Trade & Investment
From The Report: Mongolia 2015
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Wedged between two of the world’s largest economies, Mongolia’s trade and investment policies are something of a balancing act. Reliant on its neighbours for both trade and transit infrastructure, Mongolia’s small, open economy has integrated with the global one by developing relationships with “third neighbours” to improve terms of trade. As surging mineral exports in the past half-decade have exposed Mongolia to the volatilities of the global commodity markets, the government aims to leverage the nation’s abundant natural resources to develop value-added production and diversify away from exports of raw materials.

This chapter contains a viewpoint from Vladimir Putin, President of Russia; and interviews with L. Purevsuren, Minister for Foreign Affairs; and S. Javkhlanbaatar, Director-General, Invest Mongolia Agency.

Articles from this Chapter

Overview

Mongolia builds new partnerships in trade and investment, with China and Russia and beyond
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Wedged between two of the world’s largest economies, Mongolia’s trade and investment policies are something of a balancing act. Reliant on transit neighbours for both trade and the infrastructure to support it, this small, open economy has integrated with the global one by developing relationships with “third neighbours” to improve its terms of trade. As surging mineral exports in the past half-decade have exposed Mongolia to the volatilities of global commodity markets, the government aims…

Analysis

Partnering for trade: Fresh agreements with key neighbours are set to boost trade
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Landlocked between two large markets, Mongolia has long used an activist trade policy to develop “third neighbours” and improve its terms of trade. The 1965 International Convention on Transit Trade of Landlocked States already grants it access to third markets, although quotas and transit tariffs are still subject to negotiations. Over the past decade, however, China has largely cornered the market for Mongolia’s mineral exports – despite pledges to allow up to 30% of exports to transit…

Interview

Vladimir Putin, President of Russia, on improving economic and political ties
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First, I would like to note that my recent visit to Mongolia and talks with President Ts. Elbegdorj coincided with one of the biggest events in the history of our relations: the 75th anniversary of our joint victory at the river Khalkin-Gol. I would like to express our gratitude to Mongolia’s government and people for looking after our common historic heritage. The celebration marking this event is a show of respect for our past. Our common historic memory certainly provides a good basis for building…

Analysis

Mongolia’s new investment law a good start, but more reforms needed
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A new investment law passed in October 2013 sent a clear message about the government’s pro-business reform ambitions, placing foreign and local investors on equal footing. New “tax stabilisation certificates” now offer an alternative to the previous investment agreements by freezing the relevant taxes for a period of up to 22.5 years. While the state mechanisms for such benefits were set up quickly, the process for granting them has proven slower than expected – the handful of applications…

Interview

L. Purevsuren, Minister for Foreign Affairs
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Interview: L. Purevsuren How do you expect Mongolia’s role in the regional economy to develop going forward? L. PUREVSUREN: Foreign trade plays an important part in Mongolia’s economy. Since it began its transition to a market economy, Mongolia has adopted open trade and investment policies. After joining the WTO in 1997, we bound all our tariffs under the General Agreement on Tariffs and Trade and began granting most-favourednation status to all WTO members. We also have bilateral trade agreements…

Interview

S. Javkhlanbaatar, Director-General, Invest Mongolia Agency
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Interview: S. Javkhlanbaatar What trends have you seen in terms of foreign direct investment (FDI) in 2014? S. JAVKHLANBAATAR: According to statistics for the first half of the year, FDI decreased to roughly $400m. While concerning, it is misleading to rely too heavily on one metric. For instance, over the same period, more than 170 foreign companies entered the market, which is largely in line with the 390 figure we saw for full year 2013. The way foreign dollar inflows are categorised also makes…