The following is an interview with the Secretary of Economic Council B.Byambasaikhan, about the council’s “100 day plan to intensify the economy.”
Many people can’t believe that an economy built until today
can be revived in just 100 days. Can the economy be revived in 100 days?
Presently, everyone is criticizing that the USD exchange rates have
risen and that money isn’t flowing into Mongolia. Instability of the
legal environment, uncertain rules and principles and the weak legal
environment for business are all connected to the reason for shortage of
money flow into Mongolia.
Mongolia’s investment environment was improved. Major projects were
implemented and gave reason to trust Mongolia to foreign and domestic
investors. Corresponding to this, the amount of money flow into the
economy had increased. Unfortunately, Mongolians lost that trust of
investors in a very short amount of time. Many investors deflected from
Mongolia because of unscientific, baseless and uncalculated law
adoptions. The most important thing to do within these 100 days for
intensifying the economy is to regain the trust of investors and bring
back money flow.
In other words, by creating a favorable environment for running
businesses within these 100 days, we’ll be able to attract required
funds for the current economy to Mongolian markets in a short period of
time. Let’s make integrated mediums and long term economic plans.
Currently, a plan to create an environment that Mongolian businesses can
make strategy plans based on this integrated economy medium and long
term plan is being developed.
Getting investors’ trust is a time consuming work. Some
foreign investigators define Mongolia as a difficult partner to do
business with. It seems that not only foreign but also domestic
investors have lost faith in Mongolia. What do you think about this
It’s said that it’s easy to lose someone’s trust but difficult to
redeem it once it is lost. Mongolians will not be able to grow the
economy without building trust. Without regaining trust, there’s no
chance of attracting investments. All businesses are based on mutual
trust. We have to concentrate on building and regaining trust during
these 100 days. Both the government and politicians should focus on
regaining the trust they lost. Investors stopped believing in Mongolia
because Mongolians insist on changing established contracts, change laws
and regulations whenever they please and if they don’t like it, they
banish, protest and do demonstrations.
Any investor would prefer reliable and stable business environment
over partners that will change their attitude every time they wake up.
Mongolians first need to focus on their attitudes and communication
skills. Every time investors are discussed and conspired on, they will
define us as unreliable partners. When adopting laws, opinions of the
private sector, specialists and economists must be heard. We’ve just
seen the harmful consequences of laws initiated by politicians for
political purposes have to the economy. Most importantly, politicians
should stop initiating and approving laws based on their emotions.
It is widely considered by experts that an economy which is
dependent on only one sector brings about huge amounts of negative
consequences. Do you think that not only the mining sector but also
other sectors should be developed?
It’s evident that the Mongolian economy should change its model and
diversify. Determining what to concentrate on diversifying the economy
is also a big issue. Since mining and agriculture are the supporting
powers of Mongolian economy, other sectors should be developed based on
them. Undeniably, Mongolia’s economy is receiving negative effects from
global market failures for being too dependent on mining. A major change
in the policy is required. If we can acquire two billion USD in the
Mongolian economy, the exchange rate of USD will stabilize for a period
of time. It’s certain that there’ll be negative consequences after six
months or so as it is not limitless money.
The government decided to encourage exportation and limit
unnecessary importation. How will this policy be reflected on the
There’ll definitely be some difference. Through importation, Mongolia
is externalizing large sums of USD. Although, not everything can be
produced domestically, things that can be produced by us should be
produced domestically. We can grow and harvest vegetables. A country
like Mongolia, with over 40 million livestock, should supply its own
milk and wear Mongolian socks. Corresponding to this, workplaces will
become available and taxes can be charged from them. Mongolia needs to
become a producing country. A definition of an intellectual government
is to be prudent and calculative in every aspects as well as making
economic decisions based on research. Temporary emotional interferences
in decision making in the last few years became the cause of the
Mongolian economic crisis.
Now, the Economic Council is involving private sectors and aiming to
make changes together with them. As people who know the difficulties,
advantages and disadvantages of operating businesses more than
politicians, within the framework of 100 day plan to intensify the
economy, our main objective is to research and find solutions for
getting out of the economic crisis, participate in making decisions
based on estimates and most importantly, build trust which we lost in
the last few years, together with the government.
Business entities are actively participating in the 100 day
work to intensify the economy. Some people believe that you’re working
with funds that you received from the government. Is it true?
Sorry to contradict you but we’re working without any salary. Most
importantly, it’ll be beneficial everywhere if favorable conditions for
businesses are established. We’re working because we aim to create
economic changes together. Perspectives of politicians and business
entities are different. This country is held up by business entities,
not by politicians. If business entities have funds, the country will
have both power and prosperity. Regarding this, we thought that we
should participate in retrieving the country’s economy in a state of
crisis and work together with politicians on building trust. Wealth
producers must be the ones to change the economy.
After 100 days, will the exchange rate of USD drop?
Money flows into the economy through capital. Implementation work of
projects is based on mutual trust and partnership. If Mongolia desires
prosperity, everyone including ordinary residents, politicians and
businessmen should work together. The second stage of investment for Oyu
Tolgoi was halted. The funds that were to come flowing in through the
underground development are no longer coming in. Now it’s better to
concentrate on aspects to develop the economy without fracturing or
politicizing. Oyu Tolgoi must be advanced and Tavan Tolgoi should be
included in the economic utilization. Mongolians have so much work to
do, starting from the development of infrastructure and railroads and we
need to have ethical consciousness to adhere to established contracts
and stop restricting, threatening and humiliating wealth creators. It’s
clear that money will never flow into Mongolia if we lose the trust of
not only foreign investors but also domestic investors. In order to
become wealthy, attitude of the people must be changed.
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