talk about the results.
Nathaniel Meyersohn in New York talking about that.
Back in East Asia now where my next guest believes that, economically speaking, Russia is the bear, obviously. It is to the north of the country.
China is the dragon. And Mongolia is the scrappy wolf that sits in the middle.
It is my next guest I plagiarized shamelessly without attributing to him when I said that at the top of the program, and yet the Russian economy is
a hundred times bigger and the Chinese economy over a thousand times bigger. By far the largest trading partner.
Ganhuyag Chuluun is the executive director -- the chair of the Ard Financial Group.
Sir, thank you as well, for staying up so late and coming in to join us.
GANHUYAG CHULUUN, CHAIR, ARD FINANCIAL GROUP: It's an honor to be here.
QUEST: Well, the honor is all ours, sir, to have you here.
Can I just put a blunt question?
CHULUUN: Yes, I suppose so.
QUEST: Is everybody here fooling themselves, and the reality is the geopolitical situation means what China wants China is going to get. China
can switch off the power, it can cut the exports, it can bring this economy to a standstill.
CHULUUN: Thirty years ago, we've been in that kind of a situation when we allied ourselves with the Soviet Union and the Soviet bloc, and there was
no connection to China at all, so we've been through that and we've survived and the wolf always survives.
And it's not just one wolf, it's a pack of wolves. So symbolically speaking, you know, it's a versatility of the animal that made me think of
the Mongolian economy as a wolf. Because the bears go into hibernation, the dragons disappear, and then they have their millennia, and China is going
now into a stagflation, but we will prevail, I believe.
QUEST: So the other great thing, in a sense, the sort of things that because you're not selling finished durables or manufactured or consumer
goods.
CHULUUN: Exactly.
QUEST: China is still going to need an element of copper, it's still going to need an element of coal, and the resource base. Where do you see the
diversification in this economy?
CHULUUN: And that's exactly to the point, you know, we don't have cheap labor, we don't have the seaports. We cannot become the huge logistical
center. We should focus on maybe helping, becoming a transit hub. Maybe we should go, you know, focus on the green energy and become the Asia super
grid using all our solar and wind energy.
And then of course, there's uranium that we're looking at. There is plenty of coal and Russia, you know, the war that they instigated, in Ukraine, it
won't stop there, and then how do we manage to become the financial hub for Central Asia?
QUEST: We're going to be talking to the head of the stock exchange in just a moment. I'm not sure you can become the financial hub when you have other
countries like Kazakhstan, who are larger in the sense, but they also have the same ambition.
But arguably, they have a higher rate of corruption, for example, than you would have here in Mongolia.
So how important is it to root out corruption and how much more work is there to do?
CHULUUN: The Prime Minister's efforts now are focusing on corruption. I think it's widely held in Mongolia and also amongst ordinary people and
internationally, and it is producing visible results. The businesses are coming back.
We have this almost euphoric sense coming back when Mongolia produced a magnificent growth of 17.4 percent back in 2011 under Batbold's leadership.
I assess the same -- just the fact that we're standing here with, with CNN speak of that.
[15:25:02]
QUEST: But you have to keep the young people here.
CHULUUN: We do, yes.
QUEST: You have to have the opportunities, you have to have the skillset on a small economy with a low tax base and pretty horrible traffic.
CHULUUN: Yes, back in 2011, we had this type of people, young people coming back. Now we have, we see, of course, lots of people going to work
for Oyu Tolgoi region and go globally, going working for Google and they do come back when the things are positive again.
So the economy produce already seven percent growth in the first half of this year. So it will start attracting attention of the media, then, of
course, the young ones, the young Mongols will be coming back and it impacts to stuff the positions here because multinational companies are --
QUEST: You're very optimistic.
CHULUUN: I am. I'm an eternal optimist.
QUEST: I mean, you also of course, I remember the party of the government, but you believe that the future -- people like me arrive here with a dose
of cynicism and say --
CHULUUN: Exactly.
QUEST: And see Russia, China landlocked. It is all misery, turn off the lights and go home?
CHULUUN: Yes, but you yourself have this cheese and Switzerland produces cheese, they've been neutral, they've been landlocked, and they've avoided
wars, and they've managed to become a financial center.
You now have all that money from China and Russia come here because they have different systems and people there, the entrepreneurs, the people who
accumulate the wealth will choose Mongolia to --
QUEST: You can't resist these, can you?
CHULUUN: Well, I'm a Mongol. Thank you.
QUEST: He took one, and I guarantee you, before he leaves, you'll have another one. Thank you very much.
No contest.
CHULUUN: Thank you.
QUEST: Thank you very much, sir. Thank you very much.
A key part of the strategy of growth here, as you've just heard us talking about is the nature of the financial industry, the growth of the stock
exchange.
When we come back, we'll meet the CEO of the Mongolian Stock Exchange, and I have a bell, he has a gong, I'll explain.
(BEGIN VIDEO CLIP)
ALTAI KHANGAI, CEO, MONGOLIAN STOCK EXCHANGE: We need to reintroduce Mongolia. We need to reintroduce Mongolian capital markets to international
investors.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
QUEST (voice-over): Hello, I'm Richard Quest. We have a lot more Quest Means Mongolia on QUEST MEANS BUSINESS in just a moment. I will be looking
at the Mongolian stock exchange. It's housed in an old children's cinema.
What sort of movies are being shown on the screen of investors?
We'll get to that in a second. And the taste of the nomadic lifestyle, they call them ger. And we will have a look around and see exactly what you get
with a ger in just a moment. Just don't call them yurts because -- I'll explain, I promise you.
We'll get to all of that after giving you the new headlines, because, wherever we are in the world and whatever we're doing, this is CNN and, on
this network, the news always comes first.
(MUSIC PLAYING)
QUEST (voice-over): Ukraine will have to wait at least a few months longer to receive U.S.-made fighter jets. It says delivery of the F-16s isn't
expected to happen this year. Ukraine has repeatedly urged allies to provide the jets, saying they would be a game-changer for its air defense.
At least 60 people are feared dead after a migrant boat capsized off South Africa. The estimate comes from the IOM, the International Organization for
Migration. A Spanish human rights group believes the number could be much higher. It says the boat was carrying 130 people.
Police in Paris have arrested a man for jumping off the Eiffel Tower with a parachute. Sources say he scaled the east pillar and his descent before the
landmark had opened to the public. He landed off the roof of a nearby building.
On Monday, I beg your pardon, two tourists who were drunk were discovered to have spent the night trapped inside the tower.
(MUSIC PLAYING)
QUEST: CNN has learned that Rudolph Giuliani has asked former president Trump for money, presumably to help pay the ever-rising legal costs that
he's facing across a number of lawsuits but most spectacularly and recently, the indictment of conspiracy in Georgia.
He went to Mar-a-Lago to ask in person. Apparently, Donald Trump is not keen on helping. Katelyn Polantz is in Washington.
I mean, every time I hear something about Rudy Giuliani, and I lived through the whole time of him being the mayor of New York, you think about
how the mighty have fallen. But now with cap in hand to Trump, who did him no favors at any stage in many ways.
KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: In many ways. And Rudy Giuliani, at this point in time, he has quite a nice co-op
apartment in Manhattan, $6.5 million. It's up for sale right now. But he is broke otherwise.
We know that from court filings because he has a number of legal bills piling up around him, specifically for the work he did for Donald Trump
after the 2020 election. Now he has that criminal charge he's facing in Georgia. He's going to have to turn himself in and be arrested there in the
coming days.
That will cost him money; it does cost to have lawyers go to trial for a criminal case, as Rudy says he wants to do. But the real bills that he has
right now, Richard, are related largely to lawsuits.
And not just lawsuits that he has lost; he actually hasn't really lost any yet. They're still in the middle of progressing throughout the court system
and he can't even pay the $10,000 or $15,000 costs it is to pay off some of the bills to get through the litigation. So he did go with his attorney to
Florida. Richard?
QUEST: But why -- I mean, besides the fact that Donald Trump needs the money for his own legal bills -- and we know that the PAC providing much of
it is starting to get depleted -- is there a philosophical reason or a personal reason that we know of, of why Trump just would not want to help
him?
I mean, he has a reputation for stiffing lawyers and not paying bills.
POLANTZ: Yes. Rudy Giuliani set up some pretty big bills after the election, $20,000 a day was his fee. The Trump team didn't always want to
pay that but they ultimately did pay him somewhat, although there was a public split between Trump and Rudy after the 2020 election.
[15:35:00]
POLANTZ: And now that Rudy Giuliani is facing these lawsuits and has these bills mounting, to do that, he went hat in hand to Trump in Florida with
his lawyer to ask for Trump to pay through the PAC.
And we don't know the full story of why Trump was not that interested in doing it. The PAC did ultimately give Rudy about $340,000 for a debt that
he had. But it doesn't cover nearly what he has to cover.
One thing that is coming up is that there is a possibility that investigators could be trying to get information out of Rudy Giuliani or
pressing him to cooperate, plead guilty in a case that also implicates Donald Trump related to January 6th.
So there is a question of perhaps Trump might just not like what he is doing in responding to investigators. We just don't know. He's not going to
give them any more money, though. That has been made clear to Rudy's team.
QUEST: Thank you, we will be watching this. Grateful to have your analysis on it. Thank you.
The battle is brewing here in central Asia. Those countries that are all competing to be the top financial market, to have the most open equity and
bond markets, to attract the most money that they can.
Remember, I was in Kazakhstan, the financial center head spoke to me, saying clearly, I want to be number one for innovation and investment.
Not so fast, says Mongolia. The stock exchange IPO'd itself only last year. It is a third owned by shareholders, two-thirds by the government. It has
been categorized by FTE markets as a frontier economy.
So it's just on the other side of the square. I went to visit the stock exchange and the CEO says he wants to reenergize capitalism in this
country.
(BEGIN VIDEOTAPE)
ALTAI KHANGAL, CEO, MONGOLIAN STOCK EXCHANGE: The recent years has been years of tremendous growth for the market. In comparison to three years
ago, the market cap of all of this capitalism on the stock exchange has increased threefold. And now we are standing at around 20 percent of the
GDP of the country.
QUEST: The challenge you are going to have is -- there's so many companies in Mongolia and only so many of them can list. And there's so much internal
wealth.
How are you going to attract external investment into your market?
KHANGAL: If you compare the market to a person, I'd say we're going through this (INAUDIBLE) period. OK?
So we have taken our first steps. And now we have entered the new phase. I would say there are two challenges. One is lack of institutional investor
base here in the country; i.e. long term money. So that needs to be introduced, particularly a pension fund should be done in the country.
Secondly, back in the old days, when Mongolia was the top growing economy in 2011, the portion of investors on Mongolian stock exchange was more than
80 percent. Now it's gone down to less than 10 percent.
So we need to reintroduce Mongolia and we need to reintroduce Mongolian capital markets to international investors, particularly to main
international centers in the world.
QUEST: Your stock exchange was just recently given frontier status by FTSE (INAUDIBLE).
KHANGAL: Yes.
QUEST: How do you prevent frontier status from being interpreted or behaviorally Wild West?
(LAUGHTER)
KHANGAL: Very good question. Again, obtaining, getting that classification for our market has been -- let's say, we worked on that for a number of
years. And eventually, September of last year, we managed to get status.
And there is certainly -- it's a step which has been taken to attract international capital to the stock exchange, to the capital market of
Mongolia because there are a number of funds, as we all know, which track the frontier markets. So that was the attraction of international capital,
was the goal for us.
QUEST: China is obviously the key area. Most exports go to China; the single largest economic relationship that the country has is with China.
Do you worry that, eventually, the Chinese will just buy your exchange?
KHANGAL: So I would say yes and no. Of course, we have to be practical. We all know that China is number two in the world. Also in terms of
institutional investor base, they've grown significantly. They have very sophisticated institutional investor base. So we need to attract them. Also
as you said, given our geographical location --
[15:40:00]
KHANGAL: -- of course we do -- we have to have some -- but still, it should be combined with practicality with reality.
QUEST: The exchange starts in 1991, is that correct?
KHANGAL: Yes, it is correct. So at that time, Mongolia was making this dual transition (ph), both political and economic. So the economic
transition went through the stock exchange. The stock exchange played a vital role in making transition of government owned assets to the people.
QUEST: It is quite depressing when you see in a museum something that I remember using, the landline phone belonging to the first broker of 1991.
KHANGAL: Indeed.
QUEST: And all of this sort of things. Today, you have a relationship with the London stock exchange, don't you?
KHANGAL: Yes.
QUEST: Which is quite a significant relationship.
KHANGAL: Oh, yes. So we have signed this master services agreement and strategic partnership (INAUDIBLE) London back in 2011. And within the
framework of this partnership, we have implemented, introduced this trading platform.
So you just talked about those old items. So, yes, now it's all electronic. We have the potential to become the venue for instance for central Asian
countries. If we manage well, particularly our, well, related fixation as well as legal systems. So let's say central Asian countries, Central Asian
companies -- Central Asian countries' companies could come on the list in the stock exchange potentially.
I think I would say that could be -- could become real sometimes soon.
QUEST: I hear what you're saying. And on this program, in (INAUDIBLE), I heard exactly the same thing from the stock exchange in Kazakhstan.
(INAUDIBLE).
KHANGAL: Well, we do have some examples of Mongolian stock exchange, at least the companies going and investing into central Asian countries. So
from that perspective, I would say that we have the potential to attract more capital, let's say, from Asia Pacific region.
QUEST: This was a children's cinema, wasn't it?
KHANGAL: Yes, actually, it was. So up until 1991, it was children's cinema and then it was converted into stock exchange.
QUEST: What role does this play in all of this?
KHANGAL: It now rather plays a symbolic role. So it used to be used every day for opening trades.
QUEST: Right.
And then?
KHANGAL: Now it's just used for IPO ceremonies.
Yes.
(LAUGHTER)
QUEST: It sort of (INAUDIBLE) --
KHANGAL: As far as I know, it was made in 1991. So it's been with the stock exchange ever since. So it's one of the historic relics.
QUEST: Oy, oy, oy, oy, oy.
Enough of this historic relics nonsense. I remember 1991.
(END VIDEOTAPE)
QUEST: I do indeed. Historic relics, 1991, phones that I used to use. I'm sure you'll be feeling similarly. That was the stock exchange. Fascinating
growth story. We'll watch closely to see just how they all manage to battle it out and the various rules and regulations.
A big part of the Mongolian way of life and the culture, it's not just for the tourists or for a bit of historical nonsense, is the nomadic life.
Despite the harsh conditions, we are going to see the gers after the break.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[15:45:00]
(MUSIC PLAYING)
QUEST: Golf courses are notorious for taking up large amounts of green space. Manicured however they may be but now some of them are being
returned to their natural state. We visit one particular course in this week's Call to Earth. The course is in Ohio and we look at how it is being
restored to what it was.
(BEGIN VIDEOTAPE)
MIKE JOHNSON, CHIEF OF CONSERVATION, SUMMIT METRO PARKS: You see there are these large flowers down there. There's some white ones, some pink ones;
that's a native hibiscus. It's in the mallow family and the wetland ones they call them marsh mallows.
Get it?
Marsh mallows, yes.
(MUSIC PLAYING)
JOHNSON (voice-over): My name is Mike Johnson. I'm the chief of conservation for Summit Metro Parks. We are at the Valley View Area of
Cascade Valley Metro Park. Today, you would never know that this was ever a golf course.
The vegetation that you see behind me, 90 percent of it is native; whereas when this was a golf course, 90 percent of it was non native and invasive.
LISA KING, EXECUTIVE DIRECTOR, SUMMIT METRO PARKS (voice-over): This park is right within the city of Akron limits. And when we started the
acquisition, we realized that how important it was to connect the other two parks to this area.
It allowed us to knit together 1,800 acres. That is something that is very difficult to do in a county where everything is beginning to be built out.
JOHNSON (voice-over): The first choice we had to make is, do we allow it to restore on its own?
Just kind of let it go?
Or do we take a more active role in that process?
And because this was a golf course, we decided it was necessary to take a more active role. We had to undo the golf course before we could restore
the landscape. The next step was to establish a native cover of vegetation.
And rather than plant trees, we decided to plant nuts. And over the course of the fall, our volunteers brought us a quarter million nuts. And over the
course of two days, 600 volunteers showed up to plant 120,000 of them.
(MUSIC PLAYING)
JOHNSON (voice-over): This is the Cuyahoga River and we are looking out over a vast restored flood plain. When we acquired the property, the banks
of the river were steep. They had been channelized. The golf course, they wanted to keep the water out. We wanted to bring the water back into the
landscape.
(MUSIC PLAYING)
JOHNSON (voice-over): The Cuyahoga River is significant. This is the river that burned. It actually burned several times throughout history because it
was so polluted from industrial dumping.
There was a time in recent memory where this stretch of river that we have here in Valley View supported almost no fish or aquatic life. It was about
as dead as a river could be.
So this is a type of fish called a darter and darters are sort of the pinnacle of water quality indicators in fisheries biology. Again, another
species that its presence here is indicative of clean water. And what's good for fish is ultimately good for people, too.
One of the biggest challenges of any park district is preserving our natural resources and, also at the same time, letting people come in and
enjoy that.
KING (voice-over): What we knew we needed to do was one more phase.
[15:50:00]
KING (voice-over): Where we could bring access to the river for the public. So phase two is under construction now.
JOHNSON (voice-over): These parks and the wetlands and the streams filter pollutants from the water that we eventually drink. They clean the air,
they provide habitat for wildlife, including a large array of endangered species we have here in Summit County.
They're also important for people. These are places for people to come and relax, to destress. They are important for recreation and connecting with
nature, for especially young people to connect with nature and inspire them to become the next generation of land stewards.
(END VIDEOTAPE)
QUEST: And I want to know what you're doing to help preserve our planet and to make life a little bit better for everybody. Use the #CallToEarth.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
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QUEST: Some breaking news to bring to your attention.
Russian state media is reporting that a Moscow court has arrested a U.S. citizen. It's Gene Spector is the person. Spector was born in Russia but
has now been charged with espionage.
We have reached out to the State Department for more information and for comment but that's all we know so far. So Moscow of course arresting a
U.S., a Russian-born U.S. citizen. When I have more to tell you on that, I'll of course bring it to your attention.
So to one of the facts that I didn't really know, I could already feel a chill in the air, even though it's just the end of August. But Ulaanbaatar
is amongst the world's coldest cities.
Did you know that?
No, I really didn't. The annual average temperature is 30 degrees Fahrenheit. That's -1 on the Celsius scale. So to say it's parky and chilly
is an understatement. In the winter, it's downright freezing, it's harsh.
And you might want to know that those Mongolians, of course, many still live the nomadic lives. They live in traditional housing, it's called a
ger. Don't call them yurts. That is an appropriation. Don't call them yurts; they're known as gers.
Got it?
So get your ger and go and have a look and have a look inside. And when you see what's inside, it's quite remarkable.
[15:55:00]
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
JARGALSAIKHAN DABADARJAA, JOURNALIST AND POLITICAL COMMENTATOR (voice- over): Traditionally, it was always -- it's a Mongolian nomad's (ph) house, which you can to get within maybe 10 minutes, you can mantling and
dismantle it. And then you move it to the next your state.
QUEST (voice-over): Do many people still live in them?
DABADARJAA (voice-over): Say some 300,000 nomads (ph) we have. And half of Ulaanbaatar, the city, lives in these dwellings.
QUEST: So I see lots of -- in Ulaanbaatar, I see the house and I see the ger.
Do people have both?
I mean, do people --
(CROSSTALK)
DABADARJAA: Many in Ulaanbaatar, in the city have both. But in general, this is the condition, air circulation system is perfect.
(MUSIC PLAYING)
QUEST (voice-over): How typical is this?
DABADARJAA (voice-over): This one turned out quite typical because there are some tourism related places where the setting is different. But in
general, this is the way, how Mongolians sleep.
QUEST: If you family had a ger, would you have just one or would you have maybe one and then a smaller one next to them, you know, because at the end
of the day --
(CROSSTALK)
QUEST: -- if you're in a family of four or five people --
DABADARJAA: Yes, good question. I grew up in ger.
QUEST: Did you?
DABADARJAA: Yes. I am very much blue-collar, working family child. And I used to live on outskirts of Ulaanbaatar in (INAUDIBLE), exactly in almost
the same ger. And we had three generations in the same ger, without having another ger outside.
(MUSIC PLAYING)
QUEST (voice-over): This is everywhere.
DABADARJAA (voice-over): This curds. And it is everywhere. And it is a product made out of milk and kind of is a combination also cheese. And
Mongolians used to have in the summertime no meat. They had been eating traditionally only this kind of products, which made them very healthy and
(INAUDIBLE) fantastically well.
QUEST (voice-over): It's an acquired taste. (INAUDIBLE) cheese --
(CROSSTALK)
DABADARJAA (voice-over): That's another way -- another reason why Mongolians were very strong. Our soldiers were strong, as you know; from
13th century --
QUEST (voice-over): I love this cheese.
DABADARJAA (voice-over): Yes, I like it.
(LAUGHTER)
QUEST (voice-over): Ah, you're doing my trick. You're hoping no one notices.
(LAUGHTER)
(END VIDEOTAPE)
QUEST: Hoping no one notices as I'm scuffing down all of these. I will be ill before dinner. We'll take a Profitable Moment after the break. That is
breakfast next, isn't it. It's nearly 4:00 in the morning. I'm losing it.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: I can keep the Profitable Moment brief. They know what they need to do in this country to further democracy and to entrench the market
economies. It is all about rooting out corruption, as we heard about tonight on the program, and greater transparency.
They've got the right message. They know the work that needs to be done and there seems to be a willingness and a commitment to get on with it,
provided the other geopolitical issues of Russia and China, the bear and the dragon don't get too much in the way.
At the moment, things are on track. And that is QUEST MEANS BUSINESS for this Thursday night. I'm Richard Quest in Ulaanbaatar. Whatever you're up
to in the hours ahead, I hope that it is profitable. We'll see you here tomorrow.
END
