FOREIGN DIRECT INVESTMENT IN MONGOLIA

with special focus on mining sector

Tergel Bold-erdene

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)

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

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

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.

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

(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

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

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

Thank you!