“Ladies and gentlemen,
I would like to thank you for the invitation to this event and giving me the opportunity to discuss the outcome of my working visit and our next steps forward.
The United States of America is our important “third neighbor” and a close political and economic partner. We give priority to developing our trade and investment ties to a higher level with the USA, the world leader in technology, a major player in trade and source for large foreign investments.
I have no doubt that you all welcomed the declaration of the “Strategic Partnership” between our two countries, following our tete-a-tete with President Trump at the White House. The US has become the fifth strategic partner of Mongolia, out of the 192 countries which Mongolia has established diplomatic relations with.
Our elevated partnership will be an important leverage to broaden and strengthen the bilateral relations in all sectors, especially in the areas where it is lagging behind, namely trade, investment and economic cooperation.
During the discussion with President Trump, we exchanged views on pragmatic solutions and ways to improve our economic ties in actual numerical values. Mongolia is keen on having the United States as an important trading partner and a major investor.
There are opportunities to develop the mutually beneficial relations and cooperation between Mongolia and the United States in the fields of economy, investment, banking, finance and trade. However, both sides agree that our current economic cooperation leaves much to be desired.
I would like to emphasize that your investments and businesses have greatly contributed to the development of the economic cooperation between Mongolia and the US. As we focus on attracting new investors, we are still committed to providing investors and businessmen, who have overcome difficult challenges with us, with all the support to create a favorable and stable business environment where businesses can grow.
As the environment has been set for further broadening our bilateral ties, it is our goal to carry out substantive work based on this.
In 2018, Mongolia’s economy grew by 6.9%. In the first half of 2019, this figure rose to 7.3%. Last year, new records were set with $12.9 billion of foreign trade and $7.0 billion of exports.
The economic growth is likely to be stable as international financial organizations such as the World Bank and International Monetary Fund have forecasted that Mongolia’s economic growth will be 6-8% in the years 2018-2020.
“Moody’s”, “Fitch” and “Standard and Poor’s” have raised Mongolia’s credit rating, which has a positive impact on our foreign investment as well as the foreign relations and trust amongst our domestic and foreign organizations.
In the past years, Mongolia’s economic difficulties and the unfavorable legal environment for foreign investment had pulled back considerably the influx of foreign investment between 2015 and 2016.
We paid particular attention to regain investors’ confidence and took measures to encourage and support them. As a result, Mongolia’s foreign direct investment increased in 2018, reaching $ 2.47 billion at the end of the year.
As of last year, trade with the United States made up 1.7% of Mongolia’s total trade turnover, coming 5th after China, Russia, Japan and Republic of Korea. The total US investment to Mongolia since 1990 has accumulated to $806 million, making up 3.4% and ranking in 8th place overall. This shows that there is potential to substantially increase America’s economic interest in Mongolia.
The Strategic partnership has set the foundation to draw long-term and strategic investments from the United States to large projects and programs could affect Mongolia’s economic growth.
The “Roadmap for Expanded Economic Partnership between Mongolia and the United States” was declared in 2018 and the two sides agreed to develop cooperation in the fields of agriculture, water, renewable energy, mining, financial services and infrastructure as well as to cooperate in new areas such healthcare infrastructure and micro power. Furthermore, the signing and implementation of the Second Compact Agreement of the Millennium Challenge Corporation has paved the way for Mongolian and American companies to come together on joint projects and continue their cooperation.
There are ample opportunities to strengthen cooperation in agriculture, energy, small and medium sized enterprises and to execute specific joint projects and programs. In particular, Mongolian and American businesses should make use of the opportunities that the Overseas Private Investment Corporation and the “Better Utilization of Investments Leading to Development (BUILD) Act” provide and implement specific projects in Mongolia.
Furthermore, you are well aware that the approval of “Third Neighbor Trade Act” by the US Congress was one of the topics that were discussed during my visit to the United States. The adoption of this Act will have numerous economic benefits, including the development of Mongolia’s wool, cashmere and textile processing sector, provide jobs, especially for women, increase household income, economic diversification as well as export structure and market expansion.
The United States’ decision to give preferential tax treatment on textile products exported from Mongolia in the early 1990s assisted Mongolia in overcoming the challenges and difficulties during its economic transition and had a positive impact on the production of wool and wool products. As a result, 40,000 jobs were created at that time, which accounted for approximately 20% of the domestic workforce.
I would like to underline that President Trump and members of both houses of the US Congress expressed their support for the adoption of this law.
Ladies and gentlemen,
Public diplomacy, the relationship between individuals, communities and businesses, has a greater impact and role in the enhancement of bilateral trade and economic ties. We are ready to exchange views with you and work together to enrich our “Strategic Partnership” through economic means.
I wish you all success.
Thank you for your attention.