A profound change in the national investment environment needed to awaken European investors’ interest in Mongolia. EuroChamber publishes a detailed FDI climate position paper
Ulaanbaatar, October 22nd, 2021
Mongolia has many advantages which typically create initial interest from foreign investors. However, this initial interest will not lead to significant investment unless there is comprehensive change in the investment environment in Mongolia – which goes beyond one, however crucial – investment law.
The European Mongolian Chamber of Commerce and Industry (EuroChamber) is committed to contributing to a stable and positive business and investment climate in Mongolia through its work as a united voice of the European business community in policy dialogue with and advocacy towards the Government, Parliament and other public service institutions of Mongolia.
Earlier this autumn in September, the Prime Minister of Mongolia made a speech at the auspicious public-private investors consultative event to ensure that business will pick-up again in the ‘post-pandemic’ period. In his speech the Prime Minister emphasized that Foreign Direct Investment will play a key role in reviving the economy of the country and vowed that all investors will benefit from a more flexible legal framework and an improved investment environment generally. In addition, he established special Investor protection working group to oversee the process.
In support of these Parliament’s and Government’s efforts, EuroChamber has created a fundamental FDI Position paper and delivered it to the President, Parliament Speaker and Prime Minister, as well as to our partner – National Development Agency recently.
EuroChamber represents over 150 European, international and Mongolian member companies. Our ‘Foreign Investment Climate’ position paper is a result of several months of research work and draws on collective opinion and experiences of our members, and expertise of EuroChamber Board of Directors.
Our key findings and recommendation focus on:
- Need for long term stability and predictability of the FDI investment climate
- Improving public perception of FDI as a positive contributor to socio-economic progress and the advantages that positive public perception can bring to the stability of the investment environment
- Need of change of attitude into “competing for FDI as a country”
- Improving bureaucracy bottlenecks, esp. within the judiciary system, and rule of law
- Focus on connectivity and logistics infrastructure as a basis for sustainable econ. growth
- Fostering private sector’s role as the engine of economic growth, with Government acting as regulator and a catalyst of prosperity and increased business & investment confidence
This position paper covers in total 14 detailed themes to address in order to achieve a robust business and investment framework.
The timing of this coincides with several recent trade and business challenges, specifically the fuel shortage and recently highlighted ‘Tianjin Container Crisis’ (see previous press release from July 9th, 2021; https://www.eurochamber.mn/a/9 ), which still remains an issue at large. Mongolia is a very open economy, dependent on foreign trade and connectivity, and thus can benefit from foreign direct investment, while decreasing economic and transport dependence on the two neighboring countries.
EuroChamber and our members have been working since our inception in 2019 on topics like Logistics and connectivity with Europe, Sustainable development and renewable energy, Tourism and hospitality, in support of economic diversification and better trade and investment results.
Now is an opportune time to implement comprehensive changes given the unity at Mongolia’s three levels of state political institutions and the strong interest in mining investment globally. While resource nationalism has been rising in other resource dependent economies (*), Mongolia’s openness and improvements to the investment environment are likely to get noticed positively by the international business community.
(* Verisk Maplecroft, a leading resource sector focused risk consultancy, stated that in 2020-21 resource nationalism rose in a large number (34) of countries included in the resource nationalism index).
About EuroChamber Mongolia
Leading European banks and companies active in Mongolia founded the EuroChamber in 2019 with the aim to foster Europe-Mongolian business relations, investment and trade. The founding member companies are: EBRD, ING Bank, MSM Group, Termigas Impianti Tecnologici and ARI Net Associates. The Chamber enjoys strong cooperation with the EU Delegation and national European diplomatic representations to Mongolia.
EuroChamber concluded a close Cooperation agreement with DMUV, FMCCI and BBG, thus now representing a united voice of European business in Mongolia and over 150 members. The mission of EuroChamber is to contribute to the improvement of business and investment climate in Mongolia through targeted advocacy and policy dialogue with the Government and other stakeholders.
For further information about the EuroChamber, including media requests please call 9909 1557, Mr. Erdenebileg L., Communications officer of the Chamber (email: info@eurochamber.mn).