"The Investment Policy Review provides very valuable insights and will help us improve the investment environment", said Mr. Norovyn Altankhuyag, Prime Minister of Mongolia, in a meeting with UNCTAD Secretary-General Supachai Panitchpakdi. "We have already taken steps to implement some of the recommendations of the IPR, including launching a brand for Mongolia's products and a revision of mining and tourism policy in line with the IPR. The Prime Minister also stressed that Mongolia is revising its investment legislation, and expressed interest in UNCTAD's assistance.
On his visit to Mongolia, Dr. Supachai also took part in a forum with over 100 participants from the Government, local and foreign businesses, civil society, and development agencies, at which the main findings and recommendations of the Investment Policy Review were presented.
"The treasure chest of geological wealth in Mongolia could be a blessing, but also a curse,"Dr. Supachai said. He also stressed that long-term coherent strategic planning is needed to cope with and manage such rapid economic growth as that expected in Mongolia.
The IPR, prepared at the request of the Government, also recommends that Mongolia adopt a three-pronged diversification strategy aimed at attracting investment to new sectors, to new regions within the country, and from non-traditional investors. This strategy, the IPR contends, would assist Mongolia in fending off the risks of a "natural resource curse", and would help it to progress along a more balanced and inclusive growth path.
UNCTAD experts emphasized at the forum that Mongolia has made great progress towards establishing a sound investment climate. They also noted that it has adopted a modern body of laws and regulations pertaining to business.
There is investment potential for the country in tourism, business and financial services, and niche agricultural and manufacturing products, the UNCTAD experts said, but the needs of these sectors must be catered to. They cited as obstacles weak institutions and governance, and uncertainty surrounding the legal framework for investment in strategic sectors. Steps are needed to remove these barriers to private-sector development, investment, and economic diversification, they said.
The IPR counsels Mongolia to forcefully address these issues, to open new opportunities for investment in sectors other than mining and construction, and to adopt professional investor-targeting strategies. It also advises Mongolia to employ mining revenues, as well as foreign direct investment, in order to address other major infrastructure and skills impediments to development. And it urges measures to encourage investment through public-private partnerships and skills-attraction policies.
UNCTAD has now carried out more than 35 IPRs at the request of developing-country governments. The IPR for Mongolia is the first step in a programme of technical assistance being developed by UNCTAD to help the country more effectively use foreign direct investment to achieve its development goals. UNCTAD will continue to provide support to Mongolia as it implements the recommendations of the IPR.