Trade & Investment
From The Report: Mongolia 2014
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With its position adjacent to two of the world’s largest economies, Russia and China, Mongolia’s trade potential holds significant appeal for foreign investors. Furthermore, just as it strives to diversify the sources of its foreign direct investment, the country’s policy of cultivating “third neighbours” is set to broaden trade patterns geographically and should gradually improve the terms of trade. Exports to the US increased dramatically between 2010 and 2012, from $12m to $42m, while imports from the US grew from $116m to $665m over the same period. Despite this significant growth, trade with the US still represented a very modest share of Mongolia’s overall trade in 2012, when the country’s imports and exports were valued at $4.84bn and $6.74bn, respectively. FDI inflows are expected to reach $2.5bn in 2013, and then be lower in 2014, reaching approximately $2bn, with the overwhelming majority of these funds going to mining and resource extraction.
This chapter contains an interview with Fumio Kishida, Minister of Foreign Affairs for Japan; viewpoints from José Manuel Barroso; President, European Commission; and David Johnston, Governor General of Canada; and an interview with Roger Gifford, Alderman and Former Lord Mayor of London.

Articles from this Chapter

Overview

Broadening abroad: The economy is being diversified in many senses
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Mongolia is striving to establish a coherent investment regime, following two years that have damaged investor sentiment. Authorities recognise the need for foreign direct investment (FDI) to develop and leverage its estimated $1.3trn in mineral endowment to develop a diversified economy. Adjacent to two of the world’s largest economies, trade plays a key role in the Mongolian economy, a significant appeal to FDI. Just as it strives to diversify the sources of its FDI, its policy of cultivating…

Interview

OBG talks to Fumio Kishida, Minister of Foreign Affairs for Japan
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Interview: Fumio Kishida Looking forward, what will be Japan’s strategy to developing its ties to Mongolia? FUMIO KISHIDA: As everyone in Mongolia is aware of, many Mongolian sumo wrestlers have had great success in Japan since the 1990s. Mongolia is therefore a country that Japanese people have a great affinity for. Additionally, will never forget that Mongolia has extended warm support to Japan in the wake of natural disasters, including the 1995 Great Hanshin Earthquake and the 2011 earthquake…

Viewpoint

José Manuel Barroso, President, European Commission (EC), on developing Mongolian-EU relations
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Viewpoint:José Manuel Barroso Over the centuries, Mongolia and Europe have been much closer than you would think from looking at a map. Our destinies were tied together in the 13th and 14th centuries when the Pax Mongolica enabled East and West to meet for the first time in history and to travel freely along the silk route which the Khan dynasty secured as a free trade route. Despite the historic divisions of the 20th century, this distance is once again rapidly reducing as the imperatives…

Analysis

The world’s neighbour: Reaching out beyond bordering nations
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Although landlocked between China and Russia, Mongolia’s priority is to cultivate trade and investment links with its “third neighbours” – a phrase first coined in 1990 by US Secretary of State James Baker to describe Mongolia’s relations with the US. A WTO member since 1997, Mongolia has since lowered barriers to trade. With a growing array of cooperation and liberalisation agreements, the authorities are seeking to diversify trading partners and improve terms of trade, and their trade…

Analysis

From the bench: New, clearer rules for investing are being implemented
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Legislative changes in early 2012, like the Strategic Entities Foreign Investment Law (SEFIL), combined with a global trend of capital outflow from developing countries, unnerved investors and led to 17% and 47% year-on-year drops in foreign direct investment (FDI) in 2012 and the first three quarters of 2013, respectively. In November 2013, the newly elected government enacted a new Investment Law aimed at reversing falling FDI inflows. “The new FDI law is based around four concepts: liberalisation,…

Viewpoint

David Johnston, Canadian Governor General, on forging new connections
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Viewpoint: David Johnston Though separated by vast physical distance, Canadians and Mongolians are united by common bonds that transcend geography. This happy state of affairs was evident during my state visit to Mongolia in 2013, undertaken on the 40th anniversary of diplomatic relations between our two countries and the fifth anniversary of the opening of the Canadian Embassy in Ulaanbaatar. One of the highlights of my visit came when I was invited to address the State Great Khural, the supreme…

Interview

OBG talks to Roger Gifford, Alderman and Former Lord Mayor of the City of London
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Interview: Roger Gifford Which sectors provide opportunities for cooperation between the City of London and Mongolia? ROGER GIFFORD: The opportunities for London-based services in Mongolia are mainly around financial services, banking, infrastructure financing and accounting law. In addition, there is also potential for design and project management service, but in any case, we need to have a better understanding of the real opportunities in Mongolia to complete this list. The City of London is…