Economic sectors

INVESTMENT IN FOOD AND AGRICULTURE SECTOR

There is a great potential for exports of high value-added industrial products based on meat, cashmere, yak hair, sheep and camel wool and over the past decade, the agriculture sector-one of Mongolia’s oldest industries has remained integral to the country’s long-term development strategy, even as mining, telecoms and some other relatively new sectors have grown rapidly. According to recent analysis, about 60 percent of Mongolian cultivated area is low in nitrogen and potassium which is easy to use in plants, and 34.7 percent low in phosphorus concentrations, respectively. Thus, there are opportunities to intensify and further develop crop farming by systematically using mineral fertilizers based on soil test results and physiological context of crops, and by extensively utilizing nutrients and bio-fertilizers made by local natural and farming resources. Therefore wide cooperation opportunities are open for investors in this field of enhancing pastureland management, producing competitive value added agricultural products, ensuring food security, developing marketing of organic agricultural products and curing livestock from disease.

Based on investors’ interest to undertake farming, by owning a land solely or jointly with foreign investors and local organizations, or by leasing the land there are huge opportunities to plant and export food and nutritional crop of high quality and nutrition other than traditional crops cultivated in Mongolia such as buckwheat, rapeseed, soy, and produce animal feed from its byproducts.

SIGNIFICANT POTENTIAL ON RENEWABLE ENERGY SOURCES

Mongolia has a huge potential to export renewable electricity across Northern Asia. According to the ‘Renewables Readiness Assessment: Mongolia’ from the International Renewable Energy Agency (“IRENA”), Mongolia’s mostly untapped renewable resources could be used to kick-start a major cross border power corridor between Russia, Mongolia, China, South Korea and Japan. Mongolia’s Gobi Desert has a vast renewable energy potential of 2.6TW. Mongolia’s current power generation capacity is currently made up of just 7% from renewables and the government set a target of 20% renewables by 2023 and 30% by 2030. Mongolia’s parliament recently adopted broad measures aimed at future sustainability including the Green Development Policy and the Law on Energy Conservation and Efficiency. The new law enables Mongolia to provide energy security and reliability.

Wind Power

• Mongolia has potential to become one of the major wind power producers.
• Wind power classification of Good-to-Excellent wind power resources are equivalent to 1,113,300 MW of wind electric

Solar Energy

About 270-300 sunny days per year with an average sunlight duration of 2,250-3,300 hours are available in most regions of Mongolia. Annual average amount of solar energy is 1,400 kWh/ m2 with solar intensity of 4.3-4.7 kWh/m2 per day.

Hydro Power

There are 3800 small and big streams and rivers in our country, which could support up to 6417.7 MW of power and deliver 56.2 billion kWh of electric energy annually.

BOOSTING BANKING AND FINANCIAL SECTOR

With the introduction of new Securities Law (2014) and Investment Fund Law (2013), there are substantial potential high-growth opportunities for new investors in an emerging advanced financial products and services industry, given its high demand within the country. Insurance, fund management, private equity, venture capital and new credit and loan products are all areas where foreign undertakings can participate in for high capital returns.

13 commercial banks
1 development bank
541 non-banking financial institutions
288 savings & credit cooperatives
70 brokerage houses
15 insurance companies
5 foreign banks have representative offices: ING, Sumitomo Mitsui bank, Tokyo Mitsubishi bank, Bank of China and Industrial and Commercial Bank of China are present in Mongolia. According to statistics, 90-95 % percent of financial sector assets are held by commercial banks.

DIVERSIFYING INDUSTRIAL SECTOR

The Government of Mongolia attaches great importance in diversifying its economy. The mining sector is obviously the prevailing sector of our economy and main base of our trade and industry. However, we now face with disadvantages of being over dependent of one sector. Therefore, we consider in developing value added industrial sector in urgency. There are several actions and programs have been taken place including adoption of the State Industrial Policy by the Parliament so far. The industrial sector is the top economic sector of Mongolia that based on the state, science and business correlations and to develop export oriented, high technology and competitive industrialization and service.

The Parliament of Mongolia has adopted The State Industrial Policy of Mongolia in 2015. It shall lead up to determine integrated activities to create the knowledge and skill driven manufacturing of high value added products and services from agricultural raw materials and mining industry and provide the sustainable development.

Heavy industry enterprises

Oil production
Coal chemical production
Coke chemical production
Copper smelting
Steel production
Cement industry

Light industry

Leather and hide production
Cashmere production
Wool production
Wood production

Small and medium

Dairy production
Construction material production
Food production
Bio preparations
Information technology

Manufacturing is on the rise and trend is likely to continue with the rapidly rising GDP. Given the rising demand and better investment climate, there is a high potential for industrial base to grow.

DEMAND DRIVEN HEALTH SERVICES SECTOR

The Government has been committed to ensure sustainable funding to the health sector and providing accessible and equitable quality health care to all citizens. To this end, there is a high potential for investors to sustain healthcare system.

MULTI-ADVENTUROUS TOURISM SECTOR

As the birthplace of Chinggis Khaan, Mongolia offers unique natural landscape and mysterious historical and cultural relics. It remains one of the last great adventure destinations in Asia. Mongolia is ranked 99 out of 140 countries by the UN World Tourism Organization. Tourism has been highlighted as a potential sector to examine in terms of high FDI and linkages potential for the medium to long-term. In recent years, the Government introduced a series of inspiring measures to improve infrastructure and promote tourism and has set ambitious short and medium-term objectives for the sector, which include boosting international arrivals in Mongolia.

As a developing sector with high growth potential, boosting investments in hotels, tour camps, eco-tourism and foreign tour operators are highly in demand. Indeed, over the past decade Mongolia has earned a reputation as a key destination for outdoor and adventure sport and other related activities, including trekking, climbing, fishing, hunting, and birdwatching, among many other things based on exotic, untouched, wonderful nature and traditional nomadic customs.

THRIVING TELECOMS AND IT SECTOR

With the fast growth of ICT`s total revenue each year, new interest from foreign investors will develop higher-speed network and build competitive network to global markets. Since it was liberalized in the early 1990’s, Mongolia’s telecommunication sector has grown rapidly. The sector has the potential to attract a considerable amount of FDI, to facilitate new activity, faster and better services. With the high mobile penetration rate, subscriber growth is widely expected to slow or plateau in the coming years. The government has taken on a key role in this area, introducing a number of large-scale, long-term development plans aimed at ensuring steady improvements in both the reach and the quality of national telecoms networks.

Interesting fact in Mongolia:

2.6 million internet users
2.5 million Facebook users