Relief, Cautious Optimism At Mongolia Euromoney Conference

A sense of relief and cautious optimism marked the 4th Annual Mongolia Investment Forum organized by Euromoney at Government House on September 8, the first occasion to bring together investors since the Mongolian Parliament removed all obstacles to the signing of the Oyu Toloi agreement.

Delivering his opening keynote address, Deputy Prime Minister M.Enkhbold said foreign direct investment would “open new doors to the wider world” for Mongolia and asked investors to help the country “realize its economic potential to the full”. Earlier FIFTA Chairman B.Ganzorig had listed some of the measures the Government was taking to make Mongolia “more competitive and more business-friendly”, expressing the hope that more investment would accelerate such changes. Minerals and Energy Minister D.Zorigt said such conferences should be used to make “a realistic assessment of where the global recession has placed Mongolia” as well as of “the steps being taken to get out of it”.

The first of the five panel discussions was on the state of the Mongolian economy. Mr. Alisher Ali Djumanov, CEO of Eurasia Capital, said the global crisis and the delay in deciding on the Oyu Tolgoi agreement had together made the situation “desperate” but recent developments were heartening. However, the real test for Mongolia would be in choosing the right way to manage the liquidity that the expected flurry of investments would bring.

Mr. J.Peter Morrow, CEO of Khan Bank, said the Mongolian financial system had generally escaped being hit by the international downturn; it was the failure of the domestic fiscal and monetary policies that had led to runaway inflation and a sluggish economy. Calling the Oyu Tolgoi agreement “Mongolia’s stimulus package”, he said it is coming late, but it is a package that will cost the state no money while reviving the whole economy.

Mr. S.Demberel, Chairman of the Mongolian National Chamber and Industry, said “figures are poor tools” to understand the economy and he did not share the general enthusiasm that the economy was poised for a upswing. “We are merely surviving instinctively”, he said, urging the Government to give more freedom to the private sector and to adopt “more decisive” macroeconomic policies.

Source: BCM NewsWire