📍 MONGOLIAN ECONOMIC FORUM 2023 | OYU TOLGOI'S DOMINANCE IN MONGOLIA'S FDI LANDSCAPE

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Happy Naadam! May the Mongolian festival be filled with resounding cheers, vibrant colors, and joyful celebrations as traditions come alive in a magnificent display of cultural heritage!

PS: See you in 2 weeks.

🤝 MONGOLIAN ECONOMIC FORUM 2023

The Mongolian Economic Forum 2023 kicks off in Ulaanbaatar. Over 1,500 esteemed guests and dignitaries, including government representatives from Mongolia, alongside 500 international guests, over 700 domestic businesses, NGOs, and renowned scientists, have converged to actively participate in this impactful forum.

• Impact of Rio Tinto: The forum witnessed the presence of 23 esteemed board members and executives from Rio Tinto. Furthermore, Rio Tinto's invitation brought together over 100 representatives from 45 renowned global banks and financial institutions, including JP Morgan, Goldman Sachs, Morgan Stanley, CITI, Barclays, and HSBC, fostering a dynamic exchange of ideas and expertise.

Forum & Interviews

During the forum, an engaging dialogue on "Sustainability of Mongolia’s development policy" took place, underscoring the vital link between sustainable development and strategic planning in Mongolia. Notably, we had the opportunity to interview Ngaire Woods, Independent Non-Executive Director at Rio Tinto, who highlighted the importance of attracting exceptional talent to contribute to Mongolia's public service.

• CBDC: In our insightful conversation with Marc Uzan, Founder and CEO of the Reinventing Bretton Woods Committee, a prominent participant in MEF 2023, he emphasized the transformative potential of Mongolia venturing into digital currency issuance, which would unlock a realm of exciting possibilities.

To be continued…

Continuing today, the forum will delve into key topics encompassing the banking and financial sector, the dynamic capital market landscape, and the vast array of investment prospects awaiting exploration in Mongolia. For those intrigued, stay connected to the latest updates and insights on Inside Mongolia and Lemon Press' vibrant social media channels.

Finally… Undoubtedly, this economic forum presents a remarkable platform for foreign investors to make their introductions, paving the way for a substantial surge in foreign investment and fostering a thriving economic landscape for Mongolia.

⚒️ Oyu Tolgoi's Dominance in Mongolia's FDI Landscape

Mongolia's total foreign direct investment (FDI) reached $2.5 billion in 2022. The government aims to increase this figure to $4 billion in 2024 but how do we achieve this goal?

The Lesson…

Drawing upon the past 18 years, Mongolia's total FDI has amassed an impressive $38.1 billion. Astonishingly, more than half of this total, specifically 57%, is attributed to the Oyu Tolgoi (OT) project. More specifically, if we look only at FDI in 2022, about 90% or $2.2 billion is related to the OT project. Furthermore, the OT project:

• Brought in $4 billion (₮8.8 trillion) in revenue between 2010 and 2022;

• In 2022 alone, OT brought in $1.6 billion into Mongolia;

• Engaged business with 567 local enterprises as of 2022;

• Contributed to the creation of approximately 20,000 jobs, boosting employment opportunities for the local workforce.

Learn…

To increase the FDI, Mongolia must draw valuable lessons from its past and actively attract significant foreign investors to propel major projects forward. A prime example is the collaboration with Rio Tinto, the managing entity behind the OT project. Rio Tinto's substantial investment of $15 billion since 2010 is a testament to such partnerships' potential. With this investment, Mongolia is building a mine that competes globally, generating an annual income of $1-$2 billion.

FDI inflows can help Mongolia achieve the following:

• Ensure economic diversification and independence.

• Reduce the balance of payments deficit and support the stability of the Mongolian currency (₮).

• Open up many opportunities, such as supporting the growth of local companies and bringing them to the next level of development.

Finally… Mongolia has successfully paved the way for future FDI through the OT project. If it can continue to attract large foreign investors and learn from its previous experience, it seems likely that it will be able to achieve its goal of $4 billion in FDI in 2024.

🏃 QUICK STORIES

🔵Starlink will operate in Mongolia. Starlink secures operating rights in Mongolia as Starlink Service Mongolia LLC receives official approval from the CRC, positioning them as the pioneering provider of low-orbit satellite internet services in the country, revolutionizing telecommunication capabilities.

🔵Mongolia and Kyrgyz Republic Forge Joint Declaration. Through this significant step, both nations solidify their commitment to enhance practical cooperation in vital areas such as poverty reduction, food security, climate change mitigation, and the promotion of sustainable green development.

🔵In June 2023, the national inflation rate reached 10.6%. Specifically, food, beverages, and water see an 18.2% price increase, while beverages and tobacco experience a 7.3% rise. Additionally, clothing and textiles observe an 11.7% surge, and housing, water, electricity, and other fuels encountered a 6.1% uptick in prices.

🔵Parliament Approves Budget Law Amendment. The newly adopted law establishes a robust legal framework to uphold the principles of budget transparency, accountability, and stability. Notably, it mandates the inclusion of public input and deliberation in formulating the medium-term budget framework statement, cementing a participatory approach to fiscal planning.

⭐ WATCH: NAADAM in MONGOLIA Vlog

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Editor: E.Zolbayar
Writer: M.Khulan & S.Angirmaa

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.