Mongolia is Open for Business
The last two years have proved to be a defying time for countries and citizens across the globe. Under the leadership of Prime Minister Luvsannamsrain Oyun-Erdene, Mongolia has come together since the beginning of 2021 and handled the Covid-19 pandemic effectively, minimizing the spread of the virus from outside the country. The country’s vaccination program has proved to be highly successful, with 96% of the population receiving at least one dose, 92% fully vaccinated, and over half have already received a booster dose. Accordingly, Mongolia is safe, secure, open with minimal restrictions and once again open for business, Foreign Direct Investment (FDI) and tourism. The country’s recently announced a New Recovery Policy designed to allow Mongolia to successfully transition from the Covid-19 pandemic to full post-pandemic recovery, as well as meet its Vision 2050 commitments. The policy is a roadmap to industrialization, higher Gross Domestic Product (GDP) growth and economic liberalization, hopefully helping to secure Mongolia’s cultural and economic future by creating new opportunities for its people and communities.
Over the last 20 years, life expectancy has jumped from 62.2 years to 70.33. Likewise, per capita Gross Domestic Product has risen by almost 400% leaving Mongolia on the fast track to becoming a leading Asian country. The country’s Vision 2050 strategy, which starts with the New Recovery Policy, will hopefully advance social development by expanding the vivid cultural and artistic scene, quality of life, and economic growth. Such an endeavour will hopefully ensure equality of opportunities and participation for all Mongolians. The vision is comprised of nine fundamental goals and 50 specific objectives, with expected results for each of the 10-year stages of implementation. By 2050, the strategy is designed to have delivered sustainable economic growth, improved quality of life, smart and sustainable governance, and a predominant and thriving middle class. Improving quality of life is one of the core goals of the strategy. The government must ensure it can provide clean water, food, technological innovation, affordable housing, quality education, and an accessible and efficient healthcare system for all citizens. By doing so, the government will enhance public services and ensure their accessibility to all, in addition to creating a balanced sustainable economy and labor market.
The government expects to see per capita national income double under the New Recovery Policy over 10 years, a maintained average of 6% growth in the long term, and labor force participation of up to 65%. To do this, the government plans to spend 120-150 trillion Mongolian tugriks (around 40-50 billion USD) by 2030. The New Recovery Policy consists of six pillars designed to address key economic constraints: border ports, energy, industrialization, urban and rural development, green development, and state efficiency. Authorities want to fully connect border ports by railway and new roads, improve the management of Mongolia’s airspace and airways to increase the number of transit flights, and establish a freight forwarding hub. If successful, there will be a three-fold increased capacity of border ports and a doubling of the national railway network.
Energy sources will also double in this timeframe; new ones will be obtained to strengthen the existing energy sector, enhance while establishing new transmission and distribution networks, and develop renewable energy facilities. All this with the objective so that the stored resource stations and water facilities are built to ensure a stable and reliable integrated energy system. Moreover, this will boost the economy, create jobs, ensure a reliable energy supply, and become more sustainable. To further grow, Mongolia will need to transform from a supplier of raw materials into an industrialized state to increase exports and meet domestic development needs. This will include developing value-adding heavy industry, digitization, advanced technology, and increasing the volume of new services, products, and production. The country will also focus on blockchain, artificial intelligence and other advanced technologies.
The Mongolian government has announced that it is committed to improving infrastructure and the quality of life across the country. The capital city, Ulaanbaatar, is currently too densely populated. Accounting for just 0.3% of the Mongolian territory yet the city represents nearly half of the population. As part of the country’s urban and rural recovery objectives, they will reduce traffic congestion, improve public transportation, and intensify the development of new residential areas, satellite cities and free economic zones. Correspondingly, the government has also announced its intention to realize regional economic development policies, allowing Ulaanbaatar to decongest and run more efficiently while spreading the wealth and resources currently concentrated there.
What’s more, the government are committed to sustainability efforts and making strides towards upholding the Paris Climate Agreement. Authorities have said they will boost environmental protection by improving and developing new renewable technologies in line with new global trends. Likewise, planning to work with the public initiatives, businesses, and organizations to effectively launch the ‘Billion Trees’ national movement which will help rehabilitate severely degraded and deserted areas. Furthermore, throughout the implementation of the other elements of the New Recovery Policy, the government will establish environmentally friendly waste recycling plants, protect water resources, and preserve and ensure national traditions of environmental protection.
To tackle state efficiency, the government has indicated its intention to replicate the New Turn Policy of 1932. This will be achieved through identifying the government’s optimal structure, digitization, strengthening of the justice system, and shifting control of state-owned enterprises to the public. The Mongolian government has also declared its intention to remain steadfast in ensuring respect for human rights, fair justice, and a corruption-free country as a critical component for success and adherence to international standards.
While it is vital to keep up good relations with neighboring countries, they are ready and excited to embrace new and deepening trade partnerships through FDI. At the annual Mongolia Economic Forum, they welcomed stakeholders from both home and abroad, taking part in the first forum since the pandemic. The event included keynote speeches by Prime Minister Luvsannamsrain, President Khurelsukh, as well as departmental ministers and stakeholders, including Mr Marcello Estevão of the World Bank and Michael McAdoo of the Boston Consulting Group. The forum showcased the progress Mongolia has made thus far and how it will continue to develop through the delivery of the different recovery goals. To ease doing business and attract foreign investment, particularly in the prominent mining industry, the government has said it will digitize the process of issuing mineral licenses, increase the number of licenses, and reduce open pit mining costs. The country’s top exports include minerals, such as copper and gold, and agricultural products, including cashmere.
Mongolia has always been home to a rich cultural history and heritage. It is imperative that, while continuing to progress and open to foreign investment and tourism, they stay true to their identity with shared national values. It is its deep history and culture as well as its breathtaking landscapes and warm people that should make Mongolia so enticing to the world. This nation-state is a welcoming place with boundless potential and opportunity that will hopefully realise its full potential through its Vision 2050 and New Recovery Policy. The message is short and sweet: after two years of a global pandemic, Mongolia is open for business.