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- 🚨 The Job Hunt Marathon: 7.5 Months
🚨 The Job Hunt Marathon: 7.5 Months
Rising Debt, Shifting FDI, and Missed Opportunities!
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Mongolians Don’t Understand Themselves 101: Recently in Ulaanbaatar, energy blackouts are widespread. Authorities have stated that these limitations will continue until 2025. Thankfully, it's only 15 days until the new year!
Today’s newsletter in 3 sentences…
💵 XacBank offers a share buyback program
❌ Mongolia's Goal: To Scare Away Investors
🩻 Unemployment duration: 7.5 months
Let’s Dive In. 🌊
MARKET
MSE: XacBank (XAC) offers a share buyback worth ₮1.8 billion for 2.2 million shares over the next 3 months.
MNG: In the third quarter, foreign debt increases by 7.6% from the same period last year, reaching $35.6 million.
MMC: Mongolian Mining Corporation, Mongolia's main exporter of coking coal, officially joins the U.S. OTCQX market and starts trading under the "MOGLF" ticker.
🇲🇳 Job Hunt in Mongolia: 7.5 Months to Employment!
Mongolia’s unemployment rate stands at 6.1%, a modest decrease of just 0.2 percentage points over the past decade. This stagnation raises the question: Is this normal?
👀 The Paradox: No Jobs, Yet Labor Shortage
According to a report by the Institute of Labor and Social Security Training, Mongolia's unemployment rate is similar to that of other regional and developed countries. In contrast, the average duration of unemployment is 7.5 months, below the international average, most unemployed (33.5%) report being unable to find work despite actively searching. Interestingly, on November 11th, 400 job vacancies were listed on Zangia.mn, Mongolia's largest job-search platform.
❌ The Disconnect: Unemployment vs. Labor Shortage
Even though there are many unemployed individuals, the labor shortages persist. These shortages are driven by factors such as low wages, inadequate income, and a declining birth rate over recent years. Additionally, there is insufficient workforce supply for basic jobs in manufacturing, construction, and services, worsening the situation further.
🥲 No Significant Growth in Real Wages: Despite a 169% increase in nominal wages over the past decade, real wages (adjusted for inflation) have only grown by 31%. Wages in $ have seen a modest rise of just 17%, reflecting a limited increase in purchasing power.
🏴☠️ The Rise of Informal Employment: As taxes and price increases erode citizens’ purchasing power, informal employment has been steadily growing. Since 2010, informal employment has risen by 40%, reaching 215,400 people nationwide and 124,300 people in Ulaanbaatar. The recent requirement for contract workers to pay social security tax suggests that this trend will continue to rise.
🇲🇳 The Migration Dilemma: The Quest for Better Opportunities Abroad
This dynamic has triggered a brain drain. Currently, 136,000 Mongolians work abroad, and a survey of citizens aged 15-64 revealed that 2/3 would be open to working overseas if the opportunity arose. Among younger age groups, this number rises sharply, 73% of those aged 25-34 and 80% of those aged 15-24 expressed interest in working abroad.
Finally, Young Mongolians increasingly aspire to leave the country, driven not only by wages and taxes but also by concerns about the future well-being of their children, which they fear may not improve within Mongolia’s current conditions. For many, the solution is, regrettably, to seek a better life abroad.
❌ Rising Debt, Shifting FDI, and Missed Opportunities!
External debt rises by 7.2% year-on-year to $35.6 billion. The debt continues to grow, but what about the investment flowing into Mongolia?
🏃🏃➡️ The Investor Country Has Changed!
In the first 9 months of the year, foreign direct investment (FDI) in Mongolia grows by 26%, reaching $2.9 billion. Regarding the dynamics of investor countries, Canada accounted for more than 50% of total FDI in 2020 and 2021. In 2022, the Netherlands represented 66.2%, in 2023 it drops to 38.3%, and in the third quarter of this year, it makes up 46.6%. While investment from Canada and the Netherlands declines, investment from the United Kingdom and Singapore rises significantly in 2023.
☝️ Hmm Interesting… In the first quarter of 2024, FDI from countries classified as “others” represents 96.7% of the total. It is intriguing to find out which countries contribute this share.
⛏️ To Which Sector? Mining remains the dominant sector attracting investment in Mongolia. This sector consistently accounts for over 80% of total FDI and, in some years, even 90%. Other sectors struggle to draw significant investment.
🔎 Debt or Investment? In the third quarter alone, FDI inflows total $830 million, while outflows amount to $289 million. This results in a net FDI inflow of only $541 million. Notably, 51% or $16.7 million of the FDI balance comes from loan funds, with the remaining 49% from equity investments.
🙌 Lesson to Learn
Kazakhstan sets an ambitious goal to attract $150 billion in FDI by 2029. The country aims to secure significant investment in the technology and renewable energy sectors. Last year, the number of foreign-invested projects increases by 132% compared to the previous year, reaching 65 projects. Among them, 3 projects have investments exceeding $1 billion, with major investors from Germany and China.
From 2019 to 2023, Kazakhstan attracts 185 foreign-invested projects, totaling $26 billion. Like Mongolia, Kazakhstan shares geopolitical and geographical similarities, along with a high dependence on mineral resources. However, Kazakhstan is evolving rapidly, emerging as a leading example in the region.
Overall, Mongolia, with its legal and regulatory environment, forces investors to commit once, only to leave and say, "We will never invest in Mongolia again." While other countries succeed in attracting investment, Mongolia remains stuck in a cycle of missed opportunities.
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ECONOMY & BUSINESS
Mongolian Hospital Delegation Visits Myongji To Benchmark Organ Transplant Expertise, Medical Systems. (KoreaBiomedicalReview)
Welcoming Direct Flight Of MIAT Mongolian Airlines From Ulaanbaatar to Ho Chi Minh City. (RoutesOnline)
Trade & Development Bank of Mongolia Goes Live with Apple Pay. (IBSIntelligence)
World Bank Reports Outline Steps to Strengthen Mongolia’s Financial Sector and Boost Its Private Sector. (WorldBankGroup)
Mongolia's Coal Exports Rise 8.7% MoM In November. (MySteel)
POLITICS
Mongolia Approves First-Ever Deficit-Free State Budget. (XinhuaNews)
Uzbekistan, Mongolia Discuss Establishing Direct Flights On Tashkent-Ulaanbaatar Route. (Trend)
Mongolian Prime Minister Highlights Growing Interest From Gulf Nations In Critical Minerals. (MenaFN)
CIDCA and UNDP Boost Mongolia’s Forest Firefighting Capacity. (UNDP)
Women Make 25% In Mongolian Parliament Elected In 2024. (AKIPress)
Signing Of The Agreement Between The Government Of Japan And The Government Of Mongolia Concerning The Transfer Of Defense Equipment And Technology. (MFA)
CULTURE & LIFESTYLE
Overnight Temperature Plunges To Minus 42 Degrees Celsius In Western Mongolia. (XinhuaNews)
20 Soums Of 8 Provinces At Risk Of Dzud Disaster. (News.mn)
Mongolian CS2 Team Makes History at Shanghai Major. (InsiderGaming)
Top Dota 2 Teams Compete At The 2024 MESA Invitational. (Esports.net)
Mongolia's Measles Response: A Swift and Proactive Approach Deploying Experts From the Global Outbreak Alert and Response Network. (WHO)
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Publisher: Ts.Ankhbayar
Writer: M.Khulan
Graphics by: Ts.Tselmeg
Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be or constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.