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Monday, December 18, 2017

Mongolia Briefing is a magazine and daily news service about doing business in Mongolia. We cover topics relating to the Mongolian economy, the market in Mongolia, foreign direct investment and Mongolian law and tax. It is written in-house by the foreign investment professionals at Dezan Shira & Associates

Mongolia’s Wolf Economy Comes in from the Cold

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The main focus of what is going to be a decade of massive change for the Mongolian economy is going to be mining. In fact, the massive reserves that the nation possesses are such that there is talk of a “mining mania” and serious concern about how this young nation can cope with the implications this natural bonanza will bring.

At this year’s Mongolia Economic Forum, the focus was on governance and how to manage this transition. That the transition is going to come as a jolt is understating it. Even now, Mongolia’s largest export sector is agriculture – mainly cashmere wool and animal by-products. Mainly sourced – still rather archaically from the nomadic herders – this industry supports hundreds of thousands of Mongolians scattered across all corners of a country the size of Western Europe.

Yet a strengthening currency and Chinese competitiveness is squeezing even this most basic of industries. This comes as bad news for the Mongolian nomads who still make up 50 percent of this ancient, yet fiercely proud country. Yet despite the mining industry being an apparent savior, the global mining multinationals and Mongolia have not always seen eye-to-eye. Mongolians revere their land, and polluting it runs against strong local Buddhist and shamanistic beliefs that can die hard here. The Ulaanbaatar government, for example, turned down a lucrative proposal to develop a premium Japanese-funded golf course just outside the city when they found out that chemical fertilizers were needed to cultivate the grass. It’s hard to imagine that stoicism in China, where even pristine land can be treated as a convenient dumping ground for toxic waste. Plans for a casino too, to attract Chinese gamblers, were eventually aborted after it was deemed to be contrary to Mongolian Buddhist principles.

To read the full version of this article, please purchase this issuein the Asia Briefing Bookstore. Companies requiring assistance may contact any of DezanShira& Associates' 12 national offices at mongolia@dezshira.comfor advice or visit www.dezshira.com.

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