HE Saikhanbileg Chimed, Prime Minister of Mongolia, will provide keynotes remarks at a conference at Asia House, London on Thursday 2 July 2015. Other speakers include the Rt Hon Hugo Swire MP, Minister of State at the Foreign & Commonwealth Office, Jean-Sébastien Jacques, Chief Executive, Copper & Coal for Rio Tinto and Zoljargal Naidansuren, Governor of the Central Bank of Mongolia. The conference will be preceded by a private briefing for Asia House corporate members.
Since his election in November 2014, Saikhanbileg has been building a clear case that foreign investment is crucial to Mongolia’s economic growth. At the conference, he will highlight how energy, mining and infrastructure are key priority sectors for inward investment over the coming decade. He will also discuss how Mongolia plans to engage with international stakeholders regarding the country’s future. Saikhanbileg will also talk about the majority decision by the people of Mongolia that prosperity should be prioritised by the government over austerity.
Mongolia is set to be a major future supplier of commodities and in 2011 was cited by Citigroup analysts as one of the Global Growth Generators countries, these being countries with the most promising growth prospects for 2010 – 2050. Mongolia has also steadily moved up the World Bank’s Doing Business report, ranking number 72 in 2015, rising 16 places since 2011.
Whilst Foreign Direct Investment (FDI) in Mongolia plunged to $US507.6m in 2014 from $US4.45bn in 2012, the slowdown has given the country respite to prepare for the next cycle of FDI. Mongolia is now in a considerably better position to absorb investment than it was during the height of the commodities cycle in 2011 as the government has steadily been improving infrastructure. Railway agreements have been signed with China’s top coal producer Shenhua Group; the Japanese have financed the construction of bridges and a new international airport, and Ulaanbaatar’s city centre has been vastly improved due to a new network of roads.
Mongolia hosts 10 per cent of the world’s known coal reserves and its huge copper and coal deposits escalated its GDP from $US1.1bn to $US11.7bn in just 10 years. Minerals currently represent around 80 per cent of Mongolia’s exports, a proportion which is expected to rise to over 95 per cent over upcoming years, particularly as a result of FDI.
The announcement in May 2015 that the Mongolian Government signed an agreement with Rio Tinto and Turquoise Hill Resources on the pathway for the development of the underground mine at Oyu Tolgoi signals that a new round of foreign investment could flow into the country. Jean-Sébastien Jacques, Chief Executive, Copper & Coal for Rio Tinto will discuss the flagship Oyu Tolgoi copper-gold mine alongside the importance of partnerships in long-term investments as a catalyst for long-term economic growth.
Zoljargal Naidansuren, Governor of the Central Bank of Mongolia, will discuss how as the Mongolian economy faces challenges from persistent economic imbalances, the country will handle the new wave of FDI.