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FOREIGN DIRECT INVESTMENT IN MONGOLIA
with special focus on mining sector
Tergel Bold-erdene
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MONGOLIA A landlocked unitary sovereign state in East Asia
Mongolia is sandwiched between China to the south and Russia to the north
It is the second-largest landlocked country
Population of the country is more than 3 million (3,131,724)
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ECONOMY
Over the past 20 years, Mongolia has transformed into democratic country with free market from the socialist country
GDP per capita $12,100 (2015)
GDP $36.07 billion (2015)
Ranked 128th by its GDP
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GDP growth 8.0% (2014) 2.3% (2015) 0.1% (2016) 2.0% (2017)
Ease-of-doing-business rank 64th (2017)
Main import partners: China 39.9% Russia 28.4% Japan 6.4% South Korea 6.2%
Main export partners: China 84% Switzerland 9% Others 7%Export raw materials: copper, coal, molybdenum, tin, tungsten, oil , gold and cashmere
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Since 1990, after the opening of the market, Mongolia attracted investment which is equal to 16.6 billion USD
More than 30 percent of the foreign direct investment comes from China, 9 percent Luxemburg, 23 percent Netherlands, 36 is others including Russia, Japan and Korea.
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More than 1,500 foreign companies from 61 countries invested in Mongolia
77 percent of the foreign direct investment is flows into the mining sector
$2 trillion of mining commodities in the ground, and this could easily establish a $100-billion economy by 2025
mining sector dependence makes Mongolian economy quite sensitive
Commodity prices in international market have direct influence on Mongolian economy and FDI
FDI was measured by USD 4.7 billion in 2011 but in 2016 it drops into USD 232 million
FDI decreased by 95 percent in few years
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(1) Establishing investment friendly legal basis- rooting out and destroying the virulent corruption that threatens the foundational institutions of the modern Mongolian state and putting in place a more inclusive and more effective rule-making methodology for use in implementing business legislation
(2) Facilitating the emergence of private-sector small and medium size enterprises as the primary engine of the economic diversification
(3) Infrastructure - vastly improving Mongolia's physical infrastructure
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CONCLUSIONInfrastructure is vital for attracting FDI
Economic situation in Mongolia is quite risky right now
IMF offered stand by arrangement
From 2017 FDI to Mongolia is set to recover slightly
Unfortunately, debt of the Mongolia is now equal to 86.3% of its GDP
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REFERENCES
1.https://www.oxfordbusinessgroup.com/news/mongolia-year-review-2016
2.http://investmongolia.gov.mn/wp-content/uploads/2016/04/Invest-Mongolia-Guide-book-2016.pdf
3.http://www.tradingeconomics.com/mongolia/foreign-direct-investment
4.https://prezi.com/idqej2y7ovvh/presentation/
5.http://www.worldbank.org/mn/country/mongolia/brief/mongolia-mining-infrastructure-investment-support-project
6.http://www.ikon.mn/n/pir
7.http://openmongolia.mn/?p=1583
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Thank you!