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  • Writer's pictureAmar Adiya

Mongolia rolls out red carpet for investors, but walkway still rocky

Mongolia put on its Sunday best to woo investors at the high-profile Mongolia Economic Forum held on July 9-11, 2023 - but it will take more than a flashy event to overcome lingering challenges to doing business in the country.

Ulaanbaatar downtown

The big picture: The government is hungry for foreign investment to fund economic development and reduce dependence on mining. But regulatory uncertainty and inconsistent rule of law have long stifled investors' appetite.

  • Driving the news: Officials pulled out all the stops at the July forum to highlight Mongolia's potential. They trumpeted forecasts of 6% GDP growth in 2023 and announced new agencies to attract investment.

  • International executives were promised a more welcoming business environment, with the new Mongolia Investment and Trade Agency acting as a "one-stop shop."

Between the lines: The government's sales pitch only goes so far without meaningful improvement of the on-the-ground realities investors face.

  • Frequent changes to investment laws and opaque approval processes continue to deter capital inflows.

  • The Heritage Foundation's 2023 Index of Economic Freedom ranked Mongolia at only 120th worldwide for investment freedom, citing "weak institutional capacity."

  • Mongolia's global standing in the World Bank's Ease of Doing Business rankings stagnated over the past decade while Asian competitors zoomed ahead.

  • Yes, but: It's not all talk. Mongolia has notched some incremental wins that could pay dividends.

  • New initiatives like streamlined business registration and investment promotion agencies are steps in the right direction.

  • Compliance with international anti-money laundering standards helps boost investor confidence on regulatory quality.

Bottom line: The government's slick packaging shows savvy in courting capital. But to truly unlock Mongolia's potential, officials must go beyond PR and enact deeper reforms.

  • Lip service to welcoming business rings hollow without stable laws, incentives and institutions that align with global best practices.

  • For the Economic Forum fanfare to translate into real investment, Mongolia needs sustained commitment to improving its climate for outside capital.


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