BCM October Monthly Meeting

BCM October Monthly Meeting

The Business Council of Mongolia and the Finnpartnership successfully organized the BCM’s October Monthly Meeting on 3 October 2023 on the topic of “Doing Business in Finland”. This monthly meeting focused on Finnpartnership, Finland's current economic situation, and opportunities in the mining, energy, and forestry sectors. This meeting featured presentations by the Embassy of Finland in Bejing, Business Finland China, Finnpartnership, Onch & Company, and Finnish companies that came to Mongolia. We would like to extend our gratitude to our keynote speakers, companies who shared their valuable insights, and the BCM's Board Member Neil Young for chairing the meeting. October Monthly Meeting’s speakers and companies:

Neil Young, Member of the Board of Directors of the BCM 
Tommi Jämsä, Desk Officer, Embassy of Finland in Beijing
Birgit Nevala, Programme Director, Finnpartnership
Marko Tiesmäki, Country Director, Business Finland China
Elsa Nyman, Programme Officer, Finnpartnership
Tuvshin Javkhlant, Tax Director, Onch & Company  
Eelis Hemberg, Programme Officer, Finnpartnership

Normet LLC
Planora LLC
Epse LLC
Suokone LLC
Sera Helsinki LLC

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BCM OCTOBER 2022 MONTHLY MEETING RECAP

BCM OCTOBER 2022 MONTHLY MEETING RECAP

 

BCM OCTOBER 2022 MONTHLY MEETING RECAP 

The Business Council of Mongolia (BCM) held a regular Monthly Meeting on 7 October 2022 at the Shangri-La hotel under the theme of digital transformation and the role of the private sector, with around 100 people in attendance. In his opening remarks, BCM Chair Ts.Tumentsogt briefed the audience on current trends in Mongolia and the world regarding digital transformation as well as the current state of Mongolia’s economy in these post-Covid times. He noted that the government’s Vision 2050 policy document reflects digital transformation goals.

The Minister of Digital Development and Communications, Mr. Uchral Nyam-Osor MP, attended the meeting and delivered a keynote speech. This year marks the 100th anniversary of the establishment of Mongolia’s communications sector. Having been recently upgraded form a parliamentary standing committee, the new Ministry of Digital Development and Communications will oversee the sector’s future development. The government seeks to turn Mongolia into a “digital nation.” In this quest, the government seeks feedback from professional associations in its decision-making processes.


N.Uchral, Minister of Digital Development and Communications 


One key principle the government will abide by is not competing with the private sector, the MP stated. Instead, it wants to harness the private sector to achieve its goals. In doing so, the government itself must be a “responsible buyer.” The Minister gave an example of a room full of unused servers that the government bought to illustrate the expense of irresponsible purchases that arise from miscommunication between the government and private sector.

The government seeks to purchase end-products, preferably under a subscription-based method. The Digital Ministry is also going to implement a government procurement “app store,” where organizations can apply for tenders.

In addition to traffic congestion, there is a “bureaucratic congestion” where there is too much red tape and tedious necessities in submitting or receiving state documentation. A bill addressing this will be discussed during the fall session of parliament.

The minister lauded the many startups that have now found stable footing in the business world, adding that the government will continue to support the tech sector through various tax incentives.
 

Ms. N.Enkhjargal, Board Member at Gerege Systems and Vice-Chair of the BCM’s Digital Transformation Working Group, delivered a presentation introducing the Mongolian Diaspora Tech Committee. The committee aims to bring in knowledge and experience from Mongolians abroad who work in the tech sector. In May 2023, it is organizing the “Mongolian Diaspora Tech Summit” in San Francisco.
 

Mr. B.Bayartsengel, CEO of TUSSolution, gave a presentation on their in conducting a systems analysis of digital transformation. Seventy percent of digital transformation projects fail, according to McKinsey & Company. Hence, TUSSolution’s researchers set out to answer the question as to why. As with any big undertaking, systems thinking and systems engineering will be an important tool in digital transformation.

After the speeches and presentations, a panel discussion moderated by Ms. Enkhjargal was held. On the panel were:

  • Mr. Ts.Tumentsogt, Chair of the BCM
  • Ms. N.Oyun-Erdene, Head of the Department of Information and Computer Sciences, National University of Mongolia
  • Mr. B.Bayartsengel, CEO of TUSSolution
  • Mr. S.Bauyrbyek, CEO of Steppe Link

A recurring sentiment among the panelists was the issue of human resources. Not only are organizations competing domestically for the small pool of human resources, but also internationally in this sector. Expanding the pool of qualified people is vital for the sector.

After a lively Q&A with the audience, the meeting was adjourned, and attendees were invited a networking event sponsored by TUSSolution.

Photos from the meeting and networking event can be found from the BCM's Facebook page. Follow the BCM to receive updates and info.

More information can be found from the Editor's notes and presentations linked below.

Links:
  1. Editor's notes (English)
  2. "Mongolia: Business Drivers in a Post-Covid Environment" (English) - presentation by BCM Chair Tumentsogt
  3. "Mongolian Diaspora Tech Committee" (Mongolian) - presentation by N.Enkhjargal, Board Member at Gerege Systems and Vice-Chair of the BCM’s Digital Transformation Working Group
  4. "Digital Transformation from a Systems Perspective" (Mongolian) - presentation by B.Bayartsengel, CEO of TUSSolution
 
BCM Monthly Meeting Recap 20 March 2023

BCM Monthly Meeting Recap 20 March 2023

 

BCM
BCM Monthly Meeting Recap
23 March 2023


BCM MARCH 2023 MONTHLY MEETING RECAP 

The Business Council of Mongolia (BCM) held a Monthly Meeting on Monday, 20 March 2023 on the topic of “Managing Corporate Finances in a Risky Environment,” with BCM Chairman Ts. Tumentsogt hosting for an audience of around 60 people at the Shangri-La Hotel.

The BCM recently signed a Memorandum of Understanding with the Annual Investment Meeting (AIM) based in the United Arab Emirates. On this upcoming May 8-10, the BCM will lead a delegation to the annual forum held in Abu Dhabi. Members are encouraged to attend and seek investment and partnerships at the forum, which saw over 20,000 attendees last year. Contact the BCM Secretariat for more information.

On June 26-29, the 2023 World Export Development Forum (WEDF) will be held in Ulaanbaatar. The WEDF is the flagship event of the International Trade Centre. This year marks the 20th iteration of the forum, and the first since the Covid pandemic. Click here for more information.
 


Ganbold Enkhtaivan, Deputy Governor of the Bank of Mongolia

Following updates from the BCM, Bank of Mongolia Deputy Governor Mr. Ganbold ENKHTAIVAN gave a presentation on Mongolia’s economic outlook. In February, inflation stood at 12.3 percent, which shows cooling from the highest figure of 16.8 percent reported in June 2022. Although inflation is slowing, it is still too high, but the BoM believes it will fall to single digits by the end of 2023, most likely in Q4. Preliminary estimates for balance of payments showed a USD 727 million deficit. The only way to address is to ramp up exports. Thus, the BoM’s two main areas of focus in 2023-24 will be inflation and balance of payments. Forex reserves stood at about USD 3.5 billion at the end of 2022.
 


Randolph Koppa, Chairman of TDB

Next up, Mr. Randolph KOPPA, Chairman of Trade and Development Bank and BCM Board Member, gave attendees a quick lesson in corporate finance. Bank failures in the U.S. and elsewhere caused a sharp decline in global banking shares, with some fearing a contagion. However, it is not at a level to cause panic, said Mr. Koppa. Given especially the niche features of banks such as Silicon Valley Bank and Signature Bank, Mongolian banks will not be significantly impacted by the development. Mongolian banks generally hold few MNT government bonds, don’t dabble in crypto, have a broad customer base, high liquidity, and FX availability is slowly improving. However, Mr. Koppa gave three recommendations to mitigate risks. Stay liquid: secure funding before embarking on major projects. Go green: companies looking to expand or diversify should look into green financing. Stay ready: prepare for the better, as household consumption is increasing, and services and other non-mining sectors should continue to recover.

Following the presentations, a panel discussion on the topic of “Practical Cases on Risk Mitigation” was held. Moderated by BCM Chairman Mr. Tsevegmid TUMENTSOGT, on the panel were:

  • Mr. Ganbold ENKHTAIVAN, Deputy Governor, Bank of Mongolia
  • Mr. Adilbish GANKHUYAG, CEO, Premium Group
  • Mr. Randolph KOPPA, Chairman of the Board of Directors, Trade and Development Bank
  • Mr. Jon LYONS, Vice President Projects, Erdene Resource Development Corp.
  • Mr. Gumenjav TSEVEGJAV, CEO, XacBank

A recurring sentiment during the discussion was that inflation and exchange rate depreciation is nothing new for Mongolia, as such a situation has generally been the case for the past 30 years. Panelists also noted that Mongolia was dealt simultaneous blows to foreign trade with the pandemic, China’s zero-Covid policy, and the war in Ukraine. The biggest issue on the minds of business leaders in the coming years is going to be exchange rate risks. Around 80 percent of USD comes into Mongolia through exports. With a balance of payments deficit, exchange rate correction is the only option. This presents a major risk especially to businesses that deal solely in MNT. One area of disagreement was on the topic of monetary policy vs. fiscal policy. Some may say that there is too much interrelation between the central bank’s monetary policy and the government’s fiscal policy, while others may hold that close coordination is necessary to tackle inflation and foreign exchange rates. However, panelists agreed unanimously that the overall risk profile today is definitely less than in recent years.

After the panel, Ms. Bojoo LAKSHMI, Director of the Economic Policy and Competitiveness Research Center (EPCRC), briefed the audience on Mongolia’s ranking in the IMD World Competitiveness Report. The EPCRC is a non-profit research organization established in 2010.

Bojoo Lakshmi, Director of the EPCRC

Mongolia is ranked 61 out of 63 countries surveyed in the report, which has 333 indicators among 4 categories. Mongolia ranks poorly in economic health, business profitability, infrastructure, and governance efficiency. The country ranks high in trade index, tax rate, unemployment, banking services, and communications investment. Furthermore, the overall score for Mongolia has been declining for the past five years. In addition, Ms. Lakshmi calls on everyone to fill out the 2023 survey. Evaluating the economy regarding competitiveness sends an important message to government officials and media.

Last but not least, the BCM handed membership certificates to four new members:

Photos from the meeting and networking event can be found from the BCM's Facebook page. Follow the BCM to receive updates and info.

More information can be found from the Editor's notes and presentations linked below.

Links:
  1. Editor's notes (English)
  2. "Current state and outlook of Mongolia's economy" (Mongolian) by Ganbold Enkhtaivan, Deputy Governor, Bank of Mongolia
  3. "Risk aversion and Funding" (English) by Randolph Koppa, Chairman of TDB and BCM Board Member
  4. "Mongolia in the World Competitiveness Report" (Mongolian) by Bojoo Lakshmi, Director, Economic Policy and Competitiveness Research Center
 
BCM SEPTEMBER 2022 MONTHLY MEETING RECAP

BCM SEPTEMBER 2022 MONTHLY MEETING RECAP

BCM SEPTEMBER 2022 MONTHLY MEETING RECAP 

The Business Council of Mongolia (BCM) held a regular Monthly Meeting with the Development Bank of Mongolia (DBM) on 27 September 2022 at the Shangri-La Hotel. The meeting focused on potential solutions to current challenges facing the DBM, such as non-performing loans, debt restructuring, corporate governance, and future business strategies and prospects.

Chair of the BCM Ts.Tumentsogt opening the meeting with a basic introduction to development banks in general and the Development Bank of Mongolia. The five biggest development banks in the world are responsible for around USD 8 trillion in assets, with loans focused mainly on major infrastructure and development projects that regular banks cannot finance. Established 11 years ago, the DBM fills the gap in financing between the private sector and government in Mongolia. From the private sector perspective, businesses want to see more independent, impartial governance, stated Mr. Tumentsogt.

Following some brief opening words by J.Bataa, First Deputy CEO of the DBM, a presentation was given by Ms. S.Murun, Head of the Business Planning and Monitoring Department of the DBM.


S.Murun, Head of the Business Planning and Monitoring Department of the DBM

The DBM has had its ups and downs since its establishment. Shares of the DBM are 100 percent owned by the government. In 2016, a new DBM law was passed, bringing it under the supervision of the Bank of Mongolia.

It has seen repayments of MNT 600 billion since the start of the year, when it was mired in controversy over the high level of non-performing loans (NPLs). Around 55 percent of DBM loans were non-performing at the start of the year, but this has been improving, and is at around 51 percent currently.

The DBM is focusing on three key areas: NPLs, foreign cooperation, and governance. The high level of NPLs must be brought down, foreign cooperation means not letting credit ratings drop and paying back bonds on time, and all-round governance improvement measures are being taken.

For the future, the most important thing for the DBM is independence, stated Ms. Murun. It also aims to improve project monitoring and implement new mechanisms of financing. After the current issues are addressed, the DBM will play the role of an export-import bank in the future.


After the presentation, a panel discussion was held, moderated by BCM Chair Mr. Tumentsogt. On the panel were: 

  • Mr. O.Amartuvshin, Mongolian National Chamber of Commerce and Industry
  • Mr. G.Enkhtaivan, Deputy Governor, Bank of Mongolia
  • Mr. N.Manduul, CEO, Development Bank of Mongolia
  • Mr. L.Sonor, Head of the Financial Insurance Department, Ministry of Finance
As a vital organization, the DBM is often criticized as well as praised by various parties. A lively discussion was held in which the government, central bank, DBM, and the private sector were represented. One thing that everyone agreed was that there was no question regarding the need for a development bank. A development bank is absolutely necessary when we talk about national development and the economy. As public servants, businesses, NGOs, and other sectors of society see things from different points of view, panelists also agreed that we are all looking at the same issue, but from different angles. So it is essential that we sit down and find a solution that benefits all.

The meeting was adjourned after a Q&A with the audience.
 

Photos from the meeting can be found from the BCM's Facebook page.

More information can be found from the Editor's notes and presentations linked below.

Links:
  1. Editor's notes (English)
  2. Presentation by S.Murun: Activities of the Development Bank of Mongolia (Mongolian)
 
BCM Monthly Meeting Recap 1 February 2023

BCM Monthly Meeting Recap 1 February 2023

BCM
BCM Monthly Meeting Recap
1 February 2023


BCM JANUARY 2023 MONTHLY MEETING RECAP 

The Business Council of Mongolia (BCM) held a regular Monthly Meeting in cooperation with URECA on 31 January 2023 on the theme “Future-proofing your business in an increasingly net-zero world,” with BCM Chairman Ts.Tumentsogt hosting for an audience of around 120 attendees.

In his opening remarks at the first meeting of 2023, Chairman Tumentsogt noted that last year, the BCM organized over 60 Monthly Meetings, Knowledge Sharing Sessions, and Networking Events, and also sent out 50 NewsWires and 2 macro-economic updates. He also emphasized that the business community has an essential role to play in addressing climate change. It is a matter of the long-term growth and health of our businesses.

Ms. Bayasgalan Onon

Ms. Bayasgalan Onon, Chief Sustainability Officer at URECA, delivered a presentation answering the question “Why all this hype over climate change?” Many people still regard climate change as something not relevant to them personally. Not only will climate change ensue direct, physical risks on businesses, but there are also the net zero transition effects on the business environment. All trends are moving towards a systemic change – a transition towards decarbonization of economies. Despite global commitment made by over 200 governments to keep global warming below 1.5 degrees Celsius, humanity is still increasing emissions. However, net zero does not mean stopping emissions, but rather offsetting emissions at the same rate that we emit greenhouse gases. By incorporating mitigating strategies into your company’s vision, you safeguard your business, achieve access to finance and license to operate, and you will be on the right side of history.

After the opening presentation, a panel discussion was held on the topic “Finance in the time of climate change – seizing opportunities while saving the planet.” Moderated by BCM Chairman Tumentsogt, on the panel were:

  • Mr. Rufat ALIMARDANOV, Resident Representative for Mongolia, IFC
  • Ms. Byambadorj BILEGSAIKHAN, Senior Business Development and Partnership Manager, Mongolian Sustainable Finance Association
  • Mr. Onon ORKHON, CEO, Trade and Development Bank
  • Mr. Mairambek BATAEV, Principal Banker, EBRD
  • Ms. Galzagd TUUL, Head of Eco Banking, XacBank

International financial institutions are all prioritizing climate action in their policies and lending behaviors. Although the portfolio share of green projects and investments in Mongolia is not as high as across the world, each have specific figures they want to reach by certain dates. The EBRD plans to make its share of green projects more than 50 percent by 2025 (globally). The same goes for commercial banks. For example, TDB seeks to reach net-zero by 2050 not only in operations but also lending policies, and XacBank aims to increase its share of green lending to over 10 percent in the coming 2-3 years. A climate roadmap, green taxonomy, and ESG guidelines have all been developed recently in Mongolia. The market and business opportunities are there, if the right projects can attract investment.

 


Before moving onto the second panel, an introduction video of URECA was shown. Click here to view the video.


A second panel was held on the topic “On the frontlines of climate change – how organizations can lead the fight against climate change.” Moderated by Co-Founder and COO of URECA Mr. Baatartsogt AMAR, on the panel were:

  • Mr. Batsukh ANAND, Senior Advisor, Energy and Climate Change, Rio Tinto
  • Mr. Baatarsaikhan AMARSAIKHAN, Chief Growth and Strategy Officer, Gobi Corporation
  • Mr. Jon LYONS, Vice President of Projects, Erdene Resource Development Corp.
  • Mr. Mark KOENIG, Country Representative, The Asia Foundation
  • Mr. Erdenemunkh UNURBAT, Co-Founder and CTO, URECA

 
Companies large and small are taking the initiative with their own climate policies. For example, Rio Tinto plans to go net zero by 2050 and has an internal carbon price of $75, which is used as a metric to assess project costs. It also plans to overhaul its vehicle fleet and transition to electric vehicles. However, due to the size of heavy-duty copper transport trucks, this will understandably take some time.

Erdene Resource Development Corp. plans to make its flagship project at Bayan Khundii the most water-efficient mining project in Mongolia, perhaps the world, certainly for arid regions. The company will also source a portion of its energy needs from renewables. Mining is vital to the green transition, as the world needs huge amounts of copper for it to become a reality.

As an NGO, the Asia Foundation has a relatively small carbon footprint compared to industries such as mining. Despite that, the Foundation still implements a climate policy. No matter how big or small an organization’s emissions are, it is the collective contribution of everyone that is important, noted Mark Koenig. Another important aspect of climate action is to ensure that the benefits of offsets go to the most vulnerable communities.

Gobi Corporation takes a holistic approach to climate policy. Water, chemicals, pasture management, workers’ rights, ESG, CSR – all these aspects are considered interrelated. Furthermore, Gobi is launching a traceability campaign with KPIs from sourcing to manufacturing. As a vertically integrated business, it is important that everything is accounted for and traced. In the future, a specific scarf will be able to be traced to when, from where, and which specific herder the materials came from.

Following the second panel, Roy Peng, Business Development Manager at URECA, delivered a presentation on “Pathways to becoming a net zero company.” URECA offers an enterprise solution for sustainability. Incorporating ESG is no longer a choice, it is an urgent calling. Companies prioritizing ESG have been empirically proven to have higher returns compared to their counterparts, so it is also a sound economic decision. URECA will provide third-party baseline measurement of carbon footprints, create a decarbonization strategy, use MRV tech (machine learning and AI) to screen current initiatives, and then give access to the URECA market for carbon credits. The marketplace will be B2B as well as B2C.
 

NEW MEMBERS CERTIFICATE RECEIVING CEREMONY

The following organizations are new members of the BCM:
  • ChemTech - Exclusive distributor of Sinochem Agro products and services in Mongolia
  • Faro Foundation - Advancing digital literacy, online safety and more
  • Nito - AI-powered human resources platform for business, tech, and finance sectors - Giving each BCM member company 2 free job postings
  • Buren Score - Lending information service fintech company, accredited by the Bank of Mongolia
  • Bishrelt International - Importer and official distributor of global brands in Mongolia

SIGNING CEREMONY FOR MEMORANDUM OF UNDERSTAND BETWEEN URECA AND THE BCM

Last but not least, a signing ceremony was held for an MoU between the BCM and URECA, agreeing to collaborate to engage BCM members, partners, and stakeholders in promoting the net zero movement and raising awareness among its members and the public.

After the meeting, a networking event was held sponsored by URECA.


Photos from the meeting and networking event can be found from the BCM's Facebook page. Follow the BCM to receive updates and info.

More information can be found from the Editor's notes and presentations linked below.

Links:
  1. Editor's notes (English)
  2. "Why all this hype over climate change?" - by Ms. Bayasgalan Onon, Chief Sustainability Officer, URECA Pte Ltd
  3. Roy Peng's presentation cannot be shared with the public as it contains confidential and proprietary information.
  4. URECA introduction video
 
BCM June 2022 Monthly Meeting Recap

BCM June 2022 Monthly Meeting Recap

BCM JUNE 2022 MONTHLY MEETING RECAP 

The Business Council of Mongolia (BCM) held a regular Monthly Meeting on 30 June 2022 at the Shangri-La Ulaanbaatar with the aim of reviewing the 2022 Convention of the Prospectors and Developers Association of Canada held earlier in the month and discussing its impact on Mongolia’s extractives and mining sector.

BCM representatives, including Managing Director B.Javkhlan and member companies, were among the Mongolian delegation that travelled to Toronto for PDAC 2022 held on June 13-15.
 


Minister of Mining and Heavy Industry G.Yondon in his opening remarks noted that around 150 people from Mongolia flew to Toronto to represent Mongolia's mining and extractives sector. This year's PDAC was the first in-person conference since the start of the pandemic. Leaders emphasized the green transition, sustainable development, and the supply of critical minerals. The Minister relayed that some nations expressed interest in cooperating with Mongolia on critical minerals. Copper, nickel, lithium, and cobalt will all be in great demand for the foreseeable future. Seeing from the successes of Oyu Tolgoi, Canada's export support organization also said they would be willing to invest in Mongolia in this regard. At PDAC, the Mongolian delegation conveyed to the international community that the country is striving to improve the legal environment, governance, and policies related to mining.
 


Glenn Zyzanski, Head of Development Cooperation at the Embassy of Canada in Mongolia, noted that "energy and enthusiasm permeated the conference" on its 90th anniversary. Canada is committed to a strategy to advance the critical minerals supply chain, which includes six aspects: innovation research and exploration; accelerating project development; sustainable infrastructure; indigenous reconciliation; diverse workforce and communities; and global leadership and security. "Canada is proud to be a leading partner in Mongolia’s mining sector," stated Zyzanski.

After the opening statements, the first of two panel discussions was held. Moderated by BCM Chair Ts.Tumentsogt, on the first panel were: 

  • H.E. Mr. Gelen YONDON, Minister of Mining and Heavy Industry
  • Dr. Gotov BATTSENGEL, CEO of Mongolian Mining Corporation
  • Mr. Battulga GANKHUYAG, CEO of Erdenes Tavan Tolgoi JSC and Chairman at Coal and Energy Group
  • Mr. Erdene LKHAGVA, GM External Affairs and Communications, Copper, Oyu Tolgoi LLC

The panelists reviewed Mongolia's participation at PDAC 2022 as well as shared some of the big projects they are working on. There was also a heavy emphasis on the increasing need for exploration in Mongolia, which the Mining Ministry supports. With critical minerals and rare earth elements taking center stage in the mining world, Minister Yondon noted: "Where in Mongolia could these commodities be? Where should we explore?"

Before the second panel, BCM Board member and Chairman of Gund Investment LLC Mr. Dugar Jargalsaikhan delivered a presentation on “Developing a model for the extractive industry of Mongolia.” Jargalsaikhan is also a member of the BCM's Competitiveness Working Group. He has recently been working on a project to create a development model for Mongolian mining, stating we need a common understanding to eliminate discrepancies in policies and attitudes. The model must: be aligned with the constitution; be aligned with systems theory; be aligned with international standards; and be prepared for the digital transition. He expressed the problem with current attitudes through a poignant metaphor: when CEOs talk about raising funding, implementing a project, etc., it is like constructing a building without any consideration of its surroundings. That is why we need a better model to harmonize the various efforts of different people and organizations.

The second panel discussion focused on "Shaping Mongolia's Future Mining Industry." Moderated by columnist at the Daily newspaper Ms. Tsetsegmaa Baasansuren, on the panel were: 

  • Mr. Gongor DAMDINNYAM, Member of Parliament
  • Mr. Ankhbayar BILGUUN, Vice President, Business Development, Erdene Resource Development Corp.
  • Mr. Myagmarsuren DAGVA, Advisor to the Ministry of Mining and Heavy Industry
  • Dr. Andrew STEWART, Vice President of Exploration, Xanadu Mines
  • Dr. Bold UYANGA, Director General of the Geological Policy Department, Ministry of Mining and Heavy Industry

Once again, exploration and investment were key themes of the discussion. Dr. Uyanga mentioned that since 1997, only 1 out of 630 exploration licenses on average advance onto the exploitation stage. Mongolia's exploration and mining sector has the potential to compete globally; however, we have to align the domestic sector with what's happening around the world, noted Dagva. Legislators also want to lower state involvement and safeguard private investment. On the other hand, all stakeholders must be reasonably satisfied, not just the investors, stated Damdinnyam MP. Andrew Steward told the audience that investors will come if they can get on the ground, and that means licenses. "Exploration may be a business, but geology is a science," he said.

Photos from the meeting can be found from the BCM's Facebook page.

More information can be found from the Editor's notes and presentations linked below.

Links:
  1. Editor's notes (English)
  2. Developing a model for the extractive industry of Mongolia” (Mongolian) by Dugar Jargalsaikhan
BCM NOVEMBER 2022 MONTHLY MEETING RECAP

BCM NOVEMBER 2022 MONTHLY MEETING RECAP

 


 

BCM NOVEMBER 2022 MONTHLY MEETING RECAP 

"The Business Council of Mongolia (BCM) held its regular Monthly Meeting on 23 November 2022 at the Shangri-La conference hall on the topic of “Mongolia Economic Outlook 2023.” Around over one hundred guests and members participated.

In his opening remarks, BCM Chair Ts.Tumentsogt noted that the economic growth is forecasted to reach 5.0% in 2023. The two main external factors affecting Mongolia at the moment are China’s Zero-Covid Policy and Russia’s war in Ukraine.
 


The meeting featured four presentation by experts on the topics of: monetary policy, balance of payments, 2023 state budget, and mining-dependent economic volatility.

Director of Monetary Policy at the Bank of Mongolia Mr. B.Bayardavaa informed attendees that global demand outlook continues to decline due to global uncertainty, high inflation risk, and tightening of monetary policy by most central banks. 

Economic volatility based on the cyclical nature of the global mining industry has been a constant issue in recent history. A stability fund that saves revenue during price spikes can mitigate such fluctuations. Foreign investment and project management is key to saving the country's economy, said N.Enkhbayar from the Institute of Strategic Studies. Supply chain issues also persist, and cost of business is increasing, especially regarding transportation and inventory. Inflation in Mongolia was 14.5% in October, but that figure is expected to decline in the coming months. GDP grew by 3.7% in the first three quarters, and aggregate production and demand have reached pre-pandemic levels; however, the mining industry remains below pre-pandemic levels due to border restrictions.

The price of imported goods now account for 53% of inflation, whereas it used to be 30% before the pandemic. Exports of key products have not yet recovered to pre-pandemic levels. Balance of payments has swung into a deficit of 1.4 billion USD as of September 2022, the highest BoP deficit since 2014. Real household income has fallen, with people dipping more and more into their savings to plug the gap in consumption needs. Savings has been declining as a result.

The 2023 state budget is an austerity budget, with around 1.0 trillion MNT in spending slashed. Notorious spending on statues and other unnecessary expenditures have been cut, stated G.Zolboo, Director-General of the Financial and Fiscal Research Department of the Ministry of Finance. No new investments will be made from the 2023 budget. Of the 7.9 trillion MNT planned for over 1,100 projects, 2.9 trillion MNT is allocated for 2023, and around four-fifths of these projects are expected to be commissioned in 2023. The government is also reformed the tax system to have a progressive income tax system with brackets at 10%, 15%, and 20%. Only 1.3% percent of taxpayers will see an increase in their income taxes.

Economic volatility based on the cyclical nature of the global mining industry has been a constant issue in recent history. A stability fund that saves revenue during price spikes can mitigate such fluctuations, said N.Enkhbayar from the Institute of Strategic Studies.


After the informative presentations, a panel discussion was held moderated by B.Dulguun, CEO of the New Recovery Policy Accelerator. On the panel were:

  • N.Enkhbayar, Managing Director Of The Economic Security Research Centre, Institute of Strategic Studies
  • B.Munkh-Erdene, Head Of Balance of Payments Department, Ministry of Economic Development
  • Ts.Tumentsogt, Chair of the BCM
  • G.Zolboo, Director General of Financial and Fiscal Research Department, Ministry of Finance

Panelists discussed issues such as sovereign debt repayment obligations coming in 2023, recent wave of partial IPOs, reform of state-owned enterprise, attracting new investments, and safeguarding current investments.

Photos from the meeting and networking event can be found from the BCM's Facebook page. Follow the BCM to receive updates and info.


More information can be found from the Editor's notes and presentations linked below.

Links:
  1. Editor's notes (English)
  2. "Economic Outlook" (English) - by B.Bayardavaa, Director General, Monetary Policy Department, Bank of Mongolia
  3. Current state of the economy, 2023 projections, and policy direction” (Mongolian) - by B.Munkh-Erdene, Head of Balance of Payments Department, Ministry of Economic Development
  4. Unified State Budget of Mongolia 2023” (Mongolian) - by G.Zolboo, Director General of Financial and Fiscal Research Department, Ministry of Finance
  5. "Mongolian economic growth, FDI, and financing sources” (Mongolian) - by N.Enkhbayar, Managing Director of Economic Security Research Centre, Institute of Strategic Studies 
 
BCM April 2022 Monthly Meeting Recap

BCM April 2022 Monthly Meeting Recap

BCM APRIL 2022 MONTHLY MEETING RECAP 

The Business Council of Mongolia (BCM), in cooperation with the International Think Tank for Landlocked Developing Countries (ITTLLDC) and the National Road Transportation Association of Mongolia, held a Monthly Meeting on 27 April 2022 on the topic of “Pressing problems and their resolution: Mongolian Trade and Transportation Logistics.” The discussion aimed to exchange perspectives on overcoming today’s challenges faced in the areas of transportation, logistics, and trade. The Monthly Meeting also covered insights from Executive Director of the ITTLLDC, Mr. D.Dulguun. A presentation by Dulguun was followed by a panel discussion which he moderated; on the panel were:

  • Ms. D.Gerelnyam, Head of the Policy and Planning Department of the Ministry of Road and Transport Development of Mongolia
  • Dr. A.Munkhbold, President of the Mongolian Logistics Association
  • Mr. J.Ayush, Transport Manager, National Road Transport Association of Mongolia
  • Ms. D.Unurjargal, Regional Cooperation Officer, Asian Development Bank
  • Mr. E.Yesukhei, Director of the Investment Research Center – Ministry of Foreign Affairs of Mongolia

Themes throughout the discussion included foreign trade ramifications of the Russo-Ukrainian War on Mongolia, the recent Covid wave in China, and improving the handling capacity of border ports.
 
Mr. N.Batnasan, Professor at the National University of Mongolia’s Business School, expanded further on this with his presentation on the current issues Mongolia faces regarding international trade.
 
A second roundtable was held, with BCM Vice Chair Mr. E.Orchlon serving as moderator for a panel featuring:
  • Mr. N.Batnasan, Professor of Business School, National University of Mongolia
  • Mr. O.Bolorbat, CEO of Trade and Distribution Company TBI (Tavan Bogd International)
  • Mr. Ch.Davaabayar, SME Association of Mongolia
  • Mr. A.Enkhjin, Director General, Reserves Management and Financial Markets Department, Bank of Mongolia
  • Mr. G.Ulziisaikhan, Head of the Department of Foreign Trade and Economic Cooperation, Ministry of Foreign Affairs of Mongolia
 
The audience heard diverse opinions from the representatives of business, government, and academia. Sentiments ranged from Mongolia fairing relatively well given the state of the world to frustration about corruption and ineptitude.
 
An overarching theme of the meeting would be that while Mongolia’s domestic situation is significantly dependent on the political and social situations of its two neighbors, there is much room for improvement in enhancing the legalities, physical infrastructure, and policies that pertain to logistics and international trade.

Photos from the meeting can be found from the BCM's Facebook page.

More information can be found from the Editor's notes and presentations linked below.
Links:
  1. "Current issues of Mongolia's logistics sector as a landlocked nation and opportunities for improvement" (Mongolian) - By D.Dulguun, Executive Director of the ITTLLDC
  2. "Mongolia's transport sector" (Mongolian) by D.Gerelnyam, Head of the Policy and Planning Department of the Ministry of Road and Transport Development
  3. "Issues surrounding Mongolian international trade" (Mongolian) - By N.Batnasan, Professor at the Business School of the National University of Mongolia

You may find the media coverages down below:

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