Trans. by O.Shurentsetseg
The Invest Mongolia 2016 forum, held by international event organizer Frontier Conference, welcomed a total of 1,100 attendees for its tenth year to share their opinions on eight main topics.
Two hundred of the attendees were foreign investors and they discussed Mongolia’s political and economic development over the past year. The 2016 forum focused on conditions following the 2016 parliamentary elections. Two months before the elections, the ASEM Summit was held in Ulaanbaatar. Participants hoped that the meeting of international heads of state and high ranking government officials might create conditions for bringing investors back to Mongolia.
Mongolian economic conditions have deteriorated significantly since 2014. The Mongolian government and investors both agree that Mongolia’s economic situation is at its lowest level at present. So during Invest Mongolia, investors were closely paying attention to the changes to be made to the economic and political situation, Mongol Bank’s monetary policy, the possible effects of the Oyu Tolgoi project, information about the regulatory environment, energy, opportunities in infrastructure investment, economic diversification in the minerals sector and its policy, and asset investment opportunities, particularly in banking, real estate, mining, and government bonds.
Forum topics included support for fast-growing companies, infrastructure development, green development, renewable energy, the new government’s actions to resolve the economic crisis, future plans for the economic partnership with Japan, Oyu Tolgoi and Tavan Tolgoi perspectives, along with actions being taken to attract investors. The first discussion of the forum was “Investment in Mongolia”. CEO of the National Oil Shale Association of Mongolia Ch.Khashchuluun and Economic Advisor to the Prime Minister B.Enkhbayar gave presentations on the current economic situation of Mongolia, the state budget, government bond repayments in 2017, bondholders, the government’s responsibility to increase foreign investment, and policy support for green development and renewable energy.
Investors complained that sudden political decisions influence the economy. The unstable political situation of Mongolia makes it difficult to conduct business. Fierce competition between the two parties in Parliament results in adverse decisions being made about the economy. Moreover, they mentioned that the government implementing stable economic policy will create opportunity in Mongolia again.
CAN THE GOVERNMENT MAKE THE MOST OF ASEM MOMENTUM?
A presentation given by Member of Parliament L.Bold, ”ASEM’s Importance to Investors”, was one of the most intriguing of the forum. MP L.Bold spoke about the importance of creating positive and political changes to the economy from the momentum of ASEM, and to convince investors that economic capacity and opportunities still exist in the market.
As outlined in his presentation, although the Mongolian economy is in a downturn, a number of foreign representatives participated in this year’s forum. We can consider attendance in impact of ASEM. The ASEM Summit was a big achievement for the country’s foreign policy, and Mongolia secured its place on the world map. We managed to convince the global community that Mongolia is a main point linking Europe and Asia. It is vital to show foreign investors that Mongolia’s situation has changed. There are many possibilities to improve the economy beyond the mining industry’s growth and decline. We need to open up these possibilities as they will be factors in determining the future of Mongolia.
There is no opportunity to determine Mongolia’s development path through the market, because it is related to external factors. Moreover, it is closely connected to China’s market growth and decline. It is important that investors understand we are economically viable. Aside from the mining industry, many other foreign investments are made in Mongolia, but now we believe investments into more diversified industries will bring positive changes. Unfortunately, authorities are misdiagnosing the economy. An incorrectly diagnosed situation will be treated poorly. Increased taxation to rescue the economy is not the solution; instead, the answer is short-term policy solutions. Mongolia is a demographic country. Of course, there are people who have healthy minds within the ruling parties. The actions of the parties are being closely watched by people and businesses, therefore, the authorities don’t have the right to make unrealistic decisions. Even investors are shocked.
Indeed, last July, we saw the advantages of the high-level meeting held in Ulaanbaatar. It opened up opportunities for business owners to find partners, by increasing cooperation with former partners and opening up long and short-
term business agreements. This will revive the flow of foreign investment, increase investors’ expectations, and attract tourists once again. By organizing the meeting, air transport, tourism, trade, and service centers received benefits. A number of hotels in Ulaanbaatar improved their quality and service. Improved technological innovations, infrastructure, customs procedures, and international security standards were introduced. Domestically produced products were given to foreign representatives as souvenirs. In addition, ASEM created opportunities to participate in regional economic events.