Business Council of Mongolia

The BCM monthly meeting on May 25 was held with Mr. Layton Croft in the chair and 75 members attending. In his opening remarks Mr. Croft said the mining database project listing all local goods and service producers was going well, with 1,150 entities already included in it. Ivanhoe Mines is funding the project, while BCM and the Sant Maral Foundation were jointly responsible for its implementation.

Executive Director Jim Dwyer reported that BCM now has 117 members. The 7 new ones to join since the last meeting are: The Netherlands Embassy Rep Office, Polo Resources, Nomin Holding, Mongolia Procurement Agency, GTs Advocates, Sedgman Consulting and the Unversity of Pittsburgh. A proposal to offer some kind of ‘Associate’ membership was being considered, with restricted benefits for those who opt for it.

The University of Pittsburgh Honors Program is sending a group of students to work as interns with various companies here and the details have to be worked out. The five working groups are all busy.

Mr. Chung Il, Ambassador of South Korea to Mongolia, said bilateral trade relations were healthy, though the balance was very much in favor of South Korea. Almost half of the South Korean investment here was in restaurants and there were few large investments. He would work for bridging the psychological apartness between the two countries that was more than the geographical distance. His goal was to waive the need for visas for Mongolians and South Koreans to travel to each other’s country. He also wanted to have more flights between the two countries.

Mr. D.Nyamkhuu, Deputy Minister of Social Welfare and Labor, gave a presentation on the Mongolian Labor Market. He touched upon the indirect links between receiving some sort of social allowance and pressure to hold a job. Some 2.1 million of the total population of 2.7 million receive some social allowance or the other and the system is often abused. Vocational training facilities have been allowed to wither in the two decades since the end of the socialist days and have to be reintroduced with a vengeance. They must be updated, must cover many more disciplines, and must be available to many more job seekers. Prospective employers must also help in this work for their own ultimate benefit. The country’s nomadic ethos has an inhibiting impact on people taking up settled trades, and a disciplined work culture has to be cultivated among the present generation.

Labor exchanges are being set up to provide information and opportunities, but these have to spread out to all areas of the country. There is little scope for any big industry to come up in Mongolia, and scope has to be created for an extensive countrywide network of professionally run service institutions and small and medium enterprises. He detailed the constraints, both internal and external, that stood in the way, and wanted big foreign investors to help Mongolia develop into an exporter of finished products, and not just unprocessed mineral resources .

Mr. Ch.Khashchuluun, Chairman, National Development and Innovation Committee (NDIC), spoke on the NDIC Action Plan for Private Sector Development. The goal is to have the private sector as the engine of intensive growth in Mongolia and to make it responsible for generating 90% of the GDP. The plan is comprehensive and will require cooperation from several areas, but he was hopeful of success. Once formal approval is received work will begin to implement the many-pronged support strategy for the private sector. He also stressed the need for a large enough and adequately qualified labor force, and thought extensive Public-Private-Partnership could make this possible.

Sectoral industrial clusters would be set up and infrastructure developed. Local priorities change radically as one moves out of Ulaanbaatar or the mines into the countryside, and separate strategies with a regional orientation have to be adopted. A unified labor market information database was essential and so was putting an end to the wide prevalence of “unofficial” employment that props up the powerful, and profitable to some but fosters a nationally unproductive “shadow” economy.    

Mr. L.Sumati, Director of Sant Maral Foundation and Vice Chairman of BCM, talked briefly about the election of Mr. Ts.Elbegdorj as the next President of Mongolia. One feature of the election was that the actual voting behavior did not deviate much from intentions revealed in an opinion poll a month earlier.